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5 Energy Infrastructure Projects Needed in the U.S.

The United States has the energy resources it needs, but it lacks the infrastructure such as pipelines, or transmission lines, needed to transport energy from where it is to where it is needed. Consumer Energy Alliance ranked the top 5 most important energy infrastructure projects in the United States today:

1. Natural Gas Pipelines in New England 

New England natural gas prices skyrocketed during the cold winter of 2014, with the average winter heating bill increasing from $1,400 to $1,700. This is a trend that the EIA linked to insufficient pipeline delivery systems. Recently, Kinder Morgan Energy Partners announced that it would expand its Tennessee Gas Pipeline to include the Northeast Energy Direct Project, a move that is expected to provide 500 million cubic feet per day in gas, or an 11 percent increase in supply. Similarly, Spectra Energy has plans to expand its Algonquin and Martitimes pipeline systems to increase capacity and reliability in order to provide more natural gas to New England. Earlier this year, six New England governors proposed a plan to increase the region’s natural gas infrastructure by 20 percent within three years.

 

2. North Dakota Needs the President to Approve the Keystone XL Pipeline

Legislators from states lying above the Bakken Field have been outspoken for the construction of the Keystone XL Pipeline as a way to transport oil in the formation to refineries in Texas. “The President’s decision to reject the Keystone XL pipeline was the wrong one, plain and simple.   Building the Keystone Pipeline will create North Dakota jobs as well as drive down costs of fuel for small businesses and North Dakota families. There is no time to wait,” said North Dakota Senator Heidi Heitkamp in response to President Obama’s rejection of TransCanada’s application in 2012. Eventually, Bakken oil could account for nearly 25 percent of the KXL’s supply. Enbridge Energy is currently surveying a path for the proposed Sandpiper pipeline, a project that would move 15.8 million gallons of oil a day from North Dakota to terminals in Superior, Wisconsin.

 

3. Record Natural Gas Production in Marcellus Hampered by Lack of Pipelines

The growth of natural gas production in the Marcellus Shale has increased rapidly since 2007 and recently surpassed the 15 billion cubic feet per day mark.  In response to the surge in production in areas like West Virginia there has been an increasing interest in constructing pipeline systems that can deliver large volumes of natural gas to markets around the country, like those on the Atlantic coast. Dominion Resources, for instance, is exploring the feasibility of building pipeline, called the Southeast Reliability Project, to transport natural gas from West Virginia to South Carolina. If Dominion moves forward on its plans construction would begin in 2017 and be completed by the end of 2018.

 

4. Florida Natural Gas Pipeline at Max Capacity 

Over 68 percent of Florida’s electricity is generated by natural gas, yet there are only two major pipelines that provide natural gas to Central and South Florida. Coal currently provides nearly 21 percent of Florida’s energy, and natural gas will play an increasingly important role in the state’s energy plan as coal-fired plants continue to close due to increasing regulation by the EPA. In October 2013, the Florida Public Service Commission approved a pipeline proposal from Florida Power & Light that would increase natural gas capacity by 20 percent that will be operational in 2017.

 

5. Transmission Lines Needed in Midwest and New England

Wind and hydroelectric energy are quickly becoming viable sources of power for large demand centers like the Midwest and New England. Not enough transmission projects currently exist to effectively deliver power to these areas, but this may soon change: at least five major projects have been proposed to move Canadian hydroelectric power across the border to New England and Clean Line Energy Partners has announced that it wants to spend $2.2 billion to move wind energy generated in Kansas east toward Indiana through a 750-mile-long voltage overhead transmission line. Construction of these large-scale projects have raised public concerns about eminent domain, but supporters are hopeful that renewables will prove an adequate replacement for the closing of many of the country’s coal-fired plants due to EPA regulations.

Govt Seeks Public Comment on Offshore Drilling

Offshore oil rig at sunset

No country so restricts offshore drilling as ours, but the Bureau of Ocean Energy Management (BOEM) is considering opening up new offshore areas for drilling – a welcome development for Americans interested in energy security.

