Tuesday, January 31, 2012

Solar Industry Divided On Job Losses From Trade Tariffs With China

Jan 30: An economic analysis prepared by The Brattle Group -- The Employment Impacts of Proposed Tariffs on Chinese Manufactured Photovoltaic Cells and Modules -- finds that a 100% tariff on imported solar PV cells and modules from China would result in as many as 50,000 net lost jobs in the U.S. over the next three years. Furthermore, retaliatory tariffs placed on U.S. exports of polysilicon to China would put nearly 11,000 more American jobs at risk in the first year following tariff imposition. According to the analysis, the imposition of tariffs will "slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and power producers, resulting in substantial job losses."
 
    The study, commissioned by the Coalition for Affordable Solar Energy (CASE), examined the impacts that imposing a 50% tariff or a 100% tariff would have on the U.S. solar industry through 2014. Both scenarios are lower than the up to 250% tariffs sought by SolarWorld, the German-based solar cell company, in its petition to the U.S. Commerce Department and the U.S. International Trade Commission.  For each scenario, the study provides both a low and high estimate to account for variability in modeling the price elasticity of supply and demand.
 
    According to the study, a tariff of 100% would result in consumer losses between $698 million and $2,620 million. That would eliminate between 16,917 and 49,589 American jobs over the next three years. Similarly, a tariff of 50% would result in net consumer losses between $621 million and $2,287 million. That would cause between 14,877 and 43,178 job losses over the same period. These figures are all net of any potential gains in cell or module manufacturing. Jigar Shah, President of CASE said, "This analysis makes it clear that imposing even a 50% tariff, much less than SolarWorld has requested, would be devastating for American workers. We cannot allow one company's anti-China crusade to threaten the U.S. solar industry and tens of thousands of American jobs." [See WIMS 11/16/11].
 
    Dr. Mark Berkman, author of the report and principal at The Brattle Group stated, "While the U.S. solar industry has many facets and is quite complex, we were able to model the industry by utilizing straightforward economic analytical methods. We started by projecting the reduced demand for solar systems resulting from price increases due to tariffs. We then analyzed projected job gains and losses under two scenarios, each using a 50% and 100% tariff on imported solar cells and modules. Even under the most conservative assumptions, we did not find a scenario where imposing a tariff would create more jobs than it eliminates."
 
    According to the Brattle analysis, if no tariff is imposed "the aggregate demand for photovoltaic systems is expected to grow from 1,678 MW in 2011 to 4,894 MW by 2014. A 50% tariff will raise industry-wide prices and delay solar industry growth, with total MW demand falling to as low as 3,350 MW in 2014. A 100% tariff will delay this growth even more with demand falling to as low as 3,159 MW in 2014.  It is a significant decline in the market for solar cells that is central to the decrease in jobs identified in this study." To measure job effects of solar module price increases, the Brattle analysis uses the same type of analytical model (IMPLAN) as government agencies, industry and economists to measure economic impacts.
 
    Another aspect analyzed in the report is the effect of likely retaliation by the Chinese to any U.S. imposed tariff on imported solar cells from China. According to the report, "retaliation would likely take the form of a tariff on U.S. polysilicon exports. The U.S. is a major supplier of this component of photovoltaic modules, and removing Chinese demand for U.S.‐manufactured polysilicon is expected to result in around 10,881 U.S. job losses in the first year after tariffs are imposed." CASE's Shah said, "This is an eye-opening analysis. Even after accounting for job gains in solar cell manufacturing, the likely job losses in the rest of America's solar industry and economy are staggering."
 
    Shah also noted that the findings of this study are consistent with a recent story ("Get-Tough Policy on Chinese Tires Falls Flat") in The Wall Street Journal in regard to tariffs placed on Chinese tires.  As the Journal reported, "The measure was meant to whack imports of passenger and light-truck tires and give a boost to manufacturers and job creation in the U.S. Yet, for a variety of reasons, it has apparently done little of either—and has surely raised prices for consumers."  Shah added, "Imposing tariffs on imported Chinese solar modules will have the same perverse results."
 
    On January 25, 2012, an evaluation of U.S. Customs and Border Protection data released by the Coalition for American Solar Manufacturing (CASM) indicated that Chinese producers have more than doubled imports of crystalline silicon solar cells and modules in advance of potential U.S. government duties on those imports. The coalition, which represents 11,000 U.S. workers at more than 150 American companies across the country, alleges that the recent 110 percent surge in import volume since July 2011, is further proof of illegal dumping and subsidies by Chinese solar producers and warrants a finding of critical circumstances that would apply retroactive duties to Chinese imports.

    Gordon Brinser, president of SolarWorld Industries America Inc., based in Oregon said, "This significant increase in imports demonstrates that the Chinese know they have violated U.S. and international trade rules and are trying to evade the consequences. Year to date, Chinese imports of solar cells and modules in 2011 are up 346 percent by quantity and 138 percent by value. Since 2008, Chinese imports have risen 939 percent by value and 1664 percent by quantity. This most recent surge of Chinese solar imports gives the U.S. Department of Commerce the evidence it needs not only to make a preliminary determination in our favor, but also to apply a critical-circumstances finding to address this last-minute import surge."

    Brinser continued saying, "The Chinese have made it clear that, contrary to various World Trade Organization agreements they signed 10 years ago, they will employ any means necessary to dominate the American and international solar markets. Rather than reward the Chinese for cheating, Commerce and the International Trade Commission need to take every possible action to enable American manufacturers to compete fairly."

    Brinser, speaking for CASM issued a statement in response to the new CASE economic analysis saying, "SolarWorld and the other members of CASM strongly support the creation of American jobs in the solar industry. This highly speculative study ignores the illegality of China's actions and fails to consider the harm those actions have caused to high-tech manufacturing jobs in the solar sector. We do know that thousands of good-paying American manufacturing jobs have already been lost to illegal Chinese dumping and subsidies for solar products. Our goal is to build America's solar manufacturing base and the good jobs with benefits, innovation and competition that come along with it."

    On January 30, CASM, led by SolarWorld recognized the U.S. Department of Commerce for taking expedited action against what they called "a massive, evasive surge of Chinese solar cell and panel imports" ahead of Commerce's first preliminary determination on duties, now scheduled for March 2, 2012. Commerce's finding of "critical circumstances" means that if the agency imposes preliminary countervailing duties on March 2, the duties will apply to all imports of cells and modules from Chinese exporters that were brought into the United States starting December 3, 2011.

    CASM said this critical-circumstances ruling marks the first time that Commerce has issued such a finding in advance of a preliminary countervailing duty determination. Aside from the determination on anti-subsidy (also called countervailing) duties, the agency is scheduled to issue a separate preliminary ruling on anti-dumping duties on March 27. Commerce will issue a separate critical-circumstances ruling in the anti-dumping investigation. Separately, the U.S. International Trade Commission issued a unanimous preliminary determination on December 2, that the imports are harming the U.S. solar manufacturing industry.

