September 2nd, 2010
September 2010 CEA Newsletter
Issue 42
The past month has proved to be one for both optimism and great concern. While the Deepwater Horizon spill has been contained and cleanup efforts have made immense progress and continue to move forward, the Administration has continued its policy of delay – despite solid, bi-partisan evidence that drilling can and should be safely resumed.
For example, in a concerted effort to respond to the drilling ban, The Bipartisan Policy Center was recently asked by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling to generate recommendations for the federal government to determine which suspended activities could be safely resumed. The commission successfully determined that responses were inadequate on both sides and that better technology is required. They also stated that there is now an adequate margin of safety to resume some of the deepwater drilling in the Gulf of Mexico. (To read the Bipartisan Policy Center Report, click here.) It is this type of bipartisan response that is an invaluable resource to us. It is steadily becoming more evident that the response to the spill was much worse than the event itself.
The financial impact on the Gulf Coast and the nation are real, with almost $65 billion in annual revenue generated by offshore Gulf activity. Further delays – without sound justification – only add to the harm the nation has already suffered.
It also remains troubling that offshore activity in Alaska remains uncertain. Alaska is not part of the Administration’s stated drilling delay in the Gulf of Mexico, yet the Department of Interior has failed to provide any clear regulatory pathway toward future production. Alaska – and its massive oil and natural gas resources – remains in limbo at a time when the American public is crying out for more domestic energy. If, for example, Alaska was a nation, it would have the 9th largest oil resources in the world – ahead of Nigeria, Norway and Libya.
And, while all this regulatory uncertainty and delay continues, Americans consume more than 18 million barrels of oil per day (importing 12 million of those barrels).
The Administration needs to hear from consumers who are concerned about the lack of clear policy direction. This month, Consumer Energy Alliance is joining other groups to help mobilize folks in Texas and elsewhere to participate in September job rallies. We encourage you to attend and voice your concern. To learn more about these dates and locations, click here.
Also, The U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) will be hosting a Public Meeting to discuss the Obama Administration’s offshore oil and gas drilling ban. The next forums are scheduled for Tuesday, September 7th, in Houston, and Friday, September 10th in Biloxi, Mississippi. Coastal communities, affected businesses and local governments have not been given sufficient time to participate in previous public meetings hosted by BOEM and have not had the opportunity to make the Administration aware of our concerns. It is important for CEA affiliates and friends to attend and show BOEM Director Bromwich that it is time to lift the murky restrictions on Gulf development, spur economic opportunity and get this region and the nation moving again. To learn about the dates, times, and locations, click here.
It is also important to remember that the Gulf is largely spill-free and open for business, despite widespread media stories to the contrary. In an article published by the Orlando Sentinel on August 26, it was reported that travelers are still avoiding the Florida vacation spots for reasons more associated with rumors and false speculation rather than oil. So with this as a sobering example, we must, as energy consumers, continue to reach out to educate the public and move them to action.
Our only option to tip the scale in our direction is by mobilizing public response. As energy consumers, we need to improve our level of activism and join together to form collective response now.
David Holt
President
Lift the Drilling Ban: Put Hardworking Americans Back to Work!
Sign CEA’s petition urging President Obama to reverse the deepwater drilling ban now. While we witness the devastating consequences of the Gulf of Mexico spill on the environment, we now know that ceasing to drill will cause severe economic repercussions. The oil & gas industry provides significant amounts of jobs and revenue for Gulf residents. The Administration’s kneejerk reaction may have consequences reaching far beyond the oil spill and into the future – rigs are already leaving the Gulf.
Please sign the petition to lift the ban and safeguard American jobs before more damage is done. Sign the petition today!
YOUR PRESENCE IS NEEDED AT THE RALLIES FOR JOBS!!
In the wake of the Gulf oil spill, Congress and the administration are debating measures that, if approved, could cost American jobs, drive small- and mid-sized firms out of business, threaten our fragile economic recovery and jeopardize our energy security. We must ensure that policies are not implemented that would jeopardize jobs, threaten our nation’s energy security and limit our ability to safely and reliably produce affordable, domestic energy.
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
The rallies are planned for TEXAS, OHIO, NEW MEXICO, ILLINOIS, and COLORADO. For dates, locations, times, and more information, click here.
