In the Pipeline: 4/13/11

What do you think Obama said this morning: be careful what you wish for or I love it when a plan comes together Washington Post (4/12/11) reports: Gasoline prices are soaring toward $4 a gallon, a threshold that some analysts say will damage the fragile economic recovery and crimp consumer spending just as families are planning their summer vacations… Bill Simon, chief executive of Wal-Mart U.S., said recently that the retailer sees fewer customers when gas prices begin to rise, because its mammoth stores are typically farther away than local grocery and convenience stores…Oil prices above $100 will hurt the recovery, the IEA report said. “Economic impacts from high prices are never instantaneous, and often take months to materialize, but preliminary data for early 2011 already show signs of oil demand slowdown,” the IEA report said. “Unfortunately, the surest remedy for high prices may ultimately prove to be high prices themselves.”

Would everyone who understands the meaning of the phrase “arbitrary and capricious” please stand up? E&E News (4/12/11) reports: A top U.S. EPA official shook the oil and gas industry today with the assertion that injecting diesel underground is illegal unless a drilling company got a permit…”There’s no permit to go get,” said Lee Fuller of the Independent Petroleum Association of America, which represents drillers. EPA’s lack of clarity on the technical but politically charged portion of the hydraulic fracturing debate frustrates the industry, he said…Under persistent questioning at a Senate subcommittee hearing today, EPA Deputy Administrator Bob Perciasepe reluctantly stated that drillers who “frack” with diesel are supposed to get a permit, and if they do not, they are violating the law (Greenwire, April 12)…Perciasepe resisted efforts by Sen. Tom Udall (D-N.M.) and others to clarify what EPA is doing about such potential violations. He said the agency is following up on congressional investigations on the topic and reiterated details of a multi-year study of fracturing. But his answer was enough to make industry take interest…”This is the first time EPA has taken an explicit position on the issue,” said Matt Armstrong, who represents oil and gas firms at the law firm Bracewell & Giuliani.

We hate to point this out, but they have yet to meet the 2010 standard.  But that probably doesn’t make any difference when you are hurtling into the abyss Bloomberg (4/12/11) reports: Gov. Jerry Brown is poised to give California the most aggressive standard in the country for renewable energy, requiring that one-third of utilities’ power comes from solar cells, windmills or other alternative sources within 10 years…The Democratic governor is expected to sign the legislation Tuesday at a solar plant in the San Francisco Bay area, accompanied by U.S. Energy Secretary Steven Chu…Supporters say the standard will mean cleaner air and lead to less reliance on foreign oil. They also say it will assure investors that demand for renewable energy is strong and will create an environment that promotes job growth in the industry…Some critics say the move will drive up California’s already-high energy costs, hurting companies’ competitiveness.

Remember this in about a month when the President calls for more drilling to reduce his political vulnerability on gasoline prices Politico (4/12/11) reports: Interior Secretary Ken Salazar said Tuesday that Republicans have a “sense of amnesia” about last year’s Gulf of Mexico spill in pushing for legislation to spur more offshore oil and gas production…And he warned that if another disastrous spill struck and “we didn’t have the ability to contain it, it would probably mean death to oil and gas development in America’s oceans.” “I don’t have amnesia, and neither does the president,” Salazar told reporters at the Interior Department. “And much of the legislation that I have seen being bandied around, especially with the House Republicans, is almost as if the Deepwater Horizon Macondo well incident never happened.”…Salazar said he was speaking specifically about legislation from House Natural Resources Chairman Doc Hastings (R-Wash.) and perhaps from other Republicans…Hastings has introduced three bills aimed at expediting and expanding offshore energy development. His panel is set to vote on them Wednesday.