Topic A: Energy - Analysis, discussion & commentary on energy exploration, development and innovation
Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
March 2, 2015

The Case for a National Energy Policy

The Washington Post Editorial Board believes all the attention focused on the construction of the Keystone pipeline is “misplaced.”

“It would have been better placed on the Capitol, where Rep. Chris Van Hollen (D-Md.), without much fanfare, reintroduced a bill that would address the nation’s greenhouse-gas emissions in a serious way.”

“Environmentalists should have kept their sights higher, on creating a national carbon policy that would reduce demand for dirty fuels, cutting emissions by attacking the root problem.”

“Mr. Van Hollen’s market-based version is elegant and effective. It would put a slowly declining cap on the country’s carbon dioxide emissions, requiring an 80 percent cut by 2050, and rely on basic economics, not Environmental Protection Agency commands.”

“Firms putting coal, oil or natural gas into the U.S. market would have to buy permits that account for the carbon dioxide those fuels release when burned. That is, energy companies would finally have to pay the full cost of the products they sell. “

Colorado: Anti-Fracking Group Turns Focus From Ballot to Governor

The Associated Press reports that “an activist group on Thursday backed off its earlier announcement that it would to try to get a statewide ban on hydraulic fracturing on the Colorado ballot and said it would instead try to persuade Gov. John Hickenlooper to halt the practice.”

“Karen Dike of Coloradans Against Fracking said the group has not ruled out a campaign to put a ban on the 2016 ballot if the governor doesn’t act.”

“‘He should do the right thing and protect Colorado citizens, but if he doesn’t, we’ll look at other ways to achieve our goal, and our goal is to ban fracking in the state of Colorado,’ she said.”

U.S. to Canada: Keystone May Be Connected to Climate Goal

Bloomberg reports that “U.S. climate negotiators have told their Canadian counterparts that Canada’s plan to cut carbon emissions could be one of the factors that President Barack Obama weighs as he considers whether to approve the Keystone XL pipeline, a U.S. official said.”

“The U.S. hasn’t suggested it might approve the $8 billion proposed project in exchange for climate commitments, the official said. Canada is developing a proposal as part of United Nations-sponsored talks aimed at cutting carbon emissions that governments were encouraged to submit by next month.”

“Obama has secured climate concessions from China and India as part of those UN talks. A similar deal with Canada could help offset the anticipated environmental damage from the TransCanada Corp. pipeline, responding to project opponents.”

Obama Vetoes Keystone Pipeline

President Barack Obama has vetoed the Keystone Pipeline bill as promised, using his veto pen for just the third time and the first since 2010, Roll Call reports.

Obama had repeatedly vowed to veto the bill, one of the first major legislative efforts by Republicans now in charge of both chambers of Congress, citing process. Obama has said the State Department’s years-long review of the project must finish first, and Press Secretary Josh Earnest has left open the possibility Obama could approve it then.

The veto came without public fanfare or a big ceremony.

The Senate received the veto message Tuesday afternoon. Immediately after that, Senate Majority Leader Mitch McConnell, R-Ky., announced on the floor that action in response to the veto would be considered no later than March 3.

Republicans note the project generally fares well in public opinion polls.

Solar Energy Now Employs More Than Coal Mining

Slate: “While solar may just be gaining traction with corporate America, by some measures it already employs more workers than coal mining.”

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Building a Wall of Red Tape to Thwart EPA’s Climate Rule

Inside Climate News: “State legislatures in coal-dependent parts of the country are taking action to delay complying with the Obama administration’s Clean Power Plan.”

“Since the 2015 legislative session convened last month, at least a dozen states have introduced bills that effectively increase bureaucratic red tape and stall states from submitting compliance plans to the Environmental Protection Agency (EPA). And, in some cases, the bills grant legislatures the power to veto their states’ carbon emission reduction plans.”

“The maneuvering has quickly spread well beyond the borders of coal-rich states. In Nebraska, Arizona and South Dakota, lawmakers are trying to require that their states’ environmental agencies prepare a preliminary report detailing the plans’ impact on the economy.”

“‘The overall strategy is to find ways to choke the state plan with red tape one way or the other,’ said Aliya Haq, a director in the climate-and-clear-air program at the Natural Resources Defense Council. ‘These bills are all misguided in that they ironically limit the state’s options,’ she said.”

Arctic Drilling Rules Set Off New Battle

“Industry groups are blasting the Obama administration’s plan to crack down offshore oil and gas drilling in the Arctic Ocean, arguing that the proposal includes costly and unnecessary restrictions,” The Hill reports.

“The fight — the latest in a series of spats between regulators and drillers — centers on requirements that companies keep backup rigs on hand to dig relief wells in case of a spill.”

“The provision is the most expensive piece of the $1.2 billion rule proposed by the Interior Department’s Bureau of Safety and Environmental Enforcement and Bureau of Ocean Energy Management Friday.”

Oil Muddies U.S. Economic Picture

“U.S. industrial output is about to run out of energy. The same can’t be said for the U.S. economy,” the Wall Street Journal reports.

“The Federal Reserve on Wednesday will release January figures on industrial production—the combined output of U.S. manufacturing, utility and mining sectors—and economists expect a gain of 0.4% from a month earlier. A pickup in manufacturing employment and hours, as well as auto-industry production schedules, suggest factory activity increased. There was a warm-weather downdraft in utility production in December that probably at least partially reversed itself last month.”

