News

Permitorium: Shell is the latest casualty fromthe war on affordable and reliable energy; EPA and DOE carry out Obama’smyopic  energy views while the consumer suffers high energy prices New York Times (2/3/11) reports: Shell CEO Peter Voser in anearnings call with reporters said the company would need to spend as much as$150 million without knowing whether it would receive needed permits from U.S.EPA and the Interior Department…"Despite our investment in acreage andtechnology and our work with the stakeholders, we haven’t been able to drill asingle exploration well," Voser said. "Critical permits continue tobe delayed, and the timeline for getting these permits is stilluncertain….The plan took a hit in late December when an EPA appeals boardremanded Shell’s Clean Air Act permits back to the company for revisions,faulting the agency’s analysis of the impacts of nitrogen dioxide emissionsfrom drill ships on the Alaska Native communities (Greenwire, Jan. 5)…Shell, which hasinvested more than $3 billion in its Arctic development plan, also awaitsdrilling permits from Interior…The company’s decision postpones explorationby at least a year in a region federal scientists believe could hold thenation’s second-largest oil and gas reserves after the Gulf of Mexico,

Smoke ’em if you got’em:  After failing to stick it to American families with a "carbonpollution" bill (read national energy tax), Al Gore enlists Don Draper torepackage his job killing (and pocket lining) agenda Politico(2/4/11)Is Al Gore revving up his deep-pocketed advertising apparatus? By thelooks of his latest hire – the “Elvis of advertising” – that wouldbe a big yes. Alex Bogusky, a founding partner of Crispin Porter + Bogusky andthe creator of the “Truth” campaign to fight teen smoking, is joining Gore’sAlliance for Climate Protection as creative director and chief marketingofficer…“The fight against global climate change requires innovative thinkingand bold strategies,” Gore said in a statement provided to POLITICO. “We arethrilled that Alex will bring his vision and passion to the organization, andare lucky to have someone so deeply committed to helping us find new ways tocommunicate the seriousness and solvability of the climate crisis.…Thisisn’t Bogusky’s first dance with Gore’s Alliance. In 2009, he created thegroup’s “Reality” campaign that took on “clean coal” technology, and includedTV spots directed by the Oscar-winning Coen brothers….Alliance officialsstressed that they’re not announcing a new ad campaign right now. But theyacknowledged the hiring was the “first step in the next phase” as the Gore-ledgroup taps into Bogusky’s contact list for help finding new ways to talk to thepublic about climate. “He’s reaching out to that whole world of talented adagency people,” Alliance CEO Maggie Fox told POLITICO’s Darren Samuelsohn. “Hewas one of them. He’s their peeps. Part of what we’re going to do is invitethem to join us in a very aggressive way.”

Subsidizeme because my business is inefficient and expensive or I’ll take my ball and gohome WashingtonPost (2/3/11) reports: Businesses respond to signals, not speeches. Highunemployment tells companies to hold off on production, and low interest ratestell companies to borrow, but State of the Union addresses don’t have the powerto tell companies to do anything. …So when the president says he’s committed togreen energy, that’s fine. But the U.S. isn’t giving alternative energycompanies the green light. We’re giving off something more like aruddish-yellow light, as if to say: Go ahead if you’d like, but proceed at yourown caution….Ask Eric Spiegel, CEO of Siemens USA, who told me his company isheld back by the United States’ reluctance to pass a carbon tax or makepermanent the solar tax credit. "If you don’t do anything on carbon andyou don’t have renewable energy standards or investment tax credit, everyutility company would go out tomorrow and build coal," he said.

Whatif Obama had an energy plan that created real jobs instead of jobs reliant ongovernment handouts?  Bloomberg(2/3/11) reports: President Barack Obama will back new tax incentives andgovernment financing to make buildings more energy efficient as a way to cutenergy costs and encourage job growth, according to an administrationstatement…Obama wants Congress to revamp an existing tax deduction forcommercial building upgrades to create a credit that would be more attractivefor owners and real estate investment trusts to “retrofit” properties,according to a White House fact sheet. The plan also calls for the SmallBusiness Administration to work with lenders to take advantage of higher loanlimits to promote energy efficient upgrades by businesses.

The administration says building and businessowners would save a total of about $40 billion a year by making their structuresmore efficient.

Reasonablerate of return might finally become the dominate consideration instead ofgovernment mandates for renewable energyCNBC(2/1/11) reports: President Obama laid out an ambitious goal in his latestState of the Union address: By 2035, America will get 80 percent of itselectricity from clean energy sources…Achievable? Maybe, if you consider thatObama’s expansive definition of clean energy includes nuclear and emerging cleancoal technologies, which many environmentalists don’t embrace as ways to combatgreenhouse gases…A less-obvious question is whether mutual fund investors willhave the patience to stick with green investing principles that have recentlyleft them in the red…The stocks of renewable energy companies, such as wind andsolar power providers, have been big losers. The Clean Edge Global Wind EnergyIndex, which tracks wind energy stocks, is down about 27 percent over the last12 months…That disappointment came as oil company stocks and the Standard &Poor’s 500 stock index both surged about 20 percent.

Whatmore do we need to say: biodiesel production collapse by 20 percent whengovernment subsidies expired. Reuters(2/3/11) reports: Biodiesel, still a money-losing proposition in the UnitedStates compared to oil-based diesel, is about to have its best year ever thanksto government tax credits and usage mandates…But it will take months for thebiodiesel industry to bounce back after being stranded last year, when thegovernment let its six-year subsidy expire. Biodiesel production fell 20percent in 2010 and was only half of 2008 output as plants across the countryclosed or slashed production…"It’s not like the industry flipped on theswitch and we’re all running at capacity now. It takes time for the markets toadjust," said Gary Haer, vice president, sales and marketing with theRenewable Energy Group in Ames, Iowa.

Notlost in translation: China understands the allure of the SUV; demand spikes andcar manufacturers can’t keep up – I think Al Gore just fainted. WashingtonExaminer (2/3/11) reports: Uh oh, this isn’t going to sit well with BigGreen environmentalists in the U.S. who absolutely hate the trucks andSport-Utility Vehicles (SUV) American buyers have loved for nearly twodecades…Automotive News China reports that Chinese automakers are gearing up tointroduce a whole new generation of SUVs in order to meet spiralling demand inthe world’s most populous country. And no wonder, what with SUV sales soaring40 percent in 2009 and doubling again last year…ANC’s Yang Jian characterizesthe growing demand among Chinese buyers for SUVs as a "stampede," andreports that four of China’s top domestic automakers are tooling up theirfirst-ever SUV offerings…"To get a glimpse of how strong that demand is,one only needs to look at the vehicles imported into China each year,"Jian said.."In 2010, China imported 650,000 vehicles of which 57 percentwere SUVs, according to the China Automobile Trading Co.," he said.

Themarket has spoken: wind installations were down 50% in 2010. The reason? AWEAsays uncertainty about long-term federal support of wind industry. AWEA(1/24/11) reports: New wind powered generating capacity installed in 2010 inthe US was roughly half that installed in 2009, but there is a fairly robustpipeline of new capacity currently under construction, the American Wind EnergyAssociation said Monday… AWEA attributed the falloffto uncertainty about long term federal policies in support of wind…Developersinstalled 5,115 MW of new wind powered generating capacity last year, comparedwith approximately 10,000 MW installed in the record year of 2009, and 8,500 MWin 2008, AWEA said in its new report.

Windtoo risky? Goldman Sachs says buy solar. Those government contracts and grantsmust have been approved.Bloomberg(1/24/11) reports: Solar-panel makers will avoid a “hard landing” in 2011 andforecast that the industry will expand by 13 percent, Goldman Sachs Group Inc.said…The New York-based bank recommended investors buy shares of First SolarInc., SMA Solar Technology AG and GCL-Poly Energy Holdings Ltd. because themarket is priced for a decline in demand this year, according to a researchnote published today…The increase in demand for photovoltaic generators will bedriven by declines in the prices of panels, government targets for clean powerand companies installing panels, Goldman analysts led by Mark Wienkes said inthe report.

Stillnot buying? Probably a good bet since China plans on reducing exports of rareearth metals used for wind and solar development.Bloomberg(1/25/11) reports: Inner Mongolia, which contains 75 percent of China’s rareearth deposits, said in Sept. 2009 that the province is considering building astrategic reserve on behalf of the central government. China cut its quota forrare earth exports by 35 percent in the first half this year to reducepollution and arrest a decline in domestic reserves…Inner Mongolia Baotou SteelRare Earth Hi-Tech Co. and other Chinese companies are preparing to stockpilesupplies from as early as 2011, Nikkei English News said on Oct. 28. InnerMongolia Baotou may invest as much as 3 billion yuan ($455 million) over afive-year period in reserves, the report said.