    Brinser said, "After several years of massive imports of illegally subsidized and dumped Chinese solar products, the U.S. solar manufacturing industry and its workers greatly appreciate the Department of Commerce's finding that importers of Chinese products have mounted a massive surge in product to evade accountability to U.S. and international trade law. Recognizing that an attempt at circumvention can happen, the trade law allows Commerce to act against such abusive behavior. We value Commerce's decision, and we hope that it will send a clear message to the marketplace about Commerce's commitment to using all of its tools to combat unfair trade. We filed these trade cases as a key step to rekindle growth in America's renewable energy manufacturing and jobs. SolarWorld and CASM believe that free trade is trade free of illegal governmental intervention. Robust and legal international competition, not predatory pricing that relies on massive and improper subsidies, will produce the best products and sustainable price declines over the long term. Today, we are one step closer to these aims."

    The Coalition for Affordable Solar Energy (CASE), is a coalition of American solar companies representing 97% to 98% of the U.S. solar industry jobs, and believes free trade and industry competition are critical to making solar electricity affordable for everyone. CASE is united in its commitment to creating jobs through the growth and development of the American solar industry.

    The Coalition for American Solar Manufacturing (CASM) is made up of seven companies, including SolarWorld that manufacture solar cells and modules in the United States as well as more than 150 employers of more than 11,000 workers who have registered their support for CASM's case as associate members. These member companies have plants in nearly every region in the United States, including the Northwest and California, the Southwest, Midwest, Northeast and South and support several thousand U.S. manufacturing jobs. 
 
    Access a release from CASE and link to their report (click here). Access the CASE website for more information (click here).  Access a release from SolarWorld and CASM and link to their Solar Import report (click here). Access the CASM statement in response to the CASE study (click here). Access the CASM statement on the Commerce Department action (click here). Access the Department of Commerce Preliminary Determination of Critical Circumstances (click here). Access the Department of Commerce Monthly Shipment Q&V Analysis for Critical Circumstances (click here). Access the CASM website (click here). [#Energy/Solar]

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Monday, January 30, 2012

Senate Republican Bill To Approve Keystone XL Pipeline Project

Jan 30: U.S. Senators David Vitter (R-LA), John Hoeven (R-ND) and Richard Lugar (R-IN) and a total of 44 senators, including one Democrat, Joe Manchin (D-WV) announced that they will introduce legislation to approve the Keystone XL pipeline project under Congress's authority enumerated in the Commerce Clause of the U.S. Constitution, Article 1, Section 8. Senator Vitter said, "This new bill is a lot like the old one, but it makes it definitive that Congress has the authority to push the Keystone XL Pipeline forward. Everyone in Washington talks about saving the economy and creating jobs -- the Keystone XL project will actually do something about that. And it would be pure politics for the president not to support it."
                                              
    The legislation would authorize TransCanada to construct and operate the Keystone XL pipeline from Alberta, Canada, to the U.S. Gulf Coast, transporting an additional 830,000 barrels of oil per day to U.S. refineries, which includes 100,000 barrels a day from the Bakken region of North Dakota and Montana. The bill allows the company to move forward with construction of the pipeline in the United States while the State of Nebraska works to determine an alternative route. Senator Hoeven secured an opinion from the non-partisan Congressional Research Service (CRS) which he said confirms Congress's constitutional authority to approve the project.

    The Keystone XL pipeline project has been under review for more than three years, but President Obama rejected it last week saying the 60-day provision authored by Lugar, Hoeven and Vitter included in the payroll tax cut extension bill passed in December didn't give him enough time to review the project [See WIMS 1/23/12]. In fact, the Obama Administration spent 1,217 days reviewing the pipeline and there was no time limit on the State Department's ability to review the Nebraska portion of the project.

     Senator Hoeven said, "Our legislation not only acknowledges the vital national interest this project represents on many levels, but also works in a bipartisan way to begin construction. It will create thousands of jobs, help control fuel prices at the pump and reduce our reliance on Middle East oil and it can be accomplished with congressional authority, just as the Alaska Pipeline was nearly 40 years ago. The reality is that if America doesn't build the Keystone project the Canadian oil will still be produced and shipped, but instead of being refined in the United States by American workers and benefiting American consumers, it will be shipped by tanker across the Pacific to China." Senator Lugar said, "The job creation, economic and energy security arguments are overwhelmingly in favor of building the pipeline. A majority of Americans support it. President Obama's opposition is not in the best interest of the United States. The President has failed to lead but we will not stop trying to complete this critical supply line."

    When the State department recommended the denial, President Obama issued a statement saying, ". . .the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment. . . This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil.:

    Russ Girling, TransCanada's (the project developer) president and chief executive officer said, "This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. We will re-apply for a Presidential Permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014."

    Noah Greenwald at the Center for Biological Diversity (CBD) said, "President Obama made the right decision when he rejected the Keystone XL pipeline. Republicans in Congress need to stop wasting precious time doing the bidding of Big Oil and address the climate crisis and create long-term jobs in a new, clean energy economy. Keystone XL would be an environmental disaster and create few permanent jobs in the process. Instead much of the oil will be exported — even as the pipeline deepens our dependence on the fossil fuels that are polluting our air, land and water and driving the global climate crisis."

    CBD indicated in a release that "Keystone XL would transport dirty tar-sands oil 1,700 miles across six states and hundreds of water bodies, posing an unacceptable risk of spill. An existing pipeline called Keystone 1 has already leaked 14 times since it started operating in June 2010, including one spill that dumped 21,000 gallons of tar-sands crude. The pipeline would directly threaten at least 20 imperiled species, including whooping cranes. Extraction and refinement of tar-sands oil produces two to three times more greenhouse gases per barrel than conventional oil and represents a massive new source of fossil fuels that leading climate scientist Dr. James Hansen has called 'game over' for our ability to avoid a climate catastrophe. Strip mining of oil from Alberta's tar sands is also destroying tens of thousands of acres of boreal forest and polluting hundreds of millions of gallons of water from the Athabasca River, in the process creating toxic ponds so large they can be seen from space."

    On the House side, Speaker John Boehner (R-OH) said on ABC's "This Week"  "If it's not enacted before we take up the American Energy and Infrastructure Jobs Act, it'll be part of it [i.e. Keystone pipeline bill]." The House is expected to consider the American Energy Infrastructure Jobs Act (set to be H.R.7), which would link new American energy production to high-priority infrastructure projects.  Instead of more 'stimulus' spending or wasteful earmarks, the bill would permanently remove government barriers to American energy production and use the revenues to repair and improve America's roads and bridges – both of which support long-term job growth. Speaker Boehner also said there will be no earmarks in legislation which he indicated "the House will soon vote on that permanently removes government barriers to energy production to help create thousands of private-sector jobs, lower gas prices, and repair our roads and bridges."

    On February 1, the Natural Resources Committee will hold a Full Committee markup on the energy portion of the American Energy & Infrastructure Jobs Act, legislation to link new American energy production with high-priority infrastructure projects. The bill will remove government barriers to American energy production, creating over a million new American jobs, lowering gasoline prices, and helping repair our roads and bridges – with no earmarks. The energy portion includes: expanded Offshore Energy Production (H.R. 3410, Energy Security and Transportation Jobs Act); Opening less than 3 percent of the Arctic National Wildlife Refuge (ANWR) in Alaska to responsible energy development (H.R. 3407, Alaskan Energy for American Jobs Act); and increasing oil shale development by setting clear rules for the development of U.S. oil shale resources and promoting shale technology research and development (H.R. 3408, Protecting Investment in Oil Shale the Next Generation of Environmental, Energy, and Resource Security Act).

