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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, July 18

July 21, 2014

In the States

CO – Governor John Hickenlooper promised to combat ballot measures this fall that are aimed at banning hydraulic fracturing, which according to the Governor, generates more than $30 billion a year for the State’s economy. Commonly known as fracking, hydraulic fracturing is the process by which the flow of oil and gas is improved by creating rock fissures and fractures through the pumping of pressurized water, sand, and chemicals down well bores. The ballot questions will ask voters if local communities should have more control over where drilling occurs and if the State constitution should be amended to restrict wells within 2,000 feet of homes and schools. “These measures risk thousands and thousands of jobs and billions in investment and hundreds of millions of dollars in state tax revenue,” said Governor Hickenlooper. The State is currently ranked sixth in natural gas production and ninth in oil production. Colorado Governor doesn’t have support for fracking billBloomberg and Effort to avoid vote on fracking falters in ColoradoThe New York Times

NJ – State officials recently approved a bundle of tax breaks worth $260 million for a nuclear energy company to build several new reactors in the city of Camden. The tax breaks are believed to be the third-largest economic subsidy in State history. The State’s Economic Development Authority awarded the tax credit package to Marlton, New Jersey-based Holtec International. It is estimated that the company will create more than 200 full-time jobs at its future 600,000 square-foot manufacturing plant. Several Republicans and Democrats in the state legislature criticized the move, including State Senator Michael Doherty (R) who called it “crony capitalism” given the State’s dismal economic situation. Joy Russell, a vice president with Holtec, called the move “a great opportunity… we believe it is important for us and others to concentrate on creating well-paying manufacturing jobs in the United States.” N.J. gives $2670 million tax break to energy company with political tiesThe New Jersey Star-Ledger

NY – After denying a request from CSX Transportation and Canadian Pacific Railway, State officials announced it will disclose the routes and frequency of trains transporting crude oil from the Bakken formation traveling through New York to refineries on the coast. Other States, including Florida, California, and Montana, already release similar information. Trains carrying the volatile crude, usually in 100 or more tankers, commonly pass through upstate New York. A string of recent train derailment accidents has led to heightened concerns about rail safety across the United States, which in 2013 saw “an estimated 434,000 tanker loads of crude oil shipped by rail.” New York will disclose when, where trains ship oilThe Democrat & Chronicle

WA – Governor Jay Inslee announced more than $14 million in grants to assist the State’s utilities to more efficiently manage and make use of renewable energy, including solar and wind power. The grants from the State’s Clean Energy Fund, according to Governor Inslee, who announced the grants at battery technology facility, will help make Washington State a leader in smart grid and energy storage technology. Three utilities won grants, including Snohomish County PUD, Puget Sound Energy, and Avista Corporation.  "Delivering operational value for our utilities is crucial,” said Governor Inslee, “if we're going to successfully develop and deploy clean energy technologies that save energy and reduce energy costs, reduce carbon emissions and increase our energy independence." $14.3M state grant for ‘smart grid’ technology could mean big business for Mukilteo startupPuget Sound Business Journal

Federal and National

The United State Senate confirmed two of President Barack Obama’s nominees to the Federal Energy Regulatory Commission (FERC), an independent federal agency that regulates and provides oversight of interstate transmission of natural gas, electricity, and oil. Norman Bay, FERC’s enforcement director and a former federal prosecutor, was confirmed on a vote of 52 to 45 following strong disapproval from Republicans and some conservative coal-state Democrats while Cheryl LaFleur, the acting chairwoman of FERC, was confirmed by a vote of 90 to 7. Obama’s FERC nominees confirmed by U.S. SenateBloombergBusinessweek

According to a new report issued by the nonprofit American Council for an Energy-Efficient Economy (ACEEE), the United States ranks 13th out of 16 major national economies on energy efficiency. The international scorecard examines how the 16 major world economies, which account for 81% of the world’s gross domestic product and 71% of the world’s energy consumption, rank in terms of 31 different energy policy and usage criteria, including energy performance and use in buildings and industry and also fuel-economy standards. Germany was ranked first overall in the report. "The United States, long considered an innovative and competitive world leader, has progressed slowly and has made limited progress since our last report (in 2012), even as Germany, Italy, China, and other nations surge ahead," said ACEEE's executive director Steven Nadel. On energy efficiency, U.S. ranks 13th out of 16USA Today


