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Blog posts October 2011

Energy Update, October 21, 2011

October 21, 2011

In the States

CA – After an eight hour hearing that consisted of passionate speeches both in support and in opposition, the California Air Resources Board unanimously created the nation’s first statewide cap-and-trade program.  A controversial part of the landmark climate change legislation passed in 2006, AB 32, the cap-and-trade program will be phased in beginning in 2013 with the State’s largest greenhouse gas emitters and will expand in 2015 to include almost all emission sources.  The cap-and-trade program was instituted in order to help the State reach the goal mandated by AB 32 of returning greenhouse gas levels emissions to 1990 levels by 2020.  The second largest cap-and-trade program in the world has support from both Governor Jerry Brown and former Governor Arnold Schwarzenegger.  California becomes first state to adopt cap-and-trade programLos Angeles Times and California adopts limits on greenhouse gasesNew York Times and California moves ahead with cap-and-trade, adopts final rulesFox Business News

OK – Governor Mary Fallin has been unanimously elected to as Chair of the Southern States Energy Board, an organization of Governors and legislators from 16 states and two territories to encourage innovation in energy programs and policies.  Responding to her election, Governor Fallin said she was “honored to be elected” to the group that “has an excellent reputation for its powerful support of the traditional energy resources that are needed and used by Oklahoma and other states every day.”  She also said “we must build our energy infrastructure base and support American made energy” by “fully exploiting the United States’ reserves of natural gas through hydraulic fracturing as well as improving the technology needed to capture and store carbon dioxide for use in advanced oil recovery.”  Board elects Governor Fallin as chairmanTulsa Today

VA – Governor Bob McDonnell spoke to about 400 people at his second annual Governor’s Conference on Energy and critiqued the federal government’s energy policies.  The Governor said the federal government had impeded the development of fossil fuels and had not pushed hard enough for more nuclear energy.  "We unfortunately have erected too many impediments, too many roadblocks at the federal level," Governor McDonnell said.  He said that in order to create jobs and provide for the expected increase in energy demand, "We've got to have a comprehensive, red-white-and-blue American energy policy," which he said would be an “all-of-the-above approach” including fossil fuels, nuclear, and renewable energy as well as increased conservation.  The Governor also called for increased offshore oil and gas drilling as an economic development tool.  The three-day conference also included discussions and speeches by energy executives.  McDonnell chides federal government for hindering energy developmentRichmond Times-Dispatch and Va. energy conference begins 3-day run MondayBloomberg BusinessWeek

Federal News

The number of rigs drilling for oil in the U.S. has nearly doubled in the past year according to a survey of oil and gas rigs conducted by oil services firm Baker Hughes and represents a record high since they began tracking the data 24 years ago.  Nearly 1,100 oil rigs are currently drilling around the country this week, with the spike in production mainly due to technological advancements such as hydraulic fracturing that allow shale oil to be extracted in an economically viable way.   The states that contain more unconventional oil fields, such as North Dakota and Texas, have experienced most of the increases.  U.S. oil rig count hits recordReuters

The White House has identified 14 infrastructure projects that it intends to fast-track through environmental and permitting processes, as well as other regulatory requirements, including two new wind farms.  A 15-turbine wind farm to be built in southern Vermont is included on the list of expedited projects, as is a 52-turbine facility in the San Bernardino National Forest in California.  The Vermont wind farm should receive a full environmental impact statement by the end of this year and the timeline for the review process for the California wind farm should be cut in half, from three years to 18 months.  14 U.S. infrastructure projects get federal fast-trackingAtlantic Cities and Obama Administration announces selection of 14 infrastructure projects to be expedited through permitting and environmental review processWhite House

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Energy Update, October 7, 2011

October 7, 2011

In the States

GA – Governor Nathan Deal attended the ribbon-cutting ceremony for a new $98 million factory in Gainesville, GA that will produce 16-ton gearboxes for wind turbines.  Governor Deal said that while Georgia is not an ideal place for generating electricity from the wind, “we certainly are pleased that we can be part of the process that will allow us to harness wind energy.”  The new factory, which will be operated by ZF Wind Power, and which Governor Deal described as representing “cutting-edge technology,” is expected to employ 250 workers and will be in full production mode next year.  ZF Wind Power plant opens in GainesvilleGainesville Times

KS – Governor Sam Brownback held an economic development summit this week that focused on generating and transmitting energy.  During the summit, an announcement was made of a new project that will become the State’s largest wind farm.  This 66,000 acre, $800 million facility, called Flat Ridge 2, will span four counties and create 419 megawatts of wind power, 500 construction jobs, and 30 operations jobs.  At the gathering, Governor Brownback said “I love wind energy.  It’s a fabulous industry that fits our State well.”  The Governor also said the federal Production Tax Credit (PTC) is “key for the State of Kansas if we want to continue to develop wind energy.”  The summit’s agenda also included traditional energy production; Governor Brownback said that Kansas must create an “all of the above” portfolio, that the State “can’t walk away from any” type of energy production, and noted growth in oil and gas drilling and ethanol production.  Citing a need to reduce importation of energy resources, the Governor said “We need renewable energy.  We need coal.  We need oil and gas.  We're in the top 10 states in each of these fields, and we need to grow all of them.”  $800 million wind farm planned across 66,000 acres in KansasKansas City Star and Brownback brings heat to energy policy – Topeka Capital-Journal and Brownback asks energy industries to cooperate for growthWichita Eagle

MD – The solar energy industry in Maryland is growing rapidly – the amount of photovoltaic generating capacity installed in the second quarter was four times as much as the first quarter – due in part to State grants, tax breaks, a mandate for solar energy production, and innovative financing options from businesses.  The mandate, which requires an increasing amount of solar energy per year until 2022 when 2% of the State’s electricity must come from solar power, was cited by the Maryland Energy Administration’s director of energy market strategies, Kevin Lucas, as helping to create demand for solar panels.  In order to meet the 2022 mandate, 30 to 40 times more solar power must be harnessed than is currently produced.  Industry officials also cited the importance of a 30 percent federal tax credit,  local property tax breaks, and a State grant system that provides up to $10,000 to homeowners for installing a solar system paid for by the permits sold under a regional cap-and-trade system.  In addition, some companies are offering leasing options for solar systems, which allow consumers to pay little or no up-front costs, but benefit from lower electric bills and pay a monthly fee to the leasing company.  In the second quarter of this year, Maryland ranked eighth in the nation in solar installations, ahead of some sunnier states, and much higher than a few years ago when the State generated virtually no solar energy.  Solar home business shining in MarylandBaltimore Sun and Number of solar energy installations up in StateGazette.net

OH – Governor John Kasich recently held a two-day energy summit that brought together over 1,000 energy sector business leaders and government officials.  Part of Governor Kasich’s message to the summit was that “the pursuit of clean alternative, renewable, and advanced energy sources and their supportive technologies is the pursuit of the future, and our commitment to them shouldn’t waiver despite the fact that their costs aren’t yet where we want them to be.”  Governor Kasich also said that he does not support a full repeal of the State’s renewable energy standard (but would support some changes to it) and he would like to allow national oil and gas companies to develop fossil fuels from shale rock.  He described the potential shale development as an economic opportunity, saying, “if we do it right, Ohio’s new gas finds hold the potential to restore hope and prosperity to struggling regions of our State.”  Ohio Gov. John Kasich says he supports renewable energyCleveland Plain Dealer and Kasich talks of renewable energy’s value but hints at tweaking State rules – Columbus Dispatch

Regional News

Governors Robert Bentley of Alabama, Haley Barbour of Mississippi, and Bob McDonnell of Virginia all