Category: Energy

An explosion at a West Virigina coal mine owned by Massey Energy at 4:30 this afternoon left six miners dead and 21 missing. From Ken Ward at the West Virginia Gazette:

A large number of West Virginia coal miners are feared dead or missing this evening following an explosion this afternoon at a Massey Energy underground mine in Raleigh County.

Emergency crews are still responding this evening to the incident, which initial reports indicate occurred at about 3 p.m.

Agency director Ron Wooten said his agency is still assessing the incident, which occurred at Massey subsidiary Performance Coal’s Upper Big Branch Mine-South near Namoa.

“We have received information that there are several unaccounted for, perhaps as many as 21,” Wooten said in a phone interview. “We have received a report that there are six fatalities.”

Ward also reports that the mine, which employs 200 people, has a poor safety record.

In seven of the last 10 years, the mine has recorded a non-fatal injury rate worse than the national average for similar operations, according to MSHA statistics.

One miner was killed at the operation in a July 2003 electrical accident and another in a March 2001 roof fall, according to MSHA records.

Massey Energy as a whole isn’t any better. Indeed, it’s one of the least safe mining operations that regularly risks the lives of its employees. In 2008 it paid the largest fine ever paid by the coal industry in the deaths of two miners in a fire in West Virginia.

On January 19, 2006 a belt line fire killed miners Don I. Bragg, 33, and Ellery Elvis Hatfield, 47, at Massey’s Aracoma Alma Number 1 Mine in Logan County, West Virginia. Efforts to fight the fire were hampered by inadequate fire extinguishers, fire house couplings which did not match the water line, and a lack of water in the lines. On December 22, 2008 Massey Energy agreed to pay $4.2 million in civil and criminal penalties for the accident. It is the largest financial settlement in the coal industry’s history.

On Jan. 15, 2009 the Charleston (WV) Gazette reported that Aracoma widows Delorice Bragg and Freda Hatfield urged U.S. District Judge John T. Copenhaver to reject Massey’s plea bargain and fine for the accident.

Widow Bragg stated that it was clear “that Massey executives much farther up the line expected the Alma Mine to emphasize production over the safety of the coal miners inside.”

Wikipedia has more on Massey’s poor safety record. Massey Energy is owned by global warming denier and conservative activist Don Blankenship, and has recently been the target of protests by environmental and other activists.

We’ll post updates as they come in, but you should also follow Gazette reporter Ken Ward on Twitter, and check the updates posted at WSAZ’s news page.

From Green Right Now Reports

By now just about everyone has heard the downside of wind power, that it is as reliable as, uh, the wind.

When wind speeds slow over the ocean or the plains, wind power is diminished. Researchers at Stony Brook University and the University of Delaware, however, have found a way to even out the power from off-shore installations by looking at what would happen if many offshore turbines were linked via a shared power line.

According to their calculations by the linking of the turbines and by carefully selecting wind project sites to maximize the use of regional weather patterns, the power available from these wind installations would be more reliable and more extensive.

Their conclusions, being published in the Proceedings of the National Academy of Sciences, could mean that wind power could be ramped up more quickly and fulfill a bigger proportion of the nation’s energy needs than previously projected.

“Making wind-generated electricity more steady will enable wind power to become a much larger fraction of our electric sources,” said the paper’s lead author Willett Kempton, UD professor of marine policy in UD’s College of Earth, Ocean, and Environment and director of its Center for Carbon-free Power Integration.

The research team analyzed five years of wind data from 11 monitoring stations along the U.S. East Coast. Looking at the wind speeds in various locations, they estimated a hypothetical output from a 5 Megawatt offshore wind turbine and looked at what would happen if a string of turbines were positioned on a north-south line along the coast.

What they found was that positioning the turbines along the natural storm track that runs north and south along the Eastern Seaboard, the group of turbines would always have power, because parts of the array would be involved in an active weather systems.

At “any one time a high or low pressure system is likely to be producing wind (and thus power) somewhere along the coast,” said Dr. Brian Colle, associate professor in the School of Marine and Atmospheric Sciences at Stony Brook University.

The hypothetical unified wind turbine system experienced ups and downs in the supply of wind at many different points, but it never stopped producing power, the researchers reported.

There are no wind turbines off the U.S. Atlantic coast, though several projects have been proposed.

From Green Right Now Reports

A new round of storms is brewing over wind power in New England after a federal advisory panel recommended that the U.S. Interior Department block a controversial $1 billion project that has drawn opposition from local business leaders and politicians.

Cape Wind Associates LLC proposes building 130 wind towers that would rise 440 feet above the surface of Nantucket Sound. At issue: The towers would be visible from popular tourist areas such as Cape Cod, Nantucket Island and Martha’s Vineyard.

Image: Advisory Council on Historic Preservation

Concerns about the impact on those attractions prompted the Advisory Council on Historic Preservation to give a thumbs-down to the project. The Council determined that the undertaking would adversely affect 34 historic properties, 16 historic districts, 12 individually significant historic properties and six more properties of religious and cultural significance to local Indian tribes.

