News

Patriotism is the last refuge of a scandal — T. Boone ‘rent seeker’ Pickens wants to steal your money for the good of the country San Diego Tribune (2/17/11) reports: Q: How did you become a born-again alternative energy proponent? A: This is all about America. I somehow felt that the mission had been given to me because I understood the issue. It is a security issue; you are funding both sides of the war. The money you pay for oil, some part of that goes to the Taliban. Q: Critics claim that much of your alternative energy plan is self-serving, given that companies controlled by you — Mesa Power with its wind farm initiative and Seal Beach-based Clean Energy Fuels, a natural gas fueling station company — stand to benefit hugely from private contracts and government subsidies. A: I’ve invested in what I believe in. I’ve spent $82 million on trying to get an energy plan, and people know that is the case. If I’d set out to make money, probably the best thing I could do is not spend $82 million dollars.

Sierra Club’s Four Step Plan: Step 1: End Coal Step 2: End Natural Gas Step 3: Reduce Human Population Step 4: Rejoice Politico (2/16/11) reports: Whatever happened to the romance between the environmental lobby and natural gas…After years of basking in a green glow as the cleanest fossil fuel and a favorite short-term choice to replace cheap-but-dirty coal, gas now finds itself under attack from environmentalists, filmmakers and congressional Democrats — and even from some scientists who raise doubts about whether its total emissions are as climate-friendly as commonly believed…Case in point: the Sierra Club, whose former executive director, Carl Pope, has spoken warmly in recent years about gas as an alternative to coal in power plants. Now, the group is considering calling for natural gas to be phased out by 2050 — about 20 years after it wants coal eliminated…While the group said it hasn’t changed its mind about gas vs. coal, Deputy Executive Director Bruce Hamilton says he and other Sierra Club leaders are “trying to be clearer in our communication. … We want people to know that natural gas is not a clean fuel and it needs to be cleaned up before it can be an acceptable fuel.”

New Orleans judge put Obama Administration on notice; 30 days to make a decision on deep water drilling permits Wall Street Journal (2/17/11) reports: A federal judge in New Orleans ordered the Obama administration to decide within 30 days whether to grant a set of five permits for deep-water drilling projects in the Gulf of Mexico, saying the administration’s inaction on the requests is “increasingly inexcusable.”…The action by Judge Martin Feldman of the U.S. District Court for the Eastern District of Louisiana marks an extraordinary turn in the legal battle between the oil industry and Interior Secretary Ken Salazar over how quickly offshore drilling should be allowed to resume following last year’s oil spill involving BP PLC that killed 11 workers and which ranks as the worst such spill in U.S. history…The judge’s ruling comes as Republicans in Congress are ratcheting up pressure on the Obama administration to allow more drilling. It also comes just weeks after the same judge accused the Obama administration of “determined disregard” of his order last June overturning a ban on offshore oil and gas drilling that the administration imposed shortly after the BP spill…In his latest decision, issued Thursday, Judge Feldman ordered the Interior Department to decide within 30 days whether to approve five permit applications sought by London-based Ensco PLC and submitted to the department as long ago as last April.

No Joke: The latest idea to make EV’s cost competitive in the car market — take the battery out Reuters (2/17/11) reports: The report found that amidst the many technical, regulatory and market challenges that remain between today’s nascent industry and President Barack Obama’s call for 1 million electric cars on U.S. roads by 2015, the main barrier is cost of EVs — and not surprisingly it’s the batteries’ fault…“Until the cost per kilowatt-hour (kWh) [of a battery] dramatically decreases (to reach approximately $300/kWh), consumer uptake is likely to be limited to a dedicated and niche consumer market segment,” the report states.  The problem is, most EV batteries nowadays cost at least $450 per kWh — and that’s after decades of researchers making significant efforts to lower the cost. The limits of today’s battery chemistries just might have mostly been reached…The solution, Accenture suggests, is “disaggregating” battery costs from the car, usually via leasing either the car or the battery itself. Not only would that bring down vehicle costs, but it would help deal with thorny warranty issues, given EV batteries will likely end up having a lifespan of 10 years or less.

California environmental math transcends space and time — and all other natural laws Reuters (2/17/11) reports: Under California’s new carbon trading system, big polluters will be paying through the nose for the privilege…And so will everyone else in the state…The basic premise is “no pain, no gain” — when the price starts to pinch, that will spur innovation and California will lead the world in green technology. Or at least that’s the plan…The Carbon Rush officially gets underway next year. Power plants, factories and other companies will have to obtain an “allowance” permit for every ton of carbon dioxide they produce. Allowances will be sold at state auctions and on an open market…Most of the financial sting is being backloaded. The program begins with a big giveaway, with the state handing out most permits free — a “soft start,” is how state officials term it…This new market will rapidly expand, beginning at just under $2 billion and rising to nearly $10 billion in 2016, according to estimates from Point Carbon, a Thomson Reuters company focusing on carbon markets.

