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Wasn’t the world supposed to have run out of oil by now?

Anyone who has been filling up at the pump for a while understands that oil prices often appear to defy logic. They may rise during recessions, and then, just when everyone is convinced the world is running out of oil, they fall dramatically – like they did at the end of last summer’s run.

This does not mean that there are no economic explanations behind oil price swings, just that they tend to be a lot more intricate than even many serious economists appreciate.

Certainly, if the world were about to run out of oil, we’d all be paying a lot more at the pump: oil prices would not just be volatile, they’d be moving higher and higher. You can only skirt the laws of supply and demand for so long.

Still, the theory of Peak Oil persists. For practical purposes, this is not just the argument that oil is finite in supply and will at some point run out; it’s the theory that that time is either upon us, or has already passed, and that the world is already well on its way to a point where there will be No. More. Oil.

Let’s suppose you know nothing about would oil supply and all the new and improved methods for extracting oil that have led to production in many places that were once not considered feasible. You’d probably still find it curious that inflation-adjusted oil prices today are lower than they were 30 years ago, if indeed the world had already passed its peak supply. The world, in other words, is not anywhere close to peak oil.

There’s recently been some badly-needed discussion dousing water on the notion of peak oil. This New York Times op-ed says that those who promote the idea of peak oil base their conclusions on “anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum.”

New, more sophisticated extraction methods do not just improve production volumes on the margin. A consensus of geologists now place the world’s reserves of recoverable oil at ten trillion barrels, some eight trillion more than what the peak oil folks say. The fact that scientists with a deep understanding of how oil gets out of the ground believe there is that much oil yet to be produced, points the flimsy science on which so much peak oil fear mongering has been based.

But just assume, for a moment, that all the most optimistic estimates of reserves are the correct ones and that the world has so much oil that conservation is not necessary, even as rapid development in India and China leads to explosive growth in demand. Just because we don’t need to conserve doesn’t mean we shouldn’t. Just because we may not, from a supply perspective, need to invest in alternative sources of energy, doesn’t mean those investments are for naught.

Debunking the notion of peak oil is important for all sorts of reasons, and should help pave the way for a more honest discussion of energy policy. But this “discovery” of new oil should not be taken as a reason to consume with abandon.

For one thing, there’s still that pesky matter of where the oil comes from, and the problems of being dependent on overseas sources.

Reaching agreement on world reserves should also be seen as a means to work toward more price stability. Understanding that sudden price spikes are not the result of a worldwide shortage, should help policy makers better address the real causes of this volatility.

September 2009 Newsletter

CEA Newsletter
Issue 30

Message from CEA President David Holt
Consumer Energy Alliance continues to work toward a national energy policy that fully leverages America’s abundant offshore energy resources into new jobs, revenue and security for American energy consumers.

As part of this effort, CEA is proud to announce a new nationwide educational campaign – Secure Our Fuels, which highlights the damaging economic effects associated with the national Low Carbon Fuel Standard (LCFS) currently being considered by Congress. For more information on the Secure Our Fuels campaign, click here.

Though it is important to continue expansion of alternative energy resources through greater development of wind, solar, nuclear and other renewables, responsible access to America’s abundant oil and natural gas resources must be maintained to ensure stable sources of traditional energy to meet American needs. Affordable and secure energy resources are vital to the recovery of the national economy and its future growth.

Currently, the federal government is accepting comments from the public regarding another campaign and access to America’s offshore areas for development of oil and natural gas resources. CEA recognizes the necessity of reasonable and responsible access to these offshore areas, which will stimulate economic growth, create new jobs for Americans and provide much-needed revenue to states and the federal government.

Consumer Energy Alliance, made possible through the hard work and dedication of our affiliate members and individual consumers like you, stands strong in our support of offshore oil & gas drilling, as well as offshore alternative energy development.

To join our efforts and show your support of sensible energy production off of American coasts, please share your views with the Administration by submitting a comment (click here to send in a letter). The deadline to have your voice heard in this important discussion is September 21, 2009.

David Holt
President

 

Final deadline fast approaching – Support the Five-Year Plan Draft Proposed Program to Develop Offshore Oil & Gas Resources! Act by September 21!
A significant domestic supply of energy can be safely and efficiently found right here off of America’s shores. The federal government administers the considerable energy resources contained in our offshore waters and wants to hear from you about offshore oil & gas and alternative energy development.

