CEABlog
From humble beginnings to game changing technology
Friday, March 12th, 2010
When considering the nation’s daunting energy challenges, it’s always a good idea to keep in mind the power of innovation. This applies to game-changing technologies as well as new and improved ways of working in established industries: it’s both making fuel out of cow manure, and advancing deepwater drilling technology to unlock oil that was once considered unreachable.
Qteros, a small company based in Marlboro, Massachusetts, is just one of many examples of this sort of innovation. Today, the company is building a power plant that will create ethanol in a revolutionary, and highly efficient way. Not long ago, Qteros was nothing more than a lone microbe living in the ground of western Massachusetts, awaiting discovery.
That discovery was made by a local professor who was studying the biodiversity in the region, removing dirt from the forest floor, taking it to a lab and isolating its different components. One of those compounds, which was later named the “Q-Microbe,” showed an uncanny ability to digest plant matter and yield ethanol. Scientists who worked with this microbe described it as something of a plant eater.
Since cellulose – the stuff that plants are made of – is notoriously hard to break down, it has traditionally been difficult to produce ethanol in a cost-effective way. But the highly efficient way this Q-Microbe works creates new possibilities for making large volumes of ethanol from all sorts of plant matter, not just corn.
The company, in other words, has the power to upset the existing economics of ethanol production in a way that could produce a lot more for a lot less money. The fact that it’s based on a naturally occurring compound, offers a sense of all of the other potentially transformative substances that already exist in nature.
A final twist: This discovery that it is possible to break down plant cellulose more efficiently has set off a search for other so-called plant eaters. One of the recent contenders to be studied is the termite, which for all the destruction it leaves in its path seems to have a powerful bacteria in its gut that lets it digest wood. Talk about thinking outside of the box: How about eating your way out of the box?
We’ll be highlighting different examples of innovation in the coming weeks. Please be sure to tell us your thoughts on the most innovative moves in energy.
Tags: alternatives, American energy, balanced energy, cow manure, domestic energy, drilling, energy, innovation, q-microbe, qteros, termite
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An inconsistent “buy American” policy
Wednesday, March 10th, 2010
Last week we had the fortunate timing of blogging about the value of good home insulation on the same day that President Obama renewed his emphasis on this important but often overlooked energy saving measure when he called on Congress to pass a law that would give rebates to consumers who invested in insulation or other efficient energy equipment.
The announcement came with one of the most memorable sound bytes of the Obama Presidency to date: “It’s hard to import windows from China,” the President said, touting the benefits of the rebates in not just saving consumers on their energy bills but also creating jobs here at home.
Unfortunately, it was not just a sound byte, but also an opening for critics to take a look at our national energy policy and ask just how well it has worked to create domestic jobs in the energy sector. While we applaud any program that will boost domestic production of windows, water heaters and the like, we have to wonder if HomeStar is a bit of a red herring, used to distract attention from all the other areas of the energy sector where business is moving overseas.
Consider:
–Wind turbines. As the U.S. derives growing amounts of its power supply from wind, a disturbingly large number of the wind turbines we use are made in China. A large portion of stimulus funds from last year’s Recovery Act have gone toward building wind farms, but investigations have found the vast majority of wind turbines are made in China.
–Solar panels. The New York Times reports that one single Chinese solar panel maker captured nearly a third of the California market last year, while collectively, Chinese solar panel makers more than doubled their share of the California market over the course of 2009. As the American solar business grew, so too grew China’s stake in it.
–Oil. America’s dependence on foreign oil – in 2008 we imported 57% of all the petroleum we consumed — is a longstanding problem, that is arguably so entrenched that it would take a long time to reverse, even with the best intentions. But even judging on the basis of good intentions, there has been little action to support the domestic oil industry. Over the past year, CEA has tracked a pattern of roadblocks, red tape and unnecessary delays that have blocked some promising and environmentally responsible drilling and exploration projects from getting off the ground. Fewer acres were leased for on- and offshore drilling last year than in any previous year.
Oh, and let’s not forget —
–Windows. This little exercise got us curious about the claim that it’s hard to import windows from China. We’re not yet sure if windows are a major export for China, but it wasn’t hard to find some Chinese windows available for export. It should come as no surprise that a global exporter as large as China would find a way to safely export breakable glass. As long as we here in the U.S. discuss the very serious matter of international trade on such a simplistic level (“of course, you wouldn’t ship glass all the way from China”) we’re bound to adopt feel-good policies over those that really make a difference.
