News

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.

Land Shark: Locking AwayMillions of Energy-Rich Acres Out West a “Top Priority” for Few Hours thatRemain in Lame Duck Session, Sen. Reid Declares.E&E News(12/20, subs. req’d) reports, “Republican leaders over the weekend urged defeatof the omnibus package of 110 public lands, water and wildlife bills thatSenate Majority Leader Harry Reid (D-Nev.) introduced Friday and hopes to passin the final days of this Congress. House Natural Resources Chairman-elect DocHastings (R-Wash.) called the package of 110 bills (S. 303) "bloated"and said it authorizes more than $18 billion in spending over 10 years."Instead of haphazardly approving billions in new spending, we have anobligation to ask if spending money on these programs is so critical that weshould further indebt ourselves to foreign countries and put our economicsecurity at risk," Hastings said in a statement. "This monster billmust be defeated." Sen. James Inhofe of Oklahoma, the top Republican onEPW — also slammed the bill. Inhofe said through a spokesman that the package,unlike certain individual measures included, had no chance of passing andshowed that Democrats would rather "play politics than ensure passage ofenvironmental legislation." "What is truly unfortunate is that withinthis massive package there are a number of bills that have broad bipartisansupport," Inhofe spokesman Matt Dempsey said in an e-mail. "Thesebills, if considered separately from this massive omnibus package, may verywell be able to pass the Senate."

Unfortunately for Reid, the“Top Priority” for Everyone Else in His Caucus Looks to Be Passing the CR andGetting the Hell Home for the Holidays. Enviro Blotter (12/20) reports, “Harry Reid has introduceda massive public lands and water omnibus and maintains that the package is oneof his lame-duck priorities. But given Republican opposition – on top of analready crowded schedule – it is uncertain whether it will make it to the floorbefore Christmas. Reid pitched the package late last week as a bipartisancollection of non-controversial bills and claimed he had the votes to beat aRepublican filibuster – but GOP leaders were quick to counter with accusationsof political gamesmanship and said the window has closed for the year. "Iam perfectly willing to work with my colleagues to advance some of these billsindividually, but we need time to examine the changes that have been made sincethey emerged from the EPW committee, and we must consider their effect on thedeficit," said Jim Inhofe. House Republicans aren’t too pleased withReid’s effort either. "There will be plenty of time in the next Congressto individually consider the measures piled into this omnibus," DocHastings said in a statement Friday night, one in an ongoing string his officehas released since word of the package first surfaced."They shouldn’t bejammed through in the last days of a lame-duck session."

Do You Hear What I Hear? ASong, A Song, Low Beneath the Sea, that Sings of U.S. Pros-per-i-ty! Can’t HearIt? Seismic Work in Atlantic OCS Will Confirm It. Houston Chronicle (12/17) reports, “The Obama administrationtoday said it is taking the first steps to allowing new seismic research infederal waters along the Atlantic Coast that could help identify hidden pocketsof oil and gas — even though drilling in the area will be off limitsuntil at least 2017. The initial move is coming in the form of a requiredenvironmental impact statement that will assess the potential effects ofgeological and geophysical research on the outer continental shelf in the mid-and south-Atlantic. The Bureau of Ocean Energy Management, Regulation andEnforcement announced it had launched work on that programmatic environmentalimpact statement today. “This work will enable us to carefully and responsiblyidentify the resources that meet our nation’s energy needs while protecting theAtlantic and its coastal communities,” said Michael Bromwich, the bureaudirector. “It is an important part of our comprehensive approach to energydevelopment that relates to oil and gas, as well as offshore wind.” Thedecision keeps the country on a path to eventually leasing federal Atlanticwaters for oil and gas development. But it won’t be happening any time soon,under a new five-year leasing plan being developed by the Obama administration.

Cape Wind’s Survived 10Years of Enviro Assault, and 10 Years of Gov’t Incompetence – Only OneProblem Left: The Energy It Generates Is Really Expensive.Associated Press (12/19) reports, “Cape Wind has outlasted adecade of government review, a slew of court brawls and fierce opposition frommariners, fishermen, Indian tribes and Kennedys just to win the right to sellits wind-fueled electricity. Now, all it needs are customers. Last month, thenation’s first offshore wind farm nailed down its first buyer when theMassachusetts Department of Public Utilities approved a deal that sees CapeWind selling half its power to National Grid, the state’s largest electricutility. But the other half of the Cape Wind project’s electricity remainsavailable with no obvious takers, raising the possibility of a smaller project withpricier power. The top prospect for Cape Wind is the state’s second-largestelectric utility, NStar. But NStar is uninterested and says it can find cheaperrenewable power elsewhere. "It’s not that we’re for or against Cape Windat all," said NStar spokeswoman Caroline Allen. "We just want to makesure that we are promoting renewables in the region … but also being mindfulof costs for our customers." Price is always an issue with offshore wind,which costs more partly because it’s expensive to build and maintain massiveturbines at sea. The 468-megawatt Cape Wind, which is expected to produceenough power for 200,000 homes in average winds, is estimated to cost at least$2 billion to construct.

Speaking of Big Pinwheel:Must Read Editorial in WSJ Takes AWEA Annual Report at Its Word –Highlights Failure of Wind in 2010 to Deliver on Its Promises. Wall Street Journal (12/20) editorializes, “Ethanol isn’t the onlyheavily subsidized energy source that won a multibillion dollar jackpot in lastweek’s tax deal. The other big winner was the wind industry, which received aone year extension of a $3 billion grant program for renewable energy projects.Despite more than $30 billion in subsidies for "clean energy" in the2009 stimulus bill, Big Wind still can’t make it in the marketplace. DeniseBode, AWEA’s CEO, had warned that without last week’s extension of the federal1603 investment credit, the outlook for the wind industry would be"flatline or down." Some 20,000 wind energy jobs, about one-quarterof the industry’s total, could have been lost, the wind lobby concedes. Formost industries that would be an admission of failure, but in Washington this kindof forecast is used to justify more subsidies. But what have these subsidiesbought taxpayers? According to AWEA, in the first half of 2010 wind powerinstallations "dropped by 57% and 71% from 2008 and 2009 levels." Inthe third quarter, the industry says it "added just 395 megawatts (MW) ofwind-powered electric generating capacity," making it the lowest quartersince 2007. New wind installations are down 72% from last year to their lowestlevel since 2006. And this is supposed to be the miracle electricity source ofthe future? The coal industry, which Mr. Obama’s Environmental ProtectionAgency and Interior Department have done everything possible to curtail, addedalmost three times more to the nation’s electric power capacity in the firstnine months of 2010 (39%) than did wind (14%), according to the U.S. EnergyInformation Administration.

With Death of RockefellerAmdt, Last Hurdle for EPA Carbon Regs Appear to Be Removed – And AsUsual, J-Rock Doesn’t Seem Too Concerned About It.The Hill (12/19) reports, “Sen. Jay Rockefeller (D-W.Va.) believes thenew Congress will be “much more likely” to approve his legislation that wouldhalt looming Environmental Protection Agency climate change rules. Rockefellerwants to delay rules – which will begin phasing-in next month – tocurb emissions from power plants, refineries and other industrial plants, but nevergot a vote on his measure this year. “The House will be that way and the Senatewill be more inclined to be that way,” Rockefeller told The Hill in the CapitolSaturday, a reference to gains by GOP lawmakers hostile to climate rules.Rockefeller plans to immediately reintroduce the bill when the new Congressstarts, he said. Ascendant House Republicans are also vowing to block EPAclimate rules and other pollution regulations they call “job-killing.”Rockefeller, however, said he’s concerned about overreach, noting he supportsemissions standards for vehicles. “The thing I have to look at is to make surethat it doesn’t go too far,” he said. “I don’t think you get rid of EPA. I justdon’t know what the Tea Party-types are going to do, but I know they are goingto try and abolish a lot of agencies.”

