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In the Pipeline: 8/13/13

August 15, 2013 by Leave a Comment

Broken promises. SEC investigations. Empty lots. No product. In other words, pretty standard stuff for anything with the word “Green” in it.

The Washington Post (8/10/13) reports: “Just off the legendary Highway 61, where crop-dusters perform acrobatics above billboards for Mississippi Delta casinos, is the place where Virginia gubernatorial candidate Terry McAuliffe pledged to build a $60 million factory for his electric-car company. On a recent summer day, a bird was skittering over patches of weedy gravel at the vacant site of what is supposed to be GreenTech Automotive’s future plant. Virginia gubernatorial candidate’s “green” car company fails to pay desired political dividends. In Horn Lake, Miss., GreenTech runs a temporary assembly plant in an old elevator factory. There, fewer than 100 workers are producing no more than one car every two or three days, according to current and former company employees.”

Passing on the mantle.

The Washington Times (8/12/13) reports: “China will become the world’s largest importer of crude oil in October, surpassing the U.S. for the first time as the Asian giant’s rising consumer class of drivers grows increasingly thirsty for fuel, the U.S. Energy Information Administration is projecting. China already is the largest importer of oil from the troubled Middle East, taking away a distinction that plagued the U.S. since the 1970s. Its ascendance as the world’s largest importer — even as U.S. dependence on Middle Eastern oil declines to negligible levels — could transform regional and world politics as the focus of global defense efforts for decades has been keeping open the vital oil shipping lanes leading from the Persian Gulf.”

Chinese drivers may be pushing their need for imports up, but our increased oil production is decreasing our reliance on imports. 

The Institute for Energy Research (8/13/13) reports: “The Energy Information Administration (EIA) reports that the China is expected to surpass the United States in oil imports this October and to lead the world in total oil imports in 2014. As the graph below shows, the United States, on a net basis (imports less exports), has decreased its net oil imports fairly dramatically over the last several years. There are several reasons for this decline. Most importantly, U.S. oil production is up. But, other reasons include increased exports of petroleum products, lower or flat liquid fuels demand, and biofuels production that has generally been increasing. China, unlike the United States, has a heavily growing demand for petroleum products and much lower production growth.”

Stop me if you’ve heard this one before.

The Washington Free Beacon (8/12/13) reports: “The U.S. Department of Energy (DOE) has suspended stimulus payments to a major green energy company after the company said it is having trouble finding financing and may have to declare bankruptcy. ECOtality admitted that possibility in a filing with the Securities and Exchange Commission (SEC) last week. Lackluster sales caused revenues to fall significantly short of its expenses, the company said. ‘Although the company is currently exploring options for a restructuring or sale of the entire business and/or assets of the company, the company may need to file a petition commencing a case under the United States Bankruptcy Code as part of any such process or otherwise in the very near future,’ ECOtality said in its SEC filing. ECOtality has received more than $100 million in federal funds, the bulk of which came in a $99.8 million stimulus award for the construction of its electric vehicle charging stations.”

Harry Reid throws a really scary Halloween party in August. If you notice, there is not a soul invited who actually cares about affordable, reliable energy.

National Clean Energy Summit reports: “The National Clean Energy Summit has been the national stage for clean energy development discussions for six years and serves as the country’s most visible and influential gathering of leaders and top policymakers. The day-long clean energy summit is hosted by Senate Majority Leader Harry Reid (D-NV), the Center for American Progress, the Clean Energy Project, MGM Resorts International, and the University of Nevada, Las Vegas. National Clean Energy Summit 6.0: Energizing Tomorrow will focus on empowering individuals, governments, and businesses to continue our transition to a clean energy future. This year’s conference will highlight solutions needed to energize our clean energy economy for tomorrow. By identifying hurdles facing clean energy development today and discussing the solutions needed to clear these hurdles, we can energize tomorrow.”

The battle lines are forming. We’re glad these folks are in the fight with us.

Filed Under: Blog, In the Pipeline

Sorry Ethanol Lobby, RFS Does Not Promote “Free Markets”

August 14, 2013 by Leave a Comment

Growth Energy, an ethanol industry group, issued a misleading statement yesterday in response to news that refiners requested a partial waiver of the 2014 Renewable Fuel Standard (RFS). The headline reads, “Big Oil Files Waiver to Cap Ethanol, Block Free Market Competition.”