Tags: American energy, China, domestic energy, energy efficiency, energy saving, home insulation, homestar, Made in China, Obama, Recovery Act, solar energy, solar farms, wind energy, wind farms, windows
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Now We’re Talking, Part 1
Monday, March 8th, 2010
By David Holt, President of Consumer Energy Alliance
Higher energy costs lead to higher utility and gasoline prices for consumers. Enacting a national Low-Carbon Fuel Standard (LCFS) will divert affordable, previously U.S-bound energy supplies from Canada to our competitors, reduce access to critical energy products such as diesel and home heating fuel, and increase prices at the pump – all without doing a thing to reduce global greenhouse gas emissions. In fact, greenhouse gas emissions will increase as we turn our back on North American sourced oil and begin importing increasing amounts of energy from other continents via long ocean voyages. We won’t use less energy because there is a LCFS; we’ll just obtain it elsewhere.
These conclusions are well documented. Please download the PowerPoint on LCFS presented by one of the top energy policy analysts at the U.S. Department of Energy at a transportation conference last summer – and be sure to take a look at slides 16 and 17. You might also scan an LCFS study published in the American Economic Journal by professors from North Carolina and California. According to their research, an “LCFS cannot be efficient…,” and, “…contrary to the stated purpose, an LCFS can actually raise carbon emissions.”
Since it was founded in early 2006, Consumer Energy Alliance has worked to promote policies that ensure an adequate supply of energy. CEA is not opposed to using cleaner, more environmentally-friendly sources of energy and has embraced a “we need it all approach.” In light of this mission, we were surprised at the recent statement from Natural Recources Defense Council (NRDC) lawyer, Liz Barratt-Brown, who asserted in an environmental advocacy blog that CEA’s opposition to the LCFS must mean that our organization is “against shifting to cleaner fuels”. She alleged that CEA uses “deception” to represent ourselves.
While conducting its research project on CEA, it appears NRDC missed a recent post on our blog hailing the administration’s commitment to energy conservation programs, especially its efforts to promote and sustain a robust plan for home weatherization and re-insulation. NRDC also missed CEA’s press release applauding the mayor of Houston for getting an important solar energy project across the finish line in that great city. And it must have missed CEA’s many public statements in support of wind power where more needs to be done, and done now, to cut through the red tape and bring more of these installations online in parts of the country where wind generated electricity is both needed and efficient.
It’s true that CEA counts producers of conventional energy sources among its coalition, after all we are the Consumer Energy Alliance; a complete listing of our affiliates has always been available online. In her NRDC blog, Ms Barratt-Brown finds it convenient to characterize our organization as an assemblage of “Big Oil” interests. Were her blog even handed, it would note that we represent an even larger number of energy consumers: a full 60 percent of our affiliates are energy consumers. While these consuming groups don’t see eye-to-eye with the producing groups on every issue all of them embrace and support CEA’s broad mission to advance a national energy policy that encourages us to conserve what we have, allows us to safely produce what we need, and invests in the kind of technology we believe will be critical in creating jobs, revenue and opportunity in the future.
It’s a big effort, to be sure, but it is one supported by a larger and more diverse group of interests than NRDC may realize. Among our more than 130 member companies, we’re proud to work with steel manufacturers, plumbing and heating contractors, community and neighborhood organizations, seafood producers, biodiesel producers, fertilizer groups, truckers, airlines, tourism officials, and many, many others. But the backbone of our organization isn’t found there. It’s made up of the more than 265,000 everyday Americans who have signed up over the years to support our cause, men and women who believe in a balanced, sensible energy strategy for this country, and understand the relationship between such a strategy and the creation of jobs, security and affordable energy.
Yes, we disagree with NRDC on some issues. However, there is reason to believe that we agree on a number of other matters. We know that NRDC is not anti-consumer just as we are not anti-environment.
I’m delighted to continue a dialogue in the future, and I’m also hopeful that we can dispense with the personal attacks and schoolyard insults, and get down to the serious business of crafting commonsense energy solutions for the American people.
Tags: American Economic Journal, American energy, balanced energy, CEA, Consumer Energy Alliance, David Holt, greenhouse gas, LCFS, Liz Barratt-Brown, Low-Carbon Fuel Standard, Natural Resources Defense Council, NRDC
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Distributed Solar: A more efficient way to tap the sun
Thursday, March 4th, 2010
Traditionally, one the biggest problems with solar power has been rain. Make that rain, clouds and all the other kinds of less-than-sunny weather that are quite common in most parts of the country and really limit the effectiveness of a solar panel. The inability to predict how much power a panel will be able to generate has left many homeowners and businesses alike dubious about the value of installing a solar panel.
But there’s a flipside to this weather challenge that you don’t hear about as often: What do you do when a solar panel generates more energy than the structure it sits on needs?
The answer has long existed, in theory: You store that excess power and find a way to distribute it to neighboring structures, or to sell it back to the electric utility. And now a growing number of utilities are successfully implementing these Distributed Solar power plants.
The New York Times reports that in recent weeks, a number of Distributed Solar deals have been announced or approved, which collectively could produce as much power as a large nuclear plant.
