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Energy Policy ( 12/5/12 )

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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, which are also key issues in energy policy, are covered on a separate page for nuclear policy. Policymakers are working to better integrate policy for all forms of energy resources. The administration will continue to consider energy policy and clean energy development as a major area of concern, and essential for economic growth, national security, international relations, energy efficiency, sustainability, and overall quality of life. It is likely that the 112th Congress will consider measures to develop a renewable electricity standard (RES) and ways to reduce U.S. dependence on foreign oil.

Recent Action

Bill Introduced to Fund DOE Oil Shale Energy R&D Program
The House Science, Space and Technology Committee Chairman Ralph Hall (R-TX) introduced a bill, the Tapping America’s Energy Potential through Research and Development Act of 2012 (H.R. 6603), to authorize $111 million to the Department of Energy to research and develop oil shale energy extraction. The bill focuses on funding research and development (R&D) for extracting methods and reducing environmental impacts.

The bill authorizes support for R&D in oil and share resource characterizations, modeling and simulation of oil shale exploration and production technologies, minimization and re-use of water, efficient use of energy in exploration and production activities, and methods which reduce potential environmental impacts. If the bill is not passed in the lame duck session, it must be reintroduced in the 113th Congress.

The Science Committee held a hearing on this bill on November 30. A summary of the hearing can be found on AGI’s energy policy hearing web site.

First Arctic Crossing Attempt by LNG Tanker
The Ob River, a liquid natural gas (LNG) tanker set sail from Norway in November and arrived in Japan in early December after crossing the Arctic. This is the first ship of its kind to attempt the crossing, which has been made possible by melting in the Arctic region and spurred on by the U.S. shale gas revolution and increase in demand from Asia.

Ob River, chartered by Russian energy company, Gaszrprom from Dynagas Ltd, can carry 5.3 million cubic feet of gas and has a 40-person crew. For much of the journey Ob River was accompanied by a Russian nuclear-powered icebreaker. Crossing the Arctic shortens the voyage from Norway to Japan by about three weeks compared to travelling through the Mediterranean Sea and Suez Canal before proceeding around Asia.

A major driver of utilizing the Arctic for such a crossing is the potential to access and export the wealth of energy resources available in the Arctic. Another major driver is the boom in shale gas production in the U.S., which has decreased LNG imports to the U.S., making the trek a more profitable venture. Finally, concerns over nuclear power in Japan after the March 2011 tsunami has increased the demand for natural gas.

BP Expected to Pay Record Criminal Penalty for 2010 Oil Spill
Under an agreement reached with Justice Department, BPD PLC will pay a record $4 billion in criminal claims relating for their role in the 2010 Deepwater Horizon oil spill disaster.  BP will plead guilty to 14 criminal charges including 11 felony counts of manslaughter in addition to one count of misdemeanor under Clean Water Act (33. U.S.C) and another count of misdemeanor under the Migratory Bird Treaty Act (16 U.S.C.).

This agreement focuses exclusively on federal government criminal charges and Securities and Exchange Commission (SEC) claims associated with the events of April 20, 2010. The events of April 20 led to an explosion on board the Deepwater Horizon rig, killing 11 workers and causing the unrivaled oil spill disaster in the Gulf of Mexico. 4.9 million barrels of oil was spilled over 87 days.

13 of the 14 criminal charges are based on the “negligent misinterpretation” of a “negative pressure test conducted on board the Deepwater Horizon.” The remaining charge is for obstruction of Congress based on the low estimate BP reported to Congress for the amount of oil leaking into the Gulf at the time of the spill. Of the $4 billion, the National Fish and Wildlife Foundation will receive $2.394 billion, the National Academy of Sciences (NAS) $350 million, and SEC $535 million. Both NAS and SEC will receive their payments over five years.

BP will improve safety for drilling operations in the Gulf of Mexico. This includes third-party auditing and collaborating with regulators for developing new technologies for safety as well as the appointment of two monitors to evaluate BP’s safety and Code of Conduct. BP could owe billions more in civil claims, and reached a provisional $7.8 billion settlement with private plaintiffs in March. The federal government has a major civil action pending against BP and Partners Transocean Ltd. and Anadarko Petroleum Corp. for violations of the Clean Water Act and the Oil Pollution Act (P.L. 101-380). BP could owe $4,300 per barrel spilled under the Clean Water Act if they are found to have been negligent and at the least $1,000 per barrel spilled.

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Previous Action

Hearing Held in Alaska on Offshore Drilling in the Arctic (10/12)
A field hearing on “Preparing for Offshore Drilling in the Arctic: Lessons Learned From the First Season” was held at the University of Alaska Anchorage on October 11, 2012. The hearing was held by the Senate Committee on Commerce, Science & Transportation’s Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard and was attended by Subcommittee Chairman Mark Begich (D-AK).

The hearing was held to examine the operational lessons to be learned following the first season of exploratory drilling activity in the Arctic. Shell has completed preliminary drilling in the Beaufort and Chukchi Seas for the 2012 season. The U.S. Geological Survey has estimated that the offshore Alaska region could contain 27 billion barrels of oil and over 120 trillion cubic feet of gas. Witnesses included David Hayes, Deputy Secretary of the U.S. Department of the Interior; Laura Furgione, Acting Director of the National Oceanic and Atmospheric Administation’s National Weather Service; Thomas Ostebo, Commander of the Seventeenth District of the U.S. Coast Guard; Pete Slaiby, Vice President of Exploration and Production for Shell Alaska; Jacob Adams, Chief Administrative Officer for the North Slope Borough in Alaska; and Edith Vorderstrasse, Consulting Division Manager of the Ukpeagvik Iñupiat Corporation.

Pete Slaiby, head of Royal Dutch Shell PLC’s Alaska operation, called for an overhaul of the current regulatory process saying, “To put it bluntly, the regulatory process for drilling in Alaska is broken; it is not efficient, it results in unnecessary and costly delays, and it needs to be fixed.”

Slaiby told Begich that, “Shell paid the federal government $2.2 billion for leases in the Chukchi and Beaufort Seas.” Slaiby called for clarity and consistency in the regulatory process, a single office to handle federal permitting for offshore Alaska energy projects as well as coordinated and timely decisions from federal agencies. Slaiby asked Congress to limit the amount of time for activists to file lawsuits from six years to 60 days. He advocated for extending leases beyond 10 years since fluctuations in Arctic sea ice only allow for drilling during three to four months out of the year.

Jacob Adams, Chief Administrative Officer for the North Slope Borough, recommended that the Interior Department modify their upcoming management plan for the National Petroleum Reserve-Alaska to make it easier for oil companies to transport oil from the Chukchi Sea to the Trans-Alaska Pipeline System through a pipeline that runs through the reserve.

Opening statements, witness testimonies and an archived webcast of the hearing can be found on the committee’s web site.

First Assessment of Utica Shale Gas Resource Released (10/12)
According to the U.S. Geological Survey (USGS), the Utica Shale contains 38 trillion cubic feet of technically recoverable natural gas (using the mean estimate). This is the first assessment of the Utica Shale by the USGS.

The Utica Shale is found beneath the Marcellus Shale, which is the largest unconventional gas basin USGS has assessed.  The Utica Shale contains 940 and 208 million barrels of unconventional of oil and natural gas resources respectively (both at the mean estimate).

Presidential Candidate Surrogates Debate Energy and Climate (10/12)
Representatives of the Obama and Romney campaigns debated energy policy on October 5 at the Massachusetts Institute of Technology (MIT) and a representative of the Obama campaign debated climate and science policy with former governor and congressman Mike Castle (R-DE) on November 1.

At the MIT debate, Oren Cass, Domestic Policy Director for the Romney for President campaign, discussed Romney’s plan which focuses on innovation from the private sector, state management of federal lands within their border, government investments in basic and applied research and job creation. Romney “embraces not only fossil fuel resources, but any that can be effectively developed through private sector innovation, which is the type of innovation that has always worked in this country.”

Representing President Barack Obama was Joeseph Aldy, a professor at Harvard University’s Kennedy School of Government who served as a special assistant to Obama for energy and environment in 2009 and 2010. Aldy discussed Obama’s “all-of-the-above” energy strategy, investments in research and development, job creation as well as Obama’s support for extending the production tax credit for wind. On behalf of Obama, Aldy said, “When you look at the future, the president thinks it's important for us to say, what are the kinds of technologies that we're going to want, that our children are going to want.”

The surrogates clashed on issues such as permits and leasing for oil and gas exploration, exporting natural gas, exploration in the Alaska's Arctic National Wildlife Refuge, permitting the Keystone XL and other pipelines, energy subsidies, and regulating greenhouse gas emissions.

Speaking on behalf of the Presidential Candidates, both representatives discussed goals for energy independence and the different paths for achieving this goal. While both surrogates emphasized promoting increased gas and oil development, surrogates discussed differences such as Romney’s more aggressive oil and gas production on federal lands and no subsidies for wind, as well as Obama’s plan which emphasizes energy efficiency and government incentives.

At the November 1 debate, hosted jointly by ScienceDebate.org and ClimateDesk, Congressman Castle and Obama campaign surrogate, Kevin Knobloch, discussed climate change, research and development, hydraulic fracturing, and STEM education. A video of the debate can be found on the ScienceDebate.org web site.

Texas Gas-Fired Power Plants Use Less Water than Coal (10/12)
According to a study conducted by the Texas Clean Energy Coalition, switching coal-fired for gas-fired power plants would conserve 60 percent of fresh water used for energy generation in Texas.

This study was funded by the George and Cynthia Mitchell Foundation, U.S. Department of Energy and the National Science Foundation as part of a nationwide effort to study water use. Even though hydraulic fracturing uses millions of gallons of water to extract gas from shale, this study found that Texas coal mining requires five times the amount of water. This is mainly due to the higher efficiency of natural gas-fired power plants compared to currently operating Texas coal plants.

Texas coal is rich in lignite which requires higher water volumes than other types of coal. Therefore, this study is not applicable across the U.S.

Shell Delays Summer Drilling in Beaufort and Chukchi Seas (09/12)
After initially planning to complete five wells in the summer of 2012, Royal Dutch Shell PLC announced on September 17, it will forgo oil drilling in Alaska’s Beaufort and Chukchi Seas for the 2012 season because of damage to key oil spill response equipment.

Shell officials said the company’s containment dome was damaged during the final tests aboard the Arctic Challenger and will not have enough time to make repairs before the drilling window closes in 2012. However, Shell has been permitted by the Bureau of Safety and Environmental Enforcement (BSEE) to drill top holes, shallow exploratory wells that stop short of oil-bearing rock, through October in the Beaufort Sea. This is expected to help accelerate drilling activities next summer.  

This decision marks yet another setback for Shell, which has already spent $4.5 billion and six years of legal challenges and delays related to ice and construction problems to drill into these oil rich regions. According to the U.S Geological Survey, the Beaufort and Chukchi Seas could hold as much as 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

Bill Introduced to Block BLM Hydraulic Fracturing Rule (08/12)
Representative Bill Flores (R-TX) introduced the Federal Lands Regulatory Certainty Act of 2012 (H.R. 6235) on August 9 to delay further action on the Bureau of Land Management’s (BLM) rule for hydraulic fracturing on public land currently in the public comment period. The BLM rule would obligate oil and gas companies to disclose the chemicals used in hydraulic fracturing and regulate well design and wastewater disposal.

The rule was first proposed by the agency in May 2012 and the public comment period was extended in June. Flores’s bill would delay the rule until the Department of the Interior (DOI) studies the affects of the rule on oil and gas production and whether it conflicts with state regulations. The bill has been referred to the House of Representatives Committee on Natural Resources.

DOI Introduces Plan for National Petroleum Reserve in Alaska (08/12)
On August 13, the Department of the Interior (DOI) unveiled its plan for oil and gas development on the National Petroleum Reserve in Alaska (NPR-A), the U.S.’s largest contiguous federal reserve.

NPR-A is 22.5 million square acres, roughly the size of Indiana, and contains significant oil and gas deposits and landscapes like Peard Bay and Teshekpuk Lake. The plan sets aside five areas for environmental protection and allows oil and gas development of 11.8 million acres of the reserve.

Secretary of the Interior Ken Salazar explained that the petroleum production plan, called Alternative B-2, would allow for safe development and transportation of oil and gas in NPR-A while preserving its ecosystems. Goups like Pew Charitable Trusts have spoken out in support of the plan, citing its compromise of environmentalists’ and energy proponents’ interests. Oil companies and Senator Lisa Murkowski (R-AK), ranking member of the Senate Committee on Energy and Natural Resources, have challenged the plan for being too restrictive. The final Integrated Activity Plan/Environmental Impact Statement is due in November, 2012.

Hydropower Legislation Approved by House (07/12)
On July 9, the House of Representatives passed a bill that encourages permitting of small hydropower projects and supports research into pumped storage for solar and wind projects. The Hydropower Regulatory Efficiency Act of 2012 (H.R. 5892), sponsored by Representative Cathy Rodgers (R-WA), would allow the Federal Energy Regulatory Commission (FERC) to exempt conduit projects from the regulatory process that generate less than five megawatts. In addition, the bill requires FERC to submit a report to Congress on the viability for a shortened, two-year permitting process for pumped storage projects and non-powered dams.

H.R. 5892 has received bipartisan support within the House and Senate. Lisa Murkowski (R-AK), ranking member of the Energy and Natural Resources Committee, is currently working on sister legislation for the House bill, with support from the Committee Chairman Jeff Bingaman (D-NM). Many in the hydropower industry and Department of Energy claim the bill will support job creation, expand the hydropower industry, and potentially provide 15 percent of the nation’s electricity needs by 2030.

Domestic Energy Bill Introduced in Senate, Includes Critical Minerals Language (07/12)
On July 26, Senator John Hoeven (R-ND) announced the Domestic Energy and Jobs Act of 2012 (DEJA) in the Senate. This bill would put policy in place to reduce energy costs and create jobs within the energy sector. It incorporates language from Senator Lisa Murkowski’s (R-AK) Critical Minerals Policy Act of 2011 (S.1113) directing the U.S. Geological Survey (USGS) to evaluate domestic mineral deposits and find sources of critical materials. DEJA would approve the Keystone XL Pipeline, limit regulations of the coal mining industry and make more land available for oil and gas leasing. The bill has not yet been introduced though it is already supported by Senator Murkowski and Senate Minority Leader Mitch McConnell (R-KY).