Opposition to offshore energy development is mounting. We need you to let Washington know you support reasonable access to America’s offshore energy resources. Send in your comments today!

 

Support Development of Alaska’s Offshore Oil & Gas Resources!
At a time when the American public is crying out for more domestic energy, Alaska has enormous untapped oil and gas potential, especially in its offshore areas. The waters off Alaska’s coasts hold about 27 billion barrels of oil and 132 trillion cubic feet of natural gas, according to federal government estimates.

To begin producing energy from these resource basins, the federal government must take action. Join us in our effort as we build public support for offshore minerals exploration and development in Alaska. Send in your comments today!

 

CEA Blog: Talk about thinking outside the box, check out Chevron’s latest project
Check out CEA’s recent blog entry about Chevron Corp.’s new project to use solar power to produce oil at a field in California. Join the conversation at CEA’s website. Read blog…

 

Consumer Corner: Saving Energy at Your Workplace
Did you know that about half of American energy use occurs at workplaces, schools, entertainment venues and shopping malls? If we are mindful of utilizing energy conservatively in these locations, as well as our homes, we can save energy and reduce unnecessary expenditures.

To cut energy use and costs in the workplace, try these tips from Energy Star, a U.S. Environmental Protection Agency program that promotes energy efficiency:

Check out more energy-saving tips that can be applied at the office at the Energy Star for the Workplace website.

Airlines to Use Renewable Synthetic Diesel Fuel for LAX Ground Equipment
Beginning in late 2012, eight airlines will begin fueling ground service equipment at Los Angeles International Airport (LAX) with renewable synthetic diesel fuel, known as RenDiesel, as part of recent agreement with the fuel’s manufacturer.

 

Offshore Lease Sales for Oil and Gas Generate $115 Million in the Gulf of Mexico; Utah Onshore Lease Sales Generate $1.1 Million
The U.S. Department of the Interior recently announced millions of dollars in additional federal revenue generated by offshore and onshore lease sales, bringing the year-to-date total to more than $875 million. Read article…

 

CEA Launches New Campaign to Educate, Engage Public in Opposing Increased Energy Costs, Expanded Reliance on Energy from Unstable Regions
This month, CEA launched a nation-wide educational campaign that highlights the damaging economic effects associated with a national Low Carbon Fuel Standard (LCFS), which is being considered in Congress and currently enjoys the full support of the White House.

Throughout this campaign, CEA will work to mobilize its members to educate and engage the public, the press and state and federal elected officials about the devastating impact an LCFS would have on American consumers, our economy and our security.

Michael Whatley, vice president of CEA and a leading LCFS expert, said, “A Low Carbon Fuel Standard would be a major blow to America’s energy security. In short, the energy we import daily from friendly nations like Canada would essentially be prohibited from crossing our border. Canadian crude represents a critical component of the North American energy portfolio and an important source of energy our nation relies on to run its economy.”

Whatley added, “If these abundant resources were cut off, our dependence on unstable regions of the world would skyrocket and so would the price American consumers pay at the pump. This campaign seeks to alert the American public of the implications of this policy and enlist their support in ensuring it does not come to pass.”

Most Americans might not know what an LCFS is, what it stands for, or even that its stated goal – reducing the carbon content of fuel – isn’t the true intent of the policy. Unfortunately, that’s precisely how advocates of a nationwide fuels mandate want it to remain, hoping to use the pending climate bill to advance a policy that will kill American jobs, expand our foreign energy dependence and discriminate against secure supplies of energy available in our hemisphere.

Throughout this campaign, CEA will work with and engage its regional affiliates to ensure that working families, small businesses, organized labor and every American consumer understands the threat posed by an LCFS.

Visit SecureOurFuels.org to learn more about how an LCFS will increase energy costs for American consumers and our dependence on foreign, unstable regions of the world to fuel our economy.

 

Affiliate Spotlight: Apache Corporation
Established in 1954, Apache Corporation explores for and develops oil and gas in the United States, Canada, the North Sea, Egypt, Australia and Argentina.