The trend results partly from an oversupply of solar modules, which has brought prices down significantly, making it more cost effective to install a lot of smaller panels across a region. It’s also been helped along by some stimulus investments made under last year’s Recovery Act.
This Chicago utility is using federal stimulus funds to test distributed solar on a grid of 131,000 homes as part of a project that also aimed at helping households better track and limit their energy consumption.
As we move beyond simply generating power from the sun and get better at storing it and transmitting it, solar power prices are likely to become more competitive with traditional power sources, which should further boost demand.
And, once households come to understand that all the sun beating down on their roofs is not theirs for the taking, but comes at a price, we’ll probably start hearing about a strange phenomenon: Conserving solar.
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Surviving a blizzard in (relative) comfort
Tuesday, March 2nd, 2010
The series of storms that slammed the east coast in recent weeks were staggering, not just for the volume of snow they dumped, but for the number of homes that lost power. Millions of homes suffered power outages, which in many cases lasted for several days or longer. Snowed-in residents often had nowhere to go and faced a surprising test of survival involving lots of layers, cold sandwiches, and for some of the more fortunate, good home insulation.
While most people wouldn’t choose to spend a week in February with no heat, we’ve heard from a number of folks who had reinsulated their homes – or built them to be energy efficient in the first place – that that they made it through some lengthy outages in reasonable comfort. Even a week without heat, they say, wasn’t so bad. Homes that are well insulated can maintain their temperature for much longer, even if the heat goes off. Residents can remain reasonably comfortable for days.
Now, it could be a century or more before the country again sees a winter like this one. But that is no reason to dismiss the important topic of home insulation. Investing to make a home or other building more energy efficient is often the most practical way to conserve energy. Yet too often, it is overlooked in favor of costlier solutions that are not always practical for individual homeowners.
This story bemoans that home insulation is just not as sexy as things like solar and wind power:
There are celebrity sized tax credits and other incentives to encourage people who can afford the upfront costs of solar and geothermal to install them, but the bonuses for increasing the insulation of one’s current home – something within the reach of most working Americans – are paltry by comparison.
Yet if you put down the cash to install any of those fancy green options, without a properly insulated house, it’s like putting a Prius engine in a car with four flat tires.
Remember HomeStar? The proposal that was floated last year to give homeowners incentives to improve their energy efficiency was widely ridiculed with the name Cash for Caulkers. Yet, for all the up-and-coming alternative sources of energy, basic insulation is still considered one of the low-hanging fruits of energy conservation.
Among the many lessons that the blizzards of 2010 have offered us is the fact that we all take our power for granted and that even in a world full of technology designed to make our lives easier, we may still on occasion have to turn to our own survival instincts. Home insulation is hardly a new concept, but it seems we continue to overlook its value.
Tags: blizzard, caulk, consumers, energy efficiency, homestar, insulation
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A better way to create jobs
Thursday, February 25th, 2010
This week as Congress debates a $15 billion jobs bill aimed at getting more than 15 million unemployed Americans back to work, there is this story out of Janesville, Wisconsin: an autoworker was so desperate to hold onto his job that he followed it when it moved to another state 500 miles away.
Desperate times do indeed call for desperate measures, and after two straight years of jobs loss, many people can think of worse things than a 1000-mile-per-week commute that, after hours on the road, leads to a paycheck.
You have to applaud Congress for its attention to the very severe jobs crisis the country faces. But any reasonable person also has to wonder if there isn’t an easier way.
The Heritage Foundation made the same point earlier this month when it outlined research showing how increasing domestic oil production by two million barrels per day could create 270,000 jobs.
The best thing about these jobs is that they would be easy to find. Ever since July of 2008, when then-President Bush lifted a 10-year-ban on offshore drilling, there has been pent-up demand from Florida to California, Texas and even Virginia to begin exploratory drilling in the nation’s outer continental shelf.
It’s going on two years since that historic milestone, which might have created more of the well-paying jobs we need. And yet, we’re all still waiting. That’s because there seems to be a de-facto ban in place, with layers of red tape, despite an overwhelming show of support by the American public in favor of increasing the responsible production of domestic oil and gas.
Now, given the history of energy in our country, it’s reasonable to assume that oil, gas, nuclear power and even windmills will all be the topics of debate for years to come. And that’s probably fine – to a point. Vigorous public debates can help us refine our policies so that they better address a broad range of interests.
But when you reach a point where the public “discussion” is so heated that it chokes off all action, the debate is no longer serving anyone. And, at a time when lawmakers are talking about spending billions of dollars to put people back to work, it seems irresponsible to disregard the strategies that would create thousands, perhaps hundreds of thousands of jobs, without costing the government a penny.
Today more and more states are revisiting drilling projects in coastal waters. For the first time in years, California, one of the most oil-rich states in the nation, is considering ways to allow more offshore drilling. But it took a severe state budget crisis to get it to that point, and strong opposition remains. Sentiment also appears to be shifting in Florida, where even some of the tourist groups that were once the staunchest opponents to offshore drilling have come to recognize that you can’t have a strong tourism industry without a strong economic base.
