November 11, 2010

Science of the Lambs: AdministrationPledges Fealty to “Science” At Every Turn – But When Science Points toMore Energy Exploration, WH Re-Writes the Script.Associated Press (11/10) reports, “The latest complaint fromscientists comes in a report by the Interior Department’s inspector general,which concluded that the White House edited a drilling safety report in a waythat made it falsely appear that scientists and experts supported theadministration’s six-month ban on new deep-water drilling. The AP obtained thereport early Wednesday. The inspector general said the editing changes by theWhite House resulted “in the implication that the moratorium recommendation hadbeen peer reviewed.” But it hadn’t been. Outside scientists were asked only toreview new safety measures for offshore drilling. “There are really only a fewpeople that know what they are talking about” on offshore drilling,” said FordBrett, managing director of Petroskills, a Tulsa, Okla.-based petroleumtraining organization. “The people who make this policy do not … so don’tmisrepresent me and use me for cover,” said Brett, one of seven experts whoreviewed the report. The new inspector general report said Browner’s staffimplied that scientists had endorsed the drilling moratorium, by raising areference to peer review in the drilling safety report. At least one outsideexpert who was involved said he was convinced afterward that it wasn’t adeliberate deception, and Interior Department officials told the inspectorgeneral they didn’t deliberately make changes to cause confusion.



The L Word: Boston PaperSays White House “Lied” By Saying Offshore Ban Was Supported by Science,Peer-Reviewed By Experts. Boston Herald (11/11) editorializes, “Apparently there isnothing the Obama administration won’t do or say to justify the way it doesbusiness – including lying. Case in point, an administration report used tojustify its six-month ban on new deep-water drilling in the Gulf of Mexico inthe wake of the BP oil disaster. Now the Interior Department’s inspectorgeneral has confirmed that the White House did indeed alter a report that wassupposedly the work of scientists and experts in the field to make it appearthey supported the ban. With some deft editing, the White House made it appearthe drilling moratorium recommendation was “peer reviewed” when, in fact, theonly thing peer-reviewed were new safety measures for offshore drilling. “Webelieve the report does not justify the moratorium as written and that themoratorium as changed will not contribute measurably to increased safety andwill have immediate and long-term economic effects,” the scientists wrote in aletter to Louisiana Gov. Bobby Jindal and the state’s senators earlier thisyear. “The secretary should be free to recommend whatever he thinks is correct,but he should not be free to use our names to justify his political decisions,”they added. The inspector general’s report was requested by Louisiana officialslast June, after eight of the 15 scientists involved signed on to the protest



“Business As Usual”: EPARejects Notion that New Carbon Rules Targeting Businesses Big and Small willImpact Their Ability to Operate – “Pretty Much Business As Usual.” E&E News(11/10, subs. req’d) reports, “U.S. EPA’s top air official today challenged thesuggestion that the Obama administration’s new climate rules could haltconstruction projects across the country, arguing that permitting agencies willbe able to handle carbon dioxide as well as any other pollutant. Starting onJan. 2, state and local agencies are required to make the largest new andmodified facilities use the best available control technology (BACT) to reducetheir greenhouse gas emissions. EPA issued a guidance document today to explainhow regulators should incorporate greenhouse gases into the existing reviewprocess, which is required for many facilities that need a federal airpollution permit. Industry claims the changes will cause the permitting processto grind to a halt, but Gina McCarthy, the assistant administrator for EPA’sair office, says the transition should be smooth. State and local agencies haveused the review process for decades, she said. "This is pretty muchbusiness as usual," McCarthy told reporters this afternoon. Though somepeople might have expected EPA to go "outside the box" withgreenhouse gases, she added, "there is nothing groundbreaking about thisBACT guidance other than I think it makes it very clear that the Clean Air Actcan apply to greenhouse gases without breaking any barriers."



Two Years Ago, Basra, IraqWas One of the Most Dangerous Cities in the World; Today? We’re ProducingEnergy There – And the Entire Landscape Has Changed.Wall Street Journal (11/11) reports, “This dusty and raggedcity in southern Iraq was notorious a couple years back for its vicious militiawarfare and rampant smuggling. Today Basra has a very different rep: one of theworld’s newest oil boom towns. Some of the world’s largest energy companies areramping up drilling in Iraq. They are focused on a handful of fields clusterednear Basra, the nation’s oil hub, as the government attempts a dramaticexpansion of output that could help moderate world energy prices for years tocome. The drilling frenzy has triggered an investment and building boom inBasra itself. Recently, the investment commission of the local governorate saidit had awarded 11 new investment licenses worth $500 million to local andforeign companies with new projects in the area. Separately, a 65,000-seatsoccer stadium is on the drawing board. Foreign companies are sending inexpatriate managers, hiring Iraqi engineers and laborers and building massivebase camps in the desert in southern Iraq, where the country’s reserves andproduction are concentrated. Freshly imported rigs have started drilling newwells and repairing dozens more older wells near Basra, which is both an oiland port town. Shiny new restaurants and car dealerships are popping up aroundtown—and vanity license plates are fetching north of $10,000.



