U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Oil pumps stand at the Chevron Corp. Kern River oil field in Bakersfield, California.Oil pumps stand at Kern River oil field in Bakersfield, California. Photo credit: Ken James/Bloomberg.

Opposing the Keystone XL pipeline isn't enough for 30 environmental groups. They're taking their anti-energy fight west with a report opposing "proposals for pipelines, tankers and rail facilities" to transport oil sands from Canada to West Coast refineries.

This Chicken Little cry of "invasion" is a fine example of the "build-absolutely-nothing-anywhere-near-anything (BANANAs) mentality" that U.S. Chamber and CEO Tom Donohue noted in his commentary, today.

Apparently these groups watch too much South Park--"Blame Canada!" But it's disingenuous to gripe about Canadian oil sands while practically ignoring comparable California crude.

Let me explain. Oil was discovered in the Kern River field near Bakersfield, California, in 1899. Today, there are over 9,000 oil rigs in the area. Driving around, you'll see fields sprouting with oil jacks as far as the eye can see. As of 2006, the Kern River was California's third-largest oil field, having produced nearly 2 billion barrels of oil, and had estimated reserves of 476 million barrels. [h/t The Oil Drum]

You wouldn't know it from the NRDC's blog post, but what's coming out of the ground there and in other California fields is a type of oil that--from a greenhouse gas emissions perspective--is similar to Canadian oil sands.

As this Canadian Association of Petroleum Producers chart shows, when measuring the carbon dioxide generated from production to combustion (well-to-wheels), Kern River crude is as carbon intense as Canadian oil sands.

capp_ghg_emissions_2012.jpg  Tull cycle GHG emissions oil sands and other crude oils.Chart: Tull cycle GHG emissions oil sands and other crude oils.Source: Canadian Association of Petroleum Producers.

What's more, California's Low Carbon Fuel Standard Program found that other grades of California crudes have higher carbon intensities than Canadian oil sands.

The NDRC and its allies say that pointing out this gaping logic hole is a "red herring" because California oil production is declining. Ok, but then it begs a question that Tom Huffaker, Vice-President, Canadian Association of Petroleum Producers, asked in a 2009 op-ed, "Where are Californians going to get the oil they need?"

While it's true that demand for gasoline is expected to decline, according to a 2010 California Energy Commission forecast, demand for diesel fuel will rise by as much as 42%, and demand for jet fuel will rise by as much as 67% by 2030. In addition, California refiners supply all of Nevada and much of Arizona's petroleum demand.

California may be the number three oil producing state in the U.S., but it only produces 40% of the crude oil it consumes. The rest has to be imported from Alaska, North Dakota, Colorado, Texas, and even Canada. If refiners don't have reliable crude oil supplies, consumers will see already high fuel prices go higher.

Apparently the NRDC and its friends would rather sing South Park songs than worry about that.

Sean Hackbarth Oil tankers stand anchored outside the Port of Singapore.Oil tankers stand anchored outside the Port of Singapore.

A year ago, the U.S. Chamber was one of the few voices pushing to lift the U.S. oil export ban. Since then, support has grown both on Capitol Hill and outside the Beltway.

Rep. Joe Barton (R-Texas) and Rep. Henry Cuellar (D-Texas) introduced legislation to lift the 40-year-old ban on American oil exports:

Cuellar said he signed on to the bill because the ban no longer "makes sense" given advances in technology that have accelerated domestic oil production. Lifting the ban would be a jobs creator for the energy industry and beyond, according to Cuellar.

"It's not only the oil and gas industry, it's all those secondary jobs -- it's those restaurant owners, the small business owners, the workers that depend on the jobs dealing with the oil and gas industry. That's very important," Cuellar said.

Sen. Lisa Murkowski (R-Alaska) plans to introduce a bill of her own later this year.

Democratic Governor John Hickenlooper of Colorado--whose state is seventh in oil production--also announced that he wants the ban lifted:

Hickenlooper sent a letter Thursday to U.S. Commerce Secretary Penny Pritzker, saying the ban should be lifted.

His support makes him one of the highest-profile Democrats to advocate on the issue, which has been supported mostly by Republicans.

In the letter to Pritzker, Hickenlooper said that "ending the outdated and counterproductive ban on crude oil exports is the next logical step to ensuring that domestic producers continue to invest and that energy consumers benefit.

"We respectfully request your support and that of the broader Administration for full legislative repeal of the crude oil export ban," Hickenlooper wrote.

We also see grassroots support growing outside Washington, D.C.:

A chamber of commerce official from a town inside the Permian Basin region has gathered thousands of signatures asking President Barack Obama to lift the ban on exporting crude oil.

Grant Taylor with Hobbs Chamber of Commerce in New Mexico created an online petition on the "We The People" section of the White House website on April 3.

Taylor has collected over 8,000 signatures.

Karen Harbert, President and CEO of the U.S. Chamber's Institute for 21st Century Energy, who participated in a Capitol Hill event with Reps. Barton, Cuellar, and House Majority Whip Steve Scalise (R-La.), wants to see the ban lifted:

The ban on crude oil exports was enacted in 1975, during a time of energy scarcity for the United States. Thanks to technical innovation and industry know-how, our nation has now become the top oil and gas producer in the world. According to analysts, lifting the ban on oil exports would provide a boost to our economy by creating jobs, generating revenue and helping to keep prices low for businesses and consumers. It would also be a stabilizing influence on global markets.