U.S. Trial Lawyers PushingCase Against Chevron Basically Fired by Ecuadorian Government for Fraud –Now It’s Patton Boggs’ Turn to Line Up at the Trough. Wall Street Journal (12/18) reports, “Court documents filed infederal court in Philadelphia show the rift began in 2009, when Mr. Kohn andMr. Donziger feuded over control of the case. In November 2009, Mr. Kohn wrotea letter to the plaintiffs’ Ecuador-based legal team arguing that they shouldseek an immediate settlement of about $1 billion, far less than the $27 billionthat a court-appointed expert said Chevron should pay. The plaintiffs rejectedthe idea of a settlement, saying that seeking a deal would demonstrateweakness, according to a letter from the Ecuadorian attorneys to Mr. Kohn thatwas reviewed by the Wall Street Journal. In response, Mr. Kohn cut off furtherfunding, and in July, the plaintiffs formally terminated its dealings with Mr.Kohn. Mr. Kohn’s attorney, Jim Rohn, said his client had become increasinglyuncomfortable with Mr. Donziger’s handling of the case. He said Mr. Kohn leftthe case before Chevron’s fraud accusations became public. Chevron, meanwhile,zeroed in on Mr. Donziger, accusing him and his team of improperly influencingthe work of Richard Cabrera, the Ecuadorian expert who came up with the $27billion price tag. Mr. Cabrera has previously defended his work.

“Game Theorist” RunsSophisticated Modeling Program to Predict Whether Climate Conferences WillYield Success – You Won’t Believe It: His Computer Says They Failed.ClimateWire(12/20, subs. req’d) reports, “A modestly successful outcome from the latestround of international climate change negotiations in Cancun, Mexico, hasproponents breathing a huge sigh of relief. After last year’s raucous sessionin Copenhagen, Denmark, most governments and activists were put on thedefensive to prove that multilateral action on global warming was evenpossible. They now feel vindicated. But even as optimism strengthens ahead ofthe next year’s major conference in South Africa, one famous prognosticatorsays it’s still more likely that we’ll see a repeat of Copenhagen’s performancetoward the end of 2011. Last year, Bruce Bueno de Mesquita, a New YorkUniversity professor and partner in a Manhattan consultancy, famously predictedthe flat outcome at Copenhagen in an article he penned for Foreign Policymagazine, one month before that conference began. Confidence in the computermodel he designed that led to that conclusion informs his views on where thetalks are headed next: Namely, multilateral negotiations will not fix the climatechange problem, regardless of what U.N. officials and others claim. "It’sdepressing, it is what it is, but unfortunately it was right," Bueno deMesquita said in an interview. "We got nothing out of Copenhagen."

“Statoil finds more oil in Brazil,” ReadHeadlines out of Oslo and Rio; We of Course have a Permitorium, so Don’t Expectto Read This in US Papers Anytime Soon. UPI (12/17) reports, “Norwegian energy company Statoil announcedthat it struck oil at a shallow-water basin about 90 miles from the Braziliancoastline. Statoil said it encountered an oil reservoir that was about 230 feetthick in the Espirito Santo Basin off the coast of Brazil. Analysis indicatesthe prospect contains medium crude oil. "We are very pleased to havestruck oil here and the result will have an important bearing on our decisionregarding further exploration activity in this area," Tim Dodson,Statoil’s vice president of international exploration, said in a statement. Thecompany said it plans to operate three exploration wells in Brazil next year.Statoil formed a consortium during the summer with Chinese conglomerate SinochemGroup to develop Brazil’s offshore Peregrino field in order to start productionin early 2011. That field is about 50 miles offshore in the oil-rich CamposBasin in 325 feet of water. Statoil estimates the field holds at least 300million barrels of oil.”

Interior Announces 10,000 Page SolarEnergy Plan, Says They’ll be “Quite a bit of Incentive for the Companies.”Million Dollar Question? Do Consumers Want to Pay for this ExpensiveElectricity? Washington Post (12/17) reports, “The Obamaadministration issued proposed guidelines Thursday for solar development onpublic lands in the West, a move that could speed renewable-energy projectsthat have been mired in environmental controversy. The detailed analysis, knownas Draft Solar Programmatic Environmental Impact Statement, identifies 24"solar energy zones" in six states that Interior Secretary KenSalazar said would be most suited "for environmentally sound,utility-scale solar energy production. " "We think it provides acommon-sense and flexible framework through which to grow our nation’srenewable energy economy," Salazar told reporters in a conference call.Under the 10,000-page plan, which is now subject to public comment for 90 days,developers would have a higher level of confidence that they could receivefederal permits establishing solar ventures in specific areas in statesincluding Arizona, California, Colorado, Nevada, New Mexico and Utah."There’ll be quite a bit of incentive for the companies to focus ondevelopment" in the zones, said the bureau’s director, Bob Abbey, addingthat he and his colleagues have tried to identify areas that are less prone toconflicts over environmental concerns, such as harm to endangered species ordrains on local water supplies." NOTE: IER blogs on Salazar’s Renewed Commitment to Unreliable Energy.

Come Hell or High Water, W.Va. Senatorwill Force Vote EPA Carbon Criminalization Regs, Looks for Two Year Delay. Politico (12/17) reports, “Sen. John Rockefeller (D-W.Va.) is pressingforward on his drive to vote this month on his plan to delay Obamaadministration climate regulations for two years, threatening to go directly tothe Senate floor and force a vote to include it in a catch-all spending bill.Rockefeller has told Senate leadership “that he will insist on a vote” on hismeasure to block the Environmental Protection Agency global warming rules setto take effect next month. “If left with no other option, Senator Rockefellerwill seek to suspend the rules on the Omnibus Appropriations bill to bring uphis legislation,” his office said in a statement. Such a maneuver would require67 votes, which he is unlikely to get. A POLITICO analysis shows at least 56senators would likely support Rockefeller’s amendment. Rockefeller has beentrying for months to get Senate Majority Leader Harry Reid (D-Nev.) to schedulea vote on his amendment. The West Virginia Democrat has said he would hold Reidto a promise he gave Rockefeller to hold a vote this year. "The time hascome for us to make a decision on the energy future of our country,"Rockefeller said in a prepared statement. "While there are still ongoingdiscussions about how Congress should proceed, I want to make it clear that Iintend to get a vote this year on my EPA-suspension legislation. I know thereis bipartisan support for this legislation, and if necessary, I will seek tosuspend the rules and bring this up for a vote. This is too important for us todelay any further."

Who’s In, Who’s Out? Rent-Seeking, WallStreet Fat Cats that Lobbied for Cap-and-Raid Scratching Their Heads on What todo Next. Politico (12/17) reports, “Energy-themed tradegroups can measure their level of influence with the next Congress to somedegree by the amount of work they did over the past two years to pass globalwarming legislation. Some lobby shops actively supported the Obamaadministration and its Democratic allies on Capitol Hill, sensing a goldenopportunity to reshape the nation’s energy policy. Others played along,figuring it made sense to be at the bargaining table to shape a cap-and-tradebill as best they could. But now that the proposal is dead, groups like theAmerican Wind Energy Association and Solar Energy Industries Association mustdeal with the awkwardness of trying to work with the same Republicans whoopposed their efforts to put a lid on greenhouse gases. Uncomfortable days mayalso be ahead for the Edison Electric Institute, the trade group forinvestor-owned utilities that was at the center of negotiations on theHouse-passed climate bill. An electric utility industry lobbyist saidindividual companies would be smart to rely on their own Capitol Hill contactsrather than approach members through the trade group. But EEI’s stock might beat its lowest with House Republican leaders who have clear memories of thetrade association’s decision to use Brian Wolff, a former top political adviserto House Speaker Nancy Pelosi (D-Calif.), as its chief message and lobbying manon climate change. Wolff has also worked part time for Democratic congressionalcandidates.“I don’t think it’s as bad as it may seem for EEI, but it’s prettydamn bad for certainly the foreseeable future,” said a former House GOP stafferwho works on energy issues.”

Old News, But Nontheless News. Upton NamesChairs/Vice-Chairs, Next Question? Sub. Comm. Rosters and Staff. The Hill (12/16) reports, “The structure ofthe powerful House Energy and Commerce Committee under GOP rule has come intofocus. The plan includes cleaving the Energy and Environment Subcommittee intotwo separate panels, incoming full committee Chairman Fred Upton (R-Mich.)announced Thursday. Rep. Ed Whitfield (R-Ky.) will be chairman of the Energyand Power Subcommittee, with Rep. John Sullivan (R-Okla.) selected as vicechairman. Rep. John Shimkus (R-Ill.), meanwhile, will be chairman of the newEnvironment and Economy Subcommittee, with Rep. Tim Murphy (R-Pa.) in the vicechairman’s role. Upton told reporters Thursday the Energy and PowerSubcommittee will oversee the Clean Air Act, a key fact because Upton and otherRepublicans plan to attack EPA initiatives to regulate greenhouse gases underthe statute. Other EPA matters will fall under the Environment and Economypanel, Upton said. Elsewhere, as expected, Upton has named former committeechairman and ranking member Joe Barton (R-Texas) as “chairman emeritus” —a position that includes two staff members and a seat on each of the sixsubcommittees, Upton said.”

