December 1, 2010

Why the “E” needs to be Removed from E&C: UptonFirst Order of Business, Healthcare; Sterns, the deficit; Barton,Bipartisanship; Shimkus, Who Knows, He Didn’t Speak to Reporters.Politico (11/30) reports, “Upton,Barton and Reps. John Shimkus and Cliff Stearns all made their presentations tothe GOP Steering Committee Tuesday. The panel, loaded with loyalists toincoming Speaker John Boehner, is expected to make its decision by nextTuesday. After being asked about his pro-life position by a member of thesteering committee, Upton said the first item on the committee’s agenda underhis leadership would be to codify a plan from Reps. Joe Pitts (R-Pa.) and BartStupak (D-Mich.) that would ban federal funds for abortions except in the caseof rape, incest or danger to the life of the mother. Barton,who appeared first before the steering panel, told reporters afterward thatUpton isn’t ready to be chairman. “I think that I am more conservative and Ithink that Fred is well qualified at some point in time to chair thiscommittee, but not right now,” he said… I have the respect on both sides of theaisle and on both sides of the Capitol.” Stearns – who has owned a smallchain of hotels and restaurants – is seen as a long-shot candidate, butwas confident about his chances after appearing before the committee. “Andsince the election was about jobs and about the deficit, I explained to themhow I fulfilled the American dream and was able to create jobs through hotelsand restaurants.” Shimkus was less chatty than his competitors after hispresentation. “I’m no surprise as far as who I am, what I’ve done,” he toldreporters. “It’s over, so we’ll see. I don’t really have much to say.”

16. That’s the Number ofPermits Issued since the BP-Blowout; Interior Says “Ain’t our Fault.” Folks,this is what we Call the Permitorium. CNN Money (11/30) reports, “Drilling activity in the Gulf of Mexico willremain light in the years ahead, despite the fact that the ban on drillingthere has been lifted, according to a survey of oil executives releasedTuesday. Nearly 70% of industry executives expect drilling activity in the Gulfto remain below 2009 levels until at least 2012, according to a survey by BDO,a Chicago-based accounting and consulting firm. Some say it will never returnto 2009 levels. "One message came through loud and clear in this year’ssurvey — that legislative changes represent the biggest threat to growth inthe oil and gas industry," said Charles Dewhurst, who heads BDO’s naturalresources group. The U.S. imposed a moratorium on new drilling activity shortlyafter the BP disaster in April. But since the ban was fully lifted in October,very few new permits for drilling in the region have been issued. Just 16permits for new wells have been issued since the ban on shallow water drillingwas lifted in June and the deepwater ban was lifted in October, according tothe Interior Department. In 2009, a total of 171 permits were issued. Thegovernment says the drop in permits is not entirely its fault. A spokeswomanfor the Bureau of Ocean Energy Management, Regulation and Enforcement said theagency has only received two requests for deepwater wells since the ban waslifted. She said the agency has approved the vast majority of the requests ithas received to drill in shallow water since June. Daniel Kish, a policyspecialist at the American EnergyAlliance, said oil and gas companies are holding off on requesting newdrilling permits until the government finalizes the regulations that apply todeep water drilling. "The problem is that no one knows what the changeswill be," he said. Requesting a new permit "is a difficult thing tojustify economically if you think the regulations are going to change."

SalazarCalls for Disclosure of HF Fluids; May Want to Visit Pa. DEP’s Website or Halliburton or Range Resources, to Name a Few. Associated Press (11/30) reports, “The Obama administrationmay require companies drilling for natural gas on public lands to disclose thechemicals being used in a technique called hydraulic fracturing. Officials areweighing the policy, Interior Secretary Ken Salazar said, calling hydraulicfracturing "a hot and very difficult issue" on public and privatelands. Also known as "fracking," the process involves pumpingmillions of gallons of water mixed with sand and chemicals underground to forceopen channels so natural gas will flow. "As the nation’s largest landmanager, the Department of the Interior has a responsibility to ensure thatnatural gas is developed in a safe and environmentally sustainable manner andprotects the other valuable resources on those lands, including preventing harmto the air, water and species that call these lands home," Salazar saidTuesday at a forum he hosted on the issue. He said officials have yet to settleon a policy. Onshore gas wells on Interior-managed lands account for 11 percentof the nation’s natural gas supply. The U.S. Environmental Protection Agency isstudying whether the drilling practice affects drinking water and the publichealth. The EPA has subpoenaed energy giant Halliburton, seeking disclosure ofchemicals used in their fracking fluids. Eight other drilling companies haveprovided that information to the EPA or promised to do so. Drilling companieshave resisted attempts to disclose publicly the chemicals in their frackingfluids, claiming proprietary information. The forum hosted by Salazar includedpanel discussions among federal officials, energy companies and environmentalgroups.”