Interior Secretary Ken Salazar asked the panel for advice but is not bound to accept its guidance. The Obama administration supports increasing the amount of electricity generated from wind and solar power and other forms of renewable energy. The Cape Wind project would provide electricity to about 400,000 homes and would become the country’s first major offshore wind farm.

In response to the Advisory Council’s findings, Cape Wind issued a press release stating that although it disagreed, it is “pleased that the Interior Secretary has a complete record to make a final decision on the project.”

Salazar is expected to make a decision on the issue by the end of April.

By Clint Williams
Green Right Now

It didn’t make sense, really, to spend 44 cents each month to mail Southern California Edison a check for 92 cents. So the Wyman’s of Orange, Calif., decided to pre-pay their 2010 electric bill, sending the utility company a check for $12.

Consider Ray Wyman, 54, a true believer in having solar panels installed on the roof.

“There is the instant reward of reducing the cost of energy and fixing your energy costs,” says Wyman, a marketing communications consultant.

And, Wyman notes, with no out-of-pocket expenses, the savings begin from day one.

The Wyman household is one of about 6,000 in five states – Arizona, California, Colorado, Oregon and, most recently, Texas – that lease photovoltaic solar panel systems through SolarCity based in Foster City, Calif., in the Bay Area.

SolarCity provides one-stop shopping for solar power system design, financing, installation, monitoring and maintenance.

SolarCity converted eBay to solar power in 2008. (Photo: SolarCity.)

“There are other companies that design and install systems and other companies that finance systems, but we’re the only one that does it all,” says company spokesman Jonathan Bass.

SolarCity, known for having installed a 650 kilowatt commercial solar system at eBay’s offices in San Jose, also sells solar power systems and offers side-by-side cost-benefit analysis for those considering a residential setup, Bass says.

Despite an array of federal and state tax credits and utility rebates, an installed solar power rooftop system still costs as much as a compact car. A 5 kW system costs about $35,000, according to a breakdown by the Salt River Project, a major Arizona electric utility. The SRP rebate is $13,500, the Arizona tax credit is $1,000 and the federal tax credit is $6,450.

That brings the net cost of a system to just over $14,000, which means homeowners still have to write a big check to get started on solar power and wait for the tax credit and rebate money to come back to them.

“Solar is a great investment as a purchase,” Bass says, adding that after the payback period of four to 10 years the homeowner is looking at years of basically free electricity.

But that first check is a big hurdle for many people.

“Buying panels was never financially feasible,” says Len Gutman of Phoenix, who leases a system from SolarCity. “If we were buying this same system, we would have had to finance $50,000.”

Gutman’s lease payments are $140 a month. The panels provide all the power the family needs in the winter for their 2,220 square foot home, but the Gutmans buy additional  electricity during the summer.

This chart shows how a solar panel lease plus electric bill can cost less than one's old electric bill. (Image: SolarCity.)

“We like it cool and it’s hot here,” Gutman says, chuckling.

Still, the combined cost of the lease and power bill is less than the old power bill.

“We’ve actually made money every month,” Gutman says. “It’s not a lot of money, but it’s $10, $20, $40 a month going back into our pockets.”

Wyman’s $150 monthly electric bill for his 2,000 square foot, three-bedroom home has been replaced by a $95 lease payment and the 92-cent monthly charge to run the power line to the house. More importantly, Wyman says, his electricity costs are fixed for the next 15 years.

“I believe there is going to be energy inflation in very short order,” he says. “I call this the green hedge – your hedge against inflation.”

Both men note that the savings are immediate because there is no money down with the lease. The tax credits and utility company rebates are funneled to SolarCity. And, if something goes haywire – as it did after just a couple of month with Wyman’s system – SolarCity comes out and fixes it.

RESOURCES:

• Local utilities are beginning to help with residential solar solutions. In Texas, for instance, TXU Energy announced in February that it would be facilitating the installation or residential solar arrays through a partnership with SolarCity. So far, the TXU program is the only way to access SolarCity’s program in Texas.
• San Francisco’s PG&E also announced an agreement this year in which it will help finance 1,000 SolarCity installations.

Copyright © 2010 Green Right Now | Distributed by GRN Network

Did you know that America is still the third largest supplier of oil in the world? We pump around 8.3 million barrels of oil out of the ground on a daily basis, exporting around ten percent of it. The rest we consume… as well as another 12 million barrels. Every day. And the number could actually increase in coming years thanks to President Obama’s new plans.

For a guy who has clad himself in green armor, dolling out billions of dollars to fund alternative fuel research and improve the public infrastructure, approving new drilling seems counterintuitive. So is it a political olive branch to Republicans, a bent knee to oil companies, or just good forward thinking?