There is nothing “free market” about requiring someone to purchase a product, but that is exactly what Growth Energy claims. The RFS requires refiners to blend increasing amounts of ethanol into gasoline, with the goal of blending 36 billion gallons by 2022. This mandate amounts to a subsidy for ethanol producers, one that distorts the market and ultimately harms consumers.

Tom Buis, CEO of Growth Energy, claims, “Biofuels are a clean burning, reliable and sustainable alternative and it is time we start recognizing their cost savings and numerous benefits and end our addiction to a fossil fuels and Big Oil’s price gouging.” Let’s unpack these claims one at a time.

First, Buis describes ethanol as “clean burning,” but fails to point out that ethanol can emit more greenhouse gas emissions than conventional gasoline. A study published in Science finds that corn-based ethanol nearly doubles GHG emissions over the next three decades and continues to increase emissions for the next 167 years. The Union of Concerned Scientists, a liberal environmental group, cautions, “If done wrong, the production of biomass for biofuels like ethanol could destroy habitats, worsen water or air quality, limit food production and even jeopardize the long-term viability of the biomass resource itself.”

Second, far from providing “cost savings,” ethanol is actually more expensive than conventional gasoline. Ethanol contains about 33 percent less energy than conventional gasoline, which means that fuel economy declines as ethanol content rises. Indeed, the BTU-adjusted price of E85 (ethanol that contains up to 85 percent ethanol) is about 16 cents higher than regular gas. At this time last year, when both corn prices and gas prices were higher, E85 was about 70 cents more expensive than E10.

Third, Buis offers scant evidence to support his “price gouging” accusations. As the Institute for Energy Research (IER) explains, less than five percent of gas stations are owned by the “big oil” companies that Buis decries. In reality, the price of gasoline is determined largely by the price of crude oil, a commodity traded worldwide. U.S. monetary policy that increases the money supply through quantitative easing provides a ripe environment for hedge funds to bet on commodity prices, including crude oil.

Congress passed the RFS under the assumption that gasoline use would rise indefinitely, but consumption has actually declined in recent years. With consumption stagnant, the only way refiners can add increasing amounts of ethanol is by blending more than 10 percent into gasoline. But most cars are not certified to run on gas with more than 10 percent ethanol, prompting several car companies to warn that damage due to improper fueling voids any warranties. This problem is called the blend wall.

In a free market, the blend wall would never be an issue. Refiners would adjust ethanol volumes in response to supply and demand. But under the current system, refiners are left with little choice but to increase exports or reduce production, both of which would raise gas prices on American motorists. In fact, NERA Economic Consulting finds that by 2015 the RFS will increase diesel costs by 300 percent, gasoline prices by 30 percent, and reduce take-home pay for American workers by $580 billion.

Recognizing the imminent blend wall, the Environmental Protection Agency (EPA) signaled a willingness to reduce required ethanol volumes in 2014. In response, the American Fuel & Petrochemical Manufacturers (AFPM) and the American Petroleum Institute (API) asked EPA to use its authority to reduce the 2014 mandate by 3.35 billion gallons. This would be a tangible first step toward a freer market and lower gas prices.

IER Policy Associate Alex Fitzsimmons authored this post.

Filed Under: News, Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , ,

As Economy Lags, Shale Boom Spurs Rapid Job Growth

August 14, 2013 by Leave a Comment

While most of the U.S. economy endures a slow recovery process, the energy sector continues to flourish. Job opportunities in oil and natural gas increased by 40 percent from 2007 to 2012, according to new data from the Bureau of Labor Statistics.[i] Compare this to just 1 percent growth for total private-sector employment over the same period.  The key to this job growth has been the boom of domestic energy production on state and private lands.

In 2012, the U.S. recorded the largest oil and natural gas increases in the world, as well as the largest increase in oil production in American history. U.S. crude oil production increased from around 5 million barrels per day in 2007 to nearly 6.5 million barrels per day in 2012, according to the Energy Information Administration (EIA). Natural gas production also increased from 19,266 billion cubic feet in 2007 to 22,902 billion cubic feet in 2011.