By Targeting one Tool at aTime, Enviro Groups Aim to Empty the Affordable Energy Toolbox; Halt the use ofFossil Energy. E&E News (sub req’d, 11/30) reports, “Critics of thenew wave of gas drilling have focused too much on one process — hydraulicfracturing — when other aspects of drilling are proved to have caused moreproblems, an Environmental Defense Fund official said today. "If peopleover-emphasize hydraulic fracturing as a risk, they are doing industry afavor," Scott Anderson, senior policy adviser for EDF, said after a forumon fracturing at the Heritage Foundation. "They’re shortchanging attentionthat could be focused on practices that cause the bulk of the problem." Andersonsaid many people equate hydraulic fracturing with shale gas development ingeneral. But most of the documented problems with shale gas production, hesaid, have been spills of fracturing fluid, flowback or other toxic substances.Methane leaking into water supplies is also a widespread problem. Lee Fuller,vice president of government relations for the Independent PetroleumAssociation of America, said the debate isn’t about drilling safety, but thefuture of natural gas and other fossil fuels. "We tend to see the debatenot as about chemicals used in hydraulic fracturing, but as a war over thefuture of fossil energy," Fuller said. "There’s a great number ofmembers of the environmental community who have as their charter theelimination of fossil fuel." Hydraulic fracturing suits environmentalgroups’ purposes, he said, because it’s not federally regulated while spillsand other processes are regulated. Once fracturing fades or gets resolved, hesaid, environmentalists will simply come up with a new way to eliminate fossilfuel use. "It will not end thatagenda," Fuller said. "They simply will move on to the nextbattle."

Corporate Welfare at itsWorst: Taxpayers to Fork Over $31 BILLION in Ethanol Handouts Over the NextFive Years. E&E News (sub req’d, 11/30) reports, A bipartisangroup of 17 senators is urging their chamber’s leadership to drop ethanol taxcredits and protective tariffs, projecting that the current subsidies, ifextended, would cost the Treasury $31 billion over the next five years. "Wecannot afford to pay industry for following the law," the letter argues,in reference to ethanol blending requirements under the federal renewable fuelstandard. "Eliminating or reducing the ethanol tariff would diversify ourfuel supply, replace oil imports from [the Organization of Petroleum ExportingCountries] with ethanol from our allies and expand our trade relationships withdemocratic states." Citing Congressional Budget Office analyses that showthe tax credit costs taxpayers $1.78 per gallon of gasoline consumption reducedand amounts to a $750-per-metric-ton tax on carbon dioxide emissions, theletter says the costs of the two measures outweigh the benefits. Led by Sens.Dianne Feinstein (D-Calif.) and Jon Kyl (R-Ariz.), the letter puts thesignatories — all from outside of the Farm Belt — on the record in favor ofletting the 45-cent-per-gallon ethanol blending subsidy and the54-cent-per-gallon imported ethanol tariff expire.”

Coal, Rare Earths, Oil,Natural Gas – You Name it, China is Importing It. Coal Imports Surge 45%over Four Years.Investor’s Business Daily (12/1/10) reports, “Whether a company isbased in Minneapolis or Mumbai, it’s clear that emerging markets are providingnew demand for coal, metals, oil and grains. And chief among the biggest newbuyers of these raw materials is China. Consider coal. China was the No. 1producer in 2009, providing half the world’s output, according to the EnergyDepartment. But it also was the world’s biggest coal consumer. Over the fouryears through 2009, the latest data available from the DOE, China’s usagesurged 45%. In the U.S., the second-biggest coal burner, usage fell 11% in thattime frame. More to the point, China’s demand growth outstrips its outputgrowth, which the DOE puts at 34% in that four-year stretch. So China’s coalimports have been growing at a breathtaking pace. China imported 151 millionshort tons of coal in 2009. That’s 240% more than the 2008 figure and 423% morethan the 2005 figure. China is the world’s biggest producer and importer ofcoal. The emerging behemoth also is the big name in the copper industry. Chinaimports about one-third of world production, says Bill O’Neill, a partner atLogic Advisors, a commodity consultancy, broker and money manager. The story ismuch the same in other base metals and, to some degree, oil. Booming demand andstrategic stockpiling are the magnets luring huge shipments to China fromproducers around the world. In this way, the China story can’t help but impactU.S. companies. Coal miners are thriving.”

Sound Familiar? Chu aimsfor 50% Renewable by 2050; Carter Called for 20% Solar by 2000, 30years ago. Platts (11/30) reports, “US Energy Secretary Steven Chu on Tuesdaysaid he would like to see the country generate at least 20% of its electricityfrom renewable sources by 2020, and 50% or more by 2050. "And as time goeson, we get better and better at this and we can get [renewable generation]cheaper than fossil fuels, it’ll really take off," Chu said during awide-ranging live video chat on www.whitehouse.gov. "Certainly there’snothing in the laws of physics that say, by the mid to end of the century, wecan’t mostly be relying on renewable energy." But to do so will requirestates to enact robust renewable energy standards, as well as federal policiesthat guide the country towards clean energy, he said. Industry will also haveto find a way for renewable generation to be cheaper than electricity generatedfrom fossil fuels, so that such technologies will no longer require subsidies,he said. "Going into the future, we have to be able to say wind or solaror other renewables are going to be cheaper than gas, cheaper than coal,"Chu said.”