In The Pipeline: 6/22/11

When Congress’s Two Top Chemists – posing as Speaker Nancy Pelosi and Majority Leader Harry Reid — mandated 500 million gallons of cellulosic ethanol be created out of thin gruel to power our 250 million vehicles by next year, they figured willing it was enough E&E News (6/21/11) reports: U.S. EPA today released proposed requirements for 2012 biofuels use under the federal renewable fuel standard (RFS), keeping levels for conventional ethanol and advanced biodiesel in line with the gradually increasing utilization called for by law while acknowledging the failure of cellulosic ethanol to appear in the marketplace….EPA expects to require that between 3.45 million and 12.9 million gallons of cellulosic biofuels be blended into the domestic fuel supply in 2012, representing between 0.002 and 0.010 percent of total fuel usage…That range falls far short of the 500 million gallons called for under the 2007 Energy Independence and Security Act and takes advantage of flexibility in that law for EPA to adjust the required volumes based on market availability of the advanced fuels…”EPA will continue to evaluate the market as it works to finalize the cellulosic standard in the coming months,” officials said. “The agency remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead.”

It’s not about Energy or the Environment — It’s about Power. The EPA finally admits what is behind its quest for regulation E&E News (6/21/11) reports: U.S. EPA stepped closer yesterday to updating air pollution rules for the oil and gas industry, sending draft rules to the White House Office of Management and Budget as it prepares to come out with a proposal later this summer…The agency is reviewing the New Source Performance Standards for oil and gas producers, which set limits on emissions that lead to soot and smog, as well as the rules for toxic emissions such as benzene. Both sets of rules cover facilities, such as storage tanks, processing plants and compressor stations — but not refineries — that handle the oil and gas between the wellhead and the pump…Under existing EPA rules that date back to 1985, gas processors must fix leaks that allow volatile organic compounds (VOCs) to escape and prevent the sulfur in their gas from being released into the air. Some facilities and pieces of equipment have no federal standards, though they can also be regulated at the state level…In reviewing the rules, which were last updated in 1999, EPA is looking broadly across the industry to find air pollution sources and ways to address them, top officials said last year when they held public meetings in Dallas and Denver.

Denise Bode, eat your heart out. Oklahoma tribe says no to wind, yes to oil and gas Newsok (6/21/11) reports: It comes in the form of a challenge this week by the Osage Nation, which says the proposed farms could interfere with the extraction of oil and gas in the county. The tribe owns all mineral rights in the county, with royalties from oil and gas drilling disbursed to tribal members.
Principal Chief John D. Red Eagle also cited ecological and cultural concerns, although he said the tribe isn’t opposed to alternative energy development in general…This is common refrain where alternative energy is concerned. Going green is a big deal for many, but when doing so affects people individually — by altering the scenic view, or by running transmission lines across their property — it doesn’t seem like such a good idea…The Osage complaint isn’t the first about this particular plan. Environmentalists previously said the huge windmills could damage the habitat of the greater prairie chicken. But the tribe’s involvement, and its ability to spend large sums to fight the plan, is sure to give the two companies second thoughts.

I love when Obama is between a rock and a legislative hard place – White House comes out against House plan that would make energy cheaper for Americans The Hill (6/21/11) reports: The White House on Tuesday attacked a GOP-led bill to speed up oil drilling off Alaska’s coast, but continued a recent trend by declining to threaten a veto…The House is slated to debate a bill Wednesday aimed at speeding up EPA air pollution permits for Royal Dutch Shell and other companies that want to drill in Arctic waters off Alaska’s coast…The formal “statement of administration policy” issued Tuesday touts the White House commitment boosting oil production, but cautions that the bill would “curtail” EPA’s power to ensure it “proceeds safely, responsibly, and with opportunities for efficient stakeholder input.”…The GOP-led bill, which won five Democratic votes in the Energy and Commerce Committee, would set new deadlines for EPA action on offshore air permit applications, limit challenges and ease air pollution standards for offshore projects. (We’ve got more on the legislation here.)

We can file this story under the “stating the obvious” category Politico (6/22/11) reports: A few months back, the specter of $5-per-gallon gasoline this summer spread panic through the country…Record prices at the pump would rip into already tight household budgets. A fragile economy appeared teetering as hiring slowed in May. Approval ratings tumbled for President Barack Obama, who pledged to investigate price manipulation…Well, the country can relax a bit. Summer arrived Tuesday with gas averaging $3.64 per gallon, according to the American Automobile Association…And fuel prices are now expected to drop further, with several analysts predicting crude oil will fall to $85 per barrel. Based on recent history, that might cut another 50 cents off a gallon of gas…It’s essentially a stimulus package at the height of vacation season, when families are more likely to splurge…How did we avert the nightmare scenario? Certainly, there’s lower demand coupled with higher supplies. But Phil Flynn, an analyst for the Chicago brokerage PFGBEST, said it’s also because a Federal Reserve program to buy $600 billion of U.S. Treasury bonds is about to end.

When in doubt, go with what works. House Republicans are cutting renewable funding and greenies are crying foul Reuters (6/21/11) reports: Even though Republicans have vowed an “all-of-the-above” approach to America’s energy future, Democrats are accusing them of clinging to a narrow, antiquated, hydrocarbon-heavy past…Members of the House Sustainable Energy and Environment Coalition are furious about a 2012 energy and water appropriations bill that they claim shortchanges President Obama’s efforts at innovation and competition in favor of an addiction to oil, coal and natural gas…”Now is the worst possible moment to slash funding for the research and development of sustainable energy technologies,” coalition member Rep. Rush Holt (D-N.J.) said about the $30.6 billion bill that advanced out of the House Appropriations Committee last Wednesday…”At a time when our economy is already fragile, abandoning scientific research would cause the United States to lose even more high-tech jobs to our foreign competitors.”

America’s business is business and we need affordable energy CNN Money (6/21/11) reports: Jack Gerard has pretty much been in crisis mode since taking over as president and CEO of the American Petroleum Institute in November 2008. Shortly after he arrived at the powerful oil-industry lobbying group, President Obama and a wave of Democrats swept into office, promising to fund alternative energy sources and take action on climate change. Last year the BP disaster poured more than 200 million gallons of oil into the Gulf of Mexico, and Gerard spent the summer prepping his members for more than 50 congressional hearings and eight separate investigations related to the spill and its aftermath. Then, in mid-May, executives from five oil companies appeared before a committee of the U.S. Senate and defended their earnings, which could hit record highs in 2011. “Don’t punish our industry for doing its job well,” Chevron CEO John Watson said. The performance was, by all accounts, a public relations disaster…Indeed, Big Oil could scarcely be less popular than it is now: Gasoline prices on average are hovering around $4 a gallon, up more than a dollar from a year ago; turmoil in the Middle East and strong global demand contribute to high prices, but try telling that to the guy spending $75 to fill his tank at an Exxon station. President Obama, on the hunt for ways to cut debt, has targeted oil companies’ tax breaks, and an NBC/Wall Street Journal poll in February found 74% of all respondents favor such a move. “Emotionally, no one is on their side,” Robert Passikoff, president of the brand-loyalty consultancy Brand Keys, says of the industry. “No one feels bad for the oil companies.”