As a result of the domestic energy boom, oil and gas companies added 162,000 jobs from 2007 to 2012. The largest job growth has been in the support sector, which includes exploration, excavation, and well construction. The support sector alone has added 102,000 jobs since 2007, employing a total of 286,000 people by the end of 2012.[ii]

This rapid growth does not appear to be slowing down anytime soon, as proved reserves[iii] in the U.S. continue to rise. A recent report from EIA shows that proved oil reserves increased by 15 percent (nearly 3.8 billion barrels) in 2011, the largest volumetric increase in U.S. history. Proved reserves of wet natural gas increased by 31.2 trillion cubic feet (TCF), the second largest increase since 1977. [iv]

The development of America’s vast energy resources is occurring primarily on state and private lands. On federal lands, a sluggish permitting process (228 days on average) continues to stonewall energy production and job creation. As a result, oil and natural gas production declined by 15 percent on federal lands between 2010 and 2012.

The most notable success story has been North Dakota, where it takes just 10 days on average to get a permit to drill. Production on state lands in the Bakken and Three Forks shale plays has skyrocketed in recent years. From 2007 to 2012, North Dakota’s crude oil production increased from 124,000 barrels per day to 663,000 barrels per day,[v] an increase of 434 percent. Production will most likely continue to rise, as proved oil reserves in North Dakota increased by 771 million barrels from 2010 to 2011. The increase in domestic energy production is a driving force behind the state’s 3.1 percent unemployment rate, the lowest in the nation.[vi]

Thanks to domestic energy boom on state and private lands, oil and gas companies are creating jobs at a time when the rest of economy continues to sputter. Opportunities in the oil and gas sector have expanded despite policies that restrict energy development on federal lands. Opening up federal lands to oil and gas development would provide a huge boost to the economy and put even more Americans back to work.

IER Press Secretary Chris Warren authored this post.

[i] http://www.eia.gov/todayinenergy/detail.cfm?id=12451&src

[ii] ibid i

[iii] Proved reserves are resources that are recoverable under current economic and operating conditions.

[iv] http://www.eia.gov/naturalgas/crudeoilreserves/index.cfm

[v] http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPND2&f=A

[vi] http://data.bls.gov/timeseries/LASST38000003

Filed Under: News, Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , , , ,

Fed Up With Ethanol, Boaters and Bikers Search for Alternatives

August 13, 2013 by Leave a Comment

One of the many problems with the Renewable Fuel Standard (RFS) is that it requires refiners to blend increasing amounts of ethanol into motor fuel, even though ethanol can damage engines. Gasoline blended with even as little as 10 percent ethanol can accelerate engine failure in boats, motorcycles, lawnmowers, and other small engines.

Musa Agil has firsthand knowledge of this problem. Agil, who operates two independent gas stations in Wilmington, North Carolina, started selling ethanol-free gasoline a few years ago. Since then, he says he’s gained a loyal base of customers who are willing to drive across the county to buy his product, even though it is more expensive than conventional gasoline (E10).

“They’re willing to pay it to protect their boats, old cars, motorcycles, landscaping equipment,” Agil said in an interview with the Wilmington Star-News. “They just don’t want that crappy gas going into their engines.”

One of Agil’s customers, Capt. Allen Cain, said he switched his boat to ethanol-free gasoline about three years ago after his friends started having problems with E10.

“Ethanol is bad for your boating outboards and it’s bad for your fuel lines because ethanol will eat through the fuel lines and mess them up, so it’s worth it in the long run to use non-ethanol fuel,” Cain said.

Keith Beasley, owner of Thomasville Lawn and Garden in Thomasville, North Carolina, estimates that fuel problems related to ethanol account for between 75 and 80 percent of his business.

“[Ethanol] being from a corn base it is gritty,” he explains. “Inside a carburetors there are a lot of small tiny passages that the grit will just get stopped and can’t go through.”

Despite the harmful effects of ethanol, the Environmental Protection Agency (EPA) approved last year production of gasoline that contains up to 15 percent ethanol. As AAA points out, use of E15 is “expressly prohibited” for boats, motorcycles, power equipment, lawnmowers, and off-road vehicles.

