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In the Pipeline: 4/17/13

April 17, 2013 by 1 Comment

My very strong suspicion is that half of everything they sell is made with petroleum products. And everything they sell is transported with petroleum products. I also suspect that they are really, really inane. Politico (4/15/13) reports: “APPAREL COMPANY PATAGONIA ORGANIZING AGAINST KEYSTONE: The gear, clothing and apparel company Patagonia is blasting the proposed Keystone XL pipeline in a new email to customers. ‘Tar sands oil in the Keystone XL pipeline will cross more than 1,000 bodies of water through three states, threatening freshwater with a devastating oil spill. We want to get a million comments against Keystone XL to the State Department by April 22. The clock is ticking,’ the company writes. On the lobbying side, Patagonia has not retained a lobbying firm since 2008.”

It’s got to be hard trying to keep building up the myth of scarcity when reality continues to knock it down. Denver Business Journal (4/15/13) reports: “The two biggest oil and gas companies working in Colorado’s Niobrara oil play could be drilling new wells nearly 20 years from now, based on the number of locations they’ve identified and the number of wells they plan to drill every year.”

You know, the tragic thing is that some Republicans are definitely that stupid. The good news is that most of them belonged to previous Administrations, or previous losing campaigns. And I used to have a lot more respect for Nobel laureates, before they started to give them out to people like Paul Krugman. Forbes (4/16/13) reports: “And You Thought Income Redistribution Was Just a Liberal Democrat Thing? Yeah, and the amount of the tax would then rise or fall on the basis of the subsequent increase or lessoning of ‘climate effects’… and ‘should be supplemented by a reasonable and sustained support for research and development in the energy area.’… Sadly, they aren’t the only prominent and usually brilliant conservatives who seem to have sampled the carbon tax Kool-Aid. Reagan economist Arthur Laffer has said he would support such a tax in exchange for a payroll or income tax reduction; Bush 43 economist Greg Mankiw supports a global tax; and Douglas Holtz-Eakin, a senior advisor to John McCain in 2008, wants a tax to provide the energy industry with regulatory ‘certainty.’”

Mike Brune is going to run the Sierra Club off the cliff. That may not be a bad thing. PoliticoPro (4/16/13) reports: “The Democratic Party could suffer if President Barack Obama approves the Keystone XL oil pipeline, Sierra Club Executive Director Michael Brune warned Tuesday… Brune, whose 1.4 million-member group was a major Obama supporter in last year’s election, said major Democratic donors are keeping a watchful eye on the president’s Keystone decision. An approval, he said, could affect fundraising and make activists less inclined to campaign for Democrats facing reelection in 2014.”

Evidently, this dude has not paid attention for the last 15 years or so. Science is the last thing this conversation is about. Examiner (4/15/13) reports: “Yesterday we reported on a new study by the U.S. Federal Drought Task Force that stated global warming was not to blame for the much-politicized 2012 drought in the Great Plains. As the New York Times notes:…‘By contradicting the established and widely accepted theory…that the drought was a palpable and detrimental sign of climate change, the [drought] report grabbed headlines in the American press and prompted sharp retorts from climate change scientists and climate activists.’”

Reports now suggest that the Abominable Snowman is actually responsible for “unsettling” the science. The Telegraph (4/16/13) reports: “The European Union’s climate change policy is on the brink of collapse today after MEPs torpedoed Europe’s flagship CO2 emissions trading scheme by voting against a measure to support the price of carbon permits.”

Abominable_Snowman_

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

In the Pipeline: 4/16/13

April 16, 2013 by Leave a Comment

Let me explain how this works. Washington Gas agrees to buy wind power in an amount equal to the amount Union Station uses each year. They charge ratepayers more. The generators get a federal subsidy (about 1/4 of the total price) from taxpayers and get to generate power even when no one wants it. States in which the power is generated get to say they are meeting their portfolio mandates. Union Station gets the PR bump. Who pays for all this? You do, sucker. E&ENews (4/12/13) reports: “A central fixture in keeping Congress running is now relying 100 percent on wind energy… Union Station in Washington, D.C., has signed a three-year contract with Herndon, Va.-based Washington Gas Energy Services (WGES) to fulfill all its electricity needs from wind farms based around the region, the company announced this week.”

