Globe & Mail by Peter Tertzakian. Last week Total SA and their consortium partners shelved the $11-billion Joslyn oil sands project. Predictably, the belt-tightening announcement triggered the usual self-flagellating notions like, “Canadian oil and gas isn’t competitive,” and “The future of the oil sands is dim.” But ....
Tomorrow morning at 9 a.m. the Alaska Oil and Gas Conservation Commission will hold its monthly public meeting at 333 W. 7th Avenue in Anchorage, Alaska. Agenda will include: 1. Approval of Agenda; 2. Old Business; Approve April 2, 2014 Minutes; 3. New Business; Legacy Wells (Photo, Knifeblade #1), Commissioner Cathy Foerster (NGP Photo. See our story here; since we wrote it, Senator Lisa Murkowski succeeded in encouraging funding of a BLM cleanup. This update, therefore, should give indication of BLM's progress in removing federal hazardous wastes in the National Petroleum Reserve Alaska, where BLM rules ironically prevent industry from exploring and safely developing vast areas. -dh) 4. Opportunity for Public Comment
Alaskan and Canadian Producers And Governments Are Sure To Keep Alert To Changing Conditions In The World LNG Market (Read More)
Michael Whatley (NGP Photo), former staff director and chief counsel for the U.S. Senate Energy Public Works Clean Air and Climate Change Subcommittee, raised a warning flag that EPA regulations will disproportionately affect energy consumers in states in the Midwest and Southeast that are heavily reliant on coal to generate electricity.
Today at 10:30 a.m. EDT, Environmental Protection Agency (EPA) Administrator Gina McCarthy delivered remarks (Live Stream Here) on President Obama’s Climate Action Plan to cut carbon pollution from existing power plants.
We encourage all Americans to pay attention to this new demonstration of Federal power that will increase utility bills for millions of Americans while making electricity service less reliable and eliminating industry jobs along with the support industries, retail, transportation and government jobs depending on them.
Removing a large portion of the single major low-cost fuel source for much of America will further impede economic recovery and adversely affect national defense.
Since U.S. produced carbon emissions are a relatively small increment of the world's 'greenhouse gasses', and since current regulations already prohibit major noxious emissions, and since carbon is a major building block of life itself, the overall benefit to be achieved from such a national sacrifice is debatable. -dh
Alaska North Slope Point Thomson Gas Project Update
Commonwealth North (CWN) Members and guests on Friday heard a fact-filled update from ExxonMobil (XOM) on the company’s contributions to Alaska’s culture and economy—and learned that the company’s Point Thomson (PT) project adjacent to ANWR is ‘on schedule’.
Sofia Wong (NGP Photo), the Infrastructure and Pipeline Project manager of XOM’s Point Thomson project, stressed the ‘Alaska commitment’ throughout her presentation, including the project’s local hire success and four decades of sponsoring the world famous, annual Iditarod Race from Anchorage to Nome.
One of the highest pressure reservoirs in the world, at 10,200 pounds per square inch, PT contains about ¼ of the 35 Trillion Cubic Feet (Tcf) of ANS natural gas reserves, 8 Tcf.
In addition, the reservoir holds around 200 million barrels of valuable, liquid gas condensate, which separates from the lighter gas into liquid form at normal, atmospheric pressure.
The Initial Production System (IPS) will produce about 10 thousand barrels per day of the condensates when 200 million cubic feet per day of the highly pressured gas is de-pressurized by cycling up through one production well then re-pressurized and forced back into the reservoir via two injection wells. Over time, the production rate can increase to 70 thousand barrels per day.
The gas condensates, which remain liquid when de-pressurized, will move through a new, 22 mile pipeline to the Badami oil field, then commingle with Badami oil production for the remainder of a 60 mile journey to TAPS.
Once PT's initial infrastructure and production is operational – by the winter of 2016 -- the company will increase drilling and production of both liquid condensates and natural gas according to a range of development alternatives agreed upon with the State of Alaska, including a high pressure gas pipeline that would be part of an Alaska LNG export project.
Make no mistake, however, that the primary interest of the CWN Energy Action Coalition members focused narrowly on the Point Thomson (PT) project’s essential role in commercializing the stranded gas and gas condensate reserves.
PT reservoir commercialization can occur via some combination of projects: 1) adding liquid condensate to the throughput of the Trans Alaska Pipeline System (TAPS); 2) creating a successful Alaska LNG export project partly depending on PT gas; and, 3) making ANS gas available for in-state use.
Wong emphasized two major milestones, to date: 1) a current expenditure of half the ultimate $4 billion cost of the Arctic gas project, and 2) creating infrastructure that expands access to Arctic oil and gas reserves.
The Point Thomson project crouches on the western border of the Arctic National Wildlife Refuge (ANWR), on perhaps the most remote production pad in the world, about 60 miles east of the Prudhoe Bay oil field.
Wong said that the project’s current success owes in large part to the expertise Arctic-experienced Alaskan companies have contributed to the project. Of nearly a hundred contractors working on the project, over seventy are Alaskan companies. She said that of the project’s $2 billion cost to date, 70% has been spent in Alaska. She praised Doyon Regional Corporation’s construction of the liquids pipeline to Badami, including creation of 2,300 vertical support members that will elevate the warm liquids pipeline above the permafrost terrain. She also lauded the expertise of companies like HDR, which guided the project through its critical permitting requirements and played a key role in keeping the project on schedule. -dh
Commonwealth North Energy Action Committee Event Photos: May 30, 2014 (High Resolution Versions Here):
Here is the EPA Spin:
It's an important day. Today, at the direction of President Obama and after an unprecedented outreach effort, the U.S. Environmental Protection Agency is releasing the Clean Power Plan proposal, which for the first time cuts carbon pollution from existing power plants, the single largest source of carbon pollution in the United States. Today’s proposal will protect public health, move the United States toward a cleaner environment and fight climate change while supplying Americans with reliable and affordable power.
By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids. And we don't have to choose between a healthy economy and a healthy environment--our action will sharpen America’s competitive edge, spur innovation, and create jobs.
Here are the top four things to know about the proposed plan. The Clean Power Plan:
1) Fights climate change: Our climate is changing, and we're feeling the dangerous and costly effects today.
