Consumers are facing rising prices everywhere – from gas and food to lumber and electronics. CEA’s David Holt spoke with KTRH about our increasing energy bills and what smart energy policies can do to save consumers money.
“You hate to see gasoline prices go up the way they are based on some policy considerations” Holt said, “You hate to see this administration begging OPEC to deliver more energy here for the United States when we have the most energy in the world at our fingertips.”
Despite the pandemic, the United States consumed an average of about 18.19 million barrels of petroleum per day, or a total of about 6.66 billion barrels of petroleum in 2020, according to the Energy Information Administration. That was a 1.6 million barrel increase from 2019.
The top uses of crude oil lie in the following sectors:
Industrial Use – (e.g. Factories, refineries, mills, plants) – 28%
Residential, Commercial, and Electric Power – (e.g. Homes, businesses, appliances, electric production) – 6%
The most used petroleum products that people consume are:
Gasoline
Diesel and heating fuel
Hydrogen gas liquids (e.g. Propane, butane, and as by-products for consumer products)
Jet fuel
While people are doing more with less energy, its efficiency has led the charge. That doesn’t mean American’s aren’t demanding products that don’t require oil – they still do. That’s why our countries industrial complex continues to operate, churning out products the market demands.
However, new policies and mandates are being laid out to reduce consumption and work towards net zero. Much of this will require research and development into future innovations and new technologies. For oil and natural gas development, that means energy producers will need to incorporate more efficiencies, implement new techniques and maximize their processes.
In the near term, these steps are important because while American’s – and the world – continue to use oil, it’s important to note that there is no economically scalable replacement for a molecule of oil.
Originally, when oil was first discovered in 1859 through the early 1900s, producers simply drilled wells vertically to recover the oil. During this process, they were able to capture 10%-20% of oil in a reservoir. The is referred to as primary production. When primary production declines and producers can no longer do it economically, they use a technique called water flooding to produce an additional 10%-20% of the oil in the reservoir. This is called secondary production. These processes still leave behind as much as 60% of the original oil in place stranded in the reservoir.
However, drilling a well is really expensive, and leaving behind oil presents a real opportunity, but as we move into a cleaner, more efficient future, it is increasingly more important for these producers to focus on ways they can do more with less.
One of the ways oil producers can maximize their operations, achieve efficiency, and cut down on emissions is through Enhanced Oil Recovery or EOR. That is the process of extracting more oil from an existing well. Remember the 60% of the oil that is still left? By capturing carbon dioxide from industrial sources (refineries, concrete plants, mills, etc.) and injecting it into an existing well, companies can produce another 20% of the remaining oil left in place following the primary and secondary production. By capturing carbon dioxide that would have gone into the atmosphere and injecting it into the well instead, now companies are not only reducing their environmental footprint they are also utilizing existing infrastructure instead of drilling new wells.
The Oil Supply Chain – Total
Drilling for oil and extracting it from the ground is only a part of oil’s lifecycle within the supply chain. Every other part of the process is handled by a new sector with different responsibilities and different processes. While it takes more CO2 to produce a barrel of oil than the actual oil emits when it is burned, using captured industrial CO2 in combination with EOR, results in oil production that is net-carbon negative.
Building upon the foundation of EOR coupled with carbon capture to make oil production carbon net-negative is economically and technologically achievable today. The oil and gas sector not only has the largest responsibility to mitigate emissions, but also the largest opportunity – and that can start today.
People will continue to use oil and gas for the foreseeable future while new and innovative technology is discovered. Whether we’re building out renewable energy and developing biofuels and other fuel sources, we need to champion all these companies are doing to decrease emissions throughout the supply chain.
The biggest challenge is decarbonizing the transportation sector, not the residential sector. However, there are also challenges that come with the electrification process, especially as it pertains to our nation and our world’s supply of critical minerals – which are also finite resources. With roughly 1.4 billion cars on the road and a growing middle-class worldwide, a steady transition is more likely to occur.
That means following in the path of technological history and doing more, with less.
CEA’s Chris Ventura looks at the consequences of proposed tax increases on American energy production, leaving American families and small businesses holding the bill.
The proposed methane tax will raise home heating costs and already-high gas prices, and the prices of thousands of everyday products derived from oil and gas. That’s before higher transportation and energy costs increase expenses for businesses, which will filter through the entire economy.
