GOP & DEMS Trade Reports & Barbs On Gas Prices At Hearing

May 24: The House Committee on Oversight &  Government Reform, Chaired by Darrell Issa (R-CA) with Ranking Member Elijah Cummings (D-MD), held a hearing entitled, "Pain at the Pump: Policies that Suppress Domestic Production of Oil and Gas." The hearing featured testimony from U.S. EPA Administrator Lisa Jackson and David Hayes, Deputy Secretary U.S. Department of Interior (DOI). Additionally, Chairman Issa released a 43-page report entitled, Rising Energy Costs: An Intentional Result of Government Action; and, Ranking Member Cummings released a Democratic staff report entitled, Real Help for American Consumers: Who's Profiting at the Pump?

 

    Administrator Jackson testified, "As a matter of geology, America will never control more than a tiny fraction of the world's oil supply.3 America cannot prevent gasoline and diesel prices from rising when global supplies are constrained and world demand for oil is steady or increasing. Still, there are benefits to being less reliant on oil imports. Last year, American oil production

reached its highest level since 2003, and this Administration supports increasing safe and responsible oil production here at home. . ."

 

    Jackson said, "We can mitigate the impact of high fuel prices on American families and businesses by enabling them to travel the same distances and conduct the same commerce on less gasoline and diesel. The fuel efficiency standards that EPA and the Department of Transportation established last year for new cars and light trucks will save the average American driver three thousand dollars over the life of the car and conserve 1.85 billion barrels of oil over the life of vehicles of Model Years 2012 through 2016. The Administration will soon issue similar standards for heavy-duty vehicles of Model Years 2014 through 2018 and is designing ones for cars and light trucks of Model Years 2017 through 2025."

 

    DOI's Hayes testified that, "President Obama has said that 'we cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.' At the Department, we are working to expand cleaner sources of energy, including renewables like wind, solar, and geothermal, as well as clean coal and natural gas on public lands. . . Last year, America produced more oil than at any time since 2003."

 

    Hayes continued providing testimony on: Measures to Facilitate Development; Incentives for the Prompt Development of Oil and Gas Leases; Tools for the Federal Government to Oversee Offshore Oil and Gas Development Activities on a Timely and Effective Basis; Ensuring a Fair Return for American Taxpayers and Accountability for Safety Violations and Oil Spills; Necessary Reforms for Offshore Development; Onshore Development: Restoring Balance to the Process; and Improving Our Regulatory Programs.

 

    Chairman Issa indicated that the Republican report highlights evidence that the statements by President Obama and Energy Secretary Chu about "intentionally raising energy costs for Americans" can be seen across the federal government: from blocking production in the Gulf of Mexico, to hindering "fracking" technology, and stifling oil and gas production on public lands. He said, "The most troubling things about outlandish statements made by key Obama Administration officials about the need to raise energy costs is that when we examined the evidence, they appear to reflect the agenda they are pursuing. These are obviously not the policies Americans want or support." He outlined the key of the report as follows:

• Key Obama Administration figures have expressed a belief that Americans should pay more for energy – a pattern of actions shows the Administration is, in fact, pursuing an agenda to raise the price Americans pay for energy.
• While the Administration touts nascent "green" energy technologies, U.S. domestic energy resources are currently the largest on earth -- greater than Saudi Arabia, China and Canada combined.
• Recent Administration action has already led to significant cost and regulatory barriers that have limited domestic production of oil.
• EPA has collaborated with environmental groups to target independent energy producers for environmental concerns not related to their operations.
• Some green energy sources the Administration is promoting at the expense of expanded domestic oil, gas, and coal supplies create unintended environmental, security and economic consequences.

    Ranking Member Cummings called on Chairman Issa to work with him to investigate the growing impact of excessive oil speculation on high gas prices. He released the Democratic staff report which finds that, "Addressing excessive speculation offers the single most significant opportunity to reduce the price of gas for American consumers." He said the report's "chief conclusion" is that, in order to make the most significant impact on lowering gas prices, the Committee's primary focus should be on countering the growing impact of excessive speculation, rather than pursuing the oil industry's priorities of increasing domestic drilling or repealing safety measures put in place after the devastating BP oil spill." Major findings of the 31-page Democratic report include:

• Excessive oil speculation could be inflating gas prices by as much as 30%.
• Efforts to expand domestic drilling or eliminate safety measures put in place after the devastating BP oil spill would have a negligible impact on gas prices, potentially saving only pennies per gallon even after several decades
• Despite claims of a "permitorium," or a de facto moratorium on drilling in the Gulf, the reality is that the Administration has approved 14 deepwater drilling permits, 55 shallow water permits, and two new exploration plans since the BP oil spill. Initial delays in obtaining permits were a result of efforts to develop technology to prevent and contain the same type of blowout that caused the BP oil spill.
• Despite the worst economic crisis since the Great Depression, oil companies have continued to make the highest profits of any industry in the world. 
• OMB estimates that eliminating unnecessary tax subsidies could save more than $43 billion over the next ten years

    Access the GOP hearing website for links to testimony and related information (click here). Access the DEMS hearing website for links to testimony and related information  (click here). Access an overview and link to the complete GOP report (click here). Access an overview and link to the complete DEMS report (click here). [*Energy/Gasoline]

 

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House Hearing & Major Debate Over U.S.-Canada Keystone XL Pipeline

May 23: The House Energy and Commerce Subcommittee on Energy and Power, Chaired by Representative Ed Whitfield (R-KY), is holding the eighth day of its hearings on the "American Energy Initiative" today. The hearing began at 3:00 PM and will focus on the discussion draft of legislation -- the "North American-Made Energy Security Act". The draft legislation aims to bring more North American oil supplies online by expediting the consideration of the Presidential Permit for the Keystone XL pipeline expansion [See WIMS 4/26/11]. The draft legislation requires the President to issue a Presidential Permit decision no later than November 1, 2011. According to a Republican release the completion of the Keystone pipeline extension would more than double the current system's capacity, bringing 1.29 million barrels per day to into U.S. markets. 
 