“The problem area is mining. Although it conjures images of headlamps, pickaxes and coal-smeared faces, the sector is dominated by the oil-and-gas-extraction industries. Due to the shale boom, these have been major contributors to industrial output in recent years. In December, they accounted for 13.7% of total industrial production versus 7.8% a decade earlier.”

Are You Ready for $10 Oil?

A. Gary Shilling: “At about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107. They may fall more, perhaps even as low as $10 to $20. Here’s why.”

“U.S. economic growth has averaged 2.3 percent a year since the recovery started in mid-2009. That’s about half the rate you might expect in a rebound from the deepest recession since the 1930s. Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan. Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline.”

“At the same time, output is climbing, thanks in large part to increased U.S. production from hydraulic fracking and horizontal drilling. U.S. output rose by 15 percent in the 12 months through November from a year earlier, based on the latest data, while imports declined 4 percent.”

BP Stresses Need for Carbon Tax

BP CEO Bob Dudley “drew attention to the need to shift toward incorporating more climate change policies into the global energy outlook on Tuesday,” The Hill reports.

“Dudley called for a price on carbon in the company’s release of its “Energy Outlook 2035″ report to help get industrial sources on board in the fight against climate change. To stave off the 2 degree Celsius increase, and cut carbon emissions further, BP said, it will require ‘additional significant steps by policy makers beyond the steps already assumed.'”

What Happened to the Glut in Oil Jobs?

Bloomberg: “Last year, about 198,000 workers were employed in oil and gas extraction, the most since 1987. Another 325,500 were working in the industry’s support services, the most since the Labor Department began tracking those figures in 1990.”

“That’s likely to change this year.”

“A report last week from global outplacement firm Challenger, Gray & Christmas showed 20,193, or 38 percent, of the 53,041 announced job cuts in January were in the energy industry. Oilfield service company Schlumberger last month said it will eliminate 9,000 jobs; Baker Hughes and Halliburton have said they expect to cut 7,000 and 1,000 positions, respectively.”

“The January job-cut announcements in the Challenger report are particularly stark when measured against data from the same month going back to 2004. Last month was more than seven times as bad as the next-worst January for energy industry layoffs, in 2009, when companies announced 2,590 job cuts.”

Energy Department Quits on FutureGen Clean Coal Project

AllGov: “‘Clean coal’ was always a term that summoned to mind other oxymorons such as ‘jumbo shrimp,’ but now even the federal government has pulled the plug on a pilot project on which the hopes of those believing in clean coal rested.”

“The Department of Energy announced last week that it would cease support for the FutureGen project, a power plant that was supposed to trap and store underground the carbon dioxide it produced, which was initiated by the George W. Bush administration and revived under President Barack Obama.”

Where Is Climate Change Still Being Debated?

Inside Climate News: The League of Conservation Voters “tracked senators’ votes on 18 different environment-, climate- and energy-related amendments attached to the Keystone XL bill, as well the Keystone bill itself. The report’s results demonstrate the sharp partisan divide likely to rule Congress’ climate-and-energy decisions for the next two years.”

“They also provide a glimpse into where the issue of climate change is—and is not—being debated within the United States. Twenty-four states had senators split on the issue, with one voting pro-environment and the other voting anti-environment most of the time.”

“Overall, Republicans voted pro-environment just 5 percent of the time, on average. In comparison, Democrats voted pro-environment 93 percent of the time, on average.”

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What Do Lower Oil Prices Mean — and for Whom?

McKinsey offers a “cheat sheet on lower oil prices,” stating: “Oil prices have plunged, helping consumers but worrying energy-reliant countries and companies. Here’s a cheat sheet on what’s happening and its implications.”

The piece begins: “A little background: over the past seven-plus months, the price of a barrel of oil dropped from $107 to less than $50. This took prices to 2009 levels and surprised just about everyone. Stock markets do not like surprises, and many global indexes have dropped, adding another wrinkle of worry to an already wobbly global economic recovery.”

The piece offers “good news,” “bad news” and other insights. The conclusion: “A better play than peak oil is to bet on the power of the market and the human ingenuity that propels it. High oil prices encouraged substitution on the demand side, in the form of greater efficiency and other measures. They also encouraged innovation: finding new sources of supply, such as oil sands in Canada and shale in the United States. Basically, when oil prices went up, so did the interest in alternatives and their economic viability. There is no reason on Earth—or under it—to expect that dynamic ever to change.”

 

Reliance on Carbon Declines as Economic Growth Accelerates

Washington Examiner: “The United States economy is growing while using less energy … according to a report released Wednesday.”

“Electricity use and economic growth has effectively ‘decoupled,’ meaning using more power isn’t necessary to drive gross domestic product, said a report released by Bloomberg New Energy Finance and the Business Council for Sustainable Energy. Electricity demand growth has averaged zero annually from 2007 through 2014. Energy efficiency has improved 54 percent since 1990 and 11 percent since 2007 when measuring GDP per unit of energy consumed.”

“Natural gas production and consumption also hit record U.S. highs last year, and renewable energy provided 13 percent of electricity in the U.S., up from 8 percent in 2007, said the report, ‘The Sustainable Energy in America Factbook.’”

Washington Post: “The figure above shows a measure of energy productivity: As GDP has increased since 1990, primary energy consumption has not kept pace. Indeed, the new report notes that from 2007 to 2014, electricity demand has actually been flat, despite the economic rebound. And over the same time period, overall carbon emissions coming from the energy sector declined by nine percent.”

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