A House of Representatives version of DEJA was announced by Representative Kevin McCarthy (R-CA). It is unlikely DEJA will pass the Democratic Senate, however the bipartisan collaboration between Senator Murkowski and Senator Jeff Bingaman (D-NM) suggests hope for S.1113.

DOE Announces $7 Million for Carbon Capture and Storage Research (07/12)
The Department of Energy (DOE) will be allocating $7 million to eight projects at universities, companies and research institutions in an effort to control the release of carbon dioxide from coal plants and lower the cost of oxy-combustion.

The administration has said they hope to develop technologies to capture 90 percent of emissions at less than $25 per ton of carbon dioxide. Test pilot projects have not yet been able to reach commercial scale because costs were are at least double the $25 goal. FutureGen 2.0, a large-scale demonstration project, plans to use oxy-combustion when it comes online in 2017.

Projects exhibiting promise would be proposed for more funding next year. Companies and universities are adding their own money to the DOE’s $7 million, raising the total amount of funds to around $9.4 million. To date, $6.9 billion has been spent by the federal government on carbon capture and sequestration.

Drillers in Arkansas Threatened with Lawsuit for Induced Seismicity (07/12)
On behalf of Stephen Hearn and other residents of Faulkner County, Arkansas, Emerson Poynter LLP has filed a lawsuit against drilling operators due to the onset of thousands of earthquakes in 2010 and 2011. The lawsuit targets subsidiaries of Chesapeake Energy Corporation and BHP Billiton for their “ultrahazardous” decisions to inject hydraulic fracturing wastewater underground.

The process of hydraulic fracturing creates toxic, briny flowback water, which drilling companies must treat and discharge into surface water or dispose of by underground injection. Recent technological advances to hydraulic fracturing have led to an increase in gas production wells and wastewater injection sites. Numerous scientific studies, including one conducted by United States Geological Survey scientists, conclude that injecting wastewater underground can lubricate faults and induce small earthquakes.

Citizens of Faulkner County claim the earthquakes, which have reached magnitudes as strong as 4.7, are caused by the negligence of drilling companies and are asking the court to decide whether the drilling operations amount to a public nuisance or trespassing. Although no law addresses induced seismicity, the law firm claims the drilling companies disregarded the well-known connection between injection wells and seismic activity and are causing the increase in earthquake activity. The lawsuit states that this has resulted in higher insurance costs and residents now fear for their safety. The case is scheduled for trial in March 2014.

House Passes Broad Energy Bill (06/12) 
After two full days of debating 25 amendments, the Domestic Energy and Jobs Act (H.R. 4480) passed the House on June 21, 2012. H.R. 4480 is a combination of five bills passed out of the Committee on Energy and Commerce and the Committee on Natural Resources. It was approved by a vote of 248-163, with 19 Democrats voting in favor and five Republicans voting against. The bill combines a host of provisions to streamline permitting and would delay the Environmental Protection Agency’s (EPA) upcoming ozone standard.  The measure links any drawdown of the Strategic Petroleum Reserve to increases in oil and gas drilling on public lands. The White House released aStatement of Administrative Policy threatening to veto the bill, but passage through the Senate by the end of the year is unlikely.

BLM Extends Comment Period for Hydraulic Fracturing Rule (06/12)
The Bureau of Land Management (BLM) has announced an extension of the public comment period for the proposed hydraulic fracturing rules. The rule would require disclosure of chemicals used in the hydraulic fracturing process on federal and Indian lands. Currently, there are no required regulations for these lands. Originally, the comment period was supposed to close July 10 but is now set to close on September 10, 2012.

Cornell University Briefing on Hydraulic Fracturing (06/12)
On June 25, in 2167 Rayburn House Office Building, Cornell University’s Atkinson Center for a Sustainable Future held a briefing to discuss hydraulic fracturing featuring two Cornell professors. The briefing included a presentation on “Community Responses to Hydraulic Fracturing” which was presented by Susan Christopherson, professor of City and Regional Planning at Cornell. Anthony (Tony) Ingraffea, professor of Civil and Environmental Engineering at Cornell, presented “Unconventional Development of Shale Gas: Do We Really Know What We are Doing?”

Hydraulic fracturing is the method used for extracting natural gas from depth. This is achieved by injecting water, sand and chemicals at high pressures to re-fracture the rock in order to release the gas.

Christopherson referenced the 2012 Cornell Empire State Poll Results, a report that analyzes attitudes towards natural gas drilling in New York State. Results showed 53 percent of people surveyed said water contamination concerns outweigh the revenues that would be generated from gas drilling. It indicated 45 percent of individuals thought the “quality of life” would get worse from gas drilling. Some of concerns of shale gas development included: traffic, air pollution, “crowding out” of other industries, and long-term public costs. Christopherson showed a map on Municipal Anti-Fracking Movements in New York State, noting how those counties opposed were next to production counties. She discussed the job growth, indicating how it is very concentrated and follows the “boom/bust cycle” of shale gas drilling and production, and how jobs in the oil and gas industry are mostly concentrated in Texas. She closed by stating the “need for more information” to be able to “assess what the costs and benefits are.”

Ingraffea discussed the unconventional development of shale gas and how it is “spatially intense.” He noted the potential for high amounts of methane to infiltrate drinking water and the atmosphere. Ingraffea said “violations for wellbore integrity” were 6.2 percent in 2011, and has jumped to 7.2 percent for the first two months of 2012. He compared methane to carbon dioxide as a greenhouse gas, noting methane is 32 times more potent over 100 years, and 105 times more potent over 20 years. Ingraffea closed by saying that “there’s no time to waste” when it comes to the emissions.

There was a short questions segment, where one participant asked if there were any documentation of leaking and contamination of well water. Ingraffea said he had seen many letters sent to families, but did not know the exact amount. He noted that due to privacy, it is “very difficult to get data.” Another participant asked how to get people involved in making a difference in emissions. Christopherson said the on-going hydraulic fracturing debate has increased the “eagerness of people to learn” about the complicated issue.

House Natural Resources Committee Marks Up Mineral and Energy Bills
(05/12)
On May 16, the House Committee on Natural Resources held a full committee mark up to vote on the Soda Ash Royalty Extension, Job Creation, and Export Enhancement Act of 2011 (H.R. 1192), the Native American Energy Act (H.R. 3973), the Planning for American Energy Act of 2012 (H.R. 4381), the Providing Leasing Certainty for American Energy Act of 2012 (H.R. 4382), the Streamlining Permitting of American Energy Act of 2012 (H.R. 4383), and the National Strategic and Critical Minerals Production Act of 2012 (H.R. 4402). All six bills were passed by the committee. 

H.R. 1192 would extend the current reduced royalty rate of 2 percent for the development of soda ash through October, 2016. An amendment offered by Representative Paul Tonko (D-NY) to require the Secretary of the Interior to show that the reduced royalty rate will result in increased production of soda ash and increase employment was not agreed to. 

H.R. 3973, offered by Representative Don Young (R-AK), contains many provisions meant to reduce federal regulations of energy production on Indian lands. It would amend the National Environmental Policy Act of 1969 (P.L. 91-190) to only allow the affected Indian tribe to comment on the environmental impact statements of federal actions on Indian lands and would eliminate any fees for oil and gas inspection activities and leasing for non-producing acreage on Indian land. The bill would create five Indian Energy Development Offices within the Bureau of Indian Affairs to carry out Indian energy resource development programs. An amendment to exempt Indian lands from any hydraulic fracturing rules developed by the Department of the Interior (DOI) was agreed to. 

H.R. 4381, introduced by Representative Scott Tipton (R-CO), would require DOI to complete a Strategic Federal Onshore Energy Production Strategy every four years for an “all of the above” energy production plan on lands held by the Bureau of Land Management (BLM) and the Forest Service. The bill was agreed to by a roll call vote. 

Introduced by Representative Mike Coffman (R-CO), H.R. 4382 would require the Secretary of the Interior to offer as part of a lease sale “no less than 25 percent of the annual nominated acreage not previously made available for lease.”  H.R. 4383, introduced by Representative Doug Lamborn (R-CO), would require DOI to permit or deny an application for drilling within 30 days of submission and would establish Federal Permit Streamlining Projects in every Bureau of Land Management (BLM) field office. Both bills were passed by the committee by a roll call vote. 

H.R. 4402, introduced by Representative Mark Amodei (R-NV) would characterize all mines that “will provide strategic and critical minerals” to be considered an “infrastructure project” as defined by an Executive Order (EO) issued in March 2012. In the EO, all infrastructure projects deemed regionally and nationally significant will be reviewed by a Steering Committee of multiple federal agencies in an effort to reduce the amount of time it takes to make permitting decisions. The bill would designate the federal agency responsible for issuing a mineral exploration or mine permit as the lead agency and require that agency to coordinate and consult with other permitting agencies to minimize permitting delays. A failed amendment offered by Tonko would have redefined the bill’s definition of “strategic and critical minerals” from any mineral necessary for national defense, energy infrastructure, domestic manufacturing, and economic security to the lanthanides group, yttrium, scandium, and “any other mineral that is critical based on the impact of a potential supply restriction and the likelihood of a supply restriction.” The bill was passed by the committee on a roll call vote.

Methane Hydrate Test in Alaska Successful (05/12)
Field experiments conducted in Alaska have shown successful exchange of carbon dioxide for methane in methane hydrate deposits. Thus, methane for energy is gained while carbon dioxide is sequestered. Knowledge gained from the experiments and field tests is promising for future energy resource demands and carbon sequestration for climate change mitigation.

Methane hydrate resources are estimated to be around 21,000 trillion cubic feet in the Gulf of Mexico, with other resources on Alaska’s North Slope. Laboratory experiments showed the potential to produce methane without free water formation or heat of reaction issues.

Senator Lisa Murkowski (R-AK) stated, “The success of this test is wonderful news for Alaska and America.” Murkowski sponsored the Methane Hydrate Research and Development Reauthorization Act (S. 711) in 2005 and she recently proposed an additional $5 million to fund methane hydrate research in the fiscal year 2013 budget through the Energy and Water appropriations bill. The project was carried out in cooperation with the Department of Energy’s National Energy Technology Laboratory Methane Hydrates Research and Development Program, Japan Oil, Gas and Metals National Corporation (JOGMEC), and ConocoPhillips Company.

RPSEA Awards $56 Million for Ultra Deepwater Drilling Research (05/12)
The Research Partnership to Secure Energy for America (RPSEA) announced 13 new research projects that could receive funding for deepwater drilling research after negotiations conclude. The projects will partner with the Department of Energy’s (DOE) National Energy Technology Laboratory and the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research Program established by the Energy Policy Act of 2005 (P.L. 109-58). The research funding will total $56 million, with $35 million provided by the federal government and the remaining $21 million provided by industry.

To maximize the efficiency of time and research technology, RPSEA is encouraging collaboration among America’s leading universities, research institutions, national laboratories, state associations, service and operating companies. Following the Deepwater Horizon Oil Spill in 2010, officials of the RPSEA shifted research priorities to include environmental and safety components. The project selections will address technological needs, enhance safety and reliability of hydrocarbon extraction in the Gulf of Mexico, increase efficiency, and reduce costs of domestic hydrocarbon resource production.

DOE, Canada, and Mexico Announce North American Carbon Storage Atlas (05/12)
On May 1, the North American Carbon Atlas Partnership (NACAP), a mapping initiative developed by the Department of Energy (DOE), Natural Resources Canada (NRCan), and the Mexican Ministry of Energy (SENER), released the North American Carbon Storage Atlas (NACSA). The goal of the initiative is to identify and share sites of carbon dioxide production and potential geological carbon storage.

The North American carbon storage potential estimated by NACSA is larger than previously estimated because of recent advances in mapping resolution and the inclusion of sites which could utilize enhanced oil recovery (EOR) technologies. EOR is a technique that can sequester carbon dioxide and increase the amount of oil extracted from a field. 

The atlas, available as an interactive map, displays geological formations with a high carbon storage capacity as well as about 2,250 large sources of carbon dioxide in North America. The DOE has previously published a Carbon Sequestration Atlas for the U.S. and Canada, but this is the first attempt at quantifying carbon storage in North America.

Hydraulic Fracturing Banned in Vermont (05/12)
Vermont became the first state to ban hydraulic fracturing on May 16 after Governor Peter Shumlin signed H. 464. Even though the effect of the bill is insignificant because Vermont lacks economic natural gas plays, Shumlin said he hopes other states will follow with similar legislation.

In June 2011, Maryland Governor Martin O’Malley called for a three-year halt on hydraulic fracturing until a comprehensive study of economic, environmental, and safety impacts is completed. The drilling practice has been banned in Bulgaria and France and was temporarily suspended in the United Kingdom as a result of possible induced seismicity.

