November 10, 2010

Dear Mr. Bromwich, IfYou’re Looking for Cash to Run Your Agency, Here’s a Formula That Works: LeaseSales = Revenue. Drilling = Production = Royalty Revenue. Politico (11/9) reports, “Offshore drilling reforms implemented in thewake of the Gulf of Mexico oil spill may be in jeopardy unless Congressapproves a substantial cash infusion, the administration’s industry watchdogtold a panel of investigators today. Michael Bromwich, director of the Bureauof Ocean Energy Management, Regulation and Enforcement, told the commissioninvestigating the spill Tuesday that efforts to ensure the safety of offshoredrilling operations — including hiring new personnel to scrutinizepermits and inspect rigs — could fail without more funding. “I’m deeplyconcerned that without the resources we requested … the changes and reformsthat we have pursued and continue to pursue will not be realized,” Bromwichtold the oil spill commission. Industry groups and some lawmakers objected toan administration proposal to pass on increased inspection fees throughpermits, Bromwich said. Reaction to that proposal on Capitol Hill was“decidedly mixed, and there was substantial opposition from industry to raisedfees,” he said. BOEMRE was created from the former Minerals Management Servicethis summer, in the middle of the spill that left 4.9 million barrels of oil inthe Gulf of Mexico.”

Energy Finally Getting SomeAttention on the Energy Committee,‘Bout Time, if You Ask Us. Washington Times (10/9) reports, “The chairmanship of theHouse Energy and Commerce Committee is emerging as one of the top prizes of thenew Congress, and a collection of powerful House GOP members already areangling for the post. Florida Rep. Cliff Stearns said in an interview Tuesdayhe was definitely in the race, provided that the panel’s current rankingRepublican, Rep. Joe L. Barton of Texas, does not obtain from the HouseSteering Committee a waiver of term-limit rules to reclaim the gavel he hadbefore the Republicans lost their House majority in 2007. GOP Reps. Fred Uptonof Michigan, a 12-term incumbent, and John Shimkus of Illinois, now in hisseventh term, also are vying to head the influential committee. Minority LeaderJohn A. Boehner of Ohio, who heads the steering committee, has had a tenserelationship with Mr. Barton and is widely speculated to be ready to deny theTexan’s request, potentially creating a lively three-way race for the position."I think Mr. Barton has done a good job … [but] if he does not get awaiver, then I want to offer my hat to the leadership," Mr. Stearns toldThe Washington Times on Tuesday. Mr. Shimkus is considered a long-shot for thechairmanship, particularly since his seniority lags that of Mr. Upton and Mr.Stearns. But some steering committee members may view him as a suitablecompromise candidate if Mr. Barton isn’t granted a waiver.”Note: Politico also reports.

Siren: Politics TrumpsScience Once Again in Obama Admin; Interior IG Finds That WH Tampered With PeerReviewed Report.Politico (11/10) reports, “The White House rewrote crucial sections ofan Interior Department report to suggest an independent group of scientists andengineers supported a six-month ban on offshore oil drilling, the Interiorinspector general says in a new report. In the wee hours of the morning of May27, a staff member to White House energy adviser Carol Browner sent two editedversions of the department report’s executive summary back to Interior. Thelanguage had been changed to insinuate the seven-member panel of outsideexperts – who reviewed a draft of various safety recommendations –endorsed the moratorium, according to the IG report obtained by POLITICO. “TheWhite House edit of the original DOI draft executive summary led to theimplication that the moratorium recommendation had been peer-reviewed by theexperts,” the IG report states, without judgment on whether the change was anintentional attempt to mislead the public. The six-month ban on offshoredrilling installed in the wake of the Gulf of Mexico oil spill became a majorpolitical issue over the summer, as Gulf State lawmakers and industry groupscharged the White House with unfairly threatening thousands of jobs. House Republicanshave said they plan on investigating the circumstances surrounding themoratorium when they take power next year.”

