Energy policy incorporates a wide range of issues. Many of which are important to the geoscience community, including exploration and discovery, research and development related to fossil fuels and alternative energy resources, resource development on public lands, environmental concerns, and climate change. Nuclear energy, nuclear waste disposal and non-proliferation issues are also key issues in energy policy. However, due to their complexity, the AGI Government Affairs Program maintains a separate page for nuclear policy. Policymakers are working to better integrate policy for all forms of energy resources. The 111th Congress and the new Administration will continue to consider energy policy as a major area of concern, and essential for economic growth, national security, international relations, energy efficiency, sustainability, and overall quality of life. Besides working on comprehensive energy policy, policymakers will also continue on policy from the 110th Congress tackling how to best meet the energy needs of Americans while considering other natural resources, such as the global climate, water, soils and ecosystems.
National Oil Spill Commission Finishing its Work
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling held its final public meeting on December 2 to 3 in Washington DC. The meeting covered regulatory oversight of the drilling industry; environmental review and drilling in the Arctic; oil spill containment and response in the Gulf; oil spill impacts in the Gulf; and recovery and restoration of the Gulf. A video and written archive of the meeting is available online.
The commission also announced that their final report will be released on January 11 and they will hold a public forum in New Orleans on January 12, 2011.
President’s Science Council Releases Energy Report
On November 29, 2010, the President's Council of Advisors on Science and Technology (PCAST) released a report on energy policy. The report entitled, Report to the President on Accelerating the Pace of Change in Energy Technologies Through an Integrated Federal Energy Policy, calls for a quadrennial energy review to help better integrate government efforts and $16 billion per year for research, development, demonstration and deployment (RDD&D) from the federal government with $10 billion per year coming from private industry. A press release, executive summary, and webcast of the press conference are available from the PCAST website.
DOI Issues Revised Outer Continental Shelf Drilling Plan
On December 1, Interior Secretary Ken Salazar announced an updated oil and gas leasing plan for the outer continental shelf (OCS). The plan removes the mid and south Atlantic and eastern Gulf of Mexico from development until after 2017. The rest of the Gulf of Mexico, the Cook Inlet, and the Chukchi and Beaufort Seas in the Arctic may be considered for leasing before 2017. The revised plan is in response to the BP Deepwater Horizon oil spill in April 2010. See the press release for more information plus links to a fact sheet and maps of OCS areas.
Chinese and American Academies Promote Collaboration on Renewable Energy
The U.S. National Academies, the Chinese Academy of Science (CAS), and the Chinese Academy of Engineering (CAE) released a joint study, The Power of Renewables: Opportunities and Challenges for China and the United States in November. Intermittency of source power, cost, and location issues represent significant barriers to broader deployment, according to the report. The authors recommend mapping of energy resource and development options, development of pumped hydro and compressed air storage, and commitment to stable funding for renewable energy deployment. Further, they advocate for full implementation of the Renewable Energy Partnership plan developed at the U.S.-China Presidential Summit in 2009.
IEA Report Highlights Unconventional Sources, Growing Demand for Petroleum
Growing demand for petroleum will drive prices to $135 per barrel by 2035, according to the International Energy Agency. Those numbers are detailed in the World Energy Outlook 2010 released in November. The report suggests that conventional production of oil has essentially peaked at 70 million barrels per day (mb/d) and will plateau for the next several decades. With demand expected to rise to 90 mb/d, the gap will be met by natural gas liquids and unconventional oil sources. Deployment of renewable energy and energy efficiency advances may play an important role in decreasing prices as well, if they can sufficiently reduce demand.
Dangerous Corrosion in BP's Alaska Pipelines
A British Petroleum (BP) internal maintenance report, leaked by journalism group ProPublica, has revealed that at least 148 different pipelines on Alaska’s North Slope have received a grade of F, meaning that more than 80 percent of the pipe wall is corroded and in danger of rupturing. Some are only a few thousandths of an inch away from this threshold. BP claims to be pursuing maintenance and upgrades aggressively, and increased their maintenance budget four-fold after two pipeline spills in 2006. However, current spending rates mean it would take 20 years to replace the systems in need of upgrade. Meanwhile, BP has reduced their regular maintenance budget for Alaska for next year, although they will maintain higher spending for new projects and major repairs. Some inspections and the replacement of one pipeline will be deferred.
BP employees have also alleged that the fire and gas warning systems fail to work properly, the turbines pumping oil and gas are in need of replacement, and some oil and waste holding tanks are nearing collapse. Concerns about the fire and gas detectors have persisted since 2001, and the systems must be shut down every time engineers conduct maintenance or inspections. This means that some systems are off up to a third of the time. A turbine fire in 2007, caused by a jury-rigged hydraulic oil hose, failed to set off the alarms because they were turned off at the time, and the fire suppression system had to be activated manually. While no one was injured, the incident could have been catastrophic as the turbine was near pipelines that had the potential to explode.
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Commission Reveals Root Causes of Deepwater Horizon Blowout (11/10)
The National Oil Spill Commission met November 8 and 9, as part of its continuing mission to investigate the root causes of the BP Deepwater Horizon Oil Spill. The two-day meeting included an extensive review of the events leading up to the blowout, a discussion of that review with company officials, and further discussion on the role of the federal government and corporate culture in averting future spills. According to Fred Bartlit, the chief counsel for the commission, the purpose of the meeting was not to assign blame, but rather to clarify, in as much factual detail as possible, the root causes of the entry of hydrocarbons into the well and the subsequent explosion of the Deepwater Horizon rig.
To begin the meeting, Bartlit summarized the drilling technology used at the Macondo well, and the various safety measures meant to protect against blowouts. BP and Transocean, the drilling company, began drilling on October 6, 2009, and were nearing completion when the blowout occurred on April 20, 2010. The operation encountered several challenges throughout drilling, most notably a narrow pore-pressure fracture-gradient differential. That is, the drillers were required to keep the drilling mud within a narrow range of pressures or else they risked backflow of pressurized hydrocarbons – as dictated by pore pressure – or fracturing of the surrounding bedrock – as dictated by the fracture gradient. Either of these scenarios could have led to a blowout.
To avoid these threats BP decided to halt drilling and complete the well at 18,000 feet rather than the targeted depth of 21,000 feet, but additional complications arose during this final stage of drilling. The float collar, a critical piece of the deep well equipment, did not appear to convert, cement placement proved to be a challenge, and final tests on the cement job proved ambiguous.
Despite these warning signs, the rig crew began to carry out a temporary abandonment procedure that involved displacing 3,000 feet of mud with sea water. The procedure itself caps the well so that the drill rig can leave and the production rig, which actually extracts the hydrocarbons, can reopen the well head. According to Bartlit and several industry panelists, Deepwater Horizon’s particular temporary abandonment procedure would have decreased the downward pressure on the well and thereby further stressed the concrete used at the bottom of the well. In industry terminology, the well was underbalanced, and would have remained so for an extended period of time, as the rig crew performed the lengthy procedure of removing mud in the riser and extracting the riser itself for temporary abandonment. Not only was such a temporary abandonment procedure unusual in the industry, but it is disallowed by many companies, according to panelists at the meeting, on the grounds that it leaves the well vulnerable to blowouts.
Bartlit outlined the points of consensus and key factors leading to the explosion. In addition to the under balancing of the well, key factors included the misinterpretation of a negative pressure test, application of a faulty cement mix, rapid changes to the temporary abandonment plan in the week leading up to the explosion, and failure of the blowout preventer (BOP). The exact conditions of the BOP failure are unknown, as the damaged equipment is now being examined by a German engineering company DNV.
Poor communication contributed to the other causal factors, according to the investigation. For example, the cement mix used on the Macondo well had been tested four times, and it failed all but one of those tests. The results of those tests were not communicated to the Transocean drill rig operator, though BP had been informed of one of them. During a panel discussion of BP, Halliburton, and Transocean executives, Halliburton’s representative Richard Vargo acknowledged that failure. Bartlit further asked whose responsibility it was to interpret the crucial negative pressure test. Representatives from BP, Halliburton, and Transocean all agreed it was the engineers on the rig in conjunction with the well rig supervisor that would have made that determination.
Panelists admitted the rig crew’s decision on the negative pressure test was particularly difficult to justify. According to the investigation, that test is the last evaluation of integrity of the cement job at the bottom of the well. If the rig crew could not keep the pressure at zero pounds per square inch (psi) relative to the atmosphere, gas or mud must have been entering the well, invalidating the integrity of the well bore. In line with the typical procedure, the crew bled off pressure from the riser, but they could not reach zero psi. The crew tried a second time and successfully reached zero psi, but after the crew sealed the riser, the pressure rebounded; and it did so again on a third test. Something was wrong, but instead of calling to shore, the crew performed one last negative pressure test that evening.
That test was performed on the kill pipe, which is connected to the riser, and should therefore show the same pressure. For that reason, BP’s guidance documents authorize tests performed on either the riser or the kill pipe. But when the pressure on the kill pipe was successfully bled to zero psi and held there for 30 minutes, pressure on the riser still read 1400 psi. All parties represented at the rig that day are now certain that this pressure test had failed. With this misinterpretation, the crew began to remove mud from the riser, lessening the pressure at the bottom of the well. Twelve hours later, hydrocarbons began rising in the well. Around 9:40 pm, mud began flowing uncontrolled on the deck, and only three minutes later, the first explosion hit the rig.
Other preliminary conclusions of the investigation include the following. The flow path of the blowout occurred exclusively through the shoe track, or the center of the well, rather than the annular space outside the well. Cement in the shoe track and in some portion of the annular space failed to isolate hydrocarbons. BP’s temporary abandonment procedures assumed additional risk of blowout. Lastly, Pressure kicks a half hour before the explosion were clear enough to decide on a shut down, though none was performed. Bartlit concluded that no definite evidence exists of a clear tradeoff between safety and profit, where the latter was chosen.
At the end of the meeting, co-chair of the commission William Reilly asserted that, given the “egregious errors,” reviewed at the meeting, the issues at hand involve a systemic rather than an isolated problem. “That being the case, he continued, “it requires a systemic solution.” To that end, the commission is examining the regulations and guidelines regarding offshore drilling.
On the second day of the meeting, Michael Bromwich of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) testified on the federal governments’ regulatory response. “We’ve aggressively pursued a reform agenda,” Bromwich stated, including a full review of categorical exclusions under the National Environmental Protection Act (NEPA), a new Safety and Environmental Management Systems (SEMS) rule, and requests to Congress for more funds.
“The agency for decades was starved for resources,” Bromwich admitted. Bromwich warned of a technological gap between the industry and the agency, identifying a “grave need” for innovation on the side of safety equipment and regulations. Bromwich commented on problems with offshore drilling in the Arctic as well.
Shell and Exxon Mobil have introduced their own safety reforms, according to their executives Marvin Odum, and Rex Tillerson, respectively. Both executives testified on the second day of the meeting and described a culture of safety at their respective companies. Exxon reformed its oversight structure in the mid 1990’s after the Exxon Valdez spill. Its Operations Integrity Management System (OIMS) is now required for all major activities. Exxon is also working with the Department of the Interior and others on new requirements for BOPs, cementing procedures, and inspections.
Odum emphasized that Shell has instituted a stop work rule, where every employee has the right to intervene and stop work when they feel safety is compromised. According to Odum, these employees are often rewarded, even when the decision costs time and money. Furthermore, Shell has its own global standards for drilling technology and procedures. These include a rule against leaving any wells underbalanced during temporary abandonment, a rule which Bartlit suggested could be applied to the whole industry.
Other proposed reforms include greater training for how to respond to low-frequency, high-risk events, greater insistence on attention to anomalies, and requirements for fixed or standardized procedures for “crucial end-of well activities.” The commission will meet again December 2 to 3, and a final report of their findings is expected to be completed by January 2011. That report will be sent to the President and will include more information on the failure of the blowout preventer.
Presentations and Video of the Meeting will be posted at the Oil Spill Commission’s web site. More information on the Deepwater Horizon disaster is available through AGI’s Energy Policy and Hearings pages, and through BP’s Accident Investigation Report.
Energy Legislation Still on the Table for 2010 (11/10)
Energy legislation has had a tumultuous time in the second session of the 111th Congress. From renewable energy standards to offshore moratoria and oil spill response, the focus of legislation has shifted with the political landscape and current events. House bills have largely followed concerns regarding climate change plus recent events like the BP Deepwater Horizon oil spill. In June 2009, the landmark American Clean Energy and Security Act of 2010 (H.R. 2454) passed the House by a vote of 219-212. That bill devoted an estimated $6 to $9 billion per year of trading revenue towards clean energy research and development (R&D) including nuclear energy loan guarantees, incentives for waste heat use, and the development of up to ten energy innovation hubs. Other bills passed by the House include oil spill response, offshore wind, and aquaculture measures in the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act (H.R. 3534), and the Home Star Energy Retrofit Act of 2010 (H.R. 5019).
In the Senate, much has been offered in the way of renewable energy incentives, oil spill response, and energy efficiency, but the successes are few. As the waning days of the 111th Congress approach, and with a new Republican-heavy Congress arriving next year, a few measures introduced by Senator Jeff Bingaman (D-NM) remain on the table. The Renewable Energy Electricity Promotion Act of 2010 (S. 3813) would create a renewable electricity standard (RES) to require 15% of electricity production to come from solar, wind, geothermal, and other renewable sources by 2021. Public and private utilities would meet this goal by offering financial incentives to providers of renewable energy.
Secondly, Bingaman has introduced a sweeping incentives program for the development of clean energy infrastructure and retrofits under the Advanced Energy Tax Incentives Act of 2010 (S. 3935). This bill covers everything from clean energy manufacturing to green home loans. A third bill introduced by Bingaman, the Home Star Energy Retrofit Act of 2010 (S. 3434), would establish energy efficiency standards for new residential units. There may not be enough time on the Senate calendar to consider these measures. They may, however, provide a template for energy policymaking in the new Congress.
The RES bill has been designed specifically to minimize controversy. Senator Sam Brownback (R-KS), a lead author on the bill, and Bingaman have purposefully crafted a stand alone bill to see what support they could garner for a final vote. Without the 60 votes necessary to avoid a filibuster, Bingaman believes that Senate Majority Leader Harry Reid (D-NV) will not consider scheduling the bill. Should the bill become more complicated, it may threaten to take up scarce floor time for debate. With debates and votes on the extension of tax cuts and the omnibus spending bill awaiting Senate action, little time may be left for energy policy.
Despite the imperative of a simple bill, as expressed by Bingaman, several other Senators have eyed the chance to add amendments to the RES bill. Senator John Rockefeller (D-WV) may add his legislation to halt EPA regulation of greenhouse gases (GHG). Senator Mark Begich (D-AK) has considered adding oil spill response legislation drafted by Senator Mary Landrieu (D-LA). Landrieu herself has asserted that she would not vote for RES without oil spill legislation attached. The RES bill may also face competing legislation from Senator Lindsey Graham (R-SC). Graham’s proposed clean electricity standard would set a higher bar for reductions, possibly at 20 to 25 percent by 2021, but it would also include nuclear and clean coal technology as acceptable low-carbon sources. Graham has yet to release that legislation.
Bingaman’s other bill, S. 3935, takes a broader approach towards encouraging clean energy production, but it has not attracted as much interest from cosponsors and the media. That bill, now in the Senate Finance Committee, would offer a slew of clean energy tax credits for energy efficiency and renewable energy projects, including a $1.01 per gallon tax credit for production of algae biofuels. The measure would extend the clean energy manufacturing tax credit created as part of the federal stimulus, enhance the Property Assisted Clean Energy (PACE) Program, create incentives for electricity-storing technology, and revise a tax-credit for carbon capture and storage.
Another measure that Bingaman has endorsed would create a Clean Energy Deployment Agency (CEDA) to assist in the transfer of clean energy technologies from the lab to the marketplace. The CEDA bill, the American Clean Energy Leadership Act of 2009 (S. 1462), was approved by the Senate Energy and Natural Resources Committee in 2009 on a bipartisan basis. That bill was tied to Reid’s oil spill package that failed in July. Other energy provisions were included in the Kerry-Lieberman climate change bill that struggled due to a failed collaboration with Graham and the Gulf oil spill in April (see AGI’s Climate Legislation Summary). The failure of that larger piece of legislation was caused by several factors and is emblematic of the difficulty in passing energy legislation in the 111th Congress.
Passing comprehensive energy legislation may be even more difficult in the 112th Congress, with Republicans in control of the House and Democrats in control of the Senate. Turnover on key committees and subcommittees may make reaching consensus more difficult as well. In the Senate Energy and Water Development Subcommittee for example, Chairman Byron Dorgan (D-ND) and Ranking Member Robert Bennett (R-UT) are retiring. Two other subcommittee members are leaving, and it is unclear who will be heading the committee for either party.
Looking ahead to the 112th Congress, President Obama has called for passing energy legislation in separate chunks, rather than pushing a broader bill. At least one Republican has acquiesced to that idea: Senator Lindsey Graham (R-SC) has advocated for greater support of offshore oil and grass drilling, electric and hybrid cars, and nuclear energy. Obama, in turn, has stressed the financial savings and job creation benefits of energy efficiency measures. In interviews with Rolling Stone and the National Journal he has proposed that these traditionally bipartisan measures can pass in a politically divided Congress.
Independent groups have stressed that more research and development (R&D) needs to be poured into energy efficiency and reducing the costs of renewable energy. Notably, analysts from the Breakthrough Institute, the conservative American Enterprise Institute, and the more liberal Brookings Institute have released a new report, Post-Partisan Power, calling for large increases in clean energy R&D to be funded by a minimal gas tax or a tariff on imported oil.
In October, an Austrian group advocated a similar analysis, in a report entitled “Do Government’s have the right mix in their R&D portfolios?” The study focuses on increasing energy efficiency investments above all else. Some countries have already made considerable gains in this area, specifically Norway, Denmark, Sweden, Finland, and Iceland. By investing in highly efficient district heating and combined heat and power systems, several of these countries have already decreased their carbon emissions by several percentage points. Norway and the city of Helsinki, Finland are further lowering their emissions targets to be carbon neutral by 2050.
While the U.S. has not adopted efficiency measures on a comparable scale, renewable energy projects are gaining more traction on federal lands in some states. In California and Nevada, seven major solar power plants have been approved for construction on federal lands. Google has announced it will finance an interstate transmission line for offshore wind on the Atlantic Coast, and Secretary of the Interior Ken Salazar has held a groundbreaking for the One Nevada Transmission Line to connect renewable energy production with consumers from Southern Nevada through Idaho. Should the price of these renewables continue to fall, the U.S. could make some emissions reductions voluntarily. In the meanwhile, according to a new National Academies report, continued support of renewable energy R&D is crucial to meeting those goals.
Updates of energy legislation in the lame duck and 112th will be available on AGI’s Hearings on Energy Policy page. Text and summaries of S. 3813, S. 3935, and S. 1462 are available on Thomas.