So when you rob Peter to pay Paul, we are at least going to alert Peter. AEA (4/15/13) reports: “American Energy Alliance President Thomas Pyle was joined today by eight other free market organizations in a joint letter to governors of 21 U.S. states that do not force their citizens to purchase unaffordable, intermittent electricity from renewable sources. The letter urges these governors to oppose any further extension of the wind Production Tax Credit (PTC) that unfairly forces their states to subsidize such mandates in other states. The coalition chose to send the letter on Tax Day, a day when Americans have a heightened awareness of the direct cost that bad government policy imposes on them and their families.”

Heck, we could’ve bought 30 more Solyndras in 2010 with all the money wasted on duplicative and overlapping energy programs! IER (4/15/2013) reports: “The Government Accountability Office (GAO) recently issued its third annual report exposing unnecessary duplication and overlapping programs throughout the federal government.[i] The report outlines more than $95 billion spent per year on duplicative programs and inefficient practices that is more than enough to offset the costs of sequestration. GAO identified 17 areas in which evidence of fragmentation, overlap, or duplication among federal programs or activities exists, covering a broad range of government missions and functions, including international affairs, science and the environment, training, defense, information technology, agriculture, and energy.”

Here we go again… Bloomberg (4/11/13) reports: “It starts with getting into the transportation sector. When I started the Pickens Plan in 2008, there were about 200,000 vehicles on natural gas in the world; now there’s about 16 million. That growth’s coming from everywhere but the U.S. Places like Iran and Argentina. China’s already got 40,000 trucks on LNG [liquefied natural gas], and they import the stuff. And here we are in the U.S., with more natural gas than any other country in the world, and we aren’t doing a thing about it. It’s just amazing to me that these dumb f-‍-‍-s in D.C. don’t see this opportunity and try to capitalize on it.”

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

PYLE: More Tax Giveaways to Big Wind?

April 16, 2013 by Leave a Comment

WASHINGTON D.C. — AEA President Thomas Pyle released the following statement in response to today’s decision by the Internal Revenue Service to establish a loose definition for the wind Production Tax Credit’s qualifying language. According to the new IRS guidelines, wind projects can receive 10 years of taxpayer-funded subsidies by committing as little as 5 percent of the costs by Jan. 1, 2014.

“The Internal Revenue Service has twice in one month tilted the tax code to the benefit of wind energy, first increasing the taxpayer cost of the production tax credit by as much as $850 million and now by defining the new qualifying language to enable the wind industry to receive maximum benefit for negligible commitment. Only under the current green regime in Washington could a company spend 5 percent of capital costs to receive 10 years and $12 billion in cash from the federal government. Once again cronyism pays off, and industries with friends in high places reap the reward. The wind industry has no better friend than the current administration. We only wish hardworking taxpayers received the same treatment.”

Filed Under: Press Releases Tagged With: , , , , ,

In the Pipeline: 4/15/13

April 15, 2013 by Leave a Comment

You know it’s bad when… Columbia Journalism Review (4/12/13) reports: “Journalists and the GOP called for more transparency at the Environmental Protection Agency (EPA) this week, as Gina McCarthy, the Obama administration’s pick to succeed Lisa Jackson as head of the agency, entered congressional confirmation hearings… The day before McCarthy, who now heads the EPA’s air pollution division, faced off with the Senate Committee on Environmental and Public Works, a group of Republicans on the committee and the Society of Environmental Journalists (SEJ) released separate statements, with different motivations, accusing the agency of secrecy and calling for more openness.”

 

This must have been painful for Seth to write. Which is, of course, part of the fun. Energy Guardian (4/12/13) reports: “Last year’s huge drought was a freak of nature that wasn’t caused by man-made global warming, a new federal science study finds.”

 

The playbook for green energy cronyism: A wink and a nod, legalized theft, twisted economics, and a splash of PR-infused rhetoric to keep everyone happy until the roof caves in. WSJ(4/11/13) reports: “Turn over any green-energy rock, and wiggling underneath will be the usual creepy mix of political favoritism and taxpayer-funded handouts. Add to this the Clintons, Mississippi and a murky visa program, and you’ve got a particularly ripe political embarrassment for Terry McAuliffe… Everyone remember The Macker? Best Friend of Bill. Chairman of Hillary’s 2008 presidential campaign. Famed money-tree shaker. Former Democratic Party chief. Failed 2009 contender for the Virginia governorship but now back as the party’s nominee for that position in this fall’s election. Oh—and in Mr. McAuliffe’s words—‘a Virginia businessman’ intent on ‘creating jobs.’”