Headline Says It All: “China’s energy demand to leap 75%…” That Demand will bePowered by Fossil Energy. The Sidney Morning Herald (10/11) reports, “CHINA willdrive a surge in world energy demand over the next quarter century, asstraining supply enhances OPEC’s oil market share and growing coal useundermines efforts to contain global warming. In its annual world energyoutlook, the International Energy Agency forecasts Chinese demand will jump by75 per cent, accounting for more than a third of the rise in energy use thatwill lift global consumption to 16.7 billion tonnes of oil by 2035. Oilsupplies will be pushed close to their peak, thwarting European Union effortsto limit the rise in global temperature to 2 degrees. ”Oil market developmentsand growth in CO2 emissions are my greatest concern,” the chief economist ofthe IEA, Fatih Birol, said. ”Demand from emerging markets will be strong.There is a lack of united political will to reduce carbon emissions.” Globaloil demand will rise by 18 per cent from 84 million a day in 2009 to 99 millionbarrels a day in 2035, the agency said. It lowered its 2035 estimate for oiluse by 6 million barrels a day because of EU pledges to curtail carbonemissions under the Copenhagen accord signed in December. Oil supply ”comesclose” to reaching a peak by 2035, driving prices up from about $US86 a barreltoday to $US113 a barrel in 2009 terms, the agency said.”

Europe Walkingthe Plank, Again. Top EU Energy Official Pledges $1.4 Trillion in EnergyInvestment – Cash to Come From Increased Taxes, Industry. UPI (11/10) reports, “Europe’s top energy official Wednesday unveileda strategy to spend about $1.4 trillion over the next decade on a common EUenergy network to help blaze a trail into the new energy age. EnergyCommissioner Guenther Oettinger said the investment is needed to ensuresecurity of supply, fair competition and a sustainable energy mix across the27-member body. The strategy will include incentives to save energy inbuildings and infrastructure as well as fast-tracking key infrastructureprojects. "Putting our energy system onto a new, more sustainable andsecure path may take time but ambitious decisions need to be taken now,"Oettinger said in a statement. "To have an efficient, competitive andlow-carbon economy we have to Europeanize our energy policy and focus on a few,but pressing, priorities." The $1.4 trillion would come from a combination of industry cashand taxes, and to a much lesser degree, from EU funding. Brussels is expectedto commit cash to selected transnational pipeline and power grid projects inits infrastructure strategy, to be unveiled next week. Linking the continent’senergy infrastructure is a key priority for the commission, which wants tobetter integrate the fluctuating renewable energy sources into the agingEuropean grid.

Sgamma:Responsible Energy Development and Wilderness, Can, and Do, Co-Exist. Kathleen Sgamma (11/10) writesfor the Denver Post, “The West is blessed withabundant public lands, but decisions are made by a distant bureaucracy. Becausethe federal government controls more than 36 percent of Western lands, statesare often hamstrung when making decisions that directly affect jobs, economicactivity and state revenue. Policymakers’ decisions on how best to balancepublic lands are not helped by the spread of misinformation such as that foundin this Denver Post editorial. The Post is just plain wrong that once anactivity like oil and natural gas development occurs, wilderness qualities aregone forever. Western producers develop 27 percent of America’s natural gas onjust 0.07 percent of public lands, and reclaim the land to such an extent thatthose with prior and even active development are now among those proposed forwilderness designation. By discarding the erroneous notion that development andtreasured landscapes are mutually exclusive, we can better balance public landspolicies with job and national wealth creation. Americans must be fullycognizant of the tradeoffs when considering proposals to add to the 109 millionacres of existing wilderness. The editorial also totally misrepresents asettlement agreement between the Interior Department and Utah which finallyrecognized that the timeline for the Bureau of Land Management to designatewilderness areas had run out in 1991, as specified by law. That agreement doesnot affect the ability of Congress to pass laws designating new wildernessareas, but merely states that Interior cannot act on its own.”