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High unemployment and low carbon fuel standards: Two not-so-great things that are even worse together

What could possibly be worse than the 10.2% nationwide unemployment we recently highlighted? How about the jobless rates of 11% in Florida, 12.2% in California, and a staggering 15.3% in Michigan?

If you didn’t think Michigan had a big part in the debate over domestic fuel production, think again. The state, which has been bleeding jobs, faces even more economic devastation if a low carbon fuel standard is adopted.

As we’ve outlined previously on this blog, a low carbon fuel standard ostensibly designed to reduce emissions, would actually play out with many unintended consequences. They would favor many types of foreign oil over those located in the U.S. and the Canada – not because Saudi fuel is cleaner fuel, but because it takes less energy to get out of the ground. Factor in the cost of transporting all that light, sweet crude oil halfway around the world, and you have a low carbon fuel standard in name only.

Now, back to Michigan. One of the industries that hasn’t fled the state is an oil refinery in Detroit, which refines fuel from nearby Canada. Heavy fuel, that is, which would not pass muster under new low carbon fuel standards.

This recent editorial in the Detroit News outlined the problem:

“In Detroit, the Marathon refinery produces nearly 100,000 barrels of affordable, reliable fuel a day, and provides thousands of jobs that support families, pay pensions, and provide good-quality health care…. As complex and convoluted a plan as a low-carbon fuel system is, the negative impact it would have on our country’s economic and strategic well-being is simple to understand. The low-carbon fuel proposal is engineered to produce higher prices at the pump, higher unemployment … and expanded dependence on foreign, unstable regimes.”

And further south, residents in Tennessee are also concerned, not just by what a low-carbon fuel standard will mean for their local economy, but by the seemingly arbitrary standards by which fuels would be in or out.

“Fuels are assigned a carbon energy ‘score,’ based on the energy required to bring them to market,” explains this editorial. “The U.S. would be forced to rely on lighter crude from the Middle East.”

“A low carbon fuel standard will also result in volatile gas and commodity prices, the loss of U.S. refinery and pipeline jobs, and an increase in global greenhouse gas emissions.”

That’s right. As we’ve also pointed out here, emissions know no borders. Nor does a balanced energy policy. We’re working on behalf not just of the oil rich states but of the country as a whole, and we’re happy to see that our message resonates widely.

1983 all over again

Twenty-six years ago, the video of Michael Jackson’s Thriller was broadcast for the first time. The Soviet Union invaded Afghanistan. And here in the United States, unemployment peaked above 10%. That was in 1983.

Sound familiar? Twenty-six years later, Michael Jackson and Afghanistan are still making news. And last week, we learned that the nationwide jobless rate rose to 10.2%, the first time since 1983 that the country has seen double-digit unemployment.

It’s a sobering benchmark that highlights just how serious the country’s jobs crisis remains, and begs a closer consideration of the policies that got us here. At CEA, we talk often about balanced energy policy and the broad economic benefits of a steady supply of homegrown oil. We’ve talked less about specific jobs, but it’s worth emphasizing that expanded oil operations bring with them new jobs, many of them the kind of well-paying jobs that the country has lost as its manufacturing base has eroded.

In Florida, one of the many states now debating opening more offshore waters to oil exploration and development, it is estimated an expanded oil presence could create more than 13,000 jobs.

Have we mentioned North Carolina? Earlier this fall, that state’s governor set up a Scientific Advisory Panel on Offshore Energy that is reviewing the impact of new drilling projects along with offshore wind farms. You don’t hear a lot about North Carolina as a drilling destination, but advocates of expanded oil activity there estimate that more offshore exploration alone could bring in 6,700 new jobs.

It’s worth noting here that we’re all too familiar with the unfortunate term “drill baby drill,” which suggests a preference for drilling anytime, anywhere. That’s not something we’ve ever advocated. We support responsible drilling in regions that are deemed suitable for oil projects. But we also recognize that politics and special interests have too often gotten in the way of fair reviews into what constitutes suitable drilling destinations.