BetterLate than Never: Sens. Bayh and Bond Float Plan to Promote Domestic Policy/Planon Rare-Earths. E&E News (subs req’d, 12/17) reports, “Tworetiring Midwestern senators this week floated bipartisan legislation thatwould promote development of a domestic rare-earth minerals industry. Sens.Evan Bayh (D-Ind.) and Kit Bond (R-Mo.) introduced S. 4031 Wednesday to buildup a domestic rare-earth minerals supply chain. Rare earths, a group of 17elements critical to the clean energy sector, are primarily sourced from Chinadespite vast domestic reserves. And China has locked up a near monopoly onprocessing. The materials are used in wind turbines, energy-efficient lightbulbs, catalytic converters for diesel engines and hybrid car components, amongother applications. Bayh and Bond’s measure would set up an interagency taskforce to study rare earths, expand an existing federal loan guarantee programto include the companies developing the technologies used to produce rareearths, establish an Energy Department research and development program tostudy rare earths and authorize $50 million to establish domestic rare-earthprocessing and magnet manufacturing facilities. The measure expands onlegislation that passed in the House earlier this fall (H.R. 6160) and onlegislation previously introduced in the Senate by Sen. Lisa Murkowski(R-Alaska) (S. 3521). "Without a secure, domestic supply of rare earthmetals, our country is forced to rely on China for these materials, anunacceptable situation that jeopardizes our economy, our energy supply and ournational security interests," Bayh said this summer when he sent a letterto Energy Secretary Steven Chu calling for an expansion of the loan guaranteeprogram to include rare earths.”

SenateApprops Bill Zeros Out Yucca, But Jacks Loan Guarantees. That Make Sense? E&ENews (subs req’d, 12/15)reports, “Funding for the Energy Department in an omnibus appropriations billintroduced yesterday by Senate Democrats largely stays level with earlierversions, but it does boost funding for the agency’s nuclear and fossil energyloan guarantee programs and zeroes out appropriations for the nuclearrepository at Yucca Mountain, Nev. The measure authorizes $8 billion in loanguarantee authority for advanced nuclear reactor projects, giving DOE a totalof $26 billion it may use to back up prospective reactor projects. DOE hasalready used $8 billion of that for a conditional loan guarantee to thepartners building a new reactor at Southern’s Vogtle reactor in Georgia. TheSenate bill goes further than the House long-term continuing resolution (CR),which provided $7 billion in nuclear loan guarantees, $3 billion in fossilenergy and $300 million for renewable energy credit subsidies. The House lastweek passed a CR to fund the government through September 2011. The bill alsofollows through on a decision by Obama this year to zero out funding for theDOE nuclear waste repository at Yucca Mountain, as the White House establisheda "blue ribbon commission" to find an alternative waste solution. DOEhas made a motion to withdraw the license application for the project, whichhas been submitted to the Nuclear Regulatory Commission. NRC and federal courtsare reviewing whether DOE has the authority to do so.

ObamaAdmin. Comes out in Support of Marcellus Development in Del. River Basin; Anti-EnergyCrowd, Buffalo Mo Aren’t Happy.Greenwire/New York Times (12/14) reports, “The Obama administrationsupports a full study of the effects of gas drilling in the watershed thatprovides drinking water for Philadelphia and New York City, but it doesn’t wantto wait until it’s finished for drilling to begin. Gen. Peter "Duke"DeLuca of the Army Corps of Engineers outlined the position in a letter (pdf)written to Rep. Maurice Hinchey (D-N.Y.) and released today. The letter offersthe first indication of the administration’s position on gas drilling in theNortheast since the day after the Nov. 2 midterm election when President Obamahighlighted gas drilling as a potential area of common ground with Republicans.DeLuca, the Army Corps’ North Atlantic division engineer, is the federalrepresentative on the Delaware River Basin Commission, which is developingregulations for gas drilling in eastern Pennsylvania and upstate New York.Hinchey and local environmentalists want the commission to keep its drillingmoratorium until its staff does a "cumulative impacts" study, aprocess that could take years. Drilling supporters want the commission to moveahead as quickly as possible and dislike that the commission has blockeddrilling in Pennsylvania while drilling continues rapidly in the rest of thestate.”

You’veHeard of the Offshore Permitorium and Moratorium, Right? Now Meet the BLMoratorium;Records Show 79 Percent Drop in Acreage Offered for Energy Development outWest.Washington Examiner (12/14) reports, “A new analysis ofgovernment data by the Western Energy Alliance shows a 79 percent drop in thenumber of energy development leases offered by the federal government on publiclands in the Rocky Mountain region states of Colorado, Wyoming, Montana, NorthDakota, New Mexico and Utah. The U.S. Department of Interior’s Bureau of LandManagement, which oversees the activities of energy firms seeking to find anddevelop oil and natural gas under public lands, has issued only 531 new leasesin 2010, compared to 2,499 in 2005, according to WEA. The Wyoming BusinessReport notes that since 2008 90 percent of the leases awarded by BLM have beenprotested. Such protests are usually filed by Big Green groups like the NaturalResources Defense Fund, Earth Justice, and Wilderness Society. The data alsoshow that under President Obama BLM has issued 76 percent fewer leases than wasthe case during the first two years of the Clinton administration and 71percent fewer than during the first two years of the second Bushadministration. Federal revenues from these leases dropped from more than $189million in 2005 to $101 million in 2010, a 46 percent decrease, according toWEA.”

OmnibusApprops Bill Jacks Fees, Adds Red Tape to Offshore Energy Development. Questionfor the Lawyers: Is the Permit Review Change from 30 to 90 days Legal?E&ENews (subs req’d, 12/15)reports, “The $32.2 billion bill would flatline the agencies’ funding at fiscal2010 levels, but increased inspection fees for offshore drilling would raise anadditional $50 million for Interior’s Bureau of Ocean Energy Management,Regulation and Enforcement — enough to double the outer continental shelf oiland gas inspection work force. The omnibus bill also contains a controversialprovision from a House-passed spending measure last week to triple the amountof time Interior is allowed to approve offshore drilling proposals. The measure– extending drilling permit reviews from 30 days to 90 days — is backed bythe Obama administration and key Senate Democrats as a way to allow fuller reviewsof offshore drilling in the wake of the BP spill. "Review of explorationplans should not be a perfunctory, rubber-stamp activity," Bill Wicker,spokesman for Senate Energy and Natural Resources Chairman Jeff Bingaman(D-N.M.) said this week. "These plans are complicated, they’re complex andthey’re critical." But the proposal has also drawn fire from severalSenate Republicans and some coastal state lawmakers who contend that it woulddelay domestic energy production and create additional opportunities forlawsuits both from industry and environmental groups.”

Sen.Feinstein Opposes Coal, Oil and Gas Production. Now Add Solar to the List;Wonder How She Powers her Home, Fuels her Car?Politico’sMorning Environmentalist(12/15) reports, “The budget omnibus includes a rider from Dianne Feinsteinthat would restrict solar development in the Mojave Desert. The provision– tucked 808 pages into the bill – prohibits Interior from usingfunds to authorize energy development on a quarter-million acres of federalland in the Mojave. Feinstein says the lands were donated for conservation byprivate owners and should not be opened to solar power plants. Feinstein took abigger bite at that apple earlier this year with legislation that would haveblocked solar development on nearly 1 million Mojave acres. That bill alsoincluded provisions to expedite solar development elsewhere in the Mojave, butit stalled in the Energy and Natural Resources Committee after it was panned byLisa Murkowski and got only tepid support from Interior and the DefenseDepartment.”

New MexicoCap-and-Raid Proposal Under Fire. Chief Concern? You Guessed it, IncreasedCosts. Associated Press(12/14) reports, “New Mexico’s largest electric utility filed a notice ofappeal Tuesday to the state’s new cap-and-trade program. Public Service Companyof New Mexico is seeking to appeal a plan to establish what state officialscall the most comprehensive greenhouse gas pollution reduction regulations inthe nation. The New Mexico Environmental Improvement Board narrowly approvedthe program last month. Utilityspokesman Don Brown said the program imposes costs on New Mexico other statesdon’t have. "At such a vulnerable economic time, it would put New Mexicoat a disadvantage in competing for jobs," he said. In addition, PNM doesnot believe the Environmental Improvement Board has the authority to regulategreenhouse gas emissions, Brown said. The program would force coal-fired powerplants, refineries, natural gas compressor stations and other facilities thatpump out a certain level of carbon dioxide each year to reduce those emissionsby 2 percent annually starting in 2012. Supporters of the cap-and-trade programsay it’s the first step for New Mexico to get a handle on the pollution blamedfor global warming. Critics, however, contend the regulations will lead tohigher electricity costs and an exodus of businesses and jobs to surroundingstates.”

