Topic A: Energy - Analysis, discussion & commentary on energy exploration, development and innovation
Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
November 28, 2014

Gas Prices Lowest at Thanksgiving Since 2009

Fuel Fix reports that “the national average price of regular gasoline fell for a 60th straight day as millions of Americans prepared to hit the road for Thanksgiving travel.”

“AAA reported that the national price for a gallon was $2.81 Tuesday. , the lowest since Thanksgiving 2009, when prices were at $2.63 a gallon.”

“That could mean what is typically the busiest travel day of the year in the United States could get even busier — AAA estimated that 46.3 million people could choose to drive over Thanksgiving, a 4.2 percent increase over 2013.”

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Energy Companies Adjust to Social Media

Rigzone reports that “In simple terms, ‘social media has shifted the way we communicate with each other,’ both socially, and at work, Crystal Washington – author, social media strategist and owner of CMW Enterprises – told those in attendance at the 5th Annual People in Energy Summit in Houston.”

“Over the next decade, a large number of workers from the Millennial generation, also known as Gen Y, will be moving into the energy industry. The new workers will be necessary in replacing retiring workers that come primarily from the Baby Boomer generation. As the new workers begin to make up a higher and higher percentage of all workers in the industry, it will be necessary for the industry to be flexible and open to the changes – including those brought about by social media – that will arrive with the influx of new workers.”

Supreme Court to Consider Challenge to Mercury Air Pollution Rule

Reuters reports that “the U.S. Supreme Court on Tuesday agreed to weigh a challenge by industry groups and some states to an Obama administration regulation intended to limit emissions of mercury and other hazardous pollutants mainly from coal-fired power plants.”

“In a blow to the federal government, the justices said in a brief order that they would review an April ruling by the U.S. Court of Appeals for the District of Columbia Circuit that upheld the rule.”

“The court order said the justices would focus on the single question of whether the U.S. Environmental Protection Agency ‘unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.’”

Where Is U.S. Energy Policy Headed?

“Next year’s Republican-controlled Senate is expected to come out strongly against President Barack Obama ’s most consequential policies aimed at reducing the effects of climate change,” the Wall Street Journal reports.

“The GOP-controlled House already has spent the past few years passing legislation curtailing Environmental Protection Agency regulations. Now the Senate’s next majority leader, Mitch McConnell of Kentucky, is poised to put the upper chamber in lock step with the House on infrastructure and energy-efficiency bills as well.”

“To get a sense of where energy and environmental policy might be headed in the next Congress, The Wall Street Journal reached out to policy advocates on opposite sides of the political fence: Alison Cassady, director of domestic energy policy at the Center for American Progress and a former aide to House Energy and Commerce Committee ranking member Henry Waxman (D., Calif.); and George David Banks, senior fellow at the R Street Institute and former Republican deputy staff director for U.S. Senate Environment and Public Works Committee ranking member James Inhofe (R., Okla.).”

BI AA890 ELECTI 9U 20141120165709 Where Is U.S. Energy Policy Headed?

Plummeting Costs Make Renewable Power a Viable Competitor to Conventional Fuels

New York Times: “The cost of providing electricity from wind and solar power plants has plummeted over the last five years, so much so that in some markets renewable generation is now cheaper than coal or natural gas.”

“Utility executives say the trend has accelerated this year, with several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant … Recent analyses show that even without … subsidies, alternative energies can often compete with traditional sources.”

“According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end, with wind at 3.7 cents.”

“In a straight comparison of the costs of generating power, … the amount solar and wind developers needed to earn from each kilowatt-hour they sell from new projects was often ‘essentially competitive with what would otherwise be had from newly constructed conventional generation.’”

Obama Decision Likely Means Renewables Fight in Court

Bloomberg reports that “the Obama administration’s decision to put off issuing quotas for the use of renewable fuels this year sets up fights in Congress and the courts over a program that’s been bitterly contested for nearly a decade.”

“The delay, announced Friday by the U.S. Environmental Protection Agency, follows months of fighting between refiners and ethanol producers over a proposal by the agency to lower the quotas for ethanol, biodiesel and cellulosic fuels.”

“With the EPA nearly a year late in setting the mandates for 2014 under a Bush-era law, fuel blenders were left scratching their heads all year over how much of the additive they were supposed to be using.”

PA: New Governor, Legal Challenges Could Delay Public Lands Drilling

The Pittsburgh Post-Gazette reports that “the election of a new governor combined with delays caused by a legal settlement might imperil plans by Gov. Tom Corbett and the legislature to raise $95 million by signing new natural gas leases on public lands this fiscal year.”

“Gov.-elect Tom Wolf, a Democrat, campaigned on a pledge to reinstate the ban on new oil and gas leases in state parks and forests that was in place from October 2010 through this May. His inauguration is Jan. 20.”

“That leaves little time for the Department of Conservation and Natural Resources to evaluate proposals by drilling companies, especially since the state agreed not to sign any leases while the Commonwealth Court considers an environmental group’s legal challenge to the way the state raises and spends revenue from oil and gas wells on public lands.”

Former Coal Plants ‘Repowered’ With Natural Gas

National Geographic reports that “old U.S. coal-fired power plants, the target of new anti-pollution rules, aren’t necessarily shutting down. Many are getting a second life as they’re “repowered” with natural gas.”

“Decisions to keep running these plants—which are often more than 40 years old—have sparked court battles in New York and are raising questions about how much should be done to retain legacy fossil-fuel facilities.”