Thebeatings will continue until morale improves; Sen. Reid announces that energywill be his top priority this session.TheHill (1/24/11) reports: The introduction of theplaceholder bill indicates that energy will have a significant place in thisyear’s policy debate in the chamber, despite last year’s failed attempt to passa climate bill in the Senate. All the major players from last year’s climatetalks – Sens. John Kerry (D-Mass.), Joseph Lieberman (I-Conn.) andLindsey Graham (R-S.C.) – say they want to be involved in this year’senergy debate…Senate Energy and Natural Resources Committee Chairman JeffBingaman (D-N.M.), whose committee has jurisdiction over the issue, will be aco-sponsor of the placeholder legislation.

The“show me” state wants to know why they are paying more for the same amount ofenergy.KansasCity (1/24/11) reports: Depending on whom you believe,state lawmakers are about to slap Missouri voters in the face — or robthem blind…The Missouri Senate is poised to debate a resolution this week thatwould determine how and where certain utility companies can buy wind and solarpower. Jeff Davis was one of two commissioners, both Republicans, to voteagainst the new rule. He said that Missouri renewable energy companies weretrying to “stick up” consumers by forcing them to pay higher rates for theirproduct…“What you are witnessing here is an attempted train robbery ofconsumers,” Davis told a House committee that passed the resolution 8-3 onWednesday. “It will give the wind industry carte blanche to charge what theywant to.”

Sen.John Barrasso read IER’s Dan Kish’s editorial and calls out the NationalCommission on BP Oil Spill as a sham.TheHill (1/25/11) reports: The criticism Monday from Sen.John Barrasso (R-Wyo.) — the vice-chairman of the Senate RepublicanConference — comes two days before the leaders of the National Commissionon the BP Deepwater Horizon Oil Spill and Offshore Drilling will appear at apair of Capitol Hill hearings….“They weren’t experts. They weren’t experts onoil drilling, on the Gulf,” Barrasso said of the seven-member commission. “It wasa self-selected group that really opposes drilling in the Gulf, and they cameout with the recommendations that you would expect that group of people to comeup with. And those are all things that are going to make energy moreexpensive.”

Circulationof Elites: Carol Browner is heading for the exit after failing to cause energyprices to skyrocket with cap and tax. WallStreet Journal (1/25/11) reports: Carol Browner is leaving herposition as White House "energy czar," and a staff shake-up is likelyto eliminate her post altogether, according to Democrats familiar withevents…The czar position, and Ms. Browner herself, have been lightning rods forcritics of the president’s environmental-policy agenda and a reassurance to itssupporters, who liked having a top official in the White House devoted to theirpriorities… Ms. Browner led the administration’s effort to gather votes inCongress for legislation to limit emissions of greenhouse gases. The effortunraveled in the Senate last year, amid opposition from Republicans and someDemocrats fearful of its impact on energy prices and jobs.

Republicans appear to be growing some backbone, which as you mightexpect, bothers the Murkowski crew. Politico. Withthe backing of GOP caucus leaders, aides for House Energy and Commerce ChairmanFred Upton (R-Mich.) and Senate Environment and Public Works Committee rankingmember Jim Inhofe (R-Okla.) are seeking unwavering support from a host ofindustries for an all-out push to block federal and state climate rules. Sen.Lisa Murkowski (R-Alaska) – who last year offered a Senate resolutiondisapproving of EPA’s ability to regulate greenhouse gas regulations –was not involved in the meeting or this initial effort, but continues todiscuss the issue with fellow lawmakers. Murkowski spokesman Robert Dillon saidshe is coordinating with Rockefeller on legislative language as Rockefellerprepares to re-introduce language this Congress aimed at delaying EPA climaterules for stationary sources. “Senator Murkowski has told Rockefeller that shedoes support his goal of reining in the EPA,” Dillon said. But she’s keepingher options open, he added, and is supportive of all the measures aimed atblocking EPA climate rules…Murkowski is known – both on and off her topRepublican position on the Energy and Natural Resources Committee – totake some more centrist positions than some GOP leaders are seeking in thiselection cycle and has shown more willingness to strike deals with Democrats.

This guy needs to understand; the bureaucracycouldn’t care less about flowery rhetoric, or even what their bosses want. They demand obeisance.New York Times. Ken Button, the president of Verengo Solar Plus, a residentialsolar panel installer in Orange, Calif., says his company — and hisindustry — are being strangled by municipal red tape. Fifteen Verengoemployees, Mr. Button said, are dedicated solely to researching and tailoringpermit applications to meet the bureaucratic idiosyncrasies of the dozens oftowns in the company’s market. And because most jurisdictions requireapplications to be submitted in person, Verengo employs two “permit runners”whose only job, Mr. Button said, is to “take those permit packs and physicallydrive them around, stand in line, and pay the fees.” “We have 50 differentpermitting authorities within 50 miles of our office,” Mr. Button said. “Theyall have different documentation requirements, different filing processes,different fee structures. It’s like doing business in 50 different countries —just in Southern California.” His lament is being echoed by solar companiesacross the country…The analysis, which will be released publicly on Thursday,was prepared by one of the nation’s largest solar leasing companies, SunRun,and endorsed by Verengo and at least a dozen other service and installationfirms.

Ithought we were supposed to be cutting regulations? Obama announces two newgroups to oversee offshore energy production.WashingtonPost (1/20/11) reports: The Obama administration continued to shake up theagency that oversees oil and natural gas drilling, announcing a plan Wednesdayto create separate offices to promote energy development and enforce safety…Themission of the former Minerals Management Service to promote resourcedevelopment, maximize revenue and enforce safety regulations had a built-inconflict, Interior Secretary Ken Salazar said. "Those conflicts, combinedwith a chronic lack of resources, prevented the agency from fully meeting thechallenges of overseeing industry operating in U.S. waters," Salazar said.

Two things. Which September is the storefront cowboy talkingabout? And what, exactly, is Michael trying to do that has been taking so damnlong?Politico. InteriorSecretary Ken Salazar hopes to complete the revamping of the agencies thatoversee offshore oil and gas drilling by the end of September, he said today. Inthe wake of the Deepwater Horizon explosion in April 2010 and subsequent Gulfof Mexico oil spill, Salazar last May set in motion plans to split theoft-criticized Minerals Management Service into three agencies under the Bureauof Ocean Energy Management, Regulation and Enforcement (BOEMRE) banner. ButSalazar has yet to embrace one of the major recommendations of the commissionfor Congress to set up an independent safety agency within the InteriorDepartment that would be headed by a presidential appointed and Senateconfirmed official for a fixed term of years. This is similar to that whichgoverns the term of the director of the FBI. “It’s a recommendation which inbroad sense to me makes sense,” Salazar told reporters after his speech. “Butit is also is one we have to recognize how it’s going to affect the functionalityof what Michael is trying to do.” He added: “I don’t want to move forward in away that does not make organizational sense.”

The Nobel Prize has been going downhill ever since they gave oneto Yassir Arafat, or Jimmy Carter if you prefer. Sydney Morning Herald. Aclimate change study that projected a 2.4 degree Celsius increase intemperature and massive worldwide food shortages in the next decade wasseriously flawed, scientists said Wednesday.

Onceagain, big auto and big government come together in order to build aninefficient and expensive vehicle with your tax dollars. Reuters(1/19/11) reports: Chrysler, which has been criticized for a lineup heavy ongasoline-guzzling trucks and sport-utility vehicles, plans to design and buildthe hydraulic hybrid minivan by November and complete testing by July 2012…Theproject comes as automakers scramble to meet strict new fuel economy standardsexpected to take effect after 2016 that have forced automakers to rethink thedesign of their fleet…Marchionne appeared on Wednesday with EPA AdministratorLisa Jackson at the agency’s laboratories in Ann Arbor.

The study was posted Tuesday on EurekAlert, a independent servicefor reporters set up by the American Association for the Advancement ofScience, and was written about by numerous international news agencies,including AFP. But AAAS later retracted the study as experts cited numerouserrors in its approach. "A reporter with The Guardian alerted us yesterdayto concerns about the news release submitted by Hoffman & Hoffman public relations,"said AAAS spokeswoman Ginger Pinholster in an email to AFP. "Weimmediately contacted a climate change expert, who confirmed that theinformation raised many questions in his mind, too. We swiftly removed the newsrelease from our website and contacted the submitting organization." ScientistOsvaldo Canziani, who was part of the 2007 Nobel Prize winningIntergovernmental Panel on Climate Change, was listed as the scientific advisorto the report. The IPCC, whose figures were cited as the basis for the study’sprojections, and Al Gore jointly won the Nobel Prize for Peace in 2007"for their efforts to build up and disseminate greater knowledge aboutman-made climate change," the prize committee said at the time.