“Development of the nation’s energy resources in an environmentally responsible manner is a win-win: For consumers, domestic production provides reliable supplies at affordable prices, reduces the nation’s reliance on imported oil and generates tax revenues for many communities. For producers, domestic operations provide good jobs for our employees and investment returns for our shareholders,” says Director of Governmental Affairs and Corporate Outreach Obie O’Brien.

Apache’s mission has been to build a profitable, upstream independent oil and gas company for the long-term benefit of its shareholders, employees and constituents. Although Apache’s operations reach around the globe, its headquarters is in Houston, Texas, with a historical base in the United States, including significant operations in the Gulf of Mexico, the Anadarko Basin of western Oklahoma and the Permian Basin of West Texas and New Mexico.

Educating consumers and policy makers regarding the importance of development of American energy sources is a top priority at Apache, according to O’Brien.

“We want the American people – and especially our elected leaders – to understand the positive benefits that flow from a strong domestic oil and gas industry and development of our nation’s resources,” he emphasizes.

“Even with development of alternative energy sources, the nation will need fossil fuels for decades to come. Restricting responsible development in known oil and gas basins or discouraging investment through misguided tax and environmental policies will increase oil imports, reduce jobs and diminish the nation’s economic well-being.”

As a member of Consumer Energy Alliance, Apache Corporation participates in a national dialogue between the consumers and producers of energy, as well as policy makers.

“This conversation is vital if the nation is going to achieve a greater understanding of the nation’s energy challenge,” O’Brien notes. “People who use energy can provide a ‘Main Street’ perspective on issues such as responsible access to natural resources; the impact of energy prices on business, agriculture and consumers; and the most effective ways to transition to a lower-carbon economy that utilizes renewable energy sources and encourages energy efficiency and conservation.”

For more information on Apache Corporation, visit ApacheCorp.com.

Talk about thinking outside the box, check out Chevron’s latest project

SolarTraditional power meets alternative energy and Big Oil meets Silicon Valley in Chevron Corp.’s new project to use solar power to produce oil at a field in California.

Using solar energy to produce oil might sound odd, but it makes a lot of sense in places like California, where much of the oil is especially viscous in quality and flows better when warm. The common practice is to use natural gas – often straight from the producing field – to heat the oil wells, but producers often regret having to consume so much fuel in the production process. When fuel prices are high, it can seem especially wasteful. Sunny California is the ideal setting for a solar solution.

Chevron’s solar-powered oil field in Coalinga, Calif. comes through a partnership with Brightsource Energy, an Oakland, Calif. company that develops solar power plants and has raised substantial funding as many investors moved their money out of high-tech and into alternative energy.

Clearly, a lot of investors these days are interested in alternative energy; a persistent challenge, however, has been demonstrating that these power sources can execute on a large scale and can be applied to all sorts of traditional industries that run on traditional fuel.

Think oil production is traditional enough? As news reports of the story suggest, the Chevron deal offers BrightSource an opportunity to deploy its technology on a grand scale.

Other solar companies have also awakened to the potential of operating on oil fields. Ausra, a Mountain View, Calif. maker of solar energy systems, recently broke ground on a plant near oil-rich Bakersfield, Calif. The project has been described as the company’s own proof of concept that solar power has widespread industrial applications.

Since it does on occasion rain in California, Chevron says it doesn’t expect the solar project to eliminate its need for natural gas to heat its oil wells. But adding solar to the mix could significantly improve its efficiency. Like the ageing oil fields of California, where extracting oil can be like scraping peanut butter off the bottom of a jar, many other fields around the world use steam to optimize production. Producing that steam at a lower cost could even make production in particularly expensive fields more economically feasible.

If the Chevron/BrightSource deal is a case of old meeting new, and the dreamers meeting the skeptics, they seem to be coming together on some very practical territory right in the middle.

Extreme pain at the pump in Mississippi, Montana

A new study looking at driving patterns, fuel prices and income levels around the country, measures how much people in different states are spending on gasoline. The results are sobering. The typical consumer in a majority of states — including Texas, Maine, Arizona and Michigan – spend more than 5% of their incomes on gasoline. For the average consumer in Mississippi, the portion of income spent on gasoline is more than 9%; in Montana, it’s more than 8%.