E15 also poses problems for the 95 percent of cars in America that are not certified to use it. Several automakers have said their warranties will not cover claims related to improper E15 use. In response, AAA has called for a suspension of E15 sales, citing “consumer confusion and the potential for voided warranties and vehicle damage.”

Passed by Congress in 2005 and expanded in 2007, the RFS requires refiners to blend 36 billion gallons of biofuels into gasoline by 2022. Last week, EPA increased the 2013 mandate to 16.55 billion gallons, most of which will come from corn-based ethanol. As the federal mandate continues to rise, ethanol will only cause more problems for boaters, bikers, and anyone who likes to keep a nice lawn.

IER Policy Associate Alex Fitzsimmons authored this post.

Filed Under: Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , , ,

In the Pipeline: 8/12/13

August 12, 2013 by Leave a Comment

All future measurements should be in fruit-based units.

Forbes (8/10/13) reports: “There’s much screaming and shouting from the usual suspects about the new radiation leak discovered at Fukushima, the stricken nuclear power plants in Japan. What they’re not telling you is that the radiation leakage is around the same as 76 million bananas. A fact which should help to put it all into some perspective. Here’s Greenpeace: Environmental group Greenpeace said Tepco had ‘anxiously hid the leaks’ and urged Japan to seek international expertise. ‘Greenpeace calls for the Japanese authorities to do all in their power to solve this situation, and that includes increased transparency…and getting international expertise in to help find solutions,’ Dr Rianne Teule of Greenpeace International said in an e-mailed statement. Not that Greenpeace is ever going to say anything other than that nuclear power is the work of the very devil of course. And the headlines do indeed seem alarming.”

It takes over 200 days to get a permit to drill on federal lands in the Land of the Free.

The Telegraph (8/9/13) reports:  “David Cameron’s plans to kick-start shale gas fracking faced a fresh setback after the environmental regulator said energy companies could face a six month wait to secure permits despite a government pledge to cut the process to less than a fortnight. In a development that will be welcomed by those concerned about shale gas, the Environment Agency (EA) said the ‘current level of public interest’ in fracking meant that the permitting process was likely to be extended to allow for more consultation. In June, the Treasury pledged the government would take a series of measures ‘designed to kick start the shale gas industry in the UK’ including plans for the EA to ‘significantly reduce the time it takes to obtain environmental permits for exploration’. It said the EA would ensure shale gas permits which currently take a varying length of time would be issued within a “standard 13 week period” by September and then “within 1-2 weeks” by February.”

How many of the assumptions underlying the environmentalist view of the world depend on global warming and scarcity? What are they going to do when both are discredited?

Climate Depot (8/9/13) reports: “Another major European media outlet is asking: Where’s the global warming? Moreover, they are featuring prominent skeptic scientists who are warning of a potential little ice age and dismissing CO2 as a major climate driver. And all of this just before the release of the IPCC’s 5AR, no less! The August 7 print edition of the Danish Jyllands-Posten, the famous daily that published the ‘Muhammad caricatures’, features a full 2-page article bearing the headline: ‘The behavior of the sun may trigger a new little ice age’ followed by the sub-headline: ‘Defying all predictions, the globe may be on the road towards a new little ice age with much colder winters.’ So now even the once very green Danish media is now spreading the seeds of doubt. So quickly can ‘settled science’ become controversial and hotly disputed. The climate debate is far from over. And when it does end, it looks increasingly as if it’ll end in favor of the skeptics. The JP writes that “many will be startled” by the news that a little ice age is a real possibility. Indeed, western citizens have been conditioned to think that nothing except warming is possible. Few have prepared for any other possibility. In its latest 2-page report, the JP now appears to tell its readers that our views on climate science have to be much more open minded and unshackled from the chains of dogmatism.”

The ethanol industry complains of monopoly persecution, but when you talk to customers, they’ve got a very different perspective on monopolies and mandates.