 

The candle of the wicked shall be put out: “Quotations of the day on ethanol. What’s to like? Absolutely nothing, unless you’re a rent-seeking corn farmer”. AEI (4/12/13) reports: “1. Ken Green (2008): ‘Contrary to popular belief, ethanol fuel will do little or nothing to increase our energy security or stabilize fuel prices. Instead, it will increase greenhouse gas emissions, local air pollutant emissions, fresh water scarcity, water pollution (both riparian and oceanic), land and ecosystem consumption, and food prices.’”

 

It can look desperate when you come on this strong. You’ve got to play a little hard-to-get. E&ENews (4/12/13) reports: “Organizing for America yesterday deployed one of the most hackneyed pleas in social media in hopes of shaming House GOP leaders into holding hearings on climate change policy… ‘RT if you agree: It’s time to stop the denial on climate change,’ President Obama’s nonprofit advocacy organization wrote on its Twitter account, urging the nearly 30 million followers of @BarackObama to repeat the message.”

 

This is the kind of change we can believe in: 

Prius_

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

Free Market Coalition to U.S. Governors: Oppose Wind PTC

April 15, 2013 by Leave a Comment

WASHINGTON D.C. — American Energy Alliance President Thomas Pyle was joined today by eight other free market organizations in a joint letter to governors of 21 U.S. states that do not force their citizens to purchase unaffordable, intermittent electricity from renewable sources. The letter urges these governors to oppose any further extension of the wind Production Tax Credit (PTC) that unfairly forces their states to subsidize such mandates in other states. The coalition chose to send the letter on Tax Day, a day when Americans have a heightened awareness of the direct cost that bad government policy imposes on them and their families.

“Your constituents pay disproportionately for a lavish tax credit that does not benefit them,” the letter states. “Instead of helping your constituents, the PTC leads to energy production in other states that is unsustainable without the mandates and federal subsidies. Under the wind PTC, non-renewable mandate states like yours — which has wisely chosen to allow the most affordable and reliable forms of energy to be purchased by consumers and industries — are penalized for the political decisions of states like California, Massachusetts, and New York.

“By taking a principled stand against the PTC, you help taxpayers in your own state and ensure more cost-effective electricity generation over all. We urge you to call for an end to this wasteful, inequitable subsidy immediately.”

The other signatories of the letter are:

Myron Ebell, Freedom Action
Marlo Lewis, Competitive Enterprise Institute
Eli Lehrer, R Street Institute
Sabrina Schaeffer, Independent Women’s Forum
Michael Needham, Heritage Action
Wayne Brough, Freedom Works
David Ridenour, The National Center for Public Policy Research
Phil Kerpen, American Commitment

To read the full text of the letter, click here.

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Filed Under: Press Releases Tagged With: , , ,

Federal Regulations Drive Up Gasoline Prices

April 12, 2013 by Leave a Comment


Lately an argument has broken out over the Renewable Fuel Standard (RFS) and whether it drives up gasoline prices. The recent controversy was sparked by a WSJ article discussing the shocking fact that Renewable Identification Number (RIN) credits—which are one way of complying with the federal standard—had shot up in prices from about 7 cents in January to more than $1 in March. The WSJ article argued that—duh!—massively increasing a cost component would drive up gas prices.

In response, the Renewable Fuels Association (RFA) commissioned a quantitative study by “informa economics,” which concluded (surprise?) that the impact of the skyrocketing price of RIN credits had virtually no measureable impact on pump prices. In fact, the study said that the RFS mandate made it cheaper for American motorists to drive their vehicles.

Here at American Products. American Power. an earlier blog post has already documented the numerous flaws in the study. For example, the study ignores the fact that ethanol has less energy content per volume than conventional gasoline, making the RFA study’s price comparisons misleading. But more fundamentally, our blog post argued that even taking the RFA study at face value, it would mean that there is no need for a federal Renewable Fuel Standard. To repeat our point: If the people at RFA actually believe that using ethanol instead of conventional gasoline is good for the refining industry and will lower prices at the pump, then why do we need a federal mandate? Why wouldn’t natural market forces give us this outcome?

In the present post, we want to supplement our earlier critique with one additional point. One of the ways that the RFA-commissioned study tries to exonerate RIN prices from the spike in gas prices, is to say that the seasonal pattern in early 2013 was not noticeably different from that in 2011 and 2012. Looking at the “crack spread,” for example, doesn’t show us anything unusual in early 2013. Here’s how they put it:

There is a distinct seasonal pattern to gasoline prices and crack spreads, slumping during the last quarter of the calendar year and then strengthening considerably through the first quarter of the following year.  The increase in gasoline prices and crack spreads during the first quarter of 2013 has been generally consistent with increases experienced in 2011 and 2012, despite the fact that conventional ethanol RIN prices averaged $0.03 during the first quarter of 2011 and $0.02 during the first quarter of 2012.