One last, excellent wordabout the Frances Beinecke Commission before it fades into obscurity.Washington Examiner. It wasn’thard to predict the sort of recommendations to expect from the seven-memberNational Commission on the BP Deepwater Horizon Oil Spill and Offshore Drillingwhen President Obama appointed Natural Resources Defense Council PresidentFrances Beinecke, Union of Concerned Scientists board member Fran Ulmer andfive other Democratic donors to the panel. All seven oppose offshore oil andgas activity and are environmental movement stalwarts. For example, just beforeObama appointed her, Beinecke said, "We can blame BP for the disaster, andwe should. We can blame lack of adequate government oversight for the disaster,and we should." True to form, the commissionmade its findings public Tuesday. They can be summarized in one sentence: It’sall the energy industry’s fault and the only acceptable solution is moregovernment regulation and jobs for Big Green environmentalists.

Wonder What a Double Dip RecessionLooks Like?Reuters. Oil rose onWednesday after production shutdowns, falling U.S. inventories and growingdemand sent Brent crude toward $100 a barrel for the first time since 2008.U.S.government data showing U.S. crude stocks falling for a sixth straight weekhelped extend this week’s gains. Disruptions from Alaska and Norway stokedsupply concerns and cold weather in the U.S. Northeast fed demand for heatingoil. [EIA/S] Oil’s climb back toward $100 a barrel — last touched in October2008 — has raised concerns about the impact of higher fuel costs on thetenuous economic recovery. "Back in 2008, (U.S.) crude oil only tradedabove $100 a barrel for about six months before the world economy collapsedinto the worst crisis since the 1930s," warned Sabine Schels, commoditystrategist for Merrill Lynch. Crude’s rise on Wednesday was part of wider gainsacross commodities, with metals rising and soybean and corn futures touching30-month highs that further stoked economic worries. London Brent oil LCOc1,benchmark for European, Middle East, and African crudes, rose 51 cents tosettle at $98.12 a barrel, after touching $98.85 a barrel earlier, the highestlevel since Oct. 1, 2008.

Are yousure about this double dip thing? Yep. Fortunately, Bill Reilly and BobGraham are here to help. The Fiscal Times. Someobservers have suggested that the recent financial crisis had its roots in ajump in oil prices. James Hamilton of UC San Diego produced a report in2009 saying that higher oil prices in 2007-2008 impacteddomestic spending and auto purchases to such an extent that “in the absence ofthose declines, it is unlikely that we would have characterized the period2007:Q4 to 2008:Q3 as one of economic recession for the U.S.” In other words,the Great Recession may have stemmed from a sharp jump in the average cost ofimported oil, which rose from $59.05 per barrel in 2006 to $92.57 in 2008– and not from a collapse in the value of subprime mortgages. Since the1960s consumer outlays on gasoline and heating fuel have ranged from a littlebelow 5% in the late 1990s to nearly 10% in the early 1980s. When this ratiostarts moving towards the higher end of the range, as it did in the mid- 2000s,the consumer   cuts back on other spending, precipitating an economicdownturn.

Again,Please Thank the Bush Administration for the Ethanol Program, Now About to HelpFoment Social Unrest Across the Planet. Wall Street Journal. Evidence of tightening global food supplies grew as theU.S. Agriculture Department cut its estimates for global harvests of key cropsand raised some demand forecasts, adding to worries about rising food prices. Prices of corn and soybeansleapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodityprices that began in June. With yesterday’s gains, prices of corn futurescontracts are now up 94% from their June lows; soybeans are up 51% and wheat isup 80%. The USDA’s revisions reflect the impact of dry weather in South Americaand floods in Australia, which have compounded supply constraints that firststarted to emerge in the middle of last year, when a drought in Russia ravagedthat country’s wheat fields. The agency also cut estimates for U.S. harvests ofcorn and soybeans. At the same time, demand is increasing. The USDA saidethanol producers likely will increase their use of corn, and consumption byemerging market countries continues to be strong. Prices of many agriculturalcommodities are still below the levels that sparked food riots in poorcountries around the world in 2008. But economists see few signs that pricesfor grain, livestock and cotton will cool significantly anytime soon, signalingpotential headaches for consumers and food companies. "The markets arevery, very tight," said Joseph Glauber, the USDA’s chief economist."There is concern, no doubt."

What kind of world isthis, where an overpriced, unreliable, unwanted product that relies almostcompletely on government mandates and subsidies can’t make a go of it? By theway, and I hate to beat this drum too emphatically, but our friends at theInstitute for Energy Research were ringing this bell about two years ago.Reuters.In 2010 the fast-growing industry logged its biggest sales year ever, yetshares of solar panel makers lagged the broader market significantly. TheWilderHill Clean Energy Index, which includes solar and otheralternative-energy stocks, fell 5.3 percent last year, compared with a 12.8percent rise in the Standard & Poor’s 500 index, due to investor fears thatdeclining government incentives for solar power would hurt demand asmanufacturers ramp up production. This year, those worries are coming home toroost. The world’s top solar market, Germany,is preparing for further cuts to its solar subsidies, while growing supplies ofphotovoltaic panels are expected to outstrip demand, putting pressure on pricesand producers’ profits. A weak euro only makes matters worse for Chinese andU.S. panel makers who sell most of their products in Europe. . . .

Governmentsincluding Germany, the United States, Spain and Japanhave been willing to subsidize clean energy as they look to curb greenhousegases, but the resulting rapid growth in solar installations has also burdenedthem with additional costs at a time when the global economy remains weak. Lastyear, Germany, Spain, France, Italyand Czech Republic all trimmed their solar subsidies. This year, further cutsare expected in Germany and France in the first half of the year and in Italyin the second half. Those three markets account for about 70 percent of theglobal market, according to Bank of America Merrill Lynch.

See, there’s only one problem withthis: at their annual meeting last week, the utility CEOs couldn’t agree on aposition. Which means Tom is just making this up as he goes along. E&E News. "The EEIpolicy came out and said on global climate change we felt that it would behelpful to have legislation rather than regulation, number one," Kuhn toldreporters after speaking at a U.S. Energy Association event in Washington, D.C."And secondly, we said if greenhouse gas emissions are going to be a veryimportant issue … we think there should be a price on carbon that isreasonable and protects the customers." He added, "I think that isstill our policy." While it is not clear when Congress might passlegislation putting a price on carbon or what framework would be approved, hesaid, "I think all of our CEOs, in terms of their … long-term decisions… are factoring that there may well be a price on carbon in the future."

Forget the top; it’slonely at the bottom. Sad, sick California acknowledges that it is the onlyState in the West misguided enough to bankrupt itself.E&ENews. New Mexico is no longer expected to link intothe Western Climate Initiative’s regional trading structure following theinauguration of Gov. Susana Martinez (R), who intends to reverse planned cutsto carbon emissions in the state, a senior California official said today. KevinKennedy, assistant executive officer in charge of the Office of Climate Changeat the California Air Resources Board, told lawyers during a forum sponsored byLaw Seminars International that the election results likely mean New Mexicowill not participate in the fledgling WCI, at least at the outset of the marketstarting Jan. 1, 2012. "The change in administration probably takes NewMexico out of the situation," Kennedy said.

Inoffice since Jan. 1, Martinez has already tried to freeze two rules adopted bythe state Environmental Improvement Board late last year that would cut stateemissions by 3 percent annually and authorize participation in the WCI. Therules, which cannot take effect until published officially, have been suspendedfollowing an executive order by Martinez, issued hours after her inauguration,that halts all new regulations for 90 days. Environmental groups say they willsue to block Martinez, and some expect the matter to soon end up before thestate Supreme Court. The state cap would have required large stationary sourcesto cut emissions 3 percent annually below 2010 levels, starting in 2013 (ClimateWire,Jan. 10).

Kennedyadded that a cap-and-trade regulation passed by California regulators inDecember is going forward with or without New Mexico’s participation. But healso acknowledged that no other U.S. states will be part of WCI when it goeslive in 2012, with three Canadian provinces — British Columbia, Quebec andOntario — still expected to participate in trading.

Yoda was right: to adark place this line of thought will take us. Not surprisingly, EPA’s ongoinggame of Twister on GHG regulations takes an expected, but unfortunate turn.Wonder what else is going to be exempted? Greenwire. The use of biomasswill be exempt from the Obama administration’s new greenhouse gas regulationsfor three years, U.S. EPA announced today, giving the agency more time toaddress concerns that permitting requirements could chill investment in anemerging form of renewable energy. The decision responds to criticism from thebiomass industry, which has claimed that the energy source is not contributingto climate change because it is part of a natural, carbon-neutral cycle. Whennew plants are grown, the argument goes, they absorb the same amount of carbondioxide that the other plants had released when they were burned. In a statementtoday, EPA Administrator Lisa Jackson gave a nod to biomass as a form of"clean energy." The sentiment was echoed by Agriculture Secretary TomVilsack, who said the decision would create jobs and promote energyindependence. "We are working to find a way forward that is scientificallysound and manageable for both producers and consumers of biomass energy,"Jackson said. "In the coming years we will develop a common-sense approachthat protects our environment and encourages the use of clean energy.Renewable, homegrown power sources are essential to our energy future, and animportant step to cutting the pollution responsible for climate change." Today’sdecision will require changes to EPA’s "tailoring" rule, which laysout which types of new facilities will need to get greenhouse gas permits underthe Clean Air Act.

