Saturday, November 07, 2015

Center Supports Liberty Port Ambrose Project at FEIS Hearing

The Liberty Port Ambrose LNG application is currently pending before the U.S. Maritime Administration.  The U.S. Coast Guard and the U.S. Maritime Administration have produced a Final Environmental Impact Statement (FEIS) and a hearing was held on Monday, November 2, 2015 at the Long Beach Hotel in Long Beach, New York.  Center President Norris McDonald presented a statement in support of the application at the hearing.

The Center supports the project and we are hopeful that Liberty Natural Gas will adopt our recommendation for this project.

President Obama (Warren Buffet) Rejects Keystone Pipeline

President Obama on Friday rejected the application to build the Keystone XL Pipeline, ending the seven-year saga over the controversial plan to transport oil sands from Canada to the Gulf Coast. The State Department decided that the Keystone XL pipeline would not serve the national interest of the United States.  President Obama agreed with that decision.
The president believes the pipeline would not do enough to create jobs, would damage American energy security, would undercut the country’s leadership on preventing climate change and would not make a meaningful, long-term contribution to our economy.

Traditional environmental groups might be celebrating a supposed victory, but we suspect that the WARREN BUFFETT EFFECT had a lot to do with this decision.
All three of the Democratic candidates for president opposed the project. Though former Secretary of State Hillary Clinton held off on publicizing her opinion until September, Sen. Bernie Sanders (I-Vt.) and former Maryland Gov. Martin O’Malley have long opposed it. The Republican candidates overwhelmingly favor Keystone.  (The Hill, 11/6/2015)

Wednesday, October 28, 2015

Court Issues Nationwide Stay of EPA Water Rule

A divided panel of the U.S. Court of Appeals for the Sixth Circuit issued a nationwide stay against the enforcement of a regulation issued by the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers defining the scope of the “waters of the United States” subject to federal regulatory jurisdiction under the Clean Water Act (CWA). This rule — the so-called WOTUS rule — represents the EPA and Army Corps’ effort to clarify the scope of federal regulatory jurisdiction in light of Supreme Court decisions in 2001 and 2006 concluding that the agencies had adopted an unduly broad interpretation of the scope of their authority. Numerous challenges against the WOTUS rule are pending in courts around the country.
There is some question as to whether the court of appeals has jurisdiction to consider a challenge to the rule under the CWA. Specifically, there is a question whether, under the terms of the CWA, challenges to the rule are to be brought in district or circuit courts. Other courts considering WOTUS rule challenges have split on this question. Also interesting is that those parties seeking a stay — those opposing the rule — are also those who are arguing that the challenges should be heard in district courts, and that Sixth Circuit lacks jurisdiction to hear the initial challenge.
The majority concluded that the opponents of the WOTUS rule have shown a sufficient likelihood of prevailing in their challenge to justify the stay. Judge McKeague, joined by Judge Griffin, wrote for the court:
[W]e conclude that petitioners have demonstrated a substantial possibility of success on the merits of their claims. Petitioners first claim that the Rule’s treatment of tributaries, “adjacent waters,” and waters having a “significant nexus” to navigable waters is at odds with the Supreme Court’s ruling in Rapanos, where the Court vacated the Sixth Circuit’s upholding of wetlands regulation by the Army Corps of Engineers. Even assuming, for present purposes, as the parties do, that Justice Kennedy’s opinion in Rapanos represents the best instruction on the permissible parameters of “waters of the United States” as used in the Clean Water Act,it is far from clear that the new Rule’s distance limitations are harmonious with the instruction.
Moreover, the rulemaking process by which the distance limitations were adopted is facially suspect. Petitioners contend the proposed rule that was published, on which interested persons were invited to comment, did not include any proposed distance limitations in its use of terms like “adjacent waters” and significant nexus.” Consequently, petitioners contend, the Final Rule cannot be considered a “logical outgrowth” of the rule proposed, as required to satisfy the notice-and-comment requirements of the APA, 5 U.S.C. § 553. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). As a further consequence of this defect, petitioners contend, the record compiled by respondents is devoid of specific scientific support for the distance limitations that were included in the Final Rule. They contend the Rule is therefore not the product of reasoned decision-making and is vulnerable to attack as impermissibly “arbitrary or capricious” under the APA, 5 U.S.C. § 706(2).
The majority also concluded that there were good reasons to maintain the status quo pending the resolution of challenges to the rule.
What is of greater concern to us, in balancing the harms, is the burden—potentially visited nationwide on governmental bodies, state and federal, as well as private parties—and the impact on the public in general, implicated by the Rule’s effective redrawing of jurisdictional lines over certain of the nation’s waters. Given that the definitions of “navigable waters” and “waters of the United States” have been clouded by uncertainty, in spite of (or exacerbated by) a series of Supreme Court decisions over the last thirty years, we appreciate the need for the new Rule. See Rapanos, 547 U.S. 715; Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985). In one sense, the clarification that the new Rule strives to achieve is long overdue. We also accept that respondent agencies have conscientiously endeavored, within their technical expertise and experience, and based on reliable peer-reviewed science, to promulgate new standards to protect water quality that conform to the Supreme Court’s guidance. Yet, the sheer breadth of the ripple effects caused by the Rule’s definitional changes counsels strongly in favor of maintaining the status quo for the time being.
The court also noted that (as discussed here), the rule has already been stayed in 13 states. A nationwide stay serves the additional purpose of maintaining nationwide uniformity while the litigation proceeds.
Judge Keith dissented from the court’s opinion on the grounds that the court should not issue a stay against the rule until it determines that it has jurisdiction under the CWA to review the rule. In response, the majority argued that it has the discretionary power to issue a stay pending the resolution of the jurisdictional question, and that briefing on that matter is underway.  (Wash Post, 10/9/2015)