    Witnesses scheduled to testify at the hearing include representatives from: Alberta Energy Resources Conservation Board; Murray Smith & Associates; TransCanada; United Association of Plumbers and Pipefitters; IHS Cambridge Energy Research Associates; and National Wildlife Federation. 
   

    On May 20, in anticipation of a hearing today on the draft legislation to expedite federal approval of the pipeline project, Representatives Henry Waxman (D-CA), Ranking Member of the Energy and Commerce Committee, and Bobby Rush (D-IL), Ranking Member of the Subcommittee on Energy and Power, sent a letter urging the Committee to request documents from Koch Industries relating to the company's interest in Canadian tar sands and the extent to which it will benefit if the Keystone XL pipeline is constructed.

 

    The letter to full Committee Chairman Fred Upton (R-MI) and Subcommittee Chairman Whitfield, which references several related documents, indicates that, "According to Reuters, Charles and David Koch, the owners of Koch Industries, are 'positioned to be big winners if Keystone XL pipeline is approved' and would receive 'great financial opportunity.' Publicly available information indicates that the company is involved in several aspects of Canadian tar sands development. Koch's Pine Bend Refinery in Minnesota currently processes roughly 25% of the tar sands fuel imports to the United States. Koch owns Flint Hills Resources, LLP, in Calgary, Canada, which is 'among Canada's largest crude oil purchasers, shippers and exporters.' Flint Hills Resources also operates a crude oil terminal in Hardisty, Alberta, where the Keystone XL pipeline will begin. According to the Government of Alberta, Koch Industries has both proposed and producing tar sands projects in the province. The Oil Sands Developers Group also indicates that Koch is a tar sands project developer. Koch's Corpus Christi refinery is positioned near the end of the proposed Keystone XL pipeline and would be a potential buyer for the tar sands crude shipped through the pipeline."

 

    Waxman and Rush said, "In light of these reports, we asked our staff to contact Koch Industries to learn more about the company's role in the Keystone XL pipeline and Canadian tar sands.  Yesterday, our staff spoke with representatives of the company.  In that conversation, the Koch representatives would not answer questions about Koch's investments in Canadian tar sands. The Koch representatives said that the Keystone XL pipeline has 'nothing to do with any of our businesses' and that Koch had 'no financial interest' in the pipeline. They also stated that the company neither supports nor opposes the legislation we will be considering. . . 

 

    "However, Koch's representatives refused to answer questions about Koch's activities or interests in the Canadian tar sands.  They refused to confirm or deny reports that the company is developing tar sand projects. They also refused to say whether Koch Industries owns -- through a wholly owned subsidiary -- a terminal involved in the tar sands business." They said, "There appears to be a significant discrepancy between the published reports that Koch Industries would be 'big winners' if the pipeline is approved and the statement of the Koch representatives that the pipeline has 'nothing to do' with Koch's businesses. We do not presume that Koch's representations are inaccurate. But we were dismayed by the company's lack of candor in responding to staff's questions and believe additional inquiry is warranted." The Democratic Representatives requested that the Committee request a number of listed documents regarding the Koch brother involvement or interests in the Keystone XL pipeline project.

 

    The American Petroleum Institute (API) issued a statement in advance of the hearing saying the "bipartisan" legislation that would approve the Keystone XL Pipeline by November 1, is "an important driver of U.S. economic growth and job creation." API Executive Vice President Marty Durbin said, "U.S. jobs supported by Canadian oil sands development could grow from 21,000 jobs today to 465,000 jobs by 2035. The Keystone XL pipeline has undergone extensive analysis and review over the last two years and it is time to focus efforts on creating jobs and strengthening our relationship with America's number one source of imported oil: Canada. Nearly 1000 U.S. businesses in 47 states already provide services, materials or equipment to Canada in support of oil sands development," said Durbin. "A recent survey of Americans showed that 85 percent believe that U.S. government policies should support the use of oil from Canada's oil sands. Other countries are looking out for their energy futures. The U.S. needs to as well." API also thanked U.S. Reps. Lee Terry (R-NE) and Mike Ross (D-AR) for their bipartisan support.

 

    Charles Drevna, President, National Petrochemical & Refiners Association (NPRA) also wrote and op-ed indicating in part, ". . .our good neighbor to the north is offering to sell us more oil taken from oil sands in Western Canada that would benefit the American people by strengthening our economic and national security and by creating desperately needed jobs for American workers. According to a study by the Canadian Energy Research Institute, more than 342,000 new U.S. jobs are likely to be created directly and indirectly between 2011 and 2015 because of Canadian oil sands development. In part this is because much of the money Americans send to Canada to buy oil is spent by Canadians on U.S. goods and services. All that's needed is U.S. State Department approval for the construction of the Keystone XL pipeline, which would act as a superhighway to bring oil from Alberta to our country . ."