Group Warns of Global Oil Production Peak (11/10)
The Association for the Study of Peak Oil and Gas - USA (ASPO-USA), held a conference October 7 to 9 highlighting peak oil projections and the expected effects on the world economy. Conference attendees and speakers included Representative Roscoe Bartlett (R-MD), former Secretary of Energy James Schlesinger, Dr. Bob Hirsch of Management Information Services Inc, and other energy analysts. In conjunction with the conference, the Environmental and Energy Study Institute (EESI) held a congressional briefing on October 7. Speakers at the briefing, including Hirsch, suggested that oil production rates would peak in two to five years, that continuous high energy prices would prolong the recession, and that liquid fuel substitutes will not be available for decades.
Peak oil theory has been rejected by some in the energy industry who have argued that as the price of oil rises, technologically-intensive methods will become profitable, and previously inaccessible fields would be exploited. Hirsch and others rejected that claim, by citing the important distinction between peak oil reserves and peak production rates. “It’s the rate, stupid,” Hirsch explained, expressing the motto that the world economy depends on the rate of oil production, not the size of reserves in the ground.
Global oil reserves, the panelists stated, are not necessarily expected to peak. As enhanced oil recovery (EOR) and other methods increase the reserves counted from unconventional sources, total reserves may actually rise. These new resources may not, however, significantly contribute to the rate of oil production: wells in small and unconventional fields typically yield slow production rates. More importantly, production rates from the largest and fastest producing fields are gradually declining, the panelists stated.
In the Gulf of Mexico, industry is expecting a steep decline in deep well production, stated Tad Patzek, Chair of the Department of Petroleum Engineering, at the University of Texas. Patzek mentioned the rapid but short lived success of BP’s Thunder Horse Oil Field in particular. Initial estimates suggested that the field held 1 billion barrels of oil reserves. Patzek insisted that production for Thunder Horse is already falling, and that if it continues in that trend, it will fall far short of its estimated capacity.
At the ASPO conference, presenters asserted that production rates for larger areas, such as Texas and the North Sea in Europe, have fallen. In an article (Peak Oil Versus Peak Exports, ASPO-USA) released after the conference, Jeffrey Brown and Samuel Foucher report production declines of 3.7 percent and 4.8 percent per year for Texas and the North Sea, respectively. The Texas decline is for the years 1972-1982, while the North Sea production decline was calculated for 1999 to 2009. They suggest that these declines are due to technological and geologic limitations, rather than a lack of investment. In Norway, for example both international and nationalized oil companies have made significant investments in exploration and production, but production rates have consistently declined since 1999.
Panelists at the congressional briefing and the conference acknowledged that uncertainty for peak oil predictions is high. At the conference, Mr. Chris Skrebowski of the Energy Institute in London reiterated that future production in OPEC countries is uncertain, especially in Iraq and Nigeria. Skrebowski added, however, that countries such as Iran, Ecuador, and Venezuela all show steady production declines. Furthermore, panelists were confident that, despite uncertainty in Iraq and elsewhere, production rates will begin to fall in the near future and that the world would face a widening supply gap in the coming decades.
Increases in liquid fuel prices would increase food prices, damage the stock market, and prolong unemployment, according to panelists at both events. Panelists warned of national security risks associated with continued dependence on foreign oil amid rising oil prices.
To avert these challenges, panelists emphasized a need for large investments in alternative fuels, oil exploration, and vehicle efficiency. Even with these commitments, Hirsch warned that closing the supply gap would be very difficult. The gap between conventional sources and demand is expected to grow quickly, stated Hirsch. His slide adapted from a 2005 study for the Department of Energy showed an ideal alternative fuels plan that nonetheless failed to match the shortfalls expected by others on the panel. Patzek predicted a gap of 50 million barrels of oil per day (bopd) by 2030, while Guy Caruso of the Center for Strategic and International Studies predicted a gap of 60 to 90 million bopd by the same year.
All of these predictions are highly contingent upon future oil discoveries, and there is division in the energy industry over the immediacy of peak oil production. While Hirsch listed 17 major individuals, corporations, and agencies that have warned of an impending production peak – including Chevron, the International Energy Agency (IEA), and the U.S. Army Corps of Engineers – notable objectors include the Energy Information Administration (EIA), ExxonMobil, and BP. Even those groups that consider peak oil a reasonable concern differ on when the impact of peak oil will be felt. The IEA has projected that the more drastic consequences of peak production would only be realized by the year 2030. Others push that date back several decades. One thing is clear however, energy hawks will be discussing peak oil for years to come.
Presentations and audio from the briefing are available at EESI’s web site. A list of speakers, presentation slides, and an agenda for the conference are available at ASPO-USA’s web site. See also the review article, Peak Oil Versus Peak Exports, posted by ASPO-USA.Update on BP Oil Spill Investigations (10/10)
In the most significant update from the investigations of the BP Deepwater Horizon oil spill, the chief counsel of the presidential commission, Fred Bartlit, Jr., released a letter to the commission on October 27 blaming Halliburton for using a cement mix in the Macondo exploratory well that the company knew was unstable. The letter details laboratory tests conducted on the cement mix two months before the spill showing the mix was unstable. Bartlit indicates that the cement mix probably did not work and therefore was unable to prevent hydrocarbons from entering the well bore. Bartlit does not fault the cement mix as the primary reason for the accident and the ongoing investigation continues to consider many factors. The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling will hold a public meeting on November 9, 2010.
The joint investigation by the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement and the U.S. Coast Guard has been granted a 60-day extension. The joint federal investigation report was originally due in January of 2011, but now will be due in March. The investigators requested more time to complete forensic tests and to hold public hearings. More information about the Deepwater Horizon Joint Investigation is available online.
The National Academy of Engineering and the National Research Council committee on “Analysis of Causes of Deepwater Horizon Explosion, Fire, and Oil Spill to Identify Measures to Prevent Similar Accidents in the Future” continues their work, but have not released any interim reports.
Climate Legislation Stymied by Disagreement in Election Year (10/10)
Climate legislation has been abandoned for the 111th Congress, Senate Majority Leader Harry Reid (D-NV) announced in September. Two prominent bills were drafted in the spring, including a cap and trade bill supported by Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT), and a cap and dividend bill (S. 2877) sponsored by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME). The cap and trade bill garnered particular media interest as a possible bipartisan measure, with loans for nuclear power, expansion of offshore drilling, and natural gas incentives. The bill faltered in April when Graham left the coalition after a dispute with Reid. In July, Reid attempted to graft the Kerry-Lieberman bill to a measure for oil spill response, but withdrew the attempt when he failed to gain enough support among senators.
For a more detailed summary of climate legislation in the Senate and international action on climate issues, please see AGI’s Climate Change Policy Page. Text of the unreleased Kerry-Lieberman bill, the American Power Act, is available from Kerry’s Senate website, while text of the Cantwell-Collins bill, the Carbon Limits and Energy for America’s Renewal (CLEAR) Act (S. 2877), is available from Thomas.
Funding for Oceans Research (10/10)
Congress has recently been working on three bills that would provide funding for geoscientists who do research related to the oceans. The Senate is currently considering The Oceans and Human Health Reauthorization Act of 2009 (S. 1252) which was introduced by Senator Jay Rockefeller (D-WV) over a year ago, but has now made it to the full Senate for consideration. This bill would expand the authority of the Interagency Oceans and Human Health Task Force. Included are provisions that would fund ocean and climate change monitoring projects, which would be funded through the National Oceanic and Atmospheric Administration (NOAA). Voting could occur during the lame duck session after the election in November.
In the House, The Marine and Hydrokinetic Renewable Energy Promotion Act of 2010 (H.R. 6344) was introduced in September and referred to the Committee on Science and Technology. It sets up a funding apparatus within the Department of Energy (DOE) that would provide grants to researchers and facilities that are developing technology—other than dams—that will produce renewable hydrokinetic power. These grants would also fund scientists doing feasibility or environmental impact studies. The bill aims to promote partnerships with private industry in the hopes that the technology produced will be as cost-effective as possible.
Finally, the House is considering The Digital Coast Act of 2010 (H.R. 6215) which is in the Natural Resources Subcommittee on Insular Affairs, Oceans, and Wildlife. NOAA is interested in mapping the 95,000 miles of U.S. shoreline that are not accurately mapped. This data is critical to emergency preparedness, shipping, environmental health, and national security. The mapping will be contracted out to qualified geoscientists, while NOAA will provide a platform for data integration and promote commercial remote-sensing technologies. Mapping projects will include shallow bathymetric data, airborne elevation data, large-scale land use and land cover maps, benthic habitat and aquatic vegetation mapping, parcel data, planimetric data, and socioeconomic and human use data.
Bingaman Floats Energy Measures for Lame Duck (10/10)
Energy legislation may still reach the Senate floor in 2010, but finding enough time for debate will be difficult. Senator Jeff Bingaman (D-NM) has supported three major pieces of legislation, including a stand-alone renewable electricity standard (RES) (S. 3813), a tax-credit package for renewable energy sources (S. 3935), and a set of energy efficiency standards for consumer products (S. 3925). The RES language has already been passed by the House in the Waxman-Markey bill, but the measure was dropped from an oil spill response package engineered by Senate Majority Leader Harry Reid (D-NV) in July. Another measure that Bingaman has endorsed would create a Clean Energy Deployment Agency (CEDA) to assist in the transfer of clean energy technologies from the lab to the marketplace. With a Republican-controlled House in the 112th Congress, President Obama has called for passing energy legislation in separate parts, rather than considering one large, comprehensive energy bill.
U.S. Military Pushes for Renewable Energy (10/10)
The U.S. military is now in the process of field-testing a solution to one of their biggest supply challenges—energy for operations. Transport of diesel and gasoline is a major component of supply efforts, especially in Afghanistan, and accounts for 30 to 80 percent of the load in convoys. According to the New York Times, even though the military buys subsidized fuel at $1 per gallon, transporting that fuel to remote operating bases can cost up to $400 per gallon, and additionally carries a high cost in lives. A recent report, “Sustain the Mission Project: Casualty Factors for Fuel and Water Resupply Convoys,” by the Army Environmental Policy Institute, found that for every 24 fuel convoys in Iraq and Afghanistan, one soldier or civilian contractor escorting those convoys is killed.
To address this challenge, Ray Mabus, the Secretary of the Navy, has said that the goal of the Navy and Marine Corps is for 50 percent of their fuel to come from renewable sources by 2020. Marine Company I, Third Battalion, Fifth Marines has been deployed to Helmand Province in Afghanistan with solar panels, energy-conserving lights, and other special renewable technologies. While the equipment costs $50,000 to $70,000, the savings in fuel transport costs quickly makes up for it, and the independence from fuel resupplying is a huge tactical advantage. The Navy is introducing hybrid vessels, and the Air Force is converting their fleet to run on biofuels. The Marines are even developing portable biofuel plants that can produce fuel from local crops in the field. The military’s support for renewable energy could be the force that makes these technologies commercially viable in civilian use.
EPA Rehabilitates Brownfields with Renewables Project (10/10)
The Environmental Protection Agency (EPA) is hosting a series of webinars on a new plan for an initiative called RE-Powering America’s Land, which would site renewable energy projects on brownfields and other contaminated sites. These sites, which are prohibited from most uses, already contain the infrastructure necessary for such projects and are connected to the grid. They could also be a valuable source of income to neighboring communities. The webinars, which began in October, will occur again in December and January. Comments on the plan may be emailed to Lura Matthews by November 30, 2010.
U.S. Partners with Iceland on Geothermal Research (10/10)
U.S. Ambassador to Iceland Luis Arreaga and Icelandic Minister of Industry, Energy, and Tourism Katrín Júlíusdóttir have signed a bilateral agreement to boost geothermal energy technologies and use, says the Department of Energy’s Energy Efficiency and Renewable Energy Office in a press release. The agreement, signed on October 6, 2010, will allow an exchange of researchers and other resources between the two countries and attempt to identify and remove obstacles to the use of geothermal energy. Iceland, seated over the Mid-Atlantic Ridge, receives 56 percent of its energy supply from geothermal sources, while the U.S. share is less than half of one percent. President Obama allocated $350 million to promote geothermal use in the American Recovery and Reinvestment Act of 2009, and this announcement continues U.S. policy to accelerate geothermal energy use.
BP Releases Report on Causes of Gulf Spill (9/10)
BP has released a report from an internal incident investigation team on the cause of the Gulf spill. The report found that decisions made by "multiple companies and work teams contributed to the accident.” The accident involved a well integrity failure, followed by a loss of hydrostatic control of the well, and a failure to control the flow from the well with the blow-out preventer.
The report summarized eight key elements that contributed to the catastrophe. First, there were weaknesses in the cement design, testing, quality assurance, and risk assessment. The cement that was pumped down the production casing and up into the wellbore likely experienced a nitrogen breakout, which allowed hydrocarbons to enter the wellbore. Second, the “shoe track barrier” did not stop the movement of hydrocarbons in the well. The shoe track is installed at the bottom of the production casing, and consists of both cement and a float collar that prevent fluid movement into the production casing. Neither of these barriers prevented the movement of hydrocarbons following the initial cement failure. Third, the negative-pressure test to confirm well integrity was not properly interpreted. The test was conducted, and pressure readings indicated that the barriers were not intact, but the rig crew and BP well site leaders reached the “incorrect view that the test was successful and that well integrity had been established.”
Fourth, the influx of hydrocarbons was not recognized until hydrocarbons were in the riser. Because of the accepted negative-pressure test, hydrocarbons were allowed to flow through the production casing and past the blow-out preventer, to the riser on the surface. Fifth, the rig crew failed to regain control of the well and divert fluids overboard rather than into the mud gas separator system. Sixth, because hydrocarbons were diverted to the mud gas separator, the separator system was overwhelmed and gas was able to vent onto the rig. Seventh, the fire system on the drill rig did not prevent ignition of the escaping hydrocarbons. The heating and air conditioning systems probably transferred the gas-rich air to the engine rooms, creating a source of ignition for an explosion. Eighth, the blow out preventer’s three emergency modes did not seal the well as intended. The first system was likely disabled by the explosion and fire on the rig. The second system, which depended on control pods on the blow out preventer, failed because of a faulty valve in one pod and insufficient battery life in the other. The third system failed because the blind shear ram failed to seal the well. The indicators for these potential weaknesses were apparent in audit findings and maintenance records performed before the accident according to the BP report.
The report stressed that several factors contributed to the accident including mechanical failure, human judgment, engineering design, operational implementation, and team interfaces over time; no single team or action caused the accident. The full report can be found on the BP website, along with a detailed video that illustrates the investigation team’s findings.
EPA Requests that Companies Disclose Hydraulic Fracturing Fluids (9/10)
The Environmental Protection Agency (EPA) has requested that nine oil and gas drilling companies provide the EPA with a list of the chemical additives used in hydraulic fracturing fluids, as well as locations where fracturing has been used.
Hydraulic fracturing, or “hydrofracing,” is a drilling technique used in natural gas extraction. Water and chemical additives are forced into wells, physically breaking the rock to allow for gas to flow to the wellbore. These fractures are held open by “proppants” like sand or silicates that are also added to the fracturing fluids. Hydraulic fracturing is most commonly used in coal beds and oil shale formations. The EPA does not normally regulate the injection of hydrofracing fluids, but is in the process of conducting a multiyear, $1.9 billion, congressionally mandated study to examine the impact of hydraulic fracturing on drinking water. The information disclosed by oil and gas companies as a result of the September 9th request will help inform that study. In an effort to demonstrate that the technique is safe, the contacted companies are likely to provide the requested information. “(If asked) we will of course fully cooperate with their request” said a Halliburton spokeswoman.
More information is available on EPA’s Hydraulic Fracturing web page.
Multi-Agency Report Finds No Spill-Related Dead Zones in Gulf (9/10)
The National Oceanic and Atmospheric Administration (NOAA), the U.S. Environmental Protection Agency (EPA), and the Office of Science Technology and Policy (OSTP) released a joint report looking at dissolved oxygen levels in areas where federal and independent scientists had previously reported the presence of subsurface oil from the BP/Deepwater Horizon spill. The report found that in areas where subsurface oil had been reported, oxygen levels have dropped by 20 percent from their long-term average, but these levels are not low enough to characterize the areas as “dead zones.” Dead zones are areas where dissolved oxygen concentrations fall below 2 mg/L, low enough that most life forms are impacted. These zones are commonly found in the near shore waters of the western and northern gulf in summer, but do not normally occur in deep water like where the study was performed. Scientists believe that the observed low oxygen levels at depths around the underwater oil plumes are due to microbes that are using oxygen to consume the oil from the BP spill.
The findings of the report are consistent with findings of the Woods Hole Oceanographic Institution scientists, who also did not find dead zones where subsurface oil was found.
House and Senate Committees Discuss Rare Earth Element Bills (9/10)
Two bills encouraging the exploration, mining and processing of rare earth elements (REE) are being considered in the House and Senate. The House bill, the Rare Earths and Critical Materials Revitalization Act of 2010 (H.R. 6160), was introduced, amended and passed by the Science and Technology Committee within a 10 day period. It was then passed rapidly under suspension of the rules by the full House on September 29. See the markup summary for details on the amended bill. The measure creates an unfunded mandate for the establishment of a rare earth (RE) materials program and broadens a loan guarantee program for improved RE technologies. These programs would be administered by the Department of Energy (DOE).
The Senate bill, The Rare Earths Supply Technology and Resources Transformation Act of 2010 (S.3521) or RESTART Act, was discussed in a hearing by the Committee on Energy and Natural Resources on September 30. Like the House bill, the Senate bill includes no authorizations of any funding for REE work. Rather, it establishes a Rare Earth Policy Task Force in the Department of the Interior, and it directs the Secretary of Energy to describe and facilitate the extension of loan guarantee programs to industry stakeholders.
For a summary of the markup and hearing from AGI visit our hearings web page. For more information on the Senate hearing, see the committee’s web site.
Oil Spill Update (9/10)
***National Commission Investigations of Oil Spill Continue
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling held a public meeting in Washington DC on September 27-28 and interviewed government officials, scientists, Gulf coast community officials and a BP executive. National Incident commander Thad Allen called for a third party to be put in charge of any future oil spills and suggested the response should involve more local people. Environmental Protection Agency Administrator Lisa Jackson defended the use of chemical dispersants as a risk management decision and called for more study of their use and environmental impact. Other scientists interviewed by the commission expressed concern about the long-term impacts of dispersants and called for more research. National Oceanic and Atmospheric Administration scientists noted the errors in the early estimates of spilled oil and indicated that some of the problems were caused by a lack of data. A recent paper in Science has estimated the amount of oil spilled from videos and their estimated total is the same (within uncertainties) as the government’s final estimate of 4.9 million barrels.
Ken Salazar, Interior Secretary, and Michael Bromwich, Director of Bureau of Ocean Energy, Management, Regulation and Enforcement discussed current offshore drilling plans, the Gulf moratorium and reforms of the offshore drilling program. David Hayes, Interior Deputy Secretary, discussed science related to offshore drilling and response, especially research in the Arctic. He noted that the U.S. Geological Survey has been asked to conduct a special analysis of the Arctic environment.
