American energy
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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BP Enters Deepwater Brazil and Strengthens Core Portfolio
Thursday, March 11th, 2010
March 11, 2010 BP today announced a transaction that will deliver a material exploration position in the deepwater offshore Brazil and significantly enhance its position in core strategic areas.
In a broad-ranging deal, BP will pay Devon Energy $7.0 billion in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. These include interests in ten exploration blocks in Brazil, including seven in the prolific Campos basin; a major portfolio of deepwater exploration acreage and prospects in the US Gulf of Mexico; and an interest in the BP-operated Azeri-Chirag-Gunashli (ACG) development in the Caspian Sea, Azerbaijan.
In addition, BP will sell to Devon Energy a 50 per cent stake in BP’s Kirby oil sands interests in Alberta, Canada, for $500 million. The parties have agreed to form a 50/50 joint venture, operated by Devon, to pursue the development of the interest. Devon will commit to fund an additional $150 million of capital costs on BP’s behalf.
Completion of certain transfers will be subject to regulatory approvals and other third party consents.
“This strategic opportunity fits well with BP’s operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil,” said BP group chief executive Tony Hayward. “As well as giving us a broad portfolio of assets in the exciting Brazilian deepwater, it will strengthen our position in the Gulf of Mexico, enhance our interests in Azerbaijan and enable us to progress the development of Canadian assets.”
Andy Inglis, BP’s chief executive of Exploration and Production, said: “Through our entry into Brazil, BP will add a major position in another attractive deepwater basin. Together with the additional new access in the Gulf of Mexico, it further underlines our global position as the leading deepwater international oil company.”
The deal will give BP a diverse and broad deepwater exploration acreage position offshore Brazil with interests in eight licence blocks in the Campos and Camamu-Almada basins, in water depths ranging from 330 to 9,100 feet (100-2,780 metres), as well as two onshore licences in the Parnaiba basin. The Campos basin blocks include three discoveries – Xerelete, pre-salt Wahoo and Itaipu – and the producing Polvo field.
In the US Gulf of Mexico deepwater, BP will gain a high quality portfolio with interests in some 240 leases, with a particular focus on the emerging Paleogene play in the ultra-deepwater. The addition of Devon’s 30 per cent interest in the major Paleogene discovery Kaskida will give BP a 100 per cent interest in the project. The assets also include interests in four producing oil fields: Zia, Magnolia, Merganser, and Nansen.
In Azerbaijan, acquisition of Devon’s 5.63 per cent stake in the ACG development will increase BP’s operating interest in the fields to 39.77 per cent.
The undeveloped Kirby oil sands leases are in the south east of the Athabasca region of Alberta, close to the Devon-operated Jackfish development, which started production in 2007. Like Jackfish, the Kirby oil sands are suitable for in situ development using steam-assisted gravity drainage (SAGD). BP and Devon have agreed an initial appraisal programme to assess the significant potential of the Kirby acreage and to establish a long-term development plan. In addition to forming the joint venture, BP and Devon have agreed to enter into a long-term heavy crude off-take agreement for production from the Kirby development as well as a portion of the production from some of Devon’s other oil sands assets.
BP is currently undertaking a major investment programme at its Whiting, Indiana, refinery, significantly increasing its capacity to process heavy crudes such as Canadian heavy oil. The Whiting upgrade is planned to come on-stream in 2012.
“Devon is an experienced operator in the Canadian oil sands with a proven track record of in situ development and production,” said Inglis. “We expect this transaction will accelerate the development of the Kirby assets and, through the associated crude off-take agreement, provide a secure source of Canadian heavy oil for our advantaged Whiting refinery.”
On completion of the transaction, Devon’s employees in Brazil are expected to join BP.
Tags: American energy, balanced energy, BP, Brazil, Canadian oil, Devon, Devon Energy, Gulf of Mexico, Kirby oil sands, ocs, offshore Brazil, offshore energy, oil sands
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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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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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CEA Commends Administration, Department of Energy for Issuing First Loan Guarantee to Build Nuclear Power Plant
Thursday, February 18th, 2010
HOUSTON – February 17, 2010 Consumer Energy Alliance (CEA) applauded the Administration’s announcement yesterday that the U.S. Department of Energy (DOE) will soon be issuing its first loan guarantee to build two new nuclear reactors.