A gripping storyfeaturing the world’s oldest profession (AWEA, natch), some amateurrent-seeking (NEI), and one stand-up performance by Dan Whitten at ANGA.E&E News. Thewind industry’s largest trade group a few months ago rejected the idea of a"clean power" mandate on utilities that included nuclear, some coaland natural gas as options. But American Wind Energy has a new opinion today.We’re open to talking about anything at this point," said Rob Gramlich,AWEA’s senior vice president of public policy. For the nuclear industry, a CESthat includes the fuel as an option would be a kind of new frontier, said JohnKeeley, spokesman for the Nuclear Energy Institute. . . . "If the federalgovernment says this is a source that we endorse … I would have to think thatpotentially that would be an inducement for spurring investment," Keeleysaid, adding, "If it is a mandate, it would certainly help.” “There’s noneed to trade environmental quality for strong economy, jobs and clean energyproduction," Whitten said. "Hydraulic fracturing has been used for 60years on over a million wells safely.

Seeing$4 gasoline in the future, architect of Interior’s assault on energy heads forthe exits BusinessJournal (1/10/11) reports: TomStrickland, chief of staff to U.S. Interior Secretary Ken Salazar, plans toleave that post in February, The Denver Post reports. Strickland — a formerU.S. attorney from Colorado and a two-time U.S. Senate candidate — has beenSalazar’s top aide for 21 months, and also serves as assistant secretary forfish and wildlife and parks, overseeing both the National Park Service and theU.S. Fish and Wildlife Service. He intends to stay in Washington and return tothe private sector, The Post says.

How long do you figure itwill take Mr. Jefferson’s University to do the right thing and give ChrisHorner and Paul Chesser the documents to which they are entitled? E&E News. TheAmerican Tradition Institute Environmental Law Center filed an informationrequest yesterday for e-mails and other documents concerning Michael Mann, theformer university climate scientist currently the target of civil action byVirginia Attorney General Ken Cuccinelli II (R). The institute filed therequest on behalf of Del. Bob Marshall (R) and two other state residents. Itrequests documents similar to one that Cuccinelli asked for with a civilsubpoena, which the university has been fighting in court.

Hey, I forgot;where did Jim Connaughton work before Constellation? Do you think heunderstands the meaning of the word, “irony”? Gazette. Federal regulators agree with opponents of a proposedthird reactor at Calvert Cliffs Nuclear Power Plant that a draft report did notsufficiently consider alternative power sources, such as wind and solar, to the$10 billion, 1,600-megawatt project. . . . The draft environmental impactstatement’s "discussion of a combination of alternatives is inadequate andfaulty," the report states. "By selecting a single alternative thatunder-represents potential contributions of wind and solar power, thecombination alternative depends excessively on the natural gas supplement, thusunnecessarily burdening this alternative with excessive environmentalimpacts."

Can’t believe they leftout the environmental damage, the increased cost to consumers, or the fact thatit takes more energy to make than it provides. But it probably wasn’t easygetting Ben Cardin to sign on to that stuff. TheHill. Sens. Olympia Snowe (R-Maine) and James Inhofe (R-Okla.) sent aletter to EPA Administrator Lisa Jackson Wednesday asking whether the agency’sdecision to allow E15 blends in some vehicles will affect the availability ofpure gasoline. “Limited supply of pure gasoline in Maine has resulted in theuse of ethanol, which has caused damage to small engines and threatens toundermine recreational activities including snowmobiling, boating, and generalaviation,” Snowe said in a statement Thursday…A number of industry groups,including the Alliance of Automobile Manufacturers and the National MarineManufacturers Association, have asked a federal court tooverturn EPA’s ethanol decision.

Does Tom Friedman knowabout this? If Hugo Chavez can build a refinery in China, maybe PDVSA can helpus out with one here in the States. ChinaDaily. China has given initial environmental clearance to an $8.7 billionjoint-venture refinery between PetroChina Co., Ltd. and Venezuela’s state oilcompany Petreleos de Venezuela (PDVSA). The refinery, to be located in Jieyangin the southern Chinese province of Guangdong, would have a crude refiningcapacity of 400,000 barrels per day, according to the website of the country’senvironmental watchdog.

Rent-Seekers of the WorldUnite! TheNew York Times. Duke Energy is near anall-stock deal to acquire a rival, Progress Energy, that values the smallerenergy company at more than $13 billion, a person briefed on the matter toldDealBook on Saturday. The deal could be announced as soon as Monday, thisperson said, adding that talks are ongoing and could still fall apart. If anagreement is reached, it would unite two of the biggest energy companies in theSouth, continuing a streak of big mergers in the sector.

Deranged killers?Right-wing crazies? Vitriolic radio talk shows? Here is the real sickness atthe heart of our political system. Politico. One veteran Democratic operative, who blames overheatedrhetoric for the shooting, said President Barack Obama should carefully butforcefully do what his predecessor did. “They need to deftly pin this on thetea partiers,” said the Democrat. “Just like the Clinton White House deftlypinned the Oklahoma City bombing on the militia and anti-government people.”

Meet the new year, same as the old year: Obama Administrationcontinues assault on domestic energy production while gas is expected to hit $4a gallon.  Wall Street Journal (1/3/11)reports: More than two months after the Obama administration lifted its ban ondrilling in the deep-water Gulf of Mexico, oil companies are still waiting forapproval to drill the first new oil well there. Experts now expect the wait tocontinue until the second half of 2011, and perhaps into 2012…The slowdownalso has long-term implications for U.S. oil production. The Energy InformationAdministration, the research arm of the Department of Energy, last monthpredicted that domestic offshore oil production willfall 13% this year from 2010 due to the moratorium and the slow return todrilling; a year ago, the agency predicted offshore production would rise 6% in2011. The difference: a loss of about 220,000 barrels of oil a day.

If theObama Administration was truly concerned about safety,why would they shut down an industry that spills less oil in water than peopleusing jet skis?  Wall Street Journal (1/3/11)reports: Shallow-water drillers, which operate in less than 500 feet of waterand drill mostly for natural gas, have lurched back to activity after workbriefly halted in the aftermath of April’s BP well disaster. But they rely onshort-term, 30- to 60-day contracts with energy companies, making their revenuestream more vulnerable to disruption than deep-water rig owners that signmultiyear contracts….A significant speed bump foroperators is a new drill-plan requirement to calculate the worst-case dischargeof oil and provide a strategy for killing a blown-out well. Federal regulatorsreturned 101 plans requesting modification in 2010—including 77 sinceJune—compared with 59 such requests in 2009, and just 31 in 2008.

I was forit before I was against it: Will GOP presidential wannabes channel their innerJohn Kerry on GHG regs? Politco (1/2/11)reports: It may be heresy to conservatives, but a trip down memory lane showsnearly all of the top-tier Republican presidential contenders want to save theplanet from global warmingOn the campaign stump, inbooks, speeches and nationally-televised commercials, aspiring GOP White Housecandidates such as Tim Pawlenty, Mike Huckabee and Mitt Romney have warned in recent years aboutthe threats from climate change and pledged to limit greenhouse gases. Somehave even committed the ultimate sin, endorsing the controversial cap and tradeconcept that was eventually branded “cap and tax.”

ShellGame: Idaho wants to sell CA utility companies renewable energy credits, butkeep the energy produced; as usual the consumer on the hook for the deal. San Francisco Chronicle (1/2/10)reports: The deal relies on a California energy policy requiring that renewableenergy sources provide some of the state’s energy needs…The credits can’t besold in Idaho because the state doesn’t have such a requirement…FederalEnergy Regulatory Commission spokeswoman Barbara Connors said the company’splan is unique, but a lot of things have yet to be tried in the renewableenergy industry.

Pay yourtaxes: CA consumers double down with electric vehicle rebate gamble; statefunds are fore-casted to run out by February. Los Angeles Times(12/24/10) reports: California consumers counting on a $5,000 state rebate forpurchasing an electric car may be in for a shock: The money may not be therewhen they go to collect….with California mired in fiscal crisis, there’s noguarantee that rebate funds intended for future years will actually be there,Air Resources Board officials said….That’s unsettling to electric-vehicleenthusiasts who see the financial incentives as a way to even the playing fieldwith conventional gasoline-engine autos.

Mass.Gov. Deval “Green Thumb” Patrick makes an offer youcan’t refuse; Nstar and Northeast Utilities mergerwon’t take place unless they include Cape Wind as part of the deal. iStock Analyst(12/23/10) reports:  The Patrickadministration is signaling it will hold hostage the proposed Nstar-Northeast Utilities merger unless the two electriccompanies agree to buy Cape Wind power and prove they have "outstandingtrack records" on clean-energy issues. Without naming Cape Wind, Bowles,who leaves office next week, said regulators should ask: "Will a mergerhelp advance the development of the commonwealth’s solar and offshore windresources?"…Nstar has said it doesn’t want tobuy Cape Wind’s power, which is twice as expensive as electricity generatedfrom fossil fuels.