Now, they actually don’t come right out and explicitly finish their argument here—probably because even their own readers would raise an eyebrow. To finish the train of thought they should add, “So the fact that RIN prices shot up to more than $1 in the first quarter of 2013, shouldn’t make us blame the spike in gas prices—over and above changes in crude oil prices—on the Renewable Fuel Standard.”

Such analysis shows the danger of naïve statistical analysis in economic matters. It’s true, there are always a million factors changing in the real world. On top of that, producers don’t mechanically set prices based on their “costs” plus some margin for “profit.” Everything is always embedded in a context of consumer demand, as well as expectations of the future. Finally, even demonstrably obvious factors might be muted in their apparent effects, because we don’t know what the path of the economy would be in the alternate timeline. For example, eating a Snickers bar is generally not a good way to lose weight, but if we just looked at a guy stranded on a desert island, we might see a correlation between him eating the candy bar in his pocket, and losing 5 pounds.

Yet let’s put aside all of these commonsense observations, and focus just on the raw numbers. Remember, the defenders of the Renewable Fuel Standard are saying that the big jump in RIN prices in early 2013 didn’t cause a spike in gas prices (relative to crude oil prices), any more than happened in 2011 or 2012. But look at a long-term chart of crude oil vs. gasoline prices to see why that “defense” is rather misleading:

 

 

As the chart above shows, gasoline prices have been much higher, relative to crude oil prices, precisely in the period the RFA-commissioned study analyzes. We can be even fancier and look at a single measure, where we take the average price of a gallon of gas, and subtract out the price of a barrel of crude divided by 42 (since that’s how many gallons of gas are produced by a barrel of oil):

 

 

Intuitively, the second chart shows that the average U.S. retail price of gasoline, relative to the adjusted crude oil cost, was much higher in the mid-2000s and then again from 2011 through today, compared to the long-term trend. For some reason, it seems as if some additional force has been pushing up prices at the pump, that was particularly pronounced in the mid-2000s and then again in the last three years. What could it be?

As we said before, it’s impossible to point to one specific factor, because market prices are based on many different elements. But on these pages we have discussed the costly mandates embedded in the Energy Policy Act of 2005, and the Tier 2 standards that insisted on a 90 percent reduction in sulfur contact by 2006, and how the recently codified Tier 3 standards will begin rising pump prices.

In short, we have been warning on these pages that the various, bipartisan interventions into the refining sector—starting under President George W. Bush and ramping up under President Obama—have been making gasoline artificially more expensive for American motorists. The world price of crude oil alone cannot explain the annual surges in gasoline prices since 2005, with the only (relative) respite occurring during the massive economic slump of 2008.

It’s true, in economics we usually can’t have a smoking gun and point to “the” reason a market price moved in a certain way. Yet economic theory—as well as common sense—tells us that increasing refiner costs will make gasoline prices higher for motorists. Further, the historical data most certain do show a strong correlation between the Bush and Obama regulations on refining, and an extra margin in gas prices.

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

In the Pipeline: 4/12/13

April 12, 2013 by Leave a Comment

Thank goodness we have the money to spend on this sort of thing. I mean, it doesn’t seem ridiculous or pointless at all. The Hill(4/11/13) reports: “President Obama’s fiscal 2014 budget calls for using a satellite designed to track climate change that was originally pushed by former Vice President Gore… Obama proposed Wednesday spending nearly $35 million in his 2014 budget to refurbish a satellite, nicknamed GoreSat by critics, that’s been sitting in storage after it was shelved in 2001, months after Bush took office. It cost about $100 million by then with NASA’s internal auditors faulting its cost increases.”

 

Welcome to the party: “Wind power kills jobs and increases electricity costs”. Toronto Sun (4/11/13) reports: “Ontario’s pursuit of wind power has driven up electricity prices, is killing jobs and might even lead to more smog, a new Fraser Institute report says… Ross McKitrick, author of Environmental and Economic Consequences of Ontario’s Green Energy Act (GEA), says the Ontario government’s electricity plan is now 10 times more costly than installing pollution-control equipment on existing coal plants — an option he argues would have produced similar improvements in air quality.”