2) Protects public health: Power plants are the largest source of carbon pollution in the U.S. Although there are limits for other pollutants like arsenic and mercury, there are currently no national limits on carbon. Americans will see significant public health and climate benefits now and for future generations.
3) States leading with proven approaches: States and businesses have already charted a course toward cleaner, more efficient power. Our plan doesn't prescribe, it propels ongoing progress
4) Key is flexibility and putting states in the driver's seat: With EPA's flexible proposal, states choose the ways we cut carbon pollution, so we can still have affordable, reliable power to grow our economy.
Watch a video from Administrator McCarthy on the Clean Power Plan:
Power plants account for roughly one-third of all domestic greenhouse gas emissions in the United States. While there are limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxides, and particle pollution that power plants can emit, there are currently no national limits on carbon pollution levels.
With the Clean Power Plan, EPA is proposing guidelines that build on trends already underway in states and the power sector to cut carbon pollution from existing power plants, making them more efficient and less polluting. This proposal follows through on the common-sense steps laid out in President Obama’s Climate Action Plan and the June 2013 Presidential Memorandum.
Interested in more detailed information on the benefits of the rule? View the whiteboard video by Joe Goffman, EPA Associate Assistant Administrator for Climate.
By 2030, the steady and responsible steps EPA is taking will:
- Cut carbon emission from the power sector by 30 percent nationwide below 2005 levels, which is equal to the emissions from powering more than half the homes in the United States for one year;
- Cut particle pollution, nitrogen oxides, and sulfur dioxide by more than 25 percent as a co-benefit;
- Avoid up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and up to 490,000 missed work or school days—providing up to $93 billion in climate and public health benefits; and
- Shrink electricity bills roughly 8 percent by increasing energy efficiency and reducing demand in the electricity system.
For more information, view the following fact sheets:
- Overview of the Clean Power Plan - Cutting Carbon Pollution from Power Plants (PDF)
- Why We Need a Cleaner, More Efficient Power Sector (PDF)
- Flexible Approach to Cutting Carbon Pollution (PDF)
- National Framework for States - Setting State Goals to Cut Carbon Pollution (PDF)
- The Role of States - States Decide How They Will Cut Carbon Pollution (PDF)
More Consumer Energy Alliance Analysis:
What Consumers Should Know about Today’s EPA Announcement:
CEA Responds to Proposed Carbon Emission Standards for Existing Electric Utility Generators
The Environmental Protection Agency (EPA) released today its long-awaited proposed “Carbon Pollution Emission Guidelines for Existing Stationary Sources for Electric Utility Generating Units.” The proposed rule is part of the Obama Administration’s Climate Change Action Plan, released nearly one year ago.
The rule would require a 25 percent reduction of CO2 emissions from the power sector by 2025 and 30 percent by 2030 compared with 2005 levels. The proposed plan outlines state-specific emission rate-based CO2 goals and guidelines for development, submission, and implementation of those plans. In her remarks to the press, Administrator McCarthy touted the plan’s flexibility for states to customize their own path to compliance.
- The Rule Will Affect How We Generate & Consume Electricity
The rule will affect what type of electricity we consume, how much we pay for it, and how much we use. However, the exact impact may not be known for a few years. The final rule will not be ready for nearly one year, after which states will have up to three years to develop implementation plans. Essentially, we may not be able to quantify the true impact for years.
However, we do know that dramatic and significant shifts in electricity generation and demand have previously resulted in price spikes for consumers. As such, consumers will need to work closely with the states to determine how to ensure affordable and reliable electricity.
- States Have the Lead (To an Extent)
Each state will be required to develop a plan for how it plans to reach its EPA-set reduction target. The EPA’s proposal includes strategies for the Best System of Emission Reduction, including: decreasing carbon emissions and/or increasing efficiency at existing coal-fired units, dispatching lower-emitting and zero-emitting generating units, including combined-cycle natural gas, nuclear and renewable energies, and instituting or expanding end-use energy efficiency programs. States are encouraged to find the proper balance amongst these four strategies, and EPA noted that a combination of all four strategies will best achieve results at a lower cost. States can meet the goal on its own or collaborate with other states on multi-state plans.
- There is Time to Revise the Rule….
The Environmental Protection Agency will soon open a six-month comment period on its proposal. State regulators, industry, and consumers will all be given the opportunity to weigh-in on the proposal and recommend revisions. The comment period will include four public hearings in Atlanta, Denver, Pittsburgh, and Washington, DC in late July.
- But Once the Rule is Final, States Cannot Revise Their Targets
Once the final emission reduction goals have been promulgated in a final rule, states will no longer have an opportunity to request that EPA adjust its goal. Although states will be given up to three years to develop their implementation plans, states will need to work with the EPA now if they determine the reduction targets are too aggressive or unworkable.
CEA’s principal concern is how this rule, the rule on new generating units, and other existing EPA power generation rules will affect the short- and long-term affordability, and reliability of electricity. Over the past year, CEA has been leading a comprehensive dialogue amongst regulators, lawmakers, consumers, and other stakeholders to better understand how utilities can continue to supply affordable, reliable energy in the face of increasing regulation. Part of this discussion has focused on the need for swift, concerted action to bring additional sources of nuclear, natural gas, renewable, and advanced coal electricity online and institute new efforts to utilize energy efficiently in order to meet our nation’s growing electricity demand.
As regulators move forward with finalizing these rules, CEA will be working with its membership, state and federal policymakers, and other stakeholders to better understand the following:
- What impacts will these EPA regulations – including both the carbon emission standards for new and existing plants – have for coal-fired generation?
- What effect will these regulations have on the cost of electricity?
- If coal-fired utilities will be forced to close prematurely, how do producers fill the gap between supply and demand with nuclear, natural gas, renewable and advanced coal electricity, as well as efforts to increase the efficiency of electricity generation and transmission?
- What role can the states play in helping to encourage the construction of new generation to fill this potential gap?
