Today in Houston, energy experts from across the globe are meeting at the annual HIS CERAWeek conference. FuelFix reports:
A lot has happened in the past year. [Conference chairman Daniel] Yergin and CERAWeek co-founder and co-chair James Rosenfield said the 2013 conference reflects that, including sessions on growing cybersecurity threats facing energy companies and facilities, the continuing boom in production from shale and other unconventional plays, and navigation of the recovering economy.
“There is a growing recognition that unconventional gas and oil is here to stay,” said Rosenfield, senior vice president at IHS. “The shift from gas to oil, and tight oil in particular, and the emphasis on liquids.”
Unconventional gas and oil from hydraulic fracturing has caused a record-setting year for American oil and gas development. The U.S. Energy Information Agency (EIA) reported that crude oil production hit a 20-year high last November and December. The American Enterprise Institute’s Mark Perry noted that if North Dakota and Texas--where much of America’s oil production growth is taking place--were its own country, it’d be the “9th largest oil-producing nation in the world.” Also, EIA noted that natural gas production set a record in 2012.
Yergin told Politico Pro the oil and gas boom has changed the energy discussion: “Energy policy for almost four decades has been dominated by the notion of scarcity. We’re not floating out in a sea of oil and gas, but there’s a sense that the U.S. position is much, much better than had been thought.”
While the U.S. is in a great position, many in Congress think it would be smart to “fix” the sequester, across-the-board spending cuts, by targeting energy producers with higher taxes. Former Mississippi governor Haley Barbour rejects this idea:
The oil and gas industry is already the highest-taxed industrial sector in the country, pumping about $86 million a day of taxes and fees into federal coffers. That’s $31 billion annually. A completely arbitrary tax hike on the energy industry would not only reduce industry growth, it would squelch job creation and pass higher energy costs along to consumers.
Instead of trying to weigh it down energy with taxes, let’s encourage American oil and gas development to create more jobs and boost economic growth.
In case you were a normal American and finishing up your workweek last Friday afternoon, you may have missed the State Department releasing a draft supplemental environmental impact statement finding that the proposed Keystone XL pipeline wouldn’t have significant environmental impact.
Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy called the news, “long overdue, and continues to build a strong case supporting the construction of the Keystone XL pipeline.”
Here are some other reactions to the report. The conclusion: The time for study is over. The administration should approve Keystone XL’s construction. Let’s build it now.
If the Alberta oil doesn't flow south to America via the Keystone XL, it will flow west to China via other pipelines or rail. It will also flow to the Gulf Coast by other means, including pipelines and rail to East Coast ports, and then via tankers in the Atlantic and around Florida. Keystone XL will have a smaller "carbon footprint" than these alternatives.
As for the danger of spills, the high-tech pipeline will be buried underground and contain valves that allow for rapid detection and shutoff. The environmental risk is arguably greater on a tanker. Even if the oil sands were shut down entirely, Gulf Coast refineries would merely use the similarly heavy oil from Venezuela, also shipped via tankers.
Thus the issue is not whether the oil will flow but how much Americans will benefit. A rule of thumb is that for every dollar of imported foreign oil, North America receives about 10 cents of the economic benefit. The Venezuelans, Saudis and others get the rest. The benefit from oil produced in North America is roughly 80-90 cents of each $1. This includes the cost of producing and transporting the oil, and the ancillary jobs and sales that flow from it. The Keystone XL has also reserved space for about 250,000 barrels a day of oil produced in the U.S., which means a new and environmentally safer outlet for oil from the booming Bakken fields of North Dakota.
Senator Heidi Heitkamp (D-ND):
I am pleased that the State Department has taken the next step towards what should be the eventual approval by the President of the Keystone XL pipeline. The statement released today was the result of what is now one of the most thorough studies of any pipeline project, and the draft SEIS suggests that they have found little reason for further delay of this project. I have supported this project since it was initially proposed because it is good for North Dakota and good for our nation.
The State Department should now announce a concrete timeline for comments to be submitted and for a “national interest” determination to be made. The State Department and the President must adhere to this timeline and finally approve the construction of the pipeline. This will put thousands of Americans to work on a project that will deliver oil to U.S. refineries from our friendly neighbor and ally to the north.
Senator John Hoeven (R-ND):
After nearly five years of review, and a favorable supplemental study, the president needs to approve the Keystone XL pipeline. We again ask, as we have before, that President Obama and Secretary of State Kerry provide us with an actual timeline and some certainty as to when this long delayed project will finally get a decision.