Behind a rock and permit: If green tape is defunded, then no permits can be issued for work New York Times (2/17/11) reports: Building off an argument originally put forward by Republicans and industry groups in opposition to EPA’s climate regulations on stationary sources, Democrats yesterday claimed that defunding its regulations now would result in the halted construction projects and backlog of permits that opponents of the regulation feared…Pulling funding for the initiative, Rep. Henry Waxman (D-Calif.) argued, would not overturn the requirement to net the permits. Instead, it would just halt “dozens of major [construction] projects” and cost thousands of jobs, he said…”Members have different views about how to reduce pollution, but we should all agree that a multi-state construction ban is a terrible idea,” Waxman said…Last month, federal climate regulations went into effect that require large stationary sources — including power plants, refineries and cement kilns — to seek special air permits before proceeding with new construction projects or modifications to existing facilities that would result in substantial greenhouse gas emissions. In order to net these permits, local air regulators or federal EPA must be persuaded that the project will use the “best available control technology” to limit the facilities’ emissions.

We’re too late! Global Warming freezes wind turbines in New Brunswick. Anyone know Al Gore’s refund policy on carbon credits? National Post (2/16/11) reports: A $200-million wind farm in northern New Brunswick is frozen solid, cutting off a potential supply of renewable energy for NB Power…The 25-kilometre stretch of wind turbines, located 70 kilometres northwest of Bathurst, N.B. has been completely shutdown for several weeks due to heavy ice covering the blades…GDF SUEZ Energy, the company that owns and operates the site, is working to return the windmills to working order, a spokeswoman says…“We can’t control the weather,” Julie Vitek said in an interview from company headquarters in Houston, Texas. “We’re looking to see if we can cope with it more effectively, through the testing of a couple of techniques.”…She says the conditions in northern New Brunswick have wreaked havoc on the wind farm this winter….“For us, cold and dry weather is good and that’s what’s typical in the region. Cold and wet weather can be a problem without any warmer days to prompt thawing, which has been the case this year.

Obama Administration is getting ready to skin your cat — Clean Energy Standard is being prepared in the Senate Politico (2/16/11) reports: Senate Democrats are preparing energy legislation for the floor that includes the ‘clean energy’ standard sought by President Barack Obama, Majority Leader Harry Reid said Wednesday…Reid said he’s looking to Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) and ranking member Lisa Murkowski (R-Alaska) to hash out details on the plan which would increase the nations’ reliance on cleaner burning sources of energy, including solar and wind, and perhaps folding in “clean coal” and nuclear power…”There’s an agreement as I understand it between Chairman Bingaman and Sen. Murkowski on the standard, ” Reid said. “It’s not as high a standard as I’d like.” Reid said he wanted to fold the clean energy standard into a broader legislative package that includes a permanent extension of research and development tax credits for renewables and financial incentives for the deployment of a national smart grid

God created Earth in 7 days and the EPA gave Wyoming 9 days to save it New York Times (2/16/11) reports: The new Republican governor of Wyoming has filed a legal challenge to U.S. EPA’s decision to override states that were unable — or unwilling — to start requiring permits for the largest sources of greenhouse gas emissions. Wyoming Gov. Matt Mead argues that EPA didn’t give his state enough time to meet the new requirements before pushing the state aside and imposing a federal plan in its place. Though states often have three years to revise their permitting programs, EPA only gave Wyoming nine days before issuing a Dec. 22 rule that decided where federal intervention was necessary, Mead said in a statement…When the new regulations took effect on Jan. 2, EPA officials took over the responsibility of issuing greenhouse gas permits to power plants, large factories and other industrial facilities…”These rules strip our authority and primacy,” Mead said. “The state of Wyoming had the primary role in regulating air quality permitting and the EPA used unreasonable deadlines to take that away.”President Obama is a man of his word — new budget will expand the war on affordable energy; bonus handouts for the politically well-connected. Reuters (2/16/11) reports: As promised in his State of the Union Address, President Obama ‘s proposed 2012 budget continues his administration’s commitment to funding alternative energy and transportation research and development. The president aims to pay for some of his investments by jettisoning tax breaks for fossil-fuel industries worth billions every year…Exactly what the president is able to get out of a split Congress, and in particular a Republican-led House bent on slashing spending, remains to be seen. There might be at least one area of agreement between the president and Republicans, however: the Department of Energy (DOE) budget calls for $36 billion in new loan guarantee authority for the nuclear power industry, which combined with existing authority could help get six to eight plants built…The president is likely in for a big fight with Republicans when it comes to the big savings in his budget. He’s seeking repeal of “a number of subsidies and tax preferences available for fossil fuels,” the White House said, a move that would boost federal coffers by $3.6 billion in 2012. He also wants to cut the budget for the Fossil Energy Office by $418 million, or 45 percent…Overall, the White House proposes spending some $8 billion on clean energy-related topics, spread among a wide range of programs. A big chunk, some $3.2 billion, would go to energy efficiency and renewable energy programs. Nearly $600 million would fund investment in vehicle technologies.