The Interior Department has withdrawn offshore oil leases in the Arctic until more information is available about the science, the conditions, and the abilities of the government and industry to respond to any problems. Bromwich also noted that even after the Gulf moratorium is lifted, there will be additional technical requirements placed on industry that will likely delay any offshore drilling. Senators Mary Landrieu (D-LA) and Mark Begich (D-AK) appeared before the commission and requested an end to the moratorium. Landrieu also called for more support for restoration of wetlands in the Gulf.
The commission interviewed BP Executive Doug Suttles and criticized the BP report on the causes of the oil spill and suggested that the company was woefully unprepared to deal with the catastrophe.
A video archive of the two-day meeting is available from C-SPAN.
***Gulf Spill Research
BP has committed $500 million for research on the impacts of the Gulf oil spill on the environment. About $40 million was distributed to researchers. After some initial delays, it appears likely that the rest, $460 million, will go to a Gulf of Mexico Alliance, a consortium of state officials, to distribute the funds to research groups within the Gulf.
Research funds for understanding the impact of the oil spill on the Gulf will also be available through the government’s natural resource damage assessment program and through federal agencies that have provided support for basic research in these areas in the past.
***Administration Releases Long Term Recovery Plan for Gulf
The Administration released a recovery plan for the Gulf of Mexico calling for Clean Water Act penalties and other oil spill liability funds to be used in the Gulf region rather than being paid into the Oil Spill Liability Trust Fund. The plan calls for the elimination of a liability cap for offshore oil drilling damages. The plan also calls for a Gulf Coast Recovery Council to administer the restoration funds. Congress would need to enact legislation to fulfill these plans. On September 28, 2010, President Obama signed an Executive Order creating a Gulf Coast Ecosystems Restoration Task Force. The task force will be chaired by Environmental Protection Agency Administrator, Lisa Jackson. If Congress creates a council, it will replace this task force.
EPA Proposes Coal Ash Disposal Regulations – Comments Requested (8/10)
The Environmental Protection Agency (EPA) has proposed to regulate the disposal of coal combustion residues, otherwise known as coal ash, that are generated from the combustion of coal at electric utilities with the proposed “Identification and Listing of Special Waste: Disposal of Coal Combustion Residuals from Electric Utilities.” These combustion products present environmental concerns because of potential groundwater contamination and structural failures at impoundments. The proposed rule would regulate coal ash disposal under the Resource Conservation and Recovery Act. The EPA will be conducting several public hearings on the proposed rule: in Dallas, TX on September 8, 2010; in Charlotte, NC on September 14, 2010; in Chicago, Illinois on September 16, 2010; in Pittsburgh, PA, on September 21, 2010; and in Louisville, KY, on September 28, 2010. Additional information on the hearings can be found on the EPA website.
Comments on the proposed rule can be submitted here before November 19, 2010.
Department of the Interior to Restrict Exclusions for Offshore (8/10)
Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) Director Michael R. Bromwich announced on August 16 that the Department of the Interior (DOI) will undertake a comprehensive review of its National Environmental Protection Act (NEPA) process and the use of categorical exclusions for exploration and drilling on the Outer Continental Shelf. Categorical exclusions, as part of the National Environmental Policy Act of 1969, allow projects to not prepare an Environmental Impact Assessment and sidestep the NEPA process if the project would have “no significant effect on the quality of the human environment.” During the process of reviewing the NEPA process, the Department will restrict its use of categorical exclusions for offshore oil and gas development. “In light of the increasing levels of complexity and risk – and the consequent potential environmental impacts – associated with deepwater drilling, we are taking a fresh look at the NEPA process and the types of environmental reviews that should be required for offshore activity,” Secretary Salazar said in a DOI press release.
DOI also announced that it intends to conduct a new environmental analysis of the Gulf of Mexico that will help provide information to guide future leasing and development decisions.
Council on Environmental Quality Releases Report on MMS NEPA Program (8/10)
The Council on Environmental Quality (CEQ) held a press conference on August 16 about a report that reviewed the former Minerals Management Service (MMS) National Environmental Protection Act (NEPA) procedures following the Deepwater Horizon oil spill. The report found that MMS relied on the ‘tiering process’ for environmental reviews, in which prior reviews are incorporated into subsequent site-specific reviews. This ‘tiering’ can result in insufficient evaluation and disclosure of environmental impacts. CEQ gave the new Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) recommendations on how to promote more robust and transparent implementation of NEPA procedures for the future. BOEM has committed to using these recommendations as guideposts for further agency reform.
Update on Oil Spill: Damage Assessment and Research (8/10)
The April 20, 2010, BP Deepwater Horizon oil spill has been contained and now efforts are underway to try to remove the failed blowout preventer, insert a new blowout preventer and further seal the well with additional cementing through a relief well. While BP, its industry partners and the federal government carefully monitor and consider the next steps at the Macondo exploratory well site, activity and controversy are growing about research, assessment and response to the environmental consequences of the oil spill on the Gulf of Mexico.
The federal response is led by the National Oceanic and Atmospheric Administration’s Natural Resource Damage Assessment (NRDA) process. As per the Oil Pollution Act of 1990, the responsible party for the damage, BP, participates in NRDA. Controversy has erupted over the disclosure of data and research collected by NRDA so far because any disclosure must be approved by NOAA and BP. This is difficult because of the inherent conflict between the government, which is seeking restoration funding from BP, and BP which is seeking to limit the company’s liability and contain costs. After an initial outcry about potential censorship, researchers are no longer being asked to sign confidentiality agreements and can publish results if they provide advanced notice.
NOAA promises to release all pre-assessment data before moving on to its injury-assessment phase and so far twenty three sampling plans have been posted on the NRDA web site. NOAA will post the other plans as soon as they are approved. NOAA has also organized a NOAA Science Missions & Data for Deepwater Horizon/BP Oil Spill website that provides NRDA information as well as other NOAA science efforts and partnerships in the Gulf related to the oil spill.
Some other federal agencies with responsibilities and research activities related to the oil spill include the Environmental Protection Agency (EPA), the U.S. Geological Survey (USGS) and the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).
In addition to NRDA, the National Science Foundation (NSF) has provided about $10.2 million through rapid response grants and more grants for Gulf research are possible through NSF. The Unified Incident Command organized discussion sessions on subsurface oil sampling plans for academics who have not yet been part of the government or BP efforts for August 31 to September 2 at the University of South Florida, Northern Gulf Institute and Tulane University.
Academics have organized additional consortia in an effort to integrate and share research efforts. For example, many universities and state agencies in Florida have formed an Oil Spill Academic Task Force website and consortium to coordinate activities and to share information. Researchers have raised concerns about the government estimates of where the oil has gone and its impact on the environment as described in an oil spill budget report released on August 4.
Researchers have also raised concerns about their ability to conduct independent research, a lack of resources for research, a lack of access to government/industry data and a lack of access to different areas of the Gulf to collect observations and samples. A recent Op-ed in the New York Times, entitled A Gulf Science Blackout by entomologist, Linda Hooper-Biu, expresses some of these concerns. It should be noted that only a small number of scientists have publicly expressed a variety of concerns and their comments do not necessarily represent any consensus among the science community.
Industry has also been involved in conducting their own studies and in supporting the research efforts of non-industry scientists. In May, BP promised $500 million over ten years for Gulf of Mexico research. About $30 million has been distributed to Louisiana State University, the Northern Gulf Institute in Mississippi, the Florida Institute of Oceanography, and to establish an oversight panel of scientists to independently review project proposals. According to media reports, the remaining $470 million has been stalled by a June 16 White House fact sheet that called upon BP to “work with governors, and state and local environmental and health authorities to design the long-term monitoring program to assure the environmental and public health of the Gulf Region.” Reports suggest the independent review panel is being set aside and BP is being asked to provide funds for Gulf state programs on some formula basis rather than through competitive peer review. No administration official has commented on or confirmed these reports.
Additional information about the administration’s response to the oil spill is available from a new Deepwater BP Oil Spill blog that replaces a more succinct oil spill response timeline. The timeline covers the period from April 20 to May 25. The Primary BP Oil Spill Response web site of the Unified Incident Command was the main portal for federal government information until July 7. A new website, RestoretheGulf, is now the main portal for government information.
USGS Announces New Assessment Method for Carbon Sequestration (7/10)
The U.S. Geological Survey (USGS) recently announced a new methodology which is able to assess the mass of CO2 that can potentially be injected into underground rock units. This new method will allow the USGS to perform a national assessment of CO2 storage potential.
The methodology was developed in accordance with the Energy Independence and Security Act of 2007, which authorized the USGS to develop the methods necessary to conduct a nationwide assessment. The methodology allows for assessments at scales ranging from regional to sub-basinal. While many reports have previously calculated subsurface pore volume for potential CO2 storage (i.e. Bachu et al., 2007, and van der Meer and Egberts, 2008), this is the first methodology to use fully probabilistic methods to incorporate geologic uncertainty in calculations of storage potential. For more information, visit the carbon sequestration page of the USGS Energy Resource Program.
House Science Committee Marks Up Two Oil Spill Bills (7/10)
On July 14, the House Committee on Science and Technology held a markup for the Federal Oil Spill Research Program Act (H.R. 2693) and the Safer Oil and Natural Gas Drilling Technology Research and Development Act (H.R. 5716).
H.R. 2693 directs the administration to create the Federal Oil Spill Research Committee, tasked with developing a comprehensive program for oil spill research. The bill asks for the National Oceanic and Atmospheric Administration (NOAA) to award competitive grants to research institutions for developing prevention and mitigation technologies, and asks that the National Academies evaluate the status of the oil spill research program. The committee amended the language in H.R. 2693 to clarify the meaning of the bill. Some amendments broaden the focus of the bill, such as including research for oil spills from transportation vessels and vehicles, while others clarify communication between the interagency committee and Congress. Human error and the effect of spills on communities are also addressed in the bill’s amendments. The committee voted to report the amended bill favorably by a voice vote.
H.R. 5716 amends Section 999 of the Energy Policy Act of 2005 to redirect the focus of ultra-deep water drilling research towards safety and spill prevention research. The approved amendments ensure that research and technology are focused on environmental protection and worker safety. Two amendments concern the Research Partnership to Secure Energy for America (RPSEA). One asks that RPSEA give out awards for safety, and the other mandates that RPSEA includes prevention efforts in its annual report.
Chinese Court Sentences American Geologist (7/10)
Xue Feng, an American geologist and employee of IHS Inc., has been sentenced to 8 years in Chinese prison and fined $30,000 for selling a classified Chinese oil industry database. U.S. Ambassador to China Jon Huntsman has issued a statement calling for Xue’s immediate release and repatriation to the United States.
Born in China, Xue studied in the United States and earned a doctorate from the University of Chicago, where he eventually became an American citizen. Xue’s sentence concludes a two-and-a-half year case. Chinese officials claim that Xue received documents on geological conditions of onshore oil wells and coordinates to more than 30,000 of those wells, which belong to the China National Petroleum Corporation and are considered state secrets. Interestingly, the Dui Hua Foundation reports that the Chinese government did not classify the information until after it had been sold to IHS Inc. The Colorado- based company declined to comment on China’s broad interpretation of state secrets. An IHS Inc. spokesman stated that the company was never notified of wrongdoing. Xue’s thesis advisor, David Rowley, at the University of Chicago said that Xue is a “straight-up individual who worked hard, who didn’t push limits,” and that he was “simply doing his job.”
The Beijing No. 1 Intermediate People’s Court stated that Xue’s actions “endangered our country’s national security.” During the trial, Xue argued that the information he gathered is “data that the oil sector in countries around the world make public.”
Senate Unable to Progress on Energy or Climate Legislation (7/10)
The Senate was unable to consider any substantial legislation regarding climate change, energy or oil spill response in the waning days before their August recess. The Kerry-Lieberman, American Power Act, considered the most likely of the climate change bills, seemed to be dead on arrival as soon as it was introduced and senators immediately began discussing paring down parts of the legislation. No alternative to Kerry-Lieberman emerged and no actions were taken to bring the measure to a vote. The Bingaman-Murkowski, American Clean Energy Leadership Act of 2009 (S.1462), considered the most likely of the energy bills, remains in play but will probably be revised and delayed for consideration until the lame duck session in November.
While the House passed their oil spill response measure, the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act (H.R. 3534), by a vote of 209-193 on July 30, the Senate was unable to bring forward any oil spill response bill of their own. The House bill included an amendment that would allow the Interior Department to lift the ban on deepwater drilling for companies that can show that they are meeting stricter safety requirements. According to an August 5th E&E Daily story, “A Pew Research/National Journal Congressional Connection poll conducted last week found that 69 percent of those surveyed said they favored including stronger regulation of offshore drilling…” It remains uncertain though what specific regulations might be favored enough by the Senate and the House to secure passage.
Congressional Budget Office Estimates Cost of Climate Bill (7/10)
According to the Congressional Budget Office (CBO), the American Power Act, the bill introduced by Senators John Kerry (D-MA) and Joe Lieberman (I-CT) to reduce greenhouse gases (GHG) by 17 percent by 2020 and 83 percent by 2050, will cut the federal deficit by $19 billion over the next 10 years. The CBO report estimates that the act would increase federal revenues by about $751 billion from 2011 to 2020. It would increase spending by about $232 billion over that same time frame.
Following the release of the CBO report, Kerry and Lieberman issued a joint statement asking senators to pass their legislation, stating that the benefit of reducing the deficit left “no more room for excuses” and that climate and energy legislation needs to be passed this year. However, industry argues that the CBO’s assessments involve uncertainties, since many numbers—including emission rates, availability of new technology and other factors—are projected and cannot be one hundred percent accurate. It is expected that a compromise will be necessary to pass comprehensive energy and climate legislation. Kerry and Lieberman have indicated they will support a less stringent bill that includes a price on carbon.
Carbon Capture and Sequestration Bill Introduced (7/10)
Senators Jay Rockefeller (D-WV) and Pete Voinovich (R-OH) introduced the Carbon Capture and Storage (CCS) Deployment Act of 2010 (S. 3589). The bill would promote research and create incentives to develop and deploy full scale CCS technologies by funding the creation of a cooperative industry-government research and development program. The program would work in cooperation with the Office of Fossil Energy's CCS research and development program. The cost of development projects would be shared with the industry participant (20%) and the Department of Energy (80%). The measure authorizes $100 million for 2011-15, $50 million for 2016-20, and $20 million for 2021-25. The bill would likely be included in any climate or energy legislation that the Senate might consider, though it looks unlikely that the chamber will consider any comprehensive measure this summer.
Murkowski Introduces Hydropower Bills in Senate (7/10)
Senator Lisa Murkowski (R-AK) introduced two bills in the Senate to increase support of hydropower in the United States. The Hydropower Improvement Act of 2010 (S. 3570) asks the Department of Energy (DOE) to spend $50 million in competitive grant programs to improve existing hydropower facilities and construct new ones at dams that do not currently provide power. Additionally, the bill requires DOE to create a plan to expand hydropower by 2015. The second bill, named the Hydropower Renewable Energy Development Act of 2010 (S. 3571) defines hydropower as a renewable resource—including small hydropower (under 50 megawatts) lake taps, and pumped storage projects—and qualifies it for tax credit as a renewable energy resource. The National Hydropower Association states that the bills could lead to 1.4 million jobs across the country over the next fifteen years.
House Natural Resources Committee Passes Offshore Drilling Bill (7/10)
The House Natural Resources Committee passed the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act (H.R. 3534) by a vote of 27 to 21. The legislation would abolish the Minerals Management Service and divide it into three separate agencies: The Bureau of Energy and Resource Management - to manage leasing, permitting and conduct environmental studies; the Bureau of Safety and Environmental Enforcement - to conduct all inspections and investigations related to health, safety and environmental regulations; and the Office of Natural Resource Revenue - to collect all offshore and onshore oil and gas and renewable energy-related revenues.
The CLEAR Act would provide full funding, beginning in 2011, for the Land and Water Conservation Fund, the Historic Preservation Fund, and the Oceans Resources Conservation and Assistance Fund. It contains provisions to overhaul onshore oil and gas regulation, create a solar and wind leasing program and boost conservation funding. The committee also unanimously agreed to create a commission to investigate the Deepwater Horizon disaster and ban BP from obtaining new offshore oil leases.
At the markup, the committee rejected an amendment introduced by Bill Cassidy (R-LA) that would have required revenue sharing with states for offshore drilling and another amendment to end the Obama administration’s temporary moratorium on exploratory deepwater drilling. The committee defeated Republican measures that would have removed several provisions in the bill, including onshore oil and gas reforms, full funding for the Land and Water Conservation Fund, and a requirement for companies to disclose to the public the chemicals they use in hydraulic fracturing.
Oil Spill Update (7/10)
BP finally stopped the oil from leaking at the Macondo exploratory well on July 15 by capping the broken pipe with a containment device. Then the hole was plugged from the top with mud and finally cemented in by August 8. BP is continuing efforts to complete a relief well that will intersect the exploratory well pipe at a much deeper depth within the subsurface rock. The plan is to add mud and cement into the annular region around the main well to further seal the pipe. Estimates suggest that 4.9 million barrels of oil spilled into the Gulf of Mexico since the explosion on April 20. A panel of government scientists released an oil spill budget report on August 4, which estimates that 74 percent of the oil has “either evaporated or been burned, skimmed, recovered from the wellhead or dispersed”. About 26 percent of the 4.9 million barrels of spilled oil remains on the surface, in the water or washed up on the coastline. A government snapshot of currently oiled coastline (not cumulative) as of August 7 estimates about 649 miles of Gulf Coast shoreline is currently oiled—about 371 miles in Louisiana, 112 miles in Mississippi, 75 miles in Alabama, and 91 miles in Florida.
As of August 7, the oil spill has cost BP an estimated $6.1 billion, including $319 million in 103,900 compensation payments to businesses and individuals affected by the spill. About 145,000 claims have been submitted so far. The cost to BP does not include the outstanding claims, new claims, a large number of potential lawsuits and additional payments to the U.S. government. Investigations, including a criminal probe by the Justice Department, and probes by the U.S. Coast Guard, the federal Chemical Safety Board, the new Bureau of Ocean Energy Management, the National Academies, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling and the House Committee on Energy and Commerce, have yet to be completed. Under the Clean Water Act, BP could be fined $1.1 million per barrel of oil spilled to as much as $4.3 million per barrel if the investigations show gross negligence on the part of the company.
Very rough estimates suggest the oil and gas in the reservoir could be worth as much as $4 billion and while BP’s chief operating officer made comments indicating that BP is considering what to do with the oil and gas in and around the exploratory well, the Interior Department has stated that BP will never be allowed to reopen the well to extract oil and gas.
Additional information about the administration’s response to the oil spill is available from a new Deepwater BP Oil Spill blog that replaces a more succinct oil spill response timeline. The timeline covers the period from April 20 to May 25. The Primary BP Oil Spill Response web site of the Unified Incident Command was the main portal for federal government information until July 7. A new website, RestoretheGulf, is now the main portal for government information.