The Keystone XL project will provide tens of thousands of jobs and hundreds of millions of dollars in revenue to help us reduce our deficit and debt, and it will do so with good environmental stewardship. With 70 percent of the American people in support of it and 12 million Americans still out of work, there is no reasonable excuse to postpone a decision any further.
American Petroleum Institute Executive Vice President Marty Durbin:
The president could truly implement his ‘all of the above’ energy strategy by approving Keystone XL,” Durbin said. “We hope the president will choose to side with the American people who strongly support the pipeline in poll after poll. The project will create thousands of good paying jobs for the safest, most highly trained workers of the building trades at a time when construction workers have an unemployment rate higher than the national average. Keystone XL will also enhance our energy security. It would be a win win for the U.S.
National Association of Manufacturers (NAM) Assistant Vice President of Energy and Resources Policy Chip Yost:
Americans are frustrated with Washington’s inaction, and Keystone XL is a prime example of inexcusable bureaucracy and red tape. It’s time for the Administration to expeditiously complete its review and approve the pipeline to put Americans back to work.
Bloomberg television had a good panel discussion on the economics of Keystone XL and increased North American energy security.
The State Department released a draft supplemental environmental impact statement for the Keystone XL pipeline and again found that it wouldn’t have a significant impact on the environment.
Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, issued this statement:
The Environmental Impact Statement released today is long overdue, and continues to build a strong case supporting the construction of the Keystone XL pipeline. The Keystone XL project has become one of the most closely examined infrastructure projects in our nation’s history—and it continues to pass with flying colors. Once again, the State Department has confirmed that this project is environmentally sound.
The Keystone XL pipeline will make more Canadian and U.S. oil available to us—oil that will not need to be imported from unfriendly places. It will create thousands of jobs and generate millions in revenue for state and local governments that badly need them. We’ll be working over the next 45 days to ensure that the voice of the majority of American people, who favor this project, is heard loud and clear by the Obama Administration.
The State Department report states, that if safeguards are followed, there will be “no significant impacts to most resources along the proposed project route.”
It finds that the pipeline’s construction would support 42,100 jobs during the one-to-two-year construction period, which would bring about $2.05 billion in wages, as well as another $3.3 billion in other spending. It will also provide $2 million annually after construction in additional property taxes for Montana, South Dakota, and Nebraska.
The report also destroys a key talking point by anti-energy groups who argue that stopping the pipeline would stop crude from Canadian oil sands from coming to market. “[A]pproval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area,” it reads. It goes on to state that, “If all pipeline capacity were restricted, oil sands production could decrease by approximately 2 to 4 percent by 2030.” Alternative methods of moving oil would be used.
Support for the Keystone XL pipeline is wide-ranging. Business and labor unions back it, there’s bipartisan support, and the public endorses it. It’s time for President Obama to approve the pipeline so American can reap its job-creating and energy security benefits.
Oil, natural gas, and coal aren’t the only energy sources weighed down by regulatory agencies. The Cape Wind project off the Massachusetts coast is a classic example of the claim by U.S. Chamber’s Senior Vice President for the Environment, Technology & Regulatory Affairs Bill Kovacs that it’s as hard to build a wind farm in the U.S. as it is a coal-fired power plant.
After nearly a decade of red tape and even with the support of environmental groups like the Sierra Club and Greenpeace not one of the planned 130 wind turbines have been built to supply the energy-hungry East Coast. The Huffington Post’s Tom Zeller explains that it’s due to “a byzantine process involving dozens of sometimes overlapping, often contradictory agencies, hundreds of officials and thousands of pages of impact statements” that’s taken over 10 years. For example, the Department of Energy’s Environmental Impact Statement for Cape Wind alone is 800 pages long.
The regulatory and permitting situation is bigger than one wind farm. Zeller writes, “[It] highlights what some critics say has become a bloated and overly complicated regulatory maze through which fewer and fewer project developers of any kind have the wherewithal to navigate.”
Browse through the U.S. Chamber’s Project No Project for 351 energy projects that were delayed or blocked by our broken system.
In the case of Cape Wind, even though Construction is expected to being by the end of this year, additional generating capacity has been delayed. This project illustrates something bigger. Jim Gordon, President of Energy Management, the company behind Cape Wind told Zeller, "Most projects and most developers that would get involved in a process like that would probably throw up their arms and walk away. And for some worthy projects, that would be a shame."
We're stopping ourselves from building things.
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