(more…)

by Ron Paul

As we head into the summer driving season, and gasoline prices are again creeping up, the administration has announced plans to explore opening up more offshore areas for exploration and drilling. On the one hand this can be lauded as a positive step. On the other hand, it’s too little, much too late to have any meaningful or long-term effect on what Americans pay at the pump anytime soon, if at all.

Indeed, if increasing domestic energy production was really a priority, the administration would direct the EPA to remove its many roadblocks and barriers to energy production. In fact, abolishing the EPA altogether would do much to improve our country’s economy. Instead of protecting the environment as they are supposed to do, most of what they do simply chills the economy. Polluters should be directly liable in court to any and all parties they harm, rather than bureaucrats at the EPA.

Of course, last week’s announcement was couched in terms of removing barriers and red tape. However, the fact that we had these barriers in the first place is yet another reminder of how the energy market is hampered and controlled by bureaucrats and central planners in Washington, rather than to the demands of the people and the decisions of private investors.

Consider how extremely negative our government’s reaction has been to other governments around the world that have nationalized their oil and energy industries, such as Venezuela and Iran. We deposed the democratically elected leader in Iran in 1953 for this very reason. Yet the level of involvement of our government and bureaucrats in energy is nearly absolute. Of course the only thing worse than our government dictating energy decisions to its own citizens, is our government’s dictating energy decisions to citizens of other countries.

Along with the waste of prohibitions that that leave our own national resources untapped, is the waste our government perpetuates with subsidies to alternative fuel sources. There is certainly profit to be made in providing cheaper, cleaner fuel sources, but government subsidy programs interfere with finding realistic long-term solutions. Subsidies divert resources towards certain politically favored fuel types while ignoring others. If the market were left alone, private investors would put their own capital into the most promising alternative fuels. Instead, due to government incentives, resources are concentrated into politically chosen endeavors that could very well end up being dead ends. Meanwhile, precious time and money is wasted.

The government has the opposite of the Midas touch. This has been observed over and over by the reduced quality and rising prices in every private industry in which it entangles itself. Yet somehow, people still seem willing – even eager – to relinquish to government control the most important and sensitive portions of our economy and society. Education, healthcare and energy are all unfortunate examples of industries that are in my opinion far too important to be left to the government to control, when it is the market that has the golden touch.

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Green Right Now Reports

Groups fighting for a safer, cleaner, more livable Appalachia praised the EPA’s move Thursday to restrict pollution from mountaintop removal coal operations in Central Appalachia.

Hobet mountaintop removal site (Photo: Vivian Stockman, ilovemountains.org)

The Alliance for Appalachia, representing 13 groups concerned about detrimental coal practices in the region, posted grateful remarks from several members, such as this from a Tennessee-based group:

Our 13,000 members are pleased that their pleas and prayers are being heard – the grandmothers and grandchildren I work with are seeing a new spark of hope today,” said Ann League of Statewide Organizing for Community Empowerment in Tennessee.

But while many were elated to see the EPA on their side, activists say that Congress must solidify safeguards by passing the pending Clean Water Protection Act (HR 1310) and the Appalachia Restoration Act (S 696).

The EPA’s new guidance on mountaintop removal (MTR) aims to save valleys from being filled in with the waste from these operations, a practice that is degrading water quality and ecological systems across Appalachia. Mountaintop mining employs large machines to blast open coal seams in the tops of mountains, which produces millions of tons of dirt and rock waste that is cleared away from the mining site, unloaded into nearby valleys, destroying habitat and poisoning streams.

Studies now show that the toxic stew is contaminating water sheds and drinking water supplies, the EPA reports.

Government studies done in the late 1990s and early 2000s, predicted that this form of strip mining had buried more than 1,200 miles of streams and would by this time (end of the first decade of the 21st Century) have caused the loss of more than 1.4 million acres of forest — an area the size of Delaware.

Under the new EPA new guidance, “very few” if any of the valley fill permits that coal companies have applied for will be approved because they likely won’t be able to meet the stricter standards, said EPA chief Lisa Jackson.

The release of the new guidelines prompted one coal association spokesman to say that the stricter EPA rules — which must undergo a public comment period before being finalized — could be the end of an era for mountaintop mining.

But environmental activists called it an important first step. And, Appalachian watchdog groups like  AppalachianVoices say this guidance by the federal agency needs to be made permanent by Congress.

“…we expect Congress to follow the Obama Administration’s lead by passing legislation that will permanently protect our homes and communities from mining waste. The Clean Water Protection Act (H.R. 1310) currently has 167 bipartisan cosponsors in the House of Representatives, and the Appalachia Restoration act (S. 696) has 10 bipartisan cosponsors in the Senate.  Change in Appalachia is now inevitable, and the time for Congress to pass this legislation is now!”

• Want to help stop MTR? Ilovemountains.org has a tool where you can “plug in” to see how this is an issue that affects the broader public.

