Energy Policy (12-26-07) 
Energy policy involves many issues of interest to the geoscience community, including resource development on public lands, environmental regulations, climate change, nuclear waste disposal, and research related to fossil fuels and alternative energy resources. In contrast to previous years, Democrats stand at the helm of the 110th Congress. Changes in committee chairmanships, such as California Democrat Barbara Boxer replacing Oklahoma Republican James Inhofe as chair of the Senate Environment and Public Works Committee may focus more attention on the effects of energy usage on the environment. In the House, Speaker Nancy Pelosi (D-CA) has made it clear that issues such as incentives for the energy industry and climate change will be priorities. General background information on the issues surrounding energy policy is available from several Congressional Research Service (CRS) reports available from the National Library for the Environment. Energy Bill Driven Into Law The final measure does not include a requirement for utilities to use more renewable energy or a tax package that would have expanded tax incentives for the renewable energy industry and increase the taxes on large oil companies to offset the costs. Democratic leaders have pledged to continue to consider these items in future legislation. The energy measure also includes authorization of funds for research and development (R&D), some of it in the geosciences. The House Science Committee, whose members were heavily involved in this part of the legislation, put out a press release summarizing the science in the bill. The press release states "The bill directs new investments in solar energy, ocean and wave energy, and new geothermal technologies that can be deployed in every part of the country. It significantly expands research into biofuels, so that we realize the potential of new fuels like cellulosic ethanol. In addition, this bill will help advance energy storage technologies that are critical to more widespread use of renewable electricity and advanced batteries for vehicles. Finally, and importantly, this bill provides significant increased investment in technologies to capture and store carbon dioxide from coal-fired power plants, helping to ensure that we can continue to use our country's vast coal supply in cleaner and more efficient ways." More details about the energy bill are available from Thomas. (12-26-07) Energy Bill Still in Play For fuel efficiency, congressional negotiators are trying to maintain the Corporate Average Fuel Efficiency (CAFÉ) target of 35 miles per gallon by 2020 in the original Senate bill, but are being asked to give automakers fuel efficiency credits for flexible-fuel vehicles, consider separate mileage standards for light trucks and cars and give automakers more time to reach the 35 miles per gallon quota. For biofuels, the request for 3 billion gallons of "advanced biofuels" to come from sources other than corn is being pushed forward from 2016 to 2013 in the hope of easing corn prices and in recognition of advances in biofuel research. Four items in the original bills appear unlikely at this time to be included in the final bill in order to garner enough votes for passage. The four include a requirement for utilities to use minimum amounts of renewable energy, a rollback of the oil industry's share of a tax break for manufacturers, a measure to recover oil royalties lost in the late 1990s and an extension of tax breaks for renewable energy. CAFÉ standards have not been changed since they were introduced
in the mid-1970s. An energy bill that includes new CAFÉ standards
would be a major accomplishment in the politically rarefied air around
Capitol Hill. (12-11-07) Below is a brief summary of the report taken from the council's web
site: "Lighting the way" establishes the best practices for a global transition to a clean, affordable and sustainable energy supply in both developing and developed countries. The report addresses incentives that can accelerate the development of innovative solutions, provides recommendations for financial investments in research and development and explores other transition pathways that can transform the landscape of energy supply and demand around the globe. In addressing mitigation of the environmental impacts of energy generation
and use, "Lighting the way" informs global action on climate
change, such as implementation of the Kyoto Protocol, agenda setting
for the Asia-Pacific Partnership on Clean Development and Climate,
and ongoing multinational talks on future global action to reduce
greenhouse emissions. The full report is available online. (11-19-07) National Academies Releases Its Future of Coal Report June