    Access a release from the Senators with a list of cosponsors and additional background (click here). Access a release from CBD (click here). Access a statement from Speaker Boehner and link to an overview of H.R.7 (click here). Access a report in The Hill re: the House consideration of the Keystone XL project (click here). Access the statement from the President (click here). Access a release on the House Natural Resources Committee meeting (click here). Access the Presidential Memorandum (click here). Access the release from TransCanada (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here).  [#Energy/Pipeline, #Energy/KXL, #Energy/OilSands, #Energy/TarSands]

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Friday, January 27, 2012

House & Senate Prepare To Hear Nuclear Waste Issues

Jan 26: Following the release of the final report of the Blue Ribbon Commission on America's Nuclear Future (BRC) which details comprehensive recommendations for creating a safe, longterm solution for managing and disposing of the nation's spent nuclear fuel and highlevel radioactive waste [See WIMS 1/26/12], House and Senate Committees announced plans to hold hearings on the recommendations.
 
    The United States currently has more than 65,000 tons of spent nuclear fuel stored at about 75 operating and shutdown reactor sites around the country. More than 2,000 tons are being produced each year. The DOE also is storing an additional 2,500 tons of spent fuel and large volumes of highlevel nuclear waste, mostly from past weapons programs, at a handful of governmentowned sites.
 
    Energy and Commerce Committee Chairman Fred Upton (R-MI) and Environment and the Economy Subcommittee Chairman John Shimkus (R-IL) welcomed the final report. They said they were "disappointed that President Obama prohibited the commission from reviewing the merits of Yucca Mountain." They indicated that they agree with several of the commission's recommendations and believe the report's findings only underscore the urgent need to move forward with development of the Yucca program. The Subcommittee on Environment and the Economy has scheduled a hearing for Wednesday, February 1, 2012, at 9:30 AM.
 
    The two issued a joint statement saying, "In the wake of the Obama administration's mismanagement of Yucca Mountain, we agree with the commission that a new organizational structure must be put into place to manage our country's nuclear waste. The current administration has proved unwilling to carry out the law; it's time to think about a new single-purpose entity to put our country's nuclear future back on track. As recommended in the report, it is crucial this authority have full access to the Nuclear Waste Fund. Recent House efforts to fund Yucca Mountain have been repeatedly thwarted by Harry Reid's Democratic Senate and the White House. We must decouple these funds from political whims imposed by the budget cycle to ensure the billions of dollars taxpayers and ratepayers have poured into Yucca Mountain will not be squandered.
 
    "The commission underscored the need for prompt action on a long-term storage disposal facility, and we believe Yucca Mountain remains the most shovel-ready, thoroughly studied option. While we develop this repository, we agree that we must also prepare for the large-scale transport of nuclear waste. As our nation's nuclear waste increases, so does the need for a long-term nuclear waste solution. We will continue to examine the commission's findings as we work to ensure the safety of our nuclear future."
 
   The House Science, Space, and Technology Committee Chairman Ralph Hall (R-TX), issued a statement saying, "I welcome the release of the report and look forward to its thoughtful review by the Science, Space, and Technology Committee. Nuclear energy will continue to be an integral piece of America's energy portfolio, and identifying a workable path forward to manage nuclear waste, including new technology pathways, deserves consideration. I thank the Blue Ribbon Commission panel for its hard work, particularly the leadership of its Co-Chairmen, General Scowcroft and former Congressman Hamilton. 

    "President Obama threw the future of U.S. nuclear waste management into disarray when he unilaterally decided to terminate the Yucca Mountain repository. While by law Yucca Mountain continues to be the only designated permanent repository for high-level radioactive waste, sensible steps to make it easier for future generations to manage nuclear waste warrant examination. The BRC's Report is a productive contribution to that ongoing discussion. "In the meantime, American taxpayers deserve to see the results of their $15 billion investment in Yucca Mountain, including the results of the comprehensive scientific review, which have yet to be released.  At a time when the country desperately needs a comprehensive, all-of-the-above energy strategy – including expanded use of nuclear energy – the lack of a permanent storage solution continues to burden existing nuclear plants and increase liability to the American taxpayer. I look forward to an informative hearing in the coming weeks to review the Commission's report."

    Senate Energy & Natural Resources Committee Chairman Jeff Bingaman (D-NM) announced the Committee will hold a hearing on the Commission's report on Thursday, February 2, with witnesses including Co-chairs Lee Hamilton and Lt. General Brent Scowcraft, USAF. Ranking Member Senator Lisa Murkowski (R-AK), released a statement saying, "I've been working with Sens. Feinstein, Alexander and Bingaman to find a plan to deal with our nation's spent nuclear fuel. We have a lot of issues to address -- not just the need for a long-term repository, but also transportation safety issues, the federal government's contractual liability and the need to consolidate and prioritize the existing temporary storage facilities -- and I'll be looking to the commission for guidance as we consider possible legislative action.
 
    "While the commission's report doesn't break a lot of new ground, it does offer some solid recommendations for improving U.S. policy, especially the call for the creation of a new organization that's protected from political influence or annual funding bills to handle nuclear waste disposal. I think that's an idea that's overdue, which is why I cosponsored Sen. Voinovich's Fed-Corp proposal.
 
    In its report, the BRC indicated, ". . .the Obama Administration's decision to halt work on a repository at Yucca Mountain in Nevada is the latest indicator of a nuclear waste management policy that has been troubled for decades and has now reached an impasse. Allowing that impasse to continue is not an option. . .The Commission noted that it was specifically not tasked with rendering any opinion on the suitability of Yucca Mountain, proposing any specific site for a waste management facility, or offering any opinion on the role of nuclear power in the nation's energy supply mix. . . the urgent need to change and improve our strategy for managing the highlevel wastes and spent fuel that already exist and will continue to accumulate so long as nuclear reactors operate in this country."
 
    The Commission said what it has endeavored to do is "recommend a sound waste management approach that can lead to the resolution of the current impasse, and can and should be applied regardless of what site or sites are ultimately chosen to serve as the permanent disposal facility for America's spent nuclear fuel and other highlevel nuclear wastes."
 
    Access a release from Reps. Upton and Shimkus (click here). Access a release from Rep. Hall (click here). Access a release from Sen. Murkowski (click here). Access a release from BRC (click here). Access the complete 180-page report (click here). Access the BRC website for complete background information (click here). [#Energy/Nuclear, #Haz/Nuclear]
 
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Thursday, January 26, 2012

House Hearing Indicates Chevy Volt Has No Defects

Jan 25: The House Ovesight & Government Reform Committee, Chaired by Representative Darrell Issa (R-CA), Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending, Chaired by Representative Jim Jordan (R-OH), held a hearing entitled, "Volt Vehicle Fire: What Did NHTSA Know and When Did They Know It?" Witnesses included: David L. Strickland, Administrator National Highway Traffic Safety Administration (NHTSA); Daniel Akerson, Chairman and CEO General Motors; and John German, Senior Fellow and Program Director for the International Council on Clean Transportation.
 
    A Republican committee staff report indicates, "The delayed public notification of serious safety concerns relating to the Chevy Volt raises significant concerns regarding the unnatural relationship between General Motors (GM), Chrysler and the Obama Administration. Rather than allowing GM and Chrysler to enter into a traditional bankruptcy process, the Obama Administration intervened and forced the companies to participate in a politically orchestrated process. The result was that GM and Chrysler emerged as quasi-private entities, partially owned by the United States government.
 