 

So can we assume the Blazers will ride bikes between the cities where they play? Or, will they wear unis and shoes made only from non-carbon based products like hemp? Or, more likely, their billionaire owner will buy carbon offset credits and all will be fine. Oregon Live (4/11/13) reports: “Businesses with strong Northwest ties, including the Portland Trail Blazers, Nike, Intel, Adidas and Starbucks, are among 33 companies signing a “climate declaration” that urges U.S. policymakers to take action to curb global warming… The Trail Blazers are the only sports franchise on the list.”

 

So easy to see even NPR understands it. We are, however, still bullish on wood. NPR (4/10/13) reports: “Until well into the 19th century, if you lived in the U.S. and wanted to heat your house, fire your forge, or whatever, you did what people had done for thousands of years: You chopped down a tree and burned it… Though renewables have risen sharply in the past few years, they still represent a tiny fraction of the energy used in this country.”
Not all news is bad news: “State Government Tax Revenue Hits All-Time High”. WSJ (4/11/13) reports: “North Dakota and Alaska, in particular, showed the strongest tax revenue gains, (47% and 27%, respectively), mostly because of higher collections from companies using state resources, the Census Bureau said. Overall, tax revenue collected from companies using natural resources was up almost 39%, or $4.2 billion, from 2011.”

 

The following think tank chiefs are opposed to a carbon tax. Please contact us at [email protected] if you wish to join our growing ranks. We are thinking about starting a new list – trade association heads. We fear, however, it will be pretty small.


Tom Pyle, American Energy Alliance / Institute for Energy Research
Myron Ebell, Freedom Action
Phil Kerpen, American Commitment
William O’Keefe, George C. Marshall Institute
Lawson Bader, Competitive Enterprise Institute
Andrew Quinlan, Center for Freedom and Prosperity
Tim Phillips, Americans for Prosperity
Joe Bast, Heartland Institute
David Ridenour, National Center for Public Policy Research
Michael Needham, Heritage Action for America
Tom Schatz, Citizens Against Government Waste
Grover Norquist, Americans for Tax Reform
Sabrina Schaeffer, Independent Women’s Forum
Barrett E. Kidner, Caesar Rodney Institute
George Landrith, Frontiers of Freedom
Thomas A. Schatz, Citizens Against Government Waste
Bill Wilson, Americans for Limited Government
Wayne Brough, FreedomWorks
Rich Collins, Positive Growth Alliance

One last thing. The crew at the Pipeline wishes Cathy Anne a very Happy Birthday! 

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

ICYMI: White House Favors Green Energy

April 10, 2013 by 1 Comment

WASHINGTON D.C. — AEA President Thomas Pyle was cited in an E&E News Greenwire article today on the energy provisions in President Obama’s FY2014 budget proposal. Pyle’s comments target President Obama’s continued pursuit of discriminatory energy policies:

greenwire-logo

Clean energy favored, fossil fuel programs cut under fiscal 2014 budget
E&E News, Greenwire
By Nick Juliano, Hannah Northey and Katherine Ling, E&E Reporters
4/10/2013

President Obama’s fiscal 2014 budget request would boost funding for a variety of clean energy initiatives while reducing spending on fossil fuel programs and repealing oil and gas tax breaks.

The clean energy increases would come in research and development, state-based competition to enhance energy efficiency and the electric grid, a new trust fund designed to find alternatives to oil in transportation, and a permanent extension of the renewable energy production tax credit.

The falling fossil budget and resurrection of a long-standing call to eliminate tax breaks led to complaints from industry groups and Republicans that the president’s claimed “all of the above” energy strategy does not adequately account for coal, gas and oil.

The Department of Energy would see its overall budget grow to $28.4 billion next year, an 8 percent increase from fiscal 2012 levels. That also would reverse the effects of sequestration and a subsequent cut in the recently passed continuing resolution, which dropped DOE’s current appropriations to about $26 billion.

Obama’s budget emerged this morning, two months overdue and after the House and Senate each adopted their own starkly different budgets for fiscal 2014. The document already has been pronounced dead on arrival on Capitol Hill, but it outlines the administration’s priorities as the fiscal 2014 appropriations process ramps up and ahead of tax-and-spending battles likely to dominate Washington through the summer.

Within DOE, the biggest winners are efficiency and renewable energy programs. The budget would provide $615 million for solar, wind, geothermal and hydro energy as part of an overall increase of 40 percent above fiscal 2012 levels for clean technology activities, according to a summary.

The budget resurrects Obama’s long-standing proposal to eliminate a suite of tax deductions and other incentives for the oil and gas industry, including allowing exploration and production companies to deduct intangible drilling costs and a domestic manufacturing deduction. The proposal, which the administration says would save more than $40 billion over the next decade, has been roundly rejected by nearly all Republicans and most oil-state Democrats in Congress.