“In a future where carbon will increasingly be constrained, nuclear power generation needs to play an increasingly central role in contributing to the energy mix of the United States — providing baseload capacity and an affordable supply of electricity to power our homes, our businesses and our industries,” said CEA president David Holt.
“More important,” added Holt, “is that the advancement of nuclear energy and other clean energy technologies will also help create thousands of new jobs and provide substantial benefits to consumers, the economy and the environment, all while strengthening our national energy security.”
Pursuant to the president’s announcement, DOE is expected to grant an $8.3 billion conditional loan guarantee for the construction of two nuclear reactors in Georgia by Southern Company. The construction of these new reactors is estimated to generate roughly 3,000 construction jobs and more than 800 permanent operations jobs.
CEA has actively supported policies important to the nuclear energy industry, particularly as they relate to financing support and efficient licensing for new nuclear facilities.
“It is important that the federal government encourage the continued development of nuclear energy, as well as oil, natural gas, wind, solar, hydro, and biomass. These resources must all play a role in meeting our energy needs,” said Holt.
Tags: alternative energy, alternatives, American energy, balanced energy, Department of Energy, DOE, domestic energy, nuclear, nuclear power, nuclear reactors, oil and gas
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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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CEA: New Study Reveals Economic Consequences of Continued Inaction on American Energy Exploration
Monday, February 15th, 2010
NARUC study finds U.S. economy has much to gain from responsible onshore and offshore energy exploration – and much to lose under restrictive status quo
WASHINGTON, D.C. – February 15, 2010 America’s reliance on foreign countries for its energy will grow by 19 percent over the next 20 years, accelerating the transfer of U.S. wealth to members of OPEC by more than $600 billion. That’s just one of the startling conclusions found in a new report issued today by the National Association of Regulatory Utility Commissioners (NARUC) at the group’s winter meeting in Washington – all, assuming a scenario in which policy-makers keep intact decades-old restrictions on accessing America’s abundant, available energy resources.
“It’s easy to measure how the positive development of energy contributes to the creation of jobs, the generation of government revenue, and the stabilization of energy prices,” said David Holt, president of Consumer Energy Alliance (CEA), and a presenter at NARUC’s meeting this week. “It’s a lot harder trying to assess the opportunity cost we’re forced to pay by not producing that energy – how many jobs we stand to lose, how much additional money we’d have to send to OPEC. Now, thanks to this NARUC study, we have such a relative indicator. And let me tell you: It’s not pretty.”
The NARUC study, assembled by experts from the Science Applications International Corporation (SAIC) and the Gas Technology Institute, broadly examines the social, economic and environmental impacts associated with the continuation of a policy that has for generations kept billions of barrels of American oil and trillions of cubic feet of American natural gas under statutory (and de facto) lock-and-key. To do that, the study first provides the most up-to-date assessment of America’s onshore and offshore oil and natural gas resources. It then uses the well-respected National Energy Modeling System (NEMS) to render a quantitative summary of the jobs, revenue and even number of “housing starts” Americans should expect to surrender in the future under the status quo energy policies of today.
“Higher energy prices, greater volatility, expanded foreign dependence, and $2.3 trillion less for everyday Americans to spend – and that’s just the tip of the iceberg,” added Holt. “The good news is that this report describes a scenario for the future that we don’t have to accept – and mustn’t. The bad news is that, despite overwhelming support for new energy exploration among the American people, the inertia of inaction that has defined this debate will be difficult to reverse. With the help of this report, though, it’s my hope that it’s an effort about which we will finally get serious.”
The following represent some of the key findings contained in the study – again, modeled under a scenario that assumes energy resources on federal lands (onshore and offshore) currently locked away continue to be denied to the American people in the future:
- American production of crude oil: Projected to decrease – relative to a scenario in which we decide to produce our offshore energy resources –by 9.9 billion barrels, an average annual decrease of nearly 15 percent;
- Imports of oil from OPEC: Projected to increase by 4.1 Billion barrels, an average annual increase of nearly 19 percent, resulting in increased cumulative payments to OPEC of $607 Billion;
- American production of natural gas: Projected to decrease by 46 Tcf – an average annual decrease of nearly 9 percent;
- Employment (energy intensive industries): Projected to decrease by nearly 13 million jobs;
- Housing Starts: Projected to decrease by nearly 200,000;
- Annual average natural gas prices increase by 17 percent;
- Annual average electricity prices increase by 5 percent;
- Real disposable income: Projected to decrease cumulatively by $2.34 trillion;
- Energy costs to consumers: Projected to increase by $2.35 trillion – an annual average increased cost of 5 percent;
- Gross Domestic Product (GDP): Projected to decrease by $2.36 trillion;
- Real Consumption: Projected to decrease by $1.44 Trillion.
