Energy Policy ( 12/5/12 ) 
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. Bill Introduced to Fund DOE Oil Shale Energy R&D Program 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. First Arctic Crossing Attempt by LNG Tanker 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 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.
Hearing Held in Alaska on Offshore Drilling in the Arctic (10/12) 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) 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) 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) 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) 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) 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) 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) 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) 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 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) 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) BLM Extends Comment Period for Hydraulic Fracturing Rule (06/12) Cornell University Briefing on Hydraulic Fracturing (06/12) 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. Methane Hydrate Test in Alaska Successful (05/12) 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) 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) 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) 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 2 – What new design requirements are needed to provide assurance that BOPs will cut and seal effectively under foreseeable operating conditions? Panel 3 – What manufacturing, test, maintenance, and certification requirements should be established to ensure the operability and reliability of BOP equipment? 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?” Panel 5 – What type of training and certification should be required for key industry personnel? 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) 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 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. U.S. Surpasses China in Clean Energy Investments in 2011 (04/12) 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) 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.” USGS Releases Shale Oil and Shale Gas Assessment for North Slope (02/12) 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) Obama Administration Delays Decision on Keystone XL Pipeline (11/11) 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) 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) 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) BOEM Releases Proposed 2012-2017 OCS Oil and Gas Leasing Program (11/11) Energy and Climate Change Assessments as United Nations Meeting Begins (11/11) 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) 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) 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 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) House Natural Resources Committee Marks Up 21 Bills (10/11) 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) 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) 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) BOEMRE Replaced by BSEE and BOEM (09/11) 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) Schumer Floating Legislation on Mandatory Background Checks (08/11) Bill to Facilitate Wind Energy Research and Development Introduced (08/11) Secretary of Energy Advisory Board Releases Shale Gas Report (08/11) U.S. Chamber of Commerce Releases Index of Energy Security Risk (08/11) White House Creates Interagency Alaska Oil and Gas Working Group (07/11) 30 Million Barrels Released from Strategic Petroleum Reserve (07/11) Nuclear and Clean Energy Bills Pass Senate Committee (07/11) Oil and Gas Facilitation Act Passes Senate Energy Committee (07/11) House Expedites Approval of Keystone XL Pipeline (07/11) Chairman Hastings Circulates MMS Reorganization Draft (07/11) 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) ExxonMobil Pipeline Bursts under Yellowstone River (07/11) 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) 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) Hastings Introduces Two Domestic Energy Production Bills (06/11) 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) USGS Releases Report on Energy Development in the Outer Continental Shelf (06/11) Delay in New EPA Fossil Fuel Standards (06/11) Federal Agencies to Work Together on Emission Standards for Drilling (06/11) Supreme Court Rules in Favor of Power Companies (06/11) 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) Oil and Gas Bills Move as Hearings Debate Concerns (05/11) 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) Senator Burr Proposes Department of Energy and Environment (05/11) USGS Analysis on Undiscovered Oil and Gas Resources in Alaska (05/11) Three House Bills to Expedite Offshore Oil and Gas Leasing (04/11) Democratic Representatives Seek Offshore Royalty Reform (04/11) Independent Report Shows Substantial Increase in Domestic Natural Gas Reserves (04/11) DOE Releases Quadrennial Technology Review Framing Document (03/11) Failed Blowout Preventer Contributed to Oil Spill (03/11) 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) Senators Introduce Carbon Capture and Sequestration Legislation (03/11) Legislation to Tighten Natural Gas Drilling Oversight (03/11) 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) House Members Question Hydraulic Fracturing (02/11) 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) DOI Will Look at Oil Shale Rules, Water Resources (02/11) Senators Introduce Energy Legislation (02/11) Energy Bits in Congress (01/11) 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) 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) 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 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) National Oil Spill Commission Releases Final Report and Recommendations (01/11) 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) 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 |