Call to Action: Submit Comments to the BOEM to End the Drilling Ban
Currently, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) Director Michael Bromwich is holding a series of fact-finding forums in several Gulf Coast cities affected by the offshore drilling ban, as well as Anchorage, Alaska and Santa Barbara, California. BOEM plans to provide Interior Secretary Salazar with recommendations on these issues by October 31, 2010, and our voices need to be heard. While the forums will be open to the public, members of the public are encouraged to comment in person at the forums (through comment cards) or by mail or online. Please click here to learn more about ways to submit comments to the BOEM.
CEA Welcomes New Affiliate Members
Houston Clean Energy Park
The Houston Clean Energy Park (HCEP) is an 80 acre facility adjacent to a utility substation that was created to allow for harmonization and delivery of clean power into the ERCOT electric grid. In addition to this clean power is the development of the 80 acres into a technology park focusing on tenants with market competitive clean energy, environmental or infrastructure technology firms.
Ocean Energy Institute
The Ocean Energy Institute (OEI), founded in 2007 by Matthew R. Simmons, is a think-tank and venture capital fund addressing the challenges of U.S. offshore renewable energy. OEI approaches energy R&D and investment from a systems point of view, grouping the generation, usage, storage and transmission all together as an interdependent set of opportunities. They are working to educate consumers about the benefits of ocean energy and helping to clear obstacles to make ocean energy a reality.
Petrohawk Energy Corporation
Petrohawk Energy Corporation is an independent energy company and a leader in the exploration and development of shale-based oil and natural gas resources in the U.S. Their properties are concentrated primarily in the Haynesville Shale and Lower Bossier Shale of Northwest Louisiana and East Texas, the Fayetteville Shale of Central Arkansas, and the Eagle Ford Shale of South Texas.
Trans Pacific Oil Corporation
Trans Pacific Oil Corporation is one of the Top 20 Oil and Gas producers in Kansas. They focus on a combined strategy of reserve purchases, exploration, and development for the state of Kansas and the surrounding region. A part of the Kansas industry since 1980, Trans Pacific is a small, independent company committed to attracting business investment opportunities to the Kansas region.
Consumer Corner: Take This Bill and… Measure it!
Finding a starting point from which to measure is often the hardest first step to evaluating the efficiency of your home’s energy usage. The U.S. Department of Energy is helping us evaluate our households and compare them to others across the country so that we may better understand how to begin to prioritize and conserve. You will need the following information to calculate your “score”:
- · Your last 12 months of utility bills
- · Energy sources from your home (i.e. natural gas, electricity, fuel oil, propane, kerosene, etc.)
- · The square footage of your home
- · 5 minutes to plug in the information and get your results!
Visit the website today to receive your totals, compare to others across the country, and get recommendations for improvement! Click here: Department of Energy’s Home Energy Yardstick
America’s Natural Gas Alliance
On August 24th at the Houston CEA meeting, America’s Natural Gas Alliance (ANGA) gave an Energy 101 presentation highlighting the importance of natural gas and its value, specifically to the state of Texas. According to their research, the natural gas reserves in the United States are at a level of 100+ years and growing exponentially each year. They emphasized the importance of clean energy and the cost-effectiveness of natural gas as a consistent energy supply. To view their presentation, click here.
ANGA Alliance exists to promote the economic, environmental and national security benefits of greater use of clean, abundant, domestic natural gas. They represent 34 of North America’s largest independent natural gas exploration and production companies and the leading developers of the shale plays now transforming the U.S. clean energy landscape. To learn more about ANGA, visit their website at www.anga.us.
BugWare, Inc.
BugWare, Inc. is a consulting paleontology group located in Tallahassee, Florida. An organization that works closely with the oil industry, this group of scientists goes to deepwater oil rigs and determines the age of the strata being drilled via examination of the microscopic fossils found in the cuttings.
“We are among a small number of paleontologists that work in the oil industry,” says Mitch Covington, owner of BugWare, Inc. Fossils have become increasingly valuable in the exploration for deep water oil reservoirs. Despite the new & expensive technology employed by today’s oil industry, the microscopic fossils are still a valuable tool for identifying geological layers — a necessity for efficient exploration. BugWare has the largest concentration of consulting nannofossil specialists working in one office in the country. Covington also writes his own software and delivers state of the art computer data and graphics to display their findings from wellsite or from their office.