    "President Obama has used this unusual blurring of public and private sector boundaries to openly tout the results of this partnership as a top accomplishment of his Administration -- creating a dynamic where the President is politically reliant on the success of GM and Chrysler. Moreover, in the case of GM, the Administration has offered substantial taxpayer funded subsidies to encourage production of the Volt, such as $151.4 million in stimulus funds for a Michigan-based company that produces lithium-ion polymer battery cells for the Volt as well as $105 million directly to GM. It has also extended a significant subsidy to encourage consumers to purchase the vehicle, offering buyers of the Volt a federal tax credit of up to $7,500 per vehicle.
 
    "In the face of that political dependency, it is deeply troubling that public notification of the safety concerns related to the Volt was inexplicably delayed for six months – a period of time that also coincides with the negotiation over the 2017-2025 fuel economy standards. The necessity of a full explanation for NHTSA's silence concerning the Volt's safety risk has been compounded by its lack of cooperation with the Committee."
 
    NHTSA testified, ". . .we have concluded the agency's investigation and have found no discernible defect trend. The vehicle modifications recently developed by GM effectively address the issue of battery intrusion and they have included this modification as they manufacture new vehicles going forward. NHTSA continues to believe that electric vehicles show great promise as a safe and fuel-efficient option for American drivers."
 
    GM's Akerson testified, "We engineered the Volt to be among the safest vehicles on the road – earning an overall NHTSA 5 Stars for occupant safety and a Top Safety Pick from the Insurance Institute for Highway Safety. We engineered the Volt to be a technological wonder. . . In other words, we engineered the Volt to be the only current EV on the road that you can drive across town or across the country without fear of being stranded when the battery power is depleted. . .
 
    ". . .the Volt's entry into the market came soon after GM's emergence from its government rescue and restructuring -- and during this political season. As such, the Volt seems, perhaps unfairly, to have become a surrogate for some to offer broader
commentary on General Motors' business prospects and Administration policy." Following some concerns raised by NHTSA, Akerson said, "GM volunteered to conduct a Customer Satisfaction Program and implement structural and cooling system enhancements to further protect the Volt battery from the possibility of an electrical fire occurring days or weeks after a severe side crash. . .
 
    "It's also important that we reaffirm our commitment to the Volt's battery technology, and the actions we are taking have nothing to do with the battery pack itself. None of these changes will touch the battery cell or pack. As a result, we will not change any part of the manufacturing process at our Brownstown, Michigan, battery pack assembly plant. We have tested the Volt's battery system for more than 285,000 hours, or 25 years, of operation. It's important to note, the battery cell design used in the Volt was not the cause of the incidents that prompted the investigation. . .
 
    "Since news of the investigation broke, a couple of hundred out of our nearly eight thousand owners have requested either a loaner vehicle or a potential buy back. And that's no surprise as 93% of Volt owners in a recent Consumer Reports survey report
the highest customer satisfaction with their vehicles -- more than any other vehicle and the highest ever recorded by this respected third party. . . We have treated this process with NHTSA with the highest level of urgency and seriousness from day one. For its part, NHTSA has certainly been very thorough in this process and we have responded accordingly. In closing, the Volt is safe. It's a marvelous machine. It represents so much of what is right at GM and, frankly, American ingenuity and manufacturing."
 
    Representative Dennis Kucinich (D-OH), the Ranking Member on the Subcommittee said, "If I thought there was any kind of a cover-up in efforts by GM or NHTSA to protect consumer safety, I would not tolerate it. Today, I saw no such evidence. Based on what we know so far, NHTSA's New Car Assessment Program appeared to do just what it is supposed to do: catch potential safety concerns with new cars before they become a risk to consumers. And General Motors appeared to do exactly what we would hope it would do….So far, we have seen no evidence to support the implication that NHTSA has allowed politics to guide its decision-making."
 
    Rep. Kucinich said further, "A very detailed, one-hundred-and-thirty-five page final report by the National Highway Traffic Safety Administration on its investigation into the Volt Battery Fire Incident … provides detailed answers to the question this hearing seems to ask. Considering that in the last few months there have been efforts by the majority to defund programs that support the development of technologies for electric and alternative fuel vehicles, and other proposals to take away tax incentives for purchasing electric cars, I am concerned that an effect of this hearing could be to undermine technology that is critical to both protecting the environment and ensuring the success of the U.S. auto manufacturing industry, as well as U.S. economic competitiveness generally. The Chevy Volt has helped to propel the resurgence of GM, and the jobs that come with it. Technologies developed for the Volt have been adopted on other vehicles to increase their efficiency, desirability and marketability."
 
    Access the Republican hearing website for links to the testimony, staff report and video (click here). Access a release from Rep. Kucinich (click here). [#Transport/Electric, #MITransport/Electric]
 
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Wednesday, January 25, 2012

SOTU Calls For "All-Of-The-Above Strategy" For American Energy

Jan 25: President Obama delivered his State of the Union address and covered a wide-ranging agenda of topics including, of particular importance to the WIMS readers, Washington, DC gridlock, energy, infrastructure and regulatory reform.
 
    On the subject of Washington gridlock, the President emphasized the problems with the 60-vote filibuster and cloture rule in the Senate and destructive DC politics and rhetoric. He reminded that, "A simple majority is no longer enough to get anything -– even routine business –- passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a simple rule that all judicial and public service nominations receive a simple up or down vote within 90 days." He said,  I bet most Americans are thinking the same thing right about now:  Nothing will get done in Washington this year, or next year, or maybe even the year after that, because Washington is broken. Can you blame them for feeling a little cynical?" He called for lowering "the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common-sense ideas. 
 
    He said, "I'm a Democrat.  But I believe what Republican Abraham Lincoln believed:  That government should do for people only what they cannot do better by themselves, and no more. . . when we act together, there's nothing the United States of America can't achieve. That's the lesson we've learned from our actions abroad over the last few years." And, he concluded the speech reemphasizing the need for politicians to work together saying, "No one built this country on their own.  This nation is great because we built it together.  This nation is great because we worked as a team.  This nation is great because we get each other's backs.  And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard.  As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.
 
    The President spent a good deal of time talking about energy and one of the biggest applause lines of the night came when he called for an "all-of-the-above strategy" for American energy. The President said:
". . .nowhere is the promise of innovation greater than in American-made energy.  Over the last three years, we've opened millions of new acres for oil and gas exploration, and tonight, I'm directing my administration to open more than 75 percent of our potential offshore oil and gas resources.  (Applause.)  Right now -- right now -- American oil production is the highest that it's been in eight years.  That's right -- eight years.  Not only that -- last year, we relied less on foreign oil than in any of the past 16 years. 
 
"But with only 2 percent of the world's oil reserves, oil isn't enough.  This country needs an all-out, all-of-the-above strategy that develops every available source of American energy. A strategy that's cleaner, cheaper, and full of new jobs.
 
"We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy.  Experts believe this will support more than 600,000 jobs by the end of the decade.  And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. Because America will develop this resource without putting the health and safety of our citizens at risk.
 
"The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy.  (Applause.)  And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock –- reminding us that government support is critical in helping businesses get new energy ideas off the ground.    
 
"Now, what's true for natural gas is just as true for clean energy.  In three years, our partnership with the private sector has already positioned America to be the world's leading manufacturer of high-tech batteries.  Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.
 