The Bureau has just announced it’s extending its comment period on this matter until August 15. This means there is still an opportunity to register your support for a commonsense energy policy that moves us closer to energy self-sufficiency and lowers gasoline prices for consumers.

The U.S. Outer Continental Shelf is the location of more than 6,200 active oil and gas leases covering almost 34 million acres and producing approximately 18 percent of domestic oil production and 5 percent of domestic natural gas production, according to BOEM. These areas also, however, hold an estimated 89.93 billion barrels of oil and 404.52 trillion cubic feet of natural gas of undiscovered, technically recoverable resources.

Unfortunately, only the western and central portions of the Gulf of Mexico and some limited areas off the Alaskan coast are available for leasing in the federal government’s current leasing program. Some 87% of offshore areas have been closed off from drilling by our government while, incredibly, other countries are allowed to develop the resources just off our shores (including Canada, Cuba and the Bahamas). Imagine what opening other areas off the Atlantic coast or the eastern Gulf of Mexico would do for our economy and especially consumers.

The Energy Information Administration reports the price of gasoline (all grades) on August 4 was $3.51 nationally and $3.89 on the West Coast, where no drilling is permitted except under old leases. Compare that to December, 2008, when it was $1.67 and $1.90, respectively.

It is estimated every one-cent increase in the gasoline price causes a roughly a $1 billion increase in household energy costs. It’s more than fair to considerate this a tax on consumers, given that the US supply of gasoline has been artificially restricted by government action putting all these offshore areas off-limits for drilling. The cost of gasoline is now $1.93 higher than it was in December, 2008. Our federal government, therefore, has arguably imposed the equivalent of a $193 billion tax on US households.

The naysayers will counter that there are many reasons for gasoline price increases, which is true, but all of them come back to the basic law of supply and demand. When the government limits the supply (oil production on offshore Federal lands has declined 13% since the gasoline price was $1.67) it raises prices – plain and simple.

We also know the price would be much higher today than the $3.60 per gallon we’re currently paying, but for the development of tight oil resources such as the Bakken Shale in North Dakota. The Wall Street Journal, for example, recently noted that “If this were 2005 we would have seen a 20-30 cent jump in gas prices.  But, it’s lower today because domestic energy production is so much higher.” Opening up offshore areas to drilling would magnify this positive effect and save consumers billions.

The Heritage Foundation captured the both the problem and the opportunity nicely in one of their recent reports:

Production of crude oil in the United States is up to 8.36 million barrels per day—the highest since January 1988. The increased supply of oil has widespread economic benefits, but a new Congressional Research Service report shows that when the numbers are broken down by ownership it becomes clear that the situation could be even better. Although oil production overall has almost doubled in less than six years, production continues to fall on federally owned land areas.

They also note, “Daily federal onshore oil production is equal to about one-third of what is produced every day at the Bakken formation alone.” That’s not too surprising if you recall that87% of federal waters are not open to energy development. If the Bakken  can help mitigate   wild price swings caused by international crises in oil-producing countries,, then development of offshore areas would almost certainly stabilize gasoline prices.

Offshore oil and natural gas development takes time, of course. Even though the energy supply may not hit the market for years, the federal government can send positive signals to the market by supporting expanded energy access. The fact is we need to act now to have an impact on future gasoline prices and, if we act now, the market will price that future action into the price today.

So, do something about it by using this convenient link to file your comments.

 

“Rigged” by Bill Dodd is licensed under CC BY 2.0.

 

Roger Allgeier – Colorado Energy Voices

Lake Charles, Louisiana – Energy Voices

Consumers to EPA: Be Cautious

Sean McCarville, IBEW, speaks at CEA's Denver press conference

Consumer groups caution EPA to not move too fast or risk price spikes.

Elected leaders, key consumer groups, businesses, and representatives from organized labor joined with Consumer Energy Alliance (CEA) on Tuesday, July 29th to host a series of press conferences voicing concern with the U.S. Environmental Protection Agency’s proposed Clean Power Plan.

The press conferences took place before commencement of the two-day hearings on the EPA’s proposed carbon emissions regulations at the Omni Hotel at CNN Center in Atlanta and the EPA Region 8 Building in Denver.