These are promising signs to be sure, but without decisive support and follow through, they will remain just that: unfulfilled promises.
In Virginia, lawmakers are close to passing a law that would allocate revenues from offshore drilling projects for roads in the state. Yet, the drilling itself has not yet commenced and could face delays for years. Even Alaska’s oil industry, long a strong and steady source of domestic oil, faces an uncertain future thanks to red tape.
Irresponsible behavior, or just madness? At a time desperate job seekers are being forced to drive thousands of miles to find work, this ongoing resistance to increased domestic oil and gas production seems to be a little bit of both.
Tags: American energy, American jobs, autoworkers, balanced energy, economy, energy security, jobs, jobs bill, offshore drilling, The Center for North American Energy Security, unemployed
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Not all wind power created equal
Tuesday, February 23rd, 2010
The Wall Street Journal this week issued a kind of report card on all the different sources of alternative energy, where they stand and how much they are growing. One of the most interesting details was that the growth of the wind power sector will depend largely on where that wind comes from. Wind produced offshore is usually preferential to wind coming from a dusty plain in the middle of nowhere. Offshore wind would be generated close to large coastal population centers and would require less costly transmission.
This is the sort of assessment you start to hear once a power source is ready for Phase Two. Wind power has made enormous strides in recent years, both in terms of public acceptance and improved technology. U.S. wind power capacity surged 39% last year alone. The more sobering data point is that it still accounts for just 2% of total power generation in the country. If wind power producers want to increase that portion significantly, they need to start thinking strategically about how and where they build power plants.
This helps to explain why the long-contested Cape Wind project near Martha’s Vineyard, Massachusetts is so vital to the industry’s future. If — over the many objections from coastal property owners to fishermen to the Audubon Society — the project goes through, it would be the largest offshore wind power in the country, potentially offering a whole new paradigm of the power of wind.
But in the meantime, it is the power plants built on land that are generating the most investor interest.
Of course, this isn’t really logical – why a wind farm in remote West Texas would be embraced, while one near a major metropolitan area would be blocked for more than a decade. But if we continue to bow to special interests and let them dictate where these new power plants reside, we could very well be forfeiting the industry’s future promise to be anything more than a niche player. Already, the U.S. is quite far behind: its total wind power capacity ranks fifth worldwide on a per capita basis, behind China.
Once upon a time, when wind was new, any electricity it generated was viewed as a net gain. But those days are gone and the stakes are now much higher.
Tags: alternative energy, balanced energy, cape wind, domestic energy, offshore energy, offshore wind, wind, wind power
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Truckers join fight against low carbon fuel standard
Thursday, February 18th, 2010
In states like California that have adopted low carbon fuel standards, truckers are emerging as one of the biggest opponents – and with good reason. The American Trucking Association recently joined in a lawsuit against the California Air Resources Board over the state’s low carbon fuel standard, which it says would not only open the door to an increase in foreign crude oil, but would also make it harder for truckers in California to compete with those in neighboring states.
The truckers have a point. While we here at CEA have been largely focused on the threat such standards posed the overall domestic oil industry, low carbon fuel standards could also make interstate commerce a lot more difficult, especially if different states pass different variations of the law.
It’s very similar to what could happen on a global scale. While a preference for lighter crudes from far away could trigger a surge oil imports, businesses looking to save costs locally could simply hire truckers from, say, Nevada, instead of California, who must pay dearly to comply with the low carbon fuel standard and inevitably will pass that cost along to their customers.
In some instances, a low carbon fuel standard might require truckers to buy new trucks capable of running on so-called low-carbon fuels, at a cost of $100,000 or more per vehicle. It’s a staggering amount that truckers will be hard pressed to afford, particularly if they see increase competition from out-of-state fleets.
This story notes that out-of-state truckers running on more affordable heavy fuels “might continue to pass through parts of California with impunity.” Alternatively, in-state truckers based close to the border could just drive to another state to fill their tanks. A new set of winners, losers … and scammers would emerge. And all for what? Increased dependence on oil from Saudi Arabia and other places far from home.
Tags: american trucking association, california air resources board, domestic oil industry, LCFS, Low-Carbon Fuel Standard, truckers
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More about that letter writing campaign
Wednesday, February 17th, 2010
Last year, CEA launched a successful campaign, which we later reported, sent a bundle of letters supporting responsible drilling to Interior Secretary Ken Salazar. More, recently, we’ve highlighted reports confirming what we said: That those in favor of expanded drilling outnumbered opponents by a two-to-one margin.
Seemingly a cause for celebration, except that no one from Interior is focused on this issue. This disparity between what the public wants and what is happening in Washington is increasingly cause for concern.