20, 2007 On June 20, 2007 the Committee on Coal Research, Technology and Resource Assessments to Inform Energy Policy released a prepublication version of their report. The final version which will include minor editing will be available to the public from the National Academies web site in August to September. Senators Robert Byrd (D-WV) and Arlen Specter (R-PA) requested the Academies to examine coal research and development (R&D) for the entire fuel cycle with emphasis on "upstream" R&D such as the mining, processing and transport of coal. They also ask the committee to highlight any stumbling blocks to increase coal production and to develop a national coal R&D strategy for the next 25 years. In 2005 the federal government spent $538 million on coal R&D but over 90% of the funding went to "downstream" R&D such as utilization and transmission. According to the committee, coal accounts for about 23% of total U.S. energy use and about 50% of U.S. electricity generation. About 92% (1.1 billion tons) of the coal mined every year is used for electricity generation. Conversely, industrial and commercial use of coal has steadily declined for the past 50 years. The committee noted that the outlook for coal use will depend on several factors such as carbon dioxide emission policies adopted in the future, future electricity demand, and availability of alternate energy sources. It is because of this uncertainty that the committee estimated that by 2020, the use of coal could grow by 25% above 2004 levels or decline by 15% below 2004 levels. Estimates beyond 2020 become even more unclear; in 2030, projections of coal demand could grow from 70% above or 50% below 2004 levels. However, the committee was confident that coal use would increase in the U.S. and other countries such as India and China would have the largest increase in consumption up through 2020. The committee provided an estimate of coal reserves in the United States. The country has sufficient coal through 2030 at current consumption rates and will probably have enough coal for 100 years. The committee was unable to determine whether the often quoted "250 year supply of coal" projected by Energy Information Administration (EIA) was viable. Based on their coal reserve estimates, the committee recommended that a coordinated effort between states, industry, and government agencies to provide a "comprehensive accounting of national coal reserves within the next 10 years." The current reserves estimates are based on studies done in 1974 and more recent small area surveys suggest that only a small fraction of estimated reserves are reachable with current mining techniques. The committee further recommended that the U. S. Geological Survey (USGS) be the lead agency in this effort. The committee estimated that this study would cost $10 million per year for 10 years. Additionally the committee also recommended that the USGS conduct an assessment of the nation's carbon capture resources and that an additional $10 million per year be spent for 5 years to conduct this research. As the easily mined coal is exhausted, mining will become more challenging and hazardous. The committee stated that mines will probably have to go deeper, increasing the risk of collapses and exposure to toxic or explosive gases. The committee recommended that an additional $35 million be spent to reduce exposure to hazardous conditions and improve worker training. They recommended that the National Institute for Occupational Safety and Health be the lead agency. The committee also recommended increased spending for improved environmental protection and land reclamation. Acid mine drainage and hill top removal are among some of the most pressing issues that need to be addressed. The committee recommended an additional annual funding of $60 million for R&D research and that the Office of Surface Mining be the lead agency in conducting this research. Mine productivity over the last 3 decades of the 20th century improved by two to three times, but in recent years improvements have been incremental. The committee suggested this might be correlated with the minimal amount of federal funding (0.2 percent of total coal R&D) for mining technologies over the past decade. Therefore the committee called for $30 million annually from federal funding as well as $30 million annually from non-federal funds to support advanced coal processing and optimization of coal resources. The Office of Fossil Energy at the Energy Department would serve as the lead agency for this research. Taking into account all of the committee's recommendations an additional
$144 million would be spent on "upstream" R&D funding
bringing the total spending up from $46 million per year to $190 million
per year. Coal will be a major source of energy in this country for
at least the next few decades, so it is essential to have a thorough
assessment of coal resources, improved technologies for efficient,
safe and environmentally sensitive extraction and improved methods
for environmental protection and reclamation after the mining is done.