BSEE Forum on Next-Generation BOPs and Control Systems Technology, Management, and Regulations (05/12)
Panel 1 – Technology Needs Identified from the Deepwater Horizon
Moderator: David Hayes, Deputy Secretary, Department of the Interior
Jim Watson, Director, Bureau of Safety and Environmental Enforcement
Thomas Hunter, Chairman, Ocean Energy Safety Advisory Committee
Christopher Smith, Deputy Assistant Secretary for Oil and Natural Gas, Department of Energy

Panel 2 – What new design requirements are needed to provide assurance that BOPs will cut and seal effectively under foreseeable operating conditions?
Moderator: Richard Sears, Visiting Scientist for Stanford University and Massachusetts Institute of Technology; Gamechanger, LeadingEnergyNow
Roger McCarthy, National Academy of Engineering
Bryce Levett, Director, Risk Management Solutions
Frank Gallander, Chairman of API RP 53, Chevron
Chuck Chauviere, General Manager Drilling, GE Oil and Gas

Panel 3 – What manufacturing, test, maintenance, and certification requirements should be established to ensure the operability and reliability of BOP equipment?
Moderator: Harish Patel, Manager Corporate Technology-Drilling & Process, American Bureau of Shipping
Moe Plaisance, Vice President, Governmental and Industry Affairs, Diamond Offshore Drilling
John Modine, Director Global Industry Services, American Petroleum Institute
Don Jacobsen, Senior Vice President – Industry & Government Affairs, Noble Corporation
Jeff Sattler, Senior Vice President Engineering, West Engineering

Panel 4 – What real-time technologies are available to measure the “health” of BOPs in service and aid in the detection and response to “kicks?”
Moderator: Pisces Carmichael, Project Manager, Lloyd’s Register
Garry Davis, Group Manager, Center of Excellence Well Control Equipment, Moduspec USA
Fereidoun Abbassian, Vice President for Wells Technology, BP
Frank Chapman, President, Ashford Technical Services
Tony Hogg, Director of Subsea Engineering, Ensco

Panel 5 – What type of training and certification should be required for key industry personnel?
Moderator: Mark Rubin, Executive Director, Society of Petroleum Engineers
Donald Winter, National Academy of Engineers
Mark Denkowski, International Association of Drilling Contractors
Ken Dupal, Well Delivery Manager, Shell International Exploration and Production
J. Ford Brett, Petroskills
Joe Savoy, Wild Well Control

The Bureau of Safety and Environmental Enforcement (BSEE) held an offshore energy safety forum on May 22, 2012 to discuss methods that can be taken to improve safety and reliability of blowout preventers (BOPs). The forum consisted of five panels that were each posed with different questions that pertained to design, manufacturing, test, maintenance, certification of BOPs as well as real-time technologies to measure the “health” of BOPs in service and training requirements for personnel. Panels consisted of individuals from government agencies, industry, trade associations, manufacturing, consulting, training companies, and BOP monitoring companies. The reason for the forum was to ask for help in putting together a new regulation for BOPs.

Jim Watson, director of BSEE, introduced Secretary of the Interior, Ken Salazar for opening remarks. Salazar re-capped the events of the days following the BP Deepwater Horizon oil spill at the Macondo well on April 20, 2010. He mentioned some of the questions that were brought up regarding the BOPs, including why there are no sensors and gauging to monitor activities. Salazar stated that “the Gulf of Mexico is back.” He went on to say that the U.S. is producing a third of all its domestic oil from the Gulf of Mexico. The number of rigs is higher than it was in 2009 and in the last two months, 67 permits for deep water drilling have been issued.

David Hayes moderated the first panel discussion. He listed four criteria for a new rule on BOPs: the ability to cut and completely seal off well, better maintenance, better sensors, and fully trained personnel operating the BOP. Thomas Hunter covered the function of the BOP, the characteristics desired and what a BOP needs to provide in an oil spill. Christopher Smith covered research at DOE and DOE’s collaboration with BSEE. Hayes posed a question about forging relationships with industry, manufacturers, and others to come up with a good design. Watson said the event was a great start and that taking advantage of the internet and bringing people into DOI would be beneficial. He mentioned how BSEE is still building their organization. Hunter advised starting with industry organizations and suggested a “vigorous” research and development program that can support research for the future.

Panel two was moderated by Richard Sears. He opened by commenting that the most important lesson of the Gulf spill taught to industry regulators was “that the unthinkable actually could and did happen.” Roger McCarthy focused on testing of BOPs and how their design must account for real emergency chaos. Bryce Levett covered the requirements for a BOP and a blowout arrestor (BOA) using a bow-tie model. BOP is referred on the left side of the model as a preventative measure. The right side is where the BOP becomes the BOA, where instead of preventing a blowout it now has to stop or arrest the blowout. Frank Gallander discussed the status of Standard 53, which is an industry guidance document for operation and maintenance of BOP equipment. Chuck Chauviere finished up the discussion by highlighting the concept of cut and seal. He discussed when giving design parameters to engineers it must be careful what phrases are used because they will build accordingly. Chauviere said, “Tell them what you want, which is to stop it.” He provided videos of some tests conducted.

Panel three was lead off with Moe Plaisance who discussed pre-deployment and aspects that fall under testing. John Modine discussed the American Petroleum Institute’s (API) Monogram Program which has been around since 1924. The program is formed to “promote the manufacturing of safe, reliable, interchangeable equipment.” This allows for easy identification of manufacturers who make equipment and products that abide by API standards. He discussed how standards are still being worked out on Standard 53. Don Jacobsen discussed the standards in place for manufacturing, maintenance, pre-deployment testing, and competency of workers on the rig. Jeff Sattler talked about other standards, both private and regulatory and how they can affect compliance and verification. Sattler finished his presentation by asking the audience, “Are we happy with the standards?”

Panel four was lead off by Garry Davis who began by talking about the challenge involved, which is to assess risk and reliability instantly and communicate to all interested people. His solution was BOP risk modeling, with risk spectrum software specifically designed for real time assessments. This results in instantly revised risk levels and a standard way of communicating. Fereidoun Abbassian presented recent technologies, highlighting three recent efforts: real-time BOP health monitoring, pressure testing, and the Houston Monitoring Center. He states the monitoring presents “traffic light” status on the availability of key functions. The Houston Monitoring Center watches well parameters “24/7” from onshore via a staff of 30 specialists. Frank Chapman explained the cycling of information for BOP health and emphasized the point of remotely monitoring current and historical status anytime and anywhere. He mentioned the similarities of this and a “black box” but the purpose in this instance is to identify problems before they become critical. Tony Hogg answered the forum topic by mentioning redundant control panels, competent crews, and remote monitoring.

Panel five’s discussion began with Donald Winter who stated “quick responses are absolutely critical.” He provided four recommendations for the forum topic: realistic and effective training situations, major training events at sea, re-examination of qualifications for key positions, and annual evaluations. Mark Denkowski discussed the International Association of Drilling Contractor’s WellCAP program, which provides accreditation for well control competency. Ken Dupal reflected on the safety bow tie and how competence of personnel is required at all times. J. Ford Brett covered training for specific skills necessary for full cycle well integrity, crew competence, and certification. Joe Savoy finished up the forum by highlighting some challenges ahead and said that even though well control training recertification is usually required every two years, many crews forget six months later.

Presentations, photos, transcripts and video can be found on the BSEE web site.

Obama Creates Hydraulic Fracturing Working Group (04/12)
On April 13, 2012 President Barack Obama signed an executive order creating a working group of more than twelve agencies to promote the safe domestic production of natural gas through unconventional techniques such as hydraulic fracturing. The working group, chaired by the director of the Domestic Policy Council, will coordinate policy efforts among agencies.

Hydraulic fracturing is a technique to extract natural gas and oil out of relatively impermeable shale formations by injecting fluids at high pressure to fracture the shale and allow the hydrocarbons to migrate to the borehole for efficient extraction.  Shale gas extraction via hydraulic fracturing is booming throughout the U.S. because natural gas provides a relatively clean and inexpensive alternative to coal. As shale gas production has ramped up, concerns have been raised about environmental problems, such as contamination of water wells and triggered seismicity. Although industry and the government have noted that any potential problems might be related to wastewater injection rather than hydraulic fracturing, the public does not appreciate the distinction and considers the problems associated with “fracking” in general.

In addition to the working group, the Obama Administration requested $45 million to study hydraulic fracturing in fiscal year 2013 at the United States Geological Survey, the Department of Energy, and the Environmental Protection Agency.  Later this year the Bureau of Land Management is expected to release a set of rules regulating the practice of hydraulic fracturing on public lands.

BLM Releases Proposed Disclosure Rule for Hydraulic Fracturing (04/12)
The Bureau of Land Management (BLM) announced the availability of its draft proposed rule for regulating hydraulic fracturing on public land. The rule would require disclosure of chemicals used on public and Indian land, increase regulation of well bore integrity to prevent leaks, and require companies to have a water management plan for handling flowback water.

The proposed rule includes several new requirements for companies using hydraulic fracturing. Before a fracturing job, companies must submit a Notice of Intent Sundry at least 30 days before well operations begin. This notice must include among other requirements cement bond logs for well casings, the geological names and description of the formation into which fluids would be injected, an estimate of the total volume of fluid to be used, the maximum injection treating pressure, and the estimated or calculated fracture length and fracture height. Within 30 days of the completion of the fracturing job, companies must submit a Subsequent Report Sundry Notice which includes a disclosure of the types and amounts of chemicals used, the actual total volume of fluid used, the actual surface pressure and final pump pressure, and a description of how the flowback water as recovered, handled, and disposed of. Where previous regulations distinguished between “routine fracturing jobs” and “nonroutine fracturing jobs,” the proposed rule would remove these terms to eliminate the distinction.
  
An economic analysis of the proposed rule provided by the BLM found that the rule would increase the costs of drilling on federal lands but would benefit society by removing risk associated with the process and by making the names and types of chemicals used available to the public. The economic analysis estimates the proposed rule would not affect the supply, distribution, or use of energy and it is not expected to reduce employment.

U.S. Surpasses China in Clean Energy Investments in 2011 (04/12)
Pew Charitable Trusts and Bloomberg New Energy Finance released a report in April 2012 examining global public and private spending for clean energy among G-20 nations. “Who’s Winning the Clean Energy Race?” shows the United States in the lead for the first time since 2009 with clean energy technologies investments totaling $48.1 billion. Globally, green investments continued to rise last year to a record high of $263 billion, over half of which was made in solar technologies.

While the United States outspent China last year, it is unlikely the United States will remain first in clean energy investments in the future. The report attributes the large amount of American investments last year to a rush to spend before renewable energy tax credits expire. The federal production tax credit expires at the end of 2012 and Republicans in Congress have objected to extending tax credits or loan guarantees. The National Governors Association wrote a letter on April 4 asking leaders in Congress “to pass a long-term extension of tax provisions that encourage the investment in renewable energy sources and diversify our nation’s energy portfolio.” 

Energy Portions of Transportation Reauthorization Bill Draw Controversy (02/12)
Passed by the House on February 15, the American Energy and Infrastructure Jobs Act of 2012 (H.R. 7) contained provisions that would open the Arctic National Wildlife Refuge for exploration and development, approve the construction of the Keystone XL pipeline, and open public lands to oil shale exploration and development. The measures are within H.R. 7 and H. Res 547, a resolution which defined the rules of debate regarding H.R. 7. Congress is attempting to reauthorize several transportation programs before many expire on March 31 and it is likely these energy measures will either be scaled back or removed in the final version of the reauthorization.

Several Republican members of Congress opposed the provision in the bill to open ANWR for exploration and development as a partial funding offset for the transportation projects in the reauthorization bill. Representatives Charlie Bass (R-NH), Dave Reichert (R-WA), Robert Dold (R-IL), Mike Fitzpatrick (R-PA), Nan Hayworth (R-NY), and Timothy Johnson (R-IL) sent a letter to Speaker of the House John Boehner (R-OH) and other leaders of the majority expressing concern with the development of ANWR. In addition to “serious questions from both a fiscal and environmental perspective,” the members tell Boehner they “believe that this measure can achieve broader support and better force Senate consideration if ANWR were removed.” 

Most of the oil shale development language is found in the Protecting Investment in Oil Shale the Next Generation of Environmental, Energy, and Resource Security Act, or the PIONEERS Act (H.R. 3408) which was added to H.R. 7 as part of H. Res. 547. The PIONEERS Act implements rules for the development of oil shale resources and promotes oil shale technology through research and development. The bill would require a lease sale by the Secretary of the Interior on 10 parcels of land to be used strictly for the research, development, and demonstration of oil shale resources. The bill requires the Secretary of the Interior to issue commercial leases on a minimum of five parcels of land at a minimum of 25,000 acres each by January 1, 2016. Rules set forth by the bill require that Congress ensure American manufacturing and technology benefit by the creation of jobs through oil shale development.

USGS Releases Shale Oil and Shale Gas Assessment for North Slope (02/12)
On February 24, the United States Geological Survey (USGS) released the first assessment of shale oil and shale gas reserves of Alaska’s North Slope.  The estimates of technically recoverable resources range from 0 to 2 billion barrels of oil and 0 to 80 trillion cubic feet of natural gas. 

The resource estimates were derived from USGS assessments of Mesozoic shale formations.  The high degree of uncertainty in the estimates reflects the lack of drilling data for these deposits.  The assessed formations are known to have produced large quantities of oil and natural gas that migrated and accumulated in the Prudhoe Bay field in the North Slope.  This assessment explores the potential of oil and natural gas still trapped in these formations. 

Senate ENR Committee Moves Four Energy Bills and a Nomination (12/11)
The Senate Energy and Natural Resources Committee passed four energy bills and approved a nomination in December. Arun Majumdar, current director of the Advanced Research Projects Agency for Energy (ARPA-E), was nominated by President Obama to fill the vacant position of Undersecretary of Energy at the Department of Energy (DOE) and approved by the committee on December 15. Majumdar’s nomination must now be approved by the full Senate.

After Majumdar’s nomination, the committee voted on and passed the 10 Million Solar Roofs Act of 2011 (S. 1108), the Geothermal Exploration and Technology Act of 2011 (S. 1142), the Geothermal Production Expansion Act of 2011 (S. 1149), and the Department of Energy Administrative Improvement Act of 2011 (S. 1160). Senator Bernie Sanders’s (I-VT) bill, S. 1108, would establish a program in DOE to provide competitive grants to local governments that have adopted best practices for solar permitting and sets a goal to install solar energy systems on at least 10 million U.S. properties by 2021. The Geothermal Exploration and Technology Act, sponsored by Senator Jon Tester (D-MT), would direct the DOE to create a direct loan program for geothermal wells in high risk or unexplored areas through the establishment of a Geothermal Investment Fund. The legislation further promotes the development of geothermal energy by directing DOE to conduct research and development (R&D) on geothermal heat pumps and to provide loans to install geothermal heat pumps designed to service large populations. Senator Ron Wyden’s (D-OR) bill, S. 1149, would increase the availability of federal geothermal resources by amending the Geothermal Steam Act of 1970 (30 U.S.C. 23) to allow adjacent lands of a previously granted lease to be made available for a noncompetitive lease at fair market value. Chairman Jeff Bingaman (D-NM) and Ranking Member Lisa Murkowski (R-AK) co-sponsored S. 1160 to require the Secretary of Energy to submit an annual report to Congress detailing DOE’s five fiscal year report of the department’s anticipated expenditures and proposed appropriations. The measure eases DOE’s ability to appoint “highly qualified scientists, engineers, or critical technical personnel…in the event of a severe shortage of candidates or a critical hiring need for particular positions.”  