Usually amicable colleagues, Murkowski and Wyden couldn't be farther apart on this issue:
Sen. Murkowski Criticizes Latest Unilateral Obama Administration EPA Regulation
Wyden: Inaction on Climate Change is No Longer an Option
Washington, D.C. – Sen. Ron Wyden, (NGP Photo), today issued the following statement after the Environmental Protection Agency announced a proposal to reduce U.S. greenhouse gas emissions by 30 percent from 2005 levels:
"American businesses, farmers, ranchers and families are experiencing the effects of climate change in the United States today. Inaction on climate change is no longer an option, so those who would criticize EPA’s plan have a responsibility to put forward their own ideas on how to move to a low-carbon economy.
Climate change is the most important environmental challenge of our time. Without immediate action, its effects will only get worse. EPA’s proposed rule offers an opportunity to put our country on the road to lower emissions and put each state in the driver's seat to determine its own best course.”
The EPA will hold public meetings to gather input on the proposed rule and the public will have until the fall to comment on it. Read the proposed rule here.
WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski (NGP Photo), R-Alaska, today criticized the Environmental Protection Agency’s (EPA) proposal to regulate greenhouse gas emissions from existing power plants as harmful to the U.S. economy.
“Despite negative economic growth last quarter, and despite far better approaches pending in Congress to promote energy efficiency and energy innovation, the president has decided to push ahead and propose a sweeping new regulation on our still-weak economy.
“For years, I have expressed concern that EPA’s unilateral regulations will come at a high cost and harm the affordability and reliability of our energy supply. Nothing I have seen today, including the general dismissal of concerns about the rule’s costs, has lessened my concerns.
“This draft rule is more than 600 pages long and paired with nearly 400 pages of regulatory analysis. As a result, it’s impossible to immediately give a full reaction to what EPA has proposed. It will take time to fully review how it would impact my home state of Alaska – which EPA seems not to have considered as it developed the rule – and the rest of our country.
“As we begin our review, however, I would encourage stakeholders to remember that this is one of many rules that EPA has issued in recent years. We still do not have an accurate accounting of the cumulative costs associated with them, but we do know that EPA has dramatically underestimated plant retirements in the very recent past.
“I am also convinced that this rule will make it even more important for the Federal Energy Regulatory Commission and the Department of Energy to step up and protect the reliability and affordability of U.S. power supplies.”
Murkowski is the top Republican on the Senate Energy and Natural Resources Committee.
Alaska's other Senator Mark Begich (NGP Photo), issued a release that neither opposed nor supported the EPA's proposed carbon rules, observing that, "...this rule exempts all of rural Alaska, but could impact a handful of Railbelt power plants,” said Begich. “My office has already asked the EPA for additional information and I will work closely with both the EPA and the State of Alaska to ensure that any final rule is flexible and protects Alaska businesses and families.”
Gina McCarthy's Remarks Today:
Remarks for Administrator McCarthy, Announcement of Clean Power Plan, Washington, DC
WASHINGTON- About a month ago, I took a trip to the Cleveland Clinic. I met a lot of great people, but one stood out—even if he needed to stand on a chair to do it. Parker Frey is 10 years old. He’s struggled with severe asthma all his life. His mom said despite his challenges, Parker’s a tough, active kid—and a stellar hockey player.
But sometimes, she says, the air is too dangerous for him to play outside. In the United States of America, no parent should ever have that worry.
That’s why EPA exists. Our job, directed by our laws, reaffirmed by our courts, is to protect public health and the environment. Climate change, fueled by carbon pollution, supercharges risks not just to our health, but to our communities, our economy, and our way of life. That’s why EPA is delivering on a vital piece of President Obama's Climate Action Plan.
I want to thank Janet McCabe, our Acting Assistant Administrator at the Office of Air and Radiation, and the entire EPA team who worked so hard to deliver this proposal. They should be very proud of their work; I know I am.
Today, EPA is proposing a Clean Power Plan that will cut carbon pollution from our power sector, by using cleaner energy sources, and cutting energy waste.
Although we limit pollutants like mercury, sulfur, and arsenic, currently, there are no limits on carbon pollution from power plants, our nation’s largest source. For the sake of our families’ health and our kids’ future, we have a moral obligation to act on climate. When we do, we’ll turn climate risk into business opportunity, we’ll spur innovation and investment, and we’ll build a world-leading clean energy economy.
The science is clear. The risks are clear. And the high costs of climate inaction keep piling up.
Rising temperatures bring more smog, more asthma, and longer allergy seasons. If your kid doesn’t use an inhaler, consider yourself a lucky parent, because 1 in 10 children in the U.S. suffers from asthma. Carbon pollution from power plants comes packaged with other dangerous pollutants like particulate matter, nitrogen oxides, and sulfur dioxide, putting our families at even more risk.
Climate inaction is costing us more money, in more places, more often. 2012 was the second most expensive year in U.S. history for natural disasters. Even the largest sectors of our economy buckle under the pressures of a changing climate, and when they give way, so do businesses that support them, and local economics that depend on them.
As our seas rise, so do insurance premiums, property taxes, and food prices. If we do nothing, in our grandkids’ lifetimes, temperatures could rise 10 degrees and seas could rise 4 feet. The S&P recently said climate change will continue to affect credit risk worldwide.
This is not just about disappearing polar bears or melting ice caps. This is about protecting our health and our homes. This is about protecting local economies and jobs.
The time to act is now. That’s why President Obama laid out a Climate Action Plan—to cut carbon pollution, build a more resilient nation, and lead the world in our global climate fight.
Today’s proposed Clean Power Plan is a critical step forward. Before we put pen to paper, we asked for your advice. Our plan was built on that advice—from states, cities, businesses, utilities, and thousands of people. Today kicks off our second phase of crucial engagement.
Shaped by public input, present trends, proven technologies, and common sense, our Plan aims to cut energy waste and leverage cleaner energy sources by doing two things: First, setting achievable, enforceable state goals to cut carbon pollution per megawatt hour of electricity generated. And second, laying out a national framework that gives states the flexibility to chart their own, customized path to meet their goals.
All told, in 2030 when states meet their goals, our proposal will result in 30 percent less carbon pollution from the power sector across the U.S. when compared with 2005 levels. That’s like cancelling out annual carbon pollution from two thirds of all cars and trucks in America. And if you add up what we’ll avoid between now and 2030—it’s more than double the carbon pollution from every power plant in America in 2012.
As a bonus, in 2030 we’ll cut pollution that causes smog and soot 25 percent more than if we didn’t have this plan in place. The first year that these standards go into effect, we’ll avoid up to 100,000 asthma attacks and 2,100 heart attacks—and those numbers go up from there.