I cannot think of any other industry that would shut down completely if government funding was pulled — mail would still go through with FedEx and the DMV doesn’t count Washington Post (2/16/11) reports: Democratic Sen. Dianne Feinstein says renewable energy projects across the country will be jeopardized if House Republicans are successful in scaling back a program that helps companies gain financing for solar, wind and geothermal plants, and transmission lines…The House is considering legislation to fund the federal government through Sept. 30. As part of their budget proposal, GOP lawmakers want steep cuts to a federal loan-guarantee program…Feinstein says the GOP’s effort, if successful, would halt dozens of projects around the country, many in the West. It would prevent the Department of Energy from finalizing any more loan guarantees, which help companies finance projects at lower interest rates…Her letter to senators of both parties was released to reporters Wednesday.

Intellectual Hubris: We don’t need more government money for energy research and development because the market will guide investment. Remember switchgrass? New York Times (2/16/11) reports: The new Republican chairman of a House energy and power subcommittee delivered a decidedly mixed verdict on President Obama’s energy policies on Wednesday. Representative Ed Whitfield of Kentucky – a state, he noted, that gets 92 percent of its electricity from coal – addressed an electricity forum convened by the National Association of Regulatory Utility Commissioners, a Washington-based organization of state public service commissioners…Talk at the meeting is that utilities do not know what federal environmental regulations they will be facing on carbon dioxide and other emissions. That may hinge in part on how aggressively the new Republican majority in the House seeks to hobble the Environmental Protection Agency’s rule-making…Mr. Whitfield made clear that he was lukewarm about some of the energy ideas that Mr. Obama has been stressing hard, like limiting those emissions, getting electricity from renewable sources and weaning the electric system away from its overwhelming reliance on fossil fuels. But he did agree with one of Mr. Obama’s priorities, increasing research and development funds for energy.

At $57,000 a pop, Tesla only needs 2,600 rent seekers to buy their car in order to meet revenue goals and I am confident they can find them in CA Bloomberg (2/16/11) reports: Tesla Motors Inc., the U.S. electric carmaker backed by Daimler AG and Toyota Motor Corp., said its revenue this year may rise as much as 50 percent because of higher demand for its rechargeable vehicles and battery packs…“We project revenue to increase about 40 to 50 percent in 2011, to $160 million to $175 million,” Deepak Ahuja, Tesla’s chief financial officer, said in a conference call yesterday…The company released annual results yesterday for the first time since its initial public offering in June, posting revenue of $116.7 million in 2010. Tesla’s forecast for this year exceeded the $152 million average estimate of six analysts surveyed by Bloomberg…Tesla, based in Palo Alto, California, said the fourth- quarter net loss widened to $51.4 million from $23.2 million a year earlier as it increased investment in the Model S sedan, its next all-electric model. Excluding some items, the loss was 47 cents a share, Tesla said in a statement. That compares with a 52-cent average estimated loss in a survey of four analysts…Tesla seeks to become the leader in battery-powered cars, aided by supply agreements with Toyota and Daimler. Along with development costs for the Model S, the company is also readying a former Toyota joint-venture factory in Fremont, California, that is to begin making the $57,400 Model S next year.

Sputnik Moment: Moscow embraces Arctic drilling while Washington D.C. prefers wood chips and switchgrass New York Times (2/15/11) reports: Earlier this month, Royal Dutch Shell postponed plans for drilling off Alaska’s Arctic coast, as the company continued to face hurdles from wary Washington regulators…The Russians, who control far more prospective drilling area in the Arctic Ocean than the United States and Canada combined, take a far different view…As its Siberian oil fields mature, daily output in Russia, without new development, could be reduced by nearly a million barrels by the year 2035, according to the International Energy Agency. With its economy dependent on oil and gas, which make up about 60 percent of all exports, Russia sees little choice but to go offshore — using foreign partners to provide expertise and share the billions of dollars in development costs…Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow’s openness to new ocean drilling, are now having similar discussions with Russia…New oil from Russia could prove vital to world supplies in coming decades, now that it has surpassed Saudi Arabia as the world’s biggest oil producer, and as long as global demand for oil continues to rise…But as the offshore Russian efforts proceed, the oil companies will be venturing where other big countries ringing the Arctic Ocean — most notably the United States and Canada — have been wary of letting oil field development proceed, for both safety and environmental reasons.