Now that the country is suffering the worst jobs crisis since the last days of disco and Soviet aggression, it appears people are taking a more reasonable look at domestic oil production and all the economic benefits it brings.

Taking the drilling debate south for the winter

Texas. California. Alaska. And now, Florida. That’s the latest site of what has become a series of heated debates over offshore drilling. All around the country, lawmakers overseeing diminished state and local coffers are proposing opening up some regions that are now off limits for offshore drilling, and longtime opponents are clinging to outdated arguments.

This kneejerk sort of reaction of turning to oil in the most desperate of economic circumstances is in many ways regrettable. A robust domestic energy industry, after all, has a lot more to offer us all than some emergency funds. But it’s also an opportunity for which many of us have waited a long time and for that reason, we all need to become active participants in these debates and do what we can to educate policy makers and the general public.

Based on what we’ve seen coming out of Florida so far, this is not a battle that will be easily resolved. But there does appear to be a fair amount of genuine interest in hearing what the oil industry has to say. Consider some of the arguments that were made – and covered in the press – during a series of symposiums like this one recently held in Tallahassee:

–The majority of oil released into the ocean has been shown to come from natural seeps from the ocean floor.

–Transporting oil long distances in tankers poses a greater environmental hazard than producing it close to home and transporting it on pipelines.

–Offshore drilling and coastal tourism have a strong track record of coexisting well together, even before the introduction of directional drilling technologies, which minimize the surface disturbance.

As these debates gain momentum around the country, we are struck by how people everywhere have such similar concerns. They want economic stability for the country and a sustained or improved quality of life for themselves.

But as we shift our focus from California to Alaska to Florida, we’re also reminded that while the domestic drilling debate is in many ways a no-brainer, it does take on a different tone in different locales. If we really want to make progress nationwide, we must understand the specific concerns of all different communities, from the tundra to the tropics.

Finally, we cannot forget what is at stake: What is quite likely the world’s largest supply of oil and oil equivalents. As this advocate recently argued, “Leading the world in resource reserves would be something of a prize, if Washington would permit our corporations and entrepreneurs to actually access it.”

The recent history of nuclear power: Sounds a lot like the story of oil

A promising home-grown source of power is abandoned over safety and environmental concerns and regulatory roadblocks. Said industry addresses those concerns and comes back safer and more environmentally friendly than ever. But the roadblocks remain.

Sound familiar? It’s a story that those of us at CEA are all too familiar with.

As advocates of a balanced domestic energy industry push for more responsible drilling in Alaska and along the country’s outer continental shelf, a parallel battle is waging in the nuclear power industry. It’s been 30 years since ground has been broken on a new nuclear power plant in the U.S., even though nuclear is not only a zero-emissions source of power, but it has a proven ability to generate power on a massive scale. While nuclear power has not been subject to the same sweeping bans placed on oil, it has been stymied by a lot of fence-sitting on the part of lawmakers, who have failed to get fully behind the nuclear industry, with sensible regulations and financial incentives that would help make more plants feasible.

That could be about to change. Lawmakers working to assemble a climate change bill that a majority can agree on are proposing including a nuclear power tax credit that would put nuclear on equal footing with other zero-emissions sources of power like wind and solar. Two prominent U.S. senators, John Kerry and Lindsey Graham, last month published an Op-Ed explaining why nuclear power needed to have the same level of support that wind and solar power enjoy. Nuclear power, they noted, is “our single largest contributor of emissions-free power (which) needs to be a core component of electricity generation.”

“We need to jettison cumbersome regulations that have stalled the construction of nuclear power plants,” the senators wrote.

We at CEA couldn’t agree more. At a time when so many Americans are embracing the need for increased energy security and more stable energy prices, we hope nuclear will receive the long-awaited attention it deserves along side natural gas, oil, and a host of alternative energy sources.

For more information about nuclear power and to get involved, please visit Nuclear Advocacy Network and register with the code word “uranium.”