That means lower medical bills and fewer trips to the emergency room, especially for those most vulnerable like our children, our elderly, and our infirmed. This is about environmental justice, too, because lower income families, and communities of color are hardest hit.
Now let me get into the details of our proposal.
This plan is all about flexibility. That’s what makes it ambitious, but achievable. That’s how we can keep our energy affordable and reliable. The glue that holds this plan together, and the key to making it work, is that each state’s goal is tailored to its own circumstances, and states have the flexibility to reach their goal in whatever way works best for them.
First, to craft state goals, we looked at where states are today, and we followed where they’re going. Each state is different, so each goal, and each path, can be different.
Second, the goals spring from smart and sensible opportunities that states and businesses are taking advantage of right now. From plant to plug.
Let me tell you about the kinds of opportunities I’m talking about:
We know that coal and natural gas play a significant role in a diverse national energy mix. This Plan does not change that—it recognizes the opportunity to modernize aging plants, increase efficiency, and lower pollution. That’s part of an all-of-the-above strategy that paves a more certain path for conventional fuels in a carbon constrained world.
States also have the opportunity to shift their reliance to more efficient, less polluting plants. Or, instead of low carbon sources, there’s always the opportunity to shift to “no” carbon sources like nuclear, wind, and solar. Since 2009, wind energy in America has tripled and solar has grown ten-fold. Our nuclear fleet continues to supply zero carbon baseload power. Homegrown clean energy is posting record revenues and creating jobs that can’t be shipped overseas.
Those are all opportunities at plants, but what about at the plug? Existing technologies can squeeze the most out of every electron, helping us use electricity more efficiently in our homes and businesses. More efficiency means we need less electricity to cool our refrigerators or charge our phones. For the fuel we burn, let’s get the most bang for our buck.
All of these options are not new ideas. They’re based on proven technologies, proven approaches, and are part of the ongoing story of energy progress in America. Our plan doesn’t prescribe—it propels that progress already underway.
And like I said, there’s no one-size-fits-all solution. States can pick from a portfolio of options to meet regional, state, and community needs—from ones I mentioned, or the many more I didn’t, and in any combination. It’s up to states to mix and match to get to their goal.
If states don’t want to go it alone, they can join up with a multi-state market based program, or make new ones. More players mean more flexibility and lower costs. States have flexibility not just in means and method, but in timeline, too. Under our proposal, states have to design plans now, and start reducing so they’re on a trajectory to meet their final goals in 2030. That kind of flexibility means a smooth transition to cleaner power that doesn’t leave investments behind.
The flexibility of our Clean Power Plan affords states the choices that lead them to a healthier future: Choices that level the playing field, and keep options on the table, not off. Choices that reflect where we are today, and look to seize opportunities for tomorrow. Choices that are focused on building up, not shutting down, so we can raise the common denominator for a cleaner, low carbon economy that’ll fuel growth for decades to come.
What’s special about the flexibility of our plan is that it doesn’t just give states more options—it gives entrepreneurs and investors more options, too. It’ll deliver the certainty that will unleash market forces that drive even more innovation and investment, and spur even cleaner power and all sorts of new low-carbon technologies. Our Plan pulls private investment off the shelves and into our clean energy revolution, and sends it in every direction, not just one or two. The opportunities are tremendous.
The good news is states, cities, and businesses have already blazed the trail. Our clean energy revolution is unfolding in front of us. Just in the past few weeks, I went to Salt Lake City, where the mayor and utilities are teaming up on efficiency. I went to St. Paul, where a science center is recycling energy waste, saving money and teaching kids what we adults are just learning. I’ve seen fortune 500 companies revamp strategies to lower business risk by meeting the demands of a carbon constrained future.
I want to give a shout out to all the local officials, rural co-ops, public power operators, and investor owned utilities leading on climate change: It’s clear that you act not just because it’s reasonable, but because it's the right thing to do for the people you serve. Governors and mayors of all stripes are leaning into climate action. They see it not as a partisan obstacle, but as a powerful opportunity. And we know that success breeds success. Those of us who’ve worked in state and local government have seen healthy competition push states to share ideas and expertise. That’s when everybody wins.
EPA has had a longstanding partnership with states to protect public health. We set goals, and states are in the driver’s seat to meet them. So releasing the Clean Power Plan shifts the conversation to states. If you’re a teacher, scientist, mechanic, business person—or just someone with a good idea—share your thoughts with your state leaders. Help them see how they can build a plan that will better our future.
I know people are wondering: can we cut pollution while keeping our energy affordable and reliable? We can, and we will. Critics claim your energy bills will skyrocket. They’re wrong. Any small, short-term change in electricity prices would be within normal fluctuations the power sector already deals with. And any small price increase—think about the price of a gallon of milk a month—is dwarfed by huge benefits. This is an investment in better health and a better future for our kids.
In 2030, the Clean Power Plan will deliver climate and health benefits of up to $90 billion dollars. And for soot and smog reductions alone, that means for every dollar we invest in the plan, families will see $7 dollars in health benefits. And if states are smart about taking advantage of efficiency opportunities, and I know they are, when the effects of this plan are in place in 2030, average electricity bills will be 8 percent cheaper.
This plan is a down payment on a more efficient, 21st century power system that cuts energy waste, cuts pollution, and cuts costs. It’s a proven path—a lot of states have been doing it for years. Think about it like this: we set historic fuel efficiency standards that will double the distance our cars go on a gallon of gas. That means you fill up less often, and save more money. Efficiency is a win for our planet and our pocketbooks. And given the astronomical price we pay for climate inaction, the most costly thing we can do; is to do nothing.
The critics are wrong about reliability, too. For decades, power plants have met pollution limits without risking reliability. If anything, what threatens reliability and causes blackouts is devastating extreme weather fueled by climate change. I’m tired of people pointing to the Polar Vortex as a reason not to act on climate. It’s exactly the opposite. Climate change heightens risks from extreme cold that freezes power grids, superstorms that drown power plants, and heat waves that stress power supplies. And it turns out, efficiency upgrades that slow climate change actually help cities insulate against blackouts.