Greenwire: Ecuador’s government announced yesterday it plans to appeal an international arbitration tribunal’s $700 million award in favor of Chevron Corp., which claimed the country did not pay for millions of barrels of oil after Chevron subsidiary Texaco Petroleum Co. sold its operations to a state-owned oil company.

The award was unrelated to an ongoing case in which Ecuadorean plaintiffs are asking Chevron to pay $27 billion for decades of environmental contamination. Though a trial in that case is under way in Ecuadorean court, a federal judge in New York ruled earlier this month that Chevron could pursue arbitration in The Hague (Greenwire, March 19).

Chevron sought to establish through the oil payments case that Ecuadorean courts have not administered justice in a fair and timely manner. Diego Garcia, Ecuador’s attorney general, issued a statement yesterday describing the case as part of “a well-orchestrated strategy by Chevron to evade its responsibilities ahead of the Ecuadorean courts’ eventual adverse decision for its possible responsibility in the destruction of the environment.”

The $700 million award in Chevron’s favor is about one-fifth of Ecuador’s $3.85 billion in international reserves as of March 26, according to the country’s central bank. If Ecuador were to pay the award, it could decrease by as much as 87 percent once the government accounts for back taxes related to oil contracts, Garcia said (Daniel Cancel, Bloomberg, March 31). – GN

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ENN News: President Barack Obama is to announce on Wednesday a plan to permit exploration for oil and natural gas off the coast of Virginia as a way to create jobs and reduce U.S. dependence on foreign oil.

Obama, who wants Congress to move a stalled climate change bill, has sought to reach out to Republicans by signaling he is open to allowing offshore drilling, providing coastlines are protected.

Joined by Interior Secretary Ken Salazar, Obama is to detail an updated plan for offshore oil and natural gas drilling in remarks at a military base in nearby Maryland.
For more than 20 years, drilling was banned in most offshore areas of the United States outside the Gulf of Mexico because of concerns that spills could harm the environment.

The administration has been weighing the pros and cons of offshore drilling since it took office and put the brakes on a Bush-era proposal which called for drilling along the East Coast and off the coast of California.

An administration official said, as part of the new plan, Interior will conduct the first new offshore oil and gas sale in the Atlantic Ocean in over two decades as part of a lease sale 50 miles off the coast of Virginia.

Seismic exploration in the south Atlantic and mid-Atlantic Outer Continental Shelf of the United States will determine the quantity and location of potential oil and gas resources to support energy planning.

The Bush plan had called for leases to be offered in November 2011, but it was not immediately clear whether the Obama administration would stick to that schedule.

A senior Interior official said in January that drilling off Virginia’s coast would be delayed past the original 2011 leasing date.

The proposed Virginia lease area, located about 50 miles from shore, may hold 130 million barrels of oil and 1.14 trillion cubic feet of natural gas, based on Interior Department estimates.

Article continues: http://www.reuters.com/article/idUSTRE62T06520100331

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I have to disagree with my friend Adam Bink on this one:

In other words, while I see headlines in other progressive media spaces “Obama flip-flops on drilling!!” and “which guy did we elect President again?!”, I see it less as a flip-flop than a validation of (a) a previously-held position and (b) that he is more of a Conservadem than many are willing to admit.

While Adam is correct to point out that then-candidate Obama pivoted on offshore drilling in the final months of the Presidential campaign, he misses a few important points.

1. The piece he cites begins as follows: “Obama said he might support more drilling if it were paired with comprehensive energy conservation measures and alternative energy development.”

Obama’s announcement on offshore drilling this week was a standalone measure. It was not in fact “paired with comprehensive energy conservation measures and alternative energy development.” By taking this action without the accompanying positive measures, this is a step further in the wrong direction than what was signaled during the campaign.

And indeed, this is the bulk of the complaint from many progressive commentators. Joe Conason calls it “surrender, then negotiate” strategy. Matthew Yglesias doesn’t understand why Obama did this without getting anything in return. Steve Benen and Kevin Drum have similar concerns. While there would have been complaints on the substance of the policy either way — it is after all, extremely bad policy — they probably would have been more subdued if it wasn’t such a baffling move politically.

2. Adam writes, “Drilling has always been on the list of expendable issues.” This is simply not true. If Obama said anything prior to August 2008 indicating he was willing to budge on the issue, I haven’t seen it. From at least 2005 until August 2008 — after he had secured the Democratic nomination — Obama argued convincingly against offshore drilling repeatedly. Think Progress has several examples:

“The days of running a 21st century economy on a 20th century fossil fuel are numbered – and we need to realize that before it’s too late.”

“The truth is, an oil future is not a secure future for America.”