Something to ponder while you’re sleeping in this weekend

We all enjoy an extra hour of sleep in the morning. And who can quibble with those long, light summer days, that bring more time to enjoy the outdoors: attend baseball games, stroll around the neighborhood, or just take in the scenery on your commute home from work?

In short, not many people seem to have a problem with the country’s 93-year-old practice of setting clocks an hour forward in the spring and then setting them back again on a chilly Sunday morning in October: the extra hours sleep offering some compensation for the cold dark winter nights that lie ahead. A couple of states do not observe daylight saving time and certain early-morning industries such as farming say it works against them. But for the most part, it’s a tradition we’re happy to keep.

As far as energy savings are concerned, however, the jury is decidedly out on the benefits of daylight saving time. It was energy conservation that first led Benjamin Franklin to promote the notion of daylight saving time. That was back in the 18th century, when the primary source of household energy was candlelight. And it was energy conservation that finally led the U.S. to officially adopt the time change in 1916.

There was never much definitive research showing this saved energy and as we become more of a 24/7 society, always burning that proverbial midnight oil, the notion of daylight saving time as an energy conservation tool seems more and more quaint. Nice enough, but quaint.

Last year, the National Bureau of Economic Research published a paper finding that daylight saving time’s “longstanding rationale is questionable,” and “if anything, seems to have the opposite of its intended effect.”

This isn’t to argue for a change in this longstanding practice, which suits most of us well enough, at least in summertime. But as we work so hard to challenge the conventional wisdom on all sorts of traditional American practices, from importing most of our oil to turning a blind eye to power sources here at home, we offer the paradox of daylight saving time as one example of how longstanding traditions can cease to serve us, at least in the way they were intended.

Enjoy that extra hour!

Consumer Energy Alliance Supports Expanded Domestic Nuclear Power to Create Jobs and Increase National Energy Security

HOUSTON – October 28, 2009   Consumer Energy Alliance (CEA) announced its support for a comprehensive set of policy initiatives proposed by the nuclear energy industry that aim to ensure the necessary expansion of nuclear energy and provide affordable energy to consumers.

In particular, CEA actively supports policies important to the nuclear energy industry, especially as they relate to financing support and efficient licensing for new nuclear facilities.

“CEA remains committed to advancing nuclear energy and other clean energy technologies that help to create thousands of new jobs and provide substantial benefits to consumers, the economy and the environment, while strengthening national energy security,” said CEA President David Holt.

“As the legislative debate over energy policy moves forward, ensuring a balanced, thoughtful approach – both now and into the future – is vitally important. Nuclear, as well as, oil, natural gas, wind, solar, hydro, and biomass must all play a role in meeting our energy needs,” said Holt.

Consumer Energy Alliance Supports Expanded Domestic Nuclear Power to Create Jobs and Increase National Energy Security

HOUSTON — October 28, 2009   Consumer Energy Alliance (CEA) announced its support for a comprehensive set of policy initiatives proposed by the nuclear energy industry that aim to ensure the necessary expansion of nuclear energy and provide affordable energy to consumers.

In particular, CEA actively supports policies important to the nuclear energy industry, especially as they relate to financing support and efficient licensing for new nuclear facilities.

“CEA remains committed to advancing nuclear energy and other clean energy technologies that help to create thousands of new jobs and provide substantial benefits to consumers, the economy and the environment, while strengthening national energy security,” said CEA President David Holt.

“As the legislative debate over energy policy moves forward, ensuring a balanced, thoughtful approach – both now and into the future – is vitally important. Nuclear, as well as, oil, natural gas, wind, solar, hydro, and biomass must all play a role in meeting our energy needs,” said Holt.

David Holt: Where Is The ‘Energy’ In Kerry-Boxer?

The following op-ed from David Holt, President of Consumer Energy Alliance, appeared on the National Journal website here, in response to the discussion question “The Nitty-Gritty: What Will Hearings Offer?”

October 28, 2009   It seems much of the discussion around this bill, and even the analysis of its impact, ignores the issue of where we will get our energy today and tomorrow. If we are actually going to pass a climate change bill, shouldn’t we also be working to actively expand our near and long-term energy solutions?