Despite all that, there are still special interest skeptics who will cry the sky is falling. Who will deliberately ignore the risks, overestimate the costs, and undervalue the benefits. But the facts are clear. For over four decades, EPA has cut air pollution by 70 percent and the economy has more than tripled. All while providing the power we need to keep America strong. Climate action doesn’t dull America’s competitive edge—it sharpens it. It spurs ingenuity, innovation, and investment. In 2011, we exported almost 33 percent more cars than we did in 2009—a clear sign of a competitive industry. And our fuel efficiency standards strengthen that.
Companies like Best Buy are investing in low-carbon operations. Bank of America pays its employees to cut carbon pollution, because investors see climate risk as business opportunity. Any business will tell you eliminating waste means more money for other things, like hiring employees. Corporate climate action is not bells and whistles—it’s all hands on deck.
And even without national standards, the energy sector sees the writing on the wall. Businesses like Spectra Energy are investing billions in clean energy. And utilities like Exelon and Entergy are weaving climate considerations into business plans. All this means more jobs, not less. We’ll need thousands of American workers, in construction, transmission, and more, to make cleaner power a reality.
The bottom line is: we have never—nor will we ever—have to choose between a healthy economy and a healthy environment.
There’s a reason empty allegations from critics sound like a broken record. It’s the same tired play from the same special-interest playbook they’ve used for decades. In the ‘60s, when smog choked our cities, critics cried wolf and said EPA action would put the brakes on auto production. They were wrong. Instead, our air got cleaner, our kids got healthier—and we sold more cars. In the ‘90s, critics cried wolf and said fighting acid rain would make electricity bills go up and our lights go out. They said industry would, quote, “die a quiet death.” Wrong again. Industry is alive and well, our lights are still on, and we’ve dramatically reduced acid rain.
Time after time, when science pointed to health risks, special interests cried wolf to protect their own agenda. And time after time, we followed the science, protected the American people, and the doomsday predictions never came true. Now, climate change is calling our number. And right on cue, those same critics once will flaunt manufactured facts and scare-tactics, standing in our way of our right to breathe clean air, to keep our communities safe, and to meet our moral duty as stewards of our natural resources.
Their claims that the science-driven action that’s protected families for generations would somehow harm us flies in the face of history, and shows a lack of faith in American ingenuity and entrepreneurship.
I don’t accept that premise. We can lead this fight. We can innovate our way to a better future. It’s what America does best. Yes, our climate crisis is a global problem that demands a global solution, and there’s no Hail Mary play we can call to reverse its effects. But we can act today to advance the ball and limit the dangers of punting the problem to our kids.
It’s no accident that our proposal is a key piece of President Obama’s Climate Action Plan—and key to American leadership in our global climate fight. Although there’s still much work to do to get carbon pollution down to safe levels, I’m hopeful when I see the progress we’ve made. I’m hopeful because I see the pattern of perseverance that defines America.
From the light bulb to the locomotive; from photovoltaic cells to cellphones, America has always turned small steps into giant leaps. We’ve cured diseases, we’ve explored the stars, we’ve connected corners of the globe with the click of a mouse, because when critics say it can’t be done, we say—watch us. That’s what America is made of. We don’t settle. We lead. And that’s how we’ll confront our climate crisis.
When it comes to our Plan, we may not agree on details of how we do it, but we agree on why we do it. When our kids ask us if we did everything we could to leave them a safer, cleaner world, we want to say, yes, we did. When we think of our children—kids like Parker from Cleveland, Ohio—it’s easy to see why we’re compelled to act.
As governors and mayors, as CEOs and school teachers, and most of all, as parents, we have a moral obligation to ensure the world we leave behind is as safe, healthy, and vibrant as the one we inherited. Our Clean Power Plan is a huge step toward delivering on that promise.
Thank you very much.
Our longtime friend and reader, Richard Berkowitz is Operations Director of the Transportation Institute. This morning, he writes:
I thought you might be interested in the following article on LNG in this week's Economist:
Key points include:
- Exxon just shipped its first cargo from a $19b project in Papua New Guinea
- By 2018 over 1/3 more LNG capacity will come on stream
- By 2025 capacity could double from existing and anticipated projects
- LNG's share of world gas supply could rise from current 15-20% to as much as 30%
- The US's first plant at Sabine Pass (LA) is expected to begin shipping in 2016 and four more anticipated to start shipments for a total of as much as 75 bcm by 2018
- With delivery of 31 new tankers in 2014 there are predictions of a deep softening of the cost to ship LNG
- Global LNG demand by 2030 could be almost double that of 2012
- 50 Norwegian vessels use LNG with hundreds more being built
- Though the spot trade market has nearly doubled since 2000, there remains no single global price
- LNG demand could fall if Japan restarts its nuclear plants and due to China's gas deal with Russia; however, Europe may take up some of the slack if Russian LNG supplies are cut
- Technology is likely to cut costs and increase supply --as evidenced by GE's new liquefacation machines which are a tenth the cost of past technology
- There remains uncertainty about the expansion of a spot LNG market in the short run
EPA Action Could "Annihilate" Business Investment
Alaska Senator Cathy Giessel (NGP Photo) responded this week to a California-based environmental activist who told the Wall Street Journal Alaskans favor more EPA controls in the state.
"The NRDC is urging EPA to issue the first pre-emptive veto in the 43-year history of the Clean Water Act," Giessel wrote. "If successful, this veto will annihilate business investment in my state and throughout our country. EPA is being litigated for its actions and rightly so. We can only hope our courts stop EPA’s usurping of power that Congress never delegated to them." (See Giessel's letter here. Her letter underscores the importance of supporting Senator Murkowski's non-partisan effort to curtail EPA's overreaching jurisdiction -- as we outlined here yesterday. -dh)
U.S. Sen. Lisa Murkowski (NGP Photo), yesterday commented on the Department of Energy’s proposal for considering liquefied natural gas (LNG) export applications:
“I have long warned that the United States faces a narrowing window of opportunity to enter the global gas trade. Projects have languished in the so-called ‘queue’ awaiting approvals from two separate agencies in a parallel process that often did not function well. This proposal for reform is a positive step toward fixing a needlessly confusing regulatory review that had become disengaged from economic reality.
