CEA President David Holt recently joined Jacki Daily to discuss how energy infrastructure is permitted.
Listen here – The Jacki Daily Show
Stand Up for American Energy!
Washington and the new administration are finally addressing government overreach and looking to expand access to American offshore energy!
This would help American energy independence and create hundreds of thousands of jobs and billions of dollars in economic activity. For middle-class Americans and those at or near the poverty line, this is a lifeline to improve economic opportunities.
From gasoline and electricity costs to everyday items like food, clothing, computers and smart phones, energy makes our lives better.
And they need to hear from you!
Ms. Kelly Hammerle
National Program Manager
Bureau of Ocean Energy Management
45600 Woodland Road
Mailstop VAM-LD
Sterling, Virginia 20166
RE: Request for Information on 2019-2024 Outer Continental Shelf Oil & Gas Leasing Program
Dear Ms. Hammerle:
I applaud the Interior Department’s decision to reexamine recent restrictions imposed on American offshore energy development and urge you to include all unleased areas in the 2019-2024 draft leasing plan.
Families and businesses across the United States, especially individuals on fixed and low income and small businesses depend on affordable, reliable energy to make ends meet and support their families and employees. Furthermore, increasing opportunities to develop our own resources here at home will provide critical jobs and economic growth that will help secure a more prosperous future for our children and grandchildren, while generating substantial public revenue that will help support upgrades and modernization to the nation’s aging infrastructure.
In addition to helping replace energy imports from foreign nations and those who are hostile to our interests, studies have shown that expanded development in areas like the Atlantic, the Gulf of Mexico, and Alaska could support more than 560,000 jobs and over $314 billion in cumulative government revenue. At the same time, by developing energy here in America under our stringent regulatory standards, we will help safeguard our environment, in part, by lessening dependence on energy from other nations with far less rigorous protections.
A sensible, long term, energy policy must include our offshore resources. To meet America’s growing and long-term energy needs, it is vital to keep every possibility in place at this early stage. That is why I strongly encourage the Bureau of Ocean Energy Management to leave all options on the table and include all 26 planning areas in the draft proposed leasing plan.
Thank you again for re-examining the recent restrictions imposed on American offshore energy development and for the opportunity to comment.
Sincerely,
Embrace Opportunity to Explore Energy Savings
CEA Florida’s Kevin Doyle recently discussed offshore energy exploration with the New Press.
We urge them to support modern seismic surveys in the Mid and South-Atlantic to see what may or may not be available to help lower energy costs and further improve national security. While the Federal Government has estimated that the area could hold billions of barrels of oil, it is likely that new studies using new technology would significantly increase these estimates. For example, Gulf of Mexico estimates rose a whopping 500 percent when new surveys were conducted utilizing more modern technology.
Read more – The News-Press
Pipeline Projects Caught up in Washington “Dysfunction”
CEA’s David Holt discusses how the lack of a quorum at the Federal Energy Regulatory Commission has harmed energy consumers.
“We’ve never had a situation like this before, with such an acute backlog,” said David Holt, president of the Consumer Energy Alliance, a trade group representing energy consumers and producers. “There’s a level of dysfunction in the Senate and other parts of the government that are now impacting our ability to do our daily work.”
Read more – Houston Chronicle
New England Families Have Paid 151% More for Electricity Since April 2015
New England families pay significantly more for their electricity than any other region in the contiguous U.S.[1] In fact, the most recent data available from the Energy Information Administration (EIA) shows that New Englanders paid, on average, 151% more than the national average for electricity. Massachusetts residents chipped in 154% above the average while Connecticut residents paid 161% above the national average.[2] The only states where families pay more are Hawaii and Alaska, both of which are geographically isolated from affordable electricity sources.