Those analysts include, Jim Krane and Anna Mikulska of the Baker Institute for Public Policy. They explain how lifting the ban will be good for both domestic oil producers and gasoline consumer:

First, it would raise domestic prices of US crude oil, providing relief to the struggling US shale patch. Second, allowing US crude to reach global markets might reduce international crude prices, which would, in turn, reduce gasoline prices.

This unlikely sounding scenario is possible because the ban has led to a glut of un-exportable light crude that is sitting in storage tanks around America. Since it cannot reach international markets and U.S. refining sector is not configured to run this much light crude oil, American crude sells at prices well below those of comparable international grades.

In addition, a study by IHS found that ending the ban would drive $746 billion in new domestic oil production investment and create 394,000 jobs annually from 2016 to 2030.

But if you're worried that U.S. oil shipped to other countries will mean higher gasoline prices, don't fret. An Aspen Institute study found that lifting the ban would put would put "modest" downward pressure on gasoline prices.

These are some of the facts we'll need to educate members of Congress and the public to end the 40-year-old ban.

Ian Wagreich

There's an energy renaissance in the air along the Texas plains.

In places where locals once boasted you could sleep in the middle of the road because of no traffic, scores of wind utility vehicles can be seen among the farm trucks.

Texas has quietly built an "all of the above" energy empire, expanding its legacy oil and coal mining to include natural gas production and wind power. And harnessing wind energy has propelled scores of tiny traditional ranching communities along the Texas prairie into the 21st century - and injected billions of dollars into local tax coffers.

The movement has created jobs and changed not just the physical landscape but cultural terrain as well. Where ranchers and farmers once were threatened to sell off land to cover the cost of diminishing returns, now many find a steady income regardless of cattle prices or drought.

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With the help of a climbing harness, we documented the state's transformation in places like Sweetwater and Sterling City - and wind energy's impact on schools and communities across Central and East Texas.

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The wind blows consistently in Capricorn Ridge, where 407 turbines operate under the watchful eyes of 32 NextEra Energy technicians. With all those moving parts, it is a 24/7 operation to manage, service and ensure that wind-generated electricity continues to flow for parent company Florida Power and Light.

Jarret Bray, 24, and his partner Mike Havlak, 47, play the role of part climbers, part technicians and part electricians. Bray, shown in this photo, and Havlak were on the first of four planned climbs for the day.

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Eighth-graders learn about the properties of gravity and friction in Logan Rawls' class at the newly renovated Highland School in Nolan County.

Since wind began to fill the school district's tax coffers, an update of the building's foundation, laid in the 1800s, is underway. And every student in grades 7 through 12 receives a laptop.

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The turbines have become a familiar site and just part of life in Nolan County - even for schoolchildren enjoying recess. The kids recognize wind energy as a part of their lives.

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Miesha Hand Adames, 23, is the next generation in charge of 1,200 acres of important real estate. Beyond leases to wheat and hay farmers, Adames is seeing income from the rail line that traverses her property, a 24-inch oil pipeline and a string of massive electrical towers (and a 10-acre substation) that carry wind-powered electricity. Additionally, Sunoco just broke ground on a natural gas pipeline, a source of more one-time revenue. Adames studies accounting at Western Governors University and works with a local energy cooperative to educate ranchers and citizens on energy policy.

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Kathy Dickson is a survivor. Not just of the historic 1956 Andrea Doria shipwreck, but as the caretaker of the massive 69 Ranch in Roscoe, Texas. "Aren't they wonderful," she says of the turbines silently spinning on the horizon. "They are what let me stay on the land after my husband died in 2006."

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Ranching is no longer as profitable as it used to be, and ranchers like Rodney Kinsey -- above checking a cow's age at the J2 Ranch outside of Sweetwater - are now pooling resources to save the cost of hiring additional ranch hands.

Another solution: Ranchers at J2 also partnered with the Lower Colorado River Authority to house an electric substation on the land that allows them to maintain their way of life.

"These people wouldn't be out there working the cattle if it weren't for wind," says former Sweetwater Mayor Greg Wortham. 

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Wortham is a larger-than-turbine energy stalwart in the region. He is the go-to guy and advocate for all things energy. He shepherded the economic renaissance for Sweetwater during his seven-year tenure.

"There was a time not too long ago when folks would say, 'Why do we care? This town's going away.' That was the attitude," he says. "If we hadn't gotten wind, we wouldn't have gotten one-thousand new jobs in the county, a new science wing, billions in new tax revenue and so much more. This town broke the mold that [only ranchers] benefit from wind energy."

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Texas is the energy leader among states in the production of crude oil, natural gas and wind-powered generation capacity. Oil and wind can make for strange bedfellows, but in Texas they regularly complement each other.

When oil prices are down, wind has been up; and when wind tax credits were cut, oil was up. And if it weren't for oil, local energy experts say, the infrastructure to install and initially transmit wind power would have been much more difficult.

Texas definitely has the wind at its back.

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