Yesterday, Sen. Ron Wyden, (NGP Photo) added his significant support to LNG exports when he said from his office that:
“Natural gas is a strategic American advantage that is already creating jobs and making our industries more competitive in the world market. I have long said that the studies DOE has relied on need to be updated to reflect current market conditions and data. I am pleased to see DOE has taken my suggestions to heart and that we will look before we leap in order to maximize the economic and environmental benefits of natural gas.
A clearer process will mean more certainty for developers and workers about which projects are commercially viable.”
“I continue to oppose delays to the build-out of our export capacity, which I firmly believe to be in the national interest, and do not believe additional study is necessary. Multiple studies have confirmed time and again that the nation as a whole would benefit in both security and economic terms as a result of selling American gas to our friends and allies overseas.”
For NGP Reader calendars:
The House Natural Resources Subcommittee on Energy and Mineral Resources will hold an oversight hearing on Thursday, June 12th entitled “American Energy Jobs: Opportunities for Innovation.”
Innovation is at the heart of the American energy sector and advancements in technology are making our energy resources cleaner and more efficient, reducing the environmental footprint while increasing production capabilities. Cutting-edge technology is making it possible to explore new forms of energy; and existing energy resources, such as natural gas, are becoming more accessible. Using technological innovation to harness both alternative energy resources such as wind, solar, hydropower, and nuclear as well as oil, natural gas, and coal is driving job growth on American shores and creating new economic opportunities throughout the country.
Subcommittee on Energy and Mineral Resources Oversight Hearing on “American Energy Jobs: Opportunities for Innovation”
Witnesses by Invitation Only
Thursday, June 12, 2014
1334 Hearing Room in the Longworth House Office Building
Visit the Committee Calendar for additional information, once it is made available. The meeting is open to the public and a live video stream will be broadcast at http://naturalresources.house.gov/live.
5-29-14 RDC Alert: Help Senator Murkowski Fight EPA Overreach !!! - Murkowski Promotes Yergin Oil Export Ban Study
Alaska Mining Guru Steve Borell (NGP Photo) tips us that, "Sea NG Corporation is a Canadian company engaged in the development and commercialization of technology for marine transportation of compressed natural gas (CNG). Sea NG offers its customers a safe, economic and reliable method of transporting natural gas by ship." (We wouldn't be a bit surprised to see this company become more involved with Alaskan and Canadian coastal villages and rural construction and natural resource projects -- assuming its net, delivered BTU value meets or reduces prices paid for heating oil. -dh)
The analysis by Daniel Yergin (NGP Photo) and the consultancy IHS estimates ending the prohibition on exporting most domestic oil supplies could boost U.S. production by more than 2 million barrels a day, inject $750 billion of new investment into the economy, and reduce gasoline prices for American drivers by as much as 12 cents a gallon.
Resource Development Council for Alaska's Rick Rogers (NGP Photo) sends our readers this ALERT today:
Please consider writing to your local newspaper today in support of the Regulatory Fairness Act (S. 2156). This bill, introduced in March, and cosigned by U.S. Senator Lisa Murkowski in April, reigns in the Environmental Protection Agency’s (EPA) authority, as was initially intended by Congress.
Currently, the EPA is seeking to expand its authority under Section 404(c) of the Clean Water Act, so that it can effectively veto community and resource development projects before, during, and after the federal permitting process. This expansion of federal regulatory power could have widespread and long-lasting consequences for Alaska’s economy, as it deprives developers of any certainty that permit applications will be fairly considered and fully vetted by existing rigorous processes – or that permits issued will remain valid over the course of the project’s life.
In response to this overreach the Regulatory Fairness Act (S. 2156) was introduced in the U.S. Senate. It requires the EPA to use its 404(c) authority at the appropriate time – during the permitting process and only after a thorough environmental review – rather than preemptively or retroactively.
Please write a brief letter to the editor or your local newspaper, expressing your concern about how the EPA’s actions could impact business, communities, and the economy in Alaska. Additionally, take this opportunity to thank Senator Murkowski for supporting the Regulatory Fairness Act.
“The IHS analysis reinforces what I’ve been saying for months – modernizing the regulations that govern energy exports will create jobs, boost energy production, and help lower global oil and gasoline prices,” Murkowski said. “The current rules of engagement on energy trade were written at a time of energy scarcity, not abundance, and they are causing distortions in the market that is undervaluing America’s energy resources. It’s time to reverse a policy that has far outlived its usefulness – something that would benefit the entire country.”
The IHS study found that removing the ban on oil exports would have positive impacts on employment, GDP, and energy production, including:
- Increased oil production of 1.2 million to 2.3 million barrels per day;
- Declining gasoline prices by 8 cents to 12 cents;
- Creation of 394,000 to 859,000 jobs;
- Increased government revenues by $1.3 trillion to $2.8 trillion;
- Increased annual GDP of $86.4 billion to $170 billion.
The benefits of free trade would extend beyond oil-producing states, as well, with 24 percent of the new jobs created by lifting the ban occurring in states without production, according to IHS.
ALERT - ALERT - ALERT
|Information on today's Anchorage meeting with Commonwealth North on Government equity interest in an Alaska gas pipeline.|
Politico by Tal Kopan. “I would be warning against using a chess analogy because in chess we have rules, and clearly Putin doesn’t care about rules because what he’s been doing now in Ukraine, it violates international law and international treaties Russia has signed before,” Kasparov said on CNN’s “The Lead.”
Comment: The rule of law is all about citizens living within the law.
When a president like Putin cheats in chess or sends a disguised army into Ukraine, how can he be a trustworthy energy producer and marketer, business partner or neighbor? See our commentary, yesterday.
When a president like Obama unilaterally enforces or ignores laws, illegally targets political opponents with the power of government (1, 2, 3), has agencies overreach lawful authority, lies, or creates law by fiat, how is he to be trusted to defend the Constitution against all enemies, foreign and domestic? How can he be thought to fairly administer national energy policy? -dh
The Russians Have Come
Dear Reader: we always solicit new content, comment and facts from our highly knowledgeable and experienced readers -- along with additions/corrections to our commentary. Maintaining accuracy, with your help, is critical to the usefulness of our hundreds of thousands of pages of Northern energy archives spanning over 4 decades (See our internal 'search bar', upper right). -dh
In yesterday's Memorial Day commentary, amid unhappiness in Ukraine, we again reminded ourselves that the former owners of Alaska have returned as Alaska North Slope (ANS) investors. (We are also sensitive to US-Russian efforts to create an International park that could someday affect Alaska's commercial fisheries, energy and mining developers, Alaska Native Regional and Village Corporations, and free use of the Northwest Passage.)