These are staggering numbers in any economic environment, but in the current climate, they drive home a point that we’ve made on this blog before, about the burden of high and volatile oil prices on people living on fixed incomes, including the elderly.

You can click on this interactive map to see where your state ranks in this pain at the pump index.

Here’s the twist: The study  — designed to highlight how vulnerable people are to rising oil prices — comes from the Natural Resources Defense Council (NRDC), a group that has not always supported domestic oil production. Nonetheless, the council’s transportation policy director acknowledged in an interview with CNN that the high costs of gasoline, even in a down economy, was due in large part to the country’s dependence on foreign sources of oil.

CNN then took the argument one step further and cited critics who argued that groups like the Natural Resources Defense Council were part of the very problem they are now highlighting. By promoting an anti-oil agenda, they’ve helped keep domestic supply scarce, critics say.

This gets to the heart of CEA’s call for a realistic and balanced approach for energy in the 21st Century to replace the all too common pie-in-the-sky strategies that would have you believe oil could just be abandoned tomorrow.

Of course, we agree with the NRDC that all consumers need alternatives to rising and uncertain oil prices that consume too much of their family budgets. We’d just like to point out that the alternative can often be found close to home in the form of untapped oil that could be produced and transported with respect to the environment.

Indeed, our natural resources are our greatest asset. But only if we use them wisely.

David Holt: What ‘Back Burner’ Issues Need Attention?

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 “What ‘back burner’ issues need attention?”

August 24, 2009   There are indeed critical issues being overlooked in the current energy discussion. By focusing so much attention on the climate change component of energy policy, issues like jobs, energy prices, and the development of the full spectrum of energy resources available to us are being overlooked to the detriment of our economy. What we need is a comprehensive, balanced and long term approach to energy policy – one that looks at ways to not only to control climate change, but also to lower prices, create jobs and build the US economy.

The fact of the matter is that for decades to come our global economy will rely on oil and natural gas for the vast majority of our energy needs, while we continue to work towards developing a diverse energy portfolio that includes wind hydro and nuclear (among others). To get there from here, we need to focus on a sensible and balanced US energy policy that includes provisions for access to our offshore and onshore oil and gas supplies. Failure to do so is costing this country millions of jobs and putting us as significant competitive disadvantage relative to other countries that more effectively utilize their natural resources.

Testimony by Dave Harbour, Ocean Policy Task Force Public Meeting, Aug. 21, 2009

Madam Chair and members of the Interagency Ocean Policy Task Force[1]:

I am Dave Harbour, a retired Alaska regulatory commissioner[2].  I publish an energy website and serve as a volunteer member of the Consumer Energy Alliance Board of Advisors[3].

Since you wish to recommend Ocean policy that is based on science and facts I offer you these additional recommendations on ‘process’ as a former Alaskan regulator.

First, On Timing.   There are few courts or regulatory bodies that would commit in advance to a full and complete, science-based, factual adjudication of a complex issue within a brief timeframe of six months or three months—especially when multiple parties, as here, should be given ‘due process’.  The president has given you one of the most complex challenges in the entire history of natural resources policy making.  The president has ordered that you produce recommendations for a national ocean policy, a framework for policy coordination of ocean stewardship and an implementation strategy within three months of June 12.  He has ordered that you produce a framework for ‘effective’ coastal and marine spatial planning within 6 months of June 12.  If quickly transformed into laws and administrative rules, the result could change America and change the world—not just ocean policy–and not necessarily for the better.  Deadlines now loom within sight.  As good advisors, please ask for more time if, as I suspect, this greatest of all natural resources planning projects cannot, by application of science and facts, be comprehensively and competently organized and completed within the dictated timeframe.

Second, On Comprehensive Policy. A sustainable ocean policy presupposes a comprehensive approach.  A little while ago, University of Alaska-Anchorage Chancellor Fran Ulmer spoke of the importance of your producing a ‘comprehensive’ policy.  She made reference to the significant body of knowledge available to you through the University of Alaska.  To not identify, subsume into your record and analyze such relevant material, along with that produced from other oceanographic, sea grant, aquaria, military, maritime and similar public and private sources would be to debase the importance and value of your work.  Nor should the body of knowledge you assemble and analyze be restricted to U.S. institutions since the oceans, like knowledge, are not limited by national boundaries.