Saturday, October 24, 2015

24 States Sue EPA Over President Obama's Coal Regulations

A coalition of 24 states and a coal mining company filed lawsuits Friday to challenge President Obama’s climate change rule for power plants. The climate rule, dubbed the Clean Power Plan, seeks a 32 percent cut in the power sector’s carbon emissions by 2030, compared with 2005 levels. Each state has been assigned a specific emissions goal based on its unique circumstances, with flexibility in how the goals are met.
The litigants accuse the Environmental Protection Agency (EPA) of going far beyond the authority Congress granted to it by ordering a significant transformation of states’ electricity generation, moving away from fossil fuels like coal and toward lower-carbon sources like wind and solar power.
The states joining West Virginia are Texas, Alabama, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, New Jersey, Ohio, South Carolina, South Dakota, Utah, Wisconsin, Wyoming, Arizona and North Carolina.
They are asking the Court of Appeals for the District of Columbia Circuit to overturn the rule. They also want the court to immediately stop its implementation while it works its way through the courts.
The EPA said its rule is legal and will pass all court challenges.
The attorneys general of 15 liberal states, along with the District of Columbia and New York City, are planning to intervene in the lawsuit to support the EPA.  Those state and city officials, led by New York State, said in August that they “fully anticipate defending the rules if they are challenged in court.”  (The Hill, 10/23/2015)

Monday, October 12, 2015

House Passes Bill To Lift Federal Prohibition on Crude Oil Exports

The House on Friday approved a bill, sponsored by Joe Barton (R-TX), to lift the federal prohibition on crude oil exports. Lawmakers voted 261-159 to end the 40-year-old crude oil export ban, arguing that the measure is necessary to help prop up the American oil industry by allowing its product to hit the world market.
The House’s Friday vote was the latest step in the lengthy congressional debate over lifting the export ban.  Industry (American Petroleum Institute, Independent Petroleum Association of America, National Association of Manufacturers) cheered the vote while environmentalists (League of Conservation Voters and others) think that pumping more oil out of the ground will be bad for the environment.

Suppoerts believe that lifting the ban on U.S. oil exports will offer our global allies and trading partners an alternative source of energy, shrink global dependence on oil sourced from hostile regimes, and put America on level fitting with all other producing nation. (The Hill, 10/9/2015)

Thursday, October 08, 2015

West Coast Petroleum Markets Differ by Supply, Demand, and Distribution

graph of selected petroleum products demand by region, as explained in the article text

Source: U.S. Energy Information Administration, PADD 5 Transportation Fuels Markets
Note: Gasoline supply includes ethanol.

The U.S. Energy Information Administration released a PADD 5 Transportation Fuels Markets study on September 30 that examines supply, demand, and distribution of petroleum-based transportation fuels in Petroleum Administration for Defense District (PADD) 5, which encompasses California, Arizona, Nevada, Oregon, Washington, Alaska, and Hawaii.
PADD 5's large and diverse geography contains several regional markets, each with its own distinct supply and demand situation:
  • Southern California and Southern Nevada
  • Northern California and Northern Nevada
  • Pacific Northwest, which includes Washington and Oregon
  • Arizona
  • Hawaii
  • Alaska
The sub-PADD markets are relatively isolated from each other and have different characteristics. Examining the markets at this level allows for insights into the dynamics of each market and how it relates to the PADD as a whole. For instance, PADD 5 includes Hawaii and Alaska, which use a disproportionally higher amount of jet fuel than other markets.
For each regional market as well as PADD 5 as a whole, the study considers supply, demand, supply logistics, and infrastructure. Supply includes in-region refinery production, receipts of fuels produced in other U.S. areas and in other PADD 5 regional markets, and imports. Demand includes in-region consumption, transfers of fuels to other parts of the United States (other PADDs) and to other regional markets within PADD 5, and exports to the global market. Distribution infrastructure includes storage terminals, pipelines, rail facilities, marine loading and unloading facilities, and marine vessel availability.
This study is the first in a series that the U.S. Energy Information Administration plans to conduct to enhance public understanding of the important features of petroleum product markets and to inform EIA's own analyses of those markets. The information provided in this first study will be especially valuable during periods of petroleum supply disruption and market change.  (DOE-EIA)

Wednesday, October 07, 2015

Let’s Modernize Our Environmental Laws

Gregg Easterbrook makes some interesting observations in his New York Times Op Ed where he states:

"Our major environmental laws are a generation or more out of date — written for conditions of the past, not the present. The Clean Air Act, signed by President Richard M. Nixon in 1970, has not been amended since 1990, a quarter-century ago. The Clean Water Act, passed in 1972, has not been updated since 1987. The Endangered Species Act, passed in 1973, was last amended in 1982. The National Environmental Policy Act, the law that mandates environmental impact statements, was passed in 1970 and last amended in 1982."