 

    Peter Lehner, Executive Director, Natural Resources Defense Council issued a statement saying, "Tar sands oil is dirty and destructive, and the proposed Keystone XL tar sands oil pipeline won't reduce gas prices. Instead, this pipeline will perpetuate our dependence on oil, with all its attending problems of climate change and high energy costs. Given the major consequences involved in locking ourselves into tar sands oil, this pipeline should not be rushed -- not through an expedited State Department process or through legislation. And yet recently the State Department issued a supplemental environmental review after the EPA deemed its first round inadequate. Unfortunately, the department failed once again to do its homework and only gave superficial treatment to serious questions of need, greenhouse gas emissions, pipeline safety, environmental justice around refineries, and alternative routes to the current proposal to cross the Ogallala Aquifer -- the source of freshwater for eight states. The department only gave 45 days for public comment and has completely disregarded the many requests from farmers and landowners for hearings . ."

 

    Access the hearing website for links to the draft legislation, a background memo, and witness testimony following the hearing (click here). Access the letter from Reps. Waxman and Rush (click here). Access the statement from API (click here). Access a number of statements for and against the XL project, including those from the NRDC and NPRA, posted on the National Journal Energy & Environment Experts blog (click here). Access the 4/22/11 FR announcement on the Supplemental Draft Environmental Impact Statement  (click here). Access the State Department Keystone Project website for complete information (click here). [*Energy/TarSands]

 

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EPA Issues Final Rule On GHG CBI Determinations

May 19: U.S. EPA issued final confidentiality business information (CBI) determinations for data elements to be reported under 34 subparts of the Greenhouse Gas Reporting (GHG) Rule. In the action, EPA also amended the regulations that govern the handling procedures for data collected under the Clean Air Act (CAA). EPA said the action does not include data elements that are inputs to emission equations. The Subparts, which refer to specific industrial sectors and operations, covered by the final action include: A,C, D, E, F, G, H, K, N, O, P, Q, R, S, T, Y, V, X, T, Z, AA, BB, CC, EE, FF, GG, HH, II, LL, MM, NN, OO, PP, and TT. The final confidentiality determinations and amendment to 40 CFR 2.301 will be published in the Federal Register soon. In the meantime a prepublication copy is available (See link below).

 

    The final rule which will become effective 60-days following publication indicates that, "This action finalizes the confidentiality determinations for certain data elements required to be reported under the Mandatory Greenhouse Gas Reporting Rule. This action also finalizes amendments to the Special rules governing certain information obtained under the Clean Air Act, which authorizes EPA to release or withhold as confidential reported data under the Mandatory Greenhouse Gas Reporting Rule according to the final determinations for such data without taking further procedural steps. This action does not include final confidentiality determinations for data elements that are in the 'Inputs to Emission Equations' category."

 

    According to a fact sheet, in addition to finalizing confidentiality determinations for data elements to be reported under 34 subparts of the GHG Reporting Program, the action:

• Delineates which data elements can be released to the public and which ones will be treated as confidential.
• Is also amending the regulations that govern EPA's handling of information obtained under the Clean Air Act. The amendments allow EPA to release or withhold as CBI data elements according to these final confidentiality determinations.
• Is not [emphasis in original] making final confidentiality determinations for data elements that are "Inputs to Emission Equations." In December 2010, EPA proposed to defer reporting of "Inputs to Emissions Equations" so that EPA can obtain and review additional information to resolve issues related to reporting and public availability of data elements that are "Inputs to Emission Equations."
• Is not [emphasis in original] making final confidentiality determinations for the data elements to be reported under eight subparts. EPA plans to re-propose confidentiality determinations for the data collected under these eight subparts.

    EPA indicated that it typically makes confidentiality determinations under the Clean Air Act (CAA) on a case-by-case basis. However, due to the large numbers of entities expected to report under the Greenhouse Gas Reporting Program (over 13,000) and the large number of data reporting elements (over 1,900), EPA concluded that case-by-case determinations would not result in a timely release of non-confidential data. As a result, EPA said it:

• grouped data elements into data categories and generally made confidentiality determinations on a category basis.
• evaluated the data reporting elements to determine which data elements are "emission data" and, therefore, are not eligible for confidential treatment.
• (for the remaining data elements), evaluated whether the data elements qualify for confidential treatment. In particular, EPA evaluated whether the data are already publicly available and whether the release of the data would be "likely to cause substantial harm to the reporting business's competitive position.
• solicited comment on the proposed determinations during a 60-day public comment period and addressed those comments in this final action.
• And, for a list of the data elements along with the corresponding final confidentiality determinations, EPA issued a memorandum "Final Data Category Assignments and Confidentiality Determinations for Part 98 Reporting Elements" (See the link below).

    Access the EPA Confidentiality Determinations for Part 98 Data website for link to all related information and background (click here). Access the prepublication copy of the final rule (click here). Access a fact sheet on the final rule (click here). Access the EPA memorandum (click here). Access more information on EPA's Greenhouse Gas Reporting Program (GHGRP) including guidance and a schedule of training opportunities (click here). [*Air, *Climate]

 

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NRC Releases Unredacted Yucca Report To Congressional Members

May 17: Back in February, Republican members of the Science, Space, and Technology Committee called on the Nuclear Regulatory Commission (NRC) to release for public review information related to its scientific and technical evaluation of the Yucca Mountain nuclear waste repository. In particular, the letter requests Volume III of the NRC's Safety Evaluation Report Related to Disposal of High-Level Radioactive Wastes in a Geologic Repository at Yucca Mountain, Nevada. The report was planned for release last year and was delivered to the NRC Office of Nuclear Material Safety and Safeguards in July 2010 for final approval and publishing, but has yet to be released by the Commission. In addition, the members requested answers to a number of questions about the Yucca Mountain site.