“We could open up every square inch of America to drilling and we still wouldn’t even make a dent in our oil dependency.” 9/15/05

“It would be nice if we could produce our way out of this problem, but it’s just not possible.” 2/28/06

“Instead of making tough political decisions about how to reduce our insatiable demand for oil, this bill continues to lull the American people into thinking that we can drill our way out of our energy problems.” 8/1/06

“Now is the time to end this addiction, and to understand that drilling is a stop-gap measure, not a long-term solution. Not even close.” 8/28/08

So yes, for the last 90 days of the Presidential campaign, Obama expressed willingness to concede on offshore drilling. But for the previous 3+ years, throughout his Senate career and the long primary campaign, he argued against it over and over again. This is when all of us got to know Mr. Obama and what he stood for, and this is when Democrats selected him as their candidate for President.

In conclusion, I think it is perfectly reasonable for folks to express disappointment and outrage now that he has actually gone through with a 180 degree reversal on the issue. I’m not sure what any of us have to gain by pretending drilling was “always” an expendable issue or that this was exactly what he campaigned on.

graphic: U.S. Dept. of Defense

Thursday’s announcement regarding new nationwide CAFE standards was greeted with a degree of surprise; initial reactions viewed the policy as a chit to quiet the concerns of the enviro left after Wednesday’s announcement by President Obama regarding approval of exploration for offshore oil.

But there should have been no surprise; the statement from the office of the White House press secretary Wednesday in advance of Obama’s speech clearly indicated that an agreement between the Environmental Protection Agency and the Department of Transportation on CAFE standards was going to be signed today. This issue was simply lost in the angry hubbub over the drilling decision.

It was not the only issue lost Wednesday which had also been included in that same statement from the White House. Media outlets did not make note that the decision to allow exploration for petroleum offshore in specific portions of the U.S. coast was driven in part by the Department of Defense’s Quadrennial Defense Review. Here’s the key excerpt from the White House press secretary’s statement:

Department of Defense Energy Security Strategic Emphasis: The recently released Quadrennial Defense Review makes clear that crafting a strategic approach to energy and climate change is a high priority for the Department of Defense (DoD). This reflects mission considerations above all. The Department’s own analysis confirms what outside experts have long warned: our military’s heavy reliance on fossil fuels creates significant risks and costs at a tactical as well as a strategic level. The DoD is actively pursuing strategic initiatives to enhance energy security and independence and reduce harmful emissions, including encouraging the development and use of domestically produced advanced biofuels. You can learn more about DoD’s energy initiatives here.

Congress established a process during the Clinton years by which the country’s strategic defense needs would be assessed and reported by the DOD, analyzed and incorporated into the federal budget process every four years. The first QDR was issued in 1996; the most recent was published in February 2010, the second such report created based on post-9/11 assumptions about U.S. security needs.

The 2010 QDR addresses both climate change and energy security (p. 84) as threats to which the DOD must be prepared to respond; DOD has already begun a more comprehensive effort to be “green”. However, as outlined in the QDR, the DOD’s strategic response to energy security is thin in comparison to climate change response. Does this suggest a continuation of the 2006 strategy — enshrined in the QDR which made reference to the Global War on Terror as “the Long War” —  in the absence of a more detailed and current strategy?

Congress also specified in 2006 that a panel would review the content of the QDR once published and provide an independent assessment of the conclusions reached by the Defense Department. (To the best of my knowledge, there was no such panel review conducted in 2006 under the terms specified by Congress that year.)

The panel named to review the most recent QDR is loaded with former Bush administration officials and defense personnel, most selected by Defense Secretary Robert Gates. To make matters worse, half of the panel has a conflict of interest as they are linked to defense industry contractors. It’s likely that many of these same contract firms have ties to fossil fuel firms as well, since one critical purpose of our nation’s Defense Department has been to protect fossil fuel production so heavily wound into the American way of life. Here’s the panel members with conflicts of interest:

Richard Armitage: Member, board of directors, ManTech International;

J.D. Crouch: Head of technology solutions group, QinetiQ;

Joan Dempsey: Senior vice president, Booz Allen Hamilton;

David Jeremiah: Member, board of directors, ManTech International; chairman,Wackenhut Services; chairman, Technology Strategies & Alliances, a consulting firm with defense contractors as clients;

George Joulwan: Member, board of directors, General Dynamics;

Alice Maroni: Member, board of trustees, LMI Government Consulting, which provides consulting services for the military;

Jack Keane: Member, board of directors, General Dynamics; adviser to chairman,URS Corp.; chairman, Keane Advisors, a consulting firm with defense contractors as clients;

John Lehman: Chairman, J.F. Lehman & Company, a private equity firm that owns defense contractors; member, board of directors, Ball Corp., and EnerSys;

Robert Scales: Chairman, Colgen LP, a consulting firm with defense contractors as clients.

Note, too, that former Bush administration National Security adviser Stephen Hadley, who now works for defense contractor Raytheon, is a co-chair with former Defense Secretary William Perry, who is the chairman of the board of LGS Innovations, a division of Alcatel Lucent and a defense contractor as well.

Perhaps the drilling decision announced Wednesday also looks so much like Bush administration policy continuation because it’s the same Defense Department — quite literally, the same Defense Secretary at the helm — loaded with left-behinds from the previous administration, which concluded in its QDR that energy security would continue to be a problem for the foreseeable future.