The latest to weigh in on the injustice is the Heritage Foundation, which cites that same gaping two-to-one margin (how often is any election won by so much?) and asks the very reasonable question How about some transparency on offshore drilling?
“Government inaction simply doesn’t make sense,” notes Heritage, which last year also sponsored a successful Free Our Energy campaign. “Offshore drilling will create jobs and increase energy supply without cost to the taxpayer. It will create revenues for financially strapped state government and increase revenues for federal governments. President Obama said in his State of the Union address that we should make tough decisions about offshore drilling. It sounds like a pretty easy decision.”
In view of such disregard of overwhelming public opinion, it seems that making your opinion heard – while still vital – is no longer sufficient. In 2010, there will be battles over energy policy, but we will also need to get the word out that the public has spoken and that their views are being discarded. In the coming weeks and months we will provide more information about how to keep the pressure on lawmakers to do the right thing with regards to national energy policy.
In the meantime, keep in mind that two-to-one ratio. It’s a remarkably strong vote of confidence for the policies we at CEA promote. Two out of three people support expanded offshore drilling: The more those numbers are shared, the more pressure the Interior Department will come under to remove some of that red tape that stands in the way of sensible policy.
Tags: American energy, balanced energy, Department of the Interior, domestic energy, domestic oil, drilling, Interior, Ken Salazar, offshore drilling, oil and gas
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Washington, offshore drilling, and you
Monday, February 15th, 2010
In his State of the Union address last month, President Obama got a lot of people excited when he mentioned that it was time to “make tough choices on offshore drilling” in a sentence that initially seemed to suggest he was open to considering some new projects. That sense of hope may be short-lived, however, when you examine all of the recent decisions by the Administration that indicate a reluctance to fully encourage access to our domestic resources. All you had to do was look at the current Interior Department’s track record to conclude that, much like previous Administrations, it has been more focused on setting up barriers than to helping responsible drilling proceed.
This blog argues that, far from suggesting he might be open to more drilling on the country’s Outer Continental Shelf, Obama may have meant the exact opposite:
“Maybe by ‘tough choices’ (the President) meant deciding not to open up the OCS for more exploration. That’s exactly what Interior Secretary Ken Salazar has been doing for the last year.”
CEA has repeatedly highlighted past and present Interior Departments’ uses of stall tactics and red tape that has resulted in a historically low number of lease sales for oil and gas development, which, in turn, leads to reduced revenues for the federal government, fewer jobs and a worsening economy.
But we are also doing more than just keeping track of what has been going on in Washington for the past decade. By rallying support for responsible drilling onshore and off, as well as advancing expanded use of alternative energy, we’ve made considerable progress against opponents who are often more vocal and visible than we are. And by encouraging our company members and individual supporters to make their voices heard in various letter writing campaigns to Interior Secretary Salazar and others, we’ve demonstrated that a majority of Americans are on our side.
The Wall Street Journal recently reached the same conclusion, reporting that public comments supported expanded offshore drilling by a margin of two-to-one.
We have to believe this groundswell of support means that hope is not lost and that we must continue to work with the Administration on ways to improve our national energy policy. Obama might not have meant that he’d support more drilling when he alluded to the “tough decisions” that awaited him. But with a growing demand for more domestically-produced power, for more jobs and for a swifter economic recovery, it is time that we ask our leaders in Washington to review our national energy policy and listen more closely to what we have to say. We all need to work together to redouble our efforts and get the word out about the urgent need for responsible domestic energy production.
Tags: administration, balanced energy, domestic resources, Obama, offshore drilling, oil and gas
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Our blog bots don’t like red tape blocking access to domestic energy.
Tuesday, February 9th, 2010
Tags: American energy, balanced energy, domestic energy, oil and gas
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A pattern of delays
Tuesday, February 2nd, 2010
Is the Interior Department really giving a fair and balanced review of the properties up for consideration for oil and gas leasing? Or, as the data we posted earlier this week suggest, is it engaged in a pattern of blocking any progress with repeated delays and endless red tape?
In support of the second theory, you might want to submit the recent delays to allow drilling off the coast of Virginia as Exhibit A. Except that there have been so many other instances of stalling tactics all around the country, that it’s getting hard to count them all. Far from an isolated example of the country’s Interior Department blocking responsible development of natural resources, this latest delay — in what would have been the first Atlantic coast drilling project to get underway since the ban ended in 1998 – suggests more of the same. Ban or no ban, lots of projects are still being blocked.
You don’t necessarily think Big Oil when you think of the state of Virginia. But like so many states all around the country, Virginia’s estimated reserves are substantial. The three million acre swath located 50 miles offshore that was to have been leased next year, holds an estimated 130 million barrels of oil and 1.14 trillion cubic feet of natural gas.
Now, the Interior Department says any lease sales will be delayed until at least 2012, and may not go forward at all.