 

    On May 17, Committee Chairman Ralph Hall (R-TX) released an April 28, 2011, letter from NRC Chairman Gregory Jaczko. In the letter Jaczko explains that despite his reservations, a majority of the Commission is willing to provide unredacted copies in response to Congressional Committee requests provided that they are held in confidence. Jaczko said that, "Even my colleagues and I have not had access to the redacted portions of SER Volume III." He said the findings and conclusions in the document are preliminary and "The staff's preliminary findings may turn out to be incorrect or incomplete. As such, they can mislead or confuse the public." He indicated that the document was being released "with the request that you and your staff will respect the potential adverse impact of public release and safeguard this information accordingly."

 

    In response to a question stating: "In October, you noted "No specific actions have yet been taken to terminate the program." Since then, what specific actions have been taken or will be taken to terminate review of the license application, including all actions related to Staff review of the application?"

 

    Jaczko responded, "As explained in my response to an earlier letter on the matter (attached), at the beginning of the new fiscal year, the staff began the process of transitioning to close-out of the Yucca Mountain program consistent with Commission policy, the general principles of appropriation law, and applicable guidance from the Office of Management and Budget and the Government Accountability office on expenditure of funds under continuing resolutions. At that time, the staff began the process of documenting and preserving the staff's review, including the development of a technical evaluation report (TER). The agency will continue and conclude these close-out activities consistent with the recently enacted Fiscal Year 2011 appropriations law."

 

    Access the 3-page Jaczko letter to Rep. Hall (click here). Access links to related Science Committee releases on the Yucca Mountain issue (click here). [*Haz/Nuclear, *Energy/Nuclear]

 

WIMS Environmental News Blogs - On April 20, 2011, WIMS launched its new network of 24/7 Environmental News Blogs. The first phase of the launch includes the following news blogs: (see news release)

·         White House News; Congressional News; Federal Agencies News; Industry News;
Enviro Group News; Air Quality News; Hazardous Waste News; and Transportation News

DEMS Fail To End Oil Subsidies; GOP Fails In Call For More Drilling

May 17: As expected, the Senate Democrats' effort to end the tax subsidies for the five big oil companies -- the Close Big Oil Tax Loopholes Act, S. 940 -- was defeated by a 52-48 vote due to the Senate rule that required a 60-vote majority to move the bill forward [See WIMS 5/17/11]. Two Republicans, Snowe (R-ME) and Collins (R-ME) voted with the Democrats; while three Democrats -- Begich (D-AK), Landrieu (D-LA) & Nelson (D-NE) -- voted with Republicans to defeat the measure.

    Senator Majority Leader Harry Reid (D-NV) issued a brief statement saying, "Republicans would rather cut college scholarships, slash cancer research and end Medicare than take away taxpayer-funded giveaways to oil companies that are raking in billions in profits. That tells you everything you need to know about their priorities. We could have cut our deficit by $20 billion today, but Republicans defended oil companies instead. This is exactly the kind of wasteful spending we should be cutting. Democrats are not going to stop trying to end these wasteful taxpayer giveaways. I hope next time my Republican colleagues will put America's seniors, students and middle-class families ahead of oil companies."

 

    The White House Press Secretary issued a statement following the vote saying, "It is disappointing that at a time when oil companies are posting near record profits, Republican Leadership in the Senate led an effort to protect billions of dollars in tax breaks for the oil and gas industry that even oil and gas CEO's in the past have admitted are unwarranted and unnecessary. The bottom line is that there are more responsible ways to spend tens of billions of federal dollars, including investments that will help protect American consumers from high gas prices. The vote today -- with support from over half the U.S. Senate -- is an important step towards repealing these unwarranted subsidies for the oil and gas industry. The Administration will continue to pursue this important reform."

 

    Democrats indicated the battle over ending oil company subsidies was not over and vowed to make it part of the upcoming debate over raising the U.S. debt ceiling. Senator Robert Menendez (D-NJ)the sponsor of S.940 said following the vote, "A bipartisan majority of the Senate has spoken. If we are going to reach a deal on raising the debt ceiling, cutting wasteful oil subsidies needs to be on the table. We cannot reduce the deficits on the backs of working class Americans alone.  Even the most wealthy and powerful among us must pay their fair share."

 

    Senate Republican Leader Mitch McConnell (R-KY) delivered a speech on the Senate floor this morning discussing the vote on S.940 last evening and in support of the upcoming vote this afternoon on S.953, the Offshore Production & Safety Act of 2011, which he sponsored with 22 cosponsors. Like the Democrats' bill, the Republican bill was also defeated for a lack of 60 votes. The final vote on the bill, which was just completed at about 2:55 PM today was 42-57. The details of the roll call vote will be posted in about an hour (see link below).

 

    Sen. McConnell said, "Last night, Senate Democrats put forth a plan to raise taxes on American energy that, in their own words, would have done nothing to lower the price of gas at the pump. As the Chairman of the Finance Committee put it, `That's not the issue.' Well, I think that for most Americans high gas prices actually is the issue. . . Americans are struggling. My constituents in Kentucky are hurting. They want relief. And all they're getting from Democrats in Washington is a dog and pony show. . .