Marcellus Well Explodes, Renews Push for "Fracking" Regulations (6/10)
On June 3, 2010, operators lost control of a natural gas well in Pennsylvania. The well, operated by EOG Resources, Inc., was tapping the Marcellus Shale, a rock formation believed to contain a large supply of natural gas. The ensuing blowout caused 35,000 gallons of drilling fluid to be released. On June 7, the Pennsylvania Department of Environmental Protection ordered EOG to halt all drilling until the incident could be investigated.
The explosion increased the pressure for legislation regulating hydraulic fracturing, or “fracking.” Fracking is a process used in oil and gas production to release hydrocarbons in compact rocks by blasting water, chemicals, and sand to crack open rocks. The process has gained attention due to concerns that the hydraulic fracturing drilling fluids may be contaminating groundwater. Currently, regulations on hydraulic fracturing are managed by individual states, but there is demand for the federal government to step in. The proposed Fracturing Responsibility and Awareness Act of 2009 (H.R.2766), introduced by Representative Diana DeGette (D-CO), would require drilling operators to disclose the chemicals used in fracturing fluids. It is currently stalled in committee while the Environmental Protection Agency (EPA) conducts a study on fracking fluids’ impact on water supplies. A similar senate bill (S.1215) introduced by Senator Bob Casey (D-PA) and Senator Chuck Schumer (D-NY) is waiting in committee.
IEA Releases New Study on Global Fossil Fuel Subsidies (6/10)
The International Energy Agency (IEA) released the report Energy Subsidies: Getting the Prices Right on June 7, 2010. It identifies thirty seven countries that offer subsidies to reduce the price of fossil fuels to levels lower than what they would be in an unadjusted market, leading to higher consumption of fossil fuels. It reports that governments spent $557 billion on fossil fuel subsidies in 2008, but since then some countries have made reforms to reduce subsidies.
The Group of 20 (G-20) nations decided to phase out oil and gas subsidies last year. The report states that this would decrease greenhouse gas emissions along with energy consumption. The IEA’s study acknowledges the political obstacles of eliminating fossil fuel subsidies, citing governments’ dedication to providing citizens with low cost energy.
MMS Gets a Name Change, Just Call it "BOE" (6/10)
As of June 21, 2010, the Minerals Management Service (MMS) has been re-organized. The Bureau of Ocean Energy, Reform and Management, or Bureau of Energy (BOE) for short, comes with reforms that attempt to remedy the problems of MMS uncovered by Deepwater Horizon oil spill. A new director accompanies the name change. Michael Bromwich, the former Justice Department Inspector General, will head BOE as it initiates multiple reforms.
The reforms include separating the conflicting missions of BOE into three different departments: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resource Revenue. Stronger safety requirements will be issued to outer continental shelf (OCS) operators, including new blowout prevention requirements. A six month moratorium on drilling in the Gulf is a part of the reforms. The Department of the Interior (DOI) maintains the necessity of the moratorium in order to implement the new safety regulations in the Gulf of Mexico. A recent court ruling struck down the moratorium and DOI is currently considering next steps.
House Committee Approves Oil Spill Accountability Bill (6/10)
In response to the Deepwater Horizon oil rig explosion and subsequent oil spill into the Gulf of Mexico, the House Transportation and Infrastructure Committee passed the Oil Spill Accountability and Environmental Protection Act (H.R.5629). The bill, which is sponsored by Chairman James Oberstar (D-MN), eliminates the $75 million liability cap on oil spill damages, increases the mandatory insurance level from $150 million to $1.5 billion and enacts a host of other reforms. The bill requires stricter reviews of drilling safety plans and requires oil drilling vessels to register in the U.S. Many vessels, like the Deepwater Horizon rig, register in the Marshall Islands because of their lax safety requirements.
The bill requires the Environmental Protection Agency to study the toxicity and effectiveness of oil dispersants and expands the Coast Guard’s role in offshore drilling regulation. The bill allocates $75 million in additional funding over the next five years to the Coast Guard so that it can add 300 people to its workforce, provide more training, and conduct inspections and address potential worst-case scenarios during reviews. Some committee members fear that the sweeping reforms will drive away the offshore oil industry, which the Gulf region depends on for jobs and money from royalties.
Senate Introduces Outer Continental Shelf Management Reform Act (6/10)
Senator Jeff Bingaman (D-NM) is sponsoring legislation (S. 3516) that will reform management and oversight of offshore drilling on the outer continental shelf (OCS). The bill is cosponsored by Senator Lisa Murkowski (R-AK). The bill is meant to correct the issues with offshore drilling management that were realized with the Gulf Coast spill. In addition the bill would authorize more research and development on offshore drilling and safety, and would require more training for employees.
The bill would create legislation implementing the changes Interior Secretary Salazar made to the Minerals Management Service (MMS). Additionally, it would create an Outer Continental Shelf Safety and Environmental Advisory Board to provide independent assessment and advice. The legislation would examine drilling plans more closely; including engineering reviews of blowout prevention systems, and would extend the current 30 day timeline for federal approval of exploration plans to 90 days. Enforcement would be increased, with required investigations for employee allegations of safety risks and more frequent Department of the Interior (DOI) inspections and reviews.
Administration’s Response to the Deepwater Horizon Oil Spill (6/10)
Although the Deepwater Horizon oil rig was destroyed on April 20, the Macondo Prospect oil well continues to leak oil and gas at a rate that is variable and difficult to accurately estimate. Changing conditions have affected the flow rate and made estimates more uncertain. Responders continue to use boom, controlled burns, chemical dispersants, skimming, and onshore clean-up to attempt to contain and mitigate the oil spill. The federal government continues to monitor air, water, wildlife and onshore conditions and has restricted commercial, recreational and other uses of Gulf waters and coastal areas based on different hazards presented by the oil spill.
The most significant development within the administration in June was a meeting between President Obama and Vice President Biden with BP Chairman Carl-Henric Svanberg and BP executives on June 15. The meeting led to a financial agreement between BP and the federal government.
BP has agreed to the following:
Major re-organization and changes in oversight and regulation of offshore oil and gas drilling at the Department of the Interior (DOI) include:
Other key agency responses of particular interest to the geosciences community include:
Additional information about the administration’s response to the oil spill is available from a new Deepwater BP Oil Spill blog that replaces a more succinct oil spill response timeline which covers the period from April 20 to May 25. The Primary BP Oil Spill Response web site remains the main portal for all federal government information.
Obama Nominates New Director of MMS, Salazar Swears Him In (6/10)
Michael Bromwich was sworn in as the new leader of the reformed Minerals Management Service (MMS), now called the Bureau of Ocean Energy (BOE) on June 21, 2010. Although he was not given an official title, Obama has made Bromwich’s task clear: create an organization that monitors the offshore drilling industry. The appointment did not require Senate confirmation, and will not unless Congress adjusts the three agencies Interior Secretary Ken Salazar has created.
Bromwich graduated from Harvard in 1976, and received his JD from Harvard Law School, as well as a Masters degree in public policy from the John F. Kennedy School of Government. He served as an assistant U.S. attorney in the U.S. Attorney’s Office for the southern district of New York from 1983 to 1987, followed by an associate counsel in the Office Independent Counsel until 1989. Bromwich served as Inspector General for the Department of Justice from 1994 to 1999, where he oversaw a few major investigations, including the agency’s involvement in the Aldrich Ames case. He has been a partner at Fried, Frank, Harris, Shriver & Jacobson since 1999.
Bromwich has had no involvement in energy issues or the offshore industry. He has had no connections with environmental organizations either. This lack of experience has caused some raised eyebrows, but it has been argued that an outsider is exactly what is needed for this period of transition.
New Ecological Report on the Science of Storing Carbon in Forests (5/10)
In their article “A Synthesis of the Science on Forests and Carbon for U.S. Forests,” published in the Spring 2010 publication of Issues in Ecology, Mike Ryan et al. review proposed methods of using forests to store carbon, and their cost benefits and tradeoffs. They stress that relying on forests to offset carbon emissions is not as simple as it sounds. For example, to offset 10 percent of greenhouse gas emissions with tree planting requires planting trees on one-third of U.S. agricultural land. This alone is not cost-effective, and would require a price on carbon or other incentives to be feasible. The authors note that climate change may increase the occurrence of fire, drought, and insect outbreaks, which can devastate forests. Ryan et al. recommend making “sure we focus on retaining the forests we have by making sure we get tree regeneration after these disturbances.” A more in depth summary of this article is available from the Ecological Society of America here.
Student Body Presidents Urge Congress to Support RE-ENERGYSE (5/10)
Student body presidents from over 100 universities submitted a letter (PDF) on April 28, 2010 to Congress urging them to support the “REgaining our ENERGY Science & Engineering Edge” (RE-ENERGYSE) program. As part of a plea for a national program in clean energy science and engineering education to train the U.S. workforce and remain competitive in the clean energy industry, the Americans for Energy Leadership and the student body presidents called for $55 million to fully support RE-ENERGYSE.
RE-ENERGYSE, originally proposed by President Obama in April 2009, would foster energy education by creating energy research opportunities for undergraduates, an education and outreach campaign on clean energy science and technology, partnerships with private industry and technical colleges, and interdisciplinary energy graduate programs. RE-ENERGYSE is now being considered by Congress as part of the Department of Energy (DOE)’s fiscal year 2011 budget. It would be jointly funded by DOE and the National Science Foundation.
Read the full press release and letter from Americans for Energy Leadership.
Senators Introduce Amendments to Clarify “Renewable Biomass” (5/10)
Senators Mike Crapo (R-ID), Max Baucus (D-MT), and Jon Tester (D-MT) introduced a bill (S.3381) on May 17 that would broaden the definition of “renewable biomass” to eliminate confusion. As it stands, renewable biomass is currently defined by the last amendments made to the Clean Air Act in 1990. The senators’ proposed legislation would change the definition to the one set in the 2008 farm bill (H.R.2419) and would require that future systems designed to regulate electricity and greenhouse gas emissions use the same definition. On federal lands renewable biomass would need to be taken in an environmentally stable manner, and cannot be taken from designated wilderness areas. For private lands, biomass is recognized as any material that is renewed on a regular basis.
The Pollution and Costs Reduction Act (S.3379) submitted by Senator Barbara Boxer (D-CA) on May 17 defines the term “advanced renewable biomass” as renewable biomass produced following sustainable practices. This legislation would provide incentives through grants for the research and development of biofuels.
The broadening of the definition of renewable biomass is of concern to some environmentalists, who worry that plantations will develop to provide biomass. They argue that the landscape changes would result in a decrease in Earth’s ability to remove greenhouse gases from the atmosphere.
Update on Congressional Response to the Oil Spill (5/10)
After the Deepwater Horizon offshore oil rig explosion and subsequent oil spill, Congress has been grappling with the growing regulatory and environmental disaster. The House and Senate have held numerous hearings in multiple committees to try and understand what went wrong, figure out who is at fault, and determine how to proceed. The heads of BP, Transocean, Halliburton and a barrage of others associated with the oil rig and the petroleum industry have been on Capitol Hill repeatedly in May to testify before Congress. On May 27 alone, there were 5 congressional hearings related to the spill. Read more of the AGI coverage of the congressional hearings on our energy policy page.
Some members of Congress have introduced bills to ban offshore drilling entirely. Representative John Garamendi (D-CA) and Senator Barbara Boxer (D-CA) introduced the West Coast Ocean Protection Act of 2010 (H.R. 5213/S. 3358) to put a moratorium on offshore drilling leases for exploration, development, or production of oil or natural gas in any area offshore of Oregon, Washington, and California. Representative Corrine Brown (D-FL) introduced similar legislation for the Atlantic Ocean and Gulf of Mexico, called the East Coast and Gulf Coast Ocean Protection Act of 2010 (H.R. 5287).
Senator Sheldon Whitehouse (D-RI) introduced the Outer Continental Shelf Lands Act Amendments Act of 2010 (S. 3346) to increase the liability coverage from $75 million to $10 billion that would retroactively apply to what BP has to cover. Other bills have been introduced to overhaul the spill claims process and future offshore regulatory process. Senator Olympia Snowe (R-ME) and others on the Senate Commerce Committee want to mandate that Minerals Management Service get scientific advice from the National Oceanic and Atmospheric Administration (NOAA) during the offshore permitting process. For additional information, read the Ecological Society of America (ESA) summary (second article in the list) of the congressional response.
On May 27, a $68 million appropriation to cover federal response to the oil spill was passed as part of the $58.8 billion Senate war supplemental bill. The House bill currently provides $275 million for the clean-up efforts, but their supplemental will not be voted on until after the Memorial Day Recess.
Congress, particularly the House Select Energy Independence and Global Warming Chair Edward Markey (D-MA), Senate Environment and Public Works Chair Barbara Boxer (D-CA), and Senator Bill Nelson (D-FL) have been instrumental in getting BP to release live underwater footage of the spill. Read Markey’s letter to BP and press release here, and the letter and press release from Boxer and Nelson here. Markey has also been vocal about the use of chemical dispersants in the oil clean-up, expressing his concern for the environmental hazard they might pose and asking about other options.
The Obama Administration has been involved with the spill response and has indicated it is taking full leadership of the response while holding BP accountable. Read the monthly review summary above about the administration’s response and involvement (see 1). Nonetheless the administration will seek input and new legislation from Congress in order to respond to the spill and initiate any new regulations or agencies in order to try to avoid another catastrophic spill of similar dimensions.
Kerry and Lieberman Release Climate and Energy Bill Draft (5/10)
Senators John Kerry (D-MA) and Joseph Liebermann (I-CT) released a draft of their climate and energy bill, called the American Power Act, on May 12, 2010. Their colleague, Senator Lindsey Graham (R-SC), who worked with them on the draft for many months, withdrew his support over immigration reform legislation—though he indicates he supports the measure in spirit.
The measure sets up a cap for the largest greenhouse gas emitters, which will include 7,500 factories and power plants according to the senators. It sets a floor ($12 per ton) and ceiling price ($25 per ton) for emissions that exceed reduction targets. The revenues from the cap will go to a “universal refund” that will be used to reduce the federal deficit and as refunds to consumers. The bill includes funding and tax incentives for research and innovations for renewable energy and clean energy technologies. An additional $6 billion annually would go toward improving transportation infrastructure and other incentives to help improve the efficiency and reduce the emissions from the nation’s transportation fleet.
Given the April 20 Deepwater Horizon oil rig disaster, the senators added new protections for coastal states by allowing them to opt-out of drilling up to 75 miles from their shores and allows nearby states to veto any drilling that might cause adverse impacts to their shores. States that pursue drilling will receive 37.5 percent of royalty revenues, adding for the first time an important incentive for states interested in offshore drilling in federal waters.
To deal with the difficult issue of the coal industry, the measure provides $2 billion annually for research and development of carbon capture and sequestration plus incentives for the commercial deployment of such technologies.
For all of the details of the draft and comments, visit Kerry’s American Power Act site.
Update on Administration’s Response to the Oil Spill (5/10)
Much has happened in a month of frustrations and failures in stopping the oil spill from the Deepwater Horizon drill rig that exploded and collapsed on April 20, 2010. BP tried capping, siphoning and plugging the leak with mud and materials, but none of these efforts worked and the spill has now become the largest oil spill in U.S. history. Additional solutions will be tried while two relief wells continue to be drilled with the hope that in several months time one of these wells can permanently stop the spill. President Barack Obama summarized much of the federal effort in a public statement and press conference on May 27. The President stated that his administration is taking over control of the efforts to stem the spill and mitigate the impacts, though BP and other industry experts will be needed to stop the leak and clean-up the oil and related impacts.
Other highlights of Administration activities include:
About 20,000 people, 1,400 vessels, 1.85 million feet of boom, 920,000 gallons of dispersants, 28 boat surveillance and recovery teams and 17 federal staging areas have been deployed as of the end of May.
Elizabeth Birnbaum, Director of the Minerals Management Service (MMS) resigns and Bob Abbey (Director of the Bureau of Land Management) is assigned as the Acting Director of MMS.
The Unified Command’s Flow Rate Technical Group, led by U.S. Geological Survey Director Marcia McNutt, estimates flow rates between 12,000 to 19,000 barrels per day, far more than the earlier BP estimate of 5,000 barrels per day.
Coast Guard Admiral Thad Allen approves of a section of the Louisiana barrier island project to determine its effectiveness and impact and approves controlled burns on some marshes.
The National Oceanic and Atmospheric Administration (NOAA) releases its 2010 hurricane forecast for the Atlantic Basin, which might affect oil spill response plans.
The Department of the Interior (DOI) places a moratorium on drilling of new deepwater wells until after further review.
DOI will postpone consideration of five exploration wells by Shell Oil Company in the Arctic and will reconsider offshore drilling in new areas for offshore Alaska.
DOI will cancel the proposed 2012 lease sales for offshore Virginia and the 2010 lease sales in the Gulf of Mexico.
DOI completed an expedited safety report and wants “a recertification of all Blowout Preventers (BOPs) for floating drilling operations; stronger well control practices, blowout prevention and intervention procedures; tougher inspections for deepwater drilling operations; and expanded safety and training programs for rig workers.”
Interior Secretary Salazar issues a secretarial order that calls for dividing MMS into three agencies (see summary #16 below for more information). Salazar also called upon Congress to consider organic legislation to formally establish MMS, or whatever agencies are created, as the agency currently exists as the result of a secretarial order after the passage of the Federal Oil and Gas Royalty Management Act of 1982 (Public Law 97-451). The Energy Policy Act of 2005 (P.L. 109-58) gave MMS authority to develop renewable energy projects on the Outer Continental Shelf.
President Obama signs an executive order on May 21, establishing a Bipartisan National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. The Commission will be led by two co-chairs: former two-term Florida Governor and former Senator Bob Graham and former Administrator of U.S. EPA William Reilly.
NOAA further restricts fishing in more areas of the Gulf and for longer periods, while the Coast Guard closes coastal areas where oil poses a threat.
The Environmental Protection Agency (EPA) and BP carry out intense discussions and debates about the use of chemical dispersants and which chemical dispersants to use. For the third time, EPA convenes a panel of scientists from University of New Hampshire’s Coastal Response Research Center, NOAA, EPA and the Coast Guard to study dispersant use and its impacts. Rigorous monitoring and analysis will continue, but little is really known about the impacts of such large amounts of dispersants, especially underwater use.
The National Science Foundation calls for and issues Rapid Response Research Grants for scientists to study the impacts of the oil spill and the use of dispersants.
National Park Service creates a web page to inform the public of closures and efforts to protect coastal assets.
For more information visit the DOI’s Deepwater Horizon Response web page.
House Climate Change Bill and Senate Energy Bill Stifled in April (4/10)
Plans by Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT) to introduce a compromise climate change and energy bill on Earth Day (April 22) fell through. Senator Graham dropped out of the effort because the Senate announced plans to consider an immigration bill before climate and energy. The Deepwater Horizon oil rig disaster is also complicating efforts to compromise because likely legislation is thought to involve incentives for offshore oil and gas drilling.