So, why is electricity in New England so expensive? According to the Massachusetts Office of Energy and Environmental Affairs,
Massachusetts’s higher electricity prices are largely due to having to import fossil fuels to use as generation for electricity. In 2015, Massachusetts generated 64% of its electricity from natural gas and 7% from coal. [3]
ISO New England adds:
The dependable performance of New England’s fleet of power resources is the cornerstone of a reliable supply of electricity, but that performance hinges on adequate arrangements for and access to fuel. This fuel-security issue has been a growing concern over recent winters, particularly for generators that run on natural gas, but also for those that run on oil either primarily or as an alternate fuel source.[4]
In addition to having relatively few natural resources to draw on for energy production, the region also lacks critical energy delivery infrastructure. In lieu of these issues, New England faces several challenges in delivering affordable energy to its families.
According to ISO-New England, the organization responsible for overseeing electricity deliveries to families and businesses across New England:
Inadequate fuel infrastructure, particularly natural gas infrastructure to serve New England’s growing fleet of natural-gas fired power plants, is a current and growing reliability risk. On the coldest days of the year, a significant portion of the region’s power plants can’t get the fuel they need to generate electricity.[5]
Simply stated, electricity would become less expensive if more pipelines were built in the region.
According to energy delivery experts in New England, the region needs better access to reliable sources of natural gas and oil. The following facts and statistics strengthen the case for expanded natural gas and liquids infrastructure:[6]
- New England imports about 15% of its electricity from other regions
- Almost half of all electricity consumed in New England comes from natural gas (and this percentage is growing despite huge advances in renewables, which comprise less than 10% of generation)
- Coal, oil, nuclear, and hydropower supplies are dwindling, leaving natural gas and renewables to make up the difference
- Between 2012 and 2020, 4200 MW – or approximately 15% – of New England’s generating capacity will be lost
- Another 5,500 MW is at risk for retirement
- Uncertainty surrounds 3,300 MW of generation from nuclear plants (through retirements)
- An additional 6,391 MW of natural gas generation capacity has been proposed
It is clear that energy delivery is vitally important for New England families, small businesses, and manufacturing for fuel, home heating and cooling, and transportation. Increasingly, natural gas suppliers rely on efficient energy delivery systems – such as pipelines – to provide nearly half the region’s electricity, up from just 15% in 2000.[7] With this growing demand for natural gas, New England’s infrastructure and pipeline construction must keep pace to deliver affordable supplies.
Implications of Energy Delivery in New England[8]
- A recent analysis found that the bottom 20 percent of earners spend almost 10 percent of their income solely on electricity, more than seven times the portion of income that the top fifth pays.[9]
- Of those low-income earners that spend 10 percent of their income on power bills, 50 percent of them are African-American families.[10]
- Assuming the country continues current levels of renewable energy deployment, denying traditional energy delivery will cost New England – and surrounding states – more than 78,000 jobs and curtail the region’s gross domestic product by $7.6 billion by 2020.[11] 7 million young people, seniors and hard-working families, living in poverty across the region would feel the brunt of this loss. [12]
- Per the EIA, New England already has the highest regional residential electricity in the continental United States. All seven states are in the top 10 nationally in terms of highest residential rates.
- Adding more energy delivery infrastructure capacity could save collectively New England ratepayers between $2.1 billion and $2.8 billion per year. [13]
- On average, a motorist in New England is saving $1.26 per gallon of gasoline.[14]
Despite all of this, there is good news. Expansion of energy delivery from pipeline buildouts has had a positive effect on consumers across New England and the nation at large. Families and motorists in the region have saved more than $7.7 billion in gasoline costs compared to 2012 based on data compiled by the Energy Information Administration (EIA). With pipelines responsible for moving roughly 70% of the nation’s crude oil and petroleum products,[15] these savings have been achieved largely due to stable energy delivery.[16] Now, many families and households in New England are turning those savings into more travel and leisure activities. Just this year, over Memorial Day Weekend, AAA estimated that travel was at its highest levels since 2005, with more than 39.3 million Americans driving or flying 50 miles or more from home.[17] Consider this: A New England road trip from Bridgeport, Connecticut, to Bar Harbor, Maine, cost $47.20 less than it did in 2012.[18]
Public Policy Has Negatively Impacted New England Energy Delivery
By repeatedly denying proposals for pipeline development and expansions, New England’s policymakers and regulators continue to block several opportunities to bring more necessary supplies and capacity improvements to the region. Despite the lack of a viable solution to address shortfalls during extreme weather, such as the Polar Vortex of 2014 or the heat wave earlier this month, policymakers have been unable or unwilling to remove barriers that would allow for pipeline expansion. In response, ISO New England has introduced market rules encouraging power plant owners to buy pipeline space to boost construction – but the rules will not take effect until 2018.