Energy issues directly affect BugWare due to the nature of their business. “Our entire existence is dependent upon a healthy deepwater Gulf of Mexico exploration and production policy,” says Covington. And according to his calculations, the moratorium has cut his business by about 90%. “We would like to see a sensible drilling policy in areas that are currently off limits.”
Covington decided to join CEA due to the organization’s ability to be a mechanism for educating the public as well as policy makers. “In an atmosphere adverse to offshore drilling, CEA can help inject logic and common sense into the equation through communication and activism,” he says.
To learn more about BugWare, Inc., visit their website at http://bugware.com/.
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September 1st, 2010
It’s back to school season, but how will all those kids actually get back to school? Public education budgets around the country are tight and many school districts are slashing spending on transportation, reducing or eliminating the school bus.
One city in Wisconsin is taking a different approach, incorporating hybrid buses in its fleet of vehicles in order to save money on fuel even as it reduces emissions. Oconomowoc, in southern Wisconsin, is introducing 11 hybrid school buses and installed a solar charging station. Estimated savings: About 7,500 gallons or $22,500 a year. And, because the buses travel about twice as far as a conventional bus on a tank of fuel, maintenance costs are expected to be lower as well. It all adds up to a lot of resources that could be spent on pencils, paper and books.
And speaking of books, programs like the one being unveiled in Wisconsin achieve more than just saving money and emissions. At a time that schools around the country are trying to teach sustainability, those that practice what they teach are bound to be more effective. Moreover, when cash-strapped schools find creative ways to preserve bus services, they are serving the community by reducing the number of cars clogging the roads making those quick trips to and from school.
In case you ever wondered why we don’t have more solar-powered cars, trucks and vehicles on our roads, these vehicles have traditionally posed multiple challenges with design, since they have only so much surface space to soak up the sun. Early prototypes have been described as tabletops on wheels, with so much space taken up with solar panels that there was barely any room left for a driver.
But while the concept of a completely self-sufficient solar car never took off, solar technology is being incorporated into hybrid plug-in vehicles more and more. The 2010 Toyota Prius incorporates solar panels used to power the car’s ventilation system, and electric and hybrid vehicles will increasingly be able to recharge at solar-powered charging stations.
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August 31st, 2010
| September 11, 2010 |
| 11:00 am | to | 1:00 pm |
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
More energy equals more jobs, higher incomes and greater economic growth. Attend a rally and show your support for American jobs and American energy!
Sept. 11, 2010: COLORADO RALLY FOR JOBS
- Grand Junction, Colorado: 11 a.m. – 1 p.m. Two Rivers Convention Center, 159 Main Street, Grand Junction, CO 81501
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August 31st, 2010
| September 8, 2010 |
| 11:00 am | to | 1:00 pm |
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
More energy equals more jobs, higher incomes and greater economic growth. Attend a rally and show your support for American jobs and American energy!
Sept. 8, 2010: ILLINOIS RALLY FOR JOBS
- Joliet, Illinois: 11 a.m. – 1 p.m. Pipefitters Training Center (in Mokena), 10850 W. 187th Street, Mokena, IL 60448
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August 31st, 2010
| September 8, 2010 |
| 11:00 am | to | 1:00 pm |
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
More energy equals more jobs, higher incomes and greater economic growth. Attend a rally and show your support for American jobs and American energy!
Sept. 8, 2010: NEW MEXICO RALLY FOR JOBS
- Farmington, New Mexico: 11 a.m. – 1 p.m. McGee Park, 41 Road 5568, Farmington, NM 87401
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August 31st, 2010
| September 7, 2010 |
| 12:00 pm | to | 2:00 pm |
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
More energy equals more jobs, higher incomes and greater economic growth. Attend a rally and show your support for American jobs and American energy!
Sept. 7, 2010: OHIO RALLY FOR JOBS
- Canton, Ohio: 12 – 2 p.m. Canton Memorial Civic Center, 1101 Market Ave N, Canton, OH 44702
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August 31st, 2010
| September 1, 2010 |
| 11:00 am | to | 1:00 pm |
The Rally for Jobs is an opportunity for those whose livelihoods depend on the oil and natural gas industry and American consumers to express their concerns with these harmful proposals.