Kerry and Lieberman recently announced that they do plan to unveil their legislation in May without the public support of Graham. Meanwhile the Senate Energy and Natural Resources Committee completed work on their energy bill, the American Clean Energy Leadership Act of 2009 (S.1462). They approved nine amendments on May 5 including research and development funding for efficient lighting, wind energy, and hydropower efficiency. One amendment creates an award for carbon capture and sequestration technological innovation.
The House-approved climate change bill (H.R. 2454) still awaits a comparable Senate bill for conferencing to work out compromise legislation. The Senate energy bill (S.1462) and the possible Kerry-Liebermann bill are the most likely measures the Senate may consider. Senator Jeff Bingaman (D-NM), Chair of the Senate Energy Committee has called for the Senate to consider S.1462 on its own with possible floor amendments to address climate change issues, however, several other senators indicate an energy-only bill is not workable.
Administration’s Task Force Begins Discussion of Carbon Capture and Storage (4/10)
The President’s Interagency Carbon Capture and Storage (CCS) Task Force held its first public meeting on May 6, 2010. The task force is suppose to provide a plan for developing 5 to 10 commercial CCS projects by 2016. Some called this goal too ambitious, while others indicated more optimism and stated that the various technologies already existed in part and just need to be put together. CCS is considered essential for coal-fired power plants. Coal accounts for about 51 percent of U.S. electricity generation and about 30 percent of U.S. carbon dioxide emissions.
There are no coal-fired power plants with fully operational CCS systems even though the federal government has spent $4 billion on the technology and the private industry has invested about $7 billion. Some experts at the meeting suggested that another $3 - $4 billion needs to be invested in CCS development. Deploying the technology will also have costs with a price as high as $110 per metric ton of carbon dioxide called for at the meeting. Current legislation in Congress is considering a price closer to $20 per metric ton. In addition, a recent research paper (see Research Paper Claims Carbon Capture and Geologic Storage Is Not Feasible (4/10)) questions the feasibility of geologic sequestration for mitigating climate change on a national or global scale.
The task force has a massive task ahead of them trying to understand the research, development and deployment needs and then trying to plan a practical, economical and feasible plan for commercial scale CCS. The task force will accept public comments until July 2, 2010.
Senate Grapples with Carbon Capture and Storage (4/10)
The Senate Energy and Natural Resources Committee considered three measures on carbon capture and storage (CCS) in public hearings. One measure would provide $20 billion in incentives for CCS deployment, a second measure (S.1134) would authorize $3.8 billion in spending for CCS research and demonstration and a third measure (S.1856) would establish that subsurface pore space below federal lands belongs to the U.S. government. Over in the House, the climate change bill (H.R. 2454) provides $60 billion in incentives for CCS deployment and additional spending for CCS research and demonstration. Congress like the President’s Interagency Task Force (see summary #3) is trying to advance CCS as a major tool to mitigate climate change, especially from coal-fired power plants.
Administration’s Response to the Deepwater Horizon Oil Rig Disaster (4/10)
On April 20, 2010, an explosion on the oil rig, Deepwater Horizon, in the Gulf of Mexico, led to fatalities, injuries, an emergency evacuation, a massive fire and the eventual collapse of the oil rig. After the fire was extinguished, it was determined that oil was leaking from the damaged well at the seafloor. The oil spill is fouling the environment, affecting commerce and requiring a massive response from industry, government, other stakeholders and volunteers.
BP owns the oil rig and is being held responsible for the damage and clean-up by the U.S. government at this time under the Oil Pollution Act. Other industry partners involved in assessment, clean-up and potential liability include Transocean, the rig operator, Halliburton, whose workers were finishing a cement casing near the time of the explosion and Cameron, which supplied the blowout preventer that is being implicated as failing to stop the subsequent oil leak.
There is not enough information at this time to determine the cause of the catastrophe. The Deepwater Horizon is among the deepest oil well (extending 5,000 feet below the surface) ever drilled in the Gulf of Mexico and working at such depth with large, complex and cutting edge technology for the first time with no previous real world experience could have contributed to unexpected problems that led to system failures and are causing complexities and uncertainties with the response.
Efforts to mitigate the disaster so far have included burning the oil off the surface, injecting chemical dispersants on the surface and at depth, containing and skimming the oil off of the surface, preparing to place a large containment device over the leak and preparing to drill a relief well to intercept the damaged pipeline at a deeper level to plug the pipe and remove any excess oil through the relief well.
After the initial emergency response by the U.S. Coast Guard and BP, the National Contingency Plan was initiated. Interagency coordination included the Coast Guard; the Departments of Homeland Security (DHS), Commerce (DOC), Interior (DOI); and the Environmental Protection Agency (EPA). These agencies provide federal assets and oversight of BP’s response. Rear Admiral Mary Landry was named the Federal On-Scene Coordinator and a Regional Response Team was stood up that included the U.S. Coast Guard, DHS, DOC/NOAA, DOI and the EPA, as well as state and local representatives.
Once it was determined that the spill was significant, Janet Napolitano, Secretary of Homeland Security, declared the disaster a Spill of National Significance and appointed U.S. Coast Guard Commandant Thad Allen as the National Incident Commander. Many additional federal resources are called in, including Department of Defense assets and the National Guard.
The Coast Guard and Minerals Management Service (MMS) were given the power to begin a joint investigation into the causes of the catastrophe. MMS set up an Emergency Operations Center in New Orleans and has been providing guidance, oversight and permitting for clean-up and spill containment efforts. The National Oceanic and Atmospheric Administration (NOAA) deployed a scientific support coordinator and is providing weather condition reports, assessments of the oceanic and atmospheric conditions, seafood inspections and tracking the extent of the spill. The Environmental Protection Agency is providing assessments and helping with air and water quality sampling, control and clean-up.
The U.S. Geological Survey, the U.S. Fish and Wildlife Services and the National Parks Service are providing scientific support, assessments and helping to coordinate responses to environmental impacts to coastal ecosystems. The National Aeronautics and Space Administration (NASA) is providing airborne and satellite-based assets to monitor the extent of the spill and help NOAA with forecasts of spill trajectories. The Occupational Safety and Health Agency and the Center for Disease Control are training, assessing and monitoring human health effects of all workers and volunteers in the affected areas.
Specific actions taken by the federal government include: NOAA has issued fishing restrictions in affected areas, DOI has issued a moratorium on new offshore drilling until the investigation is completed, DOI has directed MMS to conduct physical inspections of all deepwater rigs and platforms and DOI has established an Outer Continental Shelf Safety Oversight Board.
More information about the Administration’s response to the Deepwater Horizon collapse and spill is available from the Department of the Interior’s response web page at http://www.doi.gov/deepwaterhorizon/index.cfm
Amendment to Energy Act of 2005 To Encourage Natural Gas R&D (4/10)
Representative Harry Teague (D-NM) introduced the Unconventional Domestic Natural Gas Research and Development Act (H.R. 5062), which would amend the Energy Act of 2005 to promote natural gas and oil drilling and exploration. The legislation would expand the Research Partnership to Secure Energy for America (RPSEA) program between universities and the energy industry, with about 80 percent of the funding in H.R. 5062 for university researchers. H.R. 5062 would authorize the Department of Energy's unconventional domestic natural gas research and development program for an additional 3 years until October 2017, triple federal funding for the program, and increase funding for commercial technology development.
MMS Rewrites Gas Flaring and Production Rates from Offshore Wells (4/10)
The Minerals Management Service (MMS) published a final rule that limits natural gas flaring and production rates from offshore gas wells. The goal of the rule is for MMS to better monitor the amount of gas flaring or venting that occurs in offshore oil and gas production to ultimately reduce the amount of greenhouse gases (GHGs) emitted.
Venting is the release of natural gas into the atmosphere and flaring is when the gas releases are ignited. These processes are most often used as a safety precaution to briefly divert the flow of gas during an equipment failure. This rule will continue to allow flaring for safety reasons, but will require accurate measurement of total gas emitted to monitor volume of GHGs released.
House Climate Change Bill and Senate Energy Bill Still in Play (3/10)
The Senate Energy and Natural Resources Committee was planning to add some amendments to their key energy bill, the American Clean Energy Leadership Act of 2009 (S.1462), in March, but the hearing was canceled because of health care reform acrimony. Look for possible amendments related to energy efficiency and other topics to be considered in April.
The House-approved climate change bill (H.R. 2454) remains in limbo as the Senate struggles to prepare their own bill. Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT) remain the leading authors of an unfinished draft that is suppose to become the main Senate climate change bill. Media reports suggest the senators will drop cap and trade, allow oil and gas drilling in more areas offshore, restrict the Environmental Protection Agency from regulating hydraulic fracturing and enhance incentives for nuclear power plant development.
Separately, Senators Jay Rockefeller (D-WV) and George Voinovich (R-OH) have proposed draft legislation to promote carbon capture and storage research followed by incentives for development and deployment. Their draft is similar to the House bill and previous Senate climate change legislation (S.1733), but it would not put a price on carbon dioxide emissions thus protecting the coal industry from increased costs.
Meanwhile Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) continue to advocate for their bill, Carbon Limits and Energy for America’s Renewal (CLEAR) (S.2877), which revolves around a “cap and dividend” approach. The bill requires producers and importers of fossil fuels to pay for their carbon contribution and for 75 percent of these revenues to be returned to consumers. Kerry, Graham and Lieberman, who need all of the votes they can find, are likely to consider both proposals as they finish their draft.
The latest media reports suggest that the three senators are working on a “reduction and refund” approach that would target every industrial sector, but will involve different allocations, different emission limits and different target dates. The senators may try to link the transportation fuel sector with the industrial sector by tying a transportation fuel fee to an industrial carbon market fee. The senators hope to introduce their legislation in the Senate around Earth Day, which is April 22.
Obama Announces Offshore Drilling Plan (3/10)
President Obama announced a new proposal for offshore drilling on March 31. The plan would open parcels of the outer continental shelf (OCS), which were previously blocked by a drilling moratorium. New land available for exploration and development is in the southern Atlantic Ocean, the eastern Gulf of Mexico and off of the north coast of Alaska. The Department of the Interior press release on the new OCS plan includes maps of the proposed regions to be opened for exploration. Any drilling would still be many years away because of needed exploration, regulatory requirements and other requirements. The Interior Department emphasized the need for science to guide exploration potential and environmentally responsible drilling. The U.S. Geological Survey would be involved in assessing offshore resources and seismic reconnaissance would help guide decisions on future drilling leases.
The administration’s move drew positive and negative criticism from Democrats and Republicans alike. According to the New York Times and the Washington Post, some Republicans felt ending the moratorium was a step in the right direction, but other barriers to drilling reflected the administration’s intent to implicitly continue the moratorium. Meanwhile, some Democrats were dismayed by the decision, arguing it would put America’s coastal environments and marine wildlife in danger. Opponents also claim that the economic benefits did not outweigh the risks.
Obama wants to move past the partisan divide on offshore drilling saying, “Ultimately, we need to move beyond the tired debates of the left and the right, between business leaders and environmentalists, between those who would claim drilling is a cure all and those who would claim it has no place,” he said, “because this issue is just too important to allow our progress to languish while we fight the same old battles over and over again.”
For more information, see the press release from Interior Secretary Ken Salazar.
House Committee Seeks Information on Fluids Used in Hydraulic Fracturing (2/10)
House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Subcommittee Chairman Edward Markey (D-MA), have sent additional letters to eight oil and gas companies requesting more information about the chemicals they use in their hydraulic fracturing fluids. Hydraulic fracturing took center stage at a hearing last summer, as it has the potential to unlock large natural gas reserves in U.S. shale beds. There are concerns that increased use of chemical-based fluids during hydraulic fracturing may contaminate local water sources and harm the environment.
The chemicals used in hydraulic fracturing are not regulated, however there is a voluntary agreement between Halliburton, BJ Services and Schlumberger Technology Corporation with the Environmental Protection Agency (EPA) restricting use of diesel-based fluids. After the first letter writing campaign by Waxman, Halliburton and BJ Services responded that 807,000 and 2,500 gallons respectively of diesel-based fluids were used in their fracturing ventures—potentially violating the EPA agreement. In the most recent letters, Halliburton and BJ services received requests for more chemical information, as did Schlumberger Technology Corporation and many smaller companies. Copies of the letters are available here.
Obama Announces an Interagency Task Force on Carbon Capture and Storage (2/10)
On February 3, 2010 President Obama called for an Interagency Task Force on Carbon Capture and Storage (CCS) to define a coordinated federal strategy to fast-track the development of clean coal technologies. The 14-member task force will be comprised of a senior officials designated to represent their respective cabinet level offices or executive office of the president. It will be co-chaired by the Department of Energy and Environmental Protection Agency representatives.
The task force will be named within 180 days of this announcement and then begin developing a comprehensive plan to develop cost-effective CCS within 10 years, with 5-10 commercial demonstration projects online by 2016. The task force will look at coordinating existing administrative authorities and programs, including building international collaboration on CCS. Obama named comprehensive energy and climate legislation as the largest incentive for CCS, and this task force will prepare for the low carbon energy transition and spur investments into CCS in the near future.
Interior Launches Oil and Gas Leasing Reforms (1/10)
The Bureau of Land Management (BLM) announced reforms to oil and gas leasing sales on public lands. Key changes include interdisciplinary reviews that consider site-specific concerns, greater public involvement in the Master Leasing and Development plans and BLM will take a lead role in determining areas where leasing can occur.
The full press release is available from DOI.
House Passes Energy and Water Research Bill (12/09)
The Energy and Water Research Integration Act (H.R. 3598) passed out of the House on December 1, 2009. The bill addresses the nexus between energy and water resource demands by directing the Secretary of Energy to take water into consideration. The Secretary of Energy must work to advance energy technologies to become more water efficient, consider the implications of climate change on water supplies for energy, estimate the water needed for energy production, and understand the energy required to provide water to the public. It creates an Energy-Water Architecture Council to work on improving energy and water resources data and advance technological innovations. The Energy Department will take the lead, but work in coordination with other federal agencies.
The bill has now goes to the Senate Energy and Natural Resources Committee for consideration.
DOE Announces $366 Million for 3 Energy Innovation Hubs (12/09) The Department of Energy (DOE) plans to invest up to $366 million to establish and operate three new Energy Innovation Hubs focused on: 1) fuels from sunlight, 2) energy efficient building design, and 3) computer modeling and simulation of advanced nuclear reactors. Each hub will receive $22 million the first year and up to $25 million per year for the following four years. The goal is for a multidisciplinary team of researchers to conduct high-risk research in a single area to accelerate research and commercial deployment of highly promising energy-related technologies.
“The DOE Energy Innovation Hubs represent a new, more proactive approach to managing and conducting research. We are taking a page from America’s great industrial laboratories in their heyday,” said Energy Secretary Steven Chu. The centralized and focused hubs will be complemented by the Energy Frontier Research Centers (EFRC) and Advanced Research Projects Agency-Energy (ARPA-E). The EFRCs work on collaborations to make an easier transition from basic science research to game-changing discoveries. ARPA-E funds diverse research with the potential for high reward that would otherwise be too risky for industry or other programs to fund.
Originally Chu wanted eight hubs, but Congress felt they were too redundant and only allocated money for one. However, Chu shuffled existing money around to ultimately fund these three, though at a reduced starting budget from the orignial $35 million.
Information on the implementation plan and strategy for managing the hubs is on the DOE Energy Innovation Hubs web site: http://hubs.energy.gov
International Report on Energy Outlook (11/09)
The International Energy Agency’s (IEA) World Energy Outlook report gives projections concerning the world’s energy needs and the changing climate. The report estimates that from 2010 to 2030 about $26 trillion will be needed for energy development globally and an additional $10.5 trillion will be needed for energy technologies and efficiency in order to reduce greenhouse gas (GHG) emissions to about 450 parts per million (ppm) and avoid catastrophic climate change. More than half of the emissions reductions by 2030 will be from improved energy efficiency with the rest from renewables and biofuels, nuclear power, hybrid and electric vehicles and carbon capture and sequestration. Efficiency will lead to global savings of about $8.6 trillion in transport, buildings and industry costs.
Within the IEA scenario, demand for fossil fuels is projected to peak in 2020, however, fossil fuels will still contribute about 70 percent of global energy in 2030. The financial crisis reduced oil demand in 2009, but also led to a $90 billion cut in investments in oil and gas exploration and development. This may lead to fewer supplies to meet growing demand and thus higher prices in the future. Natural gas is predicted to play a significant role in transitioning to a low-carbon energy economy. The huge boost in North American unconventional gas discoveries and production (primarily oil shale) makes natural gas a “transition fuel” to a clean energy economy in this world outlook.
DOE Awards $151 Million in First Round of ARPA-E Projects (11/09)
The Advance Research Projects Agency-Energy (ARPA-E) has awarded a total of $151 million to 37 projects in its first round of proposals. The awards go to researchers in 17 states, and a variety of sectors. Most awards went to small businesses and academic institutions (43 percent and 35 percent respectively), and 19 percent went to large corporations. These projects focus on high risk, high reward breakthroughs to fundamentally change the energy sector in all fields from biofuels to carbon capture. Proposals include advanced battery science for large-scale energy storage to allow “round-the-clock” electricity from wind or solar power sources, and synthetic enzymes to trump the current amine and ammonia based carbon capture process at power plants with a cheaper, easier method.
In response to the original call for ARPA-E proposals in April, about 3,600 concept papers were submitted. Of those, ARPA-E requested full applications for 300 proposals and ultimately selected 37 for funding. This first round is only a portion of the $400 million President Obama announced for ARPA-E as part of the American Recovery and Reinvestment Act, or “stimulus” funds. A second round of proposal solicitations will begin soon, but no timelines have been announced yet.
For more information and a full list of the awards, please visit the ARPA-E website.
EESI Briefing on Human Behavior and Energy Use (11/09)
The Environmental and Energy Study Institute (EESI) held a briefing November 18, 2009 on Human Behavior and Energy Use in conjunction with the Behavior, Energy, and Climate Change (BCEE) Conference. The panelists stressed that energy efficiency is as reliant on changing human attitude and behavior as technological advances. The briefing examined how and why people choose to use or ignore energy efficiency technologies.
Representative Brian Baird (D-WA) deemed the quickest and easiest fix to energy use to be changing human behavior, calling a 20 percent reduction in 20 weeks completely attainable. Doug McKenzie-Mohr, a psychology professor and founder of Community-Based Social Marketing, talked of the misconceptions in human behavior. McKenzie-Mohr said people are not solely driven by economic self-interest. He recommended tackling behavior changes which have a higher probability of participation even if they have less of an overall reduction in energy usage. Gene Rodrigues, Director of Energy Efficiency for Southern California Edison, agreed saying it was all about engagement. Southern California has such successful energy efficiency programs because they have an engaged public.