CEA’s recent independent study assessing job losses and economic impacts in Michigan from a political shutdown of Line 5 was recently cited as propane prices reach seasonal highs. And, with home heating season quickly approaching, consumers are going to be seeing an even larger economic impact.
Immediate supply shortages would kill jobs, hamstring Michigan manufacturers, stiff farmers, close small businesses and more. The Consumer Energy Alliance estimates Nessel’s goal would kill thousands of jobs, cost the state $3 billion in economic activity, $1 billion in gross state product and drain $56.8 million tax dollars out of public coffers.
Montgomery, AL –Consumer Energy Alliance (CEA), the leading energy and environmental advocate for families and businesses, the Coastal Alabama Partnership (CAP) and the Gulf Economic Survival Team (GEST), today held a roundtable discussion bringing together elected officials and local stakeholders to discuss the important role that the Gulf of Mexico plays in the state and national economy.
“Consumer Energy Alliance thanks Congressman Carl and all of those who joined this important conversation. Today’s discussion provided an opportunity for business leaders and government officials to learn more about Alabama’s role as an energy producer and the critical role that Alabama’s energy industry – encompassing renewable and traditional energy sources – can play in generating tax revenue, driving economic growth, reducing energy bills, creating jobs and lowering global emissions. As we have seen time and again, bad energy policies that limit our nation’s energy production end up creating higher gas prices for the American consumer. Relying on OPEC to meet our demand for energy is not in the best interest of Americans who should be able to rely on affordable energy, nor is it helping us to reach our environmental goals,” said Kaitlin Schmidtke, Consumer Energy Alliance’s Gulf Coast Director.
“I’m proud to stand with local and state leaders against the Biden Administration’s attacks on the future of the GOMESA program with its overreaching efforts to impose a never-ending moratorium on new oil and gas lease sales. Whether its restoring shorelines, protecting habitats, investing in hurricane protection, or building boat ramps and bike trails, GOMESA funds are critically important to Coastal Alabama. I know firsthand how impactful these funds are on our local economy, so I am committed to fighting to ensure Coastal Alabama not only maintains, but also grows its share of revenue from energy production off our coast,” said Congressman Carl.
Wiley Blankenship, President and CEO of the Coastal Alabama Partnership added, “CAP is grateful for the opportunity to participate in this roundtable discussion alongside other key leaders in our coastal region. We are greatly concerned about the impacts of the proposed ban put forth by the White House and the multiple effects it could have on GOMESA funding, the oil and gas industry along the Gulf Coast, and further impacts to our local and state economies.”
Lori LeBlanc, Executive Director of the Gulf Economic Survival Team noted, “A healthy offshore oil and gas industry is critical to our local economies and meeting our environmental goals. Thanks to the Gulf of Mexico Energy Security Act, revenue from oil and gas leases in federal waters is used to fund coastal-restoration and hurricane protection efforts across the Gulf coast. Simply put, Alabama’s offshore energy industry not only fuels our vehicles, businesses and economy, but it funnels millions in funding back into our own communities and local environmental and conservation programs.”
Responsible offshore energy development, carried out with the strictest environmental regulations and in one of the lowest environmental-impact production areas in the world, is a continued commitment to environmental stewardship that protects our coasts, all while advancing our economy and keeping energy and gas prices low for consumers, families and small businesses.
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About Consumer Energy Alliance Consumer Energy Alliance (CEA) is the leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future. With more than 550,000 members nationwide, we are committed to leading the nation’s dialogue around energy, its critical role in the economy, and how it supports the vital supply chains for the families and businesses that depend on them. CEA works daily to encourage communities across the nation to seek sensible, realistic, and environmentally responsible solutions to meet our nation’s energy needs.
Rising inflation and higher gas prices are upon us, and now some in Congress want to slip an inequitable, punitive tax into the pending $3.5 trillion reconciliation bill.
The proposed methane tax will raise home heating costs and already-high gas prices, and the prices of thousands of everyday products derived from oil and gas. That’s before higher transportation and energy costs increase businesses expenses, which will filter through the entire economy.
“There is no excuse for any political party to try and tax an industry out of existence, especially one that affects everyone’s wallet. Energy costs disproportionately affect low- and fixed-income families in New Hampshire and New England, so punishing an industry critical to our economy creates injustice because it forces financial harm on the undeserving.”
It’s as nonsensical as curbing American energy production, and then begging OPEC to export more — especially when America has delivered the world’s largest emissions reductions for two decades straight. U.S. energy companies cut methane emissions by almost 70% from 2011-2019, and are working on industry initiatives and innovations to reduce them further.
