Lawmakers voice concern over Ocean Policy Task Force

Word seems to be getting out about President Obama’s Ocean Policy Task Force and the need for all groups that use the oceans to be included in the discussion. Some 69 members of the House of Representatives have sent a letter to the task force, expressing concern that it could set in place new policies that would block offshore oil development and impose other restrictions that could cost American jobs.

As Doc Hastings, the representative from Washington state put it, “We can protect our oceans without inflicting more economic damage in the middle of a serious recession.”

CEA, which has in the past successfully organized letter-writing campaigns to the Interior Department over contested offshore drilling leases, more recently rallied our members and supporters to weigh in on the Ocean Policy Task Force, and its initial report that proposed a new system of governance of the country’s Great Lakes and coastal areas.

It seems a lot of people agree that this is a very complex and sensitive matter that deserves the input of many parties before any new policy is established.

In recent months CEA has been repeatedly pleased, not just by our members’ efforts to engage in this challenging grassroots work, but also in the results that we’ve achieved. Last month, our letter writers arguing in favor of responsible offshore drilling, out-wrote the other side.

What’s gratifying about the strong response to the Ocean Policy Task Force is that it is so far-reaching. Objections have poured in from places ranging from San Francisco to Louisiana, and representing industries from oil to wind power to fishing. As our own blog-bot (see blog from October 15) said, we all want to do what’s right to protect the oceans. But clearly a lot of people are concerned about doing the right thing in the right way. Keep up the good work!

David Holt: Greater Use Of Nuclear Necessary

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 “Does nuclear fit the bill?”

October 23, 2009   It is indeed encouraging to see Congress turning more attention towards nuclear energy as a source of affordable domestic energy. Greater use of nuclear energy is absolutely a necessary step to becoming a more environmentally responsible, energy-producing nation. Nuclear energy is not only the most readily available form of clean-air electricity, but it is also the most sustainable and cost-effective. Of all forms of clean-air electricity, nuclear energy has the smallest impact on the environment. If we invest in this form of power now, we will see benefits for years to come.

In any discussion of climate change, nuclear power is a must. Just like other major sources of clean-air electricity, such as hydroelectric power, wind energy and solar energy, nuclear power plants do not emit any carbon or greenhouse gases. And nuclear energy is the only large-scale, clean-air electricity source that can be expanded widely to produce large amounts of energy. In fact, it makes up nearly 74 percent of the nation’s clean-air electricity.

As we potentially work toward a new generation of nuclear plant development, it is important to note that average nuclear production costs have already declined more than 30 percent in the past 10 years to 1.87 cents per kilowatt-hours, and new and more complex forms of technology are continually being explored to make this cost even lower. Currently, it is the lowest-cost producer of baseload electricity.

We believe that any legislation that addresses climate change and decreased dependency on foreign oil should also encourage increased use of nuclear energy as part of an overall push toward a balanced domestic energy program and should expand tax incentives for construction of new nuclear plants and nuclear electricity generation. It should also provide $2 billion over 10 years from federal energy research, development, demonstration and deployment budgets for demonstration of one to two new advanced nuclear facilities.

What do toys from China have to do with oil imported from the Middle East?

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.

Dial It Up: CEA On Air in Tenn. Explaining Real Consequences of LCFS

New statewide radio campaign seeks to educate Tennesseans on perils of a nationwide Low-Carbon Fuel Standard

WASHINGTON – October 19, 2009   Efforts to add a Low-Carbon Fuel Standard (LCFS) to the Senate cap-and-trade bill would weaken America’s national security and divert secure, North American energy resources to China – a message hundreds of thousands of Tennesseans will hear over the next two weeks in a new statewide radio advertisement spot produced by Consumer Energy Alliance (CEA).

“Though they might not know it, a good bit of the refined gasoline and diesel products that Tennesseans rely on every day to get to and from home, work and school is derived from sources of energy targeted for elimination under an LCFS,” said David Holt, president of CEA. “Couple that reality with the fact that an LCFS would allow competitors like China to lay claim to secure energy resources previously earmarked for U.S. consumers, resulting in lost American jobs and higher prices at the pump, and you start to see just how devastating this policy would be for America’s economic and national security.”

The 60-second ad, which went up today and will appear statewide over the next two weeks, comes in advance of an anticipated markup of climate legislation in the Senate Environment and Public Works Committee (EPW), likely to happen before the chamber’s Thanksgiving Recess. U.S. Sen. Lamar Alexander (R-Tenn.) is a member of EPW.