Richard Andres, Energy Chair for the National Defense University, showed that the military is making “energy culture” part of their energy strategies. They see being greener as a money-saver, a life-saver, and something that will be passed onto civilians and help change the entire U.S. energy culture. Karen Ehrhardt-Martinez, chair of the BCEE Conference, pointed out that people really want to conserve energy, they just need some help in achieving their goals, keeping in mind that there are many different motivators to get people to change behavior.
EESI Creating Jobs in Appalachia Briefing (10/09)
The Environmental and Energy Study Institute (EESI) held a briefing on “Creating Jobs in Appalachia through Investments in Energy Efficiency.” The briefing focused on a report commissioned by the Appalachian Regional Commission (ARC) entitled “Energy Efficiency in Appalachia: How Much More is Available, at What Cost, and By When” (PDF). The speakers included Anne B. Pope, Federal Co-Chair of the ARC; Ben Taube, Executive Director of the Southeast Energy Efficiency Alliance; Ryan Unger, Special Assistant to the Executive Director of SEDA-Council of Governments; and Jen Worth, Program Manager of the Center for Workforce and Economic Development with the American Association of Community Colleges.
Pope, Taube, and Unger spoke about the money saved and jobs created by taking energy efficiency into consideration. The EIA projects energy consumption to grow by 28 percent by 2030 in the Appalachian Region, which is much higher than the 19 percent projection for the U.S. average. The report found that an energy efficiency initiation could potentially create over 77,000 jobs as well as reduce energy consumption in the region “by up to 24 percent by the year 2030.” Pope said the ARC is interested in energy for economic development and “not for energy’s sake.”
Worth talked about the green efforts at community colleges. She said that every community college is improving the energy efficiency of their campuses, making sustainability part of their curriculum, and “expanding industry and workforce partnerships to rapidly train much of the nation’s “greening” workforce.”
New DOE Plan for Clean Energy Loans (10/09)
Steven Chu announced the Department of Energy’s (DOE) plan to administer up to $750 million of the American Recovery and Reinvestment Act funds to be used towards accelerating the development of renewable energy projects. The funding is intended to cover loan guarantee costs, which could assist in lending between $4 billion and $8 billion to appropriate projects.
To help with this, DOE has created a new loan guarantee program called Financial Institution Partnership Program (FIPP). According to DOE, the goal of FIPP is to “leverage the human and financial capital of private sector financial institutions by accelerating the loan application process while balancing risk between DOE and private sector partners participating in the program.”
State Surveys Get $17.79 Million in DOE Geothermal Grants (10/09)
Energy Secretary Steven Chu dedicated up to $338 million in American Recovery and Reinvestment Act (or stimulus) funds for geothermal research, exploration and development grants. In addition, Chu announced that a coalition of 40 state geological surveys led by the Arizona Geological Survey (AZGS) will gather state-specific data for the new National Geothermal Data System (NGDS) using the Geoscience Information Network (GIN). The GIN is a program between the Association of American State Geologists (AASG) and the U.S. Geological Survey to integrate geological databases into an accessible, online format.
In the grant announcements, AZGS will receive $17.79 million of the funds over three years on behalf of the coalition to populate the NGDS. Most of the other projects announced are also expected to contribute their data to the NGDS.
For more information on the announcement and projects funded, read the press release on the DOE website.
DOI Releases Review of Oil and Gas Leases in Utah (10/09)
A Department of the Interior (DOI) review team recommends opening 17 of the 77 leasing sites withdrawn after their last minute sale in the final weeks of the Bush Administration. Interior Secretary Ken Salazar has pledged to uphold the recommendations, and use them as a starting point to overhaul the Bureau of Land Management oil and gas leasing programs. Of the remaining 60 parcels, 8 will be withdrawn and 52 are under further review.
In January, a temporary injunction was issued by a federal district court against the 77 sites in Utah after environmental groups challenged the sales. Many of the sites are located near national parks, or other sensitive lands. In February, DOI withdrew the leases and ordered a thorough review of the sites.
Measure Proposes a New Oil and Gas Leasing Agency (10/09)
The Minerals Management Service Reform Act (H.R. 3736) has been introduced by Government Reform Committee Ranking Member Darrell Issa (R-CA) to remove the Minerals Management Service (MMS) from the Department of the Interior (DOI) and make it an independent agency. MMS, which oversees oil and gas royalty payments, would become an independent federal agency with a director appointed by the President. Issa argues that this will allow for more effective oversight by Congress.
House Natural Resources Chairman Nick Rahall (D-WV) disagrees and introduced a bill of his own (H.R. 3534) that would consolidate the energy programs of both the Bureau of Land Management (BLM) and MMS into one office at DOI in charge of onshore and offshore oil and gas leasing. Rahall says this bill will also give more authority to DOI’s inspector general.
Secretary Ken Salazar agrees that an office is needed within DOI to collaborate between BLM and MMS, but it is yet to be seen how to best set up and carry this out.
House Bill Aims to Provide $250M for Clean Tech Start Ups (10/09)
Representative Glen Nye (D-VA) introduced the Small Business Early-Stage Investment Act of 2009 (H.R. 3738) to allocate $250 million for a Small Business Administration program designed to provide grants to small and early stage companies in clean technology.
Despite the growth in interest for clean technology, lending in the sector has been hit hard by the recession. Studies show that investment fell by over half throughout the past year. Proponents of the bill noted the potential economic benefit to be unleashed by the investment.
The funds will be administered through established venture capital firms. This system was commended by supporters in business and government for the potential efficient and effective investment that can be made by professionals. The strict stipulations of the bill, however, may prove to be an issue in the venture capital community. A mandate to spend the fund within five years may be too quick as many capital venture funds last 10 or more years. The stipulations for experience and fund success could also prevent talent laden young firms from participating in the program.
Solar R&D Bill Passes House (10/09)
The Solar Roadmap Technology Act (H.R. 3585), introduced by Representative Gabrielle Giffords (D-AZ) in the House Science and Technology Committee, passed the House on October 22 and awaits approval in the Senate. The bill would allocate $2.25 billion from fiscal years 2010 to 2015 for solar research and development projects. It also would create a “Solar Technology Roadmap Committee” of Department of Energy (DOE) appointed experts, a third of which will be solar industry representatives. It also mandates that by 2012, 30 percent of the DOE funding for solar research, development, and demonstration (RD&D) is consistent with the roadmap recommendations, and is ramped up to 75 percent by 2015. Energy Secretary Steven Chu will be in charge of awarding grants to carry out the solar programs and providing awards to industry for solar manufacturing RD&D.
EESI “Zero Energy” Homes Briefing (10/09)
The Environmental and Energy Study Institute (EESI) and Representative Bart Gordon (D-TN) held a hearing on “‘Zero Energy’ Homes: Here Now.” About 40 percent of the country’s energy is consumed by buildings. With much concern surrounding climate and energy legislation and the projected rise in price of energy bills, this briefing was held to show that the technologies needed to build energy efficient homes are available. To reinforce that point, zero energy homes were on display near the Capitol as part of the Department of Energy’s Solar Decathlon in October. The speakers included Cathy Zio, Assistant Secretary for Energy Efficiency and Renewable Energy for the U.S. Department of Energy; Richard King, Director of the Solar Decathlon; Donald Colliver, Solar Decathlon Project Leader and Professor at the University of Kentucky; Erin Poch, Director of Business Development at Roofing Resources, Inc.; and John Stanton, Associate of the Solar Energy Industries Association (SEIA)
Zio, King, and Colliver gave talks about the Solar Decathlon. The goal of the Decathlon is to build “attractive, fully functional 800 square-foot homes…that operate completely and independently on the electric grid.” King said the decathlon not only educates students, but also professionals, builders, and architects. Colliver stated that the objectives of the Decathlon are to demonstrate that net-zero energy homes are not only possible, but feasible, and that these houses can be marketable. He called the experience of being a project leader the “most exciting opportunity in [his] 30 years of teaching.”
Poch and Stanton talked about ways that someone could cheaply improve the efficiency of an already existing building. Poch suggested the addition of a bio-based cool roof system, low-height insulations, and liquid thermal barriers. Stanton said that solar technologies are becoming more and more affordable as the rate of manufacturing increases. He added that since last year, the production of solar panels have increased by 80 percent and that the prices have gone down by 50 percent.
Forum on the Perils of Energy Sprawl (10/09)
Resources For the Future held a policy leadership forum entitled “The Perils of Energy Sprawl.” Senator Lamar Alexander (R-TN), a member of the Senate’s Environment and Public Works Committee and Chairman of the Senate Republican Conference, discussed the current movement towards renewable energy. He proposed that this movement could threaten the nations habitats, landscapes, and land.
Alexander spoke of the Nature Conservancy paper titled, “Energy Sprawl or Energy Efficiency: Climate Policy Impacts on Natural Habitat for the United States of America” (PDF). The paper warns that production of renewable energies such as wind power, biofuels, and solar could potentially require a landmass larger than Nebraska. It recommends four ways for policymakers to approach this problem: 1) concentrate on energy conservation, 2) place renewable energy technologies in already developed sites to decrease energy sprawl, 3) make carbon regulation flexible for coal and nuclear plants, and 4) give thought to the site selection of the energy projects.
Alexander gave suggestions on how the country can reach its carbon goals with the least environmental damage. Alexander urged that the country rethink nuclear power, calling it the most compact form of renewable energy. He advised that the U.S. should, over the next 20 years, build 100 nuclear power plants as well as electrifying half of the cars and trucks being driven. He also recommended the placement of solar panels on rooftops in order to use already developed space. Alexander ended his speech by referring to Al Gore's documentary "An Inconvenient Truth", calling nuclear power the “inconvenient solution” to an “inconvenient problem.”
The transcript for Senator Alexander’s speech can be found here.
Competing Energy Bills Emerge in the House (9/09)
Representatives Tim Murphy (R-PA) and Nick Rahall (D-WV) have introduced competing energy bills to overhaul onshore and offshore energy leases and revenue systems. Hearings were held in September on Murphy’s American Conservation and Clean Energy Independence Act (H.R. 2227) and Rahall’s Consolidated Land, Energy, and Aquatic Resources Act of 2009, or CLEAR Act, (H.R. 3534).
The CLEAR Act would create a new Department of the Interior (DOI) agency to govern oil and gas leasing on federal lands, a task currently split between the Bureau of Land Management (BLM) and Minerals Management Service (MMS). It would pressure industry to quickly develop their leases and would add new fees. It also makes changes to offshore development rules, includes a commercial wind and solar leasing program, and boosts funding for ocean conservation and land acquisition
H.R. 2227 is a bipartisan bill with wide support from Republicans and conservative Democrats in the House. It includes the Bush Administration plan for the outer continental shelf, which expands leasing into areas off all coasts. The revenue from offshore production, which Murphy estimates to increase to at least $2 trillion with the expanded area, would be distributed to states and various reserves. The reserves include a renewable energy fund to promote alternative energy development, an environmental restoration reserve, and a clean coal and carbon capture technology fund.
The CLEAR Act, while garnering some support, has many industry groups concerned about the proposed fee increases and environmentalists worried about a disconnect between the proposed leasing office and the land management side. Some moderates prefer the provisions in H.R. 2227, but have not expressly opposed the CLEAR Act.
House Passes Wind Energy and Advanced Vehicles Bill (9/09)
The Wind Energy Research and Development Act (H.R. 3165), which passed the House this month, would provide $1 billion over five years for research into wind energy generation. This includes materials and turbine design, offshore applications, and reliability improvement. The bill’s sponsor, Congressman Paul Tonko, (R-NY), extolled the potential for wind in the U.S. and described this bill as bringing the country closer to realizing that full potential.
With a vote of 312-114, the House passed the Advanced Vehicle Technology Act (H.R. 3246) to provide $3 billion over five years for research and development of advanced vehicle technologies. Most of the prescribed technology is fuel efficiency and energy related. Approved amendments included adding recreational vehicles and farm equipment, public-private partnerships, reporting requirements, and expand the scope of technologies. The rejected amendment, proposed by Representative Paul Broun (R-GA), would have cut the bill by $700 million. Broun argued that existing funding programs are addressing these needs. Despite the bill’s cost, House Science and Technology Committee Chair Bart Gordon (D-TN) said it would aid in stimulating the economy and developing the next generation of vehicles.
DOI to Eliminate Royalty-in-Kind Program (9/09)
Interior Secretary Ken Salazar cancelled the royalty-in-kind program, saying that in his view, the program has been “a blemish” on the department. The program allowed industry to bypass cash royalty payments by providing oil and gas directly to the Department of the Interior (DOI) instead. DOI reported last year that nearly a third of the royalty-in-kind program staff was receiving gifts and gratuities from oil and gas companies doing business with the agency. Representative Nick Rahall (D-WV) accused the employees of “cozying up with industry officials” rather than getting fair returns for taxpayers. Rahall was pleased with Salazar’s announcement, having recently introduced his own bill (H.R. 3534) to give the federal royalty system a make over, including termination of the royalty-in-kind program.
The American Petroleum Institute is opposed to terminating the royalty-in-kind program because they think the program is cost-effective and reduced paperwork. The DOI’s Minerals Management Service has expressed similar views, saying the program simplifies royalty collections, keeps down administrative costs, and curtails conflicts with energy companies. Regardless, Salazar said a secretarial order to end the royalty-in-kind program will be issued within the next few weeks.
UN Estimates Cost for Renewables in Developing World (9/09)
The 2009 World Economic and Social Survey “Promoting Development, Saving the Planet” issued by the United Nations (UN) in September estimates the cost of converting the world’s developing nations to renewable sources of energy will be between $500 and $600 billion a year for the next ten years. The total investment would represent around one percent of global GDP annually. This is a revised estimate and is much higher than an earlier estimate of about $100 billion.
The report recommends a “Global Sustainable New Deal”, modeled on the one that drove the U.S. out of the Great Depression. This “New Deal”, according to the report, will require large-scale investment that will not easily be supported by developing nations. Funding will likely come largely from public funding, like a global investment program, in conjunction with partnerships, incentives, and innovative financing options. Another important requirement is the transfer of key renewable energy technology from those nations possessing the scientific and technical capital to help less developed nations. These recommendations are founded on the disproportionate degree to which developing nations will be exposed to the potential hazards of climate change.
The report was assembled by the Department of Social and Economic Affairs of the UN Secretariat, and is published annually. The report argues that the combined management of climate change adaptation and planned economic development in developing regions will improve the environment as well as the economic outlook and stability of developing countries.
The responsibility of developed and developing nations to address climate change will be discussed this December at the UN Climate Change Conference in Copenhagen. This report will provide some basis for discussing the costs of developing a new climate change treaty to follow the Kyoto Protocol.
The survey is available here.
Algae-Based Biofuels Gain Congressional Favor (8/09)
Interested in the benefits of algae as a biofuel, Representatives Brian Bilbray (R-CA), Jay Inslee (D-WA), and Harry Teague (D-NM) have introduced a bill (H.R. 3460) to include algae-based fuels in the renewable fuels standard (RFS) and cellulosic biofuels tax credit. The Energy Policy Act of 2005 currently limits corn-based ethanol production to 15 billion gallons a year by 2015 and has 21 billion gallons of renewable fuels coming from advanced biofuels, which includes cellulosic biofuels and biodiesel. However, there is no specific inclusion of algae-based biofuels. The Senate has not introduced any similar bills. Senate Energy and Natural Resource Committee Chairman Jeff Bingaman (D-NM) has called the RFS too restrictive and fellow New Mexico Senator Tom Udall (D) is a strong proponent of algae-based fuels, so companion legislation may come soon.
Congress’ interest is sparked by investment in algae-based biofuels by industry giants, small start-ups, and Native American tribes. This year, Exxon Mobil and Dow Chemical announced investments in algae-based biofuels, and a frenzy of smaller companies have demonstration projects across the country. The Southern Ute tribe in Colorado is contributing about one third of the capital and free use of their natural gas rich land to partner with Solix Biofuels. Solix proposes using the waste streams from natural gas processing plants to grow algae for fuel. The growing algae trend will likely makes its way into the energy bill discussions this fall.
NY Times article on the Southern Ute tribe algae investment:
Funds Announced for Energy Frontier Research Centers (8/09)
The Department of Energy (DOE) announced on August 6 that $377 million will be used to establish 46 new Energy Frontier Research Centers (EFRCs). The new EFRCs are located within 31 universities, 12 national laboratories, 2 nonprofit organizations, and one corporate research center that were selected as part of an extensive merit-based review process. The objective of these centers is to facilitate and accelerate the U.S. transition to a clean energy economy by producing the necessary scientific breakthroughs.
The EFRCs will work on advances in renewable energy, transportation, energy efficiency, electricity storage and transmission, clean coal and carbon capture and sequestration, and nuclear energy. These centers are part of Energy Secretary Steven Chu’s plan to spur innovation that will reduce greenhouse gas emissions and lessen U.S. reliance on foreign oil. Funding for these centers comes mostly from the American Recovery and Reinvestment Act of 2009, but $100 million is from the DOE fiscal year 2009 budget.
DOI Fast Tracks Renewables on Public Land (8/09)
The Department of the Interior (DOI) is trying to quickly expand renewable energy development on federal lands by designating more than 670,000 acres for Solar Energy Study Areas. These study areas are located in six western states and will be evaluated for environmental impacts and resource suitability for utility-scale solar energy development. The study areas will be segregated from other mineral resource development to allow the Bureau of Land Management (BLM) to complete the environmental reviews and establish acceptable development zones by the end of 2010. DOI hopes to have 13 commercial-scale solar plants under construction by the end of next year. DOI is also setting up new solar energy permitting offices to facilitate permitting for companies that have already applied for solar projects inside and outside of the study areas.
Large-scale solar energy projects may not move as quickly as DOI hopes, as concerns over the impacts arise. Environmental and conservation groups are worried that the large projects and the long transmission lines needed to connect the power plants to the urban areas will destroy endangered species’ habitats. Industry is also concerned about developing in the rain parched west, where getting water rights to cool their systems may be difficult. DOI does not have similar study zones planned for wind or geothermal.
IEA Warns Of "Oil Crunch" in Next 5 Years (8/09)
The chief economist, Fatih Birol, of the International Energy Agency (IEA) declared that a devastating “oil crunch” will occur in the next five years because most of the major oil fields are past their peak production. Birol warned that global oil production will peak in 10 years, which is sooner than predicted because the decrease in oil production is occurring twice as fast as projected. Birol stated that oil prices will be higher because the supply will not increase with demand.
The comments were made on June 29, 2009 after the IEA released an update to its medium-term forecast for oil demand. The IEA is comprised of energy experts from its 28 member countries and conducts energy research as well as advises the 28 countries on energy policy. The organization focuses on the “Three E’s”, energy security, economic development, and environmental protection.
More details about the IEA’s medium-term oil forecast are available here.