Our congressional representatives should reject this tax before it adds more inflation and high gasoline prices, without actually reducing emissions. Sen. Maggie Hassan’s position on the Senate Energy, Natural Resources and Infrastructure Subcommittee puts her in a strong position to protect our wallets in New Hampshire by rejecting this measure.
The Granite State doesn’t need a costlier winter heating season, nor a repeat of the inflation and high gas prices of the 1970s.
Carbon Capture Utilization and Storage (CCUS) is a process and also a technology that helps reduce carbon dioxide (CO2) emissions from the atmosphere while continuing to meet present and future energy demands.
It involves the following steps:
Capturing CO2 from an industrial source such as coal and gas power plants or cement and steel plants to name a few
Transporting the compressed CO2 to a dedicated geological storage site or for utilization as a tertiary injectant in enhanced oil recovery (EOR) or to make other products.
Leaving the CO2 permanently in EOR or injecting compressed CO2 into a deep subsurface rock formation for permanent geological sequestration
The U.S. Department of Energy (DOE) estimates that the U.S. could sequester roughly 1-4 trillion metric tons of CO2. Currently, annual total U.S. emissions of CO2 are approximately 5.5 billion metric tons; therefore, there is sufficient storage capacity for many decades to come.
There are several ways that CO2 can be captured. One of those methods is where CO2 is captured from a combustion plant, which is a place where fuel is burned to create heat. These are your mills, power plants, steel plants, etc. where the technology is retrofitted onto existing equipment in the plant. This helps save costs building a new plant and prevents taking down a source of energy or a piece of the industrial process.
Oxy-fuel combustion is another technology that can capture CO2. In this process, you inject pure oxygen (rather than air) into the available chamber where fossil fuel is being burned. The oxy-fuel process produces an exhaust stream of virtually pure CO2, making separation from other combustion by-products unnecessary.
Capturing CO2 can occur before, during, or after fuel is combusted. With pre-combustion technologies, CO2 is removed from traditional fuel prior to combustion. With post-combustion technology, a chemical reaction is used to capture CO2 from flue gas (think of the chimney on a fireplace) after the fuel is burned.
Transporting Captured CO2
In some cases, once CO2 is captured it has to be transported to where it can be sequestered (or stored) if it is not being used for consumer applications (e.g. wine and beer making, research and pharmaceuticals, and for metals and manufacturing). CO2 is non-flammable, colorless, and odorless and can be transported as a solid, liquid, or gas. For the CCUS process in the U.S., CO2 is compressed and primarily transported via the existing 5,100 miles of CO2 pipelines, but can also be delivered by train, truck, ship, or barge.
Injecting CO2 for Sequestration
The figure above illustrates the general CCS process and shows a typical depth at which CO2 would be injected from the U.S. Environmental Protection Agency.
There are two primary ways CO2 is geologically sequestered. One way is through the EOR process by injecting CO2 into the ground as a way of producing stranded oil. EOR, also known as tertiary recovery, has the unique advantage of utilizing CO2 in the recovery process. Throughout the injection of CO2 into an old oil field, recovery and processing of the oil and gas mixture, and subsequent re-injection of separated and recycled CO2, virtually all of the CO2 used in EOR becomes sequestered deep below the Earth’s surface.
Separately, CO2 can be injected into a deep subsurface rock formation for long-term geological sequestration after the viability of the site has been verified.
CCUS, Emissions and Greenhouse Gas Reduction
The Biden-Harris Administration is supportive of CCUS as a way of meeting its climate goals. The Administration has called for $75 million in funding to engineer carbon capture projects. According to the Administration, “This funding will support customized engineering designs to install carbon capture and storage technology for power and industrial plants. Retrofitting with carbon capture technology could employ a similar workforce that exists today in energy communities and position American industry to compete in a global economy”. The Administration released a report stating that If the United States wants to hit its climate targets, CCUS deployment “should increase tenfold” over the next decade, citing research.
The biggest benefit of capturing and storing CO2 is its ability to help other industrial processes get closer to achieving net-zero by producing lower carbon intensity fuels, chemicals, materials, and products (e.g., concrete) that the market demands. Every day we can get closer to net zero, is one day closer to clearing the air.
With so much focus on energy and environmental policy, Consumer Energy Alliance and our message is attracting more new members than at any time in our history. So far in 2021, we have welcomed 71 new member organizations from across the country and from an array of industries – and they’re still coming!