Families, Communities, and Finances: The Consequences of Denying Critical Pipeline Infrastructure
A report recently released by Consumer Energy Alliance (CEA) found that rejecting pipeline infrastructure and baseload power generation would remove almost a third of U.S. electricity generation capacity by 2030, dangerously raising electric rates nationwide, especially on poverty-stricken households. It also found significant impacts on energy security and fuel supplies as well as varying harmful regional implications.
For the full PDF of this report, click here.
[1] Electric Power Monthly, U.S. Energy Information Administration, https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a
[2] Electric Power Monthly, U.S. Energy Information Administration, https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a
[3] Mass.gov, The Official Website of the Executive Office of Energy and Environmental Affairs, http://www.mass.gov/eea/energy-utilities-clean-tech/energy-dashboard/mass-energy-profile/#5
[4] Fuel Security for Natural-Gas-Fired Generators, https://www.iso-ne.com/about/regional-electricity-outlook/grid-in-transition-opportunities-and-challenges/natural-gas-infrastructure-constraints
[5] State of the Grid: 2017, ISO New England, https://www.iso-ne.com/static-assets/documents/2017/01/20170130_stateofgrid2017_remarks_pr.pdf
[6] Resource Mix, ISO New England, https://www.iso-ne.com/about/key-stats/resource-mix,
[7] 2015 Regional Electricity Outlook, ISO New England, https://www.iso-ne.com/static-assets/documents/2015/02/2015_reo.pdf
[8] Consumer Energy Alliance (CEA) recently issued a report entitled, “Families, Communities and Finances: The Consequences of Denying Critical Pipeline Infrastructure,” which found that rejecting pipeline infrastructure and baseload power generation would remove almost one-third of U.S. electricity generation capacity by 2030, dangerously raising electric rates nationwide, especially for poverty-stricken households. It also found significant impacts on energy security and fuel supplies as well as varying harmful regional implications.
[9] http://groundswell.org/frompower_to_empowerment_wp.pdf
[10] http://groundswell.org/frompower_to_empowerment_wp.pdf
[11] New England Needs More Natural Gas, Kallanish Energy,
[12] Income and Poverty in the United States- 2014, U.S. Census Bureau,
https://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-252.pdf
[13] New England Energy Market Outlook, ICF International, https://www.puc.nh.gov/Electric/Wholesale%20Investigation/ICF%20Study%20-%20Demand%20for%20Natural%20Gas%20Capacity%20and%20Impact%20of%20the%20NED%20Project%20(9-6-2015).PDF
[14] Ibid.
[15] https://www.manhattan-institute.org/pdf/ib_23.pdf
[16] https://www.eia.gov/opendata/qb.php?category=40715
[17] http://newsroom.aaa.com/tag/memorial-day-travel-forecast/
[18] Based on the most recent gasoline price and consumption data available from the Energy Information Administration.
Balance Energy Security, Environmental Protection
CEA’s Kevin Doyle discusses why our elected officials must balance energy security and environmental protection in order to ensure a stronger, healthier economy for families and small businesses.
Our elected leaders need to understand how energy development helps lower their constituents’ monthly expenses and improve their standard of living. We challenge them to work with local families and businesses to strike a balance between environmental protection and energy security.