The script can be downloaded HERE.

CEA to EPW: Addition of LCFS to Climate Bill Would “Erode” U.S. Security

As Senate cap-and-trade proponents shift message campaign to focus on “national security,” CEA reminds lawmakers that a Low-Carbon Fuel Standard (LCFS) would make America less secure

HOUSTON – With the introduction last week of climate legislation in the Senate, and confirmation this week that hearings on the bill will commence later this month, Consumer Energy Alliance (CEA) president David Holt sent a letter to the Senate Environment and Public Works (EPW) Committee today, asking the members of the panel to fully consider the economic and security-related consequences of adding a Low-Carbon Fuel Standard (LCFS) provision to the text.

Holt issued the following statement after formally sending the letter to Chairman Barbara Boxer (D-Calif.), Ranking Member James Inhofe (R-Okla.), and the remaining 11 Democrats and six Republicans on the committee:

“As proponents of cap-and-trade continue to make a collective and concerted effort to emphasize the plan’s impact on American security, it’s important they know the inclusion of an LCFS title in this bill would turn those messaging points on their head. Fundamentally, an LCFS would initiate a unilateral ban on accessing secure, affordable energy supplies available on our continent – all without doing a thing to address carbon emissions. The letter we sent to the committee today makes that point clear, and more thoroughly describes the extent to which America’s security would be eroded if an LCFS is signed into law.”

The text of the letter is copied below. An electronic version of it can be accessed here.

October 14, 2009

Dear Chairman Boxer and Ranking Member Inhofe,

With the release last week of the Clean Energy Jobs and American Power Act, a bill co-authored by you, Chairman Boxer, and U.S. Sen. John Kerry (D-Mass.), your panel will soon be called upon to take the lead in crafting a final product that, with hope and much hard work, finds a way to meet the existing and growing energy needs of our country while advancing the imperative of preserving and enhancing the environment in which we live.

While not included in the base text of the legislation as introduced, the future adoption of a policy proposal known as the Low-Carbon Fuel Standard (LCFS) would cast serious doubt on the bill’s ability to meet these core objectives. That’s because an LCFS would represent, and in fact directly initiate, a de facto ban on some of the most secure and affordable sources of energy available to us in our hemisphere, all while doing nothing to rein in, or even keep static, the rate at which global greenhouse gases are emitted into the atmosphere.

Much attention has been paid to the question of how an economy-wide cap on carbon emissions might impact America’s long-term security, a consideration that has taken on added emphasis by the leadership role that Sen. Kerry, chairman of the Foreign Relations Committee, has adopted as this legislation has proceeded. The inclusion of an LCFS title to this legislation would represent a clear and categorical blow to that security, forcing American consumers to turn away sources of secure, affordable energy in favor of foreign energy imports from some of the least stable regions of the world.

Closer to home, the story of how an LCFS would impact the economic well-being of American consumers and the states in which they live isn’t much better. To be sure, some states across this nation, mostly along our coasts, may be able to more easily adapt than others to a policy that insists upon restricted access to secure North American energy supplies. But for states whose entire economic model is founded upon the availability of secure, affordable and reliable forms of energy from Canada and Mexico – the precise forms targeted for elimination under an LCFS – a policy that seeks to limit the type and amount of energy they’re allowed to permit entry each day could leave these states with few options.

Ninety-three percent of the oil that the state of Montana uses each day comes from Canada; greater than 80 percent of Minnesota’s energy comes from there as well; Illinois imports more than half of its oil from Canada; and in Michigan, a state with a 15 percent unemployment rate, 63 percent of its energy supply is tied directly to its neighbor to the north. Cut-off that supply, and you effectively cut-off thousands of high-wage jobs while imposing extraordinary upward pressure on prices at the pump – all without taking any meaningful steps to reduce global greenhouse gas emissions.

It is legitimate to ask how that can be possible – how a plan that restricts the amount of Canadian energy allowed to cross our border does not reduce, at least by a corresponding amount, the volume of carbon dioxide cast into the atmosphere.

The answer isn’t located in Canada, or in Mexico, or even in the United States. The answer is found in China. Unwilling to risk the chance of Congress instituting a de facto ban on its energy exports via an LCFS, our friends in Canada recently invited our competitors from China to make a major investment in the Albertan oil sands. The arrangement sets up the possibility, indeed the likelihood, that secure, affordable energy resources previously destined for U.S. markets will be directed to Asia instead – resulting in more, not less, carbon emissions all while casting America’s present position of security in even greater doubt.