You don’t say — new report from GAO argues Interior Department has been derelict with managing and issuing leases; best part is that it’s costing ‘taxpayers billions’ Washington Post (2/15/11) reports: The investigators found that Interior Department agencies were unable to verify production levels…”Without such verification, Interior cannot provide reasonable assurance that the public is collecting its legal share of revenue from oil and gas development on federal lands and waters,” the report said…Congressional investigators have concluded U.S. management of oil and gas leases on federal lands and waters is the newest high risk area of the government – and may be costing taxpayers billions of dollars…The Government Accountability Office said the Interior Department doesn ‘t know whether it’s being shortchanged on oil and gas revenue that is one of the largest nontax sources of federal funds. Revenues totaled about $9 billion in the 2009 financial year…The GAO report, obtained by The Associated Press, said the Interior Department’s management of the leases and production has been beset by persistent problems in hiring, training and retraining staff…The National Commission on the BP Deepwater Horizon Oil Spill found that in addition to missteps by the three companies involved, government regulators lacked the authority, the resources and technical expertise to prevent the disaster.

Murkowski is trying again to open ANWR. This is a hardy perennial; she introduces it or something like it every Congress. This time she is clearly preparing the ground for when oil prices go through the roof. Alaska Dispatch (2/15/11) reports: Alaska Sen. Lisa Murkowski has introduced two measures that would allow oil production from the coastal plain of the Arctic National Wildlife Refuge, a 1.5 million-acre swath that for decades has been a bone of contention between developers and environmentalists…ANWR, which totals more than 19 million acres, has long been protected by federal law from oil exploration and development but there are frequent attempts to pass bills that would lift the ban in the so-called 1002 area, or the coastal plain. Congress approved drilling in the coastal plain in 1996 but the measure was vetoed by President Bill Clinton…One of Murkowski’s bills would require the government to lease 200,000 acres of the coastal plain within two years of the bill’s passage. Infrastructure — including roads, drill pads, airfields, pipelines and other facilities — would be limited to 2,000 acres. Revenue from oil production would go to environmental mitigation along with federal deficit reduction, and part of the revenue also would pay for renewable and alternative energy development as well as environmental programs, according to a press release…The second bill wouldn’t let oil companies onto the refuge but would allow oil and gas production from the coastal plain through use of directional drilling from facilities on adjacent state land…”While this compromise is not my first choice,” Murkowski said in a prepared statement, I believe it’s a reasonable alternative that should silence any potential controversy over ANWR development.”

Put that in your pipe and smoke it — green tape delays with Keystone XL increase production costs from $1 to $13 billion Wall Street Journal (2/15/11) reports: TransCanada Corp. raised the cost estimate of a controversial oil-pipeline expansion by $1 billion to $13 billion and said it expects regulatory delays…The Calgary pipeline company said it expects a decision by the U.S. by “mid-to-late 2011,” citing “a heightened political environment and opposition to the project.” Previously, the company said it expected the U.S. State Department to decide by this summer on a new oil route that would boost volumes flowing south from Canada…Environmental groups as well as U.S. state and federal lawmakers have expressed opposition to the 1,700-mile pipeline-expansion project that would bring an additional 1.1 million barrels of oil a day to facilities in Nebraska and Oklahoma, and then south to the U.S. Gulf Coast, home to an extensive refining-and-port network. The project, dubbed “Keystone XL,” would help release the crude-oil bottleneck at the key U.S. supply depot in Cushing, Okla…Opponents have expressed concern about the higher environmental toll of oil-sands petroleum produced in Canada, as well as the potential for spills from the proposed pipeline.

We see your 15 and raise you 30: Sen. Vitter wants 15 deep-water permits if President Obama wants his nominee approved Fuel Fix (2//15/11) reports: Sen. David Vitter is pulling a page out of his Louisiana colleague’s playbook — for a second time — by vowing to block action on one of President Barack Obama’s nominees in a bid to speed up government approvals of offshore drilling projects…Vitter today announced his plan to stall Obama’s nomination of Dan Ashe to head the U.S. Fish and Wildlife Service at the Interior Department — a tactic similar to the strategy employed by Sen. Mary Landrieu, D-La., last year. Vitter said he wouldn’t release his hold on Ashe’s nomination until the Interior Department issues at least 15 deep-water drilling permits…Vitter also is blocking swift action on the president’s nominee for chief scientist at the National Oceanic and Atmospheric Administration… “Louisianians are desperate to get back to work,” Vitter said in a statement. “Filling those jobs is my top priority, and that has to come first. I love fish and wildlife, but my top priority is to stop the economic devastation caused to humans by the moratorium.”…Vitter said he is angry about what he calls a de facto moratorium on deep-water drilling that is stalling projects even though the administration lifted its official ban in October.