Lacking a truly independent review panel which sees continued expansion of oil production as a risk to our country rather than a benefit to its “sponsors”, there’s little chance that our nation’s security strategy and consequently the DOD will change over the rest of Obama’s term in office, or that pressure by the military industrial complex to “drill, baby, drill” will ease any time soon.

2010Apr1: The U.S. federal government establishes national greenhouse gas emissions standards for the first time. By 2016, new vehicles will be required to have a combined fuel economy average of 35.5 miles per gallon. The new rules are expected to reduce CO2 emissions and other greenhouse gases about 30% from 2012 to 2016 (New York Times).

Reference: New York Times http://www.nytimes.com/2010/04/02/science/earth/02emit.html

EPA news release http://yosemite.epa.gov/opa/admpress.nsf/bd4379a92ceceeac8525735900400c27/562b44f2588b871a852576f800544e01!OpenDocument

Image Description: Interstate 405 Southbound in Bellevue, Washington. Photo by Goldman60, 2009June3. Image Location: Wikimedia Commons http://commons.wikimedia.org/wiki/File:I-405_Southbound_Bellevue.jpg Image Permission: This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

This is a sunset; not the dawning of the hydrocarbon era. (photo: swisscan)

A day has passed, and I’m no closer to understanding the Administration’s offshore drilling strategy. Well, actually, I’m a bit closer.

The rewards remain quite obscure to me. It infuriates the environmental coalition who will actually be indispensable with selling a comprehensive bill and mounting mass support for it if one ever comes forward. The White House seems so touchy about offering it that they are highlighting other parts of what they announced yesterday. They seem fully aware of the fact that opening the coasts to potential environmental hazards has almost no reward attached to it; the most fertile tract offered in this plan has at most 6 months’ worth of the US supply of oil in it, and the Virginia tracts have closer to 6 days. It doesn’t even seem cost-competitive to LOOK for oil this scarce.

I am aware of the notion that this is an effort to draw in skeptical Senators – most of them Democrats – on a comprehensive energy and climate bill that otherwise would just die. The best spin on that comes from scientist Stephen Darksyde:

I mentioned yesterday in my Examiner column that the consensus of energy experts I’ve spoken with is that emerging alternative energy technology, combined with existing traditional power plants and conservation, can indeed meet our future needs. But the same people stress that even in the best case renewable energy scenarios, there is a gap in capacity that will still have to be filled, most likely by one of three reliable sources: coal, oil and gas, or nuclear. Each has significant, and yet distinctly different, advantages and disadvantages. Coal is chock full of a host of toxins before we inhale them, oil is a huge security headache and both oil and gas are pollutants and emit GHGs, and rightly or wrongly nuclear just flat out scares people. Both coal and nuclear (Along with solar and wind) don’t do anything for cars and trucks unless electric vehicles become far more widespread. What to do? […]

In the tragic aftermath of 9-11 we missed a huge opportunity, unwillingly thrust upon us at incalculable cost, to radically change our ways. Now we finally have a President who seems willing to make the hard choices the last President shied away from. Some of us are rightly concerned about the offshore component. But if the political price tag for getting a bunch of new programs we as progressive support — and we as a nation sorely need — is to allow energy companies to explore some offshore oil and gas reserves, is that a price we might be willing to consider paying, at least for now?

Except I have no idea if this is the political price tag. It seems to alienate as many people as it supports. Even those swing Senators who could get on a climate bill want to go further than this, and add the North Atlantic and the Pacific to the drilling possibilities. It’s possible that the White House’s bid just kicked off the opening of the coastline, with more on the way. But at that point, you lose even more coastal Senators in areas which do not support drilling in any way.

I think the Occam’s Razor conclusion is that Obama has no problem allowing very rich interests to go on with dirty energy production. He has made investments in solar and wind (and offshore wind may be a part of this exploration), sure, but he also flipped on drilling way back in August 2008, in the middle of the Presidential campaign. This announcement merely codifies that wish for an “all-of-the-above” energy solution. He has always supported clean coal, and corn-based ethanol fuels, and nuclear energy plant like Exelon; nothing new there. In fact, those elements often get MORE attention in Obama speeches than solar and wind. In short, he IS the midwestern coal-and-ethanol-state swing vote that he’s been courting. So why wouldn’t he go ahead and add drilling to the list as well?

Expect weak natural gas prices through early summer as supply and demand moves slowly back into balance, says Peters & Co. Ltd.

"Since early 2009, we have been cautious about U.S. natural gas storage levels and their effects on prices, but we had forecasted that 2010 would be year that the forsupply and demand forces came back in line, which would lead to a price rebound," the research firm said in a note to clients.

"We still hold this belief, but the time-line for this recovery has been pushed back to later in 2010 as the natural gas directed drilling activity both north and south of the border has been more resilient than originally expected with E&P operators apparently ingnoring the importance of full-cycle economic returns."