GoldenEagles – It’s what’s for dinner; new report out from U.S. Fish and Wildlifesays that over 400,000 birds are killed each year from wind turbines.  Omaha Herald (12/30/10)reports: Officials with American Bird Conservancy on Wednesday cited data fromthe U.S. Fish and Wildlife Service that estimates 400,000 birds of variousspecies are killed by turbine blades annually…The conservation group’sconcerns come as state and national officials push to expand wind energydevelopment in the coming years….“Golden eagles, whooping cranes and greatersage-grouse are likely to be among the birds most affected by poorly plannedand sited wind projects,” said Kelly Fuller, a spokeswoman for the conservancy.

Deniers: Interior Dept. Continuesto Deny Existence of “Permitorium” on Offshore Energy – But Thanks toThis Piece in Today’s Chron, That Lie Is About to Die. Houston Chronicle (12/28) reports, “When federal officialslifted the ban on deep-water drilling in early October, Houston-based ATP Oil& Gas was ready to roll. The small production company was finishing up workon a well that tied into its Telemark production hub about 100 miles south ofthe mouth of the Mississippi River. It had filed a permit to drill a sidetrackoff an existing well — a relatively low-risk proposal for the world ofdeep-water drilling. It was even revised and updated to meet all of the newrequirements imposed on deep- water permits in the wake of the DeepwaterHorizon accident. “So I kept the crew out there because I felt certain thegovernment meant what it said,” ATP Chairman and CEO Paul Bulmahn said –that permit applications that met the new guidelines would be granted. Morethan 70 days later, the company is still waiting. At a price of about $330,000per day, Bulmahn has started to get impatient, leading him to take some actionsunusual for the company. He wrote a personal letter to President Barack Obama– copied to Secretary of the Interior Ken Salazar and Michael Bromwich,director of the Bureau of Ocean Energy Management, Regulation and Enforcement– pleading with him to “Please issue a permit so we can go back to work.”And on Sunday he ran the letter as an advertisement in the Chronicle. “I can’tafford to keep these workers employed and playing cards,” Bulmahn said.

Interesting Thing AboutEPA’s Pell-Mell Rush to Criminalize Carbon – Not Clear the AgencyActually Followed Its Own Rules During Implementation Process. Rep. Fred Upton and AFP’s Tim Phillipswrite (12/28) in the Wall Street Journal, “The EPA, of course, is in a hurry to moveahead. It wants to begin regulating the largest emitters first. But it has theauthority under its endangerment finding to regulate emissions by hospitals,small businesses, schools, churches and perhaps even single-family homes. Ascompanies wait for definitive court rulings, the country could face a de factoconstruction moratorium on industrial facilities that could provide badlyneeded jobs. Moreover, the EPA has never completed an analysis of how many jobsmight be lost in the process—although Section 321 of the Clean Air Actdemands that it do so. The best solution is for Congress to overturn the EPA’sproposed greenhouse gas regulations outright. If Democrats refuse to joinRepublicans in doing so, then they should at least join a sensible bipartisancompromise to mandate that the EPA delay its regulations until the courtscomplete their examination of the agency’s endangerment finding and proposedrules. Like the plaintiffs, we have significant doubt that EPA regulations cansurvive judicial scrutiny. And the worst of all possible outcomes would be theEPA initiating a regulatory regime that is then struck down by the courts.

EPA Wants 18-Wheelers toGet Fuel Economy of the Prius – But Did You Know EPA Itself Is ComplicitIn Declining Fuel Economy of Heavy Industrial Trucks? Marlo Lewis writes (12/28) on MasterResource.org, “The declining fuel economy of 18-wheelersis a case of government failure, not market failure. Conveniently, EPA’s rolein holding back heavy-truck fuel economy is never discussed in the agencies’proposed rule. The trucking industry is highly competitive, profit-margins arethin, and fuel is the single biggest operating expense. Consequently, truckers,especially those who haul freight long distances in ”combination tractors”(semis), have a strong incentive to purchase vehicles incorporatingcost-effective improvements in fuel economy. Hence manufacturers also have astrong incentive to produce such vehicles. Yet the average fuel economy ofsemis declined by 1.2% annually over the past decade, according to theDepartment of Energy’s Transportation Energy Data Book. How can that be? … Inshort, at EPA’s behest, industry may have spent nearly $1 billion in the early2000s on penalties and R&D related to emission-control technology. Howcould that not crowd out significant investment in R&D of fuel-savingtechnology? How could it not divert significant engineering talent fromfuel-economy innovation to emission-control innovation?

Not Sure Where AWEA’sDenise Bode Went for the Holidays – But If This Editorial in TheOklahoman Is Any Indication, She Ain’t Welcome Back in Indian Country. The Oklahoman (12/27) editorializes, “Wind power has taken a poundingrecently as shale-sourced natural gas supplies grew and gas prices fell. T.Boone Pickens retreated from an ambitious plan to profit from the “Saudi Arabiaof wind” — his moniker for the American wind belt that includes westernOklahoma. Natural gas is a bridge fuel, offering a cleaner source of power thancoal and a vaster domestic supply than oil. But wind remains the most valuableplayer for environmentalists and their liberal teammates in Congress.Considering this, the Manhattan Institute’s Robert Bryce offers the term“boonedoggle,” a neologism for the once high hopes for wind power, combinedwith Pickens’ former enthusiasm for it and the Oklahoma native’s latter-dayrefocusing on natural gas. Another native Oklahoman is front and center in thedebate over wind power’s future. She’s Denise Bode, the former OklahomaCorporation Commissioner who left that job to run a natural gas industry tradegroup and left that job to run the American Wind Energy Association. A WallStreet Journal editorial last week threw a flag on Bode’s group for pushing aone-year extension of a $3 billion federal subsidy for renewable energyprojects. “Talk about throwing good money after bad,” the Journal wrote.“Despite more than $30 billion in subsidies for ‘clean energy’ in the 2009stimulus bill, Big Wind still can’t make it in the marketplace.”

Five Years Ago, Town ofTowanda, Pa. Had 3,000 People and About 1,500 Jobs; Today? Jobs and OpportunityAbound, All Thanks to the Marcellus Shale.Philadelphia Inquirer (12/27) reports, “Not so long ago, thistown was just the seat of Bradford County. Now, it lies at the epicenter ofnatural gas development in the Marcellus Shale region. It used to be a sleepylittle place on the Susquehanna River. Now, it’s a boom town. Help-wanted signsplead for waitresses, mechanics, truck drivers. Once-empty storefronts are nowoccupied in this hilly borough, population 3,000. Towanda has morning andmidday rush hours, thanks to the columns of trucks bearing water, sand, anddrill pipe. A banner hangs outside First Liberty Bank & Trust: "GasRights? We can help." "People used to call Towanda a ghosttown," said Shannon Clark, a Borough Council member and real estate agent."No more." So many title researchers have descended on the BradfordCounty Courthouse to examine deeds for gas leases that the county extendedoffice hours and installed tables in the hallways to accommodate the crowds.The rotunda looks like a college library during finals. The $7 millionChesapeake facility is the latest proof the boom in natural gas is here for thelong haul. Industry officials project that so much natural gas is contained inthe mile-deep Marcellus Shale that intense drilling activity will be sustainedfor at least a decade. Comprising prefabricated metal buildings surrounded by afence and a guarded entrance, the complex houses roughnecks who work forChesapeake’s subsidiary, Nomac Drilling L.L.C.

Woo Pig Sooie: XOM MakesHuge Investment in Arkansas’ Fayetteville Shale — $575M for the Shale Wells,and Another $75M for the Pipelines. Bloomberg (12/23) reports, “Exxon Mobil Corp agreed to pay $650 millionfor Petrohawk Energy Corp.’s natural-gas wells and pipelines in theFayetteville Shale, its second shale purchase this year. The Arkansas assetsproduce about 98 million cubic feet of gas a day, Houston-based Petrohawk saidtoday in a statement. The sale of the wells, valued at $575 million, iscomplete and has an Oct. 1 effective date. Exxon also agreed to buy pipelinesthat collect gas from Fayetteville Shale wells for $75 million. That sale issubject to regulatory approval and expected to close early next year, Petrohawksaid. Exxon Mobil, based in Irving, Texas, in June bought XTO Energy for $35billion including debt to add expertise and holdings in shale deposits, wherenew technology has reversed a decline in U.S. gas production and swelledreserves. “The logic behind the purchase of XTO and the purchase of thisacreage is very much in parallel,” said Pavel Molchanov, a Houston-basedanalyst for Raymond James & Associates Inc. who rates Exxon’s shares at“market perform” and owns none. “This represents an increase of about 40percent in acreage they own in the Fayetteville Shale.”

