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Energy Updates

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

Energy Update, April 11

April 11, 2014

In the States

AZ – Governor Jan Brewer recently signed legislation into law that eliminates the State’s sales tax on energy sold to manufacturers. Governor Brewer made the repeal of the tax, which is known as the Transaction Privilege Tax, a priority during her State of the State speech earlier this year. Hoping the repeal will help to bring more jobs to Arizona, Governor Brewer said ““In the past five years, we have worked relentlessly to position Arizona as a premier location in which to start or grow a business – and we’ve been successful because we’ve listened to what companies want and need to thrive.” Gov. Brewer signs tax reform legislation to attract business, bolster economic competitivenessExplorer News and Legislature signs off on bill to give tax breaks to manufacturersThe Ahwatukee Foothills News

 OH – An Ohio State Senator recently introduced a measure to stop the State’s mandated scheduled increases in energy efficiency and renewables standards, which require the State’s utilities and power plants to purchase a certain percentage of power from renewable sources and meet annual energy efficiency targets . Annual energy efficiency and renewable benchmarks were set in a 2008 law and are scheduled to continue until 2025. SB 310 would freeze the standards at 2014 levels, or 2.5 percent for renewable energy and 4.2 percent for energy efficiency. If adopted into law, the bill would also create a committee to analyze the necessity of such standards and to submit recommendations to the General Assembly after reviewing the issue. Some State legislators are worried the standards are causing Ohioans to pay higher prices for electricity while opponents of the measure say the bill would hurt businesses. According to one cosponsor of the bill, “"It is essential that we act to protect all Ohioans' electricity bills from continuing to rise and therefore maintain the status quo while we carefully review the best way to move forward." Ohio may freeze energy standardsThe Cincinnati Enquirer and ‘Clean’ energy bill sparks plugs, pansThe Columbus Dispatch

Regional

According to estimates by Wood Mackenzie, an energy research and consulting firm, oil production in the Bakken and Three Forks formation, which are located in parts of North Dakota and Montana, will rise to an average of 1.1 million barrels per day later this year. The firm predicts production will again rise to 1.7 million barrels per day in 2020. Last year, North Dakota alone almost produced 860,000 barrels per day, making it the second biggest oil producer behind Texas in the United States. The expected lifetime of the Bakken and Three Forks formation, which also extend into parts of Canada, is estimated to be somewhere between 25 and 30 years. “Today, the Bakken produces more crude oil than any other unconventional play in the world,” Wood Mackenzie said in a statement. Report: Bakken oil output to soar as spending hits $15BAP

 Federal

The Interior Department recently released its plan to standardize oil and gas permits on federal lands, hoping to bring certainty to the energy sector and its oil and natural gas developers. The Department said its future policies on this topic will focus on four areas when determining the impact on resources: geospatial assessments, landscape-level strategies, mitigation programs, and monitoring and evaluating projects in process. “This strategy outlines the key principles and actions we need to take to successfully shift from a reactive, project-by-project approach to more predictable and effective management of the lands and resources that we manage on behalf of the American public,” Secretary of the Interior Sally Jewell said in a statement. Interior moves to standardize oil and gas permits on federal landsThe Hill

According to the Lawrence Livermore National Laboratory, energy use in the United States increased in 2013 to 97.4 quadrillion British thermal units (BTU), or an increase of 2.3 quadrillions over 2012. Energy efficiency, however, also increased over 2012 figures. And while the economy has grown about 6 percent since 2007, prior to the recent recession, total energy use remains below the record level of 101.5 quads set that year. The United States also imported a net of 12.7 quadrillion BTUs in 2013, or the least amount of energy imported in 28 years. “Growth in the production of oil and natural gas displaced imports and supported increased petroleum product exports, driving most of the decline,” the Energy Information Administration said in a statement. U.S. used more energy in 2013 than the year before, but efficiency is up tooNational Geographic and US energy imports hit two-decade lowThe Hill