For more information, visit www.naruc.org.
Tags: American energy, balanced energy, NARUC, national association of regulatory utility commissioners, oil and gas, OPEC
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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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What research says about Low Carbon Fuel standards (and low chocolate standards)
Friday, December 11th, 2009
The Low Carbon Fuel Standard is making the rounds again in news reports about national and global energy policies. And why not? What’s not to like about low carbon fuels? With such an innocuous name, this looming legislation is bound to resurface every time people talk about policies for reducing emissions.
But you know what they say about things that seem to be true.
As we’ve said before, low carbon fuel standards just don’t make a lot of sense. There’s no evidence that such a law would actually reduce emissions, and many reasons to conclude it would actually result in the U.S. increasing its dependence on Mideast Oil.
But since we’re all likely to be hearing more about the Low Carbon Fuel Standard in the months ahead, it’s worth broadening the argument beyond what those of us here at CEA have to say about it and showing what the science says.
Earlier this year the American Economics Journal published a paper which concluded that a low carbon standard does not decrease overall emissions. Rather, it simply changes the mix of fuels consumed in a manner that might actually have the completely unintended consequence of increasing overall consumption and emissions.
That’s essentially because this fuel standard does not seek to limit actual emissions. Rather it would try to limit production and consumption of certain carbon-intensive fuels, while inadvertently promoting the carbon-light ones. It sounds confusing and it is. Attempting to judge different types of oil or natural gas on the basis of their carbon content – with no regard for shipping costs and multiple other factors – is in the end a dangerous guessing game.
The authors of the study, Greenhouse Gas Emissions Reductions under Low Carbon Fuel Standard? argue that energy consumers told to low-carbon fuels are likely to respond the same way as a child who eats a lot of chocolate and is told to eat more bananas. Rather than replacing the chocolate with a banana, the child would most likely eat the chocolate and the banana, increasing his overall calories.
It’s a useful analogy to remember when trying to make sense of the Low Carbon Fuel Standard … one that gives new meaning to the idea of a kid in a candy store.
Tags: American energy, chocolate, energy policies, LCFS, low carbon, Low-Carbon Fuel Standard
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What do toys from China have to do with oil imported from the Middle East?
Thursday, October 22nd, 2009
It’s been estimated that as much as one quarter of carbon dioxide emissions in China results from the production of goods that are exported, largely to the United States and Europe. It’s part of a phenomenon known as carbon leakage, in which reduced emissions in one country result in higher emissions elsewhere, and quite possibly a net increase in worldwide emissions.
It goes something like this: Country A passes legislation reducing emissions (good), but does so in a way that fails to contemplate the global impact of its move (not so good). As a result of the tighter standards in Country A, the cost of manufacturing goods and services there goes up, resulting in increased demand for those same products out of countries B, C and D, where production costs are comparatively low and emissions standards are slim to nonexistent. Country A loses more of its manufacturing base, and jobs along with it, without ever really achieving its main objective of cleaning up the planet. Its emissions legislation has only served to encourage increased output from some of the places with the lowest environmental standards.
The problem of carbon leakage is often cited as an unintended consequence of carbon offsets. But it also relates to the issue of low carbon fuel standards in the U.S. As CEA recently noted, policies designed to favor production of light crude oils, which in general require less energy to produce than their heavier counterparts, could easily create the unintended consequence of increasing the country’s need for foreign oil.
Now, in one sense, all foreign oil is created equal, at least when you’re measuring the amount the U.S. imports from all over the world. But just for a moment put oil from Canada in a category of its own: yes, it’s foreign oil, but it is at least a nearby and stable source that can help support jobs on pipelines and in refineries near the U.S./Canadian border.