    "They spent a week vilifying the energy industry and another week trying to punish them. The legislation they proposed yesterday would have done three things: destroy jobs, send American jobs overseas, make us more dependent on foreign sources of oil. And Democrats themselves admit it wouldn't lower gas prices by a penny. . . I would suggest that Democrats spend a little bit more time looking at the price of gas at their local gas stations than at the latest polling numbers about class warfare rhetoric. . .

    "Our plan has three objectives: "First, to restore American offshore production. Second, to improve safety. Third, to require bureaucrats in Washington to get to work on the permitting process, to make a decision one way or the other. And it would have three corresponding effects: First, and most importantly, our plan would help reduce the price of gas at the pump. By unlocking our own domestic resources, and speeding up the permitting process, our plan would actually do something to increase supply, putting downward pressure on price. . . And it would create thousands of energy jobs in America, instead of sending them overseas, which is why this bill has the support of both the National Association of Manufacturers and the U.S. Chamber of Commerce. . ."

    Senator McConnell said that S.953 would directs the Secretary of the Interior to conduct previously scheduled offshore lease sales in the Western and Central Gulf of Mexico, Virginia, and Alaska. In addition, the plan will extend lease terms by one year for Gulf leases which were suspended under the 2010 Obama Moratorium. The bill establishes a public/private task force on oil spill response and mitigation, and orders a study on Federal response to oil spills by the Comptroller General to examine capabilities and legal authorities related to spill prevention and response to clarify appropriate Federal roles. Finally, the bill puts time limits on the review of and decision on drilling permits, providing for 30 days of application review with two opportunities for the Interior Department to extend the time period. Beyond that, it provides for default approval if Interior doesn't reject the application within 60 days. Additionally, it directs the Interior Department to provide rationale for rejection of permits.

    Access the roll call vote for S.940 (click here). Access the statement from Sen. Reid (click here). Access the statement from the White House (click here). Access the statement from Sen. Menendez (click here). Access the statement from Sen. McConnell (click here). Access the roll call vote for S.953 (click here, posted soon). Access legislative details for S.940 (click here). Access legislative details for S.953 (click here). [*Energy/Tax]

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Senate Attempt To Eliminate Big Oil Subsidies Defeated

6:50 PM: The Senate vote on S.940 to eliminate big oil tax subsidies was defeated on a vote of 52-48. 60 votes were necessary to move the item forward. Roll call vote should be posted soon (click here).

Senate Showdown On Big Oil Tax Subsidies Today

May 17: The showdown on big oil tax subsidies is scheduled to take place in the U.S. Senate this evening as Senators prepare to vote on the Close Big Oil Tax Loopholes Act, S. 940 -- legislation that would eliminate $21 billion of tax loopholes over the next decade for the five largest oil companies. On May 10, a group of Democratic Senators, led by Senator Robert Menendez (D-NJ), announced the legislation which they said would "finally put an end to the unfair tax subsidies that only benefit Big Oil's bottom line and CEOs." [See WIMS 5/10/11]. The bill proposes to use the $21 billion over 10 years in savings realized to be applied to deficit reduction.

 

    The call for ending the subsidies and the legislation have caused intense debate between Democrats and Republicans, as well as between industry and environmental groups over the last several weeks. On April 30, President Obama used his weekly address to call for an end to at least $4 billion annually in taxpayer subsidies to oil and gas companies. He said, "we can afford to do without, these tax giveaways aren't right. They aren't smart. And we need to end them. . ." [See WIMS 5/2/11]. House and Senate Republican leaders have indicated there complete disagreement, calling the proposal an energy tax increase, and said they will not vote to end the subsidies [See WIMS 4/29/11].

 

    On May 12, the Senate Committee on Finance, Chaired by Max Baucus (D-MT) with Ranking Member Orrin Hatch (R-UT) held a hearing on Oil and Gas Tax Incentives and Rising Energy Prices and heard testimony from the CEO's of the Big Oil companies --BP, Exxon, Shell, Chevron, and ConocoPhillips [See WIMS 5/12/11]. The CEO's testified that, "More domestic supply, along with aggressive measures to use energy more wisely, is one of the most effective ways to counter rising energy prices, enhance our energy security and stimulate economic growth. Tax increases on the oil and gas industry – which will result if you change long-standing provisions in the U.S. tax code – will hinder development of energy supplies needed to moderate rising energy prices. It will also mean fewer dollars to state and federal treasuries…and fewer jobs -- all at a time when our economic recovery remains fragile and America needs all three." They said the tax changes under consideration are "misinformed and discriminatory" will "discourage future investment" will "undercut job creation and economic growth" and would "do nothing to help reduce prices."

 

    On May 13, the U.S. Congress Joint Economic Committee, Chaired by Senator Bob Casey (D-PA) released a 9-page report entitled, End Tax Breaks For Big Oil: Reduce the Federal Deficit Without Increasing Prices At The Pump. According to the report, "Critics of repealing these subsidies argue that the targeted tax breaks spur production and lower energy prices. In reality, most of the so‐called incentives have no impact on near‐term production decisions, and thus repealing them would have no effect on consumer energy prices in the immediate future. Even in the longer term, the current proposed changes to these tax provisions would have little impact on global production and a negligible effect on consumer energy prices. More importantly, these subsidies failed to prevent spikes in the price of gasoline, such as the spike that occurred in 2007‐08. At the same time, these tax breaks may have discouraged investment in other industries, including alternative energy sources or energy efficiency, by distorting the effective tax rate on investments in oil and natural gas."