Energy Update, March 28

April 11, 2014

In the States

MI – The Michigan State Senate passed a measure to lower the severance tax for oil and natural gas drilling projects that use carbon dioxide. The bill will soon await Governor Rick Snyder’s signature, after the State House approves other changes made to the bill. The legislation hopes to better capture so-called “stranded-oil” – oil that is at the bottom of wells – by injecting carbon dioxide to force the oil to the surface. According to the U.S. Department of Energy, such methods can result in oil extraction of 30 to 60 percent while conventional drilling methods only extract 20 to 40 percent of oil in wells. "The bottom line is that this is about energy security, environmental protection, and Michigan's economy," said state Rep. Aric Nesbitt, the sponsor the bill. Tax cuts for oil drilling pass SenateThe Traverse City Record-Eagle

 WA – Governor Jay Inslee met with Secretary Ernie Moniz of the U.S. Department of Energy to discuss the federal government’s plan to cleanup millions of gallons of radioactive nuclear waste at the 586-square-mile Hanford Nuclear Reservation in southeast Washington State. The Hanford site produced plutonium for the United State’s nuclear program, beginning in 1943 until it closed in 1989. Following the meeting and unimpressed by the federal government’s proposed action, Governor Inslee said the State may pursue legal action and seek to demonstrate how the federal government is in violation of a consent decree governing the Hanford cleanup, a project that, according to the State, is years behind schedule. "I and others have called for a comprehensive plan that will lead to an effective cleanup plan,” said Governor Inslee. “We have eagerly awaited an acceptable plan to protect the public health, the environment of our state and Columbia River." State orders DOE to pump leaking Hanford tankThe Tri-City Herald and Inslee orders more aggressive actions on Hanford KREM

Federal

Former governors and U.S. Senators Evan Bayh (D) of Indiana and Judd Gregg (R) of New Hampshire will serve as co-chairs of a newly launched initiative called Nuclear Matters, which will seek to raise awareness of the benefits of nuclear energy and showcase the risks of closing power plants. The organization, according to news reports, will focus on public education and may propose future policy changes and solutions. Nuclear Matters plans to engage stakeholders, including businesses and other organizations, via state-based events beginning in as many as 11 states, ranging from Arizona and Maryland to New Jersey and Michigan. “As America contemplates its energy future,” said Senator Bayh, “we must change course to ensure that nuclear energy stays in the mix because it is critical to maintaining a diverse, reliable, and clean energy supply for our nation.” Former senators go nuclearThe Hill

 North Dakota Senator Heidi Heitkamp (D) unveiled legislation that offers substantial loan and tax credit incentives to companies to invest in clean-coal and carbon capture and storage technology. Under the Senator’s bill, which is titled Advanced Clean Coal Technology Investment in Our Nation (ACCTION), coal-fired plans would be eligible for up to $2 billion in federal loan guarantees and tax credits based on the amount of carbon they capture. The bill also seeks to create a cost sharing program between the federal government and industry to update research and programs for carbon capture technology. "North Dakotans rely on coal for about 80 percent of our electricity, and I’m committed to making sure this affordable, abundant energy source is available for North Dakotans for decades to come," Senator Heitkamp said in a statement. Sen. Heitkamp wants to invest in coalThe Bismarck Tribune and Sen. Heitkamp pushes coal-friendly legislationThe Hill

 The U.S. Department of Energy has conditionally approved an energy facility in Oregon to export liquefied natural gas (LNG). The Jordan Cove Energy Project, which is located in Coos Bay, Oregon, will be able to export LNG at a rate of 800 million standard cubic feet per day for 20 years. Before becoming operational, the Federal Energy Regulatory Commission must approve Jordan Cove’s LNG export application. “This announcement is exactly what Coos Bay, North Bend, and America need: new jobs and new investment,” Democratic Senator Ron Wyden of Oregon said in a statement. Department of Energy OKs Jordan Cove export permitThe Umpqua Post

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