What you will agree to when you’re down and out; auto manufacturers inform Rep. Issa that fuel economy regulations are expensive Reuters (2/15/11) reports: While industry touts cleaner burning engines and is more serious about batteries for hybrids and electric plug-ins, car companies are seeking to slow or soften any requirement to nearly double efficiency by 2025 to 60 miles per gallon. Two years ago, struggling automakers, some receiving billions of dollars in taxpayer aid, agreed with the Obama administration to raise average fuel efficiency 40 percent to 35.5 miles per gallon by 2016, the largest jump ever. But they are drawing the line at more aggressive mandates, making it their top lobbying priority in Washington as they emerge from a four-year slump that devastated U.S. production. “Fuel economy regulations are by far the most expensive regulations that automakers face,” Shane Karr, vice president of government affairs for the Alliance of Automobile Manufacturers, said in a January letter to House Oversight Committee Chairman Darrell Issa.

So where are you gonna work after you follow in Jimmy Carter’s footsteps, Mr. President? Let me guess…the Center for American Progress. Obama’s budget the blueprint for his war on affordable and reliable energy Time (2/15/11) reports: It’s Budget Day in Washington, when policy wonks break out the calculators that have the “trillions” button and decide whether we’ll have six more weeks of winter, or six decades more of crippling budget deficits. Actually, today is the day President Obama released his proposed budget for fiscal year 2012, which you can explore in all its eye-glazing glory over here. Boring or not, though, it ‘s worth going through Obama’s proposals for the Environmental Protection Agency (EPA) and the Department of Energy (DOE), if only to see the areas the President really wants to save as he works to win the future…First the EPA—download a PDF of the budget here. Overall the EPA faces a 12.6% cut, with $9 billion allocated for fiscal 2012, down from the $10.3 billion that had been allocated for fiscal 2010, which represented the agency’s biggest ever budget. That means the White House is accepting some tough cuts, while allowing a few programs—including money for greenhouse gas monitoring and regulation—to rise.

American’s don’t need subsidized energy bills, what they need is affordable and reliable energy Wall Street Journal (2/15/11) reports: A proposed $2.5 billion cut to a program helping low-income Americans heat or cool their homes could leave some states out in the cold…The cuts would shrink spending on the main portion of the Low Income Home Energy Assistance Program to $1.98 billion, from about $4.5 billion in the current fiscal year. The proposed budget would set aside an additional $590 million in contingency funds to distribute as need arises, an amount unchanged from the last budget. But because of a quirk in the funding system, some states would see their fixed share of the funds fall by much more than half, while others are protected from steep declines. Arizona, Florida, Georgia, Nevada and Texas—states where some low-income residents depend on the money to cool their homes during scorching summers—all would lose more than 75% of funding, according to the Congressional Research Service, while funding for Iowa, New York and Wisconsin would drop by less than half.

Obama, this lesson is free: when you tax a company, that company transfers the tax to the consumer. In this case, a tax on the fossil fuel industry will result in higher monthly energy bills New York Times (2/14/11) reports: The president once again asks Congress to do away with billions in tax breaks for fossil fuel interests, over the outcries of the oil and gas industry…The request deals with policies that involve some of the sharpest disagreements between the administration and Congress, which will debate it line by line… Spending at the Department of Interior would remain at roughly the same level as past years, but with a major increase, to $358 million, for environmental and safety enforcement for offshore oil and gas drilling, to be offset largely with royalties and fees from oil companies…The budget request represents an increase of $119 million, or 50 percent, from 2010 and is intended to address weaknesses revealed after last year’s BP spill in the Gulf of Mexico. The additional money would be used to hire new oil and gas inspectors, to more vigorously oversee drilling activities and to process drilling permit applications more efficiently.

Hold your breath and hide your wallet: Employment Prevention Agency awarded $43 million to regulate GHG’s Bloomberg (2/14/11) reports: The president’s plan calls for about $43 million in new funding for the rules aimed at curbing carbon-dioxide emissions blamed for climate change, according to EPA Administrator Lisa Jackson…“We need to get started,” Jackson told reporters on a conference call today. “Businesses are waiting right now to make investments, and one of the things they need to know is how we will be addressing carbon pollution going forward.” ..The total EPA budget for the rules, which took effect last month, is about $190 million, including costs for state permit programs, according to Jackson. The EPA opposes any effort in Congress to bar or delay the regulations, she said.