More energy equals more jobs, higher incomes and greater economic growth. Attend a rally and show your support for American jobs and American energy!
Sept. 1, 2010: TEXAS RALLY FOR JOBS
- Houston, Texas: 11 a.m. – 1 p.m. George R. Brown Convention Center, 1001 Avenida de la Americas, Houston, TX 77010
- Port Arthur, Texas: 11 a.m. – 1 p.m. Port Arthur Civic Center, 3401 Cultural Center Drive, Port Arthur, TX 77642
- Corpus Christi, Texas: 11 a.m. – 1 p.m. American Bank Center Convention Center, 1901 North Shoreline Boulevard, Corpus Christi, TX 78401
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August 31st, 2010
One of our core missions here at CEA is to promote policies that will make energy available and affordable for all Americans. Summertime, when people take to the road for family vacations, is a good time to gauge our progress: Two summers ago, gasoline prices hit record highs that made gasoline flat-out unaffordable for millions of working Americans. Last year, we braced for another wild ride but were spared. And now, as the summer of 2010 draws to a close, gasoline prices remain stable.
In fact, gasoline prices recently hit an eight month low. You can track longer term trends on this site, which show gas price patterns over various intervals from one month to six years. As it shows, there was collapse in gasoline prices following that difficult summer of 2007, but then a modest rebound. But prices have stayed in a fairly narrow range since the beginning of last summer; they are significantly below where they started before that wild spike two years ago.
The bad news, of course, is that nothing fundamental has changed in our energy policy to produce these moderate prices. Rather, it’s a function of the nation’s economy, which remains plagued by widespread foreclosures, high unemployment and shaky consumer confidence. While consumption may be down across the board, the United States still imports well over half its crude oil, gasoline and related petroleum products. Even in times that we are consuming less fuel, we remain a country that does not even come close to meeting our energy demands.
If you were one of the fortunate ones this summer, you were able to afford a family vacation and you may have noticed that gasoline prices – while not cheap – were reasonable. But far too many less fortunate people had no disposable income to spend on a vacation. It is that widespread economic distress that accounts for the low gasoline prices we’re seeing now.
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August 26th, 2010
WASHINGTON, August 25, 2010 – API’s director of Upstream Erik Milito and its director of Global Industry Services John Modine delivered testimony today to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling on industry efforts to improve offshore safety.
Here is the testimony as prepared for delivery:
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August 26th, 2010
Fifth anniversary of most destructive storm in Entergy Mississippi’s history
Jackson, Miss. – As Hurricane Danielle and another tropical storm churn in the Atlantic Ocean, residents of Mississippi and Louisiana are reflecting on the fifth anniversary of Hurricane Katrina, the nation’s greatest natural disaster.
It was also the most destructive storm in Entergy Mississippi, Inc.’s history.
When the hurricane barreled through the state on August 29, 2005, communities throughout the 45-county service area were affected. More than 300,000 of Entergy Mississippi’s 410,000 customers were left without power. Soon after, some 1,200 linemen and support staff were on the ground, in the air and everywhere in between, working around the clock to restore service to customers.
“We had estimated it would take weeks to rebuild our electrical infrastructure, which was about 75 percent damaged,” said Haley Fisackerly, president and chief executive officer of Entergy Mississippi, Inc. At the time, Fisackerly served as the company’s vice president of customer operations.
“But with the cooperation of local leaders and the support of our customers, we were able to restore power in an unprecedented 12 days,” he said. “It was a monumental accomplishment that required incredible commitment and sacrifice by our employees and many of our retirees who also lent their expertise to the effort.”
The successful restoration effort throughout Entergy Mississippi’s service area was the result of many entities—emergency workers, church groups, civic volunteers, military, media and elected officials—working together toward the common goal of rebuilding.
“It was a Herculean effort by all citizens to help each other in our darkest hour,” said Fisackerly. “It was a pivotal event in our state’s history and our company’s history. The blow dealt to Mississippi and to Entergy by Hurricane Katrina was profound, but so was the resiliency of our workers and our customers.”