Obama Administration Delays Decision on Keystone XL Pipeline (11/11)
After initially promising a decision by the end of 2011, the Obama Administration has announced that it will not issue a decision on whether to grant a cross-border permit to the proposed TransCanada Keystone XL Pipeline until 2013. The administration was under pressure from supporters of the project who cite its potential for job creation and from environmental groups who oppose it because of potential environmental degradation. The 1,700 mile-long proposed pipeline would transport crude oil from oil sand deposits in northeastern Alberta, Canada to existing Keystone pipelines in Nebraska and Oklahoma and would cost about $7 billion to build. In response, TransCanada announced its intention to reroute the pipeline around the Sandhills, an ecologically sensitive area in Nebraska that the proposed pipeline was initially set to cross over.

Nebraska Governor David Heineman signed new pipeline construction standards into law on November 22 and approved a provision to direct the Nebraska Department of Environmental Quality, consulting with the U.S.  State Department, to conduct an environmental assessment for the alternate route. The law provides up to $2 million for the review and state officials hope to complete this study by as soon as May 2012.

Law Allows Foreign LNG Tankers In U.S. Waters (11/11)
President Obama recently signed into law the America’s Cup Act of 2011 (P.L. 112-61), which contains a provision to allow three foreign-flagged tankers to carry liquefied natural gas (LNG) from Pennsylvania to the Gulf Coast.  Ethane derived from the Marcellus Shale will be processed at Sunoco’s Marcus Hook refinery in Pennsylvania to LNG for tanker transport. The bill originally provided a waiver for about 60 foreign yachts that are participating in the 2013 America’s Cup, starting in early December in San Diego, to enter U.S. waters. The waiver is necessary because the Jones Act (P.L. 66-261) prohibits foreign vessels from entering U.S. waters.  Senator Pat Toomey (R-PA) with support from Representative Pat Meehan (R-PA) put a hold on the legislation until the LNG foreign tankers were also granted a waiver.

The two members argued that transporting LNG from Pennsylvania to the Gulf Coast would boost jobs in the state. They succeeded in convincing their colleagues to add the provision to the bill, in order to allow the yacht race to continue as planned.

Markey Introduces Energy and Mineral Extraction Reform Bill (11/11)
Representative Ed Markey (D-MA) and House Democrats from the Committee on Natural Resources have introduced the Fair Payment for Energy and Mineral Production on Public Lands Act (H.R. 3446) that would reform rules from the General Mining Act of 1872 (30 U.S.C. 22 et seq.) on public lands. Its main sponsors are Markey, Rush Holt (D-NJ), and Raul Grijalva (D-AZ).

The legislation would institute a 12.5 percent royalty on hard rock mining for materials like gold, silver, and uranium; the President suggested no less than a five percent royalty. With a seven cent-per-ton fee for all materials displaced during hard rock mining, the bill would make it easier to block mining on public lands. The money collected as a result of the fee would pay for the reclamation of the hard rock mines. The bill would increase inspection fees for offshore drilling, remove revenue sharing with the Gulf States for oil and gas production, and would require energy companies to renegotiate their oil and gas leases. Coal companies would be restricted from sending money to states that have completed reclamation of abandoned coal mines. The mining industry is not in support of the proposal.

EPA Releases Final Hydraulic Fracturing Study Plan (11/11)
Under the direction of the House Appropriations Conference Committee budget report for fiscal year 2010 (H.Rept. 111-316), the Environmental Protection Agency (EPA) published a study plan in November to investigate hydraulic fracturing associated with shale gas extraction. EPA scientists will look into the potential impacts of hydraulic fracturing on groundwater and drinking water. The study will examine the full lifespan of water in hydraulic fracturing: acquisition of the water, mixing of chemicals for fracturing, and the post-fracturing stage, including management of flowback and produced water and its ultimate treatment and disposal. The study’s initial results will be released in late 2012 and the final results are expected in 2014.

BOEM Releases Proposed 2012-2017 OCS Oil and Gas Leasing Program (11/11)
On November 8, 2011 the Bureau of Ocean Energy Management (BOEM) released its proposed 2012-2017 Outer Continental Shelf Oil and Gas Leasing Program and its accompanying draft Environmental Impact Statement (EIS). The five year leasing program consists of a schedule of oil and gas lease sales and sets out the size and locations of proposed leasing activity to meet the nation’s energy needs for the next five years. This proposed 2012-2017 program would make 15 plots available in the Western and Central Gulf of Mexico, the Chukchi Sea, the Beaufort Sea, and Cook Inlet in Alaska. The proposal does not include lease sales on the Atlantic or the Pacific Oceans outer continental shelf. Most of the Eastern Gulf of Mexico remains in a congressionally-mandated moratorium and is not included in the proposed plan for 2012-2017.  BOEM plans to conduct environmental analyses for potential seismic studies in the Mid- and South Atlantic but will not schedule leases there until at least mid-2017.

Energy and Climate Change Assessments as United Nations Meeting Begins (11/11)
At the beginning of November 2011, the International Energy Agency (IEA) stated in its annual report, World Energy Outlook 2011, that global energy demand will rise by 40 percent by 2035 and most of that need will be met with fossil fuels. Oil demand will rise as the global passenger fleet is expected to double to 1.7 billion vehicles by 2035 and alternative vehicles, such as hybrids or electrics, will make only small penetrations into the global market. Coal-fired power plants which met about 50 percent of global demand in the first decade of the twenty first century may rise to 65 percent of demand by 2035. Natural gas is expected to rise in use and compete with coal. With regards to greenhouse gas emissions, the IEA states “cumulative CO2 emissions over the next 25 years amount to three-quarters of the total from the past 110 years, leading to a long-term average temperature rise of 3.5 degrees Celsius.”

In a related study, HSBC Bank, one of the largest financial institutions in the world, completed an analysis of finances for alternative energy resources and suggests the global economy could reduce greenhouse gas emissions and stall global warming over the next few decades. Their conclusions are based on lower costs for alternative energy as demand grows and more financial institutions refuse loans to inefficient coal-fired power plants.

Both assessments directly preceded the start of the United Nations Climate Change Conference 2011 in Durban, South Africa (November 29 – December 9). Early news from the conference suggests debate about reducing greenhouse gas emissions is pitting developed countries with greater energy use and greater emissions against developing countries with less energy use and fewer emissions. In particular, many countries would like the United States to commit to greater emissions reductions, but the U.S. State Department has refused to consider possible actions including a European Union proposal unless major industrializing countries such as China and India agree to reductions. In addition, an assessment by an outside group, BankTrack, suggests commercial banks have doubled their financial support for the coal industry since 2005 when the Kyoto Treaty was adopted.

RFF Introduces Shale Gas Hydraulic Fracturing Study, Hosts a Lecture and Discussion Panel (11/11)
After launching a study in July 2011 to identify risks associated with hydraulic fracturing for shale gas development, Resources For the Future (RFF), a nonprofit nonpartisan research center, held an informational lecture and discussion event to introduce their initiative on November 14. The eighteen month study, Managing the Risks of Shale Gas: Identifying a Pathway toward Responsible Development, undertaken by RFF’s Center for Energy Economics and Policy (CEEP) with a $1.2 million grant from the Alfred P. Sloan Foundation, will be the first independent, broad assessment of the risks involved with shale gas development.

The public launch of the initiative took place on November 14, 2011, and invited expert advisors from the fields of petroleum engineering, geochemistry, and hydrology to speak on the issue. To start off the event, Alan Krupnick, Director of CEEP, provided some key background information on shale gas economics and introduced the center’s study. Krupnick pointed out the economic benefit that shale gas provides: its production needs to yield a high production rate and requires low gas prices to return a profit, whereas conventional gas and oil both yield low production rates and require high petroleum prices. He noted the environmental advantage of shale gas is that it is 40 to 50 percent cleaner than coal because of lower carbon dioxide emissions. From a geopolitical standpoint, however, Krupnick reminded the audience that shale cannot be argued as a booster to U.S. national security unless it replaces oil in the energy market. Sheila Olmstead, a fellow at RFF, told the audience about the study’s methods and goals to identify impacts and burdens at every stage of shale gas production.

Mukul Sharma, a professor of petroleum engineering at the University of Texas at Austin, spoke on seven top concerns associated with hydraulic fracturing and explained why he believes the benefits of fracking for shale gas outweighs the environmental concerns. In light of the recent earthquakes in Oklahoma and Arkansas, Sharma explained that fracking does not cause noticeable earthquakes detectable on the surface; in fact, he said that industry’s use of “micro-seismic monitoring” has shown that the tremors resulting from fracking are a “million times smaller than the average California tremor.” Although he firmly stated that fracking does not lead to contamination of groundwater from vertical migration of cracks, he did acknowledge that methane can potentially enter water supplies; such leakage has been occurring even before fracking began, he said, and is more likely to take place in locations near natural gas sinks. Sharma described the chemicals used in fracking fluids and supported full disclosure of fluid composition by industry. Finally, he put shale gas production water use in perspective, saying that the total amount of water used to produce natural gas from the Barnett shale is less than one percent of the water used at golf courses in New York and Pennsylvania.

When asked about radioactive materials that are naturally occurring in the rocks, Sharma explained that those elements are not a significant worry at the surface. He answered that such materials are also present in conventional gas and oil production, not just in shale gas production. A member from the audience asked whether “refracturing” increases the risks of vertical migration of the cracks and thus potential contamination. Sharma explained that the cracks produced by refracturing are more likely to migrate horizontally due to the extreme stress contrast from previous fracking.

Karlis Muehlenbachs, a professor of geochemistry at the University of Alberta, Canada, spoke on fugitive sources of methane. While he said that there are theoretically no environmental risks when the drilling and hydraulic fracturing are done correctly, he admitted that there have been cases where the cementing and casing are not constructed properly. He described how his university’s study of methane in water uses carbon isotope reversals to pinpoint the original source of gas, which could be derived from the fracking, from naturally occurring gas reservoirs entering casings, or from abandoned shale gas drills. Because methane has been detected in freshwater reservoirs, Muehlenbachs argued for more baseline data collection from water wells and post-drilling data evaluation.

James Saiers, a professor of hydrology at Yale University discussed water quality issues arising from shale gas development, and explored the potential impacts of site preparation, drilling and casing, and hydraulic fracturing. Site preparation, according to Saiers, involves significant clearing of vegetation, resulting in soil erosion, a large influx of soil into nearby rivers and streams, and impacts on the local drinking water and river fauna. After briefly describing the anatomy of steel casings and cementing, Saiers mentioned one instance of drilling fluids entering a shallow groundwater source. Finally, he listed the potential harmful impacts of fracking: surface spills of produced waters, chemical migration from fracking zones due to naturally occurring fractures or abandoned drills, and poorly cemented wells leaking methane into groundwater. While methane is a non-toxic, non-caustic gas, Saiers noted that it is an explosive hazard. Saiers emphasized the need for a systematic study to test industry’s “hunch” that vertical contamination from fracking is not a potential issue, even though he is inclined to believe it is true.

The panel was asked about the history of diesel use in drilling fluids. Sharma admitted that liquid hydrocarbons have historically been used in drilling fluids, but are not commonly used anymore. In response to a question regarding recycled flowback waters, Saiers said that recycling is actually increasing because industry has learned it is not restricted to freshwater for drilling purposes and can use salty flowback waters.

TransCanada's Keystone XL Pipeline Faces Uncertain Future (10/11)
The State Department plans to release its decision to grant a cross-border permit to the proposed TransCanada Keystone XL pipeline by the end of 2011. Environmental groups and several lawmakers are trying to prevent the pipeline from being built. The 1,700 mile long proposed pipeline would transport crude oil from oil sand deposits in northeastern Alberta, Canada to existing Keystone pipelines in Nebraska and Oklahoma and would cost about $7 billion. Several environmental groups filed a lawsuit with the U.S. District Court of Nebraska on October 5 against TransCanada Corporation for clearing land and moving endangered species in Nebraska to make way for the pipeline before the company had secured a permit from the administration.

Democratic lawmakers are split on the issue. Secretary of State Hillary Clinton received letters in October from Democrats urging her to redo the Environmental Impact Statement, while other lawmakers requested an internal investigation into the handling of the Environmental Impact Statement and National Interest Determination. Representative Ed Markey (D-MA) and others are asking for assurances that the pipeline’s product would only benefit U.S. consumers and not foreign nations. Another 22 Democrats sent a letter to President Obama in support of the $7 billion pipeline.

Obama Administration Announces Plan to Expedite Grid Projects (10/11)
The Obama Administration revealed plans in October to improve the nation’s electric grid by expediting federal permitting for seven proposed electric transmission lines across the country. These projects will provide electricity transmission and new jobs in 12 states including Idaho, Oregon, Minnesota, Wyoming, Wisconsin, Nevada, Pennsylvania, and Nevada, according to Secretary of the Interior Ken Salazar. Ensuring the transmission grid is built will support the Department of the Interior’s approval of 22 major renewable energy projects on public lands in the western United States that will generate more than 10,000 construction jobs, Salazar said.

"The president has been committed to moving forward with an electrical grid system that is modernized and carries us forward into the 21st century," Salazar said during a call with reporters. "We know that solar, wind, geothermal, nuclear, clean coal and natural gas all play a role, but it is absolutely critical that we have the infrastructure in place to deliver power to our homes, our businesses and our economy."

Nine federal agencies will expedite the approval of the pilot transmission projects; each agency will have specialized points of contact and project managers for each pilot project. Subject matter experts, established at each agency, will deal with transmission issues such as financing and siting.

