Topic A: Energy - Analysis, discussion & commentary on energy exploration, development and innovation
Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
September 20, 2014

A Fundamental Shift in the Nation’s Energy Market?

Financial Times: “Large wind farms and solar plants are now cost-competitive with gas-fired power in many parts of the US even without subsidy, according to Lazard, raising the prospect of a fundamental shift in the country’s energy market.”

“Costs have fallen and efficiency has risen for solar panels and wind turbines … to the point that in areas of strong wind or sunshine they can provide electricity more cheaply than fossil fuel plants.”

“The falling cost of renewable power will encourage greater investment by generators and utilities, and could help ease public concerns about the cost of federal and state regulations intended to support alternative energy and cut carbon dioxide emissions.”

“In the first half of this year, almost half the utility-scale generation capacity added in the US has been in solar and wind power, according to the government’s Energy Information Administration.”

“The economics of wind power have been improving sharply, with its lowest possible unsubsidised cost dropping from a minimum of $101 per megawatt hour in 2009 to a minimum of $37 per MWh today.”

“The decline in solar costs has been even more dramatic: since 2009 the lowest possible cost of generation from a large photovoltaic solar plant has plunged almost 80 per cent, from $323 per MWh to $72 per MWh.”

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Wisconsin: Energy Research Center Connects Business, Research

The Milwaukee Journal Sentinel reports that “the nearly vacant rooms and labs in a building on Milwaukee’s near north side can become a place of innovation, prototyping, testing and home to start-up businesses.”

“That’s the vision of Jeff Anthony, recently appointed director of the Energy Innovation Center, which will house labs and a small-business energy, power and control incubator inside the former Eaton Corp. research center.”

“Anthony, who spent much of his career at We Energies, has overseen quality control at a nuclear plant, and until recently, worked in Washington for a wind power trade association.”

Senator to Draft Legislation that Halts Coal Leasing on Federal Lands

The Casper Star-Tribune reports that “U.S. Sen. Edward Markey, a Massachusetts Democrat, said this week he intends to draft legislation halting coal leasing on federal lands after the U.S. Bureau of Land Management rejected his call for a leasing moratorium.”

“Markey had urged BLM to suspend its leasing program while it considers reforms suggested by the Government Accountability Office last year.”

“But in an Aug. 14 letter released by the senator’s office this week, BLM Director Neil Korze rejected that plea.”

Report: Offshore Drilling Would Create East Coast Boon

Fuel Fix reports that “the economic benefits that would flow from offshore oil drilling in U.S. Atlantic waters outweigh the potential environmental costs of the activity, according to a study released Wednesday.”

“The report, commissioned by the Interstate Policy Alliance and South Carolina’s Palmetto Policy Forum, says oil and gas drilling from Delaware to Georgia would generate $10.8 billion to $60 billion in added economic value for those states, plus $2.1 billion to $11.6 billion in tax revenues.”

“Environmental effects from the activity — including costs associated with air emissions, carbon pollution and oil spills — are estimated to have a price tag of $395 million to $19 billion.”

Energy Outlook Should Scotland Vote ‘Yes’

What might the energy outlook be should Scotland vote “yes” for independence?

The New York Times reports that “Scottish nationalists have long argued that being governed from London has deprived their country of its fair share of the wealth from Britain’s oil and natural gas fields, which mostly lie in North Sea waters off their shores.”

“’It’s Scotland’s oil’ was the rallying cry in the 1970s that helped raise the profile of the Scottish Nationalist Party, which now leads the country and is pushing for a vote to secede in the referendum on Thursday. Alex Salmond, the politician leading the separatist movement, has pointed to North Sea energy as the treasure that would help finance an independent Scotland — ensuring that the country could continue the generous public spending, including free university tuition, that he is promising voters.”

“But North Sea energy revenue — even if the bulk of it went to a stand-alone Scotland, as is expected — would not be sufficient to justify such a big bet on the country’s economic future.”

Meanwhile, Fortune reports that “an independent Scotland could become an energy industry powerhouse.”

Texas Feud Over Climate Education Reflects National Battle

Clare Foran of the National Journal reports on a Texas Board of Education proposal to introduce textbooks that “teach climate-science doubt—presenting the link between greenhouse gas emissions caused by human activity and global warming as an unsubstantiated and controversial theory.”