Third, Other Relevant Ocean Policy Issues.  A valid oceans policy must recognize the dangers of creating unintended consequences by fully understanding and evaluating related issues.  I would urge the task force to create–as full and equal portions of your recommendations–analyses of the social, economic, cross-polar, cultural, energy and national defense implications of America’s Ocean Policy.

Fourth, Other Alaska and National Concerns.

  • Money.  With Trans Alaska Pipeline throughput dipping by about 6% annually, America’s dependence on foreign sources increases proportionally, just as Alaska’s state government revenue—over 80% dependent on oil—creeps dangerously lower.  Alaska’s and America’s most prolific new energy resources will come from the Alaska OCS.  To properly survive, Alaska’s government needs the full, undiluted 37.5% of OCS rents, royalties and bonus moneys now accorded some Gulf of Mexico states[4].  The Federal government, seeking to repay the enormous economic stimulus spending could help control inflation and repay debt by sponsoring a strong, Federal OCS program in Alaska and the Lower 48.  OCS activity monitored under current laws and regulations will produce hundreds of thousands of jobs for Americans and jump start the economy unlike the way that any artificial stimulus could.

National Security.  Yesterday Prime Minister Harper was visiting our neighbors to the East, in the northern territories.  It was his 4th Arctic tour.  He came with Arctic announcements, including infrastructure to be provided by CanNor, a new, Arctic regional economic development agency.  The agency will provide for roads, ports and other infrastructure.   He also observed Operation Nanook, the Canadian Forces’ annual sovereignty exercise in the eastern Arctic.  And protecting our sovereign Arctic waters—as Mr. Harper is doing—is arguably as important as protecting the natural values.  We in this room have heard of the Russian Federation plans for the Arctic.  Today our Coast Guard Commandant articulated his three-fold mission in this Task Force effort but none of those missions seemed focused upon establishing, extending and safeguarding the United States’ jurisdiction and sovereignty in the Arctic…when the Canadians and Russians are making sovereignty and jurisdiction a high priority mission.

Yes, Madam Chair, the task force assignment may be well intended.  But you can only fulfill your purpose by carefully considering the web of interconnecting environmental, economic, natural resources, cultural, intra-polar, political and military imperatives and realities.  To create within a half-year an ocean policy recommendation that treats some Arctic values but not all would be to predetermine winning and losing values before assembling and analyzing a complete and factual record.  Your recommendation would be labeled incomplete or incompetent, in spite of dedication or herculean efforts, simply because you were not granted sufficient time to professionally complete the mission.  Please tell the President that you need more time to do it properly.

The President’s direction concerning, “National Policy For The Oceans, Our Coasts, and the Great Lakes,” is a concept that must be fully–not partly–investigated to assure the avoidance of very bad, unintended consequences—including those which could unintentionally harm American citizens or the very oceans themselves.

[1] http://www.whitehouse.gov/administration/eop/ceq/initiatives/oceans/

[2] http://www.naruc.org/Resolutions/Harbour%20Honorary.pdf

[3] https://consumerenergyalliance.org/cms/about/

[4] http://www.mms.gov/offshore/GOMESARevenueSharing.htm

Letter to the U.S. Commodity Futures Trading Commission

August 20, 2009

The Honorable Gary Gensler
Chairman, U.S. Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Dear Chairman Gensler:

Consumer Energy Alliance (CEA) is a non-profit, non-partisan organization that supports the sensible utilization of energy resources to improve U.S. economic and energy security. Our diversified membership represents a significant cross-section of the American economy and shares the simple goal of ensuring stable energy prices for consumers.

It is paramount for both producers and consumers of energy that prices reflect the conditions of the physical marketplace – that is, of supply-and-demand fundamentals. It is for this reason that the Commodity Futures Trading Commission (CFTC) was tasked under statute to protect market participants and the American public by implementing necessary rules and regulations designed to prevent fraud, manipulation and excessive speculation, thereby assuring fair, transparent and stable commodity markets.