The Star News Online (8/11/13) reports: “For most folks, it’s the price of gasoline that matters. But for a vocal minority, it’s what’s in the gasoline that really matters. Or, to be more precise, what isn’t – specifically ethanol. Several years ago, Musa Agil looked to capitalize on that demand and make his mark in the Wilmington market by starting to sell ethanol-free gasoline at his pair of independent gas stations – Wrightsville Country Store and Masonboro Country Store…Six years later, Agil has a loyal customer base that drives from as far away as southern Brunswick County to fill the tanks of their cars, boats, motorcycles and lawn equipment with his ethanol-free fuels – which he now sells in three grades. The gasoline is a hot seller even though it can cost 30 to 40 cents more per gallon than the fuels that are blended with ethanol.”

The Journal mischaracterizes these people. Most of them are really lobbyists for companies, trade associations, or law firms with interests and issues before the Commission. They want to make sure that the new boss likes them. In short, they are part of the problem.

The Wall Street Journal (8/8/13) reports: “As former commissioners of the Federal Energy Regulatory Commission, we object to your July 30 editorial ‘Ron Binz’s Rules for Radicals’ criticizing Ron Binz, the president’s nominee to chair the FERC, and implying that the FERC is pursuing an agenda unconstrained by law or national policy. Mr. Binz is criticized for helping draft, at his governor’s request, provisions of new utility legislation in Colorado. The law requires utilities to submit regulatory plans so that coal plants comply with expected Environmental Protection Agency regulations. Mr. Binz’s commission implemented the law, issuing a balanced decision that closed older, heavier-emitting coal plants while outfitting newer coal plants with emissions controls.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , , , , , ,

E85 Can Break the Bank, but Not the Blend Wall

August 12, 2013 by 3 Comments

The Environmental Protection Agency (EPA) recently increased the amount of ethanol refiners must blend into gasoline under the Renewable Fuel Standard (RFS), despite repeated warnings that the U.S. cannot handle higher ethanol concentrations.

While the RFS requires blending increased amounts of ethanol into gasoline, most cars are certified to run on gasoline that contains no more than 10 percent ethanol (E10). Breaching this “blend wall” would force refiners to decrease production and increase exports, resulting in higher gas prices for Americans.

The Renewable Fuels Association is touting a new report that claims to offer a solution to the approaching blend wall. The study, conducted by economists at Iowa State University, claims that increasing production of E85 (ethanol that contains up to 85 percent ethanol) would allow refiners to meet rising federal mandates without increasing the ethanol content of conventional gasoline.

Unfortunately for ethanol advocates, the study is based on several dubious assumptions about consumer demand for ethanol and E85. When these assumptions are more closely aligned with reality, the argument for E85 as a solution to the blend wall falls apart.

The most serious flaw with the study is that it relies on government regulation to keep the price of gasoline artificially high. As the authors admit:

“However, this expanded ability to use ethanol will not occur under existing policies unless EPA increases mandates significantly above the E10 blend wall because high RIN prices is the only current policy tool that provides the necessary incentives to increase the distribution capacity and demand for E85.”

To comply with the RFS, refiners can either blend the required ethanol volumes or purchase Renewable Identification Numbers (RINs). The problem, as we have explained before, is that RIN prices spiked from $0.07 cents at the beginning of the year to over $1 in March and $1.32 in July. This increases compliance costs on refiners, which puts upward pressure on prices at the pump. By the authors’ own admission, high RIN prices—and by extension high gas prices—are necessary to make E85 economical.

Another flaw with the study is that it depends on an unrealistic drop in the price of E85. The authors claim that E85 selling at $2.00 per gallon would “attract quite a lot of attention.” They fail to point out that E85 isn’t selling anywhere close to that price point. According to AAA’s Daily Fuel Gauge Report, E85 currently costs about $2.86 per gallon.

This figure does not even account for the fact that E85 contains about 33 percent less energy than conventional gasoline. The BTU-adjusted price of E85 is currently $3.76 per gallon, which is significantly higher than regular unleaded gasoline. Stating the obvious, the authors explain that “low levels of E85 consumption should be expected when E85 is not priced to save consumers money.”

Price is not the only factor drivers consider when purchasing fuel; convenience also plays an important role. The authors point out that only 2.7 percent of retail gas stations sell E85, most of which are concentrated in the upper Midwest. Millions of drivers who own flex fuel vehicles (the only cars that can run on E85) do not even live within ten miles of one of these stations. As the authors admit, this geography limits the already small pool of drivers who would be inclined to purchase E85 if it were more competitively priced.