"Protection of nature and of public health are data-driven sciences — yet environmental laws are grounded in obsolete information. Like generals fighting the last battle, regulators and their opponents keep rehashing disputes of the 1960s and 1970s, the period when the enabling statutes of environmental protection were being debated by Congress."

(Read More)

National Energy Action Month 2015

In celebration of National Energy Action Month, President Obama issued this Presidential Proclamation.  Visit the U.S. Department of Energy's website to learn more about National Energy Action Month. 

Presidential Proclamation

As Americans, we have a profound obligation to our children and our grandchildren -- to help them live better lives than we did, and to ensure the choices we make do not limit the range of their dreams.  The key to realizing a future in which our young people are not held back by choices of the past lies in the promise of a clean, sustainable America.  During National Energy Action Month, we rededicate ourselves to bolstering energy efficiency, investing in innovative clean power, and working together to preserve our planet for generations to come.

My Administration remains committed to securing a stable, energy-independent future for our Nation -- and while there is much work to be done, we have made significant advances in recent years.  The United States is now the world's top producer of oil and natural gas, and we have set strict fuel efficiency standards for cars and light trucks, which are helping to wean us off our decades-old addiction to foreign oil.  We are transitioning away from energy sources that contribute to climate change and threaten our health and safety -- instead moving toward clean energy sources and ambitiously investing in alternatives like wind and solar.  Taking our place as a major player in clean energy, we are harnessing over 3 times as much electricity from wind and 20 times as much from the sun as we did in 2008.  We also remain dedicated to ensuring the safe and secure use of nuclear power, which generates over 60 percent of our carbon-free electricity.  And we will continue working to improve our energy efficiency, double our energy productivity, and explore any and all ways of saving consumers money while reducing our total energy consumption.  These efforts are vital to preserving our way of life and will help protect our environment and boost our Nation's economy.

As the world's second-largest emitter, America must recognize the role we play in contributing to our planet's changing climate and do all we can to make our air cleaner and safer for our children to breathe.  Through our historic announcement with China last November, the United States agreed to double the pace at which we cut our emissions, while China committed for the first time to limiting theirs.  In addition, this past summer, as part of our Clean Power Plan, I announced the first set of nationwide standards aimed at reducing the carbon emitted from our country's existing power plants.  This plan will aid in our fight against climate change while strengthening our economy and helping fulfill our moral obligation to leave our kids and grandkids with a stable planet.   And we are leading by example in Washington:  I signed an Executive Order earlier this year that aims to cut the Federal Government's greenhouse gas emissions by 40 percent and increase its share of electricity consumption from renewable sources to 30 percent over the next 10 years.
Last year, the global economy grew while global emissions remained flat for the first time ever, and we have seen that our goals of addressing energy challenges and driving economic progress are mutually compatible.  In that spirit, I will keep fighting to build a more sustainable society for all people by investing in clean sources of energy -- including wind, which could provide as much as 35 percent of our electricity and supply renewable power in all 50 States by 2050 -- as well as solar, which has added jobs 10 times faster than any other sector of our economy.  Additionally, I recently committed to getting 20 percent of our country's energy from renewables -- beyond hydroelectric power -- by 2030.  My Administration will continue supporting technology, including new and advanced nuclear technology, that moves us closer to a brighter energy future, advances energy efficiency, and develops cleaner fuels.

Though we may never see the full realization of our ambition in our time, we can still have the satisfaction of knowing we did everything within our power to leave this world better than it was.  During National Energy Action Month, let us recommit to forging the future that is within our capacity to reach by supporting clean, renewable, and independent means of energy production and by taking control of our own energy consumption.  Everything we have is at stake -- and we must fight for it.

NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim October 2015 as National Energy Action Month.  I call upon the citizens of the United States to recognize this month by working together to achieve greater energy security, a more robust economy, and a healthier environment for our children.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-ninth day of September, in the year of our Lord two thousand fifteen, and of the Independence of the United States of America the two hundred and fortieth.

Tuesday, October 06, 2015

Justice Department Fines BP $20.8 Billion For Gulf Oil Spill

The Justice Department has detailed a record-setting civil settlement with BP over the 2010 oil spill in the Gulf of Mexico that will cost the London-based oil company $20.8 billion.  The historic civil penalty sends a clear message of accountability for those who pollute the U.S. environment.
The highlights of the settlement include $8.1 billion in natural resource damages, including $1 billion BP agreed to pay earlier; $5.5 billion plus interest for Clean Water Act penalties; and $5.9 billion under a separate agreement to cover state and local government claims.
The settlement does not, however, include $4 billion that BP agreed to pay earlier to settle criminal charges or the billions more it has spent cleaning up the oil spill and settling separate civil claims with private individuals.  The Justice Department settlement includes $700 million to address natural resource problems that might come to light later. 
The settlement ends a chapter of the BP oil spill, which occurred April 20, 2010, when a blowout on the Deepwater Horizon oil rig killed 11 workers, set the rig on fire and triggered the spill. It took 87 days to stop the oil from surging into the waters of the Gulf of Mexico.
The government said that the oil slick at one point grew to the size of Virginia and fouled 1,300 miles of coastline.
The Clean Water Act fine was by far the largest in history, amounting to $1,725 a barrel. That fell well short of the maximum allowable fine, $4,300 a barrel in cases of gross negligence.
The settlement is not designed to discourage any valid economic activity, but the massive fines are designed to let other companies know they are going to be responsible for the harm that occurs should accidents like this happen in the future.  (Wash Post, 10/5/2015)

