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Energy

Every two weeks Viohl & Associates publishes an Energy Update, which provides summaries of significant federal and state energy news.  

Energy Update, Dec. 5

December 10, 2014

In the States

AR – Following a review that it had not met “specified employment goals,” LM Wind Power has repaid the State of Arkansas more than $3 million that it had received as part of a larger incentives package to build a wind turbine production plant near Little Rock. The company received almost $9 million from the Governor’s Quick Action Closing Fund. Those funds were contingent on meeting an employment goal of more than 1,000 employees in Little Rock by fall 2014. The State’s Economic Development Commission (AEDC), according to the Danish manufacturer, has recouped the funds, which took into account employment and payroll estimates. "Although LM is not operating at the employment level the company originally announced in 2007, AEDC is encouraged the company still employs more than 500 people in a volatile wind energy market," said a company representative. AEDC: LM Wind Power paid back $3.4M in incentivesArkansas Business

MD – Outgoing Governor Martin O’Malley’s administration said it will release proposed rules next month on hydraulic fracturing, commonly known as fracking, in western Maryland. Fracking is the process by which fluids are injected into wellbores to help release natural gas and oil. Governor O’Malley, who previously ordered a study be completed on the risks and impacts of fracking, believes it can be done safely and will benefit Maryland economically. Governor-elect Larry Hogan will take office in January and said he will review the O’Malley administration’s rules and decide on whether to proceed with fracking immediately. "We're committed to ensuring that Marylanders have access to the economic opportunities associated with fracking," Governor O'Malley said, "while also putting the most complete practices into place to ensure the highest level of protection for Maryland residents." O’Malley administration sets out path to fracking in MDThe Baltimore Sun and Maryland to begin drafting fracking regulationsSouthern Maryland Newspapers Online

UT – Working to decrease air pollution and to improve public health, Governor Gary Herbert is proposing a ban on the use of wood-burning devices. Recently, the Utah Air Quality Board voted to explore the Governor’s idea, which was met with skepticism from some private sector companies and strong support from clean air activists. State regulators believe a total ban on wood-burning would be easier to enforce as opposed to a partial or temporary ban. The Governor’s office believes a total ban would “yield big air quality benefits” and “emphasize public health over ambiance.” Utah wholesaler John Mortensen, who owns Energy Distribution Systems and disagrees with the Governor’s proposal, said “it would be good to encourage upgrading to cleaner technology, allowing some carrot instead of all stick to reduce emissions related to wood burning.” Gov. Gary Herbert proposes wood-burning ban in UtahThe Salt Lake Tribune

Federal and Regional

 The current and former chairmen and vice chairmen of the Governors’ Wind Energy Coalition, a bipartisan group of governors from 23 states, recently sent a letter to House and Senate leadership urging Congress to approve a multi-year extension of the wind energy production tax credit (PTC) and investment tax credit (ITC). The letter cites several state examples as important “achievements directly attributable to the PTC,” including in one state where, for example, an estimated $2 billion was added to the state’s economy thanks to the construction of a tax credit-supported wind farm. The Governors’ letter also asks Congress to consider the role of the PTC and ITC in furthering the nation’s off-shore wind energy goals and contends that energy prices have decreased over the last few years in states that produced at least seven percent of their energy from wind power. “While we recognize there is support in Congress for phasing down these various tax incentives for all sectors in a comprehensive tax reform package, until we do, we must allow the nation’s wind industry to compete with other energy sources that also receive federal support.”

The Department of the Interior announced it had distributed more than $13 billion in 2014 to several government entities resulting from royalties and other fees collected thanks to energy production on federal and Native American lands. The Department, which distributes revenues each month, said “revenue generated from developing public energy resources that belong to all Americans helps fund critical investments in communities across the United States and creates American jobs, fosters land and water conservation efforts, improves critical infrastructure, and supports education.” Royalties paid to Native American tribes totaled more than $1 billion, primarily due to the increased production on a North Dakota reservation. Tribes, unlike state and local governments, receive all revenues resulting from energy production on their land while other local or state agencies receive a certain percentage. Feds distribute revenues from energy production on federal, Indian landThe Hill

 