From chambers of commerce and a professional sports team to a winery and a photography studio, businesses, families and consumers are joining CEA to advocate for energy and environmental policies that yield reliable, affordable, environmentally responsible and accessible energy for individuals, families and businesses.
These organizations, combined with CEA’s more than 550,000 individual members indicates that more and more of us are paying attention to energy policies – especially those that increase prices, hinder reliability or fail to actually achieve environmental results. With gasoline prices on the rise and inflation creeping back into American life, our shared ability to rely on safe, affordable energy has never been more important. This issue – and those politicians that understand we can easily develop our energy resources here at home AND meet our environmental goals – will be closely watched in the 2022 elections.
Since our founding in 2006, CEA members have represented every sector of the U.S. economy. They include farmers, manufacturers, truck drivers, trades-people, small business owners and individuals who believe in our mission. From traditional to renewable energy to environmental policy to efficiency, CEA’s advocacy efforts continue to focus on several key issues:
Americans Need and Deserve Affordable and Reliable Energy
Policies that intentionally or unintentionally increase energy prices or make energy less reliable – think blackouts or brownouts – disproportionately affect the less affluent among us who are not insulated from price shocks. We call this “energy justice” and if we are to achieve fair, equitable, affordable and reliable energy for all Americans we must have energy policies and markets that are designed to achieve those key objectives. Too often today, state and national policy-makers are relying on false information that says we can only achieve environmental solutions by banning traditional energy resources. This is not true. America has already proven that we can have both environmental progress and energy solutions. Policies that achieve both goals will lead us toward greater “energy justice.”
Environmental Stewardship
The U.S. is leading the world in environmental stewardship. From carbon to volatile organic compounds to nitrogen oxides, America has reduced harmful air emissions more than any nation on Earth. And, we are the only nation on Earth that will be close to achieving the Paris Accord Climate goals by 2025. This amazing feat has been accomplished at the same time as the U.S. has become the leading producer of oil and natural gas in the world; and seen the greatest increase in renewable energy in our history. Through efficiency and conservation, along with research and development we’ve seen how increasing U.S. energy supplies have helped simultaneously drive down consumer costs and lower our emissions. Tackling climate change is dependent on supporting U.S. energy in all its forms so we can continue to advance our environmental standards and our energy independence.
Energy is Critical to Maintaining our National Supply Chains
The COVID-19 pandemic has demonstrated the critical importance of our nation’s supply chains and reducing reliance on other nations for supplies. That means developing energy resources and its complementary infrastructure here at home so we don’t have to ask OPEC+ or Russia for energy. It also means investing and encouraging U.S. production of critical minerals to lessen our reliance on China for the resources we need to develop renewable energy, battery storage and other new technology needed to build alternative forms of energy.
These energy supplies are also the cornerstone for all of our industrial processes, manufacturing, transportation of consumer goods and food to name a few. We continue to see the effects of a break down in these supply chains. Early on it was the inability to get personal protective equipment at the height of the pandemic, now its building supplies, consumer goods, and oil. CEA will continue to focus on ensuring American consumers have access to abundant, domestic energy which is the single most important aspect of reinvigorating these critical US supply chains.
Now more than ever we need the continued support of our members and you to ensure individuals and businesses across America have the power of consumer choice when it comes to energy. Energy touches all of us and we interact with it in every facet of our daily lives. That means each and every person you know is affected by these policies. That is why CEA represents anyone concerned with issues around energy.
CEA members are your friends, your family and your neighbors who are out there every day trying to make a living to support themselves and their loved ones. CEA members represent the U.S. economy, and they care about having access to affordable, reliable energy to meet their business and family budgets.
If you’ve followed our work and have considered a membership, we encourage you to join. We believe that an environmentally sustainable energy future is possible through the power of traditional and renewable resources to create the best mix for families, businesses, our environment and our economy.
We are stronger together. Our efforts and successes are thanks in large part to our members who recognize that energy and environmental protection affects everyone.
Originally, when oil was first discovered in 1859 through the early 1900s, producers simply drilled wells vertically to recover the oil. During this process, they were able to capture 10%-20% of oil in a reservoir. The is referred to as primary production. When primary production declines and producers can no longer do it economically, they use a technique called water flooding to produce an additional 10%-20% of the oil in the reservoir. This is called secondary production. These processes still leave behind as much as 60% of the original oil in place stranded in the reservoir.