Monday, October 05, 2015

EPA Strengthens Ozone Standards

The U.S. Environmental Protection Agency (EPA) has strengthened the National Ambient Air Quality Standards (NAAQS) for ground-level ozone to 70 parts per billion (ppb) from 75 ppb to protect public health. The updated standards will reduce Americans’ exposure to ozone, improving public health protection, particularly for at risk groups including children, older adults, and people of all ages who have lung diseases such as asthma. Ground-level ozone forms when nitrogen oxides (NOx) and volatile organic compounds (VOCs) react in the air.
EPA examined nearly 2,300 studies in this review of the ozone standards including more than 1,000 new studies published since the last review of the standards in 2008. Scientific evidence shows that ozone can cause a number of harmful effects on the respiratory system, including difficulty breathing and inflammation of the airways.
The revised standards could significantly improve public health protection, resulting in fewer premature deaths, and thousands fewer missed school and work days and asthma attacks. For people with lung diseases like COPD (chronic obstructive pulmonary disease) or the 23 million Americans and 6 million children living with asthma, these effects can aggravate their diseases, leading to increased medication use, emergency room visits and hospital admissions. Evidence also indicates that long-term exposure to ozone is likely to be one of many causes of asthma development. And studies show that ozone exposure is likely to cause premature death.  The public health benefits of the updated standards, estimated at $2.9 to 5.9 billion annually in 2025, outweigh the estimated annual costs of $1.4 billion. 
Local communities, states, and the federal government have made substantial progress in reducing ground-level ozone. Nationally, from 1980 to 2014, average ozone levels have fallen 33 percent, while the economy has continued to grow. 
To ensure that people are alerted when ozone reaches unhealthy levels, EPA is extending the ozone monitoring season for 32 states and the District of Columbia. This is particularly important for at-risk groups, including children and people with asthma because it will provide information so families can take steps to protect their health on smoggy days. 
EPA also is strengthening the “secondary ozone standard” to 70 ppb, which will improve protection for trees, plants and ecosystems. New studies since the last review of the standards add to evidence showing that repeated exposure to ozone reduces growth and has other harmful effects on plants and trees. These types of effects have the potential to harm ecosystems and the benefits they provide. 
The Clean Air Act provides states with time to meet the standards. Depending on the severity of their ozone problem, areas would have until between 2020 and 2037 to meet the standards.
The Clean Air Act requires EPA to review the ozone standards every five years to determine whether they should be revised in light of the latest science. Today’s action comes after a thorough review and public comment process.  The agency received more than 430,000 written comments on the proposed standards and held three public hearings. 

Monday, August 31, 2015

Two Senate Energy Bills

On July 30, the Senate Energy and Natural Resources Committee voted to send to the full Senate two energy bills that originated in the Committee. One, the Energy Policy Modernization Act of 2015 (EPMA) is broad in its substantive scope, incremental in its approach, and received bipartisan support in the Committee.
The other, the Offshore Production and Energizing National Security Act of 2015 (OPENS Act) focuses on petroleum, would reverse a longstanding federal ban on export of crude oil and make substantial changes in the outer continental shelf oil and gas lease program. The latter bill (in Committee, at least) received party line support from Republicans and opposition from Democrats. 