The Art ofa Hit Piece: Lead with a Positive, Then Go to Josh Fox-Like Claims and BigGreen Inc., to fill Out a 1,500 Word Hatchet Job on Shale Gas. USA Today (12/14) reports, “Residents here rejoiced two years ago whengas companies poked into a mammoth natural gas deposit 2 miles under theirhomes, sparking a modern-day gold rush. The companies offered residents tens ofthousands of dollars an acre to drill on their land, enriching some folksovernight in this rural corner of northwestern Louisiana. Then cows started todie. Methane seeped into the drinking water. Homes were evacuated when naturalgas escaped uncontrollably from a wellhead. Today, many residents and localofficials still praise the bounty reaped from the Haynesville Shale, one of theworld’s largest natural gas deposits, spread under Louisiana, Arkansas andeastern Texas. An estimated 250 trillion cubic feet of natural gas is trappedthere — enough to power the United States for more than a decade, saysKevin McCotter, a senior director with Oklahoma City-based Chesapeake EnergyCorp., the largest gas producer in the area. The shale has delivered a cleanenergy source while enriching residents, he says. Further testing andmonitoring should be done on the technique, which also is exempt from sectionsof the Clean Water Act and other federal environmental laws, says Josh Fox, afilmmaker whose documentary film, Gasland, profiles families across the USAimpacted by natural gas drilling. The film, released this year, shows residentssetting the water coming out of their faucets on fire because of flammablemethane gas in the water. "This process has never been investigated,"Fox says. "We don’t put out drugs in the market without testing themfirst."

EPA isConsidering New Regulations on Coal-Fired Generation that will Cost Upwards of$80 Billion. Who Pays? Silly Question, You, the Consumer. Merry Christmas toyou too, Ms. Jackson.Reuters (12/13) reports, “U.S. Environmental Protection Agencyregulations could cost the industry more than $80 billion and force up to70,000 megawatts of coal-fired power plants to retire over the next severalyears, investment bank FBR Capital Markets (FBCM.O: Quote) said in a researchreport Monday. Before even considering the potential effect of possiblegovernment efforts to reduce carbon dioxide emissions to combat global warming,the report forecast coal retirements would likely reach 45,000 MW, including12,000 MW already announced.FBR said utilities would likely install emissionscontrol equipment in larger coal plants, representing about 60,000 MW ofcapacity, and replace smaller units with natural gas-fired combined cycle gasturbines. While the EPA regulations will cost billions, regulated utilities arepoised to benefit from the stricter rules. Regardlessof whether regulated utilities or merchant energy companies install the emissionsupgrades or build new power plants, consumers will bear the ultimate cost.

Mr.President, China is Not “Winning” the Renewable Energy Race, They’re Winningthe Energy Race – Coal Imports to Rise 78% Next Year.Bloomberg (12/14) reports, “China and India may increase imports of coalby 78 percent to 337 million metric tons next year, further driving up pricesfrom the highest in two years and diverting supplies from Europe to Asia. Chinamay buy 233 million tons more of the fuel than it exports next year, up fromnet imports of 143 million in 2010, Citigroup Inc. said in a Nov. 29 report.India faces a shortfall of 104 million tons in the 12 months ending March 2012,mjunction Services Ltd., a Kolkata-based commodity trader, said in a note onDec. 6, citing Coal Minister Sriprakash Jaiswal. Asia’s two fastest-growingmajor economies are burning more of the fuel as economic expansion raisesdemand for electricity. The International Monetary Fund forecasts that China’sgross domestic product will next year expand 9.6 percent and India 8.4 percent.China added about 51 gigawatts of coal-fired capacity last year, more than halfthe total capacity of the U.K., according to data from Daiwa Capital Marketsand the U.S. Energy Department. China’s appetite for the commodity sentbenchmark domestic prices at the port of Qinhuangdao to a two-year high of $129a ton for the week ended Nov. 26, according to data from IHS McCloskey, aPetersfield, U.K.-based researcher. China will need 2 billion tons of coalover the next 10 years to fuel the country’s industrial development, the ChinaSecurities Journal reported today, citing Dai Yande, deputy head of China’sEnergy Research Institute.”

Over orUnder? Goldman Predicts $100 Oil in Six Months; Pipeline Takes the Under.Bloomberg (12/14) reports, “A drop in OPEC spare production capacitywill signal a “second stage” in the oil market’s recovery, lifting crude higherthan $100 a barrel by the second half of 2011, according to Goldman Sachs GroupInc. The Organization of Petroleum Exporting Countries will supply more oil,reducing its spare capacity, as global inventory levels “normalize” from anoverhang cause by the recession, the bank said in its 2011 commodities outlookdated yesterday. The 12-member group, which pumps about 40 percent of theworld’s crude, said at a Dec. 11 meeting it will maintain production targets atlevels agreed in December 2008. “Inventories have declined rapidly in recentmonths as global demand growth has accelerated to one of the highest levels onrecord,” Goldman analysts led by London-based Jeffrey Currie said in thereport. “We expect global demand growth to remain strong at over 2 millionbarrels a day.” Goldman Sachs, in yesterday’s report, predicted West TexasIntermediate crude, the benchmark grade traded in New York, will rise to $89 abarrel within three months, $100 within six months and $105 within a year. Oillast traded above $100 in October 2008 as commodities and equities fellfollowing the collapse of Lehman Brothers Holdings Inc.”

Enviro’sPulling out all Stops to Derail Keystone Pipeline Project; Will Create too ManyJobs, Provide Affordable, Reliable Energy for America –They’re AgainstBoth. E&E News (subs req’d, 12/14) reports, Environmentalgroups fighting a $7 billion U.S.-Canada oil pipeline yesterday charged thatSecretary of State Hillary Rodham Clinton’s ties to a former adviser who nowserves as a top lobbyist for the company behind the project leave her unable toimpartially evaluate the proposal. Citing freedom-of-information law, threeconservation groups pressing the State Department to reject the 1,900-mileKeystone XL pipeline sought records of any contact between Paul Elliott,government relations director for project sponsor TransCanada Corp., anddepartment officials evaluating the company’s request for federal approval. "TransCanadaclearly sees an opportunity to get this dangerous pipeline approved throughSecretary Clinton’s relationship with Paul Elliott," said Friends of theEarth campaigner Alex Moore in a statement. Corporate Ethics International andthe Center for International Environmental Law also joined the nonprofit on theinformation request. The battle over Keystone XL, which would nearly doubleU.S. imports of crude from the Canadian oil sands, began heating up this fallafter Clinton publicly said she was "inclined to" sign off on thepipeline despite fierce opposition from environmentalists. But while moreliberal Democrats align with environmental advocates in decrying the projectedgreenhouse gas footprint of fuel from Canadian oil sands, others in Clinton’sparty view Keystone XL as a much-needed solution to the continued need for oilimports.

SenatorGraham, Still Recovering from the Gas Tax Defeat, Now Pushing Mandate toIncrease Electricity Rates, Guarantee Market Share for Expensive Power. E&ENews (subs req’d, 12/14)reports, “As the Senate slogs through the final days of this session, Democratsfeel great frustration over the failure to pass major energy legislation –leaving them open to consider backing a once-balked-at Republican proposal fora clean energy standard early next year. "Boy, it will be a major disappointmentif this Congress shuts down at the end of this year without having doneanything on energy, anything of consequence," retiring Sen. Byron Dorgan(D-N.D.) said earlier this month. Butchampions of energy legislation are not licking their wounds. Instead, they arelooking toward next year. And a one-time, long-shot Republican idea is gainingsteam among both Democrats and Republicans. The proposal for a clean energystandard, which has been batted around for years and introduced most recentlyby Sen. Lindsey Graham (R-S.C.), has created a buzz on and off Capitol Hill inrecent weeks. Graham’s measure has been offered as an alternative to Bingamanand Brownback’s RES, which would require utilities to generate 15 percent oftheir electricity from renewable sources like wind and solar by 2021. Grahamand the CES measure’s other supporters want to see nuclear energy and"clean coal" included in the standard. Democratic Sen. Tom Carper(Del.) has also supported the idea of a broader mandate. The measure got asignificant boost last week when Energy Secretary Steven Chu said he was opento discussing the idea and urged Congress to seriously "think about"it. Yesterday, Alaska Democrat Mark Begich said he, too, believes the measurehas merit.”