Near-term, Peters & Co. is cautious about investing in natural-gas weighted stocks but highlighted five names that have significant hedges above strip prices:  Anadarko Petroleum Corp., Devon Energy Corp., EnCana Corp., Paramount Resources Ltd., Peyto Energy Trust. 

David Pett
 

This is a big deal.

The Obama administration finalized the first national rules curbing greenhouse gas emissions Thursday, mandating that the U.S. car and light-truck fleet reach an average fuel efficiency of 35.5 miles per gallon by 2016.

The new fuel efficiency standards, issued by the Transportation Department and the Environmental Protection Agency as the result of a May 2009 deal with the auto industry, represent a peaceful end to a contentious legal battle over how to regulate tailpipe emissions. At a time when it remains unclear whether Congress can pass climate legislation this year, the new rules also mark the White House’s most significant achievement yet in addressing global warming.

[…]

Environmentalists hailed the move, saying it will transform the American auto market in the years to come. […] “This is the biggest step the federal government will have ever taken to save oil, cut greenhouse emissions and save consumers money,” said David Friedman, research director of the clean vehicles program at the Union of Concerned Scientists.

Credit where credit’s due, people. This is good policy.

Within three years, the world is expected to be using all of its available electricity, according to FirstEnergy Capital’s Steven Paget.

“Global power use peaks during summer in the Northern Hemisphere, usually in the first week of August when people are running their air conditioners at maximum power,” the analyst says in a new report.

As a result, he believes that global electron supplies are likely to be maxed out on or near Aug. 2, 2012, the first Wednesday of the month. That’s pretty specific.

He continues: “If we and others are correct, global electrical power use will hit a wall in 2012. Every air conditioner or appliance that is turned on anywhere will results in a decline in power for the rest of the world. Power companies will begin to observe slight brownouts that have no apparent cause in the generation or transmission systems, and firing up additional power generation will have no effect, as there will be no additional free electrons to flow through the power lines.”

Fortunately, authorities around the world are taking actions. They have imposed voluntary and enforced power austerity measures, while also banning all stic-electricity suppressing fabric softeners during the six months leading up to August 2012.

Meanwhile, power companies are looking at ways to do their part, including putting large wool “socks” on existing wind turbine blades that could rub against carpet places on the supporting towers to generate static electricity. As an emergency measure, local utilities and other power companies are fitting large warehouses with shag carpets, doorknobs and dehumidifiers, and making plans to bring in thousands of people that would generate static electricity by ribbing their feet on the carpet while holding onto the doorknobs.

“As Peak Electron Day becomes more publicly known and electron resupply measures begin in earnest, we believe demand for wool products to generate static electricity will increase,” Mr. Paget said. “Clothing stores will sell new items as the ‘static cling’ look will become fashionable – those who have the look will show that they are doing their part to fight Peak Electrons.”

Mr. Paget is the same analyst who predicted (exactly a year ago on April 1, 2009) that water from Niagara Falls would be heading to Alberta’s thirsty oil sands region.

Jonathan Ratner

The table is set for oil to rise, but it will be Brent not WTI prices that will set the tone, says a new report from First Energy Capital.    

"We think there are significant items falling into place to suggest that crude oil prices could be making a fairly orderly progression into the mid-US $80s per barrel range in the next few weeks (for both Brent and WTI)," Martin King said.

Of the two price markers, Mr. King is less bullish on WTI.  He said physical pressures appear to be lining up against any kind of fundamentally-based rally for WTI in the near-term.

"Not to say that it should be reversing course and heading lower, but simply that the necessary physical ingredients are absent, for the moment, to sustain a push to higher price levels," he said. 

As for Brent, the analyst said building global demand pressures are working in its favour.   

"Add in the usual dose of seasonal maintenance that begins to take place in the North Sea around this time of year and the impacts this has on supply, and the stage is set for stronger Brent prices relative to WTI," he said. 

"As such, the current small discount that Brent has to WTI is likely to morph into a premium fairly quickly."

David Pett

Eco Factor: Concept plug designed to conserve energy.

Designed by industrial designer Young Suk Kim, the Energy Lock is a concept plug that prevents energy from being consumed by appliances that are not being used. The device is a timer style multi-tap plug that can be cranked to a specified time. Once the timer is over, the plug shuts down the appliance, preventing any waste of energy.

(more…)

On an oddly defensive conference call, Interior Secretary Ken Salazar and White House environmental policy advisor Carol Browner tried to downplay the decision on offshore drilling as not the most important aspect of what was announced today, not as intrusive into coastal areas as suggested, and not even wholly the President’s decision, a remarkable pulling away from a policy they just advanced.

Salazar and Browner highlighted the increased mileage standards, a joint rulemaking between the EPA and the Department of Transportation that was already announced months ago but got finalized today. Browner said that would save 1.8 billion barrels of oil over the next several years, which dwarfs the impact of offshore drilling in the eastern Gulf of Mexico, for example, assumed to be the most oil-rich area affected by today’s decision but expected to yield just 100 million barrels. Browner also highlighted the greening of the federal fleet, a doubling of the number of hybrid vehicles purchased by the government.