I. The Energy Policy Modernization Act of 2015: “Something for Everyone” Legislation

EPMA was jointly introduced by Senator Lisa Murkowski of Alaska, Chair of the Energy and Natural Resources Committee, and Senator Maria Cantwell of Washington, the Ranking Member. It was reported out of Committee on an 18-4 vote, with ten Republicans and eight Democrats voting in support.
The legislation reflects the incremental approach to development of energy policy in other bills that have become law over the past two years – dating back to when Senator Murkowski was the Ranking Member and Senator Ron Wyden (D-Or) was the Chair. Two bills from 2013, the Hydropower Regulatory Efficiency Act and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act, garnered bipartisan support for sensible reforms that removed regulatory obstacles to development of hydropower resources. But where those bills were narrowly focused, EPMA is sprawling.
EPMA’s provisions defy easy summarization; the Committee’s section-by-section analysis covers 18 pages and the bill itself exceeds 350 pages. Whether the legislation is intended to promote an “all of the above” national energy policy or simply to gain congressional support the old-fashioned way – by including something on everyone’s wish list – the result is a bill that addresses nearly every energy resource in some manner.
EPMA is divided into five titles, the first four of which are focused on energy issues:
  • Title I, “Efficiency,” includes subtitles addressing Buildings, Appliances, and Manufacturing, respectively. Title I is dominated by provisions related to energy use in federal buildings, requirements for studies, and reauthorization of existing programs. For example, the Weatherization Assistance Program under Section 422 of the Energy Conservation and Production Act (ECPA) would be extended through fiscal year 2020 with an authorized appropriation of $350 million annually.
  • Title II, “Infrastructure,” addresses cybersecurity, the Strategic Petroleum Reserve, trade, electricity and energy storage, and computing. The latter category sets forth perhaps the most ambitious goal: the development of two or more “exascale” computing systems – systems capable of an “exaFLOPS” (a billion billion calculations per second). The bearing on energy policy is left to the imagination, although one can imagine many energy control applications. The most significant provision with respect to “trade,” Section 2201, would require the Secretary of Energy to issue a final decision on any application for export of natural gas to non-free trade countries within 45 days after FERC or the Maritime Administration has concluded environmental review under the National Environmental Policy Act (NEPA) for the associated liquefied natural gas export facility.
  • Title III, “Supply,” is devoted almost entirely to renewable energy, including hydroelectric, geothermal, marine hydrokinetic, and biomass. The only provision specific to fossil fuels is Section 3101, which amends and reauthorizes a statute concerning research into the commercial viability of methane hydrate as an energy source. Although production of methane from methane hydrate remains largely theoretical, the potential is immense:
    Methane hydrate is a cage-like lattice of ice inside of which are trapped molecules of methane, the chief constituent of natural gas. If methane hydrate is either warmed or depressurized, it will revert back to water and natural gas. When brought to the earth’s surface, one cubic meter of gas hydrate releases 164 cubic meters of natural gas.
    While global estimates vary considerably, the energy content of methane occurring in hydrate form is immense, possibly exceeding the combined energy content of all other known fossil fuels.
  • Title IV, “Accountability,” offers a smorgasbord of requirements for studies, reports and information gathering.  
Title V, by contrast, would permanently reauthorize the Land and Water Conservation Fund and the Historic Preservation Fund and would establish a new National Park Service Maintenance and Revitalization Conservation Fund. Authorization for both the Land and Water Conservation Fund and the Historic Preservation Fund will expire by statute on September 15, 2015. Title V is an outlier in EPMA: its only relationship to the “modernization” of energy policy is the funding source. The two existing funds are statutorily authorized to receive revenue from rentals, royalties and other sums paid under leases under the Outer Continental Shelf Lands Act. Under EPMA, the new National Park Service Maintenance and Revitalization Conservation Fund likewise would receive a portion of the revenue -- $150 million per fiscal year -- under Section 9 of the Outer Continental Shelf Lands Act. The Fund could be used only “for high-priority deferred maintenance needs” of the National Park Service “that support critical infrastructure and visitor services.” Use of the Fund for land acquisition would be prohibited.
For such wide-ranging energy legislation, little in EPMA directly addresses nuclear energy. Section 3501 would require the Department of Energy to submit a report to Congress on “assessing the capability of the Department to host privately funded fusion and fission reactor prototypes up to 20 megawatts thermal output and related demonstration facilities at sites owned by the Department.”

II. The Offshore Production and Energizing National Security Act of 2015: A Turnabout in Petroleum Policy?

On the same day the Energy and Natural Resources Committee voted on EPMA, the Committee voted out a separate bill with a much narrower focus, more significant change to established energy policy, and lacking bipartisan support. The Offshore Production and Energizing National Security Act of 2015 (OPENS Act) would repeal a nearly 40-year ban on exports of U.S. crude oil and would make substantial changes to the oil and gas leasing program on the Outer Continental Shelf. It passed out of Committee on a 12-10 party-line vote.

A. The export ban: has it run its course?

The export ban was enacted as part of the Energy Policy and Conservation Act of 1975 (EPCA) in reaction to the oil embargo of 1973 by Arab nations belonging to the Organization of Petroleum Exporting Countries. EPCA’s energy policy initiatives have proven to be enduring: in addition to the export ban, EPCA created Corporate Average Fuel Economy (CAFE) standards and the Strategic Petroleum Reserve.
The ban on export of crude oil produced in the United States is not without exceptions. Most notably, legislation signed into law by President Clinton in 1995 reversed a ban on export of crude oil from Alaska’s North Slope; that ban was put in place in 1973 as part of the Trans-Alaska Pipeline Authorization Act.
Most recently, the U.S. Commerce Department informed members of Congress earlier this month that it intends to approve a limited program through which Mexico’s national oil company, PEMEX, will be able to trade heavy Mexican crude for light crude produced in the United States. PEMEX has sought approval to trade up to 100,000 barrels per day. Mexico’s crude production has declined and has shifted from light crude toward heavier crude, leaving the nation’s refineries short of the light crude for which they were designed. Refineries in the U.S. Gulf region are generally better suited to processing heavier crudes, rather than the light crudes produced in increasing volumes from U.S. shale plays.
Nonetheless, the ban on crude oil exports has largely remained intact. With U.S. crude oil production soaring from 5,350 thousand barrels per day (bbd) in 2009 to 8,715 thousand barrels per day in 2014, however, pressure to modify or repeal the ban has been mounting.
Since speaking to the Energy Security Initiative at Brookings in January 2014, Senator Murkowski has been an open advocate for repeal of the ban on crude oil exports.
Section 501(a) of the OPENS Act would sweep the 40-year ban aside in one sentence:
Notwithstanding any other provision of law, to promote the efficient exploration, production, storage, supply, and distribution of energy resources, any domestic crude oil or condensate (other than crude oil stored in the Strategic Petroleum Reserve) may be exported without a Federal license to countries not subject to sanctions by the United States.