Far from providing a “workable and economic pathway” for refiners to comply with the RFS, the ethanol lobby’s solution to the blend wall is a recipe for higher energy prices. Increasing E85 production at the expense of conventional gasoline would only further reduce gasoline demand, which is part of the reason the blend wall is even an issue. The solution is for Congress to repeal the RFS.

IER Policy Associate Alex Fitzsimmons authored this post.

Filed Under: News, Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , ,

Biofuels: Reality vs. Federal Mandates

August 9, 2013 by 1 Comment

One of the most absurd aspects of the federal government’s energy policy is the Renewable Fuel Standard’s mandate for cellulosic ethanol volume. As we have explained on these pages, ethanol mandates drive up the price of food for no reason. We also wrote, “EPA is incredibly forcing refiners to pay a fine for not hitting cellulosic ethanol targets that even the EIA projects will be impossible, and even though in 2011 there was no evidence that any cellulosic ethanol was available commercially to make it possible for the refiners to comply with the regulation.”

Well, it’s two years later, how have things changed? The EPA based its cellulosic ethanol mandate for 2013 on two particular plants, one of them being  a Kior plant based in Columbus, Mississippi. Yet unfortunately for refiners—who will face penalties for not obeying the mandate—Kior missed its second-quarter production forecast by a whopping 75 percent. Here are the Bloomberg story’s details of the sordid affair:

Kior Inc. (KIOR), a producer of transportation fuels from biomass such as wood waste and non-food crops, fell…as production at its first commercial plant was 75 percent below its forecast.

…

The company shipped more than 75,000 gallons (284,000 liters) of fuel from its Columbus, Mississippi, plant in the second quarter…Kior said in May the facility would produce 300,000 gallons to 500,000 gallons. Revenue in the quarter was $239,000, about 12 percent of the $1.93 million average of five analysts’ estimates…

The Columbus plant opened in October, the first commercial site making cellulosic fuel in the U.S. [Bold added.]

At the same time the EPA is mandating refiners to use more cellulosic ethanol than physically exists, it is also mandating that they blend more total ethanol (including corn-based) than is feasible, because of the slower than expected increase in total gasoline usage. (This had led refiners to hit the so-called “blend wall,” driving the price on renewable credits to record highs.)

It’s one thing for the government to levy costly and inefficient mandates on industry, but it comes out of a Kafka novel to mandate renewables standards that are literally impossible to achieve. The fact that EPA is so wildly off in its forecasts—so that it unintentionally asked industry to do the impossible—casts doubts upon the whole enterprise of renewables mandates.

 

 

Filed Under: Products and Power, Renewable Fuel Standard, Threats Tagged With: , , , , ,

In the Pipeline: 8/9/13

August 9, 2013 by Leave a Comment

Congress should take this as a teachable moment and mandate that the plant generate all its electricity from wind or solar and that Congress will rely on no other powerplants.  I suspect the Republic would be a lot safer if staffers and Members had to get by on a few hours of electricity a day.

The New York Times (8/8/13) reports: “As part of the climate change agenda he unveiled this year, President Obama made a commitment to significantly reduce the federal government’s dependence on fossil fuels. The government, he said in a speech in June at Georgetown University, ‘must lead by example.’ Some critics say officials at the plant are choosing to burn dirtier fuel as a political statement. But just two miles from the White House stands the Capitol Power Plant, the largest single source of carbon emissions in the nation’s capital and a concrete example of the government’s inability to green its own turf. The plant, which provides heating and cooling to the sprawling Capitol campus — 23 buildings that include the Library of Congress, the Supreme Court and Congressional office buildings, in addition to the Capitol building itself — is operated by Congress, and its transition to cleaner energy sources has been mired in national politics for years.”

Do you ever get the feeling the NOAA crew is rooting for destruction?

My Fox New York (8/8/13) reports: “This Atlantic hurricane season may not be quite as busy as federal forecasters once thought, but they still warn of an unusually active and potentially dangerous few months to come. The National Oceanic and Atmospheric Administration updated its hurricane season forecast Thursday, trimming back the number of hurricanes they expect this year to between six and nine. That’s a couple less than they predicted back in May. The forecast calls for three to five of those hurricanes to be major, with winds greater than 110 mph. The updated forecast also predicts 13 to 19 named storms this year. Both of those predictions are just one less forecast three months ago.”

