U.S. Chamber of Commerce link

Energy Blog

Sean Hackbarth A natural gas rig in Washington Township, PA.A natural gas rig in Washington Township, PA. Photo credit: Bloomberg.

Talk of secession is usually reserved for cranks wanting to relive the Civil War, but recently some New York State towns started looking at joining neighboring Pennsylvania.

The reason? Hydraulic fracturing.

The 15 towns are conducting studies to determine whether it would be economically feasible to join Pennsylvania, where natural gas drilling is booming. Among other things, the group, which calls itself the Upstate New York Towns Association, is comparing tax rates as well as cost of living and business expenses in the two states. It expects to complete its study in the coming weeks.

The towns are in Broome, Delaware, Tioga and Sullivan counties.

While both states sit above the natural gas-rich Marcellus Shale, in New York State, Governor Cuomo last December banned hydraulic fracturing after a six-year de facto moratorium.

In contrast, Pennsylvania allows it, and as a result, the Keystone State reaps the benefits record levels of natural gas production.

New Yorkers look with a touch of envy at the job and economic opportunities shale energy is generating for their Pennsylvania neighbors:

“Everybody over the border has new cars, new four-wheelers, new snowmobiles,” said [Conklin town supervisor James] Finch, a Republican. “They have new roofs, new siding.”

Finch said some residents in his town travel the short distance to Pennsylvania, where they work in the fracking industry. Some of those workers, he said, are making six-figure salaries.

In the meantime, many businesses in Conklin are closing, he said.

"The Southern Tier is desolate," Jim Finch told WBNG-TV in Binghamton, which first reported the secession plan. "We have no jobs and no income. The richest resource we have is in the ground."

New York State’s hydraulic fracturing ban is generating frustration, Broome County GOP Chairman Bijoy Datta told IJReview:

These New York towns are literally a stone’s throw from Pennsylvania and they see the economic results of gas drilling – more jobs, new roads, reduced taxes and higher property values – and it’s just out of their reach because big government said “no.”

Secession by these towns is unlikely. Jazz Shaw, who lives in the region, writes at Hot Air, "I can’t imagine the state government in Albany ever agreeing to let some of their citizens flee New York for better conditions."

Nevertheless, it reminds us how valuable embracing America’s energy abundance can be.

A U.S. Chamber Institute for 21st Century Energy report estimates that shale energy development will create 220,000 jobs for Pennsylvania by 2020 and 387,000 jobs by 2035. New Yorkers would like to benefit from the shale boom too.

Sean Hackbarth Reporters Laugh as WH Tries to Explain Why Keystone Review has Taken Over 2,300 Days

We’ve been waiting for President Obama act on the Keystone XL pipeline, and he finally took decisive action… by vetoing the bill that would’ve approved it.

He said the bill “cuts short thorough consideration” of the pipeline.

Really? Six-plus years isn’t long enough? How long does he need?

The media responded to the veto with a “C’mon man!

The USA Today editorial board isn’t buying President Obama’s explanation:

In a terse veto message, the president said the Keystone legislation would "circumvent longstanding and proven processes" for evaluating a project like this one. Oh, please. The administration has been evaluating Keystone for more than six years. There's just no plausible excuse for the epic delay that has turned what should be a relatively minor policy dispute into one of Washington's hyperventilated shouting matches.

Neither is the Wall Street Journal editorial board [subscription needed]:

The reason he gave in a quiet veto message to Congress—no speech, no cameras—was that the bill “cuts short thorough consideration of issues that could bear on our national interest.” The Keystone has been in regulatory limbo for about 2,300 days in perhaps the most extensive permitting review in the history of American government.

The administration’s “more study is needed” excuse is such a farce that reporters laughed at White House Press Secretary Josh Earnest when he used it.

Do you know who isn’t laughing? Construction workers who would be earning good wages building the pipeline. It’s why labor unions have strongly supported the project.

Who else isn’t laughing? Local communities who didn’t expect it would take so long to approve the pipeline and planned school and road improvements around the property taxes generated from the finished pipeline.

Even as Congress attempts to overturn the president’s veto, the State Department’s work on determining if the Keystone XL pipeline is in the national interest continues.

EPA recently tried gumming up the works even more—yes, it’s possible—by asking the State Department to reconsider its environmental analysis in light of falling oil prices.

I poked holes in its batch of weak sauce, but Karen Harbert, President and CEO of the U.S. Chamber’s Institute for 21st Century Energy, dug deeper into this argument by EPA and pipeline critics:

For the sake of argument, let’s say the green groups and EPA are right, and Keystone will make oil sands production more economical.  Is that really such a bad thing?

No. The key point they overlook—whether consciously or not—is that crude oil from Canada is replacing crude oils from other suppliers that have greenhouse gas emissions profiles as high as Canadian oil sands, or even higher.

U.S. refiners along the Gulf Coast and in the Midwest are geared to process heavy, sour crudes, so if they’re not using heavy crude from Canada, they’re using heavy crude from somewhere else, such as the traditional suppliers Mexico and Venezuela.

Data from the U.S. Energy Information Administration (EIA) backs this up. Since Canada started producing from its oil sands in 2003, imports from these two formerly large suppliers have declined sharply.  EIA reports that the combined volume of crude imported from these countries to the Gulf Coast and Midwest refining regions in 2013 was 1.0 million barrels per day lower than in 2003, while crude imported from Canada was 900,000 barrels per day higher, almost a one-for-one replacement. That’s no coincidence.