A newspaper in South Dakota recently complained the passage of a low carbon fuel standard could kill a new oil refinery project that had been expected to create more than 1,000 jobs, by cutting off supply of heavy crude oil from Canada. This is not oil that could be easily replaced by a U.S. source: Under a low carbon fuel standard, a refinery in Middle America with a healthy supply of oil in its own backyard might have to tap supplies in the Middle East, where the crude is, as they say, sweet.
“Do a little digging,” the story says, “and you quickly find out that the low carbon fuel standard isn’t at all interested in making the fuel in your car today better, cleaner or more affordable. It’s only interested in making those fuels scarcer, more expensive and less available.”
For more information on low carbon fuel standards, visit our website.
Tags: American energy, carbon dioxide, CEA, China, Consumer Energy Alliance, domestic drilling, emissions, gas, Middle East, oil, toys
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CEA October 2009 Newsletter
Friday, September 25th, 2009
CEA Newsletter
Issue 31
Message from CEA President David Holt
September 21st marked the close of a nationwide public comment period by the Federal Government that allowed Americans to have their voices heard in the vital debate regarding development of U.S. offshore resources, including oil, natural gas and wind projects.
Though naysayers have received prominent placement in recent media reports, the real winners here are the overwhelming numbers of Americans who stood tall in favor of reasonable and responsible development of America’s offshore areas.
More than 360,000 positive comments were received by the government supporting a new 5-Year Plan for the development of resources off of America’s coastlines. This number, which accounts for more than 60 percent of the total comments received, sends a strong message to elected officials in Washington: Americans want more American energy.
Throughout the comment period, CEA stood strong in our support of offshore oil & gas drilling, as well as offshore alternative energy development. Working with our valued affiliates and individual consumers like you, CEA implemented a major campaign to get the word out about the importance of this effort and encourage Americans to comment and contribute to the discussion.
The tremendous results in favor of offshore development speak volumes. Washington has heard what you have to say. Your voice has made a difference in shaping American energy policy and will assist in leading the United States on a path of domestic energy development that will be good for the economy, Americans and the country.
CEA recognizes your hard work and we thank you for being part of our efforts to empower America! We consider you an essential part of our alliance and look forward to continuing to work with you to do what’s right for America and its citizens.
Yet, the work is not over. As we move forward from this great victory, CEA remains dedicated to working toward a national energy policy that fully leverages America’s abundant energy resources into new jobs, revenue and security for American energy consumers.
As part of this effort, please take part in our nationwide educational campaign – Secure Our Fuels, which highlights the damaging economic effects associated with the national Low Carbon Fuel Standard (LCFS) currently being considered by Congress. For more information on the Secure Our Fuels campaign, click here.
Again, thank you and congratulations! With your help, the tides are turning.
David Holt
President
Help Defeat Efforts to Ban North American Energy and Increase Prices at the Pump!
The Low-Carbon Fuel Standard (LCFS) is being sold to the American public as a way to blend transportation fuels with low-carbon alternatives so that tailpipe CO2 emissions can be reduced. But the fact is that affordable and reliable lower-carbon fuel options are not yet available. As a result, an LCFS simply will increase the cost of diesel fuel and gasoline and will place certain domestic supplies of transportation fuels off limits. Increasing the cost of transportation fuel and U.S. dependence upon foreign sources of petroleum is simply unsound energy policy.
Join our effort to defeat these measures, which would put an economic stranglehold on America and leave U.S. consumers stuck with higher prices at the pump. Send in your comments today!
Support Development of Alaska’s Offshore Oil & Gas Resources!
At a time when the American public is crying out for more domestic energy, Alaska has enormous untapped oil and gas potential, especially in its offshore areas. The waters off Alaska’s coasts hold about 27 billion barrels of oil and 132 trillion cubic feet of natural gas, according to federal government estimates.
To begin producing energy from these resource basins, the federal government must take action. Join us in our effort as we build public support for offshore minerals exploration and development in Alaska. Send in your comments today!
CEA Welcomes New Affiliate Members
CEA is proud to announce the addition of the many new affiliate members who have joined our alliance in recent months: Amway, Applied Fiber Manufacturing, LLC, EarthQuest Institute, Entergy Arkansas, Entergy Mississippi, The Fertilizer Institute, New England Fuel Institute and Santa Barbara County Energy Coalition. For a complete list of CEA’s valued affiliates, click here.