At the same time, Congress is currently considering legislation that would seek to reduce U.S. greenhouse gas emissions by establishing a carbon trading market. Estimates indicate that this market could top hundreds of billions or even trillions of dollars. The potential scale of such a new market increases the importance of the existence of a regulatory structure that fosters orderly and transparent markets.

To that end, CEA would like to commend you and your fellow Commissioners for looking at ways to bring added stability and confidence to the markets. We welcome your hearings into the role of aggregate position limits on energy futures – across all trading venues – and the need to increase transparency through full disclosure and accurately categorizing all transactions whether commercial or non-commercial; via regulated exchanges or over-the-counter environments.  Congress and the Administration are also considering proposals to bring greater transparency and counter-party risk management to the over-the counter-energy and other derivative markets.  Any new position limits imposed on regulated exchanges should be coordinated with limits imposed to the over-the-counter markets in order to ensure that regulatory changes are truly effective in addressing concerns related to market manipulation and excessive speculation.

Simultaneously, we recognize that poorly constructed regulatory mechanisms could be counterproductive and we urge you to proceed thoughtfully so as not to impede the price discovery function of commodities markets or deny necessary risk management tools to bona fide hedgers. Commercial traders participate in energy commodity markets as a means of hedging prices of commodities they either produce or consume in the course of their business, and ensuring their access to these markets is paramount. That said, a certain level of participation by non-commercial counterparts is necessary to ensure adequate liquidity and stability in the market. As you work through the regulatory process, we urge you and your fellow commissioners to remain mindful of these distinctions and to seek an appropriate balance that promotes fair and efficient market function.

Energy consumers and producers alike depend upon properly functioning futures markets. Free markets function best when there is accountability and transparency, as well as the prevention of undue market power. Therefore, position limits are important tools in CFTC’s current authorities for addressing the potential contributions of large individual traders to price movements in futures markets.

Again, CEA would like to commend you for continuing to uphold the important CFTC mission in defense of the American public, energy consumers and the integrity of the markets. If at any time our coalition and its member groups might be able to assist the commission with information or comments on this or any other matter, please let us know.

Very sincerely yours,

David E. Holt
President

Alaska by numbers

Advocates of increased domestic drilling have enough important battles brewing in the country’s lower 48 states to keep them busy. But it is important that we don’t inadvertently overlook Alaska, or dismiss it as a region where drilling is alive and well.

In some respects, drilling is alive and well in Alaska. The state accounts for almost 15% of total U.S. production and the Alaska Pipeline Service Company says it transports some 730,000 barrels per day.

But production is way down from its peak and the current capacity on the Trans-Alaska Pipeline System is less than half the 2.1 million barrels per day shipped in 1988. This diminished capacity flies in the face of abundant reserves. The U.S. Minerals Management Service (MMS), which tends to err on the conservative side, estimates that there are some 27 billion barrels of oil and 132 trillion cubic feet of natural gas in the waters off the coast of Alaska. That’s just about a third of all the oil estimated to lie beneath all the country’s offshore waters.

Oil producers in the Gulf of Mexico got some good news last month when a U.S. appeals court clarified an earlier decision and ruled that oil and gas projects initiated under the Bush Administration could go forward as planned. But that ruling left projects in Alaska’s Beaufort, Chukchi and Bering Seas in limbo. Although the federal government last year awarded $2.6 billion in leases in Alaska, those projects remain on hold, pending the resolution of some frivolous lawsuits.

Some of the country’s contested oil production sites would add incrementally to the domestic energy supply, and these incremental improvements are definitely worth pursuing, both for conventional and alternative sources of power. However the reserves in Alaska are so vast, they hold the collective potential to be a real game changer, helping the U.S. significantly reduce the oil it imports from overseas. The Chukchi Sea is considered the most underdeveloped source of offshore petroleum in the U.S.

One study by the University of Alaska estimated that Alaska’s outer continental shelf could produce nearly 1.8 million barrels a day, or 300,000 thousands barrels per day more than what we currently import from Saudi Arabia. The same study estimates there is enough natural gas in those waters to produce 13% of total U.S. demand.

It goes without saying that increased oil and natural gas production would create thousands of new jobs. Another important wrinkle in the case for more exploration and drilling in Alaska is that the Trans Alaska Pipeline System depends on it. Without the addition of new oil from Alaska’s coastal waters TAPS’ capacity could decline to the point that, by the year 2046, it could no longer be viable.