Tags: American energy, domestic production, Interior Department, Obama, offshore resources, offshore Virginia, oil and gas, virginia
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One year later, actions speak louder than words
Tuesday, January 26th, 2010
A few weeks ago, when we were basking in a festive holiday spirit, we made a long list of all the things CEA and its supporters had achieved in 2009. But holiday cheer inevitably gives way to the reality of the cold dark winter months, when optimism is replaced by a pressing sense of all the work yet to be done.
This year, mid-January has also brought the anniversary of President Obama’s first year in office, and as the Institute for Energy Research recently concluded, the new policies set over the past 365 days have clearly not supported a strong domestic energy industry.
For instance:
–In 2009, the Interior Department collected only a very small fraction of oil and gas lease sales it had completed in 2008.
–Less than 3% of the available public lands are leased for oil and gas development. Under Obama’s Interior Department fewer acres – both onshore and off – were leased in 2009 than in any previous year.
One story that covered these new findings quoted CEA’s David Holt blaming excessive red tape. “No administration in history has done more to ensure producers do less,” Holt said.
Meanwhile, Thomas Pyle, who heads the Institute for Energy Research, stresses that energy policy cannot be viewed in a vacuum. In this review of Obama’s first year in office, Pyle notes that the President’s efforts to create jobs have suffered from a focus on “unproven technology that is not economically viable.” Such investments have created only a small number of jobs, compared to what could be created by loosening the restrictions on oil and gas exploration and production, he said.
Just how many jobs can a strong domestic energy industry support? As American Petroleum Institute President Jack Gerard outlined in a recent speech, the U.S. oil industry directly supports 9.2 million American jobs and created millions of new jobs over the past decade.
As Obama enters his second year with unemployment higher than it has been in a generation and growing cries for aggressive job creation efforts, let’s hope that his administration starts to see the devastating economic impact of its energy policy and works to help ensure that Americans can have both jobs and affordable energy.
Tags: Barack Obama, David Holt, domestict energy, Institute for Energy Research, Interior Department, Jack Gerard, oil & gas, oil and gas, oil leases, public lands, Thomas Pyle
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Marcellus bids underscore growing interest in shale
Tuesday, January 19th, 2010
Last month, Exxon Mobil made a major investment in XTO, one of the largest shale gas producers in the U.S., and the in the weeks since then, a number of other major oil companies have moved aggressively to establish or expand their presence in the shale sector.
Earlier this week, five companies submitted bids totaling $129 million — twice as much as the amount forecasted — for the rights to drill in the Marcellus Shale natural gas formation in northern Pennsylvania. This growing interest comes amid mounting evidence of the vast volumes of shale gas, which by some estimates, on a global basis, exceed the world’s oil reserves.
Other shale areas, such as the Haynesville Shale in Texas and Louisiana, are also seeing strong interest from energy producers.
The last time we wrote about shale, we noted that improved production technologies would be key to generating a steady supply of shale gas, and helping to ensure mass production. Of course, this path to mass production is never a smooth one, even for the most promising and abundant energy resources. In addition to the technology challenges associated with production challenges, regulatory challenges are also likely. Already, shale producers in New York say that onerous regulations are driving them out of the state.
We’re not sure what the coming year has in store for the shale gas industry, but we do know that it’s an area we all must watch closely. We’re encouraged by the growing interest in these sites and we need to make sure that the projects, which could contribute significantly to our domestic natural gas supply, are allowed to proceed.
Tags: domestic energy, exxon mobil, marcellus shale natural gas, oil and gas, pennsylvania, shale gas
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In California, progress is … complicated
Thursday, January 14th, 2010
Last year, a severe budget crisis in the country’s most populous state made California the site of a lively – and unexpected — debate over reviving offshore drilling.
Now Governor Schwarzenegger has drafted a new budget, which does indeed include proposals to revive drilling in a large and controversial site, known as the Tranquillon Ridge, off the coast of Santa Barbara. It’s a site that by some estimates could generate $4 billion in revenue for the California. It seems a budget crisis is just what was needed to trigger serious policy discussions about offshore drilling as a source of new revenue.
Of course, as we’ve said again and again, we’re all for healthy debates that might lead to more coastal waters being opened to responsible exploration and production. Still, it is difficult to watch this particular debate unfold without being reminded of how far we still need to go, at least in some parts of the country.
Out west, the prospect of additional drilling is too often regarded as a move of last resort rather than a logical energy and economic policy. Schwarzenegger says that revenue from the Tranquillon site will go directly toward the state’s parks, sparing them additional cutbacks. In addition, it appears broad support for the project hinges on an agreement from the project’s developer to stop oil production there after 14 years.
If you think this all sounds a little funny — dangling the future of the state’s parks systems in order to win approval for the project, while exchanging oil now for no more oil in the future — you’re probably right. Some critics have equated the terms of this proposed project to blackmail.