"When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance.  But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts.  Today, it's hiring workers like Bryan, who said, "I'm proud to be working in the industry of the future."
 
"Our experience with shale gas, our experience with natural gas, shows us that the payoffs on these public investments don't always come right away.  Some technologies don't pan out; some companies fail.  But I will not walk away from the promise of clean energy.  I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. 
 
"We've subsidized oil companies for a century.  That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising.  Pass clean energy tax credits.  Create these jobs.
 
"We can also spur energy innovation with new incentives.  The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change.  But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation.  So far, you haven't acted.  Well, tonight, I will.  I'm directing my administration to allow the development of clean energy on enough public land to power 3 million homes.  And I'm proud to announce that the Department of Defense, working with us, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.
 
"Of course, the easiest way to save money is to waste less energy.  So here's a proposal:  Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings.  Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them.  Send me a bill that creates these jobs."
    The President also said that the focus on energy should be just one part of a broader agenda to repair America's infrastructure. He said:
"We've got crumbling roads and bridges; a power grid that wastes too much energy; an incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

"During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge.  After World War II, we connected our states with a system of highways.  Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

"In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects.  But you need to fund these projects.  Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."

    The President also reemphasized the need for regulatory reform, but cautioned about going too far and being selective in the reforms. He said:

"There's no question that some regulations are outdated, unnecessary, or too costly.  In fact, I've approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.  I've ordered every federal agency to eliminate rules that don't make sense.  We've already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.  We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill -- because milk was somehow classified as an oil.  With a rule like that, I guess it was worth crying over spilled milk. 

"Now, I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. Absolutely.  But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago.  I will not back down from protecting our kids from mercury poisoning, or making sure that our food is safe and our water is clean.  I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny your coverage, or charge women differently than men."

    Access the full text of the President's SOTU address (click here). Access the video of the SOTU (click here). Access links to more White House information on the SOTU including ways to participate and schedule of events (click here). Access the Blueprint for the Future (click here).[#All]


Reactions To The President's State Of The Union Address - Jan 24: WIMS has assembled some representative excerpts of reactions to the President's State of the Union message. In addition the White House released a composite of a number of responses from many governors, mayors, business representatives, and labor organizations (See link below).
 
    Gov. Mitch Daniels of Indiana Republican Address to the Nation: "The President did not cause the economic and fiscal crises that continue in America tonight.  But he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse: the percentage of Americans with a job is at the lowest in decades.  One in five men of prime working age, and nearly half of all persons under 30, did not go to work today. . .So 2012 is a year of true opportunity, maybe our last, to restore an America of hope and upward mobility, and greater equality.  The challenges aren't matters of ideology, or party preference; the problems are simply mathematical, and the answers are purely practical. An opposition that would earn its way back to leadership must offer not just criticism of failures that anyone can see, but a positive and credible plan to make life better, particularly for those aspiring to make a better life for themselves. Republicans accept this duty, gratefully. . .
 
    "It's absolutely so that everyone should contribute to our national recovery, including of course the most affluent among us.  There are smart ways and dumb ways to do this: the dumb way is to raise rates in a broken, grossly complex tax system, choking off growth without bringing in the revenues we need to meet our debts.  The better course is to stop sending the wealthy benefits they do not need, and stop providing them so many tax preferences that distort our economy and do little or nothing to foster growth. . . As a loyal opposition, who put patriotism and national success ahead of party or ideology or any self-interest, we say that anyone who will join us in the cause of growth and solvency is our ally, and our friend.  We will speak the language of unity.  Let us rebuild our finances, and the safety net, and reopen the door to the stairway upward; any other disagreements we may have can wait. . ."

    Eileen Claussen, President, Center for Climate and Energy Solutions: "We share President Obama's enthusiasm for homegrown solutions to America's energy challenges. Without question, America has the resources and know-how to produce more energy at home, strengthening both our economy and our national security. But protecting the climate also has to be part of the equation. If we sensitively develop domestic reserves, get serious about ramping up new energy sources, and push efficiency across the board, we can both meet America's energy needs and dramatically shrink our carbon footprint. Even if comprehensive legislation remains off the table for now, we can make important progress tackling these challenges piece by piece. C2ES is working with policymakers and stakeholders on ways to expand enhanced oil recovery using captured carbon dioxide – an approach that can boost domestic oil production while reducing greenhouse gas emissions. Similarly, we're working with automakers, environmentalists and others on a plan for integrating plug-in electric vehicles into the U.S. electrical grid. We look forward to sharing the results of these and other C2ES initiatives aimed at practical solutions to our twin climate and energy challenges."

    KierĂ¡n Suckling, Executive Director of the Center for Biological Diversity: "Rather than calling for bold action to combat climate change, Obama intends to deepen America's dependence on fossil fuels which will increase dangerous greenhouse gas emissions. Expanding offshore oil drilling raises the risk of disastrous spills, puts wildlife in harm's way and solidifies U.S. dependence on the fossil fuels that are driving the global climate crisis."

    Sierra Club Executive Director Michael Brune: Tonight President Obama laid out a blueprint for a nation built to last, highlighting important priorities to give hardworking Americans a fair shake, create good jobs for American workers and restore America's role as a global leader in manufacturing and innovation. There is no better way to achieve those goals than with a clean energy economy. We are especially encouraged by the President's commitment to doubling down on clean energy sources like wind and solar and creating incentives for clean energy growth and job creation. . . But we can't wait much longer for the clean energy revolution.  Each day, corporate polluters put our children's health and our nation's future at risk, polluting the air we breathe and the water we drink with toxic chemicals."

    Frances Beinecke, president of the Natural Resources Defense Council: "Home-grown sources of energy certainly are preferable to imports, especially from unstable regions of the world. But as the president noted, feeding our addiction to fossil fuels is not the long-term solution; we need to embrace renewable sources of energy with even greater fervor as well as energy efficiency. That's the path to a healthier, cleaner and more prosperous world. We all want American energy independence. But let's do it right."

    T. Boone Pickens, Chair BP Capital Management: "I agree we should use every available American resource. I applaud President Obama for highlighting natural gas and for calling on Congress to better promote its use. The expanded use of natural gas in America — in power generation and transportation — has enormous bipartisan support in the Congress and in the states. It is time to move from vague generalities to specifics on how we make this transition happen. I am confident that President Obama, as well as all the candidates for President, will lay out detailed plans on how they intend to achieve it. . . America does not have a natural gas production problem — we are awash in natural gas. What we have is a demand problem and unless we bring both sides of the equation in balance, we will see this cleaner, cheaper, abundant, domestic resource exported in greater and greater quantities."

     Cal Dooley, President and CEO of the American Chemistry Council: "ACC welcomes the President's focus on energy and manufacturing—key to any blueprint for a stronger economy. Our member companies and their more than 780,000 employees are part of the answer, creating solutions that will enable a strong, secure and sustainable future. . . Natural gas from shale is a prime example of the 'homegrown energy' the President wants America to use. It's a game changer for the chemistry industry and other manufacturers, who can use more affordable and stable supplies to expand exports and create jobs. . . we need effective, fiscally responsible policies and balanced, rational regulations that will allow the nation to capitalize on our significant domestic energy sources while also protecting our environment."