Albert Einstein once said that the only source of knowledge is experience. Entergy has used the many lessons from Katrina to make the company even stronger and better prepared to respond to catastrophic outages. The company has established a gateway process for all non-Entergy personnel called to assist the utility’s crews. These workers must check in at a designated location outside of the affected area where they undergo an intense, bilingual safety orientation on Entergy’s expectations for safety. They also receive a storm orientation manual developed post-Katrina, and their equipment, trucks and capabilities are inspected by an Entergy team.
Additionally, improvements have been made to the logistics process and new training has been incorporated to allow for more efficient and effective restorations. New partnerships have been developed with logistics vendors and existing relationships strengthened so that the resources are in place to feed, bathe, clothe, house and move the small army that makes up the restoration team.
Entergy is the only utility in the nation to win the top awards from the Edison Electric Institute for emergency response or emergency assistance 11 years in a row.
“Preparing for hurricane season is an ongoing process for Entergy,” said Rick Riley, director of transmission and distribution for Entergy Mississippi, Inc. “Our employees know that being storm-ready is key to a safe and quick restoration.”
Entergy has taken action for the 2010 hurricane season by protecting the system from a potential hurricane. The company has performed detailed hurricane drills, used infrared technology to evaluate priority customer facilities, such as hospitals and police stations, and inspected 200 feeders, nearly 1,000 capacitors and more than 2,000 reclosers. Entergy is also trimming trees along 3,300 line miles regionally to reduce storm-induced power outages and protect vital equipment.
“We’re also educating our customers about our hurricane preparedness efforts, and we’ve renewed and strengthened mutual assistance agreements, contractor alliances and partnerships with key governmental agencies,” said Riley. “Responding to a hurricane, tornadoes or an ice storm is critical to our customers, and we work very hard to be the best.”
Entergy has also announced several new services since Katrina struck in 2005 that are aimed at keeping customers informed, particularly in times of storm-related outages. Most recently, the company unveiled a new website, entergystormcenter.com, which offers breaking news in times of major storms, post-storm electrical safety tips, updates by area and photos and videos.
Also, customers can sign up for My Account Anywhere on the company’s website at entergy-mississippi.com, to send and receive outage-related text messages. Customers can also receive breaking news and outage updates by following Entergy Mississippi on Twitter at EntergyMediaMS.
Entergy Mississippi, Inc. provides electricity to more than 435,000 customers in 45 counties. It is a subsidiary of Entergy Corporation. Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States.
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August 26th, 2010
Click here to view U.S. Senator Lisa Murkowski’s remarks to World Trade Center Alaska, as given August 17, 2010.
Posted in CEA-AK News, CEA-AK Statements & Comments, CEA-AK Support for Development | No Comments »
August 26th, 2010
Which countries do you think about when you think about leadership in renewable energy? China may likely come to mind for its massive manufacturing base of wind turbines and solar panels. Germany is a well-recognized leader in the adoption of wind power, as is the United States, despite some recent missteps.
You probably would not think to mention Costa Rica, which is really too small to be considered a world energy leader. But consider this: Costa Rica gets about 99% of its electricity from renewable energy sources, most of which comes from hydroelectric power. Its goal is to become the first carbon neutral country on the planet, and if it achieves that, it will be in large part because of its hydroelectric dams.
Here in the U.S., we talk about renewable energy all the time, but not much about hydroelectric power, one of the most established forms of renewable energy. This story offers a good explanation why, despite its zero emissions benefits, hydropower is not more widely embraced. When dams are constructed, the natural landscape is invariably disrupted.
Although the U.S. derives most of its renewable power from hydroelectricity, it uses far less hydro power than much of the rest of the world: Seven percent of the electricity in the United States comes from hydro power, compared with 19% worldwide.
So we ask: What do you think about hydropower? Are the concerns about ecological disruption valid enough that expansion should be limited? Or, are we just being unrealistic when we fail to accept the “cons” with the “pros?” When it comes to hydroelectricity, are there more “pros” than “cons?”
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August 25th, 2010
WASHINGTON, August 23, 2010—The American Petroleum Institute announced it would provide free online public access to a large group of key industry standards, including a broad range of safety standards. This expands the number of API standards that will be available for free. A smaller number are now available to the public for free on API’s website while others can be reviewed in person in government agency offices.
“As API standards have been referenced in the federal register in rulemaking procedures, having copies available for public review in only a few locations did not meet our industry’s goal of transparency,” said API President and CEO Jack Gerard. “The industry’s standards represent our commitment to safe and successful operations and practices. Wider access through online viewing platforms is part of our public commitment.”