There may not be a quick resolution to the disputed leases in Alaska, but it is critical that we remain focused on this oil-rich region and continue a grassroots campaign to put pressure on lawmakers to make the decision that is right for the country’s energy security and its economy. The recent favorable rulings covering Gulf drilling show that these efforts do not go unnoticed. The Call to Action section of CEA’s Web site details why a strong domestic oil sector is critical. When writing to your Congressional representatives, feel free to use any of the attached text, or make the case in our own words. And thank you for all your help so far. It has made all the difference.

CEA: LCFS a Road Map to Higher Fuel Costs, Expanded Foreign Energy Dependence, Loss of U.S. Jobs

Consumer Energy Alliance responds to ethanol coalition’s support for a Low-Carbon Fuel Standard

WASHINGTON – August 14, 2009   Earlier this week at an energy forum in Nevada, a national coalition representing ethanol producers unveiled a “road map for a greener America” founded on the adoption of a policy known as the Low-Carbon Fuel Standard (LCFS).

In response to that effort, and with an eye on separating fact from fiction on the economic and strategic consequences that such a proposal would create, Consumer Energy Alliance (CEA) vice president Michael Whatley released the following statement:

“A LCFS would have serious consequences on America’s economic and strategic position in the world. An LCFS isn’t about making our environment any better, but it would make fuels from existing and future sources — sources we need — so expensive and scarce that Americans will be forced to look elsewhere for the energy they need to drive their cars, heat their homes and live their lives.”

Added Whatley: “Worse than that, an LCFS would prevent America’s fuel producers from accepting oil supplies from our closest, most important allies in the hemisphere – especially Canadian oil, of which we import more than 2.5 million barrels a day. In fact, under an LCFS, even some of America’s own homegrown reserves of crude oil would be targeted for elimination – creating a dangerous vacuum that some of the most unstable regimes in the world will be happy to fill.

“That’s not an effort that American energy consumers can support – especially when all the facts are laid out on the table. And while CEA members continue to fight for an ‘all of the above’ approach to leveraging America’s homegrown energy potential, which includes finding ways to expand our use of advanced sources of biofuels, a nationwide LCFS falls squarely outside that mandate.”

NOTE: At its core, an LCFS is a mandate on our nation’s refiners to reduce the “lifecycle” carbon emissions of the fuels they produce. But since the actual carbon content of most fuels is constant, the only options available for refiners under an LCFS is to either stop accepting shipments of “heavy” crude from Canada, Mexico, and much of the American Intermountain West, or buy up government-issued credits for the right to remain in business.

Either way, American jobs will be put in danger, the price we pay for gasoline will go up, and the amount of oil we import from unstable regimes abroad will increase substantially.

And now, a common sense tip on saving energy

The challenge of helping the world consume fuel more efficiently is a highly complex business that owes a lot to cutting edge science and technology. But when U.S. Energy Secretary Steven Chu appeared on Comedy Central recently, he offered some decidedly low-tech advice: Make it White.

White, as in white roof, that is. Chu reminded his modern audience of a basic fact that dwellers of warm climates have understood for centuries: when you paint a roof, or even an entire house white, it absorbs less heat. Way back when, that simply meant that everyone was a little bit more comfortable. Today, it means less air conditioning, lower electricity bills and reduced emissions. By Chu’s own account, if the world could somehow manage to turn all its roofs white within 20 years, it would save about 24 billion metric tons of carbon dioxide emissions – the same amount the entire world emitted last year. “So, in a sense, it’s like turning off the world for a year.” It’s a rhetorical argument of course, but it does show that little changes can add up.

The New York Times cites studies showing that in hot, sunny climates, white roofs reduce air-conditioning costs by at least 20%. They are not much more expensive than standard darker roofs and the investment can pay for itself quickly.

One disclaimer: People who live in places that have cold winters should probably keep dark roofs, which during cold, sunny days help keep homes warmer and reduce heating costs. But if you hail from a place like Arizona or Florida or southern California, take Chu’s advice and go light. Saving energy doesn’t always have to be so complicated.

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