Salazar added that “the President knows we cannot drill our way to energy independence,” and the President echoed that in his speech making the announcement today. The President tried to frame it as a bridge between the dirty energy past and the clean energy future, to somehow fill in the gaps and reduce dependence on foreign sources of energy. But the White House’s own numbers on how much oil drilling would yield show that to be completely fallacious. In addition, no benefit in terms of production would spring from this decision for several years.

In his speech, the President took a position of triangulating the middle ground between environmentalists and drilling advocates. . . :

Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy […]

There will be those who strongly disagree with this decision, including those who say we should not open any new areas to drilling. But what I want to emphasize is that this announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy. And the only way this transition will succeed is if it strengthens our economy in the short term and the long run. To fail to recognize this reality would be a mistake.

On the other side, there are going to be some who argue that we don’t go nearly far enough; who suggest we should open all our waters to energy exploration without any restriction or regard for the broader environmental and economic impact. And to those folks I’ve got to say this: We have less than 2 percent of the world’s oil reserves; we consume more than 20 percent of the world’s oil. And what that means is that drilling alone can’t come close to meeting our long-term energy needs. And for the sake of our planet and our energy independence, we need to begin the transition to cleaner fuels now.

So the answer is not drilling everywhere all the time. But the answer is not, also, for us to ignore the fact that we are going to need vital energy sources to maintain our economic growth and our security. Ultimately, we need to move beyond the tired debates of the left and the right, between business leaders and environmentalists, between those who would claim drilling is a cure all and those who would claim it has no place. Because this issue is just too important to allow our progress to languish while we fight the same old battles over and over again.

Wise Solomon, splitting the baby for us!

But a lot of this is just opening areas to study, like in the mid-Atlantic. And it does seem particularly designed to attract support from a particular group of Senators – “The coastal states with Senators opposed to offshore drilling will not receive any new drilling,” Chris Bowers notes (example: New Jersey Rep. Ron Pallone, who’s still fuming). Those who generally support drilling in the affected areas, like Bill Nelson (FL) and Mark Warner (VA), support this move.

In addition, Browner insisted, the coastal protections, particularly for Florida, were sound. There would be no drilling inside of 125 miles of the shoreline under this plan, a barrier she called “significant.” Salazar added that this was a seven-year plan, and not a license to pillage the nation’s coastlines immediately. Then, Salazar let slip a key piece of information: while the federal moratorium on new drilling expired in 2008, drilling in the eastern Gulf of Mexico is currently under a Congressional moratorium, and opening that area to drilling “will require a Congressional action for the moratorium to be lifted.”

That really makes this seem like a PR move. The question is: for who? Brad Plumer doesn’t understand how this will get red-state Senators on board with a comprehensive energy plan. Perhaps, he wonders, he wants Republicans to look unreasonable – and they are, today, by blasting this gift to them – but then we’re wandering into “11-dimensional chess” territory. And as for getting Senators aboard his climate bill, well, he does run the risk of losing just as many from the other side of the issue. Bill Nelson signed that bill warning against expanded drilling, be the way, so maybe these concerns have been mollified, but that’s probably not universal.

Plumer adds:

Another possibility, meanwhile, is that this move isn’t focused on the climate-bill debate and is geared more toward public opinion. According to the EIA, gas prices are expected to go up quite a bit this summer (probably shooting north of $3/gallon), and the administration may want to step out ahead of the inevitable teeth-gnashing and garment-rending over the issue. So this could be more about the midterms than rounding up votes in the Senate. Though, granted, this drilling announcement won’t affect summer gas prices in the slightest.

Exactly, so if this is meant to head off criticism about gas prices in the summer, it’s just a stupid bet.

Two other comments. One, this is something of a mini-jobs bill. Exploration and study provides a small hiring boost in these areas. There are serious externality costs to that, but take it for what its worth. Second, there’s Bowers’ dark take.

Rather than trying to placate green groups, the President Obama is playing up how he is charting a unifying course of moderation in opposition to those groups. Much like Blanche Lincoln, he protrays himself as an independent, nonpartisan voice standing up to environmental extremists on behalf of his constiuents.

As I wrote quite often during the health care fight, progressive groups can get as mad as they like when the Obama administration abandons them with policy moves like these. However, since President Obama is more popular among the membership of those groups then even the leaders of those groups, it is difficult for them to effectively fight back […] Until that changes, the Obama administration will continue to be able to make right-wing deals with Conservadems, and then do some hippie punching afterward, indefinitely.

Actually, sounds about right.

UPDATE: Lowell Feld has more on the conference call.

UPDATE II: The only immediate Presidential action on any of this was to protect the Bristol Bay area in Alaska, which George W. Bush offered up for drilling.