Wyoming’s state motto is ‘equal rights’ but at the moment the governor is more concerned with states’ rights in a legal battle with the EPA Bloomberg (2/15/11) reports: Wyoming has filed a legal challenge to the U.S. Environmental Protection Agency’s regulation of greenhouse gas emissions in the state…State officials say the EPA gave Wyoming just nine days to come up with a state plan to regulate greenhouse gases before a Dec. 22 deadline, and that wasn’t enough time…Without state rules, the EPA stepped in Jan. 2 and has taken charge of issuing greenhouse gas permits in the state since then…A two-tiered, federal-state permitting process is now in effect for any large, new industrial facility, such as a coal-fired power plant, that emits large amounts of carbon dioxide or other greenhouse gas, said Renny MacKay, spokesman for Gov. Matt Mead…”If somebody wants to build a facility, they come to Wyoming and get permitting for everything but greenhouse gases. For greenhouse gases, they have to go to EPA,” MacKay said

Pelosi, who said natural gas was a “good alternative” to fossil fuels, apparently thinks we power our cars with switchgrass, too The Hill (2/15/11) reports: Obama’s FY 2012 budget request calls for eliminating a series of oil and gas industry tax breaks. The Department of Energy estimates that such a repeal will save $3.6 billion in fiscal year 2012 and a total of $46.2 billion during the next decade…But Obama’s proposal faces an uphill battle in Congress. Republicans argue that any effort to eliminate oil industry tax breaks would harm the economy and result in massive job losses…Capitol Hill Democrats have given repeal of oil industry tax breaks a starring role in their political messaging on the budget, arguing that Republicans should support cutting the incentives if they truly want to help reduce the deficit. Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) have both made high-profile calls in recent days for Republicans to embrace the proposal.

Part One: Obama never let the Gulf crisis go to waste; despite lifting the moratorium, no permits have been issued, effectively shutting down oil and gas production in the Gulf The Hill (2/13/11) reports: Sen. Mary Landrieu (D-La.) slammed what she called a “de facto moratorium” on drilling in the Gulf of Mexico late Saturday night amid news that a major shallow-water driller filed for bankruptcy. Landrieu, an outspoken critic of the Obama administration’s offshore drilling policies, blamed the Interior Department’s “excruciatingly slow release of oil and gas permits” for the company’s hard times. “How many more rigs have to leave and how many more businesses have to close before it realizes the havoc the de facto moratorium is wrecking on the Gulf Coast? When these businesses close, people lose good paying jobs, our communities erode and our unique culture disappears,” Landrieu said in a statement…The Obama administration imposed a moratorium on deepwater drilling in the Gulf of Mexico in the aftermath of last year’s massive oil spill. The moratorium has since been lifted, but Landrieu and other drill-state lawmakers say drillers are operating under a “de facto moratorium” because no deepwater drilling permits have been issued.

Part Two: Obama’s war on affordable and reliable energy claims new casualty and along with it: tax revenue and jobs. Wall Street Journal (2/12/11) reports: Seahawk was “forced to seek strategic alternatives only after an unprecedented decline in the issuance of offshore drilling permits following the Macondo blowout,” Mr. Stilley said, referring to the BP well that blew out on April 20, killing 11 workers and triggering the worst offshore oil spill in U.S. history…Seahawk Drilling Inc., one of the largest operators of shallow-water rigs in the Gulf of Mexico, on Friday said it would seek bankruptcy protection and sell its assets to a competitor, blaming the Obama administration for a crippling regulatory environment in the aftermath of the BP PLC oil spill…Seahawk’s assets will be acquired by Hercules Offshore Inc., in a cash and stock deal worth about $100 million. The cash component will be $25 million but could be upped another $20 million if needed to pay Seahawk’s debt. Hercules will also provide the seller 22.3 million shares of common stock, valued at $3.36 per share. The number of shares would be reduced, however, if more cash is required…The deal is subject to bankruptcy court approval…The deal represents the second significant consolidation among U.S. rig contractors in a week, following Ensco PLC’s acquisition of Pride International on Feb. 7

It’s hard to be caustic when the subject matter is so somber — Oil companies look to other parts of the world for work Financial Times (2/11/11) reports: When Michael Bromwich, head of permitting for the Gulf of Mexico, comes to Texas oil country on Friday, the message the industry hopes to deliver is that deepwater drilling will continue – with or without the US…Last year Chevron, a lead investor in the Gulf, said it acquired acreage in nine major deepwater areas. This year it will drill in deepwater off China, Australia, West Africa, the UK, Brazil, and, if permitted, the Gulf. Bobby Ryan, Chevron’s vice president for Global Exploration, explains: “Deepwater is a major component of our exploration program. The only place we are not drilling is the Gulf of Mexico.”… Indeed, he says that every day he gets a drilling report from the Gulf. The email reports no exploration wells are being drilled and no development wells are being drilled. He deletes it: “I never thought I’d reach a point in my career when I’d see that for the Gulf of Mexico.”