 

    The American Petroleum Institute (API) Vice President of Regulatory and Economic Policy Kyle Isakower criticized the study and said, "This study was neither accurate nor insightful. Annually raising taxes on the industry by billions of dollars would reduce investment in American oil and natural gas development, cost thousands of U.S. jobs, and, over time, reduce both energy production and the taxes and royalties generated from it. It would also increase imports. We wouldn't reduce the deficit, and necessary government investments could be adversely affected. Those advocating tax increases, therefore, would be cutting off their nose to spite their face."

 

    Meanwhile, the Republican staff of the Joint Economic Committee released a study yesterday (May 16) saying, "A weak U.S. dollar due to the Federal Reserve's unprecedented pumping of dollars into the American economy is adding 56 and a half cents* to the price of every gallon of gasoline, according to a new study by the Joint Economic Committee Republican staff. Titled The Price of Oil and the Value of the Dollar, the study notes the value of the U.S. dollar has declined 14 percent since the Federal Reserve began its program of quantitative easing in November of 2008. With oil an international commodity that trades in U.S. dollars, the declining value of the dollar has added $17.04 per barrel to the price of Brent Crude oil. Crude oil is the primary input in the process of making gasoline.

 

    In advance of the expected vote today, Senate Democrats released a video and a series of statements from Republican Senators from the past few years showing their previous support for repealing subsidies for oil companies. Among the statements are: Senator Snowe (R-ME), "Snowe: Subsidies Are "Unnecessary" And "Reckless"; Senator Thune (R-SD), "If In Fact They Are Making Such Enormous Profit, Perhaps They Don't Need The Support Of The Tax Incentives That Are Given To Them By The American Taxpayer"; Senator Collins (R-ME), We Should Not "Continue to Subsidize The Oil And Gas Industry."

   

    Yesterday on the Senate floor, Majority Leader Harry Reid (D-NV) said, ""The bonus checks taxpayers are writing to Big Oil are absurd and obscene. They defy common sense. Big Oil isn't hurting. It doesn't need a hand. In the first three months of this year, the oil industry made $36 billion in profits alone. Not revenues -- profits. That's $12 billion a month.  That's $3 billion a week.  That's pretty good money. Meanwhile, the American taxpayer is giving these same successful companies $4 billion a year. . . The people who want to keep giving their Big Oil buddies four billion taxpayer dollars a year are the same ones who want to take the social safety net away from the sick, seniors and the poor. These people kick and scream about investing in cancer research, or protecting student loans that help so many afford the rising costs of college. But ask them to recognize the absurdity of giving Big Oil taxpayer money it doesn't need, and they cover their eyes and plug their ears. . ."

 

    Today, Senate Republican Leader Mitch McConnell (R-KY) responded to the Democrats with his own floor statement. He said, "Instead of actually doing something about high gas prices, our Democratic friends staged what one of my Republicans colleagues accurately described as a dog and pony show [referring to the Senate hearing with big oil CEOs]. They rounded up what they believed were a few unsympathetic villains who they could blame for high gas prices, hoping nobody would notice they don't have a plan of their own to deal with them. . . Blame this crisis on somebody else -- and then see if they can't raise taxes while they're at it. . . symbolic votes like this that aim to do nothing but pit people against each other will only frustrate the public even more. "Americans aren't interested in scapegoats. They just want to pay less to fill up their cars. . . Over the past two years, the President has mounted nothing short of a war on American energy, cancelling dozens of leases, imposing a moratorium off the Gulf Coast, arbitrarily extending public comment periods, and increasing permit fees. On the crucial issue of permits, the administration has held them up in Alaska, the Rocky Mountain West, and particularly offshore. . ."

 

    Because Senate Republicans threatened to conduct a "silent-filibuster" if Senator Reid attempted to bring the bill to the floor, he filed a cloture motion on Monday evening on the legislation, which means it could come to a vote at 6:15 PM. Insiders do not expect the bill to get the required 60 votes to pass. Most Republicans and some Democrats including Senator Mary Landrieu (D-LA), are opposed to the bill. In a May 11, floor speech Sen. Landrieu indicated she was strongly opposed to the Menendez and said, "Of the $16.6 billion spent on U.S. energy subsidies over the course of one year, fuels such as renewables, refined coal nuclear, solar and hydro account for more than 85%. You would think, because of this bill, that the big oil and gas companies are getting all the subsidies, making all the profits, paying no taxes, and the rest are suffering. Nothing could be further from the truth. So, why are we doing it? Will it create jobs? No."

 

    Access legislative details for S.940 (click here). Access the complete Democratic Economic Committee report (click here). Access the API release on the study (click here). Access the complete Republican Economic Committee report (click here). Access the Senate Democrats release on previous Republican statements (click here). Access the floor statement from Sen. Reid (click here). Access the floor statement from Sen. McConnell (click here). Access the statement from Senator Landrieu (click here). Access a lengthy analysis of big oil tax subsidy issue from the Center for American Progress (click here).[*Energy/Tax]

 

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Blue Ribbon Commission Draft Recommendations On Nuclear Energy

May 13: The President's Blue Ribbon Commission (BRC) on America's Nuclear Future held a day-long meeting in Washington, DC, and released its draft recommendations from subcommittees on: Reactor & Fuel Cycle Technology; Disposal of Nuclear Waste; and Transportation and Storage of Nuclear Waste. The actions follows last week's May 10 release of the Government Accountability Office's (GAO's) 80-page report entitled, Commercial Nuclear Waste: Effects of a Termination of the Yucca Mountain Repository Program and Lessons Learned (GAO-11-229, April 08, 2011) [See WIMS 5/11/11], and recent Congressional investigations and debates between Republicans and Democrats on nuclear energy and nuclear waste disposal [See WIMS 5/5/11].