Ain’t Easy Being Green:Obama White House Buffeted by Special Interest Enviros Apoplectic over EPA’sReversal on Boiler MACT Rule – Frank O’Donnell’s Out for Blood.Politico (12/11) reports, “Greens and public health advocates fear theWhite House is losing its backbone when it comes to defending its environmentalpolicies — at the worst possible time. EPA this week delayed two majorclean air regulations aimed at curbing ozone and toxic air pollution fromindustrial boilers. The Obama administration denies that politics are in play,but that appearance is hard to avoid as House Republicans prepare to use theirmajority to try and rollback EPA standards. The delays have garnered nationalattention, including a front page story of Friday’s New York Times — andsent shockwaves through the environmental and public health communities. Now,activists who heralded Obama’s aggressive environmental policies are preparingto circle their wagons around other rules they say may be vulnerable. “Giventhe events of this week, environmental regulators are on high alert for signsof future attempts to delay or interfere with the roll-out of importantregulatory health protections,” said Bill Becker, of the National Associationof Clean Air Agencies. Next up are measures to slash soot, smog and mercuryfrom power plants and a national air-quality standard for fine particlepollution. The delayed air rules “should be a clarion call to arms that we’re goingto need to step up or we’re just going to get rolled," said FrankO’Donnell, president of the advocacy group Clean Air Watch.

Mean Streaks of Paterson:NY Gov Takes One Step Forward By Vetoing Ridiculous Moratorium on HF –Then Signs Exec. Order Basically Instituting the Same Damn Thing. NY Times (12/11) reports, “Industry representatives complained thatsuch a sweeping moratorium would outlaw virtually all drilling in New York,including in its portion of the Marcellus shale, a vast and deep deposit ofnatural gas stretching under several states. Mr. Paterson’s veto, and thesubsequent executive order, appeared aimed at distinguishing between verticalwells and newer “horizontal drilling” techniques, in which gas drillers plumbthe underground shale seams laterally. The governor’s order restricts permitsfor “high-volume, horizontal hydraulic fracturing.” Most modern wells that use frackingare, in fact, horizontal wells, but the industry welcomed the governor’s vetoas staking out middle ground. “We are very pleased that the governor saw thebill for what it was – a flawed piece of legislation replete withunintended and dire consequences for the people and businesses in our industry.” said Brad Gill, the executive director of the Independent Oil & GasAssociation of New York, in a statement. “Our members are aware of theconsiderable pressure put upon lawmakers and the governor to approve thisbill,” he added. “We’re hopeful that the governor’s veto today will set thestage for a more reasoned and rational public discussion about these issuesgoing forward.”

Like Oil at $90 a Barrel?Good: OPEC Says It’ll Stay There for a While — And, Owing to OffshorePermitorium in the Gulf, US No Longer in a Position to Do Anything About It.Houston Chronicle (12/11) reports, “OPEC ministers decidedSaturday to keep oil output at current levels, citing ample inventories amidpersisting global economic uncertainty and a price of just under $90 a barrel.The 12-member cartel said after an unusually short meeting that it based itsdecision on projections showing demand for crude would grow more slowly in 2011than this year. It’s statement also cited the "challenging risks to thefragile global economic recovery" including "fears of a secondbanking crisis in Europe." The world’s major industrialized nationscontinue to face "lower industrial output, lagging private consumption aswell as persistently high unemployment," the ministers added. "Themarket is in balance and is stable," Oil minister Ali Naimi of SaudiArabia, OPEC’s biggest producer, told reporters. "The fundamentals aregood." Suffering a cold, he left quickly after the closed-door meeting,which lasted less than two hours. OPEC’s next scheduled gathering is June 2 inVienna, its home. "OPEC is always ready to meet when there is importantchange in the market," he said. There was much discussion about whetheroil would soon broach the psychological price barrier of $100 — or evenclimb nearer its 2008 historic peak of $147 a barrel. Venezuela’s minister,Rafael Ramirez, said he thought such a price was "proper" consideringhow much producers invest in removing crude from the ground.

No Shame: Justice Dept.Clears Fmr. Interior Secretary of Any Wrongdoing in Oil Shale Case – ButNot Even the Facts Prevent Nick Rahall from Taking One Last Shot on His WayOut. Politico (12/10) reports, “The Justice Department has declined to filecharges against former Interior Secretary Gale Norton in connection with oilshale bids by Royal Dutch Shell. At issue are valuable oil shale leases thatShell won from Interior after Norton left the George W. Bush administration inMarch 2006 but before she took a job as a lawyer with the oil giant thatDecember. Kendall referred to the report to the Justice Department, whichdeclined to file charges. “We found that Norton was very interested in the[Research, Development and Demonstration] program during her tenure assecretary, but we did not find evidence to conclusively determine that Nortonviolated conflict-of-interest laws, either pre- or post-employment, withShell,” Acting Interior Department Inspector General Mary Kendall wrote in aletter accompanying a report obtained by POLITICO. But despite the lack offederal charges, House Natural Resources Committee Chairman Nick Rahall(D-W.Va.) delivered a scathing verdict. “It sounds like Secretary Norton wasearning her salary from Shell even before they put her on the payroll,” Rahallsaid in a statement.

Green Is Universal: GeneralElectric, Owner of NBC and Windmills (Which Is Why You See Lots About theLatter on the Former) Makes Major New Play on Offshore Oil and Gas.Reuters (12/13) reports, “General Electric Co has agreed to buyBritish oil drilling pipe-maker Wellstream Holdings Plc for 800 million pounds($1.3 billion), as GE continues its push into the offshore oil servicesindustry. The deal is the latest in a series of GE buys in the oil servicessector in recent years and shows that, despite the BP oil spill in the Gulf ofMexico this summer, the industry expects deep water drilling to continue apace.The acquisition would also give GE a strong footing in Brazil, where Wellstreamhas a manufacturing facility. Brazil has made a series of multi-billion barrelsoil discoveries in recent years in very deep water — traditionally high costfor oil producers and high opportunity for equipment makers — and Brasiliaencourages the use of locally produced materials. GE and Wellstream said in ajoint statement on Monday that GE would pay Wellstream investors 780 pence incash plus a special dividend of 6p, per Wellstream share, up from a bid of 750 pence/sharetabled in September that Wellstream rebuffed. Wellstream is one of only threemain manufacturers of flexibles "riser" pipes, which connect drillingrigs to well-heads on the sea floor.

Live Free or Walk: Folks Upin New Hampshire Not Exactly Sold on Electric Cars – For Starters:Because the Only Ones that Seem to Work Actually Run on Gasoline. David Brooks writes (12/13) in the Nashua (N.H.) Telegraph, “The “chicken and egg” issue of cars andcharging stations is one of the big obstacles facing the electric-vehicleindustry – since few people will buy battery-powered cars if there’snowhere except home to plug them in, and few companies will pay to installcharging stations if no one has an electric car. But it will never be tackledif no one plunges in. Wheego is an unusual car company. The body and chassisare made by Shuanghuan, a Chinese firm that bases it on a gas-powered model.Enxing hopes to have several Wheego dealerships throughout New Englandeventually, so perhaps we’ll see him again. The lack of electricity “gasstations” explains why GM put a gasoline-powered engine in the Volt. It canrecharge the motor and extend the car’s range beyond the inherent limits ofbatteries, which hover over the Leaf and Wheego. The Volt internal combustionengine is not connected to the drivetrain, which is entirely powered by theelectric motor. In theory, you could drive a Volt all year and never put a dropof gas in it, as long as you recharge it often enough, and it’s not reallycorrect to call the Volt a “plug-in hybrid.” But it does mean that the Voltisn’t a true “electric-only” car like the Leaf or Wheego. You can’t entirelythumb your nose at OPEC in it.