Once changes to the API website are complete, 160 standards will be available online. The standards represent almost one-third of all API standards and will include all that are safety-related or have been incorporated into federal regulation. Examples include process safety standards on refinery and chemical plant operations and equipment, offshore drilling standards, hydraulic fracturing and well construction standards, and pipeline safety standards on welding and public awareness programs.
The newly accessible standards will be available for review, and hardcopies and printable versions will continue to be available for purchase. API standards are generally technical in nature and designed principally for use by oil and natural gas companies. Revenue from the sale of standards supports API’s standards program, which operates on a non-profit basis. API expects to continue to sell standards to oil and natural gas companies and other interested parties.
Bureau of Ocean Energy Management officials and others in the administration have encouraged API to increase access to industry standards. “We are pleased to help the administration demonstrate the industry’s commitment to safe operations,” said Gerard. “Much of the nation’s energy is produced on public lands, and the public has a right to know what measures industry is putting in place to stay safe and improve its environmental stewardship.”
API began its standards program in 1924 and has continuously updated and added to its standards and recommended practices.
API represents more than 400 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports more than 9.2 million U.S. jobs, accounts for 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives, while reducing the industry’s environmental footprint.
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August 24th, 2010
There is a new prototype of the classic Volkswagen Beetle in the U.K. that gets its fuel from a nearby sewage plant. That’s right: it runs on human waste. As a car that runs on biogas, VW’s Bio-Bug is not really a new concept. But the specific type of biogas it consumes is raising a lot of eyebrows and questions.
Yes, the sewage is treated. And no, if you didn’t know the fuel source, you’d have no way of knowing it was sewage, the company says. In fact, the U.K. biogas plant that introduced the prototype says that it already uses biogas derived from sewage to produce electricity. It said it had a surplus of gas that it wanted to put to a good use and thought automobile fuel was a natural fit. Volkswagen is reportedly considering converting some of its cars to run on biogas, depending on the outcome of the Bio-Bug test run.
Now, before anyone gets too excited – or too offended as the case may be – remember this: Poop-powered cars probably are not coming to a road near you anytime soon. It is estimated that it would take the annual, “output” of 70 households to get one car to produce enough fuel for one car to travel 10,000 miles. Even under the best case scenario, we’re looking at a pretty small niche market.
But at a time when consumers are raising all sorts of objections to less controversial energy sources like wind and solar power, human waste as fuel does bring up some interesting questions. Could it ever fly in the United States? Or, would automobile fuel derived from sewage just make a lot of people uncomfortable? What about you? Would you buy a car that got fuel from the same stuff that gets flushed down the toilet? If not, why not? Would you rather fill up you vehicle on cooking oil?
Tell us what you think.
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August 19th, 2010
Earlier this summer, The National Review asked whether Americans had a realistic view of our energy needs, our energy supply, and our ability to transition away from conventional fuels and toward alternative sources of power.
The story argued that we have consistently taken a decidedly unrealistic approach to these issues, not only two years ago when Al Gore set a goal of producing 100% of our electricity from alternative sources within a decade, but also Jimmy Carter’s pledge more than 30 years ago that we would never use more foreign oil than we did in 1977. (In fact, we’ve used quite a bit more foreign oil since then).
The story also made the important point that transitions to new sources of energy tend to take a long, long time. Case in point: Oil did not surpass coal as the world’s primary source of power until 1965. That detail, and many of the other facts in the story, support the reality that oil will not – and in fact cannot – go away any time soon.
These are all points that are worth remembering now as we begin to see larger scale adoption of alternative power sources like wind and solar. But as we take a realistic view of the future of oil, we also must ask whether we are doing enough to support these up-and-coming power sources. Consider some recent developments that have thwarted the very power supplies that are supposed to represent our future:
–California’s goal to obtain 20% of its power from renewable sources by the year 2020 is being obstructed by environmentalists’ objections to building new solar power plants.
–A wind power plant in Oregon has generated so many complaints about noise pollution, that the plant has reportedly had to pay off nearby residents to silence them.