 

    The BRC was established in accordance with the provisions of the Federal Advisory Committee Act (FACA), and as directed by the President's Memorandum for the Secretary of Energy dated January 29, 2010: Blue Ribbon Commission on America's Nuclear Future. The Commission is organized under the authority of the U.S. Department of Energy (DOE). The draft recommendations respond to questions presented to the three subcommittees. The BRC was co-chaired by: Lee Hamilton, former Democratic U.S. Representative from Indiana from January 1965-January 1999; and, Brent Scowcroft, a Republican who served as the National Security Advisor to both Presidents Gerald Ford and George H.W. Bush. Thirteen additional members included former Senators Chuck Hagel (R-NE); and Pete Domenici (R-NM) and long-time chair of the Senate Energy & Natural Resources Committee; John Rowe, CEO of Exelon Corporation; MIT Physics Professor Ernie Moniz and others.

 

    The Technology subcommittee addressed the question: "to evaluate existing fuel cycle technologies and R&D programs in terms of multiple criteria. Criteria for evaluation should include cost, safety, resource utilization and sustainability, and the promotion of nuclear nonproliferation and counterterrorism goals; and will any of the technologies "have the potential to change the fundamental nature of the nuclear waste management challenge we confront over the next several decades." The draft recommendations indicate that the, "technologies may hold promise for achieving substantial benefits," research should continue, but, "No currently available or reasonably foreseeable reactor and fuel cycle technologies including current or potential reprocess or recycle technologies have the potential to fundamentally alter the waste management challenge this nation confronts over at least the next several decades."

    The Transportation subcommittee addressed the question: "Should the United States change its approach to storing and transporting spent nuclear fuel (SNF) and high-level radioactive waste, while one or more permanent disposal facilities are established?" The draft recommendations indicate that, "The United States should proceed expeditiously to establish one or more consolidated interim storage facilities as part of an integrated, comprehensive plan for managing the back end of the nuclear fuel cycle" and, "there do not appear to be unmanageable safety or security risks associated with current methods of storage at existing sites."

 

    The Disposal subcommittee addressed the question: "How can the United States go about establishing one or more facilities for permanently disposing of high-level nuclear wastes in a manner and within a timeframe that is technically, socially, economically, and politically acceptable?" The draft recommendations indicate in part that, "The United States should proceed expeditiously to

develop one or more permanent deep geological facilities for the safe disposal of high-level nuclear waste. Permanent disposal is needed under all reasonably foreseeable scenarios. Geologic disposal in a mined repository is the most promising and technically accepted option available for safely isolating high-level nuclear wastes for very long periods of time."

 

    Additionally, the Disposal subcommittee recommended, "A new, single-purpose organization is needed to develop and implement a focused, integrated program for the transportation, storage and disposal of nuclear waste in the United States. . . siting processes for all such facilities are most likely to succeed if they are: (1) consent-based; (2) transparent; (3) phased; (4) adaptive; and (5) standards- and science-based." The subcommittee also said that the Nuclear Waste Technical Review Board "should be retained as a valuable source of independent technical advice and review."

 

    Even before the draft recommendations were officially released, they received immediate, harsh criticisms from Republicans. House Energy and Commerce Committee leaders expressed what they said was "disbelief with reports that the Obama administration's blue ribbon commission on nuclear waste disposal is set to recommend taxpayers fund a new search for temporary storage – despite 30 years of research and billions of dollars already spent on a permanent storage site buried deep within Yucca Mountain." They cited advance media reports which indicated that the scope of the panel's review which they said "did not allow for the consideration of Yucca as an option."

 

    Full Committee Chairman Fred Upton (R-MI) and Environment and the Economy Subcommittee Chairman John Shimkus (R-IL) who are conducting their own investigation into the Administration's termination of the Yucca repository said that "already, facts have come to light revealing significant internal legal and policy dissent within the Nuclear Regulatory Commission (NRC) about the administration's decision." Representatives Upton and Shimkus said, "The Obama administration's blue ribbon panel is nothing short of a smokescreen -- we already have a long-term, visionary plan for permanent storage in Yucca Mountain. It is unconscionable for the Obama administration to squander three decades of bipartisan collaboration, breakthrough scientific research, and billions of taxpayer dollars, all for what the GAO has determined to be political calculations. This administration should be listening to the nuclear scientists, not political scientists, on matters as serious as our nuclear future. Nuclear safety is a matter of national security, and political motives cannot be allowed to jeopardize the investments and expertise gathered over the course of decades." 

 

    Access the meeting materials, recommendations and a webcast Access (click here). Access complete background on the BRC including all meetings, background papers, correspondence, comments and more (click here). Access the release and links to more information from the House Energy and Commerce Committee (click here). [*Energy/Nuclear, *Haz/Nuclear, *Haz/Transport]

NAS Warns "Risk Of Dangerous Climate Change Impacts Is Growing"

May 12: As Congress continues to engaged in divisive debates on EPA's authority to address climate change and whether the basic science of global warming is a hoax, the National Academy of Sciences (NAS), National Research Council (NRC) reiterated "the pressing need for substantial action to limit the magnitude of climate change and to prepare to adapt to its impacts." The nation's premiere science institution warned that "the risk of dangerous climate change impacts is growing with every ton of greenhouse gases emitted into the atmosphere."