If oil from Canadian oil sands stopped flowing to the United States, what would happen? While U.S. production is up, we still must import millions of barrels of oil each day.  Among the likely suppliers that would increase their markets if Canadian oil decreased would be Venezuela.  

What would that mean for GHG emissions? According to an analysis by the National Energy Technology Laboratory (NETL), crudes from Venezuela have a life-cycle greenhouse gas emissions quite similar to Canadian oil sands crude.  But unlike Canada, Venezuela has hardly been a reliable ally and a major trading partner.

The bottom line: denying the Keystone permit application and over-regulating hydraulic fracturing drilling techniques in the U.S. would make our nation more reliant on imports of oil from sources less reliable than Canada.  In the process, there would be no discernable benefit to the environment. 

Tell President Obama: It's time to build the Keystone XL pipeline.

Sean Hackbarth  Scott Dalton/Bloomberg.A worker walks past pipe ready to be used to construct the Keystone XL pipeline. Photographer: Photographer: Scott Dalton/Bloomberg.

Business and labor criticized President Obama for vetoing the bipartisan bill approving the Keystone XL pipeline.

“By vetoing this legislation and continuing to delay a decision on the Keystone XL pipeline, it is becoming harder and harder to take President Obama’s commitment to job creation and energy security seriously,” said Tom Donohue, U.S. Chamber President and CEO, “The lack of approval for Keystone has major implications for America’s relationship with Canada—our strongest and most reliable ally—and on the way America is perceived around the world.”

“Instead of saying yes to 42,000 good paying jobs and enhanced North American energy security, this veto proved once again that it’s politics as usual here in Washington,” Jack Gerard, President and CEO of the American Petroleum Institute, lamented.

TransCanada President and CEO, Russ Girling, while disappointed with the veto, remained confident:

The facts show Keystone XL passes the national interest determination test and President Obama’s climate test.  Without Keystone XL, U.S. refineries are forced to use other methods of transportation to get the oil they need for creating products we all rely on every day. 

The Keystone XL pipeline is an issue that has united labor and business, because both understand the job and economic opportunities it will create. The National Association of Manufacturers and Laborers’ International Union of North America (LIUNA) said in a joint statement:

With the stroke of his pen, the President said no to more than just a pipeline. He said no to a conduit for new jobs, opportunities for thousands of working men and women, and energy security for manufacturers here at home.

President Obama’s veto isn’t the end of the story. The State Department still must decide if the project is in the national interest. It should, based on its economic and environmental findings. However, if another agency like EPA objects, then President Obama will make a final decision. There’s no time table for when this will be finished. As we’ve seen with the six-year-plus wait so far, it could be a while. 

Read more discussion at memeorandum.

Tell President Obama: It's time to build the Keystone XL pipeline.

Abram Olmstead Image of White House with veto banner

President Barack Obama on Tuesday rejected bipartisan legislation to approve the Keystone XL oil pipeline — and missed a chance to bring many sides together.

Of all the chances to put politics aside and offer a productive gesture of bipartisan compromise, it's hard to not see this as a lost opportunity. The measure was approved by 266-153 in the House, and nine Democrats joined 53 Republicans to pass the bill in the Senate. Furthermore, both labor unions and business leaders came together — along with a broad majority of the public — in support.

After a long journey through every procedural hurdle, Keystone XL has become a poster-child for a larger issue.

Our permitting process makes it virtually impossible to build anything. Clearly we need regulatory and permitting reform.

Yes, we still need Keystone XL — along with a host of other infrastructure projects — but more importantly, we need to fix the system that has allowed progress to get so regularly lost in translation.

The Golden Gate Bridge, the Hoover Dam, and the Pentagon were all built in less time than it's taken for this project to get through the review process.

It shouldn't take 6-plus years to approve (or block) the creation of 42,000 new jobs:

022314_ss_keystone.jpg Infographic highlighting timeline of Keystone KL review process
Sean Hackbarth Pipe to be used for the Keystone XL pipeline in a field in Gascoyne, ND.Pipe to be used for the Keystone XL pipeline in a field in Gascoyne, ND. Photo credit: Sean Hackbarth.

Congress is sending the bill approving the Keystone XL pipeline to the White House on Tuesday. Expect it to dominate coverage in Washington.

I’ve been following the saga for over three years and even traveled with the U.S. Chamber's Institute for 21st Century Energy along the proposed pipeline’s route last fall.

I'll be chatting about Keystone XL pipeline Tuesday, 10:30am ET on Facebook.

Until then, here are some things to read to help you catch up before President Obama is expected to veto the legislation:

6 reasons why the Keystone XL pipeline is in the national interest. If the president is as concerned with minimizing greenhouse gas emissions, then he should approve the pipeline. I talked to Jim Doolittle and his wife, Karen Wagner. The pipeline will travel across their ranch in South Dakota. If the pipeline is denied, a Glasgow, MT resident told me that she hopes someone from the administration comes to her town to explain why he did it. While Canada continues developing its oil, America is losing out on the jobs, economic growth, and local tax revenue that would be generated by the Keystone XL pipeline.

Pages