Obama’s budget also proposes eliminating various tax incentives for the coal industry, which it says would save nearly $3.3 billion over the next decade.

Revenue from closing the fossil fuel and other tax “loopholes” would go to a variety of new or extended tax supports for clean energy, efficiency, domestic manufacturing, and research and development totaling $53.4 billion over the next decade. That includes a permanent extension of the production tax credit, which would cost $17 billion over 10 years, as well as several incentives for advanced technology vehicles and efficient buildings.

Conservatives were quick to dismiss the proposed trade-off.

“He continues his effort to incorporate punitive and discriminatory tax measures for oil and gas producers into the tax code, while renewing his effort to poach mineral royalties owed to U.S. taxpayers to fund his green energy schemes without opening new lands for exploration and development,” said Tom Pyle, president of the American Energy Alliance, a conservative think tank.

The president’s defenders, meanwhile, said his budget provided a welcome contrast to the one adopted by House Republicans last month.

“By eliminating nearly $40 billion in unnecessary special tax breaks for Big Oil over the next 10 years, President Obama’s proposed budget makes the tax code more fair while investing additional revenue to support the middle class,” said Daniel Weiss, director of climate strategy for the liberal Center for American Progress. “Meanwhile, the Republican-controlled House continues to ignore the needs of Americans by passing Rep. Paul Ryan’s (R-WI) budget, which would pour $20 billion in new tax breaks into Big Oil’s already full revenue barrel while draining funding from vital health programs and investments in economic growth.”

Obama’s budget also formalizes several proposals that have been gaining traction among administration members and in energy policy circles, including an interstate clean energy competition program modeled on the popular “Race to the Top” education initiative. The budget proposes a one-time $200 million pool of money from which states would receive competitive grants for a variety of efficiency and grid improvements.

“Key opportunities for States include: modernizing utility regulations to encourage cost-effective investments in efficiency, including combined heat and power and demand response resources, and in clean distributed generation; enhancing customer access to data; investments that improve the reliability, security and resilience of the grid; and enhancing the sharing of information regarding grid conditions,” the budget summary says.

The budget also formalizes Obama’s call for an Energy Security Trust Fund that would grow to $200 million per year to fund research into alternative transportation fuels; the budget envisions the fund receiving $60 million next year. The idea has some bipartisan support, but there is a split between the White House and congressional Republicans over whether additional coastal areas should be open to drilling in order to fund it, dampening its chances of becoming a reality.

Efficiency up, fossil energy down

DOE’s Office of Energy Efficiency and Renewable Energy would receive a substantial boost under the budget, growing to nearly $2.8 billion, a nearly 62 percent increase over its current, sequester-adjusted level of about $1.7 billion.

Some of the largest proposed increases are concentrated in EERE efforts to make buildings more efficient, develop cleaner vehicles and promote domestic manufacturing of clean energy products. Vehicle programs would grow to $575 million from an estimated $340 million in the current fiscal year. The advanced manufacturing program would grow to $365 million from $146 million. And EERE’s weatherization and intergovernmental activities account would grow to $248 million from $145 million under the budget.

Meanwhile, the Fossil Energy Research and Development program would see its budget fall to $420 million from its current level of about $470 million.

The fossil budget would boost funding for carbon capture — from an estimated $69 million in fiscal 2013 to $112 million for next year — while cutting the carbon storage budget from $115 million to $61 million. The only other fossil line item proposed to receive an increase is spending on natural gas technologies, which would grow from $15 million to $17 million.

The Energy Information Administration, which provides a wealth of data on energy commodity prices and supplies as well as projections of future trends, would see its budget set at $117 million, up from about $101 million currently.

Nuclear, Yucca Mountain

The administration’s request for nuclear power dipped to slightly more than $735 million, down from $771 million under current sequestered spending levels, and didn’t include a request for any new authority for loan guarantees for new nuclear projects.

The White House also asked for $70 million to support the licensing of small modular reactors, which the Obama administration hopes will bolster domestic job creation, cut carbon emissions and provide a solution for replacing aging coal-fired power plants. The funds would go toward the Energy Department’s five-year, $452 million total cost-share program aimed at licensing small modular reactors.

Congress appropriated $67 million for the grant program in fiscal 2012, and DOE asked for an additional $65 million in fiscal 2013.

The president’s budget proposes a number of reforms for how the government pays for storing and disposing of nuclear waste, an issue that’s triggered multimillion-dollar lawsuits against DOE. Although the White House asked for no money to continue working on the Yucca Mountain nuclear repository in Nevada, which Obama abandoned years ago, the budget did call for the establishment of a new program.