    National Association of Manufacturers (NAM) President and CEO Jay Timmons: "Tonight the President focused on the need to create jobs, shore up our energy security through increased domestic production and revive manufacturing in America. Yet his decision last week to reject the Keystone XL killed the promise of nearly 20,000 manufacturing and construction jobs along with the 118,000 indirect jobs that would ripple across our economy. . . The Obama Administration must take action to put an end to the rampant overregulation and overreach by the National Labor Relations Board and the Environmental Protection Agency. . . As consumers of one-third of our nation's energy supply, manufacturers embrace a true 'all-of-the-above' energy policy – not one subject to the political winds."

    U.S. Chamber of Commerce President and CEO Thomas J. Donohue: "Tonight the president addressed a number of subjects important to the economy and our nation. Unfortunately, too many of the solutions he proposed rest on higher taxes, more spending, and an avalanche of new regulations. The way to create the jobs Americans need is to grow our free enterprise economy, not to further expand the federal government. "The Chamber stands ready to work with the administration and both parties in Congress to create American jobs without raising taxes or adding to the deficit. Stronger growth is fundamental to creating more opportunity, a more inclusive economy, and a better quality of life for all Americans. "All participants in this discussion should concentrate on uniting Americans around a common plan, not dividing them for political purposes."

    House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA): The President tonight outlined a laundry list of popular programs without regard to what they cost and his own record in office. He has failed to deliver on economic growth promises, has squandered $800 billion in stimulus funds, and vetoed jobs and affordable domestic energy bills passed by Congress. What is clear is that he is pursuing a partisan class-warfare agenda aimed at dividing the American people. . ."

    House Energy and Commerce Committee Chairman Fred Upton (R-MI):"President Obama talked of a future where we're in control of our own energy, but time and again, he has blocked our ability to develop our vast energy resources and partner with North American allies to lessen our dependence on hostile regions of the world. The President said we need an all-out, all-of-the-above strategy that develops every available source of American energy, but his government's policies are keeping supplies locked away and squeezing our power sector, making energy less reliable and less affordable for working families and businesses struggling to grow. He said a lot about energy at a time when the American people recognize the jobs and security that come with energy development, but he stayed silent on two of the most significant energy issues facing our nation today: the Keystone XL pipeline he rejected and the failed government gamble on Solyndra. The silence speaks volumes about contrasting policy visions. . ."
 
    U.S. Senate Republican Leader Mitch McConnell (R-KY): "Tonight, the President delivered a campaign speech designed to please his liberal base. The President told the American people that he has a blueprint for the economy, but what he failed to mention is that we've been working off the President's blueprint for three years. And what's it gotten us: millions still looking for work, trillions in debt, and the first credit downgrade in U.S. history. The President also proposed some ideas tonight that could have bipartisan support. If he's serious about those proposals -- if he really wants to enact them -- he'll encourage the Democrats who run the Senate to keep them free from poison pills like tax hikes on job creators that we know from past experience turn bipartisan support into bipartisan opposition. The President can decide he's not interested in working with Congress if his party only controls one half of it. That's his prerogative. He can give up on bipartisanship. But we won't. Our problems are too urgent. The economy is too weak. The future is too uncertain."

    Senator James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works: "President Obama has clearly received the message that his global warming agenda is gone, dead, done with the American people -- that's why he was touting oil and natural gas so much in his State of the Union address tonight. . . But while he talks the talk, he is clearly still determined to achieve his global warming agenda by shutting down oil, gas and coal development so that energy prices will, as he said himself, 'necessarily skyrocket'. . . He took credit for increased natural gas production, but this is the same President who said that we have to develop natural gas in a way that won't 'poison people' and has an administration that is waging a regulatory assault on hydraulic fracturing – the primary method of shale gas extraction – even though under state regulation, there has not been one confirmed case of water contamination from fracked formations. . ."
 
    Senator Barbara Boxer (D-CA), Chairman of the Environment and Public Works Committee: "The President's eloquent optimism stands in marked contrast to the angry tone Americans have been hearing on the campaign trail from his opponents. I welcome his call to action for us to work together to strengthen the middle class, create clean energy jobs, help responsible homeowners stay in their homes, protect the environment from toxins such as mercury and rebuild America's infrastructure. I will do everything I can to bridge the partisan divide and we can start right away by passing a bipartisan surface transportation bill that saves or creates millions of jobs."
 
    Senate Committee on Commerce, Science, and Transportation Chairman John D. (Jay) Rockefeller IV (D-WV) : "The President is absolutely correct to focus on reviving our nation's manufacturing sector. . . President Obama also addressed infrastructure development as one of the keys to creating jobs and spurring economic growth.  Our nation's transportation infrastructure is weakening by the day, roads and bridges are deteriorating, and the traveling public's lives are at stake.  It's critical we focus on making transportation safety a top priority, and with sound investments in our infrastructure we can do just that."
 
    Senate Energy & Natural Resources Committee Chairman Senator Jeff Bingaman (D-NM): "I thought President Obama laid out a very good blueprint for how we can accelerate economic growth in our country – to create jobs now and to lay the foundation for a strong economy for the next several decades.  I think it's important for us to focus on rebuilding manufacturing jobs in our country, and to develop a labor force that can do the work that needs to be done.  I also agree with the president that we need to focus on our own energy sources to meet our economic needs.  All of that, I think, is very positive and would be good for the country.  I hope the Congress will rise to the challenge and work with President Obama over the next several months."
 
    Access the White House listing of comments (click here). Access the complete statements by clicking on the underlines above. [#All]
 
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Tuesday, January 24, 2012

EIA 2012 Annual Energy Outlook Early Release Reference Case

Jan 23: The U.S. Energy Information Administration (EIA) issued the 2012 Annual Energy Outlook (AEO2012) Early Release Reference case, which provides updated projections for U.S. energy markets through 2035. In addition to a press release and tables that summarize the new projection, an Overview report is provided that addresses key findings and major changes in assumptions and results from the previous year's projection. The Early Release Overview specifically highlights the Reference case, which assumes no changes in current laws and regulations, thus serving as a starting point for analysis of potential policy changes or technology breakthroughs. The complete AEO2012, to be released this spring, will include many alternative cases in recognition of the uncertainty inherent in making projections about energy markets, which in part arises from assumptions about policies and other market drivers such as trends in prices and economic growth. Some key findings of the early report include:

Domestic crude oil production is expected to grow by more than 20 percent over the coming decade: Domestic crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net petroleum imports make up a smaller share of total liquids consumption: U.S. dependence on imported petroleum liquids declines in the AEO2012 Reference case, primarily as a result of growth in domestic oil production of over 1 million barrels per day by 2020, an increase in biofuel use of over 1 million barrels per day crude oil equivalent by 2024, and modest growth in transportation sector demand through 2035. Net petroleum imports as a share of total U.S. liquid fuels consumed drop from 49 percent in 2010 to 38 percent in 2020 and 36 percent in 2035 in AEO2012.

U.S. production of natural gas is expected to exceed consumption early in the next decade: The United States is projected to become a net exporter of liquefied natural gas (LNG) in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. The outlook reflects increased use of LNG in markets outside of North America, strong domestic natural gas production, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the United States compared to other global markets.