A press release from the National Academies about the report is
available here. The prepublication version of the report is available here. (7/9/07) National Geographic and the Norwegian Embassy: World Environment
Day Conference June 5, 2007 The theme for this year's United Nations (UN) World Environment day was "Melting Ice - a Hot Topic." The Norwegian Embassy along with the National Geographic Society held a conference at the National Geographic Headquarters in Washington D.C. to draw attention to the effects of climate change on the Arctic environment and future options for reducing greenhouse gas (GHG) emissions. According to Dr. Robert Corell, Director of Global Change at the John Heinz III Center for Science, Economics and Environment, CO2 levels are the highest they have ever been in the past 600,000 years. Evidence of this comes from frozen gas bubbles buried deep in Antarctic ice which provide a paleoclimate model of Earth's atmosphere. Right now CO2 concentration in the atmosphere is about 385 ppm, which is causing an increase of absorbed solar energy which is warming Earth, melting glaciers, and causing a rise in sea level. Will Steger, a polar explorer, said that the Larsen A and B ice shelf breakup that took place between January and March of 2002 is evidence of rapid global warming. The mass melting of glaciers could cause serious concerns with respect to sea level rise. Steger stated that if the glaciers on Greenland melted, global sea level would go up by 24 feet, causing severe consequences for coastal cities across the globe. Other dangers exist besides sea level rise. In the summer, the sun melts the first few inches of permafrost in the Arctic tundra; beneath the permafrost are billions of tons of methane. Should the overlying permafrost melt, it would cause a release of methane into the atmosphere which would not only accelerate the rate at which solar heat is trapped but also cause serious local environmental concerns. At the present rate of warming, in 50 years 50% of the permafrost would be gone and in 100 years about 90% would be gone. The melting of permafrost and sea ice is accelerated by the actual melting process; earth and water absorb more solar energy as opposed to ice which reflects the majority of solar heat back into space. In the Arctic sea, the summer ice minimum has decreased by 20% and there is less recovery every year. This has caused serious problems for coastal communities. In the past coastal communities were protected by the build up of sea ice barriers from the harsh pounding of the sea. Since these barriers have melted it has caused the punishing waves to completely obliterate some of these communities to the point where they are uninhabitable or they simply do not exist anymore. Congressman Jay Inslee (D-WA) and Congressman John Larson (D-CT) were also in attendance at the conference. Both stated that the world is at a tipping point; the choices made today can destroy the environment and ruin the economy or these choices can mitigate the effects of climate change and provide humanity with sustained economic growth. Both noted many solutions being worked on by Congress to address climate change and reduce reliance on foreign oil, such as increased use of biofuels, deployment of carbon capture technology for electric power plants, creating a low carbon fuel standard bill and improving the Corporate Average Fuel Economy (CAFE) standards. An audience member inquired as to whether Congress has considered the effects of ethanol on fresh water supply. Inslee made the analogy that today's biofuels are much like that of the Wright brothers' airplane; this is the first step and while it does provide some improvements to addressing energy and climate issues the development of better technologies will continue. Larson added that the U.S. has everything it needs to start addressing climate change; it is simply a matter of government will to ensure that these mitigation measures take place. The government of Norway has taken a lead in several climate change mitigation measures. Ambassador of Norway Knut Vollebaek stated that his country is committed to reducing greenhouse gases by 30% by 2030 and further reduce emissions by 80% in 2050. Norway plans to accomplish this goal with the help of carbon capture sequestration (CCS) technology. Currently Norway has three CCS projects underway: Mongstad project, Shell/Statoil (CO2 in this project is being used for enhanced oil recovery) and the Kårstø project. These programs will help develop cheaper CCS technology which other countries can model similar programs after. The success of future programs will also depend on a tax on carbon of about $25 per metric ton. Norway hopes to deploy full scale commercial CCS technology by 2014. According to the International Energy Agency (IEA) Greenhouse Gas R&D Program, CCS technology started in the 1970's when oil companies began injecting CO2 into reservoirs for enhanced oil recovery. In this process oil is pushed towards the well and the CO2 remains safely and securely in the ground. In fact the best storage areas of CO2 are depleted oil and gas fields, because their geology is well known. Suitable geologic conditions include a porous permeable reservoir (sandstone or limestone) with an impermeable layer or cap rock above typically shale and a known structural or stratigraphic trap. Deep saline aquifers are another avenue for CO2 storage, however, the geology of saline formations is not as well understood as depleted oil fields and continued research into saline aquifers is needed. CO2 stays underground for several reasons: first, as the CO2 is pumped down into the reservoir it becomes a liquid under higher pressure. This causes much of the CO2 to become stuck within the pore spaces, known as residual trapping. However, CO2 is more buoyant than water and some of the CO2 will rise up to the top of the formation