Senators Propose American Energy Roadmap (10/11)
On October 13, 2011 a group of senators introduced a bill that would require the government to create an energy “roadmap” by reassessing its domestic energy resources, technologies, and policies every four years. This bill, entitled the “Quadrennial Energy Review Act of 2011,” (S. 1703) is modeled after the Department of Defense’s  four-year review of its defense strategy and priorities. The legislation is supported by the Bipartisan Policy Center’s Energy Project (BPC) and is cosponsored by Senators Mark Pryor (D-AR), Lisa Murkowski (R-AK), Mark Begich (D-AK), Chris Coons (D-DE), Jon Tester (D-MT) and Jeff Bingaman (D-NM). The BPC believes that improved long-term energy planning “would be of great value to investors, producers, and consumers” and put the U.S on the “right track” toward addressing future energy challenges.

House Natural Resources Committee Marks Up 21 Bills (10/11)
On October 5, the House Natural Resources Committee passed 21 bills including the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2011 (H.R. 2842), the Providing for our Workforce and Energy Resources Act (H.R. 2360), the BLM Live Internet Auctions Act (H.R. 2752), and a bill to direct the Department of the Interior to conduct a study of the mineral potential from the shallow and deep seabed of the United States (H.R. 2803).

Meant to ease the installation of small canal and pipeline hydropower development projects, H.R. 2842 passed the committee on a bipartisan vote of 30-12. Both H.R. 2360, which extends the laws governing offshore oil and gas development  to apply to offshore renewable energy development, and H.R. 2752, which allows onshore oil and gas lease sales to take place on the internet, passed unanimously. Delegate Eni Faleomavaega of American Samoa introduced H.R. 2803 which would require the Bureau of Ocean Energy Management, Regulation, and Enforcement to conduct a technological capability assessment, survey, and economic feasibility study regarding the production of minerals, not including oil and natural gas, from the shallow and deep seabed of the United States. An amendmentby Rep. Doug Lamborn (R-CO) makes the U.S. Geological Survey a co-lead agency and extends the scope of the study to examine the safety and environmental issues associated with deep sea mining. All other bills were related to fisheries, public lands, tribal lands, and endangered species.

DOI Issues BP and Contractors Violations from Oil Spill (10/11)
The Department of the Interior (DOI) issued on October 12, 2011 fifteen violation notices to BP, Transocean, and Halliburton for violating a number of offshore drilling rules associated with the Deepwater Horizon oil spill. Transocean, the owner of the Deepwater Horizon rig, and Halliburton, the drilling services company, each received four violation notices, while BP received five. These notices, called “incidents of non-compliance,” (INCs) involve a maximum civil penalty of $40,000 per violation per day for each of the three companies. The announcement of these notices came a month after the Coast Guard and Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Joint Investigation Team Report was released and one day before a House Committee on Natural Resources oversight hearing on the report.

DOI will allow a 60-day appeal period after which the department will review potential civil penalties. A Transocean spokesman announced the company’s intent to appeal, while a Halliburton spokeswoman said that the company “reserves its right to appeal.” A BP spokesman said the company will respond to DOI "in due course" after the company reviews the citations.

Council Report to Congress on Insufficient Energy Innovation Funding (09/11)
In mid-September the American Energy Innovation Council (AEIC), composed of some of America’s top business executives, released a report that called on Congress to improve the U.S. energy innovation program within the Department of Energy (DOE). This report, “Catalyzing American Ingenuity: The Role of Government in Energy Innovation,” is a 37-page document that concludes American spending on energy research and development (R&D) is insufficient.

The report provides three striking facts that support their conclusion. First, of the $3.6 trillion total U.S. fiscal year (FY) 2010 budget, only $2.1 billion was dedicated to energy R&D. Second, in 2008 China allocated 0.11 percent of its GDP on public energy spending, compared to only 0.03 percent in the U.S. Finally, the U.S. pharmaceutical industry spends 20.5 percent of its sales on R&D, but the energy industry only spends 0.42 percent. The council argues that the energy industry is unlikely to increase its R&D spending on its own and thus needs enhanced support from government funding.

The report encourages the development of a “comprehensive, government-wide” Quadrennial Energy Review, support of “innovation hubs” within DOE, support and expansion of the new Advance Research Projects Agency-Energy (ARPA-E) with at least $300 million per year, and the development of a technology commercialization engine along the lines of the Clean Energy Development Administration (CEDA). The report also provides suggestions on how additional funding could be obtained through taxes, fees, and by streamlining DOE operations. According to the council, “federal funds for energy innovation should originate from revenues from the energy sector itself rather than from general revenues.” 

Shortly after the report’s release, Secretary of Energy Stephen Chu and Office of Science and Technology Policy Director John Holdren released the Department of Energy’s Quadrennial Technology Review. Additionally, the House and Senate recently released their FY 2012 appropriations bills that dedicate $180 million and $250 million to ARPA-E, respectively.

The AEIC members include Norm Augustine, former chairman and CEO of Lockheed Martin; Ursula Burns, chairman and CEO of Xerox; John Doerr, partner at Kleiner Perkins; Bill Gates, chairman and former CEO of Microsoft; Charles Holliday, chairman of Bank of America; Jeff Immelt, chairman and CEO of GE; and Tim Solso, chairman and CEO of Cummins Inc.

Senate Energy Committee Hosts Report on Energy Policy (09/11)
Senators Jeff Bingaman (D-NM) and Lisa Murkowski (R-AK), chair and ranking member of the Senate Energy and Natural Resources Committee, hosted a special briefing for senators by the American Energy Innovation Council of the Bipartisan Policy Center about their report, Catalyzing American Ingenuity. The report highlights the need for an active government role in energy innovation, recommends ways to improve the effectiveness of government innovation programs, and lays out options to pay for energy innovation investments.

BOEMRE Replaced by BSEE and BOEM (09/11)
On October 1, the new Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) replaced the Bureau of Ocean Energy, Management, Regulation, and Enforcement (BOEMRE). BOEMRE was put in place as part of an overhaul of the former Minerals Management Service (MMS) in the aftermath of the BP Deepwater Horizon oil spill in April 2010. The well blowout and resulting spill highlighted problems with resource management, leasing, revenue collection, and safety and environmental oversight managed by one agency. The new reorganization separates the former roles of MMS into three independent agencies within the Department of the Interior. The third agency, the Office of Natural Resource Revenue (ONRR), has already been established and is responsible for the collection and disbursement of royalties, fines, bonuses, penalties, and assessments for onshore and offshore energy production.  Michael Bromwich, who had directed BOEMRE since its inception, will lead BSEE and Tommy Beaudreau will lead BOEM.

Chairman Doc Hastings of the House Committee on Natural Resources has proposed an alternative form of reorganization which would separate the former MMS into the Bureau of Ocean Energy - responsible for planning, leasing, and environmental studies; the Ocean Energy Safety Service - responsible for permitting, safety, and inspection; and an Office of Natural Resources Revenue - responsible for collecting all royalties and revenues for onshore and offshore energy production.

Deepwater Horizon Joint Investigation Team Final Report Released (09/11)
On September 14, 2011, the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) and U.S. Coast Guard Joint Investigation Team (JIT) released their final investigative report of the April 2010 BP Deepwater Horizon explosion and oil spill. The final report, also known as Volume II, concludes that BP, Transocean and Halliburton violated a number of federal offshore safety regulations. BP said that it "has accepted its responsibility for responding to the spill and is accordingly paying costs and compensation,” while Halliburton has refused to accept any responsibility or accountability.

Schumer Floating Legislation on Mandatory Background Checks (08/11)
To prevent security threats against infrastructure facilities, Senator Charles Schumer (D-NY) will introduce legislation to run background checks on employees at power plants, water treatment plants, and other critical infrastructure. Brought to light by a July 2011 Department of Homeland Security (DHS) report, the upcoming legislation would increase the role of the Federal Bureau of Investigation (FBI) in the employment process. The DHS report warned that extremists are likely to launch physical and cyber attacks from the inside of a major U.S. utility facility. The DHS report cited “high confidence in [DHS’s] judgment that insiders and their actions pose a significant threat to the infrastructure and information systems of U.S. utilities.” If Schumer’s legislation is passed, background investigations will be run against the FBI’s criminal history record and the Interstate Identification Index, a system that contains fingerprint records from U.S. states, territories, and federal and international criminal justice agencies.

Bill to Facilitate Wind Energy Research and Development Introduced (08/11)
On August 1, Representative Paul Tonko (D-NY) introduced the Wind Energy Research and Development Act of 2011 (H.R. 2782).  The bill would provide $1 billion over five years for the Secretary of Energy to direct a research program to improve the efficiency, reliability, and capacity of wind turbines.  The program would work to optimize the design of wind energy systems to meet a wider range of atmospheric conditions and reduce the cost of creating and maintaining such systems.  Tonko introduced a similar bill (H.R. 3165) in 2009, which passed in the House but stalled in the Senate.

Secretary of Energy Advisory Board Releases Shale Gas Report (08/11)
The Natural Gas Subcommittee of the Secretary of Energy Advisory Board released a preliminary report on August 11 calling for improvement in the management of shale gas development in the U.S.  The subcommittee was charged with identifying actions that can be taken to reduce environmental impact and increase safety.  The report’s recommendations include the creation of a public database of information about shale gas drilling, disclosure of fracturing fluid composition, reduction in the use of diesel fuel, creation of a national organization to improve best practices, and investment in research and development.  The report will be available for public comment for 90-days with a final report to be released on November 18.

U.S. Chamber of Commerce Releases Index of Energy Security Risk (08/11)
On August 4, the Energy Institute of the U.S. Chamber of Commerce released their second annual Index of Energy Security.  The group calculated an energy security risk score of 98.0 for 2010.  This is the fourth highest score since 1970 and an increase from the 2009 score of 91.5.  The index measures energy security based on 37 individual geopolitical, economic, reliability, and environmental metrics.  Of these metrics, 20 increased, 11 decreased, and six remained constant in 2010, with the largest numerical changes attributed to energy prices and price volatility, particularly in crude oil.  The index tracks changes in energy security risk beginning in 1970 and projects future risk to 2035.

White House Creates Interagency Alaska Oil and Gas Working Group (07/11)
President Obama released an executive order on July 15, 2011 outlining the organization of an interagency working group to address oil and gas development in Alaska.  The group will be chaired by the Deputy Secretary of the Interior, with representatives from the Departments of Defense, Commerce, Agriculture, Energy, Homeland Security and other government agencies.  The move is in response to growing criticism of the federal permitting process for oil and gas development in Alaska.  Oil industry representatives have complained that the process takes too long and that there are too many agencies with jurisdiction.

30 Million Barrels Released from Strategic Petroleum Reserve (07/11)
At the end of June, 2011 the Obama administration released 30 million of 727 million barrels of crude oil from the Strategic Petroleum Reserve (SPR). The release was in collaboration with the International Energy Agency (IEA) to reduce energy prices over the short-term as oil consumption increases during the summer months. As stated on the Department of Energy (DOE) web site, “the SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy.” The SPR is the largest emergency reserve held by any government. In the past, supplies from SPR have been used in the aftermath of natural hazards such as Hurricane Katrina. This most recent release of crude has received little support from congressional Republicans. Senator Lisa Murkowski (R-AK), ranking member of the Energy and Natural Resources Committee, was suspicious about the effectiveness of the administration’s decision. However, industry interest in purchasing the crude oil was high as indicated by 90 offers sent to DOE on June 22, 2011. Discussions on a possible carbon tax and analysis of domestic oil supply have followed the release. Critics of the recent release suggest a carbon tax would provide a more long term and effective method of curbing energy prices.

Nuclear and Clean Energy Bills Pass Senate Committee (07/11)
On July 14, the Senate Committee on Energy and Natural Resources reported 23 bills that covered energy, water, and public land issues. Of note in this first package of bills were two nuclear energy demonstration bills and four bills to reduce oil consumption and increase domestic clean energy production. The Nuclear Power 2021 Act (S. 512) would require the Department of Energy (DOE) to demonstrate two small modular reactor designs and the Nuclear Energy Research Initiative Improvement Act of 2011 (S. 1067) would require the DOE to support research to reduce the manufacturing and construction costs associated with nuclear reactors. To reduce oil consumption and increase domestic clean energy development and deployment, the committee passed the Advanced Vehicle Technology Act of 2011 (S. 734), the Energy Savings and Industrial Competitiveness Act of 2011 (S. 1000), the Alternative Fuel Vehicles Competitiveness and Energy Security Act of 2011 (S. 1001), and a bill to promote the domestic development and deployment of clean energy technologies. This last bill would create a Clean Energy Deployment Administration (CEDA) which was first discussed as part of the 21st Century Energy Technology Deployment Act (S. 949) which was introduced in 2009.

Oil and Gas Facilitation Act Passes Senate Energy Committee (07/11)
In its second mark-up of July, the Senate Committee on Energy and Natural Resources passed the Oil and Gas Facilitation Act of 2011 (S. 916). The measure would ease the restrictions on domestic oil and gas development, provide funds to improve onshore oil and gas permit processing, facilitate the coproduction of oil and gas and geothermal energy, charter a comprehensive inventory of natural resources in the outer continental shelf, create an outer continental shelf lease and permitting office in Alaska and promote the development of an Alaska natural gas pipeline.

House Expedites Approval of Keystone XL Pipeline (07/11)
On July 27, 2011 the House of Representatives voted 279-147 to pass the North American-Made Energy Security Act (H.R. 1938) that would expedite the consideration process for the $7 billion U.S.-Canada Keystone XL oil pipeline.  Under the current timeline the State Department will submit a final ruling on the pipeline by the end of 2011. Because of this, the Obama administration and House Democrats called the bill unnecessary.  Environmental groups strongly oppose the pipeline while the oil industry and other business groups cite it as a critical action to improve U.S. economic interests.