B. The Outer Continental Shelf: expanding opportunities and sharing revenue

The OPENS Act would expand and enhance opportunities for oil and gas leases on the outer continental shelf in the Gulf of Mexico, in a new “Nearshore Beaufort Sea Planning Area” and in the “South Atlantic Planning Area” off the coast of Virginia, North Carolina, South Carolina and Georgia. The Secretary of the Interior would be required to implement, with some modifications, the Proposed Final Outer Continental Shelf Oil & Gas Leasing Program (2017-2022). The Secretary also would be required to make available for leasing “any outer Continental Shelf planning area in the Gulf of Mexico that – (i) is estimated to contain more than 2,500,000,000 barrels of oil; or (ii) is estimated to contain more than 7,500,000,000,000 cubic feet of natural gas.”
For such required lease sales that are not part of the Proposed Final Outer Continental Shelf Oil & Gas Leasing Program (2017-2022), analysis under NEPA would be restricted: the Secretary would not be required to identify any non-leasing alternatives to the proposed action, and would only be required to consider one preferred leasing action and one alternative leasing proposal.
The OPENS Act also would expand a precedent from Section 105 of the Gulf of Mexico Energy Security Act of 2006 requiring that revenue from certain oil and gas leases in the Gulf of Mexico be shared with Gulf states. Sections 104, 203 and 305 of the OPENS Act expand the revenue sharing concept respectively within the Gulf, Alaska and the four states adjoining the South Atlantic Planning Area.

III. Conclusion

The legislative future of both bills is uncertain. Although bipartisan support for EPMA in the Energy and Natural Resources Committee bodes well for passage by the Senate, it remains to be seen whether the plethora of new or reauthorized loan and grant programs, pilot programs, studies and new agency offices authorized by EPMA’s “something for everyone” approach will win favor in the more conservative House.  (Marten Law, 8/26/2015)

Friday, August 28, 2015

Judge Blocks EPA Streams & Wetlands Rule

Federal Judge Ralph Erickson of the District Court for the District of North Dakota acted late Thursday to block the Obama administration’s controversial water pollution rule over small waterways like streams and wetlands, hours before it was due to take effect.  Judge Erickson found that the 13 states suing to block the rule met the conditions necessary for a preliminary injunction, including that they would likely be harmed if courts didn't act and that they are likely to succeed when their underlying lawsuit against the rule is decided.
The decision is a major roadblock for the Environmental Protection Agency (EPA) and the Army Corps of Engineers, who were planning Friday to begin enforcing the Waters of the United States rule, expanding federal jurisdiction over small waterways like streams and wetlands.

The EPA believes the injunction only applies in the thirteen states that filed for it: Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.  In all other respects, the rule is effective on August 28, according to the EPA.

The Obama administration says the rule is necessary to protect small waterways from pollution or harm, as called for under the Clean Water Act.
As a preliminary injunction, Erickson’s ruling is designed only to last as long as the litigation persists, and can be overturned.
The 13 states, led by North Dakota, are participating in just one of 10 lawsuits against the water rule. In total, 29 states, along with business interests representing energy, developers, farmers and others are suing.
The cases have been consolidated into one lawsuit at the Court of Appeals for the Sixth Circuit in Cincinnati, but Erickson argued that he could still issue his injunction. Multiple litigants had requested injunctions in their lawsuits, and most had been dismissed and deferred to the Sixth Circuit.  (The Hill, 8/27/2015)

Wednesday, August 26, 2015

Fitch Report Says Hazy Outlook for U.S. Nuclear Power

According to Fitch Ratings, cost and retirement of some plants will likely keep a cap on U.S. nuclear development into the mid term.   Last year, the U.S. Energy Information Administration forecast that nuclear generation will drop by approximately 10,800 MWe by 2020 on the low cost of natural gas and an expected lack of growth in electricity demand. Fitch believes this number could grow if more plant operators find upgrades and local political pressure too costly to continue operations. 

The total cost to complete the Vogtle nuclear power plant expansion has risen to approximately $17 billion. Similarly, construction costs for the new units at the V.C. Summer plant have risen to approximately $12.4 billion. Both projects are approximately three years behind schedule. They are using a modular construction technique and technology developed by Westinghouse, the AP1000 PWR, which was designed to be less costly and faster. Four AP 1,000 reactors under construction in China have also experienced cost overruns and delays. In our view, the change in expectations about this technique could join other forces in keeping expansion down. 

These pressures shut Dominion Resources' Kewaunee plant, Duke Energy Corp.'s Crystal River plant, Edison International's San Onofre plant, and Entergy's Vermont Yankee plant. Exelon's Oyster Creek is scheduled for retirement in 2019. Approximately eight additional merchant units, with an aggregate capacity of 6,334 MW, are also at risk of early retirement. 