Our hope is that the analysis and discussions on this issue will press further to provide transparency into all aspects of the bill. This bill, if passed, could have a significant impact on the US economy and the process should be accessible to consumers so they understand its full implications – including the legislation’s impact on US business competitiveness vis a vis the rest of the world. This means a global solution, not just a US solution to a real global problem.

Let’s make sure that our public policy decisions fully account for potential increased energy costs and negative economic impacts on consumers. Addressing all our energy needs – both now and into the future, as well as the American economy, job creation and the needs of the US consumer seem like a good start.

CEA November 2009 Newsletter

CEA Newsletter
Issue 32

Message from CEA President David Holt
As we prepare for the upcoming winter season and the excitement of celebrating holidays with family and friends, increased heating bills and energy concerns are also on the minds of many Americans. The higher energy costs associated with cooler temperatures highlight the need for a balanced American energy policy which focuses on reasonable and responsible use of all resources, including traditional and alternative.

One significant resource of American energy is our nation’s offshore area. The Obama Administration recently established the Ocean Policy Task Force to propose policies for the management of our oceans and coasts, as well as the resources and activities within those waters.

While the Task Force is rightly concerned with the environmental stewardship of our oceans and coasts, they released an Interim Report that proposes a system of oceans governance that could significantly impact our nation’s ability to safely develop its own offshore energy, including oil, natural gas and renewable energy.

In September, the Obama Administration closed its public comment period on a new Five Year Program to oversee offshore energy leasing. The Interim Report proposes policies that could undermine such a program and hurt consumers in the long-run.

We must urge President Obama and his Task Force to issue an oceans governance policy that successfully recognizes the importance of striking a balance between the protection of our oceans and their economic uses, particularly where responsible energy production is concerned.

Join CEA in this effort to secure a balanced approach to regulation of America’s offshore and ocean resources. Visit CEA’s website to learn more and participate in this important effort.

Thank you for being part of CEA’s valued membership and participating in our efforts to empower America.

David Holt
President

Ensure Balanced Approach to America’s Offshore & Ocean Resources
To help ensure a balanced oceans policy that will secure our energy and economic future, please tell President Obama and the Ocean Policy Task Force today that you support the development of a policy that does not actively prohibit the safe and responsible development of our offshore energy resources. Send in your comments today!

 

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!

 

 

 

CEA Blog: Lawmakers voice concern over Ocean Policy Task Force
Check out CEA’s recent blog entry about President Obama’s Ocean Policy Task Force and concerns that it would block American offshore oil development and impose restrictions that would cost Americans jobs.  Join the conversation at CEA’s website. Read blog…

 

Consumer Corner: Prepare To Cut Costs This Winter!
As you prepare your home for colder temperatures this winter season, use a few of these easy, energy-efficient tips from Energy Star and the U.S. Department of Energy to save both energy and money.

  1. Set the thermostat comfortably low to save big – for instance, resetting your temperature from 72 degrees to 65 will save 10 percent on your heating bill.
  2. Save on hot water by setting your electric water heater temperature to 120 degrees Fahrenheit and taking shorter showers.
  3. Open window coverings during the day to allow the sun’s warmth in and close them at night to keep the chill out.
  4. Make sure your home is leak-free – check all the nooks and crannies around windows, doors, plumbing and more.
  5. Insulate your hot water heater and hot water pipes to prevent heat loss.
  6. Install storm windows to reduce heat loss by 25 to 50 percent.
  7. Keep your heating equipment in tip-top shape and replace all filters regularly.

President Announces Multi-Billion Dollar Investment in Smart Energy Grid
President Obama recently announced plans and funding of a more efficient, reliable and stronger modern energy smart grid to meet American electricity needs. Read article…

 

Arizona’s First Commercial-Scale Wind Energy Development Keynoted by Salazar
Noting America’s need to reduce its “dangerous dependence on foreign oil,” Secretary of the Interior Ken Salazar recently participated in a dedication ceremony for a large wind energy project in Arizona. Read article…

 

American Association of Petroleum Geologists: Informing Policy with Science
By David Curtiss
The American Association of Petroleum Geologists (AAPG) is the world’s largest scientific and professional geological association, with more than 34,000 members in 116 countries. Founded in 1917 and headquartered in Tulsa, Oklahoma, AAPG is not a trade association.  We do not represent the petroleum industry.  Rather we represent the science and profession of petroleum geology.  Our members include professionals active in industry, government, and academia.  They are practitioners of the science.