“In the past four years, at least 29 coal units in 10 states have switched to natural gas or biomass, according to SNL Financial, a market data firm. Another 54 units, mostly in the U.S. Northeast and Midwest, are slated to be converted over the next nine years. The future and completed conversions represent more than 12,000 megawatts of power capacity, enough to power all the homes in New England for one year.”

“By switching to natural gas, plant operators can take advantage of a relatively cheap and plentiful U.S. supply. The change can also help them meet proposed federal rules to limit heat-trapping carbon dioxide emissions from power plants, given that electricity generation from natural gas emits about half as much carbon as electricity from coal does.”

After the Spill, Oil Boom Has Returned to the Gulf

The Wall St. Journal reports that “four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf—bigger and more expensive than ever.”

The piece continues: “The resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf.”

“For the near term, though, the activity promises to return the Gulf to prominence as a major source of U.S. energy. In 2001, the waters produced about a quarter of all American oil and gas. Since then, production has fallen by half as wells petered out and the government issued fewer permits in the aftermath of the 2010 Deepwater Horizon explosion and oil spill. Last year, the Gulf accounted for less than 10% of the country’s energy production, in part because of soaring output from wells drilled in onshore shale formations.”

Is the Keystone XL Pipeline Project Now Irrelevant?

Rebecca Leber argues that the push to approve the Keystone XL pipeline project comes at time when it has become irrelevant.

“Since it was first proposed, the economics surrounding it have changed, with oil prices falling sharply, and the oil industry has pursued other options for oil transportation, including other pipeline projects and railroad shipments. Harold Hamm, an oil billionaire and CEO of Continental Resources, recently told Politico the debate is no longer relevant. ‘We’re supporting other pipelines out there, we’re not waiting on Keystone,’ he said. ‘Nobody is.’ Bloomberg News quoted several energy consultants that said the same. TransCanada’s CEO, however, continues to make the case that its pipeline will be necessary.’”

Could Obama Use Keystone as Leverage for His Domestic Agenda?

Reuters: “President Barack Obama might be open to using the Keystone pipeline as leverage with Republicans if they cooperate on other aspects of his long-stalled domestic agenda, such as investing in infrastructure, closing tax loopholes or reducing carbon emissions.”

“After years of fighting over TransCanada’s crude oil pipeline from Canada, a Keystone deal is not entirely out of the question, sources inside the administration and others close to the White House told Reuters on Tuesday.”

“Any deal would have to yield concrete gains for Obama on his agenda. Obama also likely would insist on making an executive decision on the $8 billion pipeline from Canada, rather than letting Congress approve the permit, sources said.”

“‘Whatever the president decides, I expect it will be driven by the bottom line on carbon pollution, not by symbolism,’ one former administration official told Reuters.”

2014 on Track to be the Hottest Year on Record

Think Progress: “It has been the warmest January-October on record and last month was the hottest October on record, the National Oceanic and Atmospheric Administration (NOAA) reported Thursday.”

“And while you wouldn’t know it from the cold temperatures in large parts of this country, NOAA’s “State of the Climate: Global Analysis,” projects that 2014 is almost certainly going to be the hottest year on record worldwide — probably by far.”

“As it has done for the last few months, NOAA plotted out several scenarios for the next two months, and they all show 2014 becoming the hottest year on record.”

2014 ytd scenarios NOAA 638x468 2014 on Track to be the Hottest Year on Record

Study: Drillers Should Prioritize Water Supply Issues

Fuel Fix reports that “oil and gas producers need to do more than look at their own operations to address water supply problems in the areas where they drill, according to a report from consulting group Deloitte.”

“Outlining the financial and political risks of the industry’s growing use of water, the report suggests that the problems are often bigger than one single producer; Will Sarni, a director and practice leader at Deloitte Consulting LLP, said in the report that oil companies should look to work with residential water users and other industry in the same watershed.”

“’There is an increasing recognition that you really can’t manage your water risk by just looking at direct operations,’ Sarni said, ‘You have to look outside.’”

Fracking to Occur in National Forest

The Associated Press reports that “over the objection of environmental groups and Virginia’s governor, a federal management plan released Tuesday will allow a form of natural gas drilling known as fracking to occur in parts of the largest national forest on the East Coast.”

“The U.S. Forest Service originally planned to ban fracking in the 1.1 million-acre George Washington National Forest, but energy companies cried foul after a draft of the plan was released in 2011. It would have been the first outright ban on the practice in a national forest.”

“’We think we’ve ended up in a much better place, which is we are allowing oil and gas drilling,’ Robert Bonnie, the U.S. Department of Agriculture’s undersecretary for natural resources and environment, told The Associated Press in a telephone interview.”

Senate and Keystone: What’s Next?

National Geographic reports that “the U.S. Senate’s failure Tuesday to approve Keystone XL won’t resolve the seemingly endless pipeline saga that has engulfed Barack Obama’s presidency.”

“Looking ahead, here are six questions and answers about the pipeline’s fate.”

  1. “Why has Keystone XL remained so controversial?”
  2. “What’s holding up an Obama administration decision?”
  3. “Will Obama really veto a bill to approve Keystone?”
  4. “Does TransCanada face other state-level obstacles?”
  5. “Aren’t other pipelines proposed to move oil sands crude?”
  6. “Will falling oil prices decrease demand to produce and transport oil sands?”

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