The proposed program, which would cost $5.6 billion during the first decade, would allow the government to tap into appropriated funds and the Nuclear Waste Fund, a pot of money utilities pay into for waste disposal. The program would be a “very long-term, flexible, multi-faceted approach to dispose of the nation’s commercial and defense waste” that assumes DOE is making progress on building and operating a pilot interim storage project, as well as a permanent repository.

The White House said the proposal is aimed at curbing a growing number of lawsuits against the federal government for failing to take waste from utilities that generate nuclear power. The government signed contracts in the 1980s to take the waste but failed to do so. “The sooner that legislation enables progress on implementing a nuclear waste management program, the lower the ultimate cost will be to the taxpayers,” the administration wrote.

The administration is seeking about $1 billion for the Nuclear Regulatory Commission, the bulk of which the agency would recover through fees from applicants that are seeking or hold licenses. The NRC did not seek additional funds to review the Yucca Mountain project. The agency is arguing in federal court that a lack of appropriated funds is preventing a review of DOE’s application to build the Nevada facility (Greenwire, March 28).

Funding for the Federal Energy Regulatory Commission would remain at about $305 million.

But the president’s budget proposal called for an investment of $153 million in research and development of “smart grid” technology to modernize the country’s aging electric grid, site and plan new power lines, and secure the system against cyberattacks. An additional $80 million would be directed to the Office of Energy Efficiency and Renewable Energy to help usher in more renewables onto the grid.

R&D

Obama’s proposed budget continues his strong support for clean energy research and development, focusing on accelerating breakthrough technology to the marketplace. Most funding requests remain at about the same level as Obama’s fiscal 2013 budget proposal.

“To compete in the 21st century economy and make America a magnet for jobs, the budget invests in American innovation, reviving our manufacturing base and keeping our Nation at the forefront of technological advancement,” a summary of the budget said.

The budget would advance the administration’s strong focus on innovation and R&D for advanced vehicles and biofuels. The budget would provide $575 million for advanced vehicles technologies, a 75 percent boost over the 2012 enacted level, including efforts to reduce the price of electric vehicles. Biofuels and biorefineries would receive a 42 percent increase to $282 million to develop and demonstrate conversion technologies to produce cellulosic ethanol and other advanced biofuels, such as algae-derived biofuels. Overall solar, wind and other renewable energy budget levels would each receive about a 50 percent budget increase from current enacted levels under the proposed budget.

Advanced manufacturing is an important focus of the Obama administration, and the budget would provide $365 million in overall DOE funding to expand innovative manufacturing processes and advanced industrial materials, plus an additional $5 billion in tax credits and a one-time $1 billion investment to launch a network of up to 15 manufacturing innovation institutes.

DOE’s agency charged with developing “game-changing” energy technology, the Advanced Research Projects Agency-Energy (ARPA-E), would receive $379 million under the proposed budget, a 35 percent increase from current levels under sequestration and slightly higher than last year’s administration request.

The Office of Science, the lead agency for fundamental scientific research for energy and the physical sciences, also would see a 5.7 percent increase to its budget from 2012 levels under sequestration to $5 billion. That is level with Obama’s fiscal 2013 request. The budget would boost research on all fronts, particularly for advanced computing and fusion energy with about 10 percent budget increases, but slightly cuts laboratory infrastructure. The budget also includes funding for new Energy Frontier Research Centers, which will undergo a recompetition of current grants in 2014, and Energy Innovation Hubs.

The budget would cancel the ultra-deepwater and unconventional natural gas and petroleum research fund again, although Congress continues to show support for the program.

Overall, Obama’s proposed budget would increase nondefense research and development investment by 9 percent above 2012 levels.

The budget would also make permanent important tax incentives for research and development, along with renewable energy and energy efficiency.

Filed Under: News, Press Releases Tagged With: , , , , , ,

AEA Statement on White House Budget Proposal

April 10, 2013 by Leave a Comment

President Barack Obama released his FY 2014 budget on Wednesday, a $3.77 trillion plan with a $744 billion deficit. AEA President Tom Pyle released the following statement in response to the energy provisions included in the White House budget:

“Now months overdue, President Obama’s budget represents the administration’s desire to double down on bad energy policy. The same week that the U.S. Comptroller General identified scores of fragmented, duplicative and wasteful renewable energy programs, the Obama budget calls for even more spending on these and other initiatives, including permanent taxpayer-funded subsidies for century-old industries like wind and solar. He continues his effort to incorporate punitive and discriminatory tax measures for oil and gas producers into the tax code, while renewing his effort to poach mineral royalties owed to U.S. taxpayers to fund his green energy schemes without opening new lands for exploration and development.