Let’s talk about that jobs “blip.”

The Energy and Commerce Committee (8/8/13) reports: “If the president is indeed committed to reducing unemployment, he should swiftly pivot toward American energy production. Data from the Labor Department’s Bureau of Labor Statistics illustrate that the U.S. oil and gas industry continues to be a bright spot in America’s economy. The Energy Information Administration reported today, ‘From the start of 2007 through the end of 2012, total U.S. private sector employment increased by more than one million jobs, about one percent. Over the same period, the oil and natural gas industry increased by more than 162,000 jobs, a 40 percent increase.A recent study commissioned by the American Petroleum Institute found the oil and gas industry supported a total of 9.8 million American jobs in 2011, including over 600,000 jobs created in just two years. While the country still struggles with high unemployment, energy producing states like North Dakota and Texas are experiencing job growth.”

 

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For you Alaskaphiles out there…

Energy Intelligence (7/29/13) reports: “Doyon, one of the largest private landowners in the US, has spent the last three years conducting additional seismic surveys and analyzing test results from a well targeting natural gas that was drilled in the summer of 2009. That well, Nunivak #1, located 50 miles west of the city of Fairbanks, showed signs of oil generation below 7,000 feet, and Doyon believes that the basin may hold more than 1 billion barrels of oil. ‘The initial look was really for gas, but it clearly has turned to oil as a result of the well we drilled in 2009,’ Jim Mery, Doyon’s senior vice president of lands and natural resources told Oil Daily in an interview. ‘We see an opportunity to change the paradigm about oil development in this state.’ The basin has the advantage of accessibility in a state where the road system and electrical grid only reach 40% of the land area. The drilling site for the second well, Nunivak #2, is near Alaska’s main north-south railroad and highway corridor and roughly 65 miles from both the state’s largest refinery and the Trans-Alaska Pipeline System.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , , , , ,

In the Pipeline: 8/8/13

August 8, 2013 by Leave a Comment

I bet you did not know that Commissioner Binz is the hand-picked successor of the current FERC chairman, who himself is hostile to coal, natural gas, and anything, really, that works.

Complete Colorado (8/7/13) reports: “As Ron Binz campaigns to be confirmed as the head of the Federal Energy Regulatory Commission, much of the emphasis has been on his position as an activist for what he considers to be low or no carbon energy sources, predominantly Big Wind. (Forget the fact that wind requires an enormous amount of carbon emissions in the manufacturing of gigantic wind turbines.) But Binz’s no carbon advocacy is hypocritical. While Binz now advocates for lowering carbon emissions, he was instrumental in shutting down Colorado’s lowest carbon emitting power source, the Fort St. Vrain nuclear plant, which eventually converted to natural gas – a technology he now calls “dead end” when it comes to carbon emissions. As head of the Office of Consumer Council (OCC), Binz successfully argued before the Public Utilities Commission (PUC) that the power plant did not work correctly and that the shareholders of the company running the plant must pay for the capital costs rather than customers using the electricity.”

Musk to market: We don’t need no stinking Generally Accepted Accounting Principles. Our friend Matt Yglesias (and we use the term loosely) points out that Tesla actually lost money this quarter. Of course, Matt is fine with that (and apparently so is Wall Street).  

Slate (8/7/13) reports: “Tesla somewhat unexpectedly earned a modest profit in the first quarter of this year, which naturally raised expectations for the following quarter. And in a letter to shareholders pegged to today’s earnings release, CEO Elon Musk claims victory: ‘While profits were still modest in absolute terms and not our primary mission, net income increased by 70% from last quarter, driven by record Model S deliveries and a significant improvement in automotive gross margin.’ Delve into the report, however, and this turns out to be not quite as simple as it seems. Publicly traded companies are obliged to report earnings in terms of what are known as Generally Accepted Accounting Principles (GAAP) and that 70 percent increase in based on a non-GAAP measure.”

Teachable moment for Governor Hickenlooper: Sometimes those crony capitalists don’t live up to their end of the bargain.

