Archive for the ‘oil’ Category

The following is a repost of my National Journal Energy Experts blog

Electricity policy faces enormous challenges—three different federal agencies (EPA, DOE, FERC) and 10 Congressional committees wrestle with oversight over electricity markets, new generation sources, air and water emissions issues, and energy efficiency initiatives. Resolving the current political stalemate requires an acknowledgement that maximizing investment in a decentralized electricity structure has to be a significant part of policy going forward. And we must recognize that while constitutional rights within our Democratic Republic often clash with companies’ need for efficiency, preserving those rights must be our priority.

Not only are capital cost barriers of proposed new nuclear and coal-fired units significant, but so are the associated transmission infrastructure upgrades needed to move the power from new sources to population centers. Trying to build any new type of large infrastructure system designed to accommodate our centralized power system has traditionally run into NIMBY opposition, which lately has been characterized as Not on Planet Earth (NOPE). Population density in the US has increased 105% from 1950 to 2010—from 42.6 people per square mile in 1950 to 87.4 people per square mile in 2010. With more people living per square mile than ever before, Americans’ Fifth Amendment Constitutional right to due process guarantees that large projects will continue to be delayed. Congress’ unwillingness to grant the Federal Energy Regulatory Commission ultimate authority over transmission siting leaves permitting at the state level, where property owners will continue to hold sway over project developers. Meanwhile, the plummeting cost of solar photovoltaics, advances in micro-wind turbines, and continued permitting successes of geothermal are providing more opportunities for distributed renewable energy generation. It’s more efficient to site millions of rooftop solar systems than permit just a handful of new coal/nuclear stations with hundreds of miles of needed transmission.

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This week National Journal reports that former Senators Byron Dorgan, D-N.D. and Trent Lott, R-Miss “are working together on a blueprint for energy legislation” through their role as co-chairs of the Bipartisan Policy Center’s Strategic Energy Initiative, and plan to release it in January. NJ notes that “their effort could gain traction: Both are held in high regard by their former colleagues, and the BPC is a serious player in the energy debate.

What NJ fails to mention is that both Dorgan and Lott are also lobbyists getting rich taking special interest money from a who’s who of major energy corporations, which raises the question: will their energy blueprint serve as yet another veiled, sophisticated sell for their high priced energy corporate clients? When does their respected “high regard” begin and their shilling for their corporate clients end?

Lott’s Breaux Lott Leadership Group represents ExxonMobilEntergy, GE, energy trader Goldman Sachs, National Propane Gas Association, Plains Exploration and Shell Oil. In addition, the Breaux Lott group is a subsidiary of lobbying giant Patton Boggs, so you should also include PBs list of energy clients: ATP Oil & Gas, the Mining Awareness Resource Group, Oil States International and the oil giant TOTAL.

Dorgan co-chairs Government Relations for Arent Fox, where his corporate energy clients include oil companies Denbury Resources & Noble Energy.

I’m sure there will be some good recommendations in the Lott-Dorgan energy report. And I’m sure there’ll be policies that will be controversial. At the end of the day, we just don’t know what made it into the blueprint because of policy merits or the special interest paycheck.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @tysonslocum

After a concerted effort by Republican lawmakers to stall progress on a policy that would lead to cleaner and more fuel-efficient cars, it looks today as if the long-awaited new standard is close to becoming a reality. It is designed to reduce oil Tyson Slocum "fuel efficiency standard"consumption by 2.2 million barrels a day and cut greenhouse-gas emissions by 6 billion metric tons by 2025, according to the White House, which hammered out the deal with automakers in July 2011. That will be accomplished by requiring the industry to double the 2011 fuel-efficiency standard of 27.3 mpg to 54.5 mpg by 2025. Automakers have until 2017 to begin turning out vehicles that meet this requirement.

The new environmentally friendly policy resulted from the administration’s ability to extract “cooperation” from an industry at its most vulnerable. After the government bailed out General Motors with taxpayer dollars, the automakers had little choice but to go along with the administration’s proposed fuel-efficiency program – a regulatory policy it has resisted for decades.

President Barack Obama may have called the deal “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” but it is clear that the industry had to be cornered first before it would agree to the landmark effort to benefit both our economy and the environment.