where it will be stopped by an impermeable layer of rock. As time passes the storage becomes even more secure as the CO2 reacts with salt water. The CO2 dissolves in the salt water, making it heavier than the water around it; this causes the water with CO2 to sink to the bottom of the formation. This process is known as dissolution trapping. The dissolution of CO2 in water forms weak carbonic acid and this can react with surrounding minerals, forming new minerals that coat the rock grains thus binding the CO2 to the reservoir. The list of potential sites for CCS is vast, with suitable locations on every continent capable of holding hundreds of years' worth of CO2. This technology is proven, and it can greatly reduce the amount of future CO2 emissions which cause global warming. However, laws and regulations need to be set in place to allow for full commercial deployment of CCS, and the proper commercial framework needs to be developed if this technology is going to be economically viable. (6/22/07) Fuel Economy Standards Addressed in Senate Maria Cantwell (D-WA) proposed an amendment to allow the Federal Trade Commission (FTC) to investigate and prosecute price gouging following national disasters. Concerns were raised about the amendment that will be addressed further in a June floor debate. "This bill is not perfect, but it's a constructive step towards addressing our nation's energy crisis and reducing our dependence on foreign oil," said Ranking Member Ted Stevens (R-AK). He expressed concern that Cantwell's amendment could hurt small, independent gas stations in the wake of emergencies. The bill was also criticized by Senator Carl Levin (D-MI), who raised concerns about harming auto manufacturers, saying it would be unwise to force companies "to make incremental improvements to meet an arbitrary standard set by the Congress." The committee did not address environmentalists' concerns that a provision in the compromise could allow the Transportation Department to delay the new CAFE standards if it determines that they are not "cost effective." Under the bill, the department could assess numerous factors in making such a determination, including increased prices for consumers, health and environmental factors and national security issues related to oil imports. (6/18/07) Advanced Energy Agency Measure Gains Momentum The full text and summaries of all bills are available from Thomas. (04-10-07) Energy Policy Propels Geoscience into the Congressional Spotlight Among the many energy hearings, the House Appropriations, Subcommittee on Energy and Water Development February 28 hearing on "A Ten Year Energy Outlook" was particularly informative. Guy Caruso, the Energy Information Administrator was the first witness and he reviewed the recently released Annual Energy Outlook, 2007. After summarizing some pessimistic numbers about future energy demands, he told the committee he wanted to end his testimony on "a note of optimism" which drew faint laughter. He then noted that EIA's energy outlook in the 1970s had projected energy use in 2006 that was at least 50% off the mark, so future projections for 2030 might also be too high. Caruso was followed by Jim Wells, Director of Natural Resources and Environment at the Government Accountability Office (GAO). Wells was very pessimistic as he presented the results of a GAO report entitled "Key Challenges Remain for Developing and Deploying Advanced Energy Technologies to Meet Future Needs". He indicated that the Energy Department's research and development (R&D) has been a failure since 1978 because the nation has not reduced its dependence on fossil fuels by any significant fraction. He concluded that cheap energy is now gone and the future will be "unsettling" for consumers. The second panel of 6 witnesses focused on a ten year outlook for energy R&D. All of the witnesses agreed that the federal government and the private sector in the U.S. was not spending enough on R&D. They also agreed that the U.S. needs to consider a diverse energy portfolio to meet future demand and that all energy resources should be adequately supported with R&D funds because all of these resources will be needed now and in the future. Professor Daniel Kammen from the University of California, Berkeley documented a disturbing decrease in energy R&D spending by the government and the private sector. He noted that the U.S. invests about $1 billion less in energy R&D than it did a decade ago. All of the representatives who attended the hearing, including the Chairman Peter Visclosky (D-IN) and Ranking Member David Hobson (R-OH) agreed that energy R&D spending should be increased and their committee would like to support appropriate increases for energy R&D. The EIA Energy Outlook for 2007 is available at: http://www.eia.doe.gov/oiaf/aeo/index.html The GAO report on energy R&D is available at their web site http://www.gao.gov/(03-14-07) President's State of the Union Addresses Energy and Climate Achieving the President's "twenty in ten" goal, however, demands a dramatic increase in the availability of alternative energy sources. The President challenged lawmakers and private industry to replace 15 percent of U.S. gasoline consumption with alternative fuels by 2017. "It is in our vital interest to diversify America's energy supply, and the way forward is through technology," he said. He also asked Congress to reform Corporate Average Fuel Economy (CAFE) standards for cars and to extend the current light truck rule, which would reduce the projected annual gasoline use by 20 percent. The President also asked Congress to double the current capacity of the Strategic Petroleum Reserve to 1.5 billion barrels by 2027, a move that would provide approximately 97 days of net oil import protection. And in historic break from his past reluctance to acknowledge climate change pressures, the Present asserted that his energy plan will "help us to confront the serious challenge of global climate change." In his rebuttal, Senator Jim Webb (D-VA) noted that "this is the seventh time the president has mentioned energy independence in his state of the union message, but for the first time this exchange is taking place in a Congress led by the Democratic Party. We are looking for affirmative solutions that will strengthen our nation by freeing us from energy independence on foreign oil, and spurring a wave of entrepreneurial growth in the form of alternative energy programs." In their joint statement, Senator Reid and Representative Pelosi commended the President's goals for energy independence and commented that "we now must get straight to work on a real national energy policy." Repeal of Oil and Gas Tax Incentives The bill, which has yet to pass the Senate, would amend the Energy Policy Act of 2005 to repeal tax incentives for domestic oil and natural gas production. It would also require companies to renegotiate 1998 and 1999 leases in the Gulf of Mexico that lack price thresholds triggering royalty payments. According to a Platts Inside Energy article, Democrats have estimated that the value of the bill to federal coffers would be about $14 billion. This money would be directed to a "strategic energy efficiency and renewable energy reserve," which would be made available to "offset the cost of subsequent legislation" geared toward the research and development of clean renewable energy technologies. Representative Ed Markey (D-MA) said "We will begin to move in a new, clean direction on energy and put an end to the free ride that big oil has had under the Bush Administration and this bill is a beginning. It is the beginning of a change in direction, away from subsidizing an industry that doesn't need extra financial incentives, and towards the technologies that do need a helping hand." The bill, however, does not have widespread support. Although 36
Republicans voted in favor of H.R.6
in the House, it is expected to encounter significant opposition from
the rest of the Republican Party. Representative Cliff Stearns (R-FL)
has voiced his opposition to the bill, saying it "will raise
energy prices for American consumers, stifle domestic energy production,
and increase our dependence on foreign sources of energy." Research and Development to Meet Future Energy Needs The GAO examined the (1) R&D funding trends and strategies for developing advanced energy technologies, (2) key barriers to developing and deploying advanced energy technologies, and (3) efforts of the states and six selected countries to develop and deploy advanced energy technologies. The GAO also spoke with DOE officials and scientists and stakeholders outside of DOE. The report concludes that Congress should consider stimulating a more diversified energy portfolio by focusing R&D funding on advanced energy technologies. The full report is available online as a pdf at: http://www.gao.gov/cgi-bin/getrpt?GAO-07-106
Energy policy, a hot topic on Capitol Hill, has become coupled with the issue of climate change as policymakers focus attention on fuel efficiency and renewable energy options. In his 2006 State of the Union address, President Bush introduced the Advanced Energy Initiative (AEI), which provides for a 22-percent funding increase for clean-energy technology research at the Department of Energy. The goal of AEI is to reduce U.S. dependence on foreign sources of energy and transform the national energy economy by promoting the development of cleaner sources of electricity production. The President's 2008 budget request includes $2.7 billion to advance the AEI, a 26 percent increase above the FY 2007 request of $2.1 billion, and 53 percent above FY 2006. A year later, in his 2007 State of the Union address, President Bush presented the nation with an ambitious new energy plan that focuses on increasing fuel economy and alternative fuel availability, stating that the nation's dependency on foreign oil "leaves us more vulnerable to hostile regimes and to terrorists who could…do great harm to our economy." President Bush urged Americans to "reduce gasoline usage in the United States by 20 percent in the next ten years." Achieving the President's "twenty in ten" goal, however, demands a dramatic increase in the availability of alternative energy sources. The President challenged lawmakers and private industry to replace 15 percent of U.S. gasoline consumption with alternative fuels by 2017. The Energy Information Administration, however, projects that fossil
fuels will remain the nation's primary source of energy for decades.
The Gulf of Mexico and the outer continental shelf (OCS) have received
a lot of attention in recent months as policy-makers debate opening
up more area to drilling for oil and natural gas. The mismanagement
of royalties from offshore oil and natural gas leases in 1998 and
1999 has also received congressional attention. Leases made during
these years omit essential price threshold language that triggers
royalty payments to the federal government. As of January 2007, the
omission has caused a revenue loss of about $1 billion for the federal
government. If left uncorrected, the mistake could cost the Treasury
about $10 billion. Addition information on energy legislation in the 109th Congress is available at http://www.agiweb.org/gap/legis109/energy.html.
Sources: Environment and Energy Daily, Greenwire, House of Representatives, Library of Congress, and Government Accountability Office. Contributed by Erin Gleeson, AGI/AAPG Spring 2007 Intern, Linda Rowan, Director of Government Affairs, Paul Schramm, AGI/AIPG Summer 2007 Intern and David McCormick, AGI/AIPG Summer 2007 Background section includes material from AGI's Energy Policy Overview for 109th Congress. Please send any comments or requests for information to AGI Government Affairs Program. Last updated on July 9, 2007. |