Tossing His Bolo Into theRing: Rep. Raul Grijalva, of Boycott-My-Own-State Fame, Says He’ll Challenge EdMarkey for Ranking Member Slot on Resources Committee. The Hill (11/10) reports, “Rep. Raul Grijalva (Ariz.) will challengeRep. Ed Markey (Mass.) for the top Democratic spot on the Natural ResourcesCommittee, Grijalva’s spokesman confirmed Wednesday. Grijalva was chairman ofthe National Parks, Forests and Public Lands Subcommittee on the NaturalResources panel this Congress and as a Westerner may be seen as a more typicallawmaker to lead the Democrats on a committee with vast oversight over publiclands. Markey, however, would be a loud mouthpiece for Democrats on issues likeoffshore oil drilling and the need to shift away from fossil fuels. Markey— who currently heads both the House Energy and Commerce’s Energy andEnvironment Subcommittee as well as House Speaker Nancy Pelosi’s (D-Calif.)Energy Independence and Global Warming Select Committee — has been aleading player among House Democrats on energy and climate issues thisCongress. Markey — who is entering his 19th term in the House — isalso far more senior than Grijalva. Markey has not officially said he is seekingthe ranking member post on Natural Resources but was seen Monday and Tuesdayscoping out minority committee offices in the Ford and Longworth House OfficeBuildings.



Meanwhile, Fred UptonFinding Himself All of a Sudden in Tight Race for E&C Chairmanship –Writes Letter to Sec. Clinton Supporting the Keystone Pipeline.E&E News(11/10, subs. req’d) reports, “Rep. Fred Upton of Michigan, currently battlingthree fellow Republicans for the chairmanship of the House Energy and CommerceCommittee, today came out strongly in favor of a high-profile pipeline thatwould ship crude from the Canadian oil sands to U.S. refineries. Upton pressedSecretary of State Hillary Rodham Clinton, whose department must decide on apermit for the $7 billion Keystone XL pipeline, to sign off on the project"as soon as possible" in a letter that subtly invoked hisconservative bona fides. "As my old boss, President Reagan, once said,’Government is not the solution to our problem, government is theproblem,’" Upton wrote. "Government is currently standing in the wayof this $7 billion, privately funded project, which is expected to stimulate$20 billion in new spending for the U.S. economy and spur the creation of118,000 jobs." Those estimates of economic benefits are often cited by thepipeline’s sponsor, Calgary, Alberta-based TransCanada Corp., and major laborunions that support Keystone XL. A final State Department decision on thepipeline is not expected until early next year, although Clinton made headlines– and aroused bipartisan concerns — last month after publicly saying she is"inclined to" let the pipeline go forward.



Memo to Upton: Want to ShowYou Can Think “Outside the Box” on Energy? Support the Effort (We Just InventedIt) to Create an Energy and Natural Resources Cmte in the House. IER president Tom Pyle writes (11/10) onthe IER blog, “It would be difficult to argue that Upton is a sturdychampion of energy production, but similarly challenging to defend Mr. Barton’srecord. On his watch, Barton cleared legislation imposing an ethanol mandate,expanding the power of FERC, banning incandescent light bulbs, and establishinggasoline price controls (a first for Republicans since Richard Nixon). Morerecently, Ranking Member Barton teamed up with current Chairman Henry Waxman(D-CA) on legislation to create a new and destructive regulatory regime foroffshore oil and gas exploration and production as a response to the BP oilspill. A committee with jurisdiction over health care, telecommunications, andenergy has little hope to develop and keep coherent and meaningful expertise onall of it. And thanks to Obama Care, the health care issue alone will take aconsiderable amount of the committee’s time and attention in the next twoyears. The result is that many Members and staff who care about and knowsomething about energy policy tend to reside elsewhere. It is time to create anEnergy and Natural Resources Committee, one whose focus is on the energy thatpowers our economy and the resources that are the shared inheritance of allAmericans. Such a committee would provide accountability, and perhaps moreimportantly, clarity for those who seek to understand and truly reform federalenergy policy.



Producers Rightly SeeOpportunity in President Tip-of-Cap to Natural Gas Last Week – ButQuestion Whether Obama Actually Knows We Have t to Drill for It. Spectra CEO Greg Ebel writes (11/10) in the Houston Chronicle, “In his Nov. 3 press conference, PresidentObama voiced support for the role of natural gas in a forward-looking energypolicy. In his words: “We’ve got, I think, broad agreement that we’ve gotterrific natural gas resources in this country. Are we doing everything we canto develop those?” The answer to the president’s question is no, we are notdoing everything we can to develop our natural gas resources. But with hiswords, we have the making of a bipartisan agreement on the gifts provided bynatural gas: energy security, jobs, investment and environmental benefits. Lastweek, voters spoke loud and clear in terms of their concerns about the economy.Greater use of natural gas means more jobs and economic opportunities. Thenatural gas industry supports more than 2.8 million U.S. jobs and contributes$385 billion annually to the national economy. It’s an industry that’s addingjobs — experiencing a 17 percent increase over the past several years.Thousands more jobs will be created as we capitalize on the vast reserves ofunconventional gas. Achieving common ground begins with common-sense choices.Let’s get to work, Washington.



Here’s Why Shale Gas CanWork: ‘Cuz It Doesn’t Need a Hand-Out; It Doesn’t Need a Bail-Out; It Doesn’tNeed a Tax Break; It Just Needs EPA to Get Out of the Way. OIPA chairman Mike McDonald tells (11/11) The Oklahoman, “Natural gas can no longer be ignored bypolicymakers. The use of horizontal drilling and hydraulic fracturing hasopened vast new natural gas resources across the country, and we must takeadvantage of this American-made source of energy. Crude oil has and willcontinue to be the fuel of choice for our country’s transportation needs, andthe same technological advancements that have opened new natural gas fieldshave spurred increased crude oil production across the country. Our nationneeds a balanced energy policy that supports the production of crude oil andnatural gas. Q: What does the industry need from the government to flourish? A:We need to be left alone. Without government interference, the oil and naturalgas industry has increased production of both oil and natural gas and developednew techniques to extract fossil fuels from areas once thought unreachable.Without burdensome and unnecessary regulatory programs or crippling taxesleveled at the industry, oil and natural gas producers can develop new andbetter methods to extract oil and natural gas from the earth, enhancing security and helping our nation recover from a recession.



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