Valentines Day: China will spend the next year trying to figure out how much love they can get from Europe in the form of solar subsidies Bloomberg (2/14/11) reports: China, the world’s biggest electricity consumer, is figuring out how to capture a larger share of the solar-energy market without losing money…The government will spend at least a year studying Europe’s system of paying above-market prices for solar power before deciding if there’s a better way to spur clean-energy plants across China, said Wu Dacheng, an adviser to national power regulators. The delay has stalled projects planned on Chinese soil by developers such as First Solar Inc. of the U.S.…“We need to learn from European countries like Germany” that pay subsidized rates to spark solar-panel installations, Wu, vice chairman of the Solar Photovoltaic Committee of China’s Renewable Energy Society, said in an interview….Europe, which attracted more than $65 billion in solar plant investment in 2010, is providing lessons for China. Germany, the largest panel market, together with Spain and France carried out four unscheduled subsidy cuts in 2010, trying to slow a torrent of projects by developers and speculators.

Follow the money: Small wind rapidly expanded in 2009, but in 2008 Congress expanded tax credits for these bite-sized turbines MSNBC (2/11/11) reports: “Small wind” is getting big. The market for these pint-sized windmills grew 13 percent in the United States in 2009, the latest year for which figures are available, to $82.4 million. With that boost, the total capacity of small turbines in the U.S. now exceeds 100 megawatts. That accounts for 3 percent of wind energy here, which might not seem like much, but over half that capacity has been built in just the last three years….Small tower turbines have been stippling Midwest horizons for at least 80 years. Interchangeably called “small wind” and “residential wind,” the category covers tower- and roof-mounted turbines with the capacity to generate anywhere below 100 kilowatts of energy. They’re usually used to help power a home, a farm, or, in some cases, a corporate campus. The modern small-wind craze, however, traces back to October 2008, when Congress expanded tax credits for the turbines—first as part of the Emergency Economic Stabilization Act and later as part of the American Recovery and Reinvestment Act. The laws allow consumers to write off 30 percent of the total purchasing and installation costs of any small-wind turbine—tax credits that had been previously capped at $2,000

We love Mike Johanns, but at some point you have to wonder: what in the world is he thinking about? E&E News (2/11/11) reports: Thirty House members from both parties yesterday urged Secretary of State Hillary Rodham Clinton to sign off on a controversial $7 billion pipeline that is poised to nearly double U.S. imports of crude from the Canadian oil sands…The Keystone XL pipeline remains under review at the State Department amid intense lobbying efforts by both the oil industry, which touts the project’s job-creation value as well as its role in diminishing imports from the Middle East, and environmentalists who decry the increased emissions from the production of oil sands crude…Members of Congress on both sides of the aisle are choosing sides on the pipeline in growing numbers, with yesterday’s letter arriving as the latest volley from Capitol Hill…”As the price at the pump continues to climb, America needs to look to reliable oil producing countries that do not force us to compromise our ideals and national security,” the group of 30 wrote. “Canada is already our largest supplier of oil, a responsible and reliable partner in energy, and a friendly and democratic government that shares the values and ideals of the United States.”

Someone as poetic as Oettinger deserves a round of applause or at least some free carbon credits Guardian (2/10/11) reports: He said the tougher target would force industries to move to Asia. “If we go alone to 30%, you will only have a faster process of de-industrialisation in Europe,” he said, citing the steel industry as one of the likely casualties. “I think we need industry in Europe, we need industry in the UK, and industry means CO2 emissions.” Moving to the higher target would cost about €81bn (£68.4bn) a year by 2020, or 0.54% of GDP, according to the European commission’s research, compared with a cost of €48bn for the 20% goal. But the move would quickly yield benefits including more green jobs, better health outcomes from less air pollution, and would make reducing emissions beyond 2020 much easier…”[It shows] the best thing for CO2 emissions is a crisis, so do we need longer and deeper crises?” he asked. “Look at our deficit – we need growth, and we need more industry.”

Take note: Author says there is a lot of excitement about EVs, but only lists governments and rent seekers. I wonder, how excited is the consumer? New York Times (2/10/11) reports: There sure is a lot of excitement percolating around plug-in hybrid and electric cars these days. Chevrolet’s Volt and Nissan’s Leaf are the talk of the car world, city governments are installing battery chargers, and the Obama administration has promoted them. Even the TV commercials for the battery chargers are cool…There are some skeptics, however. And on Thursday I caught up with one of them, William M. Colton, ExxonMobil’s vice president for corporate strategic planning, who is definitely not a fan. A reverse skeptic could say, sure, why would ExxonMobil say nice things about a car that would displace gasoline? That’s certainly true, although Exxon Mobil is getting more and more invested in natural gas, which would indirectly help fuel electric and hybrid cars because it is an important fuel stock for the electric utilities that ultimately charge the car batteries.