The Denver Post (8/6/13) reports: “The General Electric Co. has abandoned plans for a $300 million solar-panel factory in Aurora and instead struck a deal with the largest U.S. solar-panel maker, First Solar Inc. GE is giving technology developed by a Colorado startup it bought to First Solar in exchange for 1.75 million shares in the Tempe, Ariz.-based company — worth about $82 million based on Tuesday’s closing share price. The Arvada research center — where the technology was created and which was formerly PrimeStar Solar — will be closed, with 50 people losing their jobs, GE spokeswoman Lindsay Thiele said.”

Watch Whatley work. Keystone opponents will not like this interview.

E&E News (7/31/13) reports: “Well, look, the environmental groups that supported the President and opposed this pipeline are not going to be satisfied no matter what decision is made. If the President says yes, no matter what excuses or reasons that he were to deliver to it, straight out they oppose this pipeline, they do not want to see the oil sands developed, and there’s not really going to be any placating them. But I think for the average American voter and for the folks that support this pipeline, and also support a clean healthy environment, the fact that this will be the safest pipeline ever done, it won’t contribute substantially to carbon emissions throughout the globe, and it’s going to help reduce gasoline prices and create jobs here in the United States, those are the important factors the President needs to take into account.”

Filed Under: Blog, In the Pipeline Tagged With: , , , , , , ,

In the Pipeline: 8/6/13

August 7, 2013 by Leave a Comment

Do you think the protesters drove there?

Reuters (8/4/13) reports: “Police arrested more than 200 demonstrators for trespassing at Chevron Corp in the California city of Richmond on Saturday to mark the one-year anniversary of a massive refinery fire and to protest a proposed Keystone XL tar sands pipeline. The arrests came as a throng of sunflower-carrying picketers chanted, ‘Hey hey, ho ho, fossil fuels have got to go,’ as people of all ages walked onto Chevron’s property to draw attention to a growing movement against fossil fuel. Police Captain Mark Gagan said the arrests, all peaceful, included three people in wheelchairs and demonstrators as young as 18 years old. Media reports said most of those arrested were cited and released. Environmentalist Bill McKibben, who is leading a call for using only renewable energy, was one of the first to be handcuffed.”

This is why FERC and Binz matter.

The Miami Herald (8/5/13) reports. “The windswept prairies of the Midwest are undergoing an energy transformation the electric grid can’t handle. Wind turbines tower over rural vistas in the heartland, where the clean energy source is becoming increasingly popular with utility companies that face state-mandated renewable energy standards. Unfortunately, the nation’s aging power grid is hampering those efforts. At the end of last year, installed wind-generation capacity totaled 60 gigawatts nationwide – 5 percent of the nation’s production capacity – according to data from the U.S. Energy Department’s National Renewable Energy Laboratory. Another 135 gigawatts of potential wind production awaits development and connection to the grid, according to industry data.”

Fancy that, we can drill our way out of the problem.

Energy Guardian (8/6/13) reports: “The price of domestic oil has steadily risen this year to about the same as that of imports. Yet the price of a gallon of gas has stayed well below the record of $4.11 a gallon set in the summer of 2008. Why? U.S. pump prices tend to rise and fall based on the world spot price, reflected in the North Sea Brent crude benchmark set in London. The good news for consumers has come because Brent prices have been held in check by stronger U.S. output and better transportation to refiners, according to the Energy Department.”

Attack energy production, modern life, and our standard of living as much as you want, but if you use global warming to threaten our ability to grill real meat? You’ve crossed a line, this is blasphemy.

Bloomberg (8/5/13) reports: “The world’s first beef burger created from stem cells has a texture that’s closer to cake than steak. The burger, fried in a public unveiling in London today, lacks the fattiness of regular meat and could be described as an ‘animal-protein cake,’ according to Josh Schonwald, a Chicago-based author and one of two tasting volunteers. The 5-ounce burger, which cost more than 250,000 euros ($332,000) to produce, was developed by Mark Post of Maastricht University with funding from Google co-founder Sergey Brin. Post is among scientists including those at Modern Meadow and New Harvest who are experimenting with ways to grow meat in labs as an alternative to raising livestock, which contributes 18 percent of greenhouse gas emissions and uses 30 percent of the world’s ice-free land, according to an Oxford University study.”

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