FutureGen to Proceed to Design Stage (7/09)
On July 14, 2009 the Department of Energy (DOE) formally announced its intentions to proceed with planning for the FutureGen Project in Mattoon, IL. The project is a non-profit industrial consortium led by the coal-fired electric power industry and the coal production industry to plan, design, construct and operate a coal gasification power plant integrated with carbon capture and sequestration. The plant will be capable of capturing 90 percent of the carbon dioxide released, but may only operate at 60 percent capacity for the first few years. The project will also limit emissions of other pollutants and include an option for a research platform to support development of technologies for future power plants that capture and sequester carbon dioxide.
In June 2008, President Bush discontinued support for the project. Since then DOE has reassessed that decision and reached an agreement to complete a preliminary design, a revised cost estimate and a funding plan. This announcement does not commit DOE to any actual construction yet. If the plans are approved, DOE will contribute $1 billion from stimulus funds with an additional $1.4 billion coming from the FutureGen consortium, revenues from electricity sales, and other sources yet to be identified.
More information about FutureGen is available at http://fossil.energy.gov/programs/powersystems/futuregen/
DOE Begins Looking at ARPA-E Proposals (7/09)
The Advanced Research Projects Agency-Energy (ARPA-E) of the Department of Energy (DOE) has completed the submission stage of its first Funding Opportunity Announcement. ARPA-E will focus on high risk, high pay-off technologies that lead to energy transformations. Its aims to maintain U.S. economic security by identifying technologies with the potential to reduce energy imports from foreign sources, reduce energy-related greenhouse gas emissions, and improve energy efficiency while keeping the U.S. as the technological leader in the world.
ARPA-E has received about 3,500 concept papers for the $150 million available from the stimulus package passed earlier this year. The number of concepts exceeded industry expectations and demonstrates the large capacity for energy innovation in the nation. ARPA-E will notify those who submitted concept papers by July 28, 2009 if they think the concepts are feasible and the applicant should proceed. Full proposals are due by August 28, 2009. ARPA-E is planning to offer further solicitations in the future.
For more information please visit the ARPA-E website at: http://arpa-e.energy.gov/
Court Clarifies Ruling On Offshore Drilling (7/09)
On July 29, 2009 the Department of the Interior (DOI) issued a press statement indicating it will proceed with the offshore oil lease sale in the Gulf of Mexico on August 19. This decision comes one day after the U.S. Court of Appeals for the District of Columbia Circuit clarified that its prior ruling to vacate the 2007-2012 Outer Continental Shelf oil and natural gas leasing program applies only to the Chukchi, Beaufort and Bering Seas around Alaska. The court vacated this part of the program because the Bush Administration did not conduct sufficient scientific and environmental analysis before scheduling the leasing.
Leasing in the Gulf of Mexico and other areas will proceed according to the five year leasing plan, while the DOI will work to fix the problems with the offshore leasing around Alaska. The DOI will provide periodic updates on their progress to ensure sufficient scientific and environmental analysis for potential offshore leasing in the Chukchi, Beaufort and Bering Seas.
Hydraulic Fracturing Debated In Congress (7/09)
Congress is debating whether hydraulic fracturing should be monitored under the Safe Water Drinking Act. In the Energy Policy Act of 2005, hydraulic fracturing was removed from the oversight of the Safe Water Drinking Act. Bills in the House (H.R. 2766) and the Senate (S. 1215) would repeal this exemption. According to an HIS Global Insight study released by the American Petroleum Institute (API), between $84 and $374 billion in gross domestic product (GDP) losses would occur by 2014 if there was increased regulation or total elimination of hydraulic fracturing. The study also found that an increase in unemployment and foreign imports would follow.
Hydraulic fracturing has been used by the industry for over 50 years to aid in drilling for difficult to recover gas reserves. Some say the chemicals mixed with the sand and water to break up the rocks are harmful to groundwater. After Congress was assured the process was safe, it was removed from the Drinking Water Act. Since then several contaminated sites have been found near gas wells, but the Environmental Protection Agency (EPA) now has limited authority to investigate. Congress wants to reinstate EPA authority and held hearings to assess the situation, while industry references studies showing that state oversight is sufficient and federal regulations will only hamper exploration.
The PDF of the API study is available here:
Information on the Safe Water Drinking Act is available from EPA:
The full text of H.R. 2766 is available from Thomas:
The full text of S. 1215 is available from Thomas:
Senate Introduces Offshore Revenue Sharing (7/09)
The Outer Continental Shelf (OCS) drilling debate continues as strong advocates of increased offshore drilling develop a coastal states revenue sharing bill. Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) introduced the Domestic Energy Security Act of 2009 (S. 1517), which would direct 37.5 percent of revenue generated by offshore oil and gas development to those coastal states and 12.5 percent to the Land and Water Conservation Fund. The bill would provide incentives for these states to contribute to the “energy bridge” between foreign oil and new energy sources. Landrieu’s argument is that all revenues currently go to the federal treasury, bypassing the states which deal with the risks and responsibilities of OCS development.
Energy and Natural Resources Chairman Jeff Bingaman (D-NM) argued against revenue sharing, pointing out that the OCS is a federal resource. Murkowski’s staff indicated she will try and add this bill as an amendment to the climate and energy legislation moving through the Senate. If energy and climate change are combined into one comprehensive bill this amendment could draw some offshore drilling supporters, but is likely insufficient to sway staunch opponents to the climate change bill. Murkowski has urged that energy be considered separately from climate legislation, despite the two being merged in the House bill.
The debate resumed this year after last summer’s high gas prices and lapse in the OCS drilling ban. Interior Secretary Ken Salazar is still working to develop his OCS policies for the Gulf of Mexico and Alaska after Congress let the 18 year moratoria expire. Senator Byron Dorgan (D-ND) has already tried to add language to widen the OCS leasing areas in the Senate energy bill, causing tension with Senator Bill Nelson (D-FL). S. 1517 includes similar widening language along with the revenue sharing plan.
The full text of S. 1517 is available from Thomas: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:s1517:
House Committee Approved Four Energy R&D Bills (7/09)
On July 29, 2009, the House Science and Technology Committee approved four bills that would establish energy research and development (R&D) programs within the Department of Energy (DOE). The first bill (H.R. 3246) would provide funding for R&D of advanced vehicles, such as electric vehicles and hydrogen fuel cells, to reduce petroleum fuel use and gasoline emissions. The second bill (H.R. 3165) would fund wind energy R&D in order to create lighter, larger and cheaper wind turbine blades and advanced sensors for better performance and reliability. Research of offshore wind energy applications and a collaborative wind energy demonstration program between DOE and industry would also be authorized. The third bill (H.R. 3029) would establish a research, development, and technology demonstration program for natural gas turbines with the goal of achieving combined cycle efficiency of 65 percent. The last bill (H.R. 3247) would establish a social and behavioral science research program in DOE to better understand the societal factors that influence energy consumption.
The full text of each of the four bills can be found on Thomas at:
H.R 3246: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.3246:
H.R 3165: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.3165:
H.R 3029: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.3029:
H.R 3247: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:h.r.3247:
The New Energy Economy and Energy Storage Briefing (7/09)
On July 16, 2009, a briefing on the status of energy storage technology was held by the National Science Foundation, Discover Magazine, the Institute of Electrical and Electronics Engineers, Inc., and American Society of Mechanical Engineers. Corey S. Powell, the Editor in chief of Discover, moderated the meeting. Dr. Daniel Nocera and Ralph Masiello spoke on their work in energy storage.
Nocera is the Henry Dreyfus Professor of Energy and Professor of Chemistry at the Massachusetts Institute of Technology. His research involves using water instead of batteries to store power. He described this technology as a process similar to photosynthesis that uses solar energy to split water molecules into oxygen and water and then recombined the gases in a fuel cell. He claimed that batteries will never be efficient enough to sustain the quantities of energy storage needed for successful renewable energy because batteries are less energy dense compared to the chemical bonds of the water molecule. While his research is not complete and the technology is a long way from being commercially available, Nocera stated that water is the future of energy storage technology and there is no way to stop it. Masiello, the KEMA innovation director, spoke of more short term solutions for energy storage, including batteries, super capacitors, compressed air, and pumped hydro-electric storage. He talked about the reliability assurance that batteries could provide for communities as local stationary storage systems, and concluded with some policy issues that still need to be worked out, like who owns the energy being stored.
Hayes Nomination Approved, Utah Lease Report Released (6/09)
David Hayes was finally confirmed to be the Deputy Secretary of the Interior, more than two months after Senators Lisa Murkowski (R-AK) and Bob Bennett (R-UT) placed holds on the process. Their concern was not over Hayes himself, but unsatisfactory answers they received from the Interior Secretary Ken Salazar about last year’s oil and gas lease auction. Hayes was confirmed on May 20, 2009 when the senators lifted their holds after Salazar promised to personally review the issue. Bennett and Murkowski wanted a commitment that the Administration was pursuing a balanced energy approach.
Salazar has evaluated the lease auction of concern, under the leadership of Hayes, and released a report on June 11, 2009. The report outlines the flaws in the procedure and inaccurate information that caused Salazar to cancel 77 leases in Utah this February, which in turn started the outcry from Senator Bennett. The report concludes that some of the leases could be reinstated, while others should not be leased for various environmental and legal reasons.
The full report on the 77 Utah leases is available from DOI: http://www.doi.gov/utahreport/
GOP House Energy Bill (6/09)
The House Minority Leader John Boehner (R-OH) and 108 co-sponsors introduced the American Energy Act (H.R. 2846) on June 12, 2009, in response to the Democratic backed American Clean Energy and Security Act of 2009 (H.R. 2454). While the two bills are similar, the emphasis of the American Energy Act is on the creation of jobs while developing renewable, nuclear, and biomass energy sources, as well as producing more domestic oil and natural gas.
The Republicans claim that the American Energy Act is an all inclusive bill that will help to clean up the environment without unnecessary taxes and without sending jobs overseas. The bill would expand all types of energy production, including drilling on the outer continental shelf and in the Arctic coastal plain. The money from the leasing of these federal lands would be used to establish a Renewable and Alternative Energy Trust Fund that provides financial assistance for renewable, alternative, and unconventional energy programs. Renewable energy expansion would also be supported with tax credits for people using or investing in renewable energy sources.
Nuclear energy would be expanded with a proposal to bring 100 new nuclear reactors online in the next 20 years. The oil shale lease program that leases federal lands to private companies for the research and development of oil shale production would be reinstated, and lastly, the bill would streamline the refinery permitting process. The American Energy Act has been referred to the House Natural Resources Committee Subcommittee on Energy and Mineral Resources.
Energy Bill Passes Senate Committee (6/09)
The Senate Energy and Natural Resources Committee voted 15 to 8 to report out a new bill entitled the American Clean Energy Leadership Act of 2009, which includes eleven bills developed within the committee. The measure contains significant legislation to help improve energy efficiency, energy security and energy market information. Some contentious issues include greater access to offshore oil and natural gas drilling in the eastern Gulf of Mexico, a national renewable electricity standard (utilities would have to provide 15 percent of their power from renewable energy sources) and new federal electricity transmission siting authority.
Details of the bill of particular interest to the geosciences community include measures for: clean energy technology development, energy innovation and workforce development, to increase domestic production and assessment of oil and natural gas, to increase production of renewable energy on public lands, to assess nuclear waste management and to understand and develop strategies regarding the energy-water nexus.
The various parts of the measure are available for review at the Senate Energy and Natural Resources Committee website.
Republicans Introduce Oil Shale Development Bill (6/09)
On June 1, 2009, the Ranking Member of the House Natural Resources Committee Subcommittee on Energy and Mineral Resources Doug Lamborn (R-CO) introduced a bill to expand the development of oil shale. The bill is called the PIONEER Act (The Protecting Investment in Oil shale the Next Generation of Environment, Energy, and Resource Security), H.R. 2540. Natural Resources and Energy Committee Ranking Member Doc Hastings (R-WA), a co-sponsor of the bill, stated that developing oil shale is not only a way to relieve the United States’ dependence on foreign oil, but will also boost the economy and create new American jobs.
The PIONEER Act would reinstate the Research, Development, & Demonstration (RD&D) leasing that Secretary of the Interior Ken Salazar removed in February. In January, the former administration had proposed a second round of RD&D leasing, where federally owned land is leased to private companies for oil shale production. Under the PIONEER Act, the Secretary of the Interior would be allowed to temporarily reduce royalties, fees, rentals, bonus, or other payments for these leases. Lamborn believes that oil shale development cannot be accomplished without the incentives for private companies to engage in oil shale production. The bill would also establish the guidelines published by the Bureau of Land Management (BLM) as rules for the investment and development of commercial oil shale production on federally owned lands. While the technology needed for commercial extraction of the oil shale is several years away, the BLM regulation will provide for the development of technologies to efficiently extract the oil in an environmentally safe way.
House Introduces Deep Seabed Mineral Resources Bill (6/09)
On June 11, 2009, Delegate Faleomavaega (D-American Samoa) introduced a deep seabed mineral resources bill (H.R. 2834). The bill would direct the National Oceanic and Atmospheric Administration (NOAA) to “conduct a technological capability assessment, survey, and economic feasibility study regarding recovery of minerals, other than oil and natural gas, from the shallow and deep seabed of the United States” and submit a report on their findings within two years of enactment. The seabed is defined as the areas within 200 miles of territorial seas. The bill does not authorize any specific appropriations for this work. The measure puts NOAA in charge of the survey but calls for NOAA to consult with other appropriate Federal agencies.
Coal Reserves Overestimated According to USGS Study (6/09)
In 2007 the Energy Information Administration (EIA) predicted a 240-year supply of U.S. coal reserves, based off their estimate of nearly 500 billion tons of recoverable U.S. coal reserves. However a new study released by the U.S. Geological Survey found that only 6 percent of the coal in the nation’s largest coalfield is economically recoverable, even if current market price was to increase. The study, started in 2004 to better understand the immense Gillette coalfield in the Powder Basin of Wyoming, reveals that the U.S. only has a 120-year supply. This discrepancy prompted the EIA to release a statement saying they will reassess their estimates using the new USGS data. The full report is available from the USGS.
USGS Arctic Oil and Gas Assessment Published in Science (6/09)
The U.S. Geological Survey (USGS) recently completed a geologically based assessment of the Arctic, the Circum-Arctic Resource Appraisal (CARA), to determine the potential for oil and gas resources stored in the Arctic Circle. The Arctic continental shelves provide a unique location, under 500 m of water, for these resources, which could be utilized given concern over future energy supplies. The CARA only considered areas with recoverable hydrocarbon volumes larger than 50 million barrels of oil or 300 billion cubic feet of gas, excluding smaller accumulations and nonconventional resources like oil shales and gas hydrates. The assessment also used mapping and assessing units (AUs) based on the sedimentary makeup of the Arctic. The average assessment found for the Arctic consists of double the amount of oil thought to be there originally. The study concluded undiscovered oil in the Arctic may account for almost four percent of the world’s remaining conventionally recoverable oil resources. In addition, they concluded the Arctic may hold three times the amount of undiscovered gas as oil. The report was included in the May 29, 2009 issue of Science Magazine.
Interior Secretary Reports on Carbon Capture Storage (6/09)
On June 3, 2009, Interior Secretary Ken Salazar submitted a report to Congress on recommendations for a national program that would select sites for carbon capture and sequestration (CCS) projects. The report was prepared with the assistance of the Bureau of Land Management (BLM), the United States Geological Survey (USGS), the Environmental Protection Agency (EPA), and the Office of Fossil Energy in the Department of Energy. The recommendations included criteria for the identification of potential sites, suggesting that deep saline formations were the most suitable due to their large storage capacity. Other potential sites are oil and gas fields, deep saline water reservoir rocks, and coal beds. The geologic formation selected must be able to store the injected CO2 for long timescales, and monitoring the site after it is sealed must also remain functional. The report also indicated that research into environmental safety is still needed, and that investigational large-scale projects must also be tested to ensure the long term isolation of the CO2. The USGS will assess storage in oil and gas fields and saline formations using a new methodology and funding in the fiscal year 2010 budget.
The full report (PDF) is available from the DOI.
Reducing Greenhouse Gas Emissions through Improved Manufactured Housing (6/09)
The Environmental and Energy Study Institute (EESI) hosted a briefing on June 25, 2009 entitled “Helping Low-Income Households Reduce Energy Bills and Greenhouse Gas Emissions through Improved Manufactured Housing” to inform the public and congressional staff on the role manufactured housing can play in energy, climate, and affordable housing policy solutions. The speakers were Mark Wolfe (Energy Programs Consortium), George McCarthy (Ford Foundation), JoAnn Choate (Maine State Housing Authority), Stacey Epperson (Frontier Housing, Inc.), and David Szymanski (USGS/GSA Science Fellow in the Office of Sen. Jon Tester (D-MT)). The presentations focused on the need to replace pre-1976 mobile homes that were built before the HUD code took effect with energy-efficient manufactured homes which are safer and require less energy, thereby reducing greenhouse gas emissions.
Currently, there are over two million units in the U.S. that low-income families call home despite unhealthy living conditions created by the lack of safety in these homes and inefficiency in energy use, causing them to have high energy bills they can ill afford. H.R. 1749 has been introduced to provide owners of pre-1976 units with a $7,500 rebate to leverage with state funding to purchase a new Energy Star qualified manufactured home. The bill is a provision in the American Clean Energy and Security Act of 2009 (H.R. 2454) and Sen. Jon Tester (D-MT) plans to introduce companion legislation in the Senate. The need to replace these homes was highlighted at the briefing with one example of a pre-1976 mobile home which when replaced with an Energy Star manufactured home reduced the owner’s electricity usage from 6,000 kilowatts per month to only 1,600 kilowatts per month.
The power points from the speakers at the briefing are available on the EESI briefing page.
ACS Briefing on “Enabling Renewable Energy: Building a Bigger Battery” (6/09)
The Senate Science and Technology Caucus and the American Chemical Society’s “Science & the Congress Project” hosted a briefing on June 16, 2009 that discussed the status of energy storage technology as a way to make solar and wind energy more reliable energy sources. Following introductory comments by Mr. Richard Campbell on current energy and climate legislation such as H.R. 2454, four guest speakers gave presentations on their views of electricity storage. Dr. Bernard Lee, a retiree from the Institute of Gas and Technology, spoke about Massive Electricity Storage (MES) that can convert intermittent power to dispatchable power for the grid. He suggested that an electrochemical battery would be the most feasible MES technology for the large scale needed. He urged Congress to recognize the importance of energy storage and fund new R&D. Dr. Yet-Ming Chiang, from the Massachusetts Institute of Technology, stated that the grid will be a hybrid of renewable and non-renewable energies, relating the development of energy storage to the recent and rapid development of hybrid cars. Dr. Ali Nourai, the Strategic Technology Consultant from American Electric Power (AEP), proclaimed AEP’s experience using energy storage and described AEP’s vision of future energy storage, where small, utility controlled batteries store energy for every four to five houses. Lastly, Mr. Bradford Roberts, the Executive Director of the Electricity Storage Association, showed the different types of batteries that are in place today, highlighting the world’s largest battery in Japan. The battery is attached to a wind farm, making the wind energy continuously dispatchable. He noted that the technology for this battery was started by the Ford Motor Company in the 1970s, but abandoned. Currently the U.S. does not have deployable technology for large scale energy storage, something necessary for increased reliance on wind or solar energy.
