July 13, 2010

InToo Deep: Salazar "Shocks" Oil Spill Commission By Asking Panel for AssuranceHe’s Doing the Right Thing in Shilling for Obama Offshore Ban – Rebuke CameQuick. WallStreet Journal (7/12) reports, "The really odd moment came when InteriorSecretary Ken Salazar said in a statement that he was looking to the commissionfor information that could inform the administration’s position on haltingdeepwater drilling. Salazar’s statement stunned the commission’s twoco-chairmen, William K. Reilly and Bob Graham, who said they had been assuredby Salazar’s office and the White House that giving advice on the moratoriumwasn’t their job. "We’re 10 minutes old," Reilly told an audience in NewOrleans, where the commission held its first hearing. "The idea we’d have anear-term responsibility to make recommendations on policy was not our understanding[of the panel’s mission] and is not consistent with my most recent conversationwith [Interior Deputy Secretary] David Hayes, who said the Interior Departmentdidn’t look to this commision for advice" on the matter. Graham, speaking toreporters after the hearing, said he too was "confused" by Salazar’s statement.He said he and Reilly plan to go back to the Interior Department "to try toclarify what is our responsibility and how we’re going to carry it out."

Meanwhile,as Salazar Trips on His Tongue in New Orleans, Justice Dept. Tells Court thatNew Moratorium Should "Render Moot" Court’s Order to Lift Previous One. Politico(7/12) reports, "Interior Secretary Ken Salazar’s move Monday issuing a new"pause" of deepwater drilling should render moot pending litigationover the similar moratorium issued back in May, the Justice Department saidMonday night. DOJ spokeswoman Tracy Schmaler said the court planned to ask afederal appeals court to drop an appeal set to be argued next Month. U.S.District Court Judge Martin Feldman, who blocked the earlier moratorium, willbe asked to dissolve his injunction and dismiss the underlying case brought bybusinesses who said they’d been devastated by the drilling limits. DOJ isarguing the two moratorium orders are entirely legally distinct and thereforethe plaintiffs need to basically sue again if they object to the new one.Feldman had objected in particular to Salazar’s ban applying to drilling inover 500 feet of water. The judge said there was little evidence in the recordto support that dividing line. The new moratorium applies to all drilling fromfloating rigs. In practice, the two orders are expected to have similar if notidentical impact. Ending the case would be a relief to the government, whichdidn’t fare too well with Feldman or in its first go-round with the appealscourt.

AsObama Ban Continues to Claim Livelihoods Along the Coast, One Worker TellsPress He Prefers Working in Angola – "Because It’s Politically Safer" ThanWorking Here. OilDaily (7/13, subs. req’d) reports, "It could take the Louisiana ports thatsupport the Gulf of Mexico exploration and production industry several years torecover from the economic damage caused by the Obama administration’smoratorium on deepwater drilling. "It will take at least five years before theports and the industry recover from this," Don Briggs, president of theLouisiana Oil and Gas Association told Oil Daily. "And yes, it will also affectany future developments in the deepwater Gulf." The service and support industryis crucial to sustaining offshore operations, he said. Without it, the oil andgas industry cannot carry out basic operations such as drilling, production orjust routine maintenance. Sen. Mary Landrieu (D-Louisiana) said the energyindustry alone could lose up to 38,000 jobs in four months because of themoratorium. An estimated 12,700 of those jobs would be lost in just two SouthLouisiana parishes: Lafayette and St. Martin.  Briggs said service companies "have seen the handwriting onthe wall and are already starting to deploy people around the world so they cankeep them working. I had one driller tell me that he prefers working offAngola, because it is safer politically than doing business in the US."

UnderPressure from IER on Membership of Oil Spill Commission, Bob Graham Insiststhat, Despite Past Statements, No One on Panel (Even NRDC?) Has "PoliticalObjectives." TheHill (7/12) reports, "The co-chairman of the presidential commissionprobing the BP oil spill said Monday that the panel will work without bias orpreconception, a pledge that follows political attacks from Republicans andpro-industry critics who say it’s tilted against oil-and-gas development. "Weall agree that this will be a science- and fact-driven, thorough, independentinvestigation without any preconceptions and without any political objectives,"said former Florida Sen. Bob Graham (D). Several GOP senators and otherconservative critics, such as the nonprofit Institute for Energy Research, have alleged the panel lacksexpertise and is stacked with members that oppose drilling. Members in thecritics’ crosshairs include Natural Resources Defense Council President FrancesBeinecke, who came under attack from two Senate Republicans last month becauseNRDC has intervened in litigation over the six-month federal ban on deepwaterdrilling. The group wants to keep the drilling freeze in place. But the environmentalgroup says it has created a firewall between Beinecke and NRDC litigation, andtaken other steps to prevent a conflict of interest.