Bio-fuel is not only uneconomical, but also drives up food prices for the world’s poor as an unintended consequence (Part 1) Washington Post (2/11/10) reports: Each year, the world demands more grain, and this year the world’s farms will not produce it. World food prices have surged above the food crisis levels of 2008. Millions more people will be malnourished, and hundreds of millions who are already hungry will eat less or give up other necessities. Food riots have started again…Nearly all assessments of the 2008 food crisis assigned biofuels a meaningful role, but much of academia and the media ultimately agreed that the scale of the crisis resulted from a “perfect storm” of causes. Yet this “perfect storm” has re-formed not three years later. We should recognize the ways in which biofuels are driving it…Demand for biofuels is almost doubling the challenge of producing more food. Since 2004, for every additional ton of grain needed to feed a growing world population, rising government requirements for ethanol from grain have demanded a matching ton. Brazil’s reliance on sugar ethanol and Europe’s on biodiesel have comparably increased growth rates in the demand for sugar and driven up demand for vegetable oil.

Ethanol is the leading cause of increased food prices in the U.S. and it’s not even a net positive energy source (Part 2) New York Times (2/9/11) reports: Reserves of corn in the United States have hit their lowest level in more than 15 years, reflecting tighter supplies that will lead to higher food prices in 2011. Increasing demand for corn from the ethanol industry is a major reason for the decline, according to federal officials…The Department of Agriculture reported Wednesday that the ethanol industry’s projected orders this year rose 8.4 percent, to 13.01 billion bushels, after record-high production in December and January…That means the United States will have about 675 million bushels of corn left at the end of the year. That is about 5 percent of all corn that will be consumed, the lowest surplus level since 1996…Corn prices have already doubled in the last six months, rising from $3.50 a bushel to more than $7 a bushel.

History repeats: Remember Range Fuels from yesterday? Well, today Ineos Bio broke ground on a new cellulosic ethanol plant. New York Times (2/10/11) reports: There are myriad routes to making car fuel from waste, using mix-and-match technologies assembled in novel ways, but none has worked yet on a commercial scale. On Wednesday, Ineos Bio, the subsidiary of a major international chemical firm, broke ground on a plant that aims to use yet another combination…The Ineos concept has a leg up over some other approaches in that it anticipates three revenue streams. The factory will get paid for taking in plant waste or possibly household garbage and will produce electricity as well as ethanol at a huge savings in carbon dioxide output…The plant, near Vero Beach, Fla., adjacent to an Indian River County landfill, will begin with plant waste, including palm tree leaves, and will gasify it. This is a common technology that involves heating material in a chamber with a controlled amount of oxygen. It produces carbon monoxide and hydrogen, both fuel gases, and carbon dioxide.

Gaming the system: Government Electric’s wind farms taking advantage of small developer regulatory loopholes, Idaho moves to block amid higher electricity rates Idaho Statesman (2/10/11) reports: These utilities contend sophisticated, well-financed developers such as General Electric Co. are breaking up their large wind farms into small, 10-megawatt projects so they can qualify for the better prices. The utilities say the big developers essentially are gaming a system originally designed to help small, independent power producers…Idaho Power said it has been overwhelmed by these fragmented projects and says they are contributing to higher costs for its customers. The utility also estimates it could have 1,100 megawatts of wind power on its system within just a few years — more than it needs during low-usage days

Let’s compete with China and develop natural resources: PetroChina buys $5.4 billion stake in Canadian shale gas BBC (2/10/11) reports: The Cutbank Ridge deal marks a further step in a developing energy relationship between China and Canada…PetroChina has made other investments in Canadian natural resources…It took a 60% stake, costing $1.7bn, in two projects owned by Athabasca Oil Sands in 2009…Many in the oil and gas industry see so-called unconventional gases as an untapped energy resource with great potential…However, the exploration of shale rocks for energy is a controversial subject for many…Environmental groups say that the process used to extract the gas is new and untested, and that the potential health effects on those who live in areas where shale gas extraction takes place are unknown.

Case study on Range Fuels: American taxpayers invested $162 million in a biofuel company and all they have to show for it is 4 million gallons of bio fuel, a closed plant and 4 employees Wall Street Journal (2/9/11) reports: Vinod Khosla stepped in with his hand out. The political venture capitalist founded Range Fuels and in March 2007 it received a $76 million grant from the Department of Energy—one of six cellulosic projects the Bush Administration selected for $385 million in grants. Range said it would build the nation’s first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million…The result has not been another Google. By the end of 2008 with no operational plant in sight, Range installed a new CEO, David Aldous. In early 2009, the company said production was not expected until 2010. Undeterred, President Obama’s Department of Agriculture provided an $80 million loan. In May 2009, Range’s former CEO, Mitch Mandich, explained that the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities. Whoops. Read IER’s Tom Pyle’s blog on Range Fuels.