Use of renewable fuels and natural gas for electric power generation rises: The natural gas share of electric power generation increases from 24 percent in 2010 to 27 percent in 2035, and the renewables share grows from 10 percent to 16 percent over the same period. In recent years, the U.S. electric power sector's historical reliance on coal-fired power plants has begun to decline. Over the next 25 years, the projected coal share of overall electricity generation falls to 39 percent, well below the 49-percent share seen as recently as 2007, because of slow growth in electricity demand, continued competition from natural gas and renewable plants, and the need to comply with new environmental regulations.

Total U.S. energy-related carbon dioxide (CO2) emissions remain below their 2005 level through 2035: Energy-related CO2 emissions grow by 3 percent from 2010 to 2035, reaching 5,806 million metric tons in 2035. They are more than 7 percent below their 2005 level in 2020 and do not return to the 2005 level of 5,996 million metric tons by the end of the projection period. Emissions per capita fall by an average of 1 percent per year from 2005 to 2035, as growth in demand for transportation fuels is moderated by higher energy prices and Federal fuel economy standards. Proposed fuel economy standards covering model years 2017 through 2025 that are not included in the Reference case would further reduce projected energy use and emissions. Electricity-related emissions are tempered by appliance and lighting efficiency standards, State renewable portfolio standard requirements, competitive natural gas prices that dampen coal use by electric generators, and implementation of the Cross-State Air Pollution Rule.

    Other highlights of the AEO2012 Reference case projections:

  • World oil prices rise in the Reference case, as pressure from growth in global demand continues. In 2035, the average real price of crude oil in the Reference case is $146 per barrel in 2010 dollars. World liquids consumption grows from 87.1 million barrels per day in 2010 to 109.7 million barrels per day in 2035, driven by growing demand in China, India, the Middle East and other developing economies.
  • Total U.S. primary energy consumption, which was 101.4 quadrillion Btu in 2007, grows from 98.2 quadrillion Btu in 2010 to 108.0 quadrillion Btu in 2035. The fossil fuel share of energy consumption falls from 83 percent of total U.S. energy demand in 2010 to 77 percent in 2035.
  • Net imports of energy meet a declining share of total U.S. energy demand as domestic energy production increases. The projected net import share of total U.S. energy consumption in 2035 is 13 percent, compared with 22 percent in 2010 and 29 percent in 2007.

    EIA notes that the Reference case results shown in the AEO2012 Early Release will vary somewhat from those included in the complete Annual Energy Outlook (AEO) that will be released in spring 2012, because some data and model updates were not available for inclusion in the Early Release. In particular, the complete AEO2012 will include the Mercury and Air Toxics Standards issued by the U.S. Environmental Protection Agency (EPA) in December 2011; updated historical data and equations in the transportation sector, based on revised data from the National Highway Traffic Safety Administration (NHTSA) and the Federal Highway Administration; a new model for cement production in the industrial sector; a revised long-term macroeconomic projection based on an updated long-term projection from IHS Global Insight, Inc.; and an updated representation of biomass supply.

    One of the more interesting factors in the AEO2012 report is a substantial reduction in the estimate of recoverable shale gas in the U.S. The report indicates that, "Cumulative natural gas production from 2010 through 2035 in the AEO2012 Reference case is 7 percent higher than in AEO2011, even though the estimated natural gas resource base is lower. This primarily reflects increased shale gas production resulting from the application of recent technological advances, as well as continued drilling in shale plays with high concentrations of natural gas liquids and crude oil, which have a higher value in energy equivalent terms than dry natural gas. Production levels for tight gas and coalbed methane exceed those in the AEO2011 Reference case through 2035, making significant contributions to the overall increase in production. Offshore natural gas production in the Gulf of Mexico fluctuates between 2.0 and 2.8 trillion cubic feet per year as new large projects directed toward liquids development are started over time.

    "In the AEO2012 Reference case, the estimated unproved technically recoverable resource (TRR) of shale gas for the United States is 482 trillion cubic feet, substantially below the estimate of 827 trillion cubic feet in AEO2011. The decline largely reflects a decrease in the estimate for the Marcellus shale, from 410 trillion cubic feet to 141 trillion cubic feet. Both EIA and USGS have recently made significant revisions to their TRR estimates for the Marcellus shale. Drilling in the Marcellus accelerated rapidly in 2010 and 2011, so that there is far more information available today than a year ago. Indeed, the daily rate of Marcellus production doubled during 2011 alone. Using data though 2010, USGS updated its TRR estimate for the Marcellus to 84 trillion cubic feet, with a 90-percent confidence range from 43 to 144 trillion cubic feet -- a substantial increase over the previous USGS estimate of 2 trillion cubic feet dating from 2002. For AEO2012, EIA uses more recent drilling and production data available through 2011 and excludes production experience from the pre-shale era (before 2008). EIA's TRR estimate for the entire Northeast also includes TRR of 16 trillion cubic feet for the Utica shale, which underlies the Marcellus and is still relatively little explored. The complete AEO2012 publication will include a more in-depth examination of the factors that affect resource estimates."
 
    Sierra Club issued a release commenting on the AEO2012 reports assessment of coal-fired electricity which is projected to continue in a steady decline in 2012, which they say will opening market space for clean energy. Bruce Nilles, Senior Director of the Sierra Club's Beyond Coal Campaign said, "For many years the Energy Information Agency has exaggerated coal's prospects for the future, and every year has had to downgrade its projections. Today EIA again downgraded coal's future, though we know coal's future is even darker than EIA is predicting."
 
    Sierra Club noted that EIA projects that at least 33,000 megawatts worth of existing coal-fired power plants are expected to retire in the coming decades, not including any retirements due to the recently-finalized mercury and air toxics standard from U.S. EPA. Sierra Club cited for reference that an average-sized coal-burning power plant is approximately 500 megawatts. Coal's market share of U.S. electricity production is expected to continue to drop, from 44 to 39 percent. Last year's EIA report thought coal would fall from 48 to 44 percent between 2010 and 2035. No new coal plants are predicted to be constructed in the time period, beyond those few that are already under construction.
 
    In their release, Sierra Club indicated that while the EIA estimates that over the next 25 years approximately 33,000 megawatts of existing coal power will retire, they have identified over 38,000 megawatts of existing coal power that has retired or announced an upcoming retirement since January 2010 -- and more are expected soon. There are about 340,000 megawatts of coal in the United States as of January 2010. Nilles said, "Even today's EIA projections remain far too rosy for coal; we expect the vast majority of coal plants to be retired no later than 2030. We agree, however, with EIA's prediction that no new coal plants will break ground in the future because clean energy is more cost effective, and we expect even more coal plant retirements."

    Access an announcement (click here). Access complete information and the AEO2012 report (click here). Access a release from Sierra Club (click here). [#Energy]

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Monday, January 23, 2012

President Denies Keystone XL Pipeline; TransCanada Will Re-Apply

Jan 18: The Department of State (DOS) recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline [See WIMS 1/6/12] be denied and, that at this time, "the TransCanada Keystone XL Pipeline be determined not to serve the national interest." The President concurred with the Department's recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest. The Department emphasized that its denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

    In an announcement DOS indicated that since 2008, it has been conducting a "transparent, thorough, and rigorous review of TransCanada's permit application for the proposed Keystone XL Pipeline project." As a result of this process, particularly given the concentration of concerns regarding the proposed route through the Sand Hills area of Nebraska, on November 10, 2011, the Department announced that it could not make a national interest determination regarding the permit application without additional information. Specifically, the Department called for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska. The Department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter of 2013. DOS said, "In consultations with the State of Nebraska and TransCanada, they agreed with the estimated timeline."