I Need a Job: OutgoingIdaho Democrat Says He REALLY Wishes He Had Voted for Cap-and-Raid, SinceClimate Change Represents “Greatest Ecological Threat” Ever.E&E News(12/13, subs. req’d) reports, “Despite a roller coaster two years, Rep. WaltMinnick (D-Idaho) says being in the 111th Congress was a better experience thanthe last time he worked in Washington, serving in President Nixon’sWatergate-besieged White House. Though serving in the 111th Congress wasbetter, that is not to say Minnick does not draw parallels between Watergateand this Democratic Congress, especially when it comes to energy andenvironmental policy. "Very little went well in energy and theenvironment," the 68-year-old representative said in an interview lastweek. "That was an area where we had a particularly tin ear and where thesolution to the biggest issue — global warming — proposed by the party …got transformed by its opposition from cap and trade to cap and tax and becamepolitically toxic almost every place in the country."Minnick calls thepolitical misjudgments that led to House passage of the "American CleanEnergy and Security Act of 2009" and the inability to then message thebill or have a fallback position "equally disastrous" to the way theNixon administration tried to message Watergate. The way the former timbercompany CEO sees it, the bill actually sent the country’s energy policybackward. "Not only did we fail to move the ball forward, the globalcommitment to doing something about what is the greatest ecological threat tohumanity since the emergence

Cave Men: New “Compromise”Senate Tax Package Includes Lots of Honey for Big Corn – Guess Ole’ BobDinneen’s Got More Juice Than We Thought.E&E News (12/10, subs. req’d) reports, “A renewableenergy grant program, ethanol tax credit and other energy tax credits would beextended one year in a compromise tax package announced by Senate MajorityLeader Harry Reid (D-Nev.) late yesterday. Reid last night filed cloture on thecompromise package. The Senate will vote on whether to end debate on thepackage Monday afternoon. The package is still headlined by the extension ofexpiring income tax cuts for all tax brackets negotiated earlier this week bythe White House and Republicans but includes changes to the renewable energygrant program. Last-minute lobbying efforts paid off for lawmakers andalternative energy companies on the ethanol blend tax credit and especially forthe Treasury Department’s 1603 renewable energy grant-in-lieu-of-tax creditprogram. The 1603 program had been left on the cutting room floor after theWhite House and Republicans reached the income tax cut agreement. The billwould extend the 1603 program — originally passed as part of the stimulus bill– through 2011, according to a bill summary from Reid’s office. The extensionwould cost about $3 billion over 10 years, according to a Joint Committee onTaxation (JCT) score from yesterday afternoon being circulated among lobbyinggroups.

Enviros “Furious” overEPA’s Decision to Delay Completely Outlandish, Technically Unattainable BoilerRule – Professional Quote-Emailer Frank O’Donnell Absolutely Unhinged. NY Times (12/10) reports, “The Obama administration is retreating onlong-delayed environmental regulations — new rules governing smog andtoxic emissions from industrial boilers — as it adjusts to a changedpolitical dynamic in Washington with a more muscular Republican opposition. Environmental advocates are furious. They fear a similar delay on theapproaching start of one of the most far-reaching regulatory programs inAmerican environmental history, the effort to curb emissions of carbon dioxideand other greenhouse gases. “Obama has already signaled that in his quest forre-election he’s more than willing to turn against his base in order to make acompromise with his adversaries,” Frank O’Donnell, president of Clean AirWatch, an advocacy group, said in an e-mail, responding to the rules delay. Mr.O’Donnell said the administration was clearly “running scared” from theincoming Congress and said he suspected that it was willing to moderate itsstand on a variety of environmental regulations, including pending greenhousegas rules aimed at reducing the pollutants that contribute to global warming.

“Revolutions Do Not goBackward”: Former Secretary Official, Gov. of Penna. Sees HistoricalSignificance in Development of Natural Gas from Shale. The Oklahoman (12/9) reports, “Revolutions do not go backward.” Former U.S.Secretary of Homeland Security Tom Ridge offered up that Abraham Lincoln quoteThursday as proof that Americans need to develop a sustained, coherent andforward-looking national energy policy. There isn’t one now, and time isrunning out to make it a reality, Ridge told his Chesapeake Energy Lectureaudience at the University of Tulsa’s Allen Chapman Activities Center. FormerCabinet official sees U.S. security in natural gas In fact, Ridge threw ineverything from the 16th president’s immortal words to “The Daily Show” hostJon Stewart while also interweaving his own “all in” conception of the Americanenergy future. “What we have is natural gas,” Ridge said. “It’s here, it’ssecure.” Now retired from public life, at least temporarily, Ridge has his owncompany and is a strategic adviser to the Marcellus Shale Coalition, whichoversees natural gas exploration and production in the deep reserves beneaththe Pennsylvania soil and neighboring areas of the Northeast. “I think it’stime we put America at the head of the global energy parade,” Ridge said.“That’s our mission; that’s not a mirage.”

Wet Our Beak: DelawareRiver Basin Commish More than Happy to Allow Folks Develop Resources fromMarcellus Shale – Just Need to Pay Millions of Dollars in Fees.NY Times/E&E News (12/9) reports, "DRBC wells will tie up moreworking capital than wells in other parts of the formation," said Book,managing director of the Washington-based consulting firm ClearView EnergyPartners, "making it more attractive to drill other places first." The amount of financial assurance has been a key sticking point in negotiationsabout the rules, and has been interpreted by some as an indicator of howwelcoming the regulators and the body’s member states will be to natural gasdevelopment in the Northeast. Tom Shepstone, a landowner and businessman inHonesdale, Pa., who supports drilling, said the operating requirements in therules are reasonable, but the commission is asserting itself too deeply intoland use. "It’s not practical, and it can be used by overzealousregulators or protestants to stop almost anything unless there is a betterdefinition," Shepstone said. One industry group says the regulations senda mixed message, indicating that the four states involved do want development,while making it financially difficult for it to occur. "Unfortunately,while a lot of the words in here sound good, a lot of the numbers sound like aswift kick to the stomach," said Chris Tucker, spokesman for Energy inDepth. "I’ve never seen bonding and fee requirements this high. They verywell might prove prohibitive."

The Real Scandal Out West: Sex and Drugs at MMSOffice In Denver? Nope: BLM Presiding over 79 Percent Drop in Leases Issuedover the Past Five Years in Region. Wyoming Business Report (12/9) reports, “Western Energy Alliancetoday announced the release of a compilation of government data related to oiland natural gas development on Western public lands. In Wyoming, the Bureau ofLand Management (BLM) issued 314 leases in FY2010, a 61 percent drop from the797 leases issued in FY2005, the data report. Since FY2008, 90 percent ofoffered parcels have been protested. Because this type of government data aredifficult to access, Western Energy Alliance has compiled the information tohelp policymakers, the media and the public identify trends in Western oil andgas development over time, a company release says. This new data resource showsa continued decrease in the use of public lands for domestic oil and naturalgas development, and a corresponding decline in revenue to federal and stategovernments. The BLM has overseen a 79 percent drop in leases issued over fiveyears in Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming. Leasingrevenue dropped 46 percent over the same period, and overall onshore royaltieshave declined 33 percent over two years. "Western Energy Alliance remainsdedicated to providing timely and credible data to enable policymakers to makeinformed decisions on how to best manage our public lands," said SpencerKimball, manager of Government Affairs.

“New” Approach Offered atClimate Kleptocrat Conf. in Cancun: U.S. Businesses Pay Brazilian Enviros toProduce Reports on Deforestation – What Can Possibly Go Wrong There?Washington Post (12/10) reports, “In response to growingfrustration that the U.N. climate negotiations are not producing real-worldresults, individual nations, states and business are cobbling togetherpatchwork solutions to preserve forests, produce clean energy and scrubpollution from the air. Under this new approach, businesses in California willoffset their greenhouse gas emissions by funding tropical-forest preservationin Mexico and Brazil, Japan will help pay for nuclear power plants indeveloping nations, and South Korea will invest in promoting renewable energyat home. But the central question remains: Will a bottom-up network of ad hocarrangements and bilateral deals be enough to avert dangerous climate change?For years, international policymakers operated on the assumption that theywould develop a successor to the landmark 1997 Kyoto Protocol, the only legallybinding international accord to reduce greenhouse gases. They expected to agreeon a common path for cutting the world’s carbon output, dole out key nations’specific obligations and create a common market for trading greenhouseemissions. That vision has evaporated, replaced by a much looser web ofclimate-related efforts across the globe.