IsAl Gore a Junior Press Aide Over There? New WH Talking Points Seek to CompareBoondoggle of Green Jobs Subsidies with the Creation of the Internet.  WashingtonPost (7/13) reports, "President Obama is looking again to convince votersthat the billions of dollars he has pumped into embryonic clean-energy firmswill build a better economy even if they generate only a modest number of jobsbefore the middle of the decade. The White House compares the effort to thegovernment’s investment in the Internet several decades ago, and Obama willhighlight startups that make electric batteries for future fleets ofzero-emissions cars and trucks. In a report due Wednesday, the president’seconomists say the loan guarantees and grants extended under the Recovery Acthave the potential to "stand up" new industries that could employthousands of Americans by 2015. They estimate that for each dollar in federalinvestment translates to $3.50 of total investment.  On Thursday, for the second time in two weeks, Obama willvisit a battery-making plant, this time in Michigan, and Cabinet officials willfan out to similar facilities across the country.  "There’s a view that crisis sometimes providesopportunities," said Jared Bernstein, the chief economist for Vice PresidentBiden. "One of the things we have to do with Recovery Act funds is plantthe seeds for ongoing opportunities. We could have had the same conversationabout the Internet several decades ago."

Anatomyof a Talking Point: Get the NYT to Weave a Mythology about How Oil CompaniesGet More in Subsidies than Wind and Solar, and Then Run Lots of Ads Off It. TheHill (7/12) reports, "As prospects for industrial carbon-pricing are onshaky ground heading into this month’s Senate energy and climate debate,environmental groups are starting to fine-tune their messaging campaign infavor of efforts to scale back billions in tax incentives for oil and gascompanies.
Environmentalistsare looking to roll out a targeted grassroots and possible paid media campaignto stop "The Big Oil Welfare Tax," a term coined to counteract Republicanarguments that Democratic climate and energy proposals would create a "nationalenergy tax."A campaign will belaunched next week to "attack Big Oil for profiting from the Big Oil WelfareTax and highlight their hypocrisy for calling investments in new technology andrenewable sources of energy an ‘energy tax,’" according to a messaging memosent Friday to members of the Clean Energy Works coalition. A paid mediacampaign may follow, timed closer to votes in a Senate floor debate that couldstart next week, a spokesman for the coalition said.
The memo – prepared bycoalition consultants at Blue Line Strategic Communications – states thecampaign will target activities in the same states where the American PetroleumInstitute is running TV ads arguing that reducing the industry’s tax incentiveswould harm the economy and jobs.

Who Could’ve Seen This Coming? Seriously: WhoCould’ve Predicted the Cellulosic Ethanol Mandate in ‘07 Energy Bill Would BeDeemed "Unmeetable" By EPA? E&E News (7/12, subs. req’d) reports, "U.S. EPA hasproposed major cuts for an ambitious nationwide mandate for cellulosic ethanolthat Congress passed in the 2007 energy bill. The agency today proposed itsannual "percentage standards" for the four fuel categories thatqualify for the renewable fuel standard program, known as RFS2. The standardsbreak down what percentage biodiesel, advanced biofuels and cellulosic biofuelswill share in the renewable fuel standard in 2011. EPA will issue newpercentage standards for subsequent years. In its sweeping 2007 energy bill,Congress included a mandate that the United States produce 36 billion gallonsof renewable fuel by 2022. The 2011 breakdown gives cellulosic biofuels aminuscule share of the mandate, at hundredths of a percent of the total fuelshare. The proposed numbers are significantly below the targets set forcellulosic biofuels in the energy bill — illustrating continued hurdles forthe industry to produce affordable, commercial-scale quantities of the fuel. Ina statement announcing the new percentage standards, EPA said it would continueto evaluate the market before it finalizes the cellulosic standard.

Opportunity Knocks: China Imported More Oil inJune than In Any Month in its History – And Guess Whose Share They’re Going After.Oil Daily (7/13, subs. req’d)reports, "China imported a record 5.44 million b/d of crude oil in June,breaking the previous 5.17 million b/d record set in April. On a daily basis,the total was up 29% from the 4.22 million b/d imported in May and was 34%higher than in June 2009 – or up by about 1.38 million b/d – underscoring thecountry’s continued strong appetite for crude oil as it builds up refiningcapacity and fills strategic stockpiles. For the first half of 2010, China’simports averaged 4.78 million b/d, up 30% year-on-year. China, the world’ssecond-largest oil consumer after the US, continued to be a net productsimporter in June. It imported 3.31million tons of products, down almost 8% fromthe same month last year, and exported 2.15 million tons, down almost 13%. Datareleased over the weekend by the General Administration of Customs do notinclude product import details, but fuel oil was likely the main reason Chinaremained a net importer. According to the most recent detailed data, China’snet imports of fuel oil in May averaged 272,000 b/d, down from 355,000 b/d inApril. China has also been a net LPG importer, although it brings in smallervolumes of LPG than fuel oil. Despite June’s lower products exports,  China’s exports for the first half of 2010 were up almost38% year-on-year to 14.3 million tons. Product imports slid 5% to 18.5 milliontons.