AAPG’s purpose is to foster the spirit of scientific research among its members and to advance the science of geology, particularly as it relates to petroleum, natural gas, other subsurface fluids, mineral resources, and the environment.  To achieve these goals, AAPG publishes the Bulletin, a juried monthly geologic science journal and the Explorer, a monthly newspaper with upstream information news; sponsors continuing education schools, seminars, and field trips; holds annual scientific meetings both in the U.S. and internationally; publishes specific geologic books and materials; and provides geologic information to the general public.

The Association has three divisions.  The Division of Professional Affairs certifies petroleum geologists, petroleum geophysicists, and coal geologists.  It also enforces the code of ethics that AAPG members agree to uphold.  The Division of Environmental Geosciences uses geologic knowledge to solve environmental challenges, and publishes Environmental Geosciences, a juried quarterly geologic science journal.  The Energy and Minerals Division focuses on energy minerals (e.g., coal and uranium), geothermal, hydrates, and unconventional petroleum resources.

Four years ago, AAPG opened the Geoscience & Energy Office in Washington, DC (GEO-DC) to bring the collective scientific expertise of AAPG members to policy makers.  Our objective is to provide the scientific understanding that enables policy makers to craft more informed laws and regulations.

For example, for the Energy 101 briefing at the CEA October meeting in Washington, D.C., my colleague Don Juckett focused on a key point that is often misunderstood in policy circles:  the difference between a petroleum resource and petroleum reserves. In brief, a petroleum resource denotes the total endowment of hydrocarbons in a particular exploration area or geologic basin.  It is an estimated amount based on geologic knowledge and conditions, and includes both discovered and undiscovered hydrocarbons.

A petroleum reserve is a more narrowly defined estimate of hydrocarbons, including geologic, engineering, and economic factors.  For publicly traded companies the definitions of reserves are set forth by the U.S. Securities and Exchange Commission.  Reserves are discovered hydrocarbons that can be produced at a given price (or price range) – it is an oil company’s inventory in storage.  When you produce oil or natural gas, you are pumping and selling from your reserves.

Converting an oil and natural gas resource into an oil and natural gas reserve takes three things: 1. Access to the resource, which in the U.S. is located either on public or private lands both onshore and offshore; 2. Technology that improves our ability to find and produce oil and natural gas; and 3. Investment climate conducive to the significant capital expenditures needed to produce oil and natural gas and deliver it to consumers.

As we speak to policy makers we spend a lot of time focusing on these issues – access, research and development, and tax reform – as well as other policy and regulatory issues.

Another topic we have been working on is the dramatic energy workforce shortage facing the United States and the world in the next decade.  We are talking about everyone, from petroleum geologists and geophysicists and electrical power line workers, to nuclear engineers and the skilled trades working in energy.  No part of the energy sector, including the government and regulatory arena, is immune from the dramatic “graying” of the workforce.  This is an issue where the Consumer Energy Alliance has provided significant leadership since its inception.

For more information about AAPG, the issues we are working on, or if you have a question about the science of finding oil and natural gas please contact David Curtiss at 202-684-8225 or dcurtiss@aapg.org.

Affiliate Spotlight: Air Conditioning Contractors of America
For more than 40 years, the Air Conditioning Contractors of America has served the nationwide educational, policy, and technical interests of the small businesses who design, install, and maintain indoor environmental systems.

“ACCA members characterize the extent of America’s economic diversity. The typical ACCA contractor member employs less than 10 people, but many of our members have hundreds of workers. ACCA protects the interests of the small business residential and commercial contractors of the HVACR industry,” says Vice President of Government Relations Charlie McCrudden.