–Some lawmakers in Maine are complaining that the state’s efforts to rapidly expand its wind power operations have prevented’ it from building these turbines “to fit harmoniously into the landscape.” They now say these expansion plans may need to be scaled back.
Clearly, there is a lot that we do not yet know about the mass adoption of wind and solar power. We need to listen to the people who live and work near these new power sources to better understand their concerns. But at a time that we should all know that all sources of energy bring risks and require compromise, these widespread objections to what many consider the most benign sources of power do make you wonder: Are we being realistic about our power supplies, both conventional sources like oil and alternative sources like wind and solar?
Or, has our not-in-my-backyard objections gone too far?
Tell us what you think.
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August 18th, 2010
Four months ago, the tragic accident on the Deepwater Horizon set oil and gas drilling operations across the Gulf of Mexico on a different course, as lawmakers revisited longstanding debates about environmental safety and economic security. It is far too early to declare that crisis over, but it is important to note that a major milestone has been passed with the successful sealing of the BP well. Drilling of a relief well is also nearing completion.
Reasonable people would hope to see similar progress in restoring economic vitality to the region. However, the moratorium on deep water drilling in the region has still not been reversed. This, despite a growing chorus of criticism, mounting confusion over the parameters of the ban, and extensive evidence that a halt to so many drilling operations is, in effect, a job killer.
Next month, CEA will participate in series of rallies around the country aimed at highlighting the large volumes of jobs the domestic oil and gas industry supports. Our message? A time of historically high unemployment is not the time to unnecessarily tighten the screws on an industry that supports more than nine million American jobs.
Recently, the Labor Department reported a nationwide unemployment rate of 9.5%, along with scant private sector job creation. About 15 million Americans are out of work. By hosting rallies from Texas to Ohio, Illinois, Colorado and New Mexico, CEA hopes to impress upon lawmakers and the general public how vital a strong domestic oil industry is to our national economy.
As the Obama Administration continues to defend its six-month ban of drilling in the Gulf, industry analysts say the ban’s effect may be more devastating than originally believed. This report says that while the ban only applies officially to deep water drilling, many shallow water rigs are not operating because they cannot obtain permits. Some deep water rigs have already left the region and many more are preparing to do so as a result of all the uncertainty. By one measure, the current restrictions on Gulf drilling account for the loss of 137,000 jobs. We could also detail the massive loss of tax revenue and domestic oil and gas production, but right now, we’re talking about the loss of jobs, which is devastating in and of itself.
Last spring’s tragic accident will not – and should not — be soon forgotten. We’ve repeatedly called on the oil industry to uphold the highest safety standards going forward: We cannot defend the oil and gas industry without doing our part to ensure that industry is a steward of the environment in which it operates. As we at CEA call for an easing of the restrictions that have put so many jobs in jeopardy, we also know that we cannot become complacent about the way in which we operate.
Likewise, we cannot become complacent about a drilling ban that is set to expire just a few months from now. A few months is enough time to cause extensive economic damage, especially if some rigs leave the Gulf for good. We also have no way of knowing whether the Administration will indeed end the ban in November as planned, or whether it will continue with longer-term restrictions and informal delays that could make production and exploration in the Gulf more challenging for years to come. We do not know and we cannot afford to wait. Check our web site for more information about the job rallies in September here.
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August 17th, 2010
WASHINGTON, August 17, 2010 – At a press conference call, API President and CEO Jack Gerard announced a series of rallies being scheduled in several cities in September, giving Americans a forum where they can voice their concerns about jobs and the economy. API has developed a new website about the rallies called rallyforjobs.org.
Tags: American Petroleum Institute, Rally for Jobs
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August 17th, 2010
WASHINGTON, August 16, 2010 — Raising taxes on the U.S. oil and natural gas industry could significantly reduce domestic oil and gas production next year and cut it by as much as 10 percent in 2017, a new API-sponsored study by Wood Mackenzie concludes.
“The study illustrates a fundamental rule of economics: tax something more, get less of it,” said API president and CEO Jack Gerard. “But more important than the lost production is the loss of thousands of jobs that would follow. Advocates of higher taxes should understand who would really be hurt.”
The study looks at what could happen by eliminating two tax incentives: intangible drilling cost expensing and the domestic production activities (section 199) deduction.