Read more – Orlando Sentinel
Benefits of Expanding Offshore Oil and Natural Gas Development Benefits Highlighted During House Hearing
Michael Whatley’s testimony on the beneficial impact offshore energy exploration will have on family budgets and job creation was covered by Daily Energy Insider.
OCS development is estimated to create more than 893,000 jobs nationally, $450 billion in new private sector investment, $550 billion in increased economic activity nationwide and more than $395 billion in increased government revenues, according to Consumer Energy Alliance Executive Vice President Michael Whatley.
Read more – Daily Energy Insider
New England Residents Pay Most in Contiguous U.S. for Electricity
CEA’s polling and research on New England energy prices and the heavy burden increased costs place on families was discussed with David Holt.
“Polls have shown that a majority of voters in these states support safely moving oil, natural gas, and transportation fuels via the approval and construction of more pipelines. And the region’s independent grid regulator who has repeatedly stressed that a lack of pipeline infrastructure on high energy demand days not only puts the grid’s reliability at greater risk but also increases pressure on spot market prices could not agree with those voters more,” said Holt.
Read more – Go Local Worcester
Planned Offshore Leasing Review Draws Party-line Questions at Hearing
CEA’s Michael Whatley recently testified on the importance offshore energy exploration has on reducing costs for energy consumers and job creation and when families could expect to see results after exploration is approved.
“To be sure, this is a long process. Assuming that these areas are ultimately included in the new program, additional environmental and public reviews, federal approvals, and business determinations will have to occur before any actual on-the-water activity takes place,” he said, adding, “Given the long lead-times associated with development in new OCS regions, actual production would be unlikely to take place before the mid-2030s.”
Read more – PennEnergy
Evaluating Federal Offshore Oil and Gas Development on the Outer Continental Shelf
U.S. House Natural Resources Subcommittee on Energy and Mineral Resources
“Evaluating Federal Offshore Oil and Gas Development on the Outer Continental Shelf”
Prepared Testimony of Michael Whatley
Executive Vice President, Consumer Energy Alliance
July 12, 2017
Chairman Gosar, Ranking Member Lowenthal, and Members of the Subcommittee, it is an honor to be here today on behalf of Consumer Energy Alliance to testify on developments surrounding offshore oil and natural gas development in America’s federal waters.
Consumer Energy Alliance is a nationwide non-profit, non-partisan trade association which represents families and businesses in advocating for balanced policies that support access to affordable, reliable energy. CEA’s membership includes over 275 affiliate members that represent nearly every sector of the U.S. economy and more than 450,000 individuals across the country dedicated to developing and implementing energy policies which will promote affordable and reliable energy.
The Need for Expanded OCS Leasing
The federal government forecasts that energy consumption will continue to rise in the coming decades, with petroleum and natural gas comprising more of the nation’s energy consumption portfolio in 2040 than it did in 2016, [1] making it vital for the federal government to promote opportunities to develop America’s natural resources in order to secure long-term affordable, reliable energy.
CEA strongly supports expanded offshore energy development as a critical component of a rational, balanced all-of-the-above energy policy. Along with a robust pipeline network which can move offshore energy to refineries, natural gas processing facilities and – ultimately – to energy consumers, offshore energy production is essential to meeting our national energy needs.
In addition to providing tens of thousands of high-paying jobs and adding billions of dollars to the American economy, domestic offshore oil and natural gas production have helped keep gasoline, diesel, and jet fuel prices affordable and greatly enhanced our national energy security. Over the past 10 years, CEA has worked with the Bush and Obama Administrations, as well as dozens of governors, hundreds of state legislators and stakeholders and hundreds of thousands of individual energy consumers to support expanded leasing in the Gulf of Mexico, Alaska and Atlantic OCS regions.