Consumer Energy Alliance (CEA), with its 125 affiliates and grassroots membership of more than 250,000 supporters, has not yet taken a formal position on the Kerry-Boxer bill, a stance we believe is prudent given the legislation’s continued evolution and the understandably modest portfolio of analysis that has been assembled detailing its potential economy-wide impacts.

But on LCFS, allow me to make our position plain: CEA categorically opposes a plan that would in any way limit or otherwise restrict reasonable access to secure sources of energy on our continent. An LCFS endeavors to do precisely this. We thank you for your willingness to consider this position as you begin the important work for our country that lies ahead.

Sincerely,

David Holt

President

Consumer Energy Alliance

CC: Full Membership of Senate Environment and Public Works Committee

Two ways of reducing the massive trade deficit

If you want to make a dent in the U.S. trade deficit, the multi-billion dollar amount by which imports exceed exports, you could contract the whole national economy: Recessions, for all the pain they cause, can help bring trade deficits in balance by reducing the amount of foreign goods purchased.

Or, you could make a concerted effort to reduce oil imports, a major component of the trade deficit in good times and bad. The U.S. trade deficit, now more than $30 billion, is not necessarily the biggest problem associated with our dependence on foreign oil. Nor is it the first thing that strapped consumers think of when they think about all the ways this prolonged economic downturn has hurt their own finances. But on a macro level, the gaping trade deficit is one more way that those massive volumes of imports hurt our economy.

The country recently got a glimpse of how reducing one single component of the trade deficit – oil – could make a huge difference in the overall total. The Commerce Department reported an unexpected $3.5 billion decline in the trade deficit in August, reflecting … drum roll … a big drop in demand for foreign oil.

That’s the good news. The bad news is that demand didn’t drop because of a more robust domestic energy supply, but only because, after 21 months of recession, consumer confidence and overall spending power has been battered. People are buying less and traveling less and businesses have less freight to ship.

Shortly after the trade deficit posted such a large drop, the Dow Jones Industrial Average passed 10,000, crude oil prices moved above $75 a barrel and nationwide unemployment moved within spitting distance of 10%: A mixed bag of economic indicators, to say the least.

The recession is clearly not over for many Americans, but as more and more signs of a nascent recovery start to emerge, the country finds itself back at the same crossroad it has visited so many times in the past, with yet another opportunity to make meaningful changes in broad energy policy. It shouldn’t have to take the worst economic downturn since the great recession to achieve a big drop in oil imports. Hopefully next time, it won’t.

Wind industry to Obama: Don’t throw the baby out with the bath water

Last week we offered a general overview of the Obama administration’s new Ocean Policy Task Force and expressed our concerns that this well-intentioned effort to help the world’s oceans thrive could result in a set of arbitrary restrictions on different industries that depend on oceans and coastal waters. This week, we direct you to the concerns of the American Wind Energy Association, which has done a good job of articulating how easily a well-intentioned plan may veer of course.

You can read AWEA’s full, 14-page response to the Task Force’s initial report here. Essentially, while the wind energy industry fully supports efforts to improve the health of the world’s oceans, it worries that imposing arbitrary limits to industrial activity in offshore waters (and the windy skies above them) could choke off efforts to expand wind power in the U.S. at the very point that the industry is gaining widespread support.

Wind and oil have a lot in common. They are both major sources of power, they have both identified offshore waters as some of the areas that offer the most potential, and they have both encountered resistance from a broad array of groups that stand under an “environmentalist” label, but often have no bigger concerns than that an oil rig or a wind mill on the horizon ruins the view. Which does seem to beg the question: Does a solar panel ruin the “view” of a house? And why do we so often object to images that represent the responsible harnessing of our natural resources?

But anyway, the wind sector, like the oil sector, has watched in frustration as other countries allow responsible use onshore and off, while progress here at home is put on hold.

“For offshore wind to make a significant contribution,” AWEA wrote in its formal response to the Ocean Policy Task Force, “the process of permitting and building the first generation projects of U.S. offshore wind farms as well as developing the needed supply chain and industry-specific infrastructure must get underway.”