Each speaker, citing studies and economic analyses, told reporters that the EPA’s proposed rules, if enacted, would significantly squeeze the nation’s energy infrastructure, cause substantial reliability concerns, and ensure higher electricity prices across the board. The proposed rules, for instance, might cost Americans $17 billion a year more to pay their electricity bills, and hit the economy with $50 billion a year in new costs, the speakers said, quoting data garnered by the U.S. Chamber of Commerce

CEA hosted the press conferences to ensure that consumers had a voice in this critical issue. CEA leaders also testified at the two-day hearing that took place in Washington, D.C. Another press conference will take place in Pittsburgh at the Courtyard Marriott Downtown on July 31st.

The following are comments made by those who spoke at Atlanta press conference:

Commissioner Tim Echols, Georgia Public Service Commission:

“In Georgia, we have made great progress at reducing carbon without a greenhouse gas rule from the EPA,” said Georgia Commissioner Tim Echols. “I’m asking the EPA to slow down and give utilities a chance to retire coal plants at the end of their useful life so we can be better stewards of the ratepayers’ money.”

Commissioner Chuck Eaton, Chairman, Georgia Public Service Commission:

“Today’s proposed rule will significantly impact not only the operation of existing power plants in Georgia, but also the operation of the electric system as a whole. As Chairman of the Georgia Public Service Commission, I am deeply concerned that this rule intrudes on the state’s electric regulatory authority.  This rule also ignores the thorough process that the PSC undertakes to accomplish its mission.  As a result, I am concerned that this rule, in combination with EPA’s proposed rule for new power plants, will increase the cost of power to our citizens and unnecessarily strand investments we have made in the existing generation fleet.”

Brian Thompson, International Representative, International Brotherhood of Electrical Workers:

“Everyone is in favor of a cleaner environment, and to present the issue as being for or against this basic principle is misleading to say the least.  The issue is how far and how fast we go to achieve clean air without disrupting our entire economy and devastating an industry and the hundreds of thousands of jobs that go along with it as well as the tax base and economic well-being of communities across the land.”


The following are comments made by those who spoke at the Denver press conference:

Sean McCarville, IBEW, speaks at CEA's Denver press conference
Sean McCarville, IBEW, speaks at CEA’s Denver press conference

Sean McCarville, Business Manager, International Brotherhood of Electrical Workers- Local 111:

“In an environment where Colorado and the nation continues to recover from the worst recession since the Great Depression, EPA’s Clean Power Plan would have a major effect on urban areas while negatively impacting fragile rural communities who receive their energy through electric co-ops.  In addition, the approximately 3,500 Local 111 members who work for electric association/co-ops, generation/transmission companies, and investor-owned utilities will see a substantial threat to their middle-class careers; careers that include health and retirement benefits.”

Andrew Browning, Executive Vice President, Consumer Energy Alliance:

“EPA’s aggressive timeline allows states only one year to develop a very complex plan that will need to address a series of adjustments to their electricity generation, consumption and energy infrastructure. Forcing through regulations of this magnitude in such a short timeframe will limit the ability of states and stakeholders to thoughtfully prepare for the drastic changes that this rule will cause. If this Administration is comfortable spending more than five years evaluating the Keystone XL pipeline, it should feel comfortable taking its time to craft a thoughtful rule that fully evaluates the consequences of its proposed actions.”

Brent Boydston, Vice President of Public Policy, Colorado Farm Bureau:

“Agriculture relies heavily on energy for day-to-day operations. Energy is required to run irrigation systems, feed livestock, plant fields, and harvest, transport and process food. The current proposal by EPA will make daily operations more expensive and unfairly burden farmers and ranchers.”

Denton City Council Opposes Fracking Ban

Texas drilling rig

Voters in Denton, TX will have the final say on whether or not to ban hydraulic fracturing inside city-limits.

Early Wednesday morning the Denton City Council rejected a proposed ban in a 5-2 vote held. Over four hundred Texans joined Consumer Energy Alliance in asking the City Council to oppose the city-wide ban.

