Summary of Conferences on Energy Issues (3-14-05)
- March 10, 2005: Senate Energy and Natural
Resources Committee Conference on Coal
- January 25, 2005: Senate Energy and Natural
Resources Committee Conference about Proposed Solutions to the
Predicted U.S. Shortage of Natural Gas
Energy and Natural Resources Committee
Conference on Coal
March 10, 2005
Panel 1: Consol, the Edison Electric Institute, the U.S. Energy Information
Administration, the National Commission on Energy Policy, the National
Mining Association, the Natural Resources Defense Council the state
of Illinois Department of Commerce
Panel 2: Clean Energy Systems, Columbia University, the Florida Municipal
Electric Association, Kennecott, the Interstate Mining Compact Commission,
the National Commission on Energy Policy, the Natural Resources Defense
Council and the Western Organization of Resource Councils.
The Senate Energy and Natural Resources committee organized a conference
of 25 groups to consider the most reasonable proposals for U.S. coal
production to be included in this year's energy bill. The committee
devoted the first panel to future possible scenarios for coal supply
and international trends, and the second panel to environmental and
regulatory challenges. The third and fourth panels regarding transportation
and financial and technological improvements were not heard due to
floor votes and will be rescheduled.
At the outset, Alan Beeman from the Energy Information Administration
reported that the U.S. faces a 25% increase in coal consumption by
2025, which would translate to an additional 87 GW of added domestic
coal capacity. Despite these increases, coal imports would continue
to increase under current law, adding to an already substantial energy
trade deficit, and providing an impetus for improving U.S. coal generation.
All who were present at the conference recognized that further investments
in coal would require utility and mining industries to face challenges
posed by climate change and other environmental impacts of coal use.
"We all agree that advanced technologies are crucial to the future
of coal," remarked John Holdren, co-chair of the National Commission
on Energy Policy. In his testimony, Holdren described NCEP's coal
proposal, which is included in its bipartisan report: "Ending
the Energy Stalemate." In order to reconcile climate change and
coal demand, he explained, NCEP recommends that federal coal policy
establish a market signal for carbon dioxide control, as in a phased
cap-and-trade program, and commit $7 billion in total investments
over the next decade to help commercialize coal gasification (IGCC)
technologies and carbon sequestration.
Members of the committee tried to pin down the correct timing for
instituting mandatory caps on CO2 and committing other investments
in a sensitive market. Several industry representatives were concerned
that a CO2 cap would slow market interest in coal. But Holdren stressed
the importance of immediate U.S. action to establish a price for CO2
and head off the consequences of an international boom in conventional
coal-fired power. "Society has a strong interest in bringing
clean technology into commercial operation so that development in
China and India does not lock in excessively high CO2 emissions,"
he reasoned. In a similar vein, David Hawkins of the Natural Resources
Defense Council insisted that energy policy enacted today must be
able to adapt to future policies regarding climate change.
In response to Senator Jeff Bingaman (D-NM) question asking if clean
coal technologies are sufficiently mature, panelists agreed there
was enough knowledge regarding CO2 storage, and clean emissions plants
are being demonstrated successfully in Illinois, as well as a few
projects in China. According to Holdren, there is a "very considerable
chance" China would follow U.S. leadership, and the major constraint
to achieving technological maturity is federal investment.
"It's pretty obvious that we've got to do something about the
technology and the cleanup," said Committee Chairman Pete Domenici
(R-NM), concerned that coal will be unable to compete with natural
gas. However, he warned environmentalists that they would not get
very far on climate change by advocating wide-spread zero-emissions
plants. "We need something in the middle," he told Hawkins.
Energy and Natural Resources Committee
Conference about Proposed
Solutions to the Predicted U.S. Shortage of Natural Gas
January 25, 2005
32 invited groups including the Natural Gas Council, Advanced Resources,
National Ocean Industries Association, Western Organization of Resource
Councils, New Mexico Oil and Gas Association, American Public Gas
Association, State of Alaska, National Commission on Energy Policy,
Dominion Energy, Center for Liquefied Natural Gas, National Association
of Regulatory Utility Commissioners, Federal Energy Regulatory Commission
(FERC), State of Louisiana, Interstate Oil and Gas Compact Commission,
Instate Natural Gas Association of America, Consumer Federation, Independent
Storage, The Wilderness Society, Natural Resources Defense Council,
Independent Petroleum Association of America, Domestic Petroleum Council,
Calpine, National Association of Regulatory Utility Commissioners,
Nuclear Energy Institute, PPM Energy, Harvard University, Coal Utilization
Research Council, American Gas Association, American Council for an
Energy-Efficient Economy, Committee of Chief Risk Officers, American
Electric Powe, Consumers Alliance for Affordable Natural Gas, New
York Mercantile Exchange and Natural Gas Council.
On January 25th, Senate Energy & Natural Resources
Committee staff invited 32 representatives from industry, environmental
groups, and government agencies to discuss 38 policy proposals that
would address the growing gap between natural gas supply and demand.
The conference was meant to initiate bipartisan discussion and draw
attention to rising gas prices before the Senate issues an energy
bill draft later this Spring.
The half-day conference involved six panels devoted to policy topics
including the expansion of on-shore and off-shore domestic supplies,
liquefied natural gas (LNG) siting and safety, infrastructure improvement,
environmental concerns, and the use of fuel efficiency and diversification
Representatives from the oil and gas and utilities industries put
forth numerous proposals for streamlining the permitting process and
expanding domestic production, calling for a re-evaluation of environmental
regulations in the face of improved technology. Many proposals sought
access to restricted land around the Rocky Mountains, in the outer
continental shelf, and expanded production in the Gulf of Mexico.
Oil and Gas stakeholders claimed that production could be realized
without creating a lasting environmental impact. The Bureau of Land
Management (BLM) and USGS reported 85% of the 400 trillion cubic feet
(tcf) offshore domestic natural gas supplies and 55% of the 600 TCF
onshore supplies would be available with direct action from Congress.
Environmentalists testified that domestic production can be increased
without surrendering restricted land and relaxing environmental standards,
citing that 88% conventional natural gas resources are already currently
available for leasing and development under the BLM onshore program.
The continental shelf, they claimed, would simply be "too fragile"
to sustain gas operations. Other policy suggestions included a targeted
interest in BLM funding to improve land use mitigation and an emphasis
on efficiency programs and a national renewable energy portfolio standard.
Senator Jeff Bingaman (D-NM) announced a consensus that BLM and the
Forest Service should receive more funding to act on drilling applications
and monitoring compliance.
Many who supported the development and expansion of natural gas and
LNG operations emphasized the need to grant the Federal Energy Regulatory
Commission (FERC) full authority over the siting and certification
process in order to minimize jurisdictional disputes among government
Proposals to promote supply diversification and energy conservation
received much attention as key components of natural gas policy. A
representative from the American Council for and Energy-Efficient
Economy (ACEEE) testified that, with supply and demand in tight balance,
a small, 4-5% improvement in efficiency could result in a much larger,
25% reduction in gas demand, translating to roughly $100 billion in
savings. Among those advocating for improved diversification, coal
gasification, synthesis gas, wind and nuclear were top picks for alternative
Link for the list of groups who offered proposals and testimony,
Sources: Environment and Energy Daily, Senate Energy and Natural
Resources Committee press release, conference testimony.
Contributed by Emily Lehr Wallace, AGI Government Affairs Program
Staff; Katie Ackerly, 2005 AGI/AAPG Spring Semester Intern
Please send any comments or requests for information to AGI Government Affairs Program.
Last updated on January 27, 2005