“Conspicuously absent from the White House budget is any mention of the Keystone XL pipeline. Now on a four-year delay despite numerous environmental impact studies and a new route that avoids sensitive areas, the failure to permit this critical infrastructure project is a daily reminder of the administration’s rejection of commonsense solutions to meet America’s energy needs.  Meanwhile, the President calls for fast-track permitting for renewables, ostensibly to hasten deployment of electricity generating facilities that don’t produce energy when Americans need it most. It’s a late budget full of lousy ideas, recycled to appear fresh and sensible in hopes that the American people will forget the failures of the past four years, higher gasoline prices, skyrocketing electricity rates, bankrupt renewable firms, and billions in wasted taxpayer money on politically connected industries.”

 

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Filed Under: News, Press Releases Tagged With: , , ,

In the Pipeline: 4/10/13

April 10, 2013 by Leave a Comment

Now that would be a mandate we could all get behind. Denver Post (4/8/13) reports: “The officials from rural cooperatives and rural counties called the bill ‘a war on rural Colorado.’…’I own a bar. I’d like you to pass a law that everyone has to drink 25 percent more. Everyone is feathering their own nest,’ Moffat County Commissioner Tom Mathers said.” 

Homer 

 

Well gosh, we didn’t realize anyone was willing to have a reasonable debate about Keystone. Bloomberg (4/9/13) reports: “The evidence is so overwhelming that railroads are far less safe than pipelines, that it would be a serious mistake to use these recent spills to say that Keystone is unsafe,” he said. Brookings is a Washington-based nonprofit that says it supports economic and social welfare and a strong American democracy.

 

Maybe we’ve been wrong about Keystone. Maybe the Canadians really do deserve what the Obama crew has been giving them. International Climate Science Coalition (4/9/13) reports: “But promoting climate alarm in Canada’s most important trading partner, as Alberta Premier Alison Redford did this afternoon at the Washington DC-based Brookings Institute, is a public relations blunder of the first order.”…“The ultimate aim of climate activists is no less than to entirely terminate our use of hydrocarbon fuels such as coal, oil and natural gas,” explained Harris. “So, it is a disastrous strategy for a province that derives most of its income from those resources to support a movement that is trying to kill the market for the same resources.”

 

It makes you realize those ads for California tourism on TV are really just a pathetic, last-ditch effort to have a single positive trend in their economy. Daily Caller (4/9/13) reports: “A federal judge sided with environmental groups on Monday and ruled that the Obama administration wrongfully issued oil leases in Monterey County, Calif., by not considering the environmental impacts of hydraulic fracturing.”

 

No good way to put this: the Navy has given a star to the wrong man. Real Science (4/10/13) reports: “The military officer charged with monitoring North Korea at a time when the rogue nation is threatening to unleash missile attacks worldwide has used a Senate hearing to double down on his claim that it is global warming that is the real danger… Navy Adm. Samuel Locklear III originally caused a stir just weeks ago when in a speech to scholars at Harvard and Tufts universities in Cambridge, Mass., he said the climate change factor should be the focus of American concern.”

 

You heard him, folks. Start to budget for energy prices that are triple what they are now. And you can’t print and borrow your way out of this; those privileges are reserved for Beltway Royalty. ThinkProgress(4/8/13) reports: “If we start really squeezing down on carbon dioxide over the next few decades, well, that could double; it could eventually triple…. I think inevitably if we squeeze down on carbon, we squeeze up on the cost, it brings along with it a push toward efficiency; it brings along with it a push towards clean technologies in a conventional pollution sense; it brings along with it a push towards security. Because after all, the security issues revolve around carbon-bearing fuels.”

 

We run this under the assumption that you’re already seated in a safe place. GAO (4/9/13) reports: “We found that federal support for renewable energy is fragmented, as 23 agencies and their 130 subagencies implemented hundreds of initiatives in fiscal year 2010.5 We could not comprehensively assess the potential for overlap or duplication among these nearly 700 renewable energy initiatives, because existing agency information was not sufficiently complete to allow for such an assessment.”

 

Sally’s a boss. She puts crude oil on her Cheerios in the morning. However, we’ve yet to see the press release from Sierra Club announcing a “Beyond Jewells” campaign. 

Jewell_Hearing

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