 

    The nation's options for responding to the risks posed by climate change are analyzed in a new report and the final volume in America's Climate Choices, a series of studies requested by Congress. The committee that authored the report included not only renowned scientists and engineers but also economists, business leaders, an ex-governor, a former congressman, and other policy experts. Committee chair Albert Carnesale, chancellor emeritus and professor, University of California, Los Angeles said, "The goal of the America's Climate Choices studies is to ensure that climate decisions are informed by the best possible scientific knowledge, analysis, and advice, both now and in the future."

 

    The final report reaffirms that "the preponderance of scientific evidence points to human activities -- especially the release of carbon dioxide and other greenhouse gases into the atmosphere -- as the most likely cause for most of the global warming that has occurred over the last several decades. This trend cannot be explained by natural factors such as internal climate variability or changes in incoming energy from the sun. The report adds that the impacts of climate change on human and natural systems can generally be expected to intensify with warming."

 

    According to the report, while it recognized that climate change is inherently a global issue requiring an international response, the committee focused on the charge from Congress to identify steps and strategies that U.S. decision makers could adopt now.  According to a release, the report says, "A coordinated national response to climate change, which the country currently lacks, is needed and should be guided by an iterative risk management framework in which actions taken can be revised as new knowledge is gained." Committee vice chair William Chameides, dean of the Nicholas School of the Environment, Duke University, Durham, NC said, "America's response to climate change is ultimately about making choices in the face of risk. Risk management strategies must be durable enough to promote sustained progress yet sufficiently flexible to take advantage of new knowledge and technologies."

 

    According to the Committee, "Substantial reductions of greenhouse gas emissions should be among the highest priorities in the national response." Although the exact magnitude and speed of reductions will depend on how much risk society deems acceptable, "it would be imprudent to delay taking action." The Committee cited many reasons for not waiting, including that the faster emissions are reduced, the lower the risks. And because the effects of greenhouse gases can take decades to manifest and then persist for hundreds or even thousands of years, "waiting for impacts to occur before taking action will likely be too late for meaningful mitigation. Beginning emissions reductions soon will also lower the pressure to make steeper and costlier cuts later."  Carnesale said, "It is our judgment that the most effective strategy is to begin ramping down emissions as soon as possible."

 

    The Committee said, state and local efforts currently under way or being initiated to reduce greenhouse gas emissions are "potentially quite significant but unlikely to yield outcomes comparable to what could be achieved with a strong federal effort." It said the most efficient way to accelerate emissions reductions is through "a nationally uniform price on greenhouse gas emissions with a price trajectory sufficient to spur investments in energy efficiency and low-carbon technologies. Having such policies in place is crucial to guide investments in energy infrastructure that will largely determine the direction of greenhouse gas emissions for decades to come."

 

    The Committee deemed the risks of sticking to "business as usual" to be a much greater concern than the risks associated with a strong response. They said, "Most policy responses could be reversed if they prove to be more stringent than is needed, but adverse changes to the climate system are difficult or impossible to undo." It also said that "uncertainty in projecting the severity, location, or time of climate change impacts is not a reason for inaction. On the contrary, uncertainty about future risks could be a compelling reason for taking action given that abrupt, unanticipated, or more severe impacts could occur."

                                   

    The committee emphasized that, aggressive cuts in greenhouse gas emissions would reduce the need for adaptation but not eliminate it and urged the nation to mobilize now to reduce vulnerability to climate change impacts. While adaptation planning largely occurs at the state and local level, the Federal government should help coordinate these efforts and develop a national adaptation strategy.

 

    In addition, they said the Federal government should maintain an integrated portfolio of research programs aimed at increasing understanding of the causes and consequences of climate change and developing tools to limit climate change and adapt to its impacts. The government also needs to take the lead in collecting and sharing climate change information to ensure that pertinent knowledge is used to inform decisions. Public and private sector engagement through broad-based deliberative processes is essential as well. These processes should include transparent analyses of climate change information, an explicit discussion of uncertainties, and consideration of how decisions will be affected by differing personal values.

 

    The Committee said, "Because emissions reductions in the U.S. alone will not be adequate to avert dangerous climate change risks, U.S. leadership needs to remain actively engaged in international climate change response efforts. If the U.S. pursues strong emission reduction efforts, it will be better positioned to influence other countries to do the same. Given that climate change impacts elsewhere in the world may affect U.S. interests, it would also be prudent to help enhance the adaptive capacity of other nations, particularly developing countries."

                       

    The final report in the series builds upon the four previous America's Climate Choices panel reports: Advancing the Science of Climate Change; Limiting the Magnitude of Future Climate Change; Adapting to the Impacts of Climate Change; and Informing an Effective Response to Climate Change. The America's Climate Choices studies were sponsored by NOAA.

 

    Jennifer Morgan, director of the Climate and Energy Program, World Resources Institute (WRI) said, "This report, from one of America's leading scientific institutions, provides another stark reminder of the increasing risks associated with human-caused climate change. The report delivers a clear message that the federal government should take an active role in managing these very serious risks. We need policies to reduce greenhouse gas emissions, as we advance adaptation measures and develop technologies to respond to the changing world. We don't wait for the flood to arrive or the fire to spark before we buy insurance. The same should be true for climate change."

 

    Access a release from NAS (click here). Access the complete 144-page report and links to the previous reports, summaries and videos (click here). Access a release from WRI (click here) [*Climate]