One of our foreign, Pacific Rim readers observed that the logical extension of Russian ANS involvement, under Alaska Statutes, could have the result of, at least indirectly, introducing Alaska to the current Russian - Ukrainian dispute.
Yesterday, we also heard from another NGP reader, James Halloran, a Trustee of the Ohio Oil and Gas Association who is an astute analyst and observer of energy matters.
He commented on the big, $400 billion China-Russian gas sale and pipeline agreement which would result in a $20 billion gas pipeline investment in China and a $75 billion investment in Russia -- not counting the value of the gas sale. (We also note the market power Russia and China will be able to exercise on Western support industries beholden to them for service, supply and logistical contracts.)
Halloran said that, "We spent four years (1974-77) actively involved with the construction of the $1 billion (estimate) Trans Alaska Pipeline System, that eventually cost $8.9 billion. Factoring in inflation since the 1970s, we would estimate the Sino-Russian pipeline system is a comparable project, in terms of complexity and remote geography. TAPS got done on time, but it had the finest engineering teams in the world, plus the resources of five major oil companies, to accomplish the task. We also think this is going to be a project worthy of keeping the popcorn ready for watching it unfold. It is instructive that the Russians insist on their part of the pipeline as costing 'at least' $55 billion."
Below, let's review current headlines helping readers connect some of the world-wide dots reflecting Russia's energy strategy. In doing so, we recall the observation of our Pacific Rim reader yesterday about, "...ongoing interest in investing in Russia with the likes of Rosneft, notwithstanding the sanctions imposed upon Rosneft's CEO, Igor Sechin, personally.":
GE and OJSC Rosneft, a leader in Russia’s petroleum industry, today signed a memorandum of understanding (MOU) that lays the foundation for the two companies to jointly evaluate and develop commercial opportunities in oil and gas exploration and production in the Russian Federation. The MOU was signed by John Krenicki, GE vice chairman and president and CEO of GE Energy; and Igor Sechin, president of Rosneft.
Igor Sechin, President and Chairman of the Management Board, Rosneft and Dinesh Kumar Sarraf, Chairman of the Board of Directors, ONGC Videsh Ltd and Chairman & Managing Director, ONGC signed a Memorandum of Understanding at the St. Petersburg International Economic Forum, in the presence of Mr. Vladimir Putin, President of the Russian Federation. The Memorandum paves the way for the companies’ cooperation in subsurface surveys, exploration and appraisal activities and hydrocarbons production in Russia’s offshore Arctic. (WEN by Joseph R. Fonseca)
Rosneft and BP signed an agreement on Saturday to jointly explore for hard-to-recover oil in Russia, the first major deal for the state-run Russian oil company since the West imposed sanctions over Ukraine in March. Rosneft chief executive Igor Sechin, a close ally of President Vladimir Putin, has been targeted by U.S. sanctions along with some other members of Putin's so-called inner circle following Russia's annexation of Crimea from Ukraine in March. (WEN by Joseph R. Fonseca)
...at the 18th St. Petersburg International Economic Forum, Rosneft signed an Investment and Cooperation Agreement with North Atlantic Drilling Ltd. (NADL) and Seadrill Limited to form a long-term partnership aimed to develop Rosneft’s offshore and onshore projects until at least 2022. (WEL by George Backwell)
Venezuela's state-run oil firm PDVSA said on Saturday a $2 billion pre-payment from Russian oil producer Rosneft will be destined in part to develop its coveted Orinoco belt. (WEL by Joseph R. Fonseca)
A major gas deal between Russia and China could finally be sealed this week when Russian President Vladimir Putin visits China on May 20-21 and meets with President Xi Jinping. (Energy Daily, by Nick Cunningham)
Yves-Louis Darricarrère, Total's head of Exploration and Production, said that his group is committed to expand its activities in Russia and forecasts the country becoming the largest contributor to its production by 2020. Russia is key to Total's strategy of finding new reserves.... (WSJ, by Géraldine Amiel)
Here's the bottom line: in addition to the above, Reuters outstanding news team reports (by Vladimir Soldatkin; Editing by Lidia Kelly and David Evans), via Yahoo Finance, UK, that, "...Rosneft signed several deals at the St Petersburg International Economic Forum over the weekend, despite sanctions imposed on the company's chief executive Igor Sechin...," including:
"Rosneft and Union Cuba Petroleo (CUPET) signed Memorandum of Cooperation on projects in Cuba.
"Rosneft and United Arab Emirates' Mubadala Petroleum signed a cooperation agreement to "foster greater co-operation between the two companies in exploration and production".
"Rosneft and India's ONGC Videsh Limited signed a Memorandum of Understanding (MOU) for cooperation in exploration, appraisal and hydrocarbon production....
"Rosneft and PetroVietnam Oil Corporation agreed on key terms of long-term oil supplies to Vietnam...of up to 6 million tonnes a year via Russia's Pacific's Kozmino terminal in 2014-2039.
"Rosneft and Mongolia's NIC LLC signed a five-year oil products supply deal...for supply of more than 1.2 million tonnes of oil products from June 2014 to May 2019.
"Rosneft and Pirelli signed a Memorandum of understanding over marketing projects in Rosneft's retail network.
"Rosneft and Azerbaijan's energy firm SOCAR signed a joint-venture agreement...for oil and gas exploration and production projects including in Azerbaijan and Russia.
"Rosneft ... said the memorandum foresees a possibility of installation of different Alstom's "solutions and products for power generation, industrial automation and emission control...."
"Rosneft signed long-term gas supply deal with Fortum.
"Rosneft signed gas supply deal with RUSAL, EuroSibEnergo and Russian Machines."
Our Comments On These Connecting Dots:
1. Rosneft is an energy arm of the Russian bureaucracy. While decision making can be swift and supported by the weight of Russia's authoritarian leadership, it can also produce stunning failures arising from a) the presence of political influence, b) the possibility if not the likelihood of graft and corruption, and c) the ultimately, and by definition, "unmanageable" movements of the free market.