“The skirmish over Texas textbooks is part of a national battle over climate education.”

“Science-education activists are pushing states to adopt a new set of science standards that reflect the scientific consensus on global warming, rather than the popular controversy. The academic framework, known as the Next Generation Science Standards, has been endorsed by organizations such as the National Science Teachers Association and the American Meteorological Society.”

“But the standards have faced intense pushback from conservatives and tea-party groups in a number of states. Earlier this year, Wyoming legislators blocked the standards due to the climate-change requirement. South Carolina’s Legislature also passed a bill that would prohibit the standards from being adopted.”

“The Lone Star State adopted its own set of science guidelines in 2009—so for now there’s no room for debate. But a fight over how climate change should be taught in schools continues to rage in Texas. The focus has just shifted from standards to textbooks.”

The ‘Greenwashing’ of Big Business

Naomi Klein, writing in The Guardian, asks why humanity is incapable of taking collective, substantive action on climate change.

“What is wrong with us? I think the answer is far more simple than many have led us to believe: we have not done the things needed to cut emissions because those things fundamentally conflict with deregulated capitalism, the reigning ideology for the entire period we have struggled to find a way out of this crisis. We are stuck, because the actions that would give us the best chance of averting catastrophe – and benefit the vast majority – are threatening to an elite minority with a stranglehold over our economy, political process and media.”

“It is our collective misfortune that governments and scientists began talking seriously about radical cuts to greenhouse gas emissions in 1988 – the exact year that marked the dawning of ‘globalization.’”

“What the climate needs now is a contraction in humanity’s use of resources; what our economic model demands is unfettered expansion. Only one of these sets of rules can be changed, and it’s not the laws of nature.”

WY May Face EPA Ozone Violations

The Casper Star-Tribune reports that “as many as eight Wyoming counties could exceed the federal standard for safe air quality if, as expected, the U.S. Environmental Protection Agency proposes lowering its threshold on ozone pollution later this year.

“Many factors remain undetermined. EPA will not finalize the rule until 2015. Then it needs to embark on a new round of air quality monitoring before determining what regions are in violation of the new standard. Exceptional events — those rare high pollution days that skew an area’s air quality averages — also need to be accounted for before a decision is made.”

The piece continues: “Environmentalists said that news should be a call to action, prompting the state to improve its air quality before the federal government forces it do so. State officials said it is too early to tell where EPA is headed, but added they are monitoring the discussions. And a top oil and gas lobbyist questioned the revision altogether, asking how much more Wyoming can reasonably be expected to improve the quality of its air.”

Does ‘Environmental Extremism’ Threaten Canadian Energy?

The Toronto Globe and Mail reports that “RCMP analysts have warned government and industry that environmental extremists pose a “clear and present criminal threat” to Canada’s energy sector, and are more likely to strike at critical infrastructure than religiously inspired terrorists, according to a report released under Access to Information.”

“Written by the force’s critical infrastructure intelligence team, the 22-page RCMP document argues there is a ‘growing criminal phenomenon’ associated with environmentalism that aims to interfere with regulatory reviews and force companies to forego development.”

Cost of Keystone XL Pipeline In South Dakota More Than Doubles

Reuters reports that “the cost of the South Dakota portion of TransCanada Corp’s Keystone XL pipeline has more than doubled to $1.974 billion in the last four years the project has awaited federal approval, the company said in a petition filed with the state Public Utilities Commission on Monday.”

The leap in costs from the previous 2010 estimate of $921.4 million is due to factors including the protracted regulatory process, inflation, currency changes, labour cost increases and materials storage, TransCanada spokesman Shawn Howard said.”

“The project to build the 1,179 mile (1,900-km) pipeline to carry 830,000 barrels per day of Canadian crude from Alberta’s oil sands to the Gulf Coast, is in its sixth year of waiting for a U.S. permit after running into fierce environmental opposition.”

Study: Fracking Didn’t Cause Tainted Water

The New York Times reports that “a study of tainted drinking water in areas where natural gas is produced from shale shows that the contamination is most likely caused by leaky wells rather than the process of hydraulic fracturing used to release the gas from the rock.”

“The study looked at seven cases in Pennsylvania and one in Texas where water wells had been contaminated by methane and other hydrocarbon gases. Both states have extensive deposits of gas-bearing shale that have been exploited in recent years as part of a surge in domestic energy production. Some environmental groups have suggested that hydraulic fracturing, or fracking, could cause the gas to migrate into drinking water aquifers.”