Chairman Hastings Circulates MMS Reorganization Draft (07/11)
House Natural Resources Committee Chairman Doc Hastings (D-WA) is circulating a discussion draft of legislation to reorganize the former Minerals Management Service (MMS) into three different agencies. The bill would essentially redefine the Obama Administration’s reorganization plans for MMS which are currently underway. Hastings’ bill would separate MMS into the Bureau of Ocean Energy, responsible for planning, leasing, and environmental studies and the Ocean Energy Safety Service, responsible for permitting, safety, and inspection. These two agencies would be overseen by a new Assistant Secretary of Ocean Energy and Safety. The existing Assistant Secretary for Policy, Management, and Budget would oversee the new Office of Natural Resources Revenue (ONRR) which would be responsible for collecting all royalties and revenues for onshore and offshore energy production. The two Assistant Secretaries would report to a new Under Secretary for Energy, Lands and Minerals which would oversee all offshore and onshore energy production.  The Obama Administration’s reorganization plans split the current Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) into the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement. Hastings’ proposal for an Office of Natural Resources Revenue shares similar responsibilities and a name to the agency already implemented by the Obama Administration.

Included in Hastings’ draft is the establishment of a National Offshore Energy Health and Safety Academy to train government inspectors and a stipulation that all inspectors have at least three years experience in the oil and gas field and a relevant academic background. The bill would create an Outer Continental Shelf Energy Safety Advisory Board to provide the Secretary of the Interior with technical advice on safe offshore energy exploration, development, and production.

Mining and Renewable Energy Bills Approved by House Committee (07/11)
The House Natural Resources Committee approved the Southeast Arizona Land Exchange and Conservation Act of 2011 (H.R. 1904) during a mark-up on July 14, 2011.  Under this legislation, 2,000 acres of federal forest land would be traded for 5,000 acres of land owned by Resolution Copper Co. The aim of the land exchange is to promote job opportunities in Arizona, facilitate domestic copper production, and increase government revenue while still protecting the surrounding wildlife. The committee approved six other bills. National Petroleum Reserve Alaska Access Act (H.R. 2150) expedites leasing of oil and gas in the National Petroleum Reserve in Alaska; Cutting Federal Red Tape to Facilitate Renewable Energy Act (H.R. 2170) streamlines the review process for renewable energy projects; Exploring for Geothermal Energy on Federal Lands Act (H.R. 2171) strives for timely geothermal energy exploration; Utilizing America's Federal Lands for Wind Energy Act (H.R. 2172) promotes wind energy production on Federal Lands; Advancing Offshore Wind Production Act (H.R. 2173) supports offshore wind energy sources; and Southeast Alaska Native Land Entitlement Finalization and Jobs Protection Act (H.R. 1408) addresses land entitlement in Southeast Alaska. 

ExxonMobil Pipeline Bursts under Yellowstone River (07/11)
At about 11 pm on Friday, July 1, ExxonMobil Pipeline Company’s 20 year-old Silvertip pipeline ruptured under the Yellowstone River releasing about 1,000 barrels of oil before the pipeline was shut down.  The rupture occurred 20 miles upstream of Billings, Montana. The Environmental Protection Agency (EPA) is leading the cleanup efforts in cooperation with the Department of the Interior, the Coast Guard and ExxonMobil. While crews are deploying booms and mats along river banks to absorb and dispose of the oil that has pooled in slow waters, EPA is collecting water and air samples to analyze for volatile organic compounds. The large snowpack, increased snowmelt and subsequent high flow rate on the river may have contributed to the rupture and is definitely complicating the cleanup efforts by limiting access and crippling equipment. As of July 23, EPA has announced that there is oil visible for about 72 miles downstream of the rupture. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has directed ExxonMobil to make safety improvements on the pipeline before operation can resume. In particular, they want the pipeline re-buried under the riverbed to protect it from damage. PHMSA is still determining the cause of the break.

At a July hearing before the Senate Committee on Environment and Public Works, Cynthia Quarterman, PHMSA administrator, testified that the pipeline has a four foot depth-of-cover requirement. In June 2011 PHMSA requested a confirmation from ExxonMobil of the depth-of-cover for the pipeline because the flow rate and volume picked up in May as the large snowpack melted and rivers flooded.  PHSMA warned all pipeline operators in flood prone areas to check their systems. ExxonMobil reported that there was 12 feet of cover at the south bank but did not report a depth-of-cover in the riverbed. ExxonMobil last reported a depth-of-cover in the riverbed in a December 2010 survey which found the pipeline to be at a depth of five feet, one foot below the four foot minimum.  

ExxonMobil Pipeline Company President Gary Pruessing has promised to do “whatever is necessary” to clean up the spill, but this has not stopped Montana’s governor, senators and other lawmakers from calling for more oversight and information. After initially being a part of the joint command team, Montana state officials backed out one week after the spill. Governor Brian Schweitzer explained the state was not satisfied with ExxonMobil’s transparency. Senators Max Baucus (D-MT) and Jon Tester (D-MT) have told ExxonMobil Corporation Chief Executive Officer Rex Tillerson that ExxonMobil should pay for the full cost of the cleanup. The senators have requested information on inspections and communications with federal regulators regarding the pipeline.

Immediately after the spill, House Energy and Commerce Committee Chairman Fred Upton (R-MI) distributed a discussion draft of the Pipeline Infrastructure and Community Protection Act of 2011. The House Committee on Energy and Commerce Subcommittee on Energy and Power passed a version of this draft on July 27. This bill would set penalties for major violators, create minimum engineering standards to reduce pipeline damage, require automatic or remote-controlled shut-off valves, expand inspection and regulation coverage to non-petroleum fuels, and require PHMSA’s inspection information to be available to the public. During the subcommittee mark-up, Representative John Dingell (D-MI) and Chairman Fred Upton introduced an amendment that included two provisions designed to respond to recent high-profile pipeline breaks. The first would require gas line operators to report their maximum allowable operating pressure, a key issue in the 2010 rupture that killed eight residents of San Bruno, California; the second, would set up a PHMSA review of existing rules for the burial of pipelines under waterways. This issue has been reviewed recently as questions about the cause of the Yellowstone River spill remain unanswered. Representative Jackie Speier’s (D-CA) bill, the Pipeline Safety and Community Empowerment Act of 2011 (H.R. 22), contains a series of provisions that require pipeline owners and operators to make information about the operation of the pipeline available to the public. Senator Dianne Feinstein’s bill, the Strengthening Pipeline Safety and Enforcement Act of 2011 (S. 234), is similar to the House Energy and Commerce bill but it would increase PHMSA’s inspection force by 100 employees.

The incident has reopened congressional debate about the Keystone XL pipeline proposal. Keystone XL would extend from the Canadian tar sands in Alberta to the Texas coast if the State Department approves the pipeline extension. Representative Steven Cohen (D-TN) has stated that the Montana spill is a small example of what could happen with Keystone XL. He noted that there have already been 12 spills in one year along the current Keystone pipeline in Canada. Policymakers are looking for assurances that pipelines have proper oversight and are not prone to breaks or leaks.

AEP Halts West Virginia Mountaineer CCS Project (07/11)
On July 14, 2011, the American Electric Power Company (AEP) shelved their plans to capture carbon dioxide emissions from a coal-burning power plant in West Virginia. In 2009, AEP began operating the first fully integrated carbon capture and sequestration (CCS) project at the Mountaineer Plant. This facility used the chilled ammonia process to remove the carbon dioxide from the unit’s exhaust. The carbon dioxide is compressed into a liquid-state and is then injected through wells into geologic layers 1.5 miles underground where the carbon dioxide is permanently stored. The CCS project demonstrated that CCS technologies can be integrated on an existing coal-fired power plant and provided a blueprint of design and operation for future CCS installations. The Department of Energy funded a portion of the cost which the contract has now been terminated.

The decision to put the CCS project on hold is due to AEP’s inability to invest $668 million into CCS without federal policy and the assurance that AEP will be able to recoup their costs. AEP burns more coal than any other U.S. power company and without CCS, AEP realizes that its coal plant may not be able to survive in a marketplace that puts a price on carbon. With the current partisan divide on Capitol Hill regarding energy policy, the idea of a federal policy on CCS seems unlikely in the near future. Power companies and lawmakers agree that storing carbon emissions in underground rock formations would allow the world to keep using coal while cutting emissions to levels that will help to stabilize the climate.

Geothermal Expansion Bills Introduced by Tester and Wyden (06/11)
Senator Jon Tester (D-MT) introduced the Geothermal Exploration and Technology Act of 2011 (S.1142). This bill supports mapping and development of U.S. geothermal resources through the establishment of a federal direct loan program focused mainly on high risk exploration wells. The bill would amend the Energy Independence and Security Act of 2007 (P.L. 110-140) to expand use of geothermal energy. The Geothermal Production Expansion Act of 2011 (S.1149) was introduced by Senator Ron Wyden (D-OR) to expand geothermal production on federal land. Both bills have been referred to the Committee on Energy and Natural Resources.

Hastings Introduces Two Domestic Energy Production Bills (06/11)
After his three offshore oil and gas bills (H.R. 1229, H.R. 1230, H.R. 1231) passed the House in May, Representative Doc Hastings (R-WA) has introduced two more bills in June to jumpstart the development of domestic energy on federal lands. The Cutting Red Tape to Facilitate Renewable Energy Act (H.R. 2170) seeks to limit an agency’s review process by requiring an agency to consider and analyze “only the proposed action” authorizing or facilitating a proposed renewable energy project. Public comments that do not specifically address the proposed action or the no action alternative would not be considered.

The National Petroleum Reserve Alaska Access Act (H.R. 2150) would direct the Secretary of the Interior to hold at least one lease sale per year from 2011-2021 in the National Petroleum Reserve in Alaska (NPRA). It imposes permitting timelines that would hold the Department of the Interior accountable for any delays and calls for the U.S. Geological Survey, in cooperation with the state of Alaska and the American Association of Petroleum Geologists, to conduct another resource assessment of technically recoverable fossil fuel resources within NPRA.

Coffman Pushes for Onshore Oil and Gas Leases (06/11)
Representative Mike Coffman (R-CO) introduced a bill, Facilitating American Security Through Energy Resources Act (FASTER) (H.R. 2375), on June 24, 2011 that would require the Bureau of Land Management (BLM) to process 200 lease requests within six months. According to BLM estimates, most drilling permits are processed within 200 days, although some permits can take two years to process. The bill would require BLM to work with industry to determine which leases exhibit the most potential for energy development. The bill has been referred to the House Committee on Natural Resources.

USGS Releases Report on Energy Development in the Outer Continental Shelf (06/11)
The U.S. Geological Survey (USGS) released a report in June outlining knowledge gaps in oil and gas development in the outer continental shelf. The report, titled An Evaluation of the Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska calls for research on climate change impacts, compilation of geospatial data, evaluation of spill risks, and an enhanced domestic and international dialogue. The report was compiled in response to a March 2010 request of Secretary of the Interior Ken Salazar, who cited the unique environmental conditions in the region as necessitating improved understanding.

Delay in New EPA Fossil Fuel Standards (06/11)
The Environmental Protection Agency (EPA) announced it will delay the release of its New Source Performance Standards (NSPS) until September 30, 2011. The NSPS were originally scheduled for release on July 26, 2011. These new regulations are intended to reduce greenhouse gas emissions from coal-fired power plants, which account for 40 percent of total emissions.  The NSPS will expand upon the rules set out by the Obama administration in January of 2011. The regulations implemented by the administration focus on construction standards for new plants and those undergoing renovation. The NSPS will regulate existing plants, which currently are not regulated under federal standards.

Federal Agencies to Work Together on Emission Standards for Drilling (06/11)
On June 24, the Obama administration announced a new Memorandum of Understanding (MOU) signed by the Environmental Protection Agency, the Department of the Interior, and the Department of Agriculture. The goal of the MOU is to streamline the emissions review process for drilling projects in hopes of reducing delays and setting expectations and agreements for how to address air quality. The new MOU primarily affects western states, which have seen a recent boom in natural gas drilling and drilling proposals.

Supreme Court Rules in Favor of Power Companies (06/11)
The U.S. Supreme Court ruled unanimously in American Electric Power Co., Inc., et al. vs. Connecticut et al. that six states (California, Connecticut, Iowa, New York, Rhode Island, and Vermont) cannot try to limit emissions of greenhouse gases under federal common law of public nuisance. The states argued that the power companies, American Electric Power Co., Xcel Energy Inc., Duke Energy Corp., Southern Co. and the Tennessee Valley Authority, were releasing greenhouse gases, contributing to global warming and damaging the environment and economy in their states.

The states filed their suit in 2004 before the Environmental Protection Agency (EPA) began to prepare regulations regarding emissions. The high court ruled that the EPA could place restrictions on greenhouse gas emissions if EPA determined that the emissions were a public health issue. The Supreme Court decided this in Massachusetts vs. EPA in 2007. The EPA issued a public health endangerment finding subsequently and has begun preparing rules.

The court’s opinion, written by Justice Ruth Bader Ginsburg, says the EPA should regulate any emissions that impact states through the Clean Air Act and therefore that states cannot claim any damages under the federal public nuisance law. The ruling allows states to sue under state public nuisance laws, but it is unclear what steps the six states will take next. Some states, such as Mississippi, are suing power companies about emissions under state public nuisance laws and other states may wait to see how these suits proceed. 

The opinion makes it clear that the Supreme Court wants EPA to regulate emissions through the Clean Air Act rather than having courts involved through the federal public nuisance law. EPA has been slow to establish regulations and states will need to decide whether they can wait for EPA or whether they should proceed with suits through state public nuisance laws to try to reduce problems and recoup any damages.

Hydraulic Fracturing Gets Banned, Halted in the East (06/11)
Amid concerns about the potential environmental risks of hydraulic fracturing, a state and a municipality have banned the controversial drilling method. Governor Martin O’Malley (D) of Maryland called for a halt on hydraulic fracturing in the state until a comprehensive study of economic, environmental, and safety impacts is completed.  This would lead to a three-year ban on the process, a move strongly criticized by industry and state legislators from the counties in which the drilling would take place. Taking O’Malley’s halt a step further, the city council in Morgantown, WV banned hydraulic fracturing within one mile of the city limits on June 22. The council explained that the move was in response to the state’s failure to pass effective regulations and that they hoped their ban would catalyze state action. Around 150 representatives of the natural gas industry protested outside the city courthouse.