Affordable and reliable energy sources help control the fluctuation of fuel prices and allow the small business contractors of the HVACR industry to grow their businesses.

“The typical ACCA member has a fleet of vehicles used to service and install HVACR systems in homes and buildings. Fuel expenses represent a significant cost of doing business as a service contractor,” explains McCrudden.

ACCA has a longstanding history of supporting efforts to encourage energy efficiency in residential and commercial buildings though increased building performance.

“Every day, thousands of ACCA members help homeowners and building managers realize the comfort and cost benefits of energy efficient heating, ventilation, and air conditioning, (HVAC) equipment.  ACCA members would like to see more incentives for building owners and homeowners to reach for higher efficiency HVACR appliances. At the same time, ACCA members would like to see more access to affordable energy sources so that normal market conditions can keep fuel prices low,” he emphasizes.

As a member of Consumer Energy Alliance, ACCA’s goal is to work with other stakeholders to ensure access to energy at reasonable prices.

“ACCA is a member of CEA because the collective voice of the Alliance membership is louder than the individual organizations combined,” McCrudden notes. “As a trade association representing small business contractors who rely on their fleet vehicles, ACCA is very concerned about access to energy and its effect on price.”

For more information on Air Conditioning Contractors of America, visit www.acca.org.

Bipartisan House Letter Urges Caution on Sweeping New Ocean Restrictions

CEA applauds lawmakers for taking a stand in defense and support of offshore energy exploration

 

WASHINGTON – Imposing a new, potentially sweeping federal oceans program that restricts the responsible energy development offshore would raise energy prices on consumers and expand our already dangerous dependence on foreign energy — that was the message delivered to the White House today by Democrats and Republican lawmakers in the U.S. House.

In a letter dated today, 69 members of the US House urged the White House to proceed with caution before totally recasting our nation’s federal ocean policies. The bipartisan group of lawmakers is particularly concerned with the potential effects such a policy could have on responsible offshore energy production, which helps stabilize energy prices, create good-paying jobs and fund essential social services from all levels of government.

David Holt, president of Consumer Energy Alliance (CEA), released this statement:

“Today’s letter from this strong, bipartisan group of lawmakers should send a message loud and clear to the White House that any policy that seeks to impose restrictions on all aspects of offshore commerce – shipping, fishing and the responsible development of homegrown energy is one that will be challenged by a large segment of Congress.

“Unfortunately, as it stands today, continuing delays have prevented the important work of crafting and implementing a new offshore energy development, creating jobs and finding sound economic footing for the nation. An oceans policy that would further complicate that regulatory chain of command offshore has the potential to erode our nation’s energy security even further, costing Americans jobs, revenues and opportunity in the process.

“These lawmakers that signed this letter, led by Congressman Bill Cassidy, have shown tremendous leadership at a critical time on this issue. CEA is grateful for their hard work and hustle. As this process continues to develop, CEA will continue to fight for expanded access to every form of energy, especially our resources offshore.”

Here are key excerpts from the bipartisan letter, which was signed by 69 members of Congress:

We are particularly concerned about the Task Force’s impact on our nation’s ability to safely develop its own offshore energy, including oil, natural gas and renewable energy.  It is critical that the Task Force’s proposals do not inhibit energy activity offshore in domestic waters and undermine the Department of the Interior’s Five Year Leasing Program for offshore energy development.  An ocean management policy that puts new restrictions on energy development would not only raise prices for consumers, but would negatively impact Americans working in the offshore energy industry and all Americans whose livelihood depends on access to affordable energy.

According to a recent American Energy Alliance report, expanded drilling in the Outer Continental Shelf (OCS) would generate 1.2 million jobs and $70 billion in additional wages annually, plus $8 trillion in economic output and $2.2 trillion in total tax receipts.  The American public has also expressed its overwhelming support for increasing offshore energy production.

We urge the Obama Administration and the Task Force to take an approach to oceans policy that recognizes and promotes access to the abundant American energy resources located offshore.

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