But Russia's grand energy strategy is not guaranteed. What if its effort and enormous investments into 'managing the mode and means of world energy production' could become frustrated by a) new and more aggressive competition (i.e. shale); b) unexpected and expensive technical delays (i.e. China gas pipeline); or, c) a dramatic world economic decline and an accompanying decline in energy demand. In that case, we believe Russia's current Ukrainian tantrum demonstrates its leader's propensity to adopt nationalism and imperialism as a means of confronting internal social and economic challenges. Doesn't this propensity make Russia a very dangerous bear, indeed, to have as a bedmate or energy partner?
2. Russia is one of the world's largest holders of natural gas and oil reserves. However, this week's events shown above demonstrate a move to more effectively dominate world oil and gas supplies and supply/distribution chains. The effect of such a growing monopoly (i.e. not forgetting China's equally aggressive oil and gas acquisition policy), is to make European and even Asian energy users less capable of acquiring reasonably priced and secure supplies from Russian (i.e. or Chinese) energy competitors. This would ordinarily bode well for Alaska's remote energy reserves, but then we note Rosneft's presence there, too.
We believe that investment advisors, were they to counsel Putin, might say that, "Adding external oil and gas investments to your already large internal reserves of oil and gas has the effect of concentrating, not diversifying, Russian investments. This increases the odds that with passage of time natural and artificial market forces could result in both massive national profits for Russia, and massive economic decline." Other world powers, depending on Russia's contractual and military stability and non-aggression have reason -- but not necessarily the insight or desire -- to believe that they share the risk of Russia's concentration of energy investments. Russia's growing energy market power can manifest itself as market strength; it can also result in the power to intimidate and create predatory pricing/supply policies, as we have witnessed in Europe.
3. Some of the flood of deals Putin succeeded in achieving last weekend may have been too hastily organized to meet an artificial, strategic deadline. Yes, he might have achieved some tactical benefit from stitching many of the world's largest oil and gas producers and support companies into a blanket of political and economic support. The modern-day Prince Putin provided a very impressive display of government/industrial coordination and effectiveness. However, history tells us that there are chinks in the armor that, as we describe above, may put the world at risk as Russia encounters unexpected bad results trickling from the impressive portfolio of Memoranda of Understanding (MOU).
- Take the deal with Argentina. A major oil company, Repsol, found out not too long ago that Argentina is not a trustworthy partner, as we reported here.
- Likewise, Argentina and other companies and governments involved in MOUs with Russia must trust in Russia's commitment to the 'Rule of Law', to living up to its contractual commitments. This might take on more of a 'religious leap of faith' than normal 'due diligence' in light of how Russia is treating European customers depending on it for stable, secure supplies of energy.
- With mounting aggressiveness, will Russia use the market power achieved through the weekend MOU and agreement signings to neutralize worldwide opposition to its dangerous designs on former and currently free Soviet republics? For example, will General Electric supply gas turbines and other technology to the Sino-Russian gas pipeline...and feel obliged to use its significant political muscle in the United States and Italy to urge appeasement in the face of Russian aggression? Will Total be inclined (or "encouraged") to advise the French and other governments on political matters affecting Russia, such as appeasement or increasing economic sanctions?
No, the Russians are not coming. They are already here in North America, South America, Western Europe, the Middle East, Africa, Asia and points between.
Those "Points" of Russian presence are like dots on a map.
We hope readers will connect them and apply their own conclusions and strategies to their own corporate, state, provincial and national interests.
The Russians are chess masters. Chess is the greatest game of strategy. It can be played innocently for fun and brain development. Its principles can also be used by expert players to outwit amateurs and more naive, less patient, less developed thinkers. A cheater can also 'win' a chess game that would otherwise be lost to a superior player.
Partners and opponents alike should be equally nervous about the presence, in their midst, of a modern, Russian prince proclaiming friendship or planning retribution.
We believe that those noted above do not fully comprehend the dangerous game in which they are engaged, with a partner/opponent who embraces such unpredictable values and unexpected aggressive capability.
See our brief commentary tomorrow, "Playing By The Rules", matching the trustworthiness of two of the world's major energy leaders.
CWN Forum – Today, May 28th
12:00pm-1:15pm, Dena'ina Center
Doors open at 11:30AM, program begins promptly at noon
On Wednesday, May 28th, Commonwealth North will hold the third of a three-part series discussing the State's plan to take a twenty percent equity share in a North Slope natural gas pipeline project. The Alaska Constitution states that, "The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people."-What does, "maximum benefit" mean? -Should rural Alaskan's benefit from a project focused on the Railbelt? -Should Alaskan's expect access to gas at below market prices?
Our panel will discuss the concept of ensuring the maximum benefit of Alaska's resources in the context of this historic, multibillion dollar investment in a gas pipeline project.
The panel will include:
Gunnar Knapp, Ph.D., has been on the faculty of the University of Alaska Anchorage Institute of Social and Economic Research since receiving his Ph.D. in Economics from Yale University in 1981. Dr. Knapp has conducted a wide variety of research on the Alaska economy and Alaska resources, including in particular markets for Alaska seafood and management of Alaska fisheries resources.
Marty Rutherford retired in 2010 as Deputy Commissioner, Alaska State Department of Natural Resources. Rutherford has extensive experience with 26 years in Alaska state government, much of it in various positions in the Department of Natural Resources. Marty is currently Special Projects Manager for the Anchorage Office of Linc Energy.
Dermot Cole is a longtime Alaska reporter, columnist and author, based in Fairbanks. He has written extensively about Alaska and Alaska history for more than 35 years. A former reporter for the Fairbanks Daily News-Miner, his most recent book is "North to the Future: The Alaska Story, 1959 - 2009." Cole grew up in Pennsylvania and lived in Taiwan, Montana and Hong Kong before moving to Alaska in 1974. He is a graduate of the University of Alaska Fairbanks.
Larry Persily will moderate the panel. Persily is the federal coordinator for Alaska natural gas pipeline projects and a former deputy commissioner at the Alaska Department of Revenue.
Members, $20; Non-Members, $35
Thank you to our event sponsors!