Energy Update, Nov. 21

November 25, 2014

In the States

MA – Critics of a proposed 400-mile natural gas pipeline in northeast Massachusetts believe they have found an ally in Governor-elect Charlie Baker, who recently said the State should first expand existing natural gas pipelines rather than build new lines. If approved, the pipeline would be built by the Tennessee Gas Pipeline Company and would cross the New York border into Massachusetts and run along the State’s border with New Hampshire before entering the latter. Outgoing Governor Duval Patrick charged a commission to study the pipeline and natural gas development in general to “estimate demand in coming years and whether additional pipelines are needed.” The commission’s findings are expected early next month. The company, which is a subsidiary of Kinder Morgan, said it is exploring alternative routes, even though it held several public meetings and hearings with state and local officials about the proposed pipeline. Gas pipeline opponents look to new governor for supportThe Eagle Tribune

NJ – Governor Chris Christie plans to visit Canada on a trade mission in early December to discuss energy policy, including his support for the Keystone XL natural gas pipeline, and his plans for a “North American energy renaissance.” In addition to stops in Calgary, Ottawa, and Toronto, the Governor will meet with Canadian Prime Minister Stephen Harper and other government ministry leaders. The upcoming trip will be Governor Christie’s third foreign trip, following an earlier trade mission to Mexico and Israel. The Governor said his trip will focus on increasing trade and enhancing existing partnerships between New Jersey and Canada, which, according to his office, amounts to approximately $16 billion annually and more than 240,000 jobs. “Too often, our neighbors in Mexico and Canada have felt that they were an afterthought in U.S. foreign policy,” Governor Christie said. “Let me be clear about my view: My view is they should be our first thought, not an afterthought.” Christie to talk trade, energy in CanadaThe Courier-Post and Christie plans Canada trip to discuss energy policyThe Daily Record

WA – A climate change task force convened by Governor Jay Inslee sent the Governor their suggestions to decrease carbon pollution, including a carbon tax or a cap-and-trade program. The panel did not favor one of the specific policy solutions in their report, but rather focused on the merits of both approaches. Governor Inslee has previously said he was “exploring a market-based system to limit heat-trapping greenhouse gases that are blamed for warming the planet” and a mandate for cleaner fuels to advance electric vehicle use. Governor Inslee is expected to release his proposals in the coming weeks, though given a divided state legislature, he may pursue issuing an executive order if he is unable to advance his plans legislatively. Republican state legislators said they will reserve judgment “to see what the governor is going to come out with.” Carbon cap report to Inslee, may spur actionThe Houston Chronicle and Inslee climate agenda to go beyond carbon pricingThe Seattle Times

Federal and Regional

 According to the Department of Energy (DOE), the federal government expects to earn $5-$6 billion from its renewable energy loan program. Created by the Energy Policy Act of 2005, the loan office was at times considered controversial during President Barack Obama’s administration, especially after its decision to invest in Solyndra, a solar panel company which eventually failed, and a few other companies that filed for bankruptcy including Fisker Automotives. The federal renewable energy loan program, which was designed to accelerate the adoption of clean energy technologies, has to date disbursed over $34 billion in loans to numerous types of businesses. According to DOE, the program has seen less than 3% in losses on borrower company defaults. "It (the program) literally kick-started the whole utility-scale photovoltaic industry," said Energy Secretary Ernest Moniz. “We have to be careful that we don't walk away from risk, because otherwise we're not really going to advance the marketplace.” After Solyndra loss, U.S. energy loan program turning a profitNPR and U.S. expects $5 billion from program that funded SolyndraBloomberg BusinessWeek

A measure to authorize the construction of the contentious Keystone XL pipeline failed by one vote in the United States Senate. The bill, which was supported by embattled Democratic Senator Mary Landrieu of Louisiana, fell short of the number needed to overcome a filibuster by opponents, collecting 59 votes in favor and 41 votes against. A similar proposal in the House of Representatives passed on a 252-161 vote. When the new Congress convenes in January, supporters will gain additional votes, but it remains to be seen whether there will be enough support to override a potential presidential veto. The State Department has been studying the proposal to determine whether it poses a hazard to the environment and a final decision is still pending.  Senate defeats bill on Keystone XL pipeline in narrow voteThe New York Times

 

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