This is not to say that a happy conclusion is out of the question. If it takes state budget crises to get states interested in their offshore resources, that’s a good thing. Even opponents of the project may come to support it once they see the economic upside.
But it shouldn’t have to be so complicated. Hopefully, when other offshore projects come up for review around the country, it won’t be.
Tags: budget crisis, California, domestic energy, drilling, offshore drilling, oil and gas, santa barbara, tranquillon ridge
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While you were toasting…
Wednesday, January 13th, 2010
CEA’s recent year in review offered a long list of achievements in public policy, technology and public opinion that all helped advance our goals of fostering a strong domestic energy industry and economy.
We also noted that there was a lot more work to be done.
Indeed, word came down on New Year’s Eve that 11 states had committed to following California’s lead in adopting a Low Carbon Fuel Standard, essentially a wildly inaccurate measure of the carbon footprint left by various fuels. We’ve noted before that such standards are less likely to reduce emissions and more likely to increase imports of Middle East crude oil. Yet, because the standard has a nice ring to it and may appear to offer the sort of simple solutions people crave, it is catching on quite quickly.
It is heartening to see pockets of opposition, such as this one out of Pennsylvania that notes that the premise of carbon accounting on which the policy is based is, at best, challenging to calculate, and at worst, just like we said, inaccurate.
But from where we stand now, too many lawmakers are taking the sound byte over the hard science and signing on to what could be a devastating policy for the future of domestic energy and our dependence on foreign resources.
As we outline our goals for the New Year, educating lawmakers, businesses and the general public about this not-so-low carbon standard must be a top priority. The future of many domestic energy suppliers and refiners will be riding on the outcome.
Tags: California, carbon footprint, crude oil, domestic energy, emissions, Low-Carbon Fuel Standard, Middle East
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Frozen Out of the Trans-Alaska Pipeline
Thursday, January 7th, 2010
Permafrost, as everyone who has worked in the oil sector in Alaska knows, describes soil that remains frozen year round. Back in the 1970s, when a group of oil companies collaborated on the groundbreaking (no pun intended) project of building the 800-mile-long Trans-Alaska-Pipeline, permafrost was just one of a multitude of daunting challenges engineers faced. They also had to transport large numbers of workers to highly remote regions, and find a way to secure the pipeline from everything from temperature swings to gunshots. (Because of the permafrost, long stretches of the pipeline were built above ground.)
It was a project on a scale that had never been attempted and the reason so many people saw it through to a successful completion in 1977 is that they knew it was worth the effort. Establishing a reliable means for transporting crude from Alaska’s oil-rich North Slope to points south was a sort of insurance policy for companies that explored in the region that their oil would find a way to market.
Interestingly, the pipeline project was born at a time of severe recession for the country and drew support both for the well-paying jobs it created and the promise of more reliable oil prices from home-grown sources.
It is ironic, then, that today the pipeline is facing an early demise even though estimates of proven oil reserves in Alaska continue to grow. The Anchorage Daily News recently published an extensive analysis of the massive investments that are already required to sustain the pipeline in the face of diminished shipments, and the growing concerns that it will soon not be economically feasible to operate the pipeline at all.
We’ve noted this problem in the past: how the health of Alaska’s oil industry impacts the health of all sorts of other industries on which the state’s economy depends. But as concerns mount about the future of the key vehicle for moving oil through the state, you also have to wonder how a weakened or entirely shut pipeline would affect production and exploration.
It’s a chicken-and-egg argument. The Trans-Alaska Pipeline was built because the demand existed to transport large volumes of oil. But if the pipeline were to go away, would producers have any incentive to stay, let alone, expand in Alaska? Political climates, of course, change with the seasons, but you can’t always patiently wait for a new, more welcoming climate, to blow in. As the saying goes, you must use it or lose it.
There have been some recent victories allowing responsible drilling in Alaska, but there are many more unresolved disputes that are critical to maintaining throughput on the pipeline, and in turn ensuring that Alaska’s oil infrastructure that was installed with great effort just a generation ago, remains intact.
Tags: Alaska, alaska pipeline, Anchorage, domestic energy, oil and gas, trans-alaska pipeline
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The consumer energy year in review
Monday, January 4th, 2010
New Year’s brings a time for all of us to review what we’ve accomplished over the past 12 months and chart a course for the future. It may sound cliché, but with such an eventful year behind us, and so many momentous challenges ahead, those of us here at Consumer Energy Alliance couldn’t resist the urge to compile our own Best of 2009 list. What follows are some of the milestone moments of the past year, in which our strong network of supporters significantly advanced our goal of making our country more energy secure and economically sustainable.
- New respect for Offshore Drilling. Yes, many key offshore sites remain off limits to exploration and production but 2009 was a year that policymakers from California to Florida revisited longstanding bans on offshore drilling. They recognized the advances in technology that are making it possible to conduct major projects with minimal footprint and conducted level-headed debates about reversing longstanding bans. Stay tuned – and stay engaged — for more in 2010.