Mean-o Sino: ChinesePrepare to Slash Exports of “Rare Earth” Minerals to US for Second Time in 12Months – Bad News for Anyone With an iPhone or Suncatcher.Reuters (12/28) reports, “China cut its first batch of rare earthexport quotas for next year by more than one-tenth, in the face of a threat bythe United States to complain to the World Trade Organization over the exportlimits. China’s Commerce Ministry allotted 14,446 tonnes of quotas to 31companies, which was 11.4 percent less than the 16,304 tonnes it allocated to22 companies in the first batch of 2010 quotas a year ago. The Ministry said ina short statement on its website that it had added more producer companies tothe quota list, but has cut volumes allocated to trading companies for themetals used in high-tech goods. The export quotas were based on export volumesfrom the beginning of 2008 to October 2010, it added, without giving details.China produces about 97 percent of rare earth elements, which are usedworldwide in high-technology, clean energy and other products that exploittheir special properties for magnetism, luminescence and strength. The decisionto cut export quotas and raise tariffs has inflamed trade ties with the UnitedStates, European Union and Japan in particular. Last week, the U.S. TradeRepresentative office said China had refused U.S. requests to end exportrestraints on rare earths that have alarmed trade partners, and that Washingtoncould complain to the WTO, which judges international trade disputes.

Must Read:WSJ Outs Rent-Seeking, Wall Street Fat Cats Looking to Make Enron-Like Profits.Wall Street Journal(12/23) reports, “Strange things happen atthe nexus of progressive ideology and private profits. Like Peter Orszagdecamping the White House budget office for Citigroup, a bank that wouldn’texist without taxpayer crutches. Then there are the utility CEOs cheering onthe Obama Administration’s plans to wipe out large portions of U.S. electricpower capacity. The Environmental Protection Agency is preparing anunprecedented torrent of air and other regulations that will force as much as athird of U.S. coal-fired power to retire in the coming years. This gambit ismeant as an anticarbon backstop now that cap and trade is in the politicalmorgue and it will cause huge reliability problems, but some electricexecutives claim all this merely follows the law and is nothing to worry about.Eight leading utility CEOs responded recently to one of our editorials with aletter defending the EPA, claiming that the coal retirements are "longoverdue" and that the regulations will "yield important economicbenefits." What they didn’t mention is that those benefits will mostlyaccrue to the businesses they happen to head. But don’t take our word for it.Here’s John Rowe, one of the letter’s signatories and the chairman and chiefexecutive of Exelon: "Put simply, we expect some drop in 2012 earnings.But we believe by that time that the trough in our revenues will be nearing itsend. This morning, I am going to cover three reasons why we believe that.First, EPA regulations will affect both capacity and energy markets, and willdo so sooner than many think," Mr. Rowe said on Exelon’s second-quarterearnings call in July.”

Mandates,Handouts, Regulations, Tax Hikes, Permitoriums and Moratoriums; That’s theObama Admin. Energy Policy… Where’s the “Olive Branch?” E&ENews (12/23) reports, “At ayear-end press conference yesterday that capped a string of legislativevictories for the White House, President Obama singled out energy reform as amajor piece of unfinished business. "We’re still going to have to figureout how we work on energy," Obama said in response to a question about hisability to make good on promises to the Hispanic community about makingprogress on immigration. "And that’s an area that I want to immediatelyengage with the Republicans to figure out.” Obama did not elaborate on anypossible avenues for bipartisan accord on energy, but several Republicans havelaid down markers for collaboration with the administration in the aftermath oftheir party’s midterm election victories. Sens. Susan Collins (R-Maine), ChuckGrassley (R-Iowa) and John Ensign (R-Nev.) this year signed onto aDemocratic-backed renewable electricity standard (RES) plan that would requireutilities to derive 15 percent of their power from sources such as wind andsolar by 2021. Meanwhile, Sen. Lindsey Graham (R-S.C.) has proposed a competingclean energy standard (CES) that would allow utilities to meet a similarmandate by expanding nuclear power and "clean coal" — a prospect EnergySecretary Steven Chu recently asked lawmakers to "think aboutseriously"

Who Coinedthis “Clean Energy Standard” BS? It’s a Mandate that will Cost Jobs and JackRates, Period. The Hill (12/22) reports, “Sen. Lindsey Graham (R-S.C.) walked awayfrom climate change and energy talks with Democrats months ago, but he’splotting a return to the thick of Senate energy debates. Graham said Thursdaythat he’s reviving his proposal to create a “clean energy” standard forutilities in the next Congress. The idea would require power companies tosupply escalating amounts of energy from various low-carbon sources. Powergenerated from new nuclear plants would be eligible. Graham told reportersthat he wants to link the idea with proposals that would prevent theEnvironmental Protection Agency from “overly” regulating several air pollutants— including carbon. “I am going to try and get with some Democrats andRepublicans and see if we can come up with a clean energy standard that has aregional flexibility, that focuses on clean energy, and keep the EPA fromoverly regulating all these pollutants. That would be the tradeoff,” Graham saidin the Capitol. Flashback: LindseyGraham advocated for increase in federal gasoline tax as part of KGLcap-and-trade proposal.

The LoneStar Showdown: Texas Gov. Taken Off the Gloves with L-Jack and EPA; Sides withJobs, Farmers, Energy Producers. New York Times (12/23) reports, “The feud between Texasand the Environmental Protection Agency reached a new level this week, withfederal officials saying that they will take over the granting of permits fornew power plants and refineries in the state because Texas refuses to regulateits emissions of greenhouse gases. The showdown centers on Texas’ opposition tothe Obama administration’s program to rein in heat-trapping emissions, whichhas become a symbol of a broader struggle by industry and some Republicanpoliticians to thwart such regulatory efforts. Texas and several other statesare fighting the mandates in court, and Republican leaders who will take overthe House of Representatives next year have made no secret of their opposition,arguing that mandating cuts in industrial emissions will harm the economy. OnMonday, Gina McCarthy, the E.P.A. assistant administrator for air issues, toldstate environmental officials in a letter that if Texas would not regulatecarbon emissions from smokestacks, the federal government would seize controlof the state’s permitting program on Thursday. “The unwillingness of Texasstate officials to implement this portion of the federal program leaves E.P.A.no choice but to resume its role as the permitting authority,” Ms. McCarthywrote. State officials see it differently. “This is an arrogant act by anoverreaching E.P.A. that is trying to implement new, unnecessary controls onAmerican industry,” said Andrea Morrow, a spokeswoman for the Texas Commissionon Environmental Quality.”

RememberProf. Gabriel Calzada? He told you Two Years Ago that Spain’s Renewable EnergyIndustry Was a House of Cards – Which is Now Coming Down. Bloomberg (12/23) reports, “Spain will cut revenue that photovoltaicplants can earn by 30 percent for three years, part of a policy shift forecastto trim the costs consumers pay for electric power by 4.6 billion euros ($6billion) through 2013. Electricity producers that use solar panels will earnthe standard rate for some of the hours each day that they are currentlyearning a premium, subsidized rate, according to an Industry Ministry statementtoday. The package, approved by Spain’s cabinet of ministers, seeks to close thetariff deficit while freezing electricity prices for the nation’s 5 millionpoorest families. The deficit, or the shortfall between what power companiesare allowed to charge consumers and the revenue guaranteed to them by thegovernment, has spiraled in recent years. The cabinet raised the legal limitfor the tariff deficit for 2010, 2011 and 2012 by a total of 4 billion euros.Madrid-based utility Endesa SA, which is owed the most money from having tocover the tariff deficit, rose 1.1 percent to 19.54 euros in Spanish trading.”

PennsylvaniaRep. With most Marcellus Acreage Lands Spot on Resources Committee, Gavel onAg. Energy Subcommittee. E&ENews (subs req’d, 12/23)reports, “Rep. Glenn "GT" Thompson of Pennsylvania will head theretooled Conservation, Energy and Forestry Subcommittee, which overseesconservation, small watershed programs, energy and biobased energy, ruralelectrification and forestry. Rep. Tim Holden (D-Pa.) held the chairmanship ofa similar subpanel called Conservation, Credit, Energy and Research this pastCongress. Thompson, who also will serve on the House Natural ResourcesCommittee, touted his new gavel as a plus for his district and forPennsylvania. "I will have more input toward the issues affecting ourlives on a daily basis — from the commonwealth’s family farms to MarcellusShale, to the Allegheny National Forest and Chesapeake Bay Watershed," hesaid yesterday in a statement. The jurisdiction of several other subcommitteesalso has been tweaked. Rep. Jeff Fortenberry of Nebraska will head DepartmentOperations, Oversight and Credit, a subpanel that lacked credit oversight butincluded nutrition and forestry during the 111th Congress.”