“Texans can and do lead the nation in having both environmental protection and energy production,” said Marty Allday, the executive director of Consumer Energy Alliance-Texas. “Too many residents in Denton have not been made to feel like their concerns are being addressed…Denton can hold the energy industry to a high standard on health, safety and the environment AND reap the economic benefits of drilling for oil and natural gas at the same time.“

In a letter released earlier this week, Railroad Commission Chairman Barry T. Smitherman requested that Denton Mayor Chris Watts and the Denton City Councilmembers deny the petition to ban fracking, stating that Texans would be “severely harmed” if they are denied the jobs, wealth, and energy security that are a result of advances in shale oil technology.

The November vote will set the precedent. In the case of a ban, the city can expect immediate legal challenges from mineral rights holders who would lose out on drilling royalties if fracking was prohibited. The City of Denton has received more than $30 million in tax revenue from energy development. Across North Texas, the Barnett Shale provides at least 110,000 jobs and billions in economic activity.

Consumer Energy Alliance warns that a ban on hydraulic fracturing affects people beyond Denton royalty owners, operators, pipeliners, all the way to down to consumers and the parents who send their kids to school with plastic baggies in their sack lunches.

Hydraulic fracturing has enabled the U.S. to dramatically reduce its carbon emissions, improving our overall environmental record and putting us on a path to achieve record air quality goals. In Texas, significant measures have been taken to protect public health, safety and local environments through a collaborative process that takes into consideration all interested parties.

Consumer Energy Alliance will continue to educate residents in Denton about the role energy plays in the Texas economy.

Don’t fall for anti-energy scare tactics

Marty Allday, executive director of Consumer Energy Alliance-Texas, penned a column for the San Antonio Express-News about how Texans should not be misled by anti-development activists threatening to thwart their state’s energy boom and its resulting economic benefits.

At a time when we should be talking about how to continue advances in environmental stewardship and develop our resources to grow our economy, some activists are working to curtail our national Energy Revolution. Now this same fight has come to Texas, the epicenter of responsible and abundant American energy production.

In Dallas, activists persuaded the city council to approve restrictive regulations that amount to a de facto ban on oil and natural gas production within the city limits. In Denton, this small opposition group is pushing a ban on hydraulic fracturing that would shut down production in one of the state’s best natural gas fields.

In San Antonio, national activist groups are telling one-sided and biased accounts on air quality impacts in an attempt to limit natural gas production from the nearby Eagle Ford shale.

A balanced, well-thought-out discussion on the merits of hydraulic fracturing and overall energy production is always warranted. Communities should make informed decisions. Unfortunately, that is not what is occurring.

In Colorado and Pennsylvania, some anti-energy activists continue to provide unsupportable data in an effort to push local restrictions on state regulations and throw the oil and natural gas industry into chaos. If they have their way, major gains in American energy security, billions in state and local revenues; and thousands of good jobs could be derailed.

Five years ago, these same activist groups embraced increased domestic natural gas production as a means to reduce U.S. greenhouse gas emissions and slow the effects of climate change. But now, just as U.S. energy self-sufficiency is within grasp, these same groups are working to undermine the nation’s leading job-creating industry along with its impressive progress in achieving the goals of our environmental protection laws and efforts to curb climate change.

Texas can expect to see more of this in the coming months and years. As the fight over the Keystone XL pipeline (eventually) comes to a close, groups who made their opposition to that project their signature issue are looking for another fight. And hydraulic fracturing is in their crosshairs. A tsunami of activist cash will be rerouted to pick apart the boom in U.S. energy by attacking its game-changing technology.

Don’t fall for their scare tactics! Be proud of Texas’ production. Let’s all take stock in Texas energy and Texas pride!

 

Severance tax could be taxing for Pennsylvania’s economy

Consumer Energy Alliance Mid-Atlantic Director Mike Butler penned a blog for ShaleReporter.com about how proposals for a severance tax of oil and gas production in Pennsylvania are again being considered – and why they shouldn’t be.