CEA Blog: Silent majorities and dressing for success
Check out CEA’s recent blog entry about the overwhelming amount of public support for developing America’s offshore energy resources, recently brought to light by the federal government’s collection of public comments on the issue. Join the conversation at CEA’s website. Read blog…
Consumer Corner: Tell Us How Energy Affects YOU!
Energy issues are important to all Americans – and they should be – because they affect all aspects of everyday life, including your businesses, your household costs and your free-time expenditures!
When you drive your kids to school in the morning or board an airplane for a vacation flight, you are affected by the energy policies that government officials in Washington put in place. Access to American energy resources affects your weekly grocery bill, how much you pay at the gas pump, your heating and cooling costs, the business decisions you make – every part of your life!
CEA wants to know your thoughts about how energy affects you. Share your energy story with CEA by sending an e-mail to info@consumerenergyalliance.org. We want to hear from YOU!
Wind Energy Could Cut Emissions in China By 30 Percent, Study Asserts
Switching to wind power for electricity needs could cut China’s emissions by 30 percent over the next 20 years, according to a recent study. Read article…
Venezuela and Russia Develop As “Comrades-In-Arms-And-Oil”
Ties between Russia and Venezuela are steadily growing stronger with increased economic development schemes, including energy and weaponry deals, between the two countries. Read article…
Affiliate Spotlight: Agriculture Energy Alliance
As farmers and agribusinesses face a looming crisis because of public policies that create demand for natural gas while restricting access to supply sources, the Agriculture Energy Alliance, which represents more than 100 growers and agriculture-related business, works to inform and educate Congress, the Administration and state-elected officials about the energy challenges facing the agricultural sector.
“The U.S. farm sector is being weakened by constraints on onshore and offshore natural gas development, even as global demand for food is growing every year,” says Coordinator for the Agriculture Energy Alliance Rosemary O’Brien, who also serves as Vice President of Public Affairs at CF Industries.
To address these concerns, AEA encourages elected and appointed officials to continue the good work begun in the Energy Policy Act of 2005 and take further measures to reduce natural gas demand and increase natural gas supply.
“By increasing domestic natural gas production, we increase our food security,” explains O’Brien.
Ensuring the stable development of American natural gas resources is essential to maintaining a successful agricultural economy, according to O’Brien, because the farm sector depends on significant use of natural gas for food processing, irrigation, crop drying, heating farm buildings and homes, crop protection chemicals and nitrogen fertilizer production.
“With wise development and utilization of our own national energy resources, Congress can help ensure that farming remains an economically viable occupation,” she emphasizes.
As a member of Consumer Energy Alliance, AEA’s goal is to join with other like-minded groups to work on energy policy, specifically access to U.S. offshore production.
“CEA presented opportunities to work with a larger coalition and to enhance our policy goals in a very positive way,” O’Brien notes. “We have been excited to work with CEA since their leadership has shown creativity, enthusiasm and focus on complex energy policy issues.
“CEA is the type of group AEA likes to associate itself with as perseverance and working on shared goals is the only way to accomplish results. In short, CEA is solution-oriented. We work well with CEA, and we appreciate the quality of advice and input we receive from them and their collaborative efforts on behalf of their coalition.”
For more information on the Agriculture Energy Alliance, visit www.agenergyalliance.com.
Affiliate News: National Oilheat Summit Sees Bright Future For Industry
NEFI joined nearly every national, regional and state oilheat industry association, along with various industry leaders, for a national oilheat industry policy summit in Baltimore, MD on Tuesday, September 15th. The big news coming out of the summit – these various oilheat stakeholders are joining together to pursue a brave new future for the industry and its consumers.
Those attending the summit overwhelmingly approved a statement encouraging Congress and appropriate state bodies to help the industry move towards a “leaner, greener and cleaner” new product through adoption of an ultra low sulfur standard and expanded use of bio components. The group also embraced solar technology as a key component of the overall industry effort to lower the carbon intensity of heating oil applications.
The summit also heard many presentations on the benefits of pursuing a lower sulfur bio-blended product, supplemented with solar technology, as well as how best to “tell the story” nationwide. “It is an exciting time for the industry,” said Peter Carini (NEFI-member) of Champion Energy, New York, which was echoed by Robert Boltz of Pennsylvania, NEFI member Jim Townsend of Townsend Oil, and Don Allen of E.T. Lawson of Virginia, the moderator for the summit. He added: “As an industry, we face many challenges, but most of them can be met if we embrace this exciting opportunity to create a new product that will be environmentally responsible and competitive, ensuring that our industry is part of the solution to the energy, security and climate change challenges that face our Nation.”
Over 80 industry representatives participated in the Summit.
Affiliate News: NSBA Report Shows On-Bill Financing Improves Energy Efficiency
On September 16, 2009, the National Small Business Association released a report showing that small business collectively could reduce greenhouse gas emissions by 259 million tons each year if they improved their energy efficiency by just 25 percent. The report, “On-Bill Financing: Helping Small Business Reduce Emissions and Energy Use While Improving Profitability,” goes on to highlight the significant savings small businesses stand to achieve through on-bill financing.
“This report obliterates that old paradigm that environmental conservation is anathema to economic growth,” said NSBA President Todd McCracken. “Quite simply, small businesses can increase their profitability while reducing their carbon footprint.”
On-bill financing is a mechanism that enables small businesses to work with their utility company to improve their energy efficiency. In practice, a local utility company identifies a small business with potential savings and evaluates their energy use and the company’s financial stability. The utility company then extends a low- or no-interest loan to the small business to make energy-efficient upgrades. The small-business owner repays the loan by continuing to pay the average monthly bill and any money paid in excess of what their actual costs are will go directly to pay down the loan.
Currently implemented in several states, on-bill financing programs have made thousands of loans to small businesses with unparalleled success. According to the report, energy-efficiency programs such as on-bill financing can help the average small business save $4,932—and oftentimes more—every year on its energy bills. The report also makes recommendations on how the federal government can help facilitate additional on-bill financing programs.
“The number one reason small-business owners cite for their inability to make their firms more energy efficient is cash-flow,” stated Keith Ashmus, NSBA chair and co-founding partner at Frantz Ward LLP, Cleveland, Ohio. “Programs such as on-bill financing can eliminate this very significant barrier many small businesses simply can’t overcome.”
NSBA has long held the belief that energy efficiency and entrepreneurial growth can and do go hand-in-hand. The current state of the U.S. economy makes it absolutely crucial to have government policies that foster, not hinder, entrepreneurial growth. With 29.6 million small firms—comprising 99.7 percent of all U.S. employer firms—small businesses stand to make significant, positive and lasting improvements to both the economy and the environment.
This report was sponsored by NSBA with funding from the Bipartisan Policy Center. Please click here to access the full report.
Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. A staunchly nonpartisan organization, NSBA reaches more than 150,000 small businesses nationwide and is proud to be the nation’s first small-business advocacy organization. For more information, please visit www.nsba.biz
Tags: 5-Year plan, Agriculture Energy Alliance, American energy, CEA, CEA Monthly, CEABlog, Consumer Energy Alliance, David Holt, energy, gasoline, Minerals Management Service, MMS, natural gas, newsletter, ocs, October 2009, offshore, oil, Outer Continental Shelf, resource development, Russia, Venezuela, wind
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CEA Urges Senate to Adopt Commonsense Offshore Energy Exploration Provision
Tuesday, September 22nd, 2009
Amendment would streamline domestic energy development, help stabilize costs for American consumers
WASHINGTON – September 22, 2009 As the US Senate considers an appropriations measure setting aside funds for the US Department of the Interior, Sens. David Vitter (La.), Jim DeMint (S.C.) and John Barrasso (Wyo.) are working to include an amendment in the bill that would streamline and advance energy development along our nation’s outer continental shelf (OCS). Consumer Energy Alliance, which has played a leading role in generating over 150,000 of the more than 350,000 favorable public comments to Secretary Ken Salazar in support of expanded offshore energy production, has urged the Senate to adopt this commonsense provision that would increase domestic energy production, helping to drive down and stabilize prices for American consumers.
CEA president David Holt issued the following statement:
“Our energy security, the price American consumers pay at the pump, and the much-needed jobs and revenues created through environmentally-sound, 21st century offshore energy development must be addressed head-on. This commonsense amendment helps do that, and it deserves strong bipartisan support in the US Senate.
“This amendment, coupled with the overwhelming support that the American people delivered to the Interior Department for expanded offshore energy production yesterday as the 5-year comment period came to an end, should continue to send a strong message to the policymakers that decisive action is needed to help meet our growing energy needs, put Americans back to work, raise revenues for the local, state and federal governments and help get the US economy rolling again.”
CEA has participated in over 100 events over past three months focused on responsibly increasing American energy production, while ensuring environmental safeguards. Early indications suggest that favorable comments to the Interior Department handily surpass those in opposition to American energy production, which would be in line with virtually all public opinion polling.
Over the past several years, public comments to the Interior Department have overwhelmingly favored increased offshore energy production. During the 2006 period, 72 percent of comments received during four separate comment periods favored increased energy production offshore. In 2008, 53 percent backed domestic OCS energy exploration. And, early indications from yesterday’s close of the public comment period, favorable comments will once again lead groups who are opposed to sensible offshore development by a sizeable margin. American consumers once again voiced clear support for increased energy production.
Tags: amendment, American energy, Barrasso, CEA, Consumer Energy Alliance, David Holt, DeMint, domestic, drilling, energy, gas, ocs, offshore, oil, outercontinental shelf, Salazar, senate, US Department of the Interior, Vitter
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CEA Praises Bipartisan, Bicameral Congressional Efforts on Expanding Domestic Offshore Energy Production
Tuesday, September 22nd, 2009
WASHINGTON – September 21, 2009 Following a letter from nearly 100 House Republicans, led by Reps. Doc Hastings (R-WA), Rob Bishop (R-UT), and Tom Price (R-GA), urging Interior Secretary Ken Salazar to move forward with a 5-Year offshore energy production plan that would expand safe American energy exploration, Rep. Dan Boren (D-OK), along with 15 other House Democrats, wrote the secretary recommending that his agency open the outer continental shelf (OCS) for responsible offshore energy development. Today, a bipartisan group of senators, led by Sens. Kay Bailey Hutchison (R-TX) and Byron Dorgan (D-ND), penned a similar letter to Secretary Salazar.
David Holt, president of Consumer Energy Alliance (CEA), a non-profit, non-partisan organization that advocates an “all of the above” approach to securing, reliable energy, issued this statement:
“Thanks to many of CEA’s thousands of grassroots supporters and a clear majority of the American public, a year ago, the federal government made positive, and long overdue, steps toward balancing the nation’s long-term energy policy through lifting decade-old bans on safe and effective offshore energy production here at home.
“CEA praises the strong bipartisan, bicameral commitment from the congressmen and senators who have taken the concerns of their constituents about affordable energy and access to American resources directly to Secretary Salazar. The groundswell of support for increased domestic energy production continues to grow, and, as an organization, we’re grateful for the steadfastness on this issues that so many members of Congress and senators continue to demonstrate.
“As the Interior Department’s public comment period on the 5-year OCS plan came to a close today, we are hopeful and encouraged that these congressional letters, as well as the hundreds of thousands of supportive comments from every day Americans, will resonate with Secretary Salazar as he and his agency move forward in crafting a blueprint for our offshore energy production goals over the next several years.
“Thousands of good-paying jobs, stable energy prices for small businesses, working-families and retirees and less dependence on unstable regions of the world to fuel our economy will result from the developing domestic oil and gas, and renewable energy offshore. At the same time, we must focus on harnessing more wind, solar, coal, hydro, nuclear, biofuels and other alternatives and renewable energy forms, while using what we have more wisely, too.”
Tags: 5-Year, American energy, bipartisan, Bishop, CEA, Consumer Energy Alliance, David Holt, domestic energy, Dorgan, drilling, energy, Five Year Plan, gas, Hastings, house, Hutchison, Minerals Management Service, MMS, offshore, oil, republicans, Salazar
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Domestic Oil and Natural Gas Supply: An Important Piece of the Puzzle
Wednesday, June 10th, 2009
Posted by: American Chemistry Council
Energy prices are down, but maybe not for long. The global recession has dampened demand for energy, giving us all a respite from the high prices we saw last summer. Many economists will tell you that today’s relatively lower energy prices are a function of “demand destruction” created by the downturn and that with the hoped-for recovery may come a resurgence in energy costs. After all, the underlying supply-demand situation has not changed. That should get us all thinking about what kind of U.S. energy policy is going to be needed to address our energy challenges.
Some energy policies are getting well-deserved attention in Congress and elsewhere. Energy efficiency and conservation policies were prominent in the stimulus package enacted by Congress. That was a good start, and policymakers are considering new pieces of legislation to encourage energy efficiency. Another key element of a sound energy policy – energy diversity – is emerging in the energy and climate debate, but more action is needed. The nation will need diverse supplies of low-emission energy, including alternatives and renewables, nuclear, carbon capture and sequestration and combined heat and power, if we are to advance greenhouse gas (GHG) emission reduction goals while meeting growing energy demand. Congress must enact policies that lead to significant investment, research, development and deployment of such important energy sources and technologies. The change needed is transformational, and these options must be brought online as quickly as possible.
Unfortunately, one important piece of a comprehensive energy policy is missing. That piece is expanded domestic oil and natural gas supply.
It’s certainly exciting to see talk of potential new energy supplies in the United States . For example, shale natural gas supplies – if deposits are as extensive as believed and if they are found, made accessible, developed and brought to market quickly – could have far-reaching benefits for consumers and for industries such as chemistry that rely on natural gas. Yet Congress needs to develop a strategic, thoughtful policy approach to domestic energy resources and how they can be used to help accomplish our energy, environmental and economic goals.
Domestic energy sources such as on-shore and off-shore natural gas fit in well with a clean energy economy. Natural gas is used for cleaner electricity generation, leading to a 69 percent increase in electricity-related natural gas demand from 1997 to 2007. Natural gas is used to make cleaner transportation fuels such as ultra-low-sulfur diesel. It’s used for fertilizer to grow renewable energy crops, hydrogen for fuel cells, and as a key raw material, or “feedstock” for chemistry products that go into energy efficiency and renewable energy applications, including building insulation, solar panels, wind turbines, lightweight vehicle parts, lithium-ion batteries, energy-efficient appliances, automotive and industrial lubricants, low-rolling-resistance tires, and many more. (Feedstock use does not emit GHGs). The clean energy demands placed on natural gas – already high today – will grow sharply as the U.S. seeks to further reduce greenhouse gas emissions. We’ll need an accessible, affordable domestic supply to keep pace with these demands. Yet America does not have the ability to access the supplies we have and need.
What should Congress do? We believe that access to potential offshore supplies of oil and natural gas should be expanded. We believe Congress should require that, once a potential supply of energy has been confirmed, the government should take immediate steps to list that resource on the inventory and entertain proposals to lease those resources. And perhaps most importantly, Congress needs to recognize the fundamental economic drivers that lie behind the development of additional oil and gas supplies. We may well have sufficient supplies of shale gas to last for decades – but economics dictates which supplies can be tapped first and brought to market quickly. That process needs to happen without market-distorting subsidies.
As demonstrated by last year’s decision to not renew America’s outdated bans on offshore energy development, Congress has also recognized the importance of offshore domestic energy to the United States. Congress should move ahead with legislation that ensures American energy resources are fully explored, developed and brought to market before the next “crisis.” We should not wait for energy prices to climb again, following economic recovery, to determine how we’ll put offshore domestic energy resources to work for our clean energy future and our economy. Among other benefits, let’s not forget that offshore energy development can generate billions for the U.S. Treasury.
The American public is supportive, too. Public opinion surveys consistently show that at least two-thirds of Americans support offshore oil and natural gas development. They understand that an affordable, reliable supply of energy is critical to the economy, to a globally competitive U.S. manufacturing sector, and to millions of jobs.
The other industrialized nations of the world – from the U.K. to Norway, Ireland to Brazil – make meaningful use of their offshore energy resources as part of a smart, present-day energy strategy. Given today’s offshore energy development technology and track record http://www.americanchemistry.com/s_acc/bin.asp?CID=217&DID=4703&DOC=FILE.PDF, as part of a broader energy policy, it only makes sense for the United States to do the same.
Tags: American Chemistry Council, American energy, congress, demand destruction, domestic, domestic oil, emissions, energy efficiency, energy prices, global recession, greenhouse gas, hydrogen fuel cell, natural gas, shale, sulfur diesel, United States, wind turbine
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