- The sun rises over the Gulf of Mexico. From the appeals court ruling over the summer allowing drilling to go forward in a vast swath of the Gulf, to new data showing strong yields from some of the older properties in the Gulf, to BP’s massive discovery in that same region, you could say that everything old became new again in the Gulf.
- Silent majority finds its voice. It’s not easy competing against protestors who play fast and loose with the facts and even resort to donning furry animal costumes to get attention. Nonetheless, when the Interior Department solicited feedback on some contested offshore drilling sites, the supporters of responsible drilling significantly outnumbered those who cried “not in my backyard.” This letter writing campaign to Interior Secretary Ken Salazar was a major CEA initiative throughout much of the year, and turned out to be a major success. Thank you!
- Alaska’s oil industry gets some needed relief. Speaking of Ken Salazar, the Interior Department’s recent decision allowing Shell Oil to drill three exploratory wells in the contested Chukchi Sea was a significant milestone in efforts to tap the state’s vast oil and gas reserves.
- Renewable energy tapped for practical purposes. Renewable energy has always been a topic of interest to consumers but in 2009 the country made great strides in incorporating renewable power sources into our overall power supply, while recognizing both the limits of these sources as well as some niche applications ideally suited for renewables. Consider the solar powered trash can and some of the new uses for cow manure.
- The argument against exporting emissions gains traction. Politics might all be local, but emissions can travel halfway around the world in no time. Those of us who support a strong domestic oil industry have always understood the folly of exporting oil production, particularly to distant destinations that lack the environmental standards we have here at home. It’s one of the reasons, we’re so opposed to low carbon fuel standards. We clearly haven’t won this argument yet, but thanks to some of our vocal supporters – and some advanced science that can actually track the movement of things like toxic clouds from coal burning power plants in China – the not-in-my-backyard line of thinking is losing some power.
- Ocean Policy Task Force faces tough questions. If the Administration thought that while no one was looking, it could just impose a new layer of regulations on all of the industries that conduct business along the country’s waterways, it was mistaken. Shortly after the Ocean Policy Task Force was convened, lawmakers began raising questions about who would be setting the new rules and whether they could cost the country jobs.
Of course, we are a long way from winning the battle to prevent regulators from taking control of our oceans. Likewise the effort continues to bring responsible drilling and production to more of our coastal waters and ultimately produce more of the oil we consume in the U.S. In the coming weeks, we’ll outline some of the challenges for the New Year.
But for now, we leave you on an optimistic note. We thank you as always for your support.
Tags: 2009, 2010, Alaska, domestic energy, emissions, five year program, Gulf of Mexico, LCFS, new year, ocean policy, ocean policy task force, oceans, ocs, offshore drilling, renewable energy, year in review
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Our robots chime in on energy policy
Monday, January 4th, 2010
Please listen to this message regarding important energy issues from our CEA robots!
Tags: LCFS, Low-Carbon Fuel Standard
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A season of paradox
Tuesday, December 22nd, 2009
Folks living within a vast swath of the eastern United States had their festive plans for caroling and last-minute holiday shopping disrupted over the weekend by the biggest snow storm in years. In many regions like the greater Washington D.C. area, the storm shattered old records for December snowfall … and winter hadn’t even officially begun yet.
The blizzard, combined with the sub-freezing temperatures, all but promises a white Christmas in regions hit by the storm.
Of course, snow days and sledding and cozy times together by an indoor fireplace come along with treacherous roads and driveways that need to be shoveled and the high heating bills required to keep everyone warm inside.
And this year, as people brace for those wintertime heating bills, they’ll be chagrined to discover that the soft economy has done little to lower the cost of keeping their homes warm. It’s an ongoing paradox we’ve discussed here before: how the normal rules of supply and demand don’t really apply when the product in question comes from overseas sources that have their own way of artificially controlling pricing.
Last summer, we discussed how oil prices were rising despite soft demand and swelling inventories. This winter, prepare for more of the same. We’re approaching our third straight year of economic downturn, and supplies of heating oil are overflowing, so much so that the early snowy cold spell isn’t expected to make much of a dent. Still, many forecasts show consumers paying more for their heating oil this year than they did in 2008 – when, by the way, it was hardly cheap.
Low demand and high prices: It’s a paradox indeed, but it’s not a mystery. Heating oil prices rise when crude oil prices rise. And here in the U.S., crude prices rise for all sorts of reasons, usually reasons that have little to do with supply or demand, or even the weather. Like so much of the oil we consume, the explanation for those persistently high winter heating prices is located far from home.
Wishing you a warm holiday.
Tags: CEA, Consumer Energy Alliance, domestic energy, energy prices, energy security, energy supply, natural gas, oil
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