Can Someone Please Explainto Us Why U.S. Sen. Johanns Is Siding with Greenpeace, NRDC and the DamnedTides Foundation in Opposing Keystone Pipeline?E&E News(12/10, subs. req’d) reports, “Sen. Mike Johanns (R-Neb.) remains the strangestof bedfellows for the coalition of Democrats and environmental groups leaningon the State Department to more closely scrutinize the potential risks of theKeystone XL pipeline project. "All I’m asking," Johanns said, is thatSecretary of State Hillary Rodham Clinton’s team more closely examinealternative routes for Keystone XL that would limit the pipeline’s impact onhis state’s ecologically delicate Sandhills region. If the department declinesto conduct that extra environmental assessment, he added, they "couldnever make the argument, then, that they’re environmentally sensitive."But for Johanns, the issue of extra environmental review remains a simplequestion of finishing the job before construction starts. "If they’re notwilling" to look at alternative routes for Keystone XL, Johanns said ofthe State Department, "it would speak very loudly and clearly that theywere willing to sacrifice thoroughness." The department does notanticipate a final decision on the proposed pipeline until early next year,after it weighs in on the proposed extra environmental review, which is alsobacked by U.S. EPA.

Speaking of Keystone,Canadian Energy: You Thought the LCFS Only Sought to Target the Oil Sands,Right? Turns Out Oil Shale Gets the Boot Too – and CTL. ClimateWire(12/9, subs. req’d) reports, ‘More than 25 companies are working to developU.S. oil shale, which holds a fuel called kerogen that can be turned intokerosene, jet and diesel fuel and gasoline. The majority of the reserves sit ina swath of the West stretching from Colorado to Utah. Climate regulations suchas proposed low-carbon fuel standards pose additional risks for investors inboth fuels, Logan said. Section 526 of a 2007 federal energy bill forbidsfederal agencies from procuring alternative fuels unless their life-cyclegreenhouse gas emissions are equal to or less than those of conventional fuels."Unless the section is actually repealed, section 526 could limit themarket for oil shale and coal to liquid developers," Ceres said. Outsideof California, low-carbon fuel standards are furthest along in Oregon, Washingtonand New England, said Chris Tucker of the Consumer Energy Alliance. In theNortheast, governors from 11 states signed a memorandum of understanding lastyear to develop such a standard. A model rule is expected early next year thatwould have to be approved by state legislatures in the region, with a possibleenactment date of 2013.

She SaidIt: CEO of Big Wind Comes Clean on Taxpayer Handouts, “Without them, theIndustry Couldn’t Operate.”Politico (12/8) reports, “A pot of sweetenersin the form of tax extenders for pet energy industries could help ease thebitter pill that Democrats may have to swallow if they agree to the tax dealPresident Barack Obama and Republicans carved out. The expiring tax incentivesdesigned to boost ethanol and other energy industries might be enough toattract Democratic votes to extend the Bush-era tax cuts for two years. Part of the Baucus proposal wasa one-year extension of a 45-cent ethanol excise tax credit at 36 cents pergallon. This decrease in the subsidy for the mainly corn-based gasolineadditive is backed by House and Ways Means Democrats and the White House. Thetax totaled at least $5 billion this year and cutting the credit to 36 centsshould bring the annual cost down about $1 billion. Along with the possibledecrease in the ethanol credit, the White House also specifically cut out oftheir deal with Republicans $1.4 billion in federal grants that would boostwind, solar, geothermal and biomass projects. Denise Bode, CEO of the AmericanWind Energy Association, contends there is a misperception that theseincentives were born in the stimulus plan.“It’s a longtime business tax extender that was tweaked in orderto allow business in the renewable sector to continue to operate,” Bode saidWednesday. “So it’s not an original stimulus package program.”

1. That’s the Number of Deepwater PermitApplications Pending Before Interior Dept. So What’s Obama Admin. AnnounceYesterday? More Red Tape, Uncertainty – Won’t be Happy Till that Numberis Zero.Houston Chronicle (12/9) reports, “The Obama administrationwill require environmental studies before approving any deep-water wells – anew regulatory hurdle that virtually assures the government will notgreen-light any of those projects soon. In outlining the plan Wednesday, thenation’s top offshore drilling regulator said he hopes the environmentalreviews will add "weeks, not months" to the deep-water permitting processcritics say is already too slow. Butoil and gas industry leaders were skeptical, noting that even though the Obamaadministration lifted its moratorium on deep-water drilling in October, thegovernment has yet to approve any new wells that would have been blocked by theban. Dan Naatz, a vice president for the Independent Petroleum Association ofAmerica, said the move would further delay deep-water drilling by creating arequirement for reviews he called redundant. Mark Shuster, the manager of Gulfof Mexico exploration for Shell Oil, said it’s a significant concern that thegovernment no longer will exempt even relatively common sidetrack operationswhere new well holes are drilled near existing ones. If the assessment planencompasses all new drilling from offshore platforms – not just from drillingrigs – it will strain the ocean energy bureau’s resources, Shuster said. Thereviews also add to oil companies’ workload because they must supplyenvironmental information – a process that can take several weeks – beforeregulators can conduct their assessments.”

We Always Knew “Green” Jobs are Temporary Jobs; Now Big Wind Confirmsit: Without Taxpayer Handout to Wind Industry, “Tens of Thousands of Jobs” areat Risk. Bloomberg (12/8) reports,“Jobs will be cut in the solar and wind industries unless a U.S. tax-grantprogram that companies have relied on is extended, renewable-energy advocatessaid. Retention of the 1603 program, which gives developers grants equal toone-third of a project’s value, wasn’t included in the tax package negotiatedby President Barack Obama and Republicans in Congress. The program, nowscheduled to expire on Dec. 31, was added to last year’s stimulus act to helpcompanies unable to get financing during the financial crisis. The grantprogram is “the most important policy for continuing growth of therenewable-energy industry in the United States,” Rhone Resch, president andchief executive officer of the Solar Energy Industries Association, said todayon a conference call with reporters. More than$5.5 billion in grants had gone to companies as of November, supporting morethan $18 billion in clean-energy development, according to the solar-industrytrade group. Denise Bode, CEO of the American Wind Energy Association, said“tens of thousands of jobs” are at risk. The wind industry would create 20,000new jobs next year if the grants are extended, renewable-energy groups said ina letter yesterday to congressional leaders. The workforce may contract by 25percent without them, the groups said.”

Meanwhile, Nat Gas Industry inPennsylvania Hiring Thousands, Investing Millions, All a Resultof What we Call the Market.PittsburghTribune-Review (12/9) reports, “RangeResources Corp. could employ 1,000 workers in Western Pennsylvania five toeight years from now, an executive said Wednesday as the natural gas producermarked the start of construction on its new Appalachian offices.The FortWorth-based company has 300 employees now in the region and 400 acrossPennsylvania. All but about 20 are from Pennsylvania, West Virginia and Ohio,Ray N. Walker Jr., senior vice president of Marcellus operations, said at thebuilding site in the Southpointe II complex in Cecil in Washington County."We are hiring the whole gamut," Walker said, from office workers to roustaboutswho labor at drilling sites, plus welders and fitters, geophysicists andgeologists. "There will be a whole lot more of the hourly workers that wewill hire going forward, as we get more wells," Walker said, estimatingRange Resources has hired just over 100 people in Western Pennsylvania thisyear. The company will have 180,000 square feet of space in its new building on13 acres of a hillside above Consol Energy Inc.’s headquarters. Southpointehouses offices for 58 energy-related companies, Walker said, and gas producershave other offices scattered around the region. Range Resources recently openeda field office near the Washington County Fairgrounds in Chartiers.”

Wind Energy Affordable? Not in the Ocean State; New Projectto More than Double the Cost of Electricity. Associated Press(12/8) reports, “A renewable energy company has proposed what it says would bethe largest offshore wind farm in the United States: a 200-turbine,1,000-megawatt project off the coast of Rhode Island that would provide powerto multiple states along the East Coast. Deepwater Wind LCC, which recentlymoved its headquarters from New Jersey to Providence, says the turbines wouldbe far enough offshore as to be barely visible from land and would be locatedin the ocean waters of Rhode Island Sound. The company has submitted anapplication for the project, estimated to cost between $4 billion to $5billion, to the U.S. Department of the Interior to lease the site where itplans to build the wind farm. It hopes to begin construction in 2014 and havethe first turbines in operation by the end of 2015. The project will requirestate and federal approval. The Deepwater Wind proposal is on top of a muchsmaller pilot project planned by the company off the coast of Block Island.Rhode Island Attorney General Patrick Lynch has appealed the power purchaseagreement to the state Supreme Court, saying the 24.4-cents-per-kilowatt dealwould force Rhode Islanders to buy overpriced electricity.”