While Public Citizen applauds the new standard, we won’t kid ourselves about the automakers’ plans for compliance. They managed to build in some wiggle room with a loophole that allows for a 2018 review of the standard, opening the door to possibly adjusting the standard in its favor just one year after it takes effect. We can be sure the industry will attempt to make a case that it is too expensive to meet the federal goal of 54.5 mpg. And you can be just as sure that we will be there, working to hold them to it.

Tyson Slocum is Public Citizen’s energy program director. You can follow him on Twitter @TysonSlocum

You might think that the declining price of gasoline means that we don’t have to pay attention to all that talk about speculation driving up the price of oil. Right? Wrong.

Tyson Slocum Memorial Day gas prices

Tyson Slocum on Gas Prices

Even though the price of gas has fallen, you’re still lining the pockets of Wall Street every time you gas up. As Memorial Day approaches and summer driving season kicks off, remember that speculators will clean up even as the price of oil drops.

It’s a rigged game, with rules that make you give your hard-earned money to financiers no matter what. It’s like the bully on the playground who established the ground rules for a coin toss game as “heads I win, tails you lose.” Under those rules, the bully always wins.

In this case, the bully is Wall Street. With oil markets, loose rules allow speculators, not end users, to dominate the volume of trading, increasing price volatility and making more money the more the price changes – whether that price is going up or down.

Goldman Sachs has admitted that speculation adds as much as $23.39 per barrel to the price of crude. That translates to 56 cents per gallon.

So, we pay more. They get richer. And it has little to do with actual supply and demand.

You would think that since speculators can legally game the system, they wouldn’t

need to resort to fraud or illegal manipulation. But last year, federal regulators charged five speculators with manipulating the price of oil in the early months of 2008 and making a $50 million profit from the scheme.

One way to solve this is for the Department of Justice to investigate fraud and manipulation in the oil markets. President Barack Obama has directed the agencies responsible for overseeing oil markets to root out anti-competitive and collusive behavior by the Big Banks that could be contributing to higher prices for families.

So far, it hasn’t produced any public findings. The government should get on the stick and report back to the American people.

As for legal manipulation, efforts are being made to curb it, but they aren’t enough. For instance, the Commodity Futures Trading Commission last year issued new rules pursuant to Dodd-Frank designed to curb excessive speculation in energy commodity markets, but they do not go far enough to protect consumers. And Wall Street is challenging even these inadequate rules.

Solutions include establishing a legal limit on the amount of oil contracts that any single trader can hold at once (legislation that would do this has been introduced), restricting communication between petroleum energy infrastructure affiliates and trading affiliates, improving trading market data disclosure by publishing trader-specific positions,  requiring companies to detail energy trading activities in their financial reporting and imposing financial disincentives to speculate. Some of these solutions are contained in legislation introduced by U.S. Sen. Bernie Sanders (I-Vt.) called the End Excessive Oil Speculation Now Act.

Long-term, we need to wean ourselves off gas. We can do this by aggressively investing in electrification of the transportation sector and mass transit.

Until then, it’s more pain at the pump while executives cash in.

Watch a video of Tyson Slocum explaining how speculation influences gas prices.

Statement of Tyson Slocum, Director of Public Citizen’s Energy Program

 

http://www.sanders.senate.gov/imo/media/image/oilmoney2.jpgWe have a powerful new tool to take on the fossil fuel industry and level the energy playing field.

Last week, new legislation was introduced by Sen. Bernie Sanders and Rep. Keith Ellison that would repeal $113 billion of tax-breaks, handouts and subsidies for the fossil fuel industry over the next 10 years.

View the list of subsidies the End Welfare Pollution Act, if passed, would repeal.

Federal subsidies and tax credits can be beneficial for short-term support of emerging technologies that help society as a whole.

Unfortunately, the mature fossil fuel industry is subsidized at nearly six times the rate of renewable energy. And unlike renewable energy incentives, which periodically expire and require Congress to approve extending, the fossil fuel industry has dozens of subsidies permanently engrained in the tax code from decades of successful lobbying.

With the burning of fossil fuels increasingly destabilizing our climate, why do we keep subsidizing the problem?

Eliminating fossil fuel handouts will go a long way toward advancing solutions like new innovations in the clean energy sector.

We can’t afford to keep throwing gobs of money at the fossil fuel industry.  Support the effort to end welfare to polluting industries.

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