Oil and Gas Bills Move as Hearings Debate Concerns (05/11)
In a month of debate about oil subsidies and high gas prices, May inspired many members of Congress to introduce fossil fuel related legislation amid a bevy of oil and gas hearings.

Introduced in April, all three of Congressman Doc Hastings’s (R-WA) oil and gas bills passed the House in May and await consideration in the Senate. The Putting the Gulf of Mexico Back to Work Act (H.R. 1229), the Restarting America’s Offshore Leasing Now Act (H.R. 1230), and the Reversing President Obama’s Offshore Moratorium Act (H.R. 1231)  passed with strong support of the Republican majority and several moderate Democrats.

After the three offshore drilling bills passed in the House, Senator Mitch McConnell (R-KY) put his own offshore drilling bill, the Offshore Production and Safety Act of 2011 (S. 953), on the floor for a vote but a majority voted against a motion to consider the bill.

In May, Senator Jeff Bingaman (D-NM), Chairman of the Senate Committee on Energy and Natural Resources, introduced the Oil and Gas Facilitation Act (S. 916) and the Outer Continental Shelf Reform Act (S. 917). Senator Lisa Murkowski (R-AK), who often works with Chairman Bingaman on energy-related legislation before it is introduced in committee, did not cosponsor these bills even though a similar Outer Continental Shelf Reform Act passed the committee last Congress. The bills were scheduled to be discussed at a committee’s mark up in late May, but the two bills were removed from the agenda and will be considered at a later date. 

There were three hearings on oil and gas extraction technologies. The House Committee on Science, Space, and Technology held a hearing to discuss the draft Environmental Protection Agency’s (EPA) study on hydrofracturing, known as “fracking.” As the lone witness in the second panel, Dr. Paul Anastas defended the scope of the proposed study from Republican members who were discouraged to see that the scope includes the “full lifespan” of fracking fluids.  Chairman Ralph Hall (R-TX) and others accused the EPA of hindering natural gas development because of an environmental concern that may not exist. Anastas had to repeatedly answer that there has been no confirmed case of drinking water contamination due to hydrofracturing.

Chairman Darrell Issa (R-CA) of the House Committee on Oversight and Government Reform held a field hearing called, “Pathways to Energy Independence: Hydraulic Fracturing and Other New Technologies.” The witness panel was in agreement that fracking was an established and safe technique that could increase profits and domestic energy production. The hearing was held in Bakersfield, CA and Chairman Issa was joined by Bakersfield’s Representative Kevin McCarthy (R-CA) and Representative Blake Farenthold (R-TX) who called Bakersfield “West Texas with mountains in the background and a few degrees cooler.”

The Senate Committee on Energy and Natural Resources held a hearing in May “to receive testimony on new developments in upstream oil and gas technologies.” Instead of dwelling on the advantages or disadvantages of fracking, the hearing focused on new exploration and production techniques such as enhanced oil recovery methods, directional drilling, extended reach and geosteering.

Carbon Capture and Sequestration Bills Introduced and Marked Up (05/11)
Senators John Barrasso (R-WY), Michael Enzi (R-WY), and Jeff Bingaman (D-NM) have introduced legislation to award cash prizes to researchers who develop and implement technologies to capture carbon dioxide from the atmosphere. A similar version of the bill (S. 757) was previously introduced last Congress , but never made it passed the Committee on Energy and Natural Resources.  Bingaman and Barrasso have also teamed up on a related piece of legislation (S. 699) which would establish a program within the Department of Energy to institute ten commercial-scale carbon capture and sequestration projects. On May 26, both bills were amended and passed in committee.

Senator Burr Proposes Department of Energy and Environment (05/11)
Senator Richard Burr (R-NC) introduced legislation this May that would create the Department of Energy and Environment (DOEE) by effectively combining the Department of Energy (DOE) with the Environmental Protection Agency (EPA). The Consolidation of Department of Energy and Environmental Protection Agency Act of 2011 (S. 892) is being touted as a shrewd way of providing savings and streamlining a coordinated approach to the administration of energy and environmental policies.  As part of the transition, there would be a reduction of funding for oil and gas research and development (R&D), energy technology development (including the Advanced Research Program Agency – Energy), a repeal of ultra-deepwater and unconventional on-shore natural gas R&D, and a prohibition on refurbishing the Los Alamos Neutron Science Center. Major EPA programs that would be reduced include multiple water-related grants and pollution control programs while local government climate change grants, diesel emissions reduction grants, and target watershed infrastructure grants would all be terminated. The bill has been referred to the Committee on Homeland Security and Governmental Affairs.

USGS Analysis on Undiscovered Oil and Gas Resources in Alaska (05/11)
In May, the U.S. Geological Survey (USGS) released a new analysis of economically recoverable oil and gas resources in the National Petroleum Reserve in Alaska (NPRA). The analysis was based on a 2010 assessment of technically recoverable oil and gas resources which estimated 900 million barrels of oil (bbl) and an impressive 53 trillion cubic feet (tcf) of natural gas. The report, Economic Analysis of the 2010 U.S. Geological Survey Assessment of the Undiscovered Oil and Gas in the National Petroleum Reserve in Alaska, estimates different amounts of resources that are recoverable at different market prices. For a market price of $8 per thousand cubic feet of gas, the NPRA could yield 18 tcf of gas. When the market price is $10 per thousand cubic feet, economic natural gas resources in the NPRA nearly double to 32 tcf. For oil, 273 million bbl are economically recoverable at an oil price of $72 per barrel and 500 million bbl at $90 per barrel. These estimates are based on technologies used in 2010 and may change due to innovations in extraction, transportation, or discovery methods. The study assumes a 10- and 20-year delay between discovery and development of production since no pipeline exists from the North Slope of Alaska.

Three House Bills to Expedite Offshore Oil and Gas Leasing (04/11)
A trio of bills was introduced in April that would speed up offshore lease sales for oil and gas production. The bills, the Putting the Gulf of Mexico Back to Work Act (H.R. 1229), the Restarting American Offshore Leasing Now Act (H.R. 1230) and the Reversing President Obama’s Offshore Moratorium Act (H.R. 1231), were passed by the House Natural Resources Committee. Together, the bills would give the Department of the Interior (DOI) 30 days to act on drilling proposals in the Gulf and would require DOI to offer future leases in areas with at least 2.5 billion barrels of oil or 7.5 trillion cubic feet of natural gas according to a 2006 Minerals Management Service assessment. DOI would be required to hold four lease sales over the next year at a site off the coast of Virginia and three more sales in the Gulf that were originally postponed after the BP oil spill last year. The Reversing President Obama’s Offshore Moratorium Act will head to the floor for consideration while the Putting the Gulf of Mexico Back to Work Act has been referred to the House Judiciary Committee. The Restarting American Offshore Leasing Now Act passed the House on May 5. 

Democratic Representatives Seek Offshore Royalty Reform (04/11)
Led by Representative Ed Markey (D-MA), a group of Democratic lawmakers have introduced legislation that would reform a decade-old royalty-waiver program for oil companies with federal leases drilling in deepwater conditions. The waivers, approved of in 1995, were originally meant to support oil companies still developing deepwater capabilities and allowed companies to reduce or eliminate their royalties until they had recouped their investments. Democrats have been trying to remove this waiver for many years and they argue the removal of the waiver can help reduce the federal deficit. According to Markey, the “Deficit Reduction through Fair Oil Royalties Act” (H.R. 1352) would “[end] this ridiculous loophole that robs the taxpayers of more than a billion dollars a year.” 

Independent Report Shows Substantial Increase in Domestic Natural Gas Reserves (04/11)
On April 27, 2011, the Potential Gas Committee released results of its latest biennial assessment of the nation’s natural gas resources. The committee estimated the United States has a total resource base of 1.898 trillion cubic feet (Tcf) of technically recoverable natural gas as of year-end 2010. This is a substantial increase due to reevaluation of shale-gas plays in the Gulf Coast, Mid-Continent, and the Rockies. This assessment includes 1,739 Tcf of gas attributable to “traditional” reservoirs (e.g., conventional, tight sands and carbonates, and shales) and 159 Tcf in coalbed reservoirs. Furthermore, if Energy Information Agency’s latest determination of proved dry-gas reserves are included (273 Tcf as of year-end 2009), the United States has a total available future supply of 2,170 Tcf, an increase of 89 Tcf over the previous evaluation. Details of the assessment and data tables can be found at the committee’s website.  

DOE Releases Quadrennial Technology Review Framing Document (03/11)
The U.S. Department of Energy (DOE) has begun a Quadrennial Technology Review (DOE-QTR) of its energy technology policies and programs and has made its DOE-QTR Framing Document available for public comment. The DOE-QTR is part of the government-wide Quadrennial Energy Review as recommended by the President’s Council of Advisors on Science and Technology (PCAST). The framing document describes the nation’s energy situation, outlines important future research and development policy decisions and summarizes current DOE energy technologies and technology program goals. Comments will be received until April 15, 2011.

Failed Blowout Preventer Contributed to Oil Spill (03/11)
The results are out on why the blowout preventer on the BP Deepwater Horizon rig failed to stop the Macondo well from gushing more than 200 million gallons of oil into the Gulf of Mexico from April to July 2010. The Columbus, Ohio office of the Norwegian company Det Norske Veritas (DNV) completed a forensic examination of the blowout preventer at a NASA facility in Michoud, Louisiana. The two volume report (Volume 1, Volume 2) was made available on March 23 by the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).

The report concludes that a buckled piece of drill pipe within the wellbore prevented the heavy duty blades called blind shear rams from cutting through the pipe and sealing the well. After loss of well control, the sudden rush of oil and gas had forced the drill pipe upward, and additional forces from below caused the pipe to bend and move off center. Based on the findings, the report recommends that industry study the equipment responsible for the failure and implement additional blowout preventer testing.

The BOEMRE/U.S. Coast Guard Joint Investigation Team announced it will hold a seventh session of public hearings to focus on the results the week of April 4 in Metairie, Louisiana.

Senators Introduce Paper on Clean Energy Standard (03/11)
Senate Committee on Energy and Natural Resources Chairman Jeff Bingaman (D-NM) and Ranking Member Lisa Murkowski (R-AK) released a document on March 21 that outlines the key elements and questions to consider when developing a clean energy standard (CES). The paper puts forward six broad questions, such as what resources would qualify as clean energy and how a CES would affect technology deployment, each with corresponding subtopics. The CES White Paper is available online and responses and comments are welcomed and encouraged until April 11, 2011.

Senators Introduce Carbon Capture and Sequestration Legislation (03/11)
Senator Jeff Bingaman (D-NM), with Senators Lisa Murkowski (R-AK), John Barrasso (R-WY) and Jay Rockefeller (D-WV), introduced the Department of Energy Carbon Capture and Sequestration Program Amendments Act of 2011 (S. 699). The text of the bill is available here. The bill would establish a program through the Department of Energy (DOE) to provide financial and technical assistance to up to 10 commercial scale carbon capture and sequestration (CCS) projects, which the Senators say would help build confidence in CCS technology developers. Monitoring, accounting and verification of the injected plume would be required at each project, and the bill lays out framework for assessment and long-term assurance of geologic storage sites. Lastly, recognizing the need for a capable workforce as the number of CCS projects increases, the legislation would set up a grant program to train personnel at state agencies responsible for regulatory aspects.

Legislation to Tighten Natural Gas Drilling Oversight (03/11)
Members of Congress have introduced legislation that would tighten oversight of natural gas drilling companies by removing exemptions from the Safe Drinking Water Act (SDWA) and the Clean Air Act (CAA). The Fracturing Responsibility and Awareness of Chemicals Act of 2011 (H.R. 1084 and S. 587), or FRAC Act, would repeal an exemption included in the SDWA for hydraulic fracturing, a practice associated with natural gas drilling operations that involves injecting a mixture of chemicals, fluids and sand to ease gas extraction. Representative Diana DeGette (D-CO) introduced the House version, and Senator Bob Casey (D-PA), whose state has seen a Marcellus Shale drilling boom, is sponsoring the Senate counterpart.

Representative Jared Polis (D-CO) introduced companion legislation, the Bringing Reductions to Energy’s Airborne Toxic Health Effects Act, or the BREATHE Act. The “sister legislation” would end a hydrogen sulfide exemption (the gas was originally included as a CAA pollutant but later removed) and require industry to follow “major source” requirements under National Emission Standards for Hazardous Air Pollutants (NESHAP), taking into consideration aggregate air pollution from clusters of wells rather than only individual wells.

Oil and Gas Leasing Legislation (03/11)
Policymakers introduced legislation in the House and Senate this month aimed at giving oil and gas companies in the Gulf of Mexico more time to develop their leases due to time lost during permitting delays following the BP oil spill and drilling moratorium in 2010. The “Lease Extension and Secure Energy Act of 2011” (S. 516 and H.R. 993) would extend leases for one year and provide operators time to meet new drilling and safety requirements put in place since the spill.

House Members Question Hydraulic Fracturing (02/11)
Representatives Edward Markey (D-MA) and Rush Holt (D-NJ), who serve on the House Natural Resources Committee, sent a letter to Interior Secretary Ken Salazar on February 28, 2011, asking for more information about hydraulic fracturing on public lands. Their letter reacts to a detailed New York Times story on possible human health effects of hydraulic fracturing and other recent stories and debates.

Hydraulic fracturing is used to extract natural gas from rock formations, primarily shale-based formations, by pumping in water and fluids that fracture the rock and allows the gas to migrate to extraction sites. The news story discusses high levels of radioactivity and other potential toxic substances that concentrate in the waste waters and may not be properly disposed of. Given the significant increase in the use of hydraulic fracturing throughout the U.S., there is growing concern about a significant increase in harmful waste water potentially contaminating drinking water and rivers.

Within days of the news story and congressional letter, a magnitude 4.5 earthquake in Arkansas increased concerns about possible connections between seismic activity and salty waste water pumping in the area. In Arkansas, hydraulic fracturing is used to extract gas and then the salty waste water is pumped into the abandoned injection wells. There have been more swarms of earthquakes in Arkansas since an increase of pumping over the past few years and the magnitude 4.5 earthquake was the largest event in about 35 years. The Arkansas Geological Survey, the New Madrid Seismic Network, and the U.S. Geological Survey have more information about seismicity in the state.