    On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (the Act). The Act included a rider that provided 60 days for the President to determine whether the Keystone XL pipeline is in the national interest. DOS said the allotted time was "insufficient for such a determination."

    The President issued a brief statement on the DOS decision and said, "I received the Secretary of State's recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department's report, I agree. 
 
    This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security -- including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico -- even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment."

    The President issued a "Presidential Memorandum -- Implementing Provisions of the Temporary Payroll Tax Cut Continuation Act of 2011 Relating to the Keystone XL Pipeline Permit." In the Memorandum, the President indicates, "I have determined, based upon your recommendation, including the State Department's view that 60 days is an insufficient period to obtain and assess the necessary information, that the Keystone XL pipeline project, as presented and analyzed at this time, would not serve the national interest. . . I direct you to submit the report to the Congress as specified in section 501(b)(2) of the Temporary Payroll Tax Cut Continuation Act of 2011 and to issue a denial of the Keystone XL pipeline permit application."
 
    TransCanada Corporation the developer of the project issued a statement saying it had received the DOS decision that the Presidential Permit for Keystone XL had been denied. Russ Girling, TransCanada's president and chief executive officer said, "This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. We will re-apply for a Presidential Permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014." The company said it expects that consideration of a renewed application would make use of the exhaustive record compiled over the past three plus years.

    Girling continued saying, "Until this pipeline is constructed, the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela and other foreign countries who do not share democratic values Canadians and Americans are privileged to have.  Thousands of jobs continue to hang in the balance if this project does not go forward. This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed." TransCanada said it will continue to work collaboratively with Nebraska's Department of Environmental Quality on determining the safest route for Keystone XL that avoids the Sandhills. This process is expected to be complete in September or October of this year.

    TransCanada has committed to a project labor agreement with the Laborers International Union of North America, the International Brotherhood of Teamsters, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, the International Union of Operating Engineers and the Pipeline Contractors Association. The company said, "Any delay in approval of construction prevents this work from going to thousands of hard-working trades people. Girling added that TransCanada continues to believe in Keystone XL due to the overwhelming support the project has received from American and Canadian producers and U.S. refiners who signed 17 to 18 year contracts to ship over 600,000 barrels of oil per day to meet the needs of American consumers.

    Republican members of the House Energy and Commerce Committee issued a release on January 20, reaffirming their "commitment to getting the Keystone XL pipeline built despite President Obama's decision this week to reject the project. Members expressed their deep disappointment in the president's choice to say no to a project that would create tens of thousands of jobs and bring nearly a million barrels of secure oil to this country each day." Committee Chairman Fred Upton (R-MI) said, "We are absolutely committed -- as a Republican team -- to keep the Keystone XL pipeline on the front burner. The State Department has taken, as you know, over three years on this issue and we are ready for a green light and not a red light."

    The Committee will be holding a hearing this week with the State Department testifying. Members will discuss a bill introduced by Representative Lee Terry (R-NE) to take the pipeline decision out of the president's hands. H.R.3548, the North American Energy Access Act, would give the Federal Energy Regulatory Commission oversight of the pipeline's permit and instruct the agency to review and approve the pipeline application within 30 days, and to work in coordination with the State of Nebraska to review and approve the route and environmental review developed by the state. Rep. Terry said, "The American people want us to put aside politics and do what is right. It seems to me that it makes more sense that we let the experts on pipelines make decisions on whether this is a safe and sound pipeline, as opposed to a political entity worried about November elections."

    Ranking Member of the Committee Henry Waxman (D-CA) issued a brief statement saying, "Today, the Obama Administration rejected a dirty and dangerous tar sands oil pipeline, refusing to be bullied by the oil industry into approving the project in 60 days without even knowing where it would be built. Despite intense and misleading oil industry lobbying, Americans understand that what's good for the oil industry is not necessarily good for the American people. Keystone XL would boost tar sands development, which produces the dirtiest oil available, open up Asian markets to tar sands, and, if anything, increase gas prices. Keystone XL is a lose-lose proposition for energy security, gas prices, a safe climate, and a healthy environment."

    U.S. Chamber of Commerce President and CEO Thomas Donohue issued a statement indicating, "The President's decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business. By placing politics over policy, the Obama administration is sacrificing tens of thousands of good-paying American jobs in the short term, and many more than that in the long term. Donohue said, "It is dumbfounding that President Obama's decision to deny the Keystone XL pipeline permit ignores his own Council on Jobs and Competitiveness "Road Map to Renewal" report. Issued yesterday, it recommends that the United States step up its game on energy and construct pipelines to deliver fuel as a key component of our economic recovery. Just as troubling, the President's decision will make us more dependent on oil from foreign nations that don't share our interests. He's also saying no to improving our relationship with our reliable and friendly ally to the north, Canada. American workers and consumers should be outraged. They deserve better than this politically-motivated decision."

    Frances Beinecke, president of the Natural Resources Defense Council (NRDC) issued a statement saying, "The pipeline was rejected for all the right reasons. President Obama put the health and safety of the American people and our air, lands and water -- our national interest -- above the interests of the oil industry. His decision represents a triumph of truth over Big Oil's bullying tactics and its disinformation campaign with wildly exaggerated jobs claims. Rather than bringing America energy security, the pipeline would have transported dirty Canadian tar sands oil through America's heartlands -- for export to other countries.

    "A decision on the pipeline proposal requires nothing less than a thorough and fair-minded analysis of its full effects on our environment and climate. But the schedule forced upon the Obama administration -- a 60-day rush to judgment -- left insufficient time to conduct that assessment. Pipeline proponents preordained this outcome. If TransCanada reapplies, Keystone XL will still face the same valid public concerns and fierce opposition as the first time. No matter how many times it is proposed, Keystone XL is not in the national interest.''

    On January 18, NRDC issued a new report along with Oil Change International, a Washington, DC-based group dedicated to exposing the true cost of fossil fuels. The groups and report indicate that, "Existing Canadian pipelines in the United States are operating only at half-capacity now, making any new pipeline unnecessary, much less a 1,700-mile XL pipeline through America's heartlands that would threaten U.S. lands and waters." The report, Keystone XL Pipeline: Undermining U.S. Energy Security and Sending Tar Sands Overseas, and authors indicate that, "This pipeline would divert up to 800,000 barrels of oil a day from the Midwest to Latin America, Europe and other countries -- at a huge profit for the oil companies." They said, "Keystone XL will ship tar sands to refineries on the Gulf Coast, where currently a quarter of the refinery output is exported. Keystone XL does nothing for U.S. energy security but plenty to boost exports and tax-free profits for Big Oil."

    Access the DOS announcement (click here). Access the statement from the President (click here). Access the Presidential Memorandum (click here). Access the full text of the DOS press conference on the decision (click here). Access the release from TransCanada (click here). Access the TransCanada Keystone XL project website for additional information (click here). Access the release from the House GOP Energy and Commerce Committee and press conference video (click here). Access the statement from Rep. Waxman (click here). Access the statement from the U.S. Chamber (click here). Access the 72-page Council on Jobs and Competitiveness Report (click here). Access the statement from NRDC (click here). Access a release and link to the report from NRDC, et al (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here). [#Energy/Pipeline, #Energy/KXL, #Energy/OilSands, #Energy/TarSands]
 
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