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Energy Policy ( 1/28/13 )

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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.

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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.

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Energy policy, a hot topic on Capitol Hill, has become coupled with the issue of climate change as policymakers focus attention on conservation, efficiency, and alternative energy options.

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).

In November 2012, the Bureau of Land Management released their plan for the National Petroleum Reserve in Alaska (NPR-A) that outlines the DOI’s conservation and petroleum production plans for the NPR-A. Offshore of Alaska, the 2012 Arctic drilling season was marked by drilling attempts in the Beaufort and Chukchi Seas by Royal Dutch Shell PLC.  Shell experienced numerous delays including heavier than expected sea ice, delays in the Coast Guard’s certification of the Arctic Challenger oil spill response vessel, failed testing of its oil spill containment dome, and an inability to meet EPA initial air pollution standards.  Additionally, Shell’s drill ship, Kulluk ran aground during a storm and the drill ship Noble Discoverer nearly ran aground.  Setbacks caused the company to only successfully drill a few top holes.

Energy legislation had a tumultuous time in the second session of the 111th Congress and the 112th Congress, with no substantial energy legislation passed for either session. From renewable energy standards to offshore moratoria, hydraulic fracturing, and oil spill responses, the focus of legislation shifted with the political landscape and current events. During the 112th Congress, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling as well as the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) and U.S. Coast Guard Joint Investigation Team (JIT) released separate reports on their investigation of the 2010 Deepwater Horizon oil spill. In an agreement with the Justice Department, BP will plead guilty on 14 criminal charges and pay a record $4 billion in claims.

Another oil spill occurred in July 2011 when an ExxonMobil pipeline ruptured under Yellowstone River near Billings, Montana. This spill reopened congressional debate about the proposed Keystone XL pipeline. While legislation was introduced in support of the Keystone XL pipeline, the Obama Administration announced it will not make a decision on the pipeline until 2013.

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.

During the 112th, Senators introduced a couple carbon capture and sequestration (CCS) bills, but little action was taken overall in terms of CCS other than the Department of Energy announcing that it will be allocating $7 million for CSS research. As of January 2011, the EPA will delay setting greenhouse gas permitting requirements for biomass fueled industries for three years as it continues investigating biomass emissions. A couple energy bills were passed by the House but died in the Senate including the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act of 2011 (H.R. 2842) and the Providing for our Workforce and Energy Resources Act (H.R. 2360).  The most significant bill to pass the House was the Domestic Energy and Jobs Act (H.R. 4480) which would have streamlined permitting, delayed upcoming EPA ozone standards, and linked withdrawal from the Strategic Petroleum Reserve to increases in oil and gas drilling on public lands. Additional energy legislation was introduced regarding critical minerals and geothermal, nuclear, wind, solar, and hydropower energy development.

The vast majority of the energy legislation introduced during the 112th Congress failed to pass. Much of the legislation and reports introduced centered on the issue of hydraulic fracturing. With concerns over environmental contamination and the possibility of induced seismicity, states such as Vermont and Maryland have enacted bans on the process. The BLM proposed a hydraulic fracturing rule that would require companies to disclose the chemicals used in hydraulic fracturing. Legislation was introduced in both the House and Senate to remove natural gas companies’ exemptions from the Safe Drinking Water Act (SDWA) and the Clean Air Act (CAA). The EPA is currently researching the potential impacts of hydraulic fracturing on groundwater and drinking water, and expects to release their final results in 2014.  Meanwhile, President Obama has 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 Obama Administration also requested $45 million to study hydraulic fracturing in fiscal year 2013.

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 112th Congress, 111th Congress and the 110th Congress.

Contributed by Wilson Bonner, AGI Geoscience Policy.

Background section includes material from AGI's Energy Policy Pages for the 112th Congress.

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

Last updated on January 28, 2013

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