The movement toward achieving a balanced domestic power industry and reducing our dependence on foreign oil has seen enough delay. Please continue to make your voice heard to ensure that the Ocean Policy Task Force does not lead to further setbacks. Both the oil sector and the wind sector have made a lot of progress in recent months. We need to keep the momentum going.

New EIA Energy Web Portal Explains Topics in Plain Language

Energy Explained , a new web portal launched today by the U.S. Energy Information Administration (EIA), celebrates Energy Awareness Month with the most comprehensive energy education resource available from the U.S. Government.

The site explains where gasoline comes from, what determines the price of electricity, how much renewable energy the United States uses, and hundreds of other energy topics.

“Energy touches us in many ways every day, from the electricity that lights our homes to the fuel we use in our cars,” said EIA Administrator Richard Newell. “Energy Explained uses plain language and clear graphics to help explain a sometimes complex, but vital subject.”

Energy Explained allows easy navigation between major energy topics:

Energy Explained includes a “rate this page” feature so visitors can easily give EIA feedback on any page.

Visit Energy Explained at: www.eia.doe.gov/energyexplained.

Don’t wait! Your help is needed on a new campaign!

The battle to achieve a balanced energy policy for the U.S. recently got a lot more complicated. Thus far, much of the debate over where we can drill for oil has focused on the country’s coastal waters. But in light of a June 12 memorandum from President Obama establishing an Ocean Policy Task Force, it appears that all the world’s waters will come under closer scrutiny.

In a letter explaining the formation of this new task force, President Obama says we have a stewardship responsibility to maintain healthy oceans, coasts and Great Lakes, and to protect them from the environmental challenges they face.

CEA, of course, supports this goal of developing policies that help the world’s oceans thrive. But we are concerned by the urgency with which the task force was instructed to, essentially, fix all the ills of the world’s oceans – especially considering this matter is barely on the public’s radar screen.

Recently this new task force produced its first interim report, proposing policies that could significantly impact all sorts of activity, including oil exploration and production and possibly bar them.

Now, this new Ocean Policy Task Force is weighing a multitude of issues, not just oil, and certainly not just offshore drilling. But with serious talk so early in this process of setting up a governance system with little to no input from commercial industry, there is a big danger the American energy industry could emerge as one of the big losers of any new ocean policies. This system of ocean governance the task force has drafted could, in fact, limit the country’s ability to develop its own offshore energy, including oil, natural gas, and renewable energy.

Recently, CEA successfully organized a massive letter writing campaign in support of responsible drilling in our coastal waters. Today, we’re asking all our members and supporters once again to start writing. The public comment period on the recommendations outlined in the task force’s interim report closes on October 17.

Like we said earlier, topics such as ocean governance and ocean ecology are as vast as the ocean itself. Likewise, the formation of a system that will enable our oceans, our people and our industries to all thrive is a lot more complicated than we can cover in this post. Check this blog for future updates and details on the Ocean Policy Task Force’s proposals, and all the different groups of people and business who might be impacted.

Our parting message for the moment, though, is Don’t Wait. Make sure your voice is heard now. A draft letter to the U.S. Council on Environmental Quality is available on our web site, along with the mailing address and other contact information. You can also submit your comments and concerns electronically here.

Remind our policy makers about all the ways that a robust domestic energy industry supports the country. And remember that your voices are heard.

Foltz addresses AIPRO Annual Meeting

Tommy Foltz, Executive Director of CEA-South, was a speaker at Arkansas Independent Producers & Royalty Owners Annual Meeting on Sept. 30, 2009. Below is coverage of the event from AIPRO.

By all accounts, AIPRO’s inaugural Annual Meeting recently held in Little Rock was a success!  We had over 115 registrations with a great turn-out for an educational and enjoyable event.

Governor Beebe started the day off recognizing the importance of the oil and natural gas industry in Arkansas.  He also applauded the original members of AIPRO for having the foresight to form the organization and bring it to its current state.  Gov. Beebe said that by working together we can more successfully impact both legislative and regulatory issues that impact our industry.

Tommy Foltz, Director for Consumer Energy Alliance (CEA) – South, was our next speaker.  Tommy explained how CEA is working to help our industry by building a rapid-response system so that through email blasts sent to their large membership, they can both educate their members on hot topics and provide an easy avenue for them to contact their Congressional delegation to impact legislation.  Tommy also addressed the Rahall bill (HR3534), currently making its way through Congress, and the Low Carbon Fuel Standard, which could have a significant impact on Arkansas oil production and American energy security.