Consumer Energy Alliance applauds the decision by the Trump Administration to develop a new offshore energy leasing program and urges the Department of the Interior to expand leasing in the Arctic, the Gulf of Mexico and the Atlantic. With 94% of federal waters currently closed to leasing, the development of a new program will provide an important opportunity to reassess and reverse existing restrictions in areas including the Arctic, the Gulf of Mexico and the Atlantic. Expanding leasing into these areas will generate significant economic benefits for the entire United States and can be done safely.
Atlantic Benefits
As a resident of North Carolina, the benefits of potential Atlantic development are important to me. According to a recent Quest Offshore Resources study, for North Carolina alone, Atlantic energy development could create more than 55,000 jobs, add more than $4 billion annually to the state’s economy, and cumulatively generate over $26 billion in spending and nearly $4 billion in new state revenue.[2]
This would provide a much-needed boost at a time when North Carolina’s middle class is struggling. A North Carolina State University economist reported just last week that North Carolina middle-class jobs fell 5% from 2001 to 2015, while the national average rose 6%, leading one professor at the University of North Carolina to note that “We are effectively seeing indications of the disappearance of the middle class.”[3]
Underscoring the need for an adequate supply of affordable energy, Inside Energy notes that while economists consider “affordable” energy to equate to 6% of income, households in North Carolina, South Carolina, and Georgia with incomes below 50% of the federal poverty level spend about 30-40% of their income on energy, while such households in Virginia spend roughly 40-50% of their income on energy.[4]
More broadly, Atlantic development could generate almost 280,000 jobs, nearly $200 billion in Gross Domestic Product, and over $194 billion in capital investment and spending and $51 billion in new public revenue. For the Atlantic Coast region only, that includes more than 215,000 jobs and over $130 billion in Gross Domestic Product, $109 billion in capital investment and spending, and $19 billion in new state revenue.
Furthermore, the study found that Atlantic development could generate an additional 1.3 million barrels of oil equivalent per day. That is enough to replace nearly two-thirds of the 2.1 million barrels of crude oil and petroleum products that we import daily from the Persian Gulf.[5]
Public polling in Atlantic coastal states underscores the support that exists for offshore development in the region. A recent poll commissioned by Consumer Energy Alliance found continued majority support for expanded drilling in Virginia and North Carolina[6], while Harris Polls establish similar majority support for offshore development in South Carolina[7] and Georgia.[8]
National Benefits
Nationally, expanded access to the Atlantic, Gulf of Mexico, Pacific, and Alaska will provide significant benefits including the creation of more than 893,000 jobs, $450 billion in new private sector spending, $550 billion in increased economic activity nationwide and more than $395 billion in increased government revenues.[9]
Access to the 404 trillion cubic feet of natural gas and 90 billion barrels of oil projected to sit in the Outer Continental Shelf will ensure a stable, steady supply of energy for American energy consumers with reduced reliance on imports from hostile overseas regimes. It will also keep prices of gasoline, diesel, and jet fuel affordable – which is critical to every segment of the U.S. economy.
In terms of American energy security, it is important to note that the United States military – the single largest energy user in the world – heavily relies on oil, bunker fuel, and jet fuel to protect our interests around the world. In Fiscal Year 2014, the Department of Defense used over 87 million barrels of fuel, at a cost of nearly $14 billion.[10] With oil hovering around $100 per barrel less than 2008 prices, we are saving around $8.7 billion per year in fuel costs – which can now be spent on body armor, new weapons systems or other critical programs. Increased domestic production can also provide U.S. allies with energy supplies, in turn reducing their dependence on hostile regimes.
Safety
It is very important that offshore energy development is safe – and is getting safer every day. Growing up, I spent a lot of time with my family on the beaches of Nags Head, Kitty Hawk, and Topsail Island, NC. Now, I take my children on vacations to the beach every year. It is important to me – as it is to all of the residents and vacationers who visit the Atlantic beaches every year – that the industry and the federal government will work together to ensure that any exploration and development of offshore energy resources is done without harming these national treasures.