With significant discoveries of natural gas resources, which are cleaner burning, and concomitant increases in the use of hydraulic fracturing to extract the natural gas, there needs to be consideration of the most effective methods for dealing with the waste streams, while conserving energy and resources throughout the extraction process.

EPA Draft Plan on Hydraulic Fracturing (02/11)
Details of EPA’s study of hydraulic fracturing have been made available with the release of their draft plan in February. The scope of the research, a “life-cycle” approach, has come under fire for being too large by industry officials and members of Congress. The study is expected to include both retrospective case studies, prospective case studies, and a thorough investigation of all substances used in hydraulic fracturing. The fundamental questions of the study ask how drinking water will be affected by large water withdrawals from the ground and surface water, by releases of hydraulic fracturing fluids, by the injection and fracturing process, by releases of flowback and produced water, and by inadequate treatment of the wastewater. Due to the timeline of the prospective case studies, the complete report isn’t expected to be released until 2014 but EPA will compile an interim report to be released sometime in 2012.

DOI Will Look at Oil Shale Rules, Water Resources (02/11)
Interior Secretary Ken Salazar and Bureau of Land Management (BLM) Director Bob Abbey announced on February 15 that the BLM will review the current commercial oil shale rules and plans issued in November 2008 under the Bush Administration. If necessary, DOI will update the rules depending on projected water needs in the West, the latest research and technologies, and cost. The review will look specifically at whether royalty rates for oil shale should be established only after more is known about oil shale technologies, whether future applications to lease should include specific resource protection programs, and whether aspects of existing regulation should be clarified. Abbey stated that BLM, which recently solicited and reviewed nominations for research, development, and deployment (RD&D) leases for oil shale on public lands in Colorado and Utah, remains committed to helping companies take a bench-scale technology to commercial scale. GAO recommended in “Energy-Water Nexus: A Better and Coordinated Understanding of Water Resources Could Help Mitigate the Impacts of Potential Oil Shale Development” that the USGS begin an analysis of baseline water resources conditions to increase understanding of how groundwater and surface water are affected by commercial oil shale activities. DOI believes that enough time exists for the review before a “commercially and environmentally viable method for development of oil shale” becomes profitable on a larger scale.

Senators Introduce Energy Legislation (02/11)
Senators introduced a new energy measure at the end of February. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM), along with Ranking Member Lisa Murkowski (R-AK), announced legislation to improve energy efficiency standards for a wide range of consumer products including furnaces, air conditioners, refrigerators and washers and dryers (S. 398). “Greater energy efficiency saves consumers money, strengthens our economy, enhances our national security, creates jobs, and reduces environmental impacts,” said Bingaman.

Energy Bits in Congress (01/11)
The Administration has indicated that “chunks” of energy policy will be the focus in working with the new 112th Congress. Indeed in President Obama’s State of the Union address, he called for 80 percent of electricity to come from clean energy by 2035, for a million electric vehicles to be on the road by 2015 and for 80 percent of Americans to have access to high speed rail by 2036. With regards to clean energy, the President included wind, solar, nuclear, clean coal and natural gas as clean resources.

In response to the President’s speech, Congress is looking at revising measures considered in the 111th Congress and incorporating new ideas to meet the challenges put forth by the President and other congressional priorities. In a public address on January 31, Senate Energy and Natural Resources Chairman Jeff Bingaman described the energy priorities for the 112th Congress. Like the president, Bingaman started his talk by highlighting the advances in China, a nation that invested $51.1 billion in clean energy in 2010. Bingaman called for work on four elements of the energy equation for the United States: 1. Energy research and development; 2. A domestic market for clean energy; 3. Financial tools to provide the capital to build clean energy systems; and 4. Policies to promote clean energy manufacturing. Bingaman noted that only 0.3 percent of gross domestic product (GDP) was spent on clean energy research and development in the U.S. in 2007, and he called for investments in energy technology research.

Bingaman has long been a champion of a renewable electricity standard (RES), which would require utilities to garner a percentage of their energy from renewable energy resources. Responding to the President’s request for a clean energy standard (CES) that would include nuclear, natural gas and clean coal plus renewables, Bingaman indicated he would consider this idea with his colleagues on the committee. Bingaman also defined clean coal as coal-fired power plants with carbon capture and sequestration. Committee Ranking Member Lisa Murkowski (R-AK) has not indicated a position on CES yet, while Senators Lindsey Graham (R-SC), Tom Carper (D-DE) and Mark Begich (D-AK) have indicated support for some form of CES.

Look for Congress to work on several measures that prioritize energy efficiency, some energy standards for electricity generation, some energy technology research and development, and policies to stimulate clean energy infrastructure and manufacturing.

Oil Spill Response Bills in the House (01/11)
Energy policy in the 112th Congress, while focused on clean energy, will also need to consider measures regarding mitigation and response to oil spills in the aftermath of the BP Deepwater Horizon oil spill in April 2010.

On January 5, 2011, Representative Steve Scalise (R-LA) and other co-sponsors, introduced the Gulf Coast Restoration Act (H.R. 56), to establish a Gulf Coast Ecosystem Restoration Task Force and a Gulf Coast Ecosystem Restoration Fund. The bill has been referred to the Natural Resources and Transportation and Infrastructure Committees for consideration.

On January 26, the House Natural Resources Committee Ranking Member, Edward Markey (D-MA) and other House Democrats introduced an oil spill response measure (H.R. 501) to enact many of the recommendations of the President’s Oil Spill Commission. The bill would reorganize offshore drilling programs, eliminate the $75 million liability cap for companies involved in causing oil spills, and initiate a dedicated funding stream for oil spill cleanup research and development. The bill is similar to a measure put forward at the end of the 111th Congress, but has been updated to consider more of the Commission’s recommendations. Congressman Rush Holt (D-NJ) also introduced a bill (H.R. 492) to ensure that companies pay the full costs of oil spill clean-up.

Over in the Senate, Senator Robert Menendez (D-NJ) introduced two measures (S.214 and S.215) to ensure that companies pay the full costs of oil spill clean-up while Senator Mark Begich (D-AK) introduced two measures (S.203 and S.204) to require the National Oceanic and Atmospheric Administration (NOAA) to conduct research on oil spill prevention and response in the Arctic and to permit funds from the Oil Spill Liability Trust to be used for NOAA oil spill research.

BOEMRE Splits and DOI Adds Safety Group for Offshore Drilling (01/11)
Bureau of Ocean Energy, Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich and Secretary of the Interior Ken Salazar announced the restructuring of the former Minerals Management Service (MMS) and discussed the next steps in revamping the nation’s offshore drilling program on January 19, 2011.

Two new bureaus have been created. The Bureau of Ocean Energy Management (BOEM) will be responsible for resource development, including leasing, and will house a Chief Environmental Officer. The Bureau of Safety and Environmental Enforcement (BSEE) will enforce safety and environmental regulations.

Salazar announced the creation of the Offshore Energy Safety Advisory Committee within the DOI. It will be made up of representatives from government, industry, academia, national labs and various research organizations and will advise the DOI on research and development relating to drilling safety, spill response and containment and drilling testing technology.

While some policymakers welcomed the added safety regulations and measures to improve enforcement, they say that it must not slow down the permit process and lessen domestic oil production.

EPA Delays Greenhouse Gas Permitting for Biomass Fuels (01/11)
The United States Environmental Protection Agency (EPA) announced January 12 that it will delay for three years setting greenhouse gas (GHG) permitting requirements for industries that use biomass as fuel. In a news release, EPA indicated it will use the additional time to gather more input and analysis from the scientific community. EPA will revisit comments received from a July 2010 Call for Information to better understand whether burning biomass results in a net increase or decrease in emissions. EPA will formulate a decision concerning how to deal with the emissions and whether permits are necessary.

The move signals to some an approval of biomass as a form of clean energy by EPA, while others view it as an indication towards a more moderate approach to regulation. The deferral comes as EPA is enacting controversial permit requirements for newly built and modified facilities that emit large amounts of GHG, such as power plants and refineries.

Browner Leaves Climate and Energy Czar Position (01/11)
Carol Browner annoucned in January that she is leaving her position as the President’s climate change and energy advisor. Browner served an important role in the administration’s efforts to address the Deepwater Horizon oil spill, but under her tenure the administration did not sign climate change legislation, which was intended to be a major focus of the position. Browner’s departure has been expected since late last year. The administration has not suggested a replacement for Browner, which is probably a sign that there will be less focus on climate change by the Obama White House.

National Oil Spill Commission Releases Final Report and Recommendations (01/11)
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released their final report, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling, on January 11, 2011. The Oil Spill Commission (OSC) discussed the results and their recommendations at a conference at the Bipartisan Policy Center.

During the conference, members stressed the urgency and importance of creating a more effective safety and regulation system while at the same time increasing research and development regarding all aspects of for offshore oil and gas development as well as renewable offshore energy resources.

A “culture of complacency” regarding safety standards and regulation within the industry and the federal government led to a series of preventable mistakes that caused the disaster, highlighting what the commission called a systemic problem with offshore drilling. In turn, the commission recommends creating a new safety entity within the restructured Bureau of Ocean Energy, Management, Regulation and Enforcement (BOEMRE), that would have the enforcement authority and oversight of all aspects of offshore drilling. Taking guidance from the nuclear and chemical industries, the oil and gas industry should create an industry-run private safety organization, separate from the American Petroleum Institute, to develop and enforce safety standards.

The commission suggests giving the National Oceanic and Atmospheric Administration (NOAA), along with input from the U.S. Fish and Wildlife Service and the Environmental Protection Agency (EPA), a formal consultative role in the leasing process; involving NOAA, the U.S. Geological Survey (USGS), the Department of Energy (DOE) and academia in risk assessment; and creating an environmental science division led by a Chief Scientist within BOEMRE to advise the safety authority on environmental considerations concerning leasing. The report also recommends giving NOAA, the Coast Guard and EPA a role in evaluating, reviewing and approving oil spill response and containment plans.

The report discusses the need to research the effects of oil and gas development in less understood frontier areas, such as the Arctic and the Atlantic, and suggests creating a board of experts from NOAA, USGS, DOI, DOE, EPA, professional societies, academia, industry and nongovernmental organizations to head such research. Research gaps to fill include understanding and predicting the fate of underwater oil plumes, estimating the amount of oil spilled and characterizing the subsurface geology.

The commission recommends that Congress provide mandatory funding for oil spill response research. OCS member Terry D. Garcia called for improvements in response and containment technology for offshore drilling.

The commission suggests that funding for additional research, technology development and safety enforcement should come from portions of fees that drilling companies pay for federal leases. The report recommends providing incentives, such as tax credits, for private investment in oil spill research. It suggests using eighty percent of fees collected for Clean Water Act penalties for long term restoration and monitoring of the Gulf of Mexico.

Commission members applauded the efforts by scientists during the disaster. Co-chair Bob Graham mentioned that the flowing well was ultimately successfully sealed because a hydrologist at the USGS, under the direction of USGS Director Marcia McNutt, developed a model that showed it was safe for the final capping device to remain in place. Without the expertise and analysis from the hydrologist with experience in fluid flow the containment cap may have been removed because of concerns about pressure anomalies.

At the conference, commissioners discussed the report in a broader context of a long-term U.S. energy plan. Commissioner Fran Ulmer acknowledged the U.S.’s need for a vibrant oil and gas industry but stated that “we can do it more safely.” The commission acknowledged that the proposed recommendations are not intended to put an end to offshore drilling, but Commissioner Frances Beinecke did stress the importance of developing a plan to avoid “drilling our way to dependence.”

Study: Advanced Biofuels Could Replace 58 Percent of World’s Liquid Fuel (01/11)
A new peer-reviewed study has indicated that 10 to 58 percent of the world’s liquid fuel consumption could be replaced by advanced biofuels grown on marginal lands. The study identified grassland, shrubland, and savannahs worldwide that could be harvested for biofuels without displacing agriculture or pasture. Those gains can only be realized from cellulosic and other advanced biofuels, the study emphasizes. The findings were published in the January 1 issue of Environmental Science and Technology and were partially funded by the Energy Biosciences Institute, a joint project of BP, two universities, and the Lawrence Berkeley National Laboratory.

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Background

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.

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 and furthered the offshore drilling efforts and searches for unconventional fossil fuels (such as oil shales or gas hydrates).

Energy legislation 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 shifted with the political landscape and current events. House bills 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, Senator Jeff Bingaman (D-NM) introduced a few measures aimed at promoting clean energy production. His 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. Bingaman 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). The bill covered 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. Though time ran out in the 111th for any substantial legislation to have passed, expect talks to start again soon for the 112th.

Much of the compromise necessary to pass energy legislation in the 112th Congress will center on what qualifies as clean energy. Some congressmen have acknowledged that they would be more willing to support a clean energy standard (CES) if it included nuclear power, natural gas and clean coal. Such negotiation may be essential for passage with a Republican-led House and a Democrat majority in the Senate.

Congress will also be considering measures regarding mitigation and response to oil spills in the aftermath of the BP Deepwater Horizon oil spill in April 2010. Expect legislation to include measures to enact recommendations from the National Oil Spill Commission, address the liability issue for drilling companies and establish restoration efforts in the Gulf.

General background information on the issues surrounding energy policy that Congress has been working on is available from several Congressional Research Service (CRS) reports.

Additional information is available on energy legislation in the 111th Congress and the 110th Congress.

Contributed by Linda Rowan, Geoscience Policy staff; Dana Thomas, Spring 2011 AAPG/AGI Intern; Vicki Bierwirth, Summer 2011 AIPG/AGI Intern; Erin Camp, Fall 2011 AAPG/AGI Intern; Krista Rybacki, Summer 2012 AIPG/AGI Intern; and Kathryn Kynett, Fall 2012 AAPG/AGI Intern.

Background section includes material from AGI's Energy Policy Pages for the 111th Congress.

Please send any comments or requests for information to AGI Geoscience Policy.

Last updated on December 5, 2012


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