Forest Biomass as a Renewable Energy Source in the United States (6/09)
The Environmental and Energy Study Institute (EESI) hosted a briefing on June 11, 2009 entitled “Forest Biomass: Renewable, Low Carbon, and Limited” to inform the public and congressional staff on the role that forest biomass can play in contributing to renewable energy supplies in the United States. The speakers were Ken Skog (U.S. Forest Service Forest Products Laboratory), Bob Abt (North Carolina State University), Ben Larson (Union of Concerned Scientists), and Michael Goergen (Society of American Foresters). The presentation focused on biomass as an opportunity to develop a new energy market while reducing the threat of climate change. It will be necessary to carefully develop this market so as to avoid negative environmental impacts to four critical areas: water quality, soil productivity, wildlife habitat, and biodiversity.
To qualify for the market, renewable biomass must not deplete forest resources and be readily re-grown. The use of the biomass resource cannot degrade the ecological potential to produce a sustained yield from that resource. All development options need to include different avenues through which forest owners can participate, as well as safeguards for certain critical private and federal lands. If this market generates more demand for biomass, a higher pace of thinning for fire hazards and forest health as well as a greater supply from traditional sources like pulpwood will likely be required to meet the need. In addition, questions remain due to how biomass fits in with the Renewable Fuels Standard of the Energy Independence and Security Act of 2007 which provides challenges in developing a renewable biomass energy market. There is a need to move toward incentives and outcomes that are consistent with the interaction of energy, forest, agriculture, environmental, and carbon policy. Forests can serve as an important resource to mitigate climate change, but they must be managed in such a way so that they are carbon sinks and not carbon sources.
The power points from the speakers at the briefing are available on the EESI briefing page.
EIA Releases 2009 Energy Outlook Report (5/09)
The Annual Energy Outlook 2009 (AEO2009) report from the Energy Information Administration (EIA) was released in March 2009, with supplemental reference material released in April 2009. The AEO2009 analyzes U.S. energy supply and demand and makes projections on energy supply and demand through 2030. The economic forecasts were updated to incorporate the stimulus effects and the recent, rapid fluctuations in U.S. and global economies. Overall, though, the projections focus on what drives the energy markets in the long-term. The key issues covered are: higher but uncertain world oil prices, growing concern about greenhouse gas (GHG) emissions and its impacts on energy investment decisions, the increasing use of renewable fuels, the increasing production of unconventional natural gas, the shift in the transportation fleet to more efficient vehicles, and improved efficiency in end-use appliances.
The key projections note that world oil prices could swing from $50 to $200 per barrel of oil through to 2030; there might be no growth in U.S. oil consumption because of increasing oil prices, fuel efficient vehicles and the use of biofuels; and there might be more limited growth in coal-fired power plants and much higher growth in natural gas-fired power plant than previously predicted because of greenhouse gas emission reductions.
Overall energy consumption is projected to increase by 0.5 percent per year through 2030 and fossil fuels will account for more than 75 percent of all consumption with nuclear, biofuels and renewables accounting for about 25 percent. Overall electricity demand is projected to increase by 1 percent annually from 2007 to 2030 and the demand will be met by nearly the same proportion of energy resources for electricty with the most noticeable increase from renewable energy resources (47 percent from coal, 18 percent from nuclear, 14 percent from renewables and 20 percent from natural gas for the 2030 reference case).
The full report, summaries, and supplemental material are all available online:
Senate Energy Bill Proceeds Slowly (5/09)
The Senate Energy and Natural Resources Committee continues work on a massive energy bill in bits and pieces. Sections on appliance efficiency; the energy and water nexus; the manufacturing sector's efficiency; work force training; a clean energy bank administration; transmission siting, planning and financing; grid cybersecurity; and a refined petroleum product reserve have been completed. Amendments on a renewable energy standard (RES) and building efficiency will be considered in the first week of June. Still to come is language on oil and gas provisions including possible funds for an inventory of outer continental shelf resources.
Another part of the energy bill is a measure limiting liability for carbon capture and sequestration projects. The Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2009 (S. 1013) would authorize the Secretary of Energy to carry out a program to demonstrate commercial application of integrated systems for long-term geological storage of carbon dioxide (more than one million tons of carbon annually) without liability. Parties must obtain certification that they are complying with state and federal drinking water protection requirements and conduct tests to verify carbon is not escaping. The bill would also allow the Secretaries of Agriculture and Interior to authorize projects on federal lands.
A large number of amendments and significant additional debate is expected on many parts of the legislation and the committee has already missed their self-imposed deadline of the Memorial Day recess to complete the bill. Even if the bill passes the committee, there is considerable uncertainty about when it might be considered by the full Senate. Majority Leader, Senator Harry Reid (D-NV) has indicated that health care legislation will be considered before energy legislation. The House is not considering an energy bill similar to the Senate’s though there is some overlap of sections with the House climate change and energy bill (H.R. 2454).
Please visit the Senate Energy and Commerce’s Energy Bill 2009 web page for the full text and drafts of the different parts of this legislation at: http://energy.senate.gov/public/index.cfm?FuseAction=EnergyBill.2009
Tar Sands And Oil Shale Are Examined On The Hill (5/09)
The Environmental and Energy Study Institute (EESI) hosted a briefing for the public and congressional staff on the economic, energy, environmental, and security issues surrounding tar sands and oil shale as part of their series on alternative transportation fuels. James Burkhard of the Cambridge Energy Research Associates (CERA), Susan Casey-Lefkowitz of the Natural Resources Defense Council, James Bartis of the RAND Corporation, and Michael Levi of the Council on Foreign Relations presented the status of research and development as well as the positive and negative implications surrounding these fuels. The well-rounded presentation showed the vast extent of the resources as well as the environmental dangers and copious water use associated with developing the industry. They concluded that more research or test facilities, oversight, and strict regulations are needed in order to create a “sustainable industry.”
The power points and audio recording of the briefing are available on the EESI briefing page. For information on the CERA study to determine the needs and priorities of the tar sands industry, read the study overview.
Senate Working on Energy and Water Bills (4/09)
The Senate Energy and Natural Resources Committee has four major energy and water bills highlighted on their website besides a measure to reform hardrock mining that was summarized in last month ’s Monthly Review.
The 21st Century Energy Technology Deployment Act (S.949) would implement reforms to the Department of Energy (DOE) loan guarantee program, including creating a new “Clean Energy Investment Fund” to allow collected costs and payments be used to support more technology deployment. The bill would also create a new entity housed in DOE, the Clean Energy Deployment Administration (CEDA), with strong financial expertise and with a specific purpose to create an attractive investment environment for the development and deployment of new clean energy technologies. Once the Secretary and the Administrator of CEDA agree it is ready, the Clean Energy Investment Fund becomes the seed fund for the new entity.
The Restoring America’s Manufacturing Leadership through Energy Efficiency Act of 2009 (S. 661) would implement programs at DOE to help manufacturers and industry develop energy efficient technologies through loans and public-private partnerships for the development of new technologies.
The Energy and Water Integration Act of 2009 (S. 531) directs the Secretary of Energy to have the National Academy of Sciences conduct an in-depth analysis of the impact of energy development and production on U.S. water resources. It requires the Secretary to conduct a study to identify the best available technologies and related strategies to maximize water and energy efficiency in the production of electricity by each type of generation. It also requires the Secretary to develop an Energy-Water Research and Development Roadmap and the Administrator of the Energy Information Administration to conduct an assessment of energy consumption in various sectors of the economy that are associated with the acquisition, treatment, or delivery of water.
The bill also directs the Secretary of the Interior to conduct a study to evaluate the quantities of energy used in water storage and delivery operations in major reclamation projects; and to operate, manage, and maintain the Brackish Groundwater National Desalination Research Facility in Otero County, New Mexico, to carry out research, development, and demonstration activities to develop technologies and methods that promote brackish groundwater desalination as a viable method to increase water supply in a cost-effective manner.
American Chemical Society hosts briefing on “Understanding the U.S. Energy Profile”
On March 27th, 2009, the American Chemical Society (ACS) held a briefing with 4 panelists who discussed the current status and outlook of U.S. energy supplies. Included in the briefing was an overview of the relationship of national security and energy policy, the current trends in energy sources and uses in the nation, fossil energy supplies, and a summary of the role renewable energy sources play in the nation’s energy profile.
Dr. Robert Fri of the National Research Council first presented an overview of national security implications associated with U.S. dependency on fossil fuels. Fri identified 2 “security” issues, one of “national” security and the other “economic” security. He stated that “national security is the least well understood but the most thought about part of the energy question,” especially in regards to shaping foreign policy. In terms of economic security, Fri indicated that with 85 percent of the U.S. energy supply based on fossil fuels and billions of dollars exported each year for oil economic security is highly vulnerable to price shocks on the global markets as evident from the massive 2008 fluctuation in oil prices. Fri bluntly stated that “energy independence isn’t going to happen” because fossil fuels are commodities traded in global markets, but that the U.S. can reduce its dependency on foreign sources of fossil fuels, which could help buffer the nation from geopolitical instability and wild market fluctuations.
Dr. Howard Gruenspecht, Acting Administrator of the Energy Information Administration, presented a summary of current sources and uses within the U.S. energy profile along with impacts a carbon cap-and-trade system would have on consumer prices for electricity, oil, and natural gas. Gruenspectht also shared various benefits/conflicts to different approaches intended to simultaneously enhance energy security and reduce carbon emissions. For example, improving vehicle fuel efficiency in the U.S. would be a win-win situation by reducing demands of foreign imports and also reduce carbon emissions, whereas carbon capture and sequestration has the benefit of removing carbon that would otherwise enter the atmosphere, but is also energy and water intensive, so is a win-lose situation.
Dr. Scott Tinker, the Texas State Geologist and President of the American Association of Professional Geologists (AAPG), presented the current state of fossil fuel use in the U.S. and abroad, and noted several important trends in the fossil fuel arena likely to impact the nation’s energy portfolio. Tinker stated that energy transitions take time and are limited by scale, and that fossil fuels are essential for the U.S. in the next 20-30 years as a bridge to the new technologies and renewable sources which will replace fossil fuels. Tinker indicated that based on his analysis of global trends “the world has and will use coal,” but stated emerging technologies in carbon capture could reduce global carbon emissions. He also indicated that the U.S. only has about 3 percent of the total world petroleum reserves, and a significant portion of this 3 percent is found in limited access areas. To conclude his presentation, Tinker urged that fossil fuels are not immediately taken of the nation’s energy strategy, stating that “proposed fossil energy policies will likely exacerbate an already poor situation.”
Dr. Allan Bard professor at the University of Texas-Austin, provided an overview on the current state of renewable energies in the U.S. energy portfolio. As of 2007, Bard stated that 9 percent of U.S. energy sources came from renewable sources, and of that nine percent, hydroelectric power provided 70 percent. Bard also shared some of the challenges with renewable energies, including new transmission infrastructure and the continual generating capacity of sources such as solar and wind, which Bard stated are only 28 and 40 percent reliable respectively. Supporting Dr. Tinker’s statement that energy transitions can often take long periods of time, Bard presented a somewhat sobering example of the difficult challenges in the renewable energies sector as defined in a new Department of Energy analysis on the future of wind energy. Bard indicated that for the nation to get 20 percent of its electricity from wind by 2030, 13 wind turbines would need to be installed every day across the nation for the next 21 years, an ambitious goal that would still leave upwards of 60 percent of the nation’s electricity derived from fossil sources. (03/09)
Brookings Calls for a New Bold Approach to Energy Research
Presenting at the National Press Club on February 10th, the Brookings’ Metropolitan Policy Program proposed a bold, new initiative of creating a network of regionally based energy “discovery-innovation” institutes (e-DIIs) across the nation. Such a shift in how the U.S. conducts energy research aims to renew the American economy, energy security, and to address global climate change. The Brookings report, “Energy Discovery-Innovation Institutes: A Step toward America's Energy Sustainability”, calls for these institutes to function as hubs of a research network connecting the nation’s top scientists, engineers, and facilities. This network would facilitate quick transfer of data and resources between research universities and laboratories resulting in accelerated movement of innovative technologies to the marketplace.
National Association of State University and Land Grant Colleges (NASULGC) president Peter McPherson stated at the event that “the Brookings proposal is exceptionally clear about just how unsustainable our way of life has become and the challenges we face in completely restructuring energy production, distribution, and use to fit within the natural limits of our climate and environment.” McPherson further added that “Perhaps the report’s most important point is that energy research, technology development, and commercialization are grossly underfunded, by as much as an order of magnitude. We are talking about the need for a large influx of new resources, not simply a reallocation of what we already have.” Although the Brookings proposal involves a paradigm shift to the approach of solving energy problems in the United States, McPherson emphasized the need for the shift to occur internationally as well. He sees the Obama Administration playing an important role in the transfer abroad of both technologies and paradigms shifts in terms of energy use. (02/09)
DOE Report Calls for a “Game-Changing” Shift in Energy Development
A December 2008 report from a subcommittee of the Department of Energy’s (DOE) Basic Energy Sciences (BES) Advisory Committee stated that current approaches to resolving today’s energy issues are not up to task, and that the rate of improvement is too slow to meet the needs of the nation. The report further explained that current efforts need to be “propelled forward by paradigm-changing breakthroughs: new ideas that change ‘the rules of the game.’” The BES office of the DOE, as described in the report, is to play a pivotal role in this transformation. Although the authors also note that engineers, scientists, venture capitalists, and entrepreneurs must also work in concert to promote the movement of innovative technologies to the marketplace.
The report emphasized that BES must lead U.S. energy research efforts in the direction of new discoveries and pool together “dream teams” of highly educated talent and give them the most advanced tools to increase the rate of discovery. The report tasks BES with leading a national effort to recruit the best talent through workforce development and early career programs to inspire young talent nationwide to strive to be the discoverers and innovators for tomorrow’s energy solutions.(02/09)
President Bush Issues Directive on Arctic Policy
In his final days in office, President Bush issued a 10-page directive on Arctic policy. The directive calls for federal agencies to define areas that the U.S. could claim as U.S. territory, determine the energy resource potential of the Arctic, and look into the need for greater environmental protection, maritime transportation and regional infrastructure. The directive also supports increased funding for research of the impact of climate change on the region. The U.S. Geological Survey, the National Science Foundation, NOAA and NASA would be just some of the agencies that would need funding and cooperation to meet the objectives of the directive.
It would also be prudent for the U.S. to ratify the United Nations Convention on the Law of the Sea if the U.S. wishes to make claims to parts of the Arctic seabed and review the claims of other nations. President Bush has supported the ratification of the treaty, but conservative Republicans have blocked the ratification in the Senate so far. The treaty allows for cooperation on resources of the seas, both the waters and the seabed and has a process for judging the claims of nations for seabed extensions of their continental shelf. If a nation can show that the seabed is part of their continental shelf then they are entitled to the resources. The nations that determine these claims include the nations who have signed the treaty. (01/09)
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Energy policy, a hot topic on Capitol Hill, has become coupled with the issue of climate change as policymakers focus attention on conservation, efficiency and alternative energy options.
In his 2007 State of the Union address, President Bush presented the nation with an ambitious new energy plan that focused on increasing fuel economy and alternative fuel availability, warning that the nation's dependency on foreign oil makes us vulnerable. 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.
Congress held many committee hearings in early 2007 to discuss energy issues. There was a significant emphasis on the need for increased investment in energy-related research and development (R&D), including reports published by the Government Accountability Office and National Academies. The 110th Congress’ work on energy issues culminated in the passage of the omnibus Energy Independence and Security Act of 2007 (H.R. 6), which was signed into law (Public Law 110-140) in December 2007. The law increases vehicle fuel efficiency standards and provides other conservation, efficiency and alternative energy provisions that legislators thought were missing from the previous congress' major energy law, the Energy Policy Act of 2005 (also H.R. 6). The Energy Independence and Security Act also authorizes funds for research and development (R&D), some of it in the geosciences.
Legislators continued to consider energy issues throughout the second session of the 110th Congress in 2008 and some additional energy bills were introduced. Energy issues were often discussed in relation to climate change legislation and Congress seemed prepared to consider energy policy that dealt with climate change. However, skyrocketing oil prices in the summer of 2008 shifted the emphasis to supply and demand issues. President Bush lifted the executive ban on expanding offshore drilling in an effort to pressure Congress to end the moratorium on new offshore drilling that is normally part of the Interior appropriations bill. This caused significant acrimony in Congress and shut down the appropriations process.
On July 23, 2008 the U.S. Geological Survey (USGS) released an assessment of undiscovered oil and gas resources north of the Arctic Circle of which 84 percent occurs in offshore areas. The estimates of 90 billion barrels of oil and 1,669 trillion cubic feet of natural gas were determined using a geology-based probabilistic methodology and account for 13 and 30 percent of the world’s undiscovered oil and gas resources, respectively. The study included resources considered technically recoverable using existing technologies, but did not include economic factors, the presence of permanent sea ice or oceanic water depth in the determination. This has spurred renewed attention to the Law of the Sea Treaty, furthered the offshore drilling efforts and searches for unconventional fossil fuels (such as oil shales or gas hydrates).
In September of 2008 the House approved a bill (H.R. 6899) that would expand offshore drilling as well as incentives for alternative energy. At about the same time, a bipartisan group of senators referred to as the “gang of 10” began discussing compromise legislation that would allow some more offshore drilling combined with more funding for alternative energy. The gang grew to a super gang of as many as 22 senators who participated in an unusual all-day energy summit held by the Senate Energy and Natural Resources Committee with the support of Senate leadership. Although an energy bill has yet to be introduced in the Senate as a result of these discussions, the framework has been laid for the 111th Congress to move forward with energy legislation.
General background information on the issues surrounding energy policy that Congress has been working on is available from several Congressional Research Service (CRS) reports.
Addition information on energy legislation in the 110th Congress is available at http://www.agiweb.org/gap/legis110/energy.html.
Sources: AGI's Monthly Review, DOE, E&E Daily
Contributed by Corina Cerovski-Darriau, Rachel Poor, and Linda Rowan, Government Affairs staff; Clint Carney, 2009 AGI/AAPG Spring Intern; Stephanie Praus, 2009 AGI/AIPG Summer Intern; Rachel Potter, 2009 AGI/AIPG Summer Intern; Mollie Pettit, 2009 AGI/AAPG Fall Intern; Joey Fiore, 2009 AGI/AIPG Summer Intern; Elizabeth Brown, 2010 AGI/AIPG Summer Intern, Elizabeth Huss, 2010 AGI/AIPG Summer Intern; Kiya Wilson, 2010 AGI/AIPG Summer Intern; and Matthew Ampleman, 2010 AGI/AAPG Fall Intern.
Background section includes material from AGI's Energy Policy Pages for the110th Congress.
Please send any comments or requests for information to AGI Government Affairs Program.
Last updated on January 5, 2011