Pennsylvania is fortunate to sit on top of one the nation’s largest natural gas deposits, the Marcellus Shale. Just last year, thanks in part to increased natural gas production from Pennsylvania’s section of the Marcellus Shale, the U.S. surpassed Russia as the world’s largest producer of natural gas. For perspective, the Marcellus Shale now produces more natural gas than the entire nation of Saudi Arabia.

Natural gas production from Pennsylvania’s Marcellus Shale topped 3 trillion cubic feet in 2013, more than double the previous year’s production. That has created a rippling effect in employment. Pennsylvania employment in mining and logging, for instance, stood at 36,500 in April, according to Pennsylvania’s Quarterly Census of Employment and Wages – a 97.3 percent jump from 10 years earlier.

According to Jim Kunz, Business Manager for the International Operating Engineers, Local 66, their members are close to full employment because of the burgeoning shale gas development. “We are running at about 3 to 4 percent unemployment,” he said. “If we did not have Marcellus Shale, we would probably be closer to 20, 25 percent unemployment. It has provided a significant amount of employment for the members of this local.”

Job growth also extends beyond the energy sector. Frank Puskarich, owner of Hogfathers BBQ, says that his business is booming. “The opportunity isn’t [for] just the guy that’s actually drilling the hole…It’s everyone servicing the gas business.” He has added numerous staff members to keep up with demand as a direct result of shale energy production.

But Pennsylvania is in jeopardy of losing these benefits, if we are not careful.

Unfortunately, during this election year, proposals for a severance tax of oil and gas extraction are again being considered. But there are a number of reasons why they shouldn’t be.

Like all businesses, energy companies make decisions on where to operate by taking into account what it costs to invest in a venture versus the potential return in profit. A severance tax, if enacted, may shift that equation unfavorably for Pennsylvania.

Why?

Because this type of tax would increase the cost of energy production. That would mean fewer wells being developed, fewer landowners collecting royalty payments, and fewer small businesses that provide products and services to the industry.

It could also devastate job growth and stifle the type of capital investment that is helping the state grow by creating an unfavorable regulatory and tax climate for energy firms operating in the Keystone State. Likewise, increased taxes could be passed onto consumers.

In other words, this unreasonable tax would strangle the state’s record-setting energy production and derail its economic progress.

In fact, oil and gas companies operating in Pennsylvania already pay the highest effective corporate income tax in the U.S., at 9.9 percent. Several other energy rich states, including Texas and Wyoming, do not have a corporate income tax.

In addition to impact fees, corporate taxes and income taxes, energy companies are subject to sales tax, capital stock and franchise tax, permit fees, fines, and bonds for wells. A local impact fee imposed on companies operating in the state in 2012, for example, have generated more than $600 million, on top of the more than $2 billion the industry has paid in state taxes since 2007.

Ultimately, tax increases on Pennsylvania’s fastest-growing industry won’t solve the state’s long-term fiscal problems – but supporting a tax climate that will allow the natural gas industry to grow just might.

 

Natural-gas production is saving jobs in Pa.

Consumer Energy Alliance President David Holt explains via an op-ed in The Philadelphia Inquirer how natural-gas production has improved the lives and livelihoods of Pennsylvanians, from Philadelphia to Pittsburgh and beyond.

There was a time, just a few years ago, when the Philadelphia region’s refineries were facing closure. But now shale energy is helping reenergize the region’s manufacturing base with the revival of several of those facilities.

Over the last two years, Delta Airlines snapped up the former ConocoPhillips refinery in Trainer, promising to invest $350 million in the facility and employ about 400 full-time workers. The old Sunoco refinery in South Philadelphia avoided a permanent shutdown and the elimination of 850 jobs when Sunoco and the Carlyle Group created a joint venture at the facility to import lower-cost oil from North Dakota’s Bakken formation and use natural gas from the Marcellus Shale.

Fortunately, the region has also seen Sunoco announce that it will reopen its Marcus Hook site as a natural-gas processing facility. Officials are calling that complex a “world-class natural-gas liquids hub.”