By comparison only five new units are currently under construction and a license has been issued for one other, according to a report published last month by the Nuclear Energy Institute. Although a further 10 units are under active Nuclear Regulatory Commission review, their status remains uncertain. Plant age could also play a role in preserving current generation. Of the 99 nuclear units in operation, 73 have received 20-year license extensions beyond their original 40-year operating licenses. An additional 19 applications for license extension are pending and the remaining units are likely to be filed over the next several years.  (Fitch Ratings, 8/20/2015)

Tuesday, August 18, 2015

EPA Proposes Methane Reduction Rules For Natural Gas Wells

Methane Molecule Formula
Today, the U.S. Environmental Protection Agency proposed rules aimed at cutting methane emissions from oil and natural-gas drilling, part of a broader Obama administration goal to cut such emissions from the sector by up to 45% over the next decade from 2012 levels.  The rules are aimed in particular at cutting methane emissions from new oil and natural-gas wells, requiring companies to install technology to prevent methane—a potent greenhouse gas—from inadvertently leaking and to monitor their operations for possible leaks.  The agency is expected to complete the rules in 2016, after a public- comment period.
EPA Headquarters
The EPA’s rules are by far the biggest part of an administration-wide goal of cutting U.S. methane emissions from the oil and gas sector by 40% to 45% by 2025. Earlier this month, the EPA issued final rules cutting carbon emissions from power plants 32% by 2030 based on emissions levels from 2005.
Methane, which is the primary component of natural gas, has a warming effect on the planet more than 25 times greater than carbon dioxide, according to the EPA. Oil and gas companies sometimes inadvertently emit methane during the production and transmission process. By capturing the methane, companies both cut down on the emissions and are able to capitalize on additional product, since methane is the primary component of natural gas.  (WSJ, 8/18/2015)

Monday, August 10, 2015

American LNG Marketing LLC Gets LNG Export Approval From DOE

The Energy Department announced today that it has issued a final authorization to American LNG Marketing LLC (American LNG) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States.

American LNG is authorized to export LNG up to the equivalent of 0.008 billion cubic feet per day (Bcf/d) of natural gas for a period of 20 years from the liquefaction facility located near Medley, Florida in Miami-Dade County, Florida using approved ISO LNG containers. 

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country.  This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record average production rate of 79.06 Bcf/d in 2015.

Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

The Energy Department conducted an extensive, careful review of the American LNG application.  Among other factors, the Department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 0.008 Bcf/d for a period of 20 years was not inconsistent with the public interest.

The full final authorization for American LNG can be found HERE.


Monday, August 03, 2015

President Obama Issues New Climate Change Regulations

The Obama administration has issued a climate change rule for power plants that requires electricity generators cut their carbon dioxide output 32 percent by 2030, from a 2005 starting point.
The Environmental Protection Agency is asking states to formulate plans to reach specific carbon reduction goals assigned to them.  If the states do not submit plans — as multiple conservative states have threatened — the EPA will write and impose its own strategies upon them.
The administration estimates that the climate benefits, in addition to benefits from reducing other pollutants from power plants, would result in a net $46 billion benefit to the nation by 2030, along with thousands of avoided premature deaths and asthma attacks.
Compared with the carbon limits the EPA proposed last year, the final rule is 9 percent more stringent than the 30 percent cut originally envisioned.
It delays the first round of carbon goals to 2022 from 2020, a move the White House said would result in far more renewable energy such as wind and solar and less natural gas replacing coal, which is currently the dominant fuel for electricity.
And despite the added stringency, the rule is predicted to avoid little more than 0.01 degrees Celsius in global warming, since the United States’s emissions are only a small part of the world’s.
The new plan also includes incentives for states to comply early, with matching grants for reductions before the deadlines.  (The Hill, 8/2/2015)

Tuesday, July 21, 2015

China Will Soon Surpass South Korea, Russia, and Japan in Nuclear Generating Capacity

graph of nuclear generating capacity for top 6 countries, as explained in the article text

Source: U.S. Energy Information Administration, International Atomic Energy Agency, World Nuclear Association

Nuclear power currently makes up slightly more than 2% of China's total power generation. However, the Chinese government has a stated goal to provide at least 15% of overall energy consumption by 2020 (increasing to 20% by 2030) from non-fossil fuel sources, including nuclear, hydroelectricity and other renewable sources. To help achieve this target, China plans to increase nuclear capacity to 58 gigawatts (GW) and to have 30 GW of capacity under construction by 2020.
China has rapidly expanded its nuclear capacity in the past several years, which likely will increase nuclear generation in the next few years. China's net installed nuclear capacity is 23 GW, after the country added 10 reactors totaling more than 10 GW since the beginning of 2013. By the end of 2015, China is expected to surpass South Korea and Russia in nuclear generating capacity, placing it behind only the United States, France, and Japan. China is also constructing an additional 23 GW of nuclear capacity that is slated to become operational by 2020. Operation of these units will make China the leading nuclear generator in Asia. Several more facilities are in various stages of planning.
All of China's nuclear plants are located along the east coast and southern parts of the country, near most of the country's power demand. Following Japan's coastal Fukushima nuclear disaster in 2011, China has increasingly considered construction of inland reactors.
China plans to take an ownership role throughout the entire nuclear supply chain. China intends to build strategic and commercial uranium stockpiles through overseas purchases and continue to develop domestic production in Inner Mongolia (north Central China) and Xinjiang (northwest China). China is developing nuclear fuel reprocessing facilities, which are expected to come online by 2017, according to the World Nuclear Association. China currently imports all of its reactor technology, but the country is in the process of designing its own large pressurized water reactors, the CAP1400, through a technology transfer with U.S.-based Westinghouse. Also, as part of its nuclear expansion program, China signed agreements with several countries (Romania, Argentina, Turkey, and South Africa) in 2014 to finance the construction of nuclear reactors and export its own nuclear technology.  (DOE-EIA)