“The incentives have increased U.S. energy production and jobs, and other industries enjoy the same or similar incentives,” Gerard continued. “Proposals to eliminate them for oil and gas alone would discriminate against an industry that already pays federal income tax at an effective rate more than 70 percent higher than the other S&P Industrials.”
The study estimates the adverse impacts of tax increases would be worse for natural gas, a clean-burning resource the nation will increasingly rely on to help reduce greenhouse gas emissions. “Total resources not produced could reach as high as 27 Tcf of gas and 700 mmbbls of oil over the next ten years,” the study concludes. “Almost half of the gas plays we consider to have future development potential are at risk under the proposed tax changes. The gas plays that become sub-economic are not only great in number, but represent more than 10% of the gas that will be produced over the next ten years.”
See the Wood MacKenzie study “Evaluation of Proposed Tax Changes on the US Oil & Gas Industry” here.
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August 17th, 2010
WASHINGTON, August 16, 2010 – API Upstream Director Erik Milito said that the announcement from the Department of the Interior that it will require more extensive environmental reviews for deepwater projects (limiting use of categorical exclusions) could delay development and job creation:
“We’re concerned the change could add significantly to the department’s workload, stretching the timeline for approval of important energy development projects with no clear return in environmental protection. Environmental review of offshore operations under existing rules is extensive, and decisions on categorical exclusions, which are intended to avoid repetitive analysis, require review.
“We’re in favor of targeted changes to regulations that enhance safety and environmental protection, provided the changes allow for the efficient moving forward of energy development and job creation.”
Tags: American Petroleum Institute
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August 16th, 2010
Since the Deepwater Horizon incident and the subsequent offshore drilling moratorium in the Gulf of Mexico (GoM), folks in the oil and gas industry have been talking about the ramifications to operations.
Though no one knows yet what will change for GoM operations, an obvious focus will be (and should be) safety, and industry organizations already are working on ways for improvement. In July 2010, the Houston Advanced Research Center hosted a technology workshop to identify research and technology needs. The Research Partnership to Secure Energy for America held a panel discussion at the forum to address deepwater development needs moving forward.
Tom Williams, managing director at Nautilus International LLC, said risk actually will increase when drilling eventually resumes. Williams gave several reasons for his prediction. First, stopping in the middle of operations likely will make it difficult to jump back in once activity resumes. Second, he expects an increase in tanker traffic.
Finally, exporting the best rigs and the loss of experienced drilling staff to active locations internationally will make it difficult to bring the highest quality equipment and personnel back to the GoM. “The best rigs and responsible drillers will get work and go elsewhere,” Williams said. “We’ll end up with ‘junkier’ rigs (they’ll still meet regulations, but they’ll be less capable).” Further, recruitment of new people will stop since the best and brightest likely will not apply for uncertain jobs, he added.
Williams also noted that employees (returning and new) will require additional training and certification. “As with the baseball offseason, players need a spring training to get back in shape,” he said. “From a safety standpoint, we can’t afford to have spring training.”
Taking into account lessons learned from occurrences similar to the event in the GoM, Greg Anderson, international board director and consulting and training president for Moody International, said the 1988 Piper Alpha tragedy in the North Sea focused attention on the impact of people’s behavior as a contributing factor in accidents.
“Whether Piper Alpha or any other incident, large or small, over 97% of the time human behavior plays a significant role,” Anderson said. “A key focus area needs to be how does a company or industry create a culture of safety where people ‘believe in’ versus ‘comply with’ safety.”
According to Anderson, “A culture of compliance only works under 1) constant supervision; and 2) absolute adherence to policies and procedures.” To create a culture of safety and compliance, he recommended addressing the “human element” by teaching people to:
• Take personal responsibility for their safety and the safety of those around them;
• Assess risk and reduce hazards associated with a task; and
• Communicate better.
Although safety procedures can have a direct impact on employees working on the rigs (both onshore and offshore), it is evident from the Deepwater Horizon incident that those effects can ripple throughout the company and all the way to the top.
In the wake of the event in the GoM, companies, operators, and more importantly, individuals should lead by example and hold one another accountable for keeping up with the highest safety standards and practices. Safety legislation and regulations can only go so far. Ultimately, employees choosing to work safely without taking shortcuts and rewarding and tolerating the same behavior in others will drive a culture of safety. To view the actual blog, click here.
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