The piece continues: “…in their analysis, published Monday in The Proceedings of the National Academy of Sciences, the researchers found no evidence that fractured shale led to water contamination. Instead, they said cement used to seal the outside of the vertical wells, or steel tubing used to line them, was at fault, leading to gas leaking up the wells and into aquifers.”

Adds Fuel Fix: “Contrary to some suspicions, the researchers found, methane in the water reservoirs did not seep up from horizontal drills working deep underground. Instead, the gas leaked from a source much closer to the water: faulty casings and cement rings used to insulate the central shaft of a gas well.”

“The results, the researchers said, help clarify the industry’s role in water pollution.”

Can We Have ‘Energy Independence’ and Climate Change?

The New Republic runs a piece titled: “‘Energy Independence’ will Destroy the Planet: U.S. politicians are fooling themselves on climate change.”

The piece argues that “we are now entering a new era of climate schizophrenia, with energy policy that accelerates climate change celebrated as a solution to global warming.”

“As the costs of fossil-fueled global warming grow, our leaders are accelerating the extraction of carbon reserves.”

Report: Lifting U.S. Oil Export Ban Would Generate Economic Opportunities

The Energy Security Initiative at Brookings released a new report titled “Changing Markets: Economic Opportunities from Lifting the U.S. Ban on Crude Oil Exports.” The report “shows categorically that the crude oil export ban does not, and for some time has not, advanced U.S. energy security. Despite these policies (not because of them), the U.S. has swung from an abundance of oil supply, to scarcity and, today, back to abundance.”

According to Brookings: “Lifting the ban significantly enhances U.S. energy security in several ways. Allowing U.S. producers to connect to global price signals will generate expansion of U.S. oil production, securing self-sufficiency in light grades of oil. By encouraging this production of light grades of oil, the U.S. increases global diversity of oil supply, while reducing the volatility of global crude oil prices. The U.S. has the opportunity to create a source of diversification to the global oil supply and create a more competitive oil market which will not only lower the global price of crude, but also enhances U.S. energy security.”

Further: “…our analysis demonstrates that lifting the ban will increase U.S. oil production, diversify global supply, reduce U.S. gasoline prices and provide net benefits to the U.S. economy. An export option is indispensable to sustaining domestic production; absent the price support that exposure to international markets provides, U.S. production will not reach its full potential. Keeping the ban in place will forgo these benefits and likely lead to reduced production and by implication less national income, employment and security. We find that it would be unwise to base national policy on protecting a small subset of U.S. refiners and question how sustainable a business model based on artificially suppressed input prices can be.”

As a sidebar, Brookings also offers “8 Facts About U.S. Crude Oil Exports,” including:

  • “In all three cases — delaying lifting the ban until 2015, lifting the ban only on condensates or lifting the ban entirely — there are positive percentage change impacts on GDP throughout the model horizon.”
  • “U.S. gas prices could decline by $0.09 per gallon in 2015 if the ban is lifted entirely.”
  • “ Removing oil export constraints will enhance U.S. energy security.”

Oklahoma Oil Hub Gains with Additional Pipelines

The Associated Press reports that “new pipeline projects are expanding the size of an Oklahoma crude oil hub that is already one of the most important oil storage facilities in the world.”

“One new pipeline is in operation at the hub in Cushing, another is almost complete and a new project was announced earlier this month when Tulsa-based NGL Energy Partners revealed plans for the Grand Mesa Pipeline, a joint venture with Rimrock Midstream LLC, the Tulsa World reported Saturday.”

“Grand Mesa, which will be open to oil producer commitments starting next week, will be a 550-mile system from Colorado to Cushing. Once completed, the pipeline could move more than 130,000 barrels per day from production.”

More Oil Growth for ND

Reuters reports that “North Dakota’s daily oil production jumped 5 percent in July to an all-time high, though the number was lower than expected as producers worked to meet aggressive flaring-reduction targets, state regulators said on Friday.”

“The production numbers, which have been steadily rising for years, highlight the massive investments Hess Corp, Whiting Petroleum Corp and other companies are making to develop the state’s oil-rich Bakken and Three Forks shale formations and others.”

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