Saturday, July 18, 2015

Southern California Edison Should Reopen San Onofre Nuclear Power Plant


By Norris McDonald

Norris McDonald at San Onofre in 2005
I first toured San Onofre Nuclear Generating Station (SONGS) in 2005.  I was very impressed with the staff, the physical plant and the view at SONGS.  I have toured 12 nuclear plants all over the United States, in France and China.  I was fascinated that the non-nuclear generating part of the plant did not have a building around it.  The view of the Pacific Ocean also made this a uniquely beautiful environment for the operation of this emission free facility.  I was extremely disappointed when Southern California Edison (SCE) decided to close the facility and began the decommissioning process.

Without going through all of the legal, economic, technical and mechanical controversies that led to the closure, let me just say that the $4.7 billion approved to support decommissioning should be reprogrammed to reopening and operating the plant.  I suspect that for this amount of money, SCE could buy 2 brand new steam generators and handle the other expenses related to restarting the plant. I understand that SCE looked at the numbers and if they had to carry employees and other expenses while the Nuclear Regulatory Commission (NRC) took the time to see if the plant could operate safely at a reduced capacity, that they would lose money hand over fist.  Thus the closure decision.  But California desperately needs this 2,000 megawatts (MW) of emission free electricity.

Although SCE believes that the SONGS Settlement approved by the CPUC was fair and reasonable, there is now significant controversy around this Settlement.  Some of the controversy:

":...An Edison executive met secretly in Warsaw, Poland, with former California Public Utilities Commission President Michael Peevey (former SCE CEO) two years ago to sketch out a framework for resolving the San Onofre case. Peevey stepped down in December amid dual state and federal corruption investigations.  State agents executed a search warrant at Peevey’s La Canada Flintridge home [in January], seizing computers, bank records, handwritten notes and other materials."

I have no idea how the Peevey investigation(s) will turn out.  I do know that it casts a shadow on the Settlement.  Lawmakers are calling for reopening the Settlement.  The International Brotherhood of Electrical Workers and the California State Association of Electrical Workers, who originally signed off on the Settlement, are now calling for revisiting the agreement.  I am sure they would agree with me about reopening the plant.

SCE's fight with Mitsubishi Heavy Industries over the steam generator problems will probably go on for years and make a lot of lawyers very rich.  The investigation and subsequent  legal issues related to the California Public Utilities Commission (CPUS) and SCE have placed a huge dark cloud over the Settlement Agreement.

Going forward, I will be trying to convince SCE, the regulatory agencies and other stakeholders. to reopen this plant.  And to reopen it with all deliberate speed.

Tuesday, July 07, 2015

Fossil Fuels Have Made Up 80% of U.S. Fuel Mix Since 1900

graph of share of energy consumption in the United States, as explained in the article text

Source: U.S. Energy Information Administration, Monthly Energy Review

While the energy history of the United States is one of significant change, three fossil fuel sources—petroleum, natural gas, and coal—have made up at least 80% of total U.S. energy consumption for more than 100 years. Recent increases in the domestic production of petroleum liquids and natural gas prompted shifts between the uses of fossil fuels (largely from coal-fired to natural gas-fired power generation), but the predominance of these three energy sources is likely to continue into the future.
For the first several decades of American history, families used wood (a renewable energy source) as a primary source of energy. Coal became dominant in the late 19th century before being overtaken by petroleum products in the middle of the 20th century, a time when natural gas usage also rose quickly. Since the mid-20th century, use of coal increased again (mainly as a primary energy source for electric power generation), and a new form of energy—nuclear electric power—emerged. After a pause in the 1970s, the use of petroleum and natural gas resumed growth. Petroleum consumption decreased in recent years, but natural gas has continued to provide a greater share of U.S. energy consumption. In the late 1980s, renewable energy consumption (other than wood and hydroelectric) began to appear, increasing significantly in the mid-2000s. In 2014, the renewable share of energy consumption in the United States was the highest (nearly 10%) since the 1930s, when wood represented a larger share of consumption. Renewable energy is a small but growing piece of the U.S. energy mix. The greatest growth in renewables today is in solar and wind power, which along with geothermal and biomass, are included in other renewables.
graph of energy consumption in the United States, as explained in the article text
Source: U.S. Energy Information Administration, Monthly Energy Review