Braskem America – a Brazilian company with its North American headquarters in Center City that makes the plastic used in a variety of products, such as diapers, plastic containers, food packaging, cups, carpeting, consumer products, and housewares – faced this closure firsthand. A Marcus Hook tenant since 1991, its site came close to closing in 2011 after a refinery next to it closed, cutting access to much-needed raw materials.

“There was a lot of concern that this area was going to lose the majority of its tax base and the majority of its employees,” said Joe Wade, Marcus Hook people and organization leader for Braskem.

Braskem acquired a processing unit from Sunoco in Marcus Hook to allow operations to continue, saving about 240 jobs. Jeremy Glisson, plant manager for the Marcus Hook facility, believes the company “is still here today because Braskem made that decision to continue to operate this facility to make necessary investments to make us competitive here at this site.”

This plant’s extraordinary turnaround is another example of how shale energy has become an economic driver and an energy resource for America, particularly in Pennsylvania. The Energy Information Administration reported that development of the Marcellus Shale has made the commonwealth the fastest-growing natural-gas-producing state in the United States. The state’s total marketed natural gas grew by 72 percent from 2011 to 2012, according to the EIA.

While shale development did not begin in Pennsylvania, the drilling and hydraulic fracturing perfected in the Marcellus Shale has led to the doubling of annual gross natural-gas production in Pennsylvania, exceeding one trillion cubic feet in 2011 and reaching 12 billion cubic a feet day in 2013.

Just last year, thanks in part to increased natural-gas production from Pennsylvania’s section of the Marcellus Shale, the United States surpassed Russia as the world’s largest producer of natural gas. For perspective, the Marcellus Shale now produces more natural gas than the entire nation of Saudi Arabia.

Indeed, for many Pennsylvanians, shale energy has translated into real savings. Analysts with Bank of America noted that the prolific quantities of natural gas produced in the Marcellus Shale have been responsible for greatly reducing the price of natural gas statewide.

In fact, consumers of the region’s largest natural-gas utilities, including Peco and Philadelphia Gas Works, saw a combined average reduction of 41.25 percent in rates from 2008 to 2011, or nearly $3,200 in average savings per customer, The Inquirer reported.

At the same time that shale development has lowered energy costs, it is also improving the state’s economy. According to the Pennsylvania Department of Labor and Industry, oil and gas development using fracking contributed more than $11 billion to the state’s economy in 2010.

Make no mistake, shale energy is helping to bring the Philadelphia region’s energy industry back by driving economic opportunity for the area. Unfortunately, consumers are being misled by special-interest groups like the Sierra Club and Food and Water Watch that are intent on stopping energy development – and the lower energy costs and prosperity that come with it. By advancing shale energy, we can bring forth new jobs and new tax revenues to fund schools and local initiatives.

Instead of misleading American consumers, as some continue to attempt to do, shale energy should be promoted. There is real opportunity available, and Pennsylvania is proof of this. In just a few short years, the Marcellus Shale has improved the lives and livelihoods of Pennsylvanians, from Philadelphia to Pittsburgh and beyond. Today’s energy renaissance is the latest chapter in our pursuit of the American dream.

CEA discusses impact of rising fuel costs on consumers

Consumer Energy Alliance’s Southeast Director Brydon Ross is interviewed by WUKY on the impact rising fuels costs on consumers.

With gas topping $3 for nearly three-and-a-half years now, according to AAA data, communities are looking for ways to bring down the costs.

And one Kentucky town is preparing to take matters into its own hands by buying gas direct from refiners and selling it based on average regional costs.

With little relief in sight and complaints about higher gas prices in town than in surrounding communities, the city plans to operate ten pumps starting later this month to help lessen the pain at the pump. Brydon Ross with the Consumer Energy Alliance says if prices keep inching upward, individuals will be looking for new solutions as well.

“Any time we approach the $4 a gallon mark you’ll see consumers getting more innovative, creative, and unfortunately more desperate in trying to figure out ways to save money on fuel costs. Because that’s a fixed cost. Folks really can’t chose not to drive to work,” he says.

In the short term, Ross recommends checking tire pressure at least once a month, limiting air conditioner use, and exploring mass transit options.

 

 

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