Embarrassed over BeingExposed for Shoddy Work on Boiler MACTs, EPA Takes Out Frustration on Economywith New Rules Targeting Refiners. Politico (12/21) reports, “The Obama administration is expected to rollout a major greenhouse gas policy for power plants and refineries as soon asWednesday, signaling it won’t back off its push to fight climate change in theface of mounting opposition on Capitol Hill. Under the schedule agreed to byEPA, states and environmental groups, the agency will issue a draft greenhousegas performance standard for power plants by July 2011 and a final rule by May2012. The agreement requires EPA to issue a draft limit for refineries by Dec.2011 and a final rule by Nov. 2012. The standards are part of a series ofclimate rules from the Obama administration that have faced fierce oppositionfrom industry groups and lawmakers on both sides of the aisle. And while thepolicies won’t go final for more than a year, the political ramifications willcome immediately. GOP lawmakers slated to claim the gavels of powerful Housecommittees next year have already vowed to launch probes into a host of EPAregulations – including the administration’s suite of climate changerules – arguing that the regulations will further damage the alreadyailing economy. Starting Jan. 2, EPA will begin regulating large stationarysources of the heat-trapping emissions, but those requirements only apply tonew and upgraded facilities and will be determined on a case-by-case basis, soit’s unclear how deeply they will slash emissions. The forthcoming standardswould set industry-specific standards and could require some of the oldest,dirtiest facilities to clamp down on carbon dioxide.

Meanwhile, Refiners andAutomakers Stand Shoulder-to-Shoulder in Rendering Safety Assessment of E-15– The Stuff’s Junk, Plain and Simple.Wall Street Journal (12/22) reports, “Several major U.S. oilrefiners said Tuesday that they won’t sell gasoline containing 15% ethanoldespite recent government authorization for fuel makers to start distributingthe fuel blend. Valero Energy Corp., Marathon Oil Corp. and Tesoro Corp. saidthey would refuse to sell E15, a mix of 85% gasoline and 15% ethanol, at theirgas stations, because it could harm older automobiles or void their warranties.They and most other refiners now sell a mix of 10% ethanol and 90% gasoline."While some government agencies may believe differently, Tesoro isn’tconvinced that E15 is ready for prime time," a Tesoro spokesman said. Thethree companies own or license their names to a combined 12,700 gas stations inthe U.S., about 7.8% of the total as of 2008, the latest figure available.Other refiners, including Exxon Mobil Corp. and BP PLC, declined to comment.Although ethanol advocates cite research saying E15 won’t damage vehicles, automakers hold that E15 could harm car and light truck engines and void theirwarranties. The Alliance of Automobile Manufacturers, representing Ford MotorCo., General Motors Co., Toyota Motor Corp., and other auto companies, filed apetition with a U.S. appellate court in Washington on Monday challenging theEPA’s approval for the sale of gasoline containing 15% ethanol. "There’sno warranty protection from engine and equipment manufacturers for E15,"Mr. Day said. "We’re not going to sell a product we can’t guarantee."

Garbage In: PollCommissioned by Big Wind, Solar Attempts to Stoke Public Fear Over Natural Gas,60-Year-Old Energy Technology Needed to Produce It.Wilkes-Barre (Pa.) Citizens Voice (12/22) reports, “Pennsylvanians are moreaware and more concerned about the natural gas extraction process of hydraulicfracturing than the national average, according to survey results releasedTuesday by a Massachusetts-based nonprofit that supports renewable energydevelopment. Knowledge and concern about the issue is varied throughout thestate, with residents in Western Pennsylvania more likely to know aboutfracking as an issue than those in the northeast and central parts of thestate, while Philadelphia-area residents are the most likely to say they are"very concerned" about fracking, according to the poll by the CivilSociety Institute. Kathryn Klaber, president of the Marcellus Shale Coalition,said that the questions "were overwhelmingly structured in such a way togenerate predetermined outcomes" but added that it is "clear our industrymust continue to educate communities about the steps we’re taking each day to protect and strengthen theenvironment" while producing the gas.Chris Tucker, spokesman for Energy inDepth, characterized the survey as "garbage in, garbage out.""You’re used to seeing ‘push’ polls in this business, but rarely do yousee one where the respondent is picked up and thrown down a flight of stairs,"he said. "The entire questionnaire is set up in a way that forces peopleto choose between drinking water and natural gas, as if those are the only twooptions out there."

Garbage Out: Provision inCR that Would’ve Broken Existing Contracts with Offshore Producers, TripledMandatory Waiting Time for Review of Permits, Removed from Bill. Politico (12/21) reports, “A plan approved by the Senate and House tocontinue federal spending until March does not contain a controversialprovision tripling a 30-day mandatory federal review period for offshore oiland gas plans, likely the last chance the White House had to get such a mandatethrough Congress. Oil-state lawmakers in both parties fiercely opposed languageto extend to 90 days the amount of time federal offshore drilling regulatorscan take to review these drilling plans – which include environmental analyses,oil spill response strategies and other aspects of a larger blueprint that needto be approved before a company requests an actual permit to drill. The 90-dayreview period – which was pushed by the Obama administration – was included ina yearlong continuing spending resolution the House passed this month, as wellas an omnibus spending plan that would have run through fiscal year 2011. Thatdied late last week in the Senate. The slimmed down Senate-passed continuingresolution removed the 60-day review extension and a host of other unrelatedpolicy changes. "There were lots of things that came out," Sen. MaryLandrieu (D-La.) told POLITICO. "It needed to be a CR with as far policychanges as possible. Rightly it was just really stripped down to the bareessentials."

State of Alaska ReadiesLawsuit Against Feds for Designating the Whole Damned State a Critical Habitatfor the Polar Bear – Potentially Bringing Economy to Halt.Associated Press (12/21) reports, “Parnell argues that thecritical habitat designation in the oil-rich Arctic could result in hundreds ofmillions of dollars in lost economic activity and tax revenue for the state.Alaska officials and the state’s oil and gas industry representatives maintainpolar bears do not need the added protection of the ESA listing, which they saywill hurt offshore drilling efforts and possibly result in hundreds of millionsof dollars in lost economic activity and tax revenue. Already, there are statelaws, international agreements and the federal Marine Mammal Protection Act toprotect polar bears, Gov. Sean Parnell said Tuesday. "The polar bear isone of the most protected species in the world," he said. The state putthe federal agency on 60-days notice that it intends to sue unless the criticalhabitat designation is withdrawn or corrected. The ESA listing for polar bears,and the designation of critical habitat, will only result in increasedregulation and consultation, and likely more litigation, the governor said. Thestate also said that areas designated as critical habitat for polar bearsincludes expanses where there is little or no evidence they are crucial topolar bear conservation. Nearly 95 percent of the designated habitat is sea icein the Beaufort and Chukchi seas off Alaska’s northern coast.

Revolving Door: Cathy Zoi’sHusband – Formerly VP of Window Company that Benefited Handsomely fromCathy’s “Weatherization” Lucre – Takes New Job at NRDC. Politico’s MorningEnvironmentalist (12/22)reports, “Robin Roy is joining NRDC as the group’s director of clean energystrategy. He most recently served as vice president of policy and projects forSerious Materials, a manufacturer of energy-efficient building materials. Flashback: yet another senior Obama administration figure has managed tofind ways to cash in on the sector she’s supposed to be regulating. Meet CathyZoi, assistant secretary of energy for energy efficiency and renewable energy— and Green Entrepreneur on the taxpayer dime: A top Obama administrationofficial who’s helping lead a campaign for energy conservation has a majorfinancial interest in two companies that are poised to benefit from thegovernment’s spending.Cathy Zoi, the assistant secretary of energy for energyefficiency and renewable energy, owns between $250,000 and $500,000 worth ofstock in Landis+Gyr, a Swiss-based manufacturer of special electric meters thatare used to create an efficient “smart” grid of electricity use. Her husband,Robin Roy, owns options on at least 120,000 shares of Serious Materials, aleading manufacturer of energy-efficient windows that’s been singled out for praiseby President Barack Obama and Vice President Joe Biden. As an officer of thecompany, Roy receives options on an additional 2,500 shares every month andwill continue to do so until October 2012. Click here for more from Wash Examiner’s Mark Tapscott.

Don’t Call It a Comeback:Enviro Sweetheart Tom Perriello, Accidental Congressman from Charlottesville,Tells Folks He May Run for Senate. E&E News(12/22, subs. req’d) reports, “One Virginia Democratic strategist pointed outthat Perriello proved himself in one of the state’s most conservative regionsand wondered why he wouldn’t want to build on the support that he has earned inmore Democratic parts of the state like northern Virginia. Some of those closeto Perriello see him as a natural fit for the Senate given his congressionalbackground and an affinity for international issues that he gained during hispre-congressional career serving as a national security consultant, working inconflict zones such as Afghanistan, Darfur, Kosovo and Liberia. One way forPerriello to head to the Senate in 2012 would be for Sen. Jim Webb (R-Va.) toretire rather than seek a second term. Webb has yet to officially announce his2012 plans and some political observers wonder if he has the fire for anothersix years in the Senate. Asked if he would be interested in the Senate job ifWebb retires, Perriello said, "I haven’t ruled anything out." LisaGuthrie, executive director of Virginia League Conservation Voters, is onePerriello supporter who believes that the congressman has a future in higheroffice. "There’s a great deal of support for Tom Perriello," Guthriesaid.