Messagefrom the Mexican Government to US-Based Oil and Gas Companies: If the AmericanGov. Doesn’t Want You Operating in Their Waters, You’re Investment is WelcomeHere. Wall Street Journal (12/8) reports, “Mexico’sSupreme Court has given state oil monopoly Petroleos Mexicanos the green lightto continue with plans to award incentive-based service contracts to privatecompanies that want to drill for oil in the country. At the same time, thecourt reiterated Mexico’s exclusive obligation and right to develop its oilwealth, reinforcing the understanding that any reserves and hydrocarbonsproduced remain the property of the state. The court issued a statement lateTuesday saying reforms to Mexico’s restrictive energy laws in 2008 are in linewith the country’s Constitution, which bars Mexico from granting oilconcessions or property rights in the energy sector to private oil companies,foreign or domestic. The ruling supports Pemex’s intentions to broaden itscollaboration with private firms, while offering the company legal cover incase of future legal challenges, says George Baker, of Houston-based consultingfirm Energia.com. A source within Pemex echoed Mr. Baker’s assertion, sayingthe ruling "removes obstacles" that may have prevented Pemex from hiringprivate firms to drill. Mexico expropriated foreign oil assets in 1938 and hassince kept foreign participation in the industry to a minimum. But with oilproduction sliding, the state company, which is extremely short on funds andtechnology, has been searching for ways to work with foreign energy companiesthat can offer both.”

Pyle: “Neitherjobs nor the nation’s energy security are important considerations for thispresident.” Thomas Pyle(12/7) writes on FoxNews.com, “Just prior to the mid-term elections,President Obama ended the drilling moratorium in the Gulf of Mexico, at longlast heeding an outcry that included members of his own party. However, thegesture was purely political, and as it turns out, deceptive. Behind thescenes, his regulators imposed new red tape so complex that a de facto“permitorium” effectively kept the ban in place. The result was permanent joblosses, even as it came to light that the Interior Department doctoredscientific reports to enforce what turned out to be an unnecessary shutdown ofGulf energy exploration in the first place. The oil and gas industry supported$12.7 billion in household earnings in Louisiana alone, according to statedata, and a study by LSU Professor Joseph Mason found that the ban cost up to155,000 jobs. The impact extended to the region’s small businesses fromsuppliers to grocery stores relying on revenue from the oil and gas industry. OnDecember 1, the president finally gave up the charade and declared that nodrilling will take place in the Eastern Gulf of Mexico for the next five years.He even upped the ante, adding the Pacific and Atlantic Coasts to the no-drillzones. Evidently, neither jobs nor the nation’s energy security are importantconsiderations for this president.”

Big Wind,Hat-in-Hand, Claims Thousands of Jobs at Stake if Taxpayer Handouts to theIndustry Aren’t Continued. Associated Press (11/7) reports, “The wind industry urgedCongress on Tuesday to extend a cash grant program for production of renewableenergy, claiming tens of thousands of jobs are at stake. Meanwhile, a birdadvocacy group, the American Bird Conservancy, cautioned lawmakers to limitgrant recipients to those who take steps to protect wildlife — arguingthat such protections are needed to prevent avoidable bird fatalities atwindmills. The flurry of lobbying came as Congress took up a tax package thatincludes President Barack Obama’s compromise with Republicans on tax cuts. TheAmerican Wind Energy Association wants the package to include renewal of thecash grant program for development in wind, solar and other renewable energy.The program, created by the federal stimulus law, is set to expire at the endof this month. The wind group said that tens of thousands of Americans couldlose their jobs or not get called back from layoffs unless the program isextended.”

Thousandsof Wells Drilled in Gulf, One Tragic Accident. Token Republican on SpillCommission says, “industry has not made safety a high enough priority.”Wall Street Journal (12/8) reports, “The oil and gas industryneeds a "major transformation" in its approach to safety to avoidanother big offshore-drilling disaster, a leader of the presidential panelinvestigating the BP PLC accident plans to tell a gathering of industryofficials Wednesday. William K. Reilly, co-chairman of the National Commission onthe BP Deepwater Horizon Oil Spill and Offshore Drilling, also plans to saythat BP and two other companies involved with the doomed Macondowell—Halliburton Co. and Transocean Ltd.—made "breathtakinglyinept and largely preventable" missteps, according to a copy of hisprepared remarks viewed by The Wall Street Journal. "The interest groupthat could most threaten the future viability of offshore drilling is the oiland gas industry itself," Mr. Reilly says in the speech. "There hasto be a recognition that the industry has not made safety a high enoughpriority. We need a major transformation in the oil and gas industry’sunderstanding of what it means to put a priority on creating a safety culture.This is an industry wide challenge that can’t simply be laid at the feet of afew rogue players."

Time forE&C to become H&C: First order of Business for Incoming Chair of ENERGY& Commerce Committee? Name Joe Pitts Chair the Healthcare Sub Committee. Politico (12/7) reports, “Overcoming concerns that he’s too moderatefor the job, Rep. Fred Upton emerged Tuesday as the winner of a bitter internalRepublican battle to lead the powerful Energy and Commerce Committee. TheMichigan Republican won the steering panel nod with critical support from Rep.John Boehner and a collection of senior and rank-and-file GOP lawmakers closelyallied with the incoming House speaker. The full GOP caucus must now ratifyUpton’s selection Wednesday, but that is expected to be a formality as formerEnergy and Commerce Chairman Joe Barton (R-Texas) told POLITICO he will notchallenge the steering committee’s decision. Upton ispoised to run a panel with broad authority over the economy, from health careto energy and telecommunications. While campaigning for the job, the 12-termlawmaker appealed to conservatives nervous about his credentials by pledging topursue repeal of key pieces of the new health care law and also closelyscrutinize the Obama administration’s climate change and energy policies. Uptonhas already made his first major choice – picking Rep. Joe Pitts (R-Pa.)as chairman of the Health Subcommittee. “Together, we will protect the sanctityof life, ensuring early next Congress that no federal funds are used for abortion,”Upton said in a statement.”

StateDept. on Global Tour Promoting HF, Shale Gas Development. Stateside, EPA isLooking to Shutdown Process. Chris Tucker (11/8) writes on the Oklahoman, “An energy revolution is under way in the U.S.thanks to hydraulic fracturing, a 60-year-old oil and natural gas stimulationtechnology that — coupled with advancement in horizontal drilling —is making the development of energy from underground shale formationseconomical for the first time. Given that natural gas has half the carbonemissions as coal, the U.S. State Department is aggressively promoting shalegas exploration throughout Asia and Europe as a way to reduce global carbonemissions. While one bureaucracy in Washington is promoting natural gas abroad,another is angling to hamstring production at home, citing claims that itcontaminates groundwater. Despite how fracturing has been portrayed inHollywood and by some national media, it’s been tightly regulated byenergy-producing states for more than six decades, and safely used more than1.1 million times without impacting groundwater. Top EPA officials haveconfirmed this fact. For decades, politicians have touted “energyindependence.” As modern shale gas development continues to expand, energysecurity is now truly on the horizon. Oklahomans reside atop the WoodfordShale, whose development has contributed ample jobs and revenue to the state.Even President Obama recently cited natural gas as an area for congressionalbipartisanship.”

RES,CES, REM; Call it What you Want. Mandated Use of One form of Electricity OverAnother is a Win for Wall Street, Raw Deal for Main Street. E&ENews (subs.req’d, 12/7) reports, “Energy Secretary Steven Chu today laid out a possibleproposal for a "clean energy standard" to help provide energycompanies more long-term investment certainty. A requirement that utilities useclean energy sources — such as solar, wind and nuclear — to meet a percentageof electric generation could give certainty to the markets and power companiesjust as a price on carbon would, Chu said during a nuclear energy roundtablediscussion hosted by the think tank Third Way and the Idaho NationalLaboratory. The "clean energy standard" (CES) would provide a targetand guidelines to help businesses make decisions but would not cost the federalgovernment any money, instead becoming a direct cost to the consumers and themarket, he said. "The federal government is ultimately responsible for thelong-term … consistent policy" for energy companies, Chu said. "Aclean energy portfolio standard is one example of a potential policy that theadministration and Congress should discuss. … In this time of fiscalausterity I propose such a standard." Chu said it could be viable to set astandard of 50 percent clean energy by 2050, with an intermediate target of 25percent by 2025. Chu added that 2020 was too short a timeline for nuclearenergy because of the long licensing and construction time needed for newreactors. A definition for "clean energy" could be any generationthat was able to capture 90 percent of emissions, he suggested.”