Energy Update, July 3

July 7, 2014

In the States

AK – Governor Sean Parnell announced a deal between the State of Alaska and four energy firms to begin work on an 800-mile natural gas pipeline. The parties involved – Exxon Mobil, ConocoPhillips, BP, and TransCanada – have signed a joint-venture agreement with with the State to transport natural gas from the Alaska’s North Slope region to a liquefied natural gas (LNG) export plant. The agreement allows the State and its partners to begin planning, designing, engineering and financing the future project. The forthcoming contract, which requires approval by the State legislature, is expected to be finalized by the end of 2015 with the first LNG exports hitting the market in the mid-2020s. "While many projects have faltered in the past, I am cautiously optimistic about this one because it's the first time in our history when all the necessary parties for a project are aligned, all the necessary parties are putting down their money and all have agreed to work together," Governor Parnell said. Alaska governor says design work to start on new LNG projectReuters

AZ – Two residential solar energy companies, SolarCity Corporation and Sunrun, Inc., recently filed a suit against the Arizona Department of Revenue over the Department’s decision to assess property taxes on leased solar panels. SolarCity Corporation, which is headquartered in San Mateo, California, provides solar electricity to the Phoenix and Prescott Valley areas. In 2013, SolarCity, which has almost 600 employees in Arizona, installed enough solar panels to generate almost 43,000 kilowatts of energy. San Francisco-based Sunrun, Inc. provides solar electricity to Phoenix, Scottsdale, and Tucson among other areas and has around 70 employees in the State. Both companies claim solar panels owned by homeowners and businesses in Arizona are exempt from taxes the Department would like to institute. According to SolarCity and Sunrun, the new levy would burden consumers and discourage the use of solar energy. Solar companies sue to stop property taxes on leased rooftop panelsThe Arizona Republic and SolarCity, Sunrun sue Arizona Department of Revenue over solar panel tax assessmentThe Phoenix Business Journal

IL – Governor Pat Quinn signed a bill into law that promotes the purchase of solar-generated electricity. The law requires the Illinois Power Agency to use up to $30 million to purchase solar power to meet a part of the State’s electricity needs and additionally establishes a competitive procurement process to purchase solar energy from existing solar installations and other sources. Under the State’s renewable portfolio standard, the State’s goal is to purchase 25 percent of its energy from renewable sources by 2025. “Thousands of average residents will soon get cheaper, cleaner energy, and we will create good paying jobs for working families in the process,” Governor Quinn said in a statement. Quinn signs Band-Aid fix for SolarThe Chicago Tribune

Federal and National

The Department of Energy (DOE) approved a $150 million loan for the construction of the contentious Cape Wind offshore turbine farm. Energy Management, Inc., which is developing the Cape Wind project, said it is on schedule to begin construction in 2015, following years of searching for financing and obtaining regulatory approvals. The Cape Wind project is projected to include more than 100 turbines and will be based in the Nantucket Sound. Governor Deval Patrick praised the DOE’s decision, stating “Offshore wind will not only provide a new, clean source of energy for the United States, but it will reduce American reliance on fossil fuel, mitigate climate change, and jump-start a new US industry that will create thousands of clean energy jobs.” Once completed, two utilities, Boston-NStar and National Grid, will purchase more than three-quarters of the power generated by Cape Wind. Cape Wind opponents recently lost a lawsuit in federal court to invalidate the agreement between Cape Wind and the utilities. Cape Wind gets $150m boostThe Boston Globe

The House of Representatives easily passed legislation by a vote of 266 to 150 to expedite applications for the export of liquefied natural gas (LNG). The bill had broad bipartisan support, including 46 Democrats who voted yes. The legislation sets a 30-day deadline to review LNG export applications for the Department of Energy (DOE) after an environmental analysis has been completed by the Federal Energy Regulatory Commission (FERC). Senator Mark Udall of Colorado is sponsoring a similar Senate bill, which requires a decision by the DOE within 45 days following FERC’s review. Several House Members, including Rep. Henry Waxman of California, voiced their concerns about the bill, which they believe will unnecessarily rush a DOE decision. "The economic impacts alone make natural gas exports a winning policy,” said Rep. Cory Gardner of Colorado, the Republican sponsor of the legislation. House passes bill speeding up decisions on LNG export requestsReuters

A new report released by the Interior Department’s Office of Inspector General (OIG) encourages the Bureau of Land Management (BLM) to speed up its consideration of oil and gas drilling permits. OIG recommended six actions, including setting performance standards and timelines for its employees and sharing best practices, and said that current delays “deprive the federal and Indian governments of royalties while holding back energy development.” According to the OIG, the BLM agreed with all six of its recommendations regarding the permit application process. Internal report finds BLM can speed oil, gas permittingThe Hill

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