Shuttered: Enviro-BackedThink Tank Created to Shill for Cap-and-Raid Set to Announce Its DissolutionToday – At Least We’ll Always Have the Memories.Politico (12/21) reports, “A panel of well-connected energy experts isending its work after eight years of pitching several ideas successfully intolaw – although the biggest fish got away. "After the inability toadvance an agenda led by climate change, our sense was it’s important to stepback and reevaluate," Jason Grumet, NCEP’s executive director, toldPOLITICO. The group will officially announce its closure Tuesday. Grumet, aformer 2008 Obama campaign adviser, will launch a new energy program in thespring under the banner of the Bipartisan Policy Center, another group he runs.Talks are already underway with several soon-to-be retiring members of Congressabout signing up to help with the energy work at BPC. The National Commissionon Energy Policy follows several prominent environmental groups that also haveclosed or recalibrated their campaigns following the collapse this summer of acomprehensive global warming and energy bill. On the energy front, severalfront-line groups from the left have shifted or shuttered their operationssince the demise of the climate bill. Al Gore’s Alliance for Climate Protectionhas scaled back its field work from 25 states to about seven. And the CleanEnergy Works coalition that included greens, labor and religious groups has putits campaign on the backburner.

Chain of Command: LisaJackson Cites Objections by the Solar Industry as Reason She Can’t ExtendPublic Comment Period on EPA’s Carbon Criminalization Scheme. EPA administrator Lisa Jackson writes in a letter to U.S. Rep. Darrell Issa (12/20), “If EPA were,as you request in your letter, to reopen the guidance document for anothersixty days now, then companies would enter the period that begins on January 2burdened by the regulatory uncertainty that you seek to avoid. Assuming thatthe new, modest requirements are allowed to stand, companies will enjoy theregulatory certainty necessary to invest in job-creating projects. But if thenew requirements were delayed, the result would be regulatory uncertaintydiscouraging job-creating investment. [T]he Biomass Power Association, theSolar Energy Industries Association, and the American Wind Energy Associationpoint out that a delay of two years actually would “extend the uncertaintyaround reducing global warming pollution under the Clean Air Act far longerthan two years” and “would only provide a boost to foreign renewable energyindustries, located in countries that already regulate greenhouse gasemissions. This further disadvantages our own businesses and economy.”

Less Water, Fewer Trucks,More Benign Chemistry – That’s What Shale Gas Development Is All AboutToday, and Is Renewing Its Commitment to for Tomorrow. Houston Chronicle (12/20) reports, “Oil field servicesproviders that offer the service are also rethinking the current model to cutcosts. Indeed, their oil company customers are demanding it as natural gasprices remain low and shale formations take center stage in the onshore U.S.oil and gas business. The latest example came last month, when oil fieldservices giant Halliburton announced a sweeping plan to significantly reducethe surface footprint and environmental impact of its hydraulic fracturingoperations by 2013. Halliburton, the market leader in North America, aims to dothis by redesigning equipment to be more efficient, automating more functionsto reduce personnel and traffic to sites, and reducing the amount of freshwater required in the process. While the company’s motivation may be largelyfinancial, the plan also hints at what could be the oil field of the future.“We’re ready to change the map,” Ron Hyden, Halliburton’s technology directorfor production enhancement, said as he stood amid towering rows of equipment atthe Poth well site. “We were concerned that a 1980s frac operation would not besustainable in this century.” Other oil services companies also have takensteps to clean up fracking, from launching technology that recycles wastewaterstreams to rolling out more robust pumping equipment that lessens the need forso many trucks on-site.

Christmas Miracle? Somehow,Someway, U.S. Gasoline Consumption Falls Even Without Top-DownCommand-and-Control Carbon Rationing Scheme from Washington. Associated Press (12/21) reports, “After seven decades ofmostly uninterrupted growth, U.S. gasoline demand is at the start of along-term decline. By 2030, Americans will burn at least 20 percent lessgasoline than today, experts say, even as millions of more cars clog the roads.The country’s thirst for gasoline is shrinking as cars and trucks become morefuel-efficient, the government mandates the use of more ethanol and peopledrive less."A combination of demographic change and policy change meansthe heady days of gasoline growing in the U.S. are over," says Daniel Yergin,chairman of IHS Cambridge Energy Research Associates and author of a PulitzerPrize-winning history of the oil industry. This isn’t the first time in U.S.history that gasoline demand has fallen, at least temporarily. Driverstypically cut back during recessions, then hit the road again when the economypicks up. Indeed, the Great Recession was the chief reason demand fell sharplyin 2008. But this time looks different. Government and industry officials -including the CEO of Exxon Mobil – say U.S. gasoline demand has peaked forgood. It has declined four years in a row and will not reach the 2006 levelagain, even when the economy fully recovers. Americans are burning an averageof 8.2 million barrels – 344 million gallons – of gasoline per day in 2010, afigure that excludes the ethanol blended into gasoline. That’s 8 percent lessthan at the 2006 peak, according to government data.

Of Course, Even with thatDrop in Demand, Price for Gasoline Expected to Soar in Q1 of New Year –Partially a Result of the Administration’s Bans in the Gulf.Houston Chronicle (12/20) reports, “Today’s gasoline prices,while higher than normal for this time of year, could end up looking cheap comespringtime, says one prominent oil analyst. Pump prices nationwide for regularunleaded could hit an average of $3.25 to $3.75 a gallon early next year onhigher crude oil prices and a seasonal rise in gasoline demand, Tom Kloza,senior oil analyst with the Oil Price Information Service predicts. “My view of2011 suggests that we are looking at the second fuel price apocalypse of the21st century, commencing during a time line that will begin with springtraining and end when the Cubs are written off as a baseball non-contender,”Kloza writes. As for whether U.S. pump prices will reach an average of $3 agallon before the end of 2010, he says it could go either way. The nationalaverage retail price for regular unleaded held overnight at $2.98 a gallon,while the Houston average rose a fraction of a cent to $2.80 a gallon,according to AAA’s Daily Fuel Gauge Report. The national average has notsurpassed $3 in more than two years, and has never hit the $3 mark in December.The all-time record is $4.11 a gallon, set in July 2008.

Follow This Logic: TexasAnnounces It Has No Intention of Trying to Impose EPA’s Ridiculous Carbon Ruleson Public; So Enviro Groups Sue … EPA?Dow Jones (12/21) reports, “Six environmental groups sent the U.S.Environmental Protection Agency a notice of intent to sue if the federal agencydoes not resolve Texas air-permitting issues that it has objected to in atimely matter. Advocacy groups including the Environmental Integrity Project,the Sierra Club, Public Citizen, Environment Texas, Air Alliance Houston, and TexasCampaign for the Environment sent a letter to EPA Administrator Lisa Jacksonfor "failing to issue or deny" permits for 43 facilities afterraising objections to them. The groups intend to file a suit in 60 days afterthe EPA receives the notice to compel the agency into action. Since the ObamaAdministration took office, the EPA has been vocal in its concern that varioustypes of air permits issued by the Texas Commission on Environmental Quality,or TCEQ, violate the national Clean Air Act. At the heart of the problem isthat permits issued to heavy-polluting oil refineries, chemical plants andother facilities do not properly regulate or provide adequate information aboutemission sources. There is a high concentration of these types of facilities inTexas such as those operated by Exxon Mobil Corp., Chevron, Valero EnergyCorp., and E.I. DuPont de Nemours & Co. Under federal law, Texas had 90days to submit revised permits after the federal agency issued its objections,but it failed to do so, and the "EPA has a duty" to take over thattask, the letter said.

Sino Evil? French HaltSolar Panels from Coming Into Country – Not Because They’re OutrageouslyExpensive, But Because They’re Made By the Chinese.Bloomberg News (12/21) reports, “France’s decision to suspend mostsolar-energy projects for three months was done partly to curb cheaper importsof Chinese solar panels, Environment Minister Nathalie Kosciusko-Morizet saidtoday on France Info radio. “Ninety percent of the solar panels installed inFrance come from China and our import criteria must be strengthened,”Kosciusko-Morizet said. “We are not here to subsidize the Chinese economy butto create green jobs in France.” European governments are revising solarpolicies after realizing their subsidies were too generous and that developersbought a majority of the panels from Chinese suppliers including Yingli GreenEnergy Holding Co. rather than manufacturers such as Q-Cells SE of Germany.France on Dec. 10 suspended projects for three months as it studies whether tolimit construction and further cut subsidized rates paid to solar-powerproducers. The feed-in tariffs, among Europe’s highest, sparked a boom inproject applications and France, following similar moves in Spain and Germany,is seeking to limit the spiraling cost of clean energy for consumers. TheFrench halt applies to projects with a capacity of more than 3 kilowatts.