Both the federal government and the offshore energy industry have made great strides in improving all aspects of offshore energy production. Among these changes are the creation of new collaborative containment companies which stand ready to deploy state of the art containment technology at the first sign of any wellhead spill, the development of more than 600 industry standards covering all aspects of production and the creation of the Center for Offshore Safety, which works with independent third-party auditors and government regulators to create an industry-wide culture of continuous safety improvement.
More than 40,000 wells have been safely drilled in the Gulf of Mexico and more than 700 are operating at depths of more than 5,000 feet. This record and the fact that 99.999% of all oil produced, transported and refined in the United States reaches its destination safely are important points for Congress and the Trump Administration to consider when anti-development activists claim that the industry cannot operate safely or that a major spill is inevitable.
Moreover, these accomplishments have occurred while the country has been making environmental strides, with net U.S. greenhouse gas emissions in 2015 being 11.5% lower than they were in 2005,[11] and as President Obama noted last year, at a time when the country has “reduced the pace at which we are emitting carbon dioxide into the atmosphere faster than any other advanced nation.”[12] This underscores the fact that American energy development and a healthy environment go hand-in-hand.
Conclusion
The development of a new leasing program for 2019-2024 presents an opportunity to expand OCS leasing in the Arctic, the Gulf of Mexico and the Atlantic. To be sure, this is a long process. Assuming that these areas are ultimately included in the new program, additional environmental and public reviews, federal approvals, and business determinations will have to occur before any actual on-the-water activity takes place. Given the long lead-times associated with development in new OCS regions, actual production would be unlikely to take place before the mid-2030s.
This important and comprehensive process provides ample opportunity to ensure that all issues and concerns are fully coordinated and addressed. At the same time, the fact that the process takes such a long time underscores why it is imperative for the Department of the Interior to take steps today to make sure that ample opportunities are available to meet our energy needs well into the future.
[1] https://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf
[2] http://www.noia.org/wp-content/uploads/2013/12/The-Economic-Benefits-of-Increasing-US-Access-to-Offshore-Oil-and-Natura….pdf
[3] http://www.citizen-times.com/story/news/2017/07/06/economist-middle-class-wage-crunch-worse-north-carolina/103462192/
[4] http://insideenergy.org/2016/05/08/high-utility-costs-force-hard-decisions-for-the-poor/
[5] https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_m.htm
[6] https://consumerenergyalliance.org/2017/05/poll-finds-virginia-west-virginia-north-carolina-voters-support-atlantic-coast-pipeline-energy-development-infrastructure/
[7] http://www.api.org/~/media/Files/News/2016/16-February/What-America-Is-Thinking-South-Carolina-Feb-2016-Questionnaire.pdf
[8] http://www.api.org/~/media/files/news/2015/15-january/what-america-is-thinking-offshore-drilling-ga-january-2015.pdf
[9] http://www.noia.org/wp-content/uploads/2013/12/The-Economic-Benefits-of-Increasing-US-Access-to-Offshore-Oil-and-Natura….pdf; http://www.noia.org/wp-content/uploads/2014/11/The-Economic-Benefits-of-Increasing-US-Access-to-Offshore-Oil-Natural-Gas-Resources-in-the-Eastern-GoM.pdf; http://www.noia.org/wp-content/uploads/2014/11/The-Economic-Benefits-of-Increasing-U.S.-Access-to-Offshore-Oil-and-Natural-Gas-Resources-in-the-Pacific.pdf; and http://arcticenergycenter.com/wp-content/uploads/2015/08/National-Effects-Report-FINAL.pdf
[10] http://www.acq.osd.mil/eie/OE/OE_index.html
[11] https://www.epa.gov/sites/production/files/2017-02/documents/2017_complete_report.pdf
[12] https://obamawhitehouse.archives.gov/the-press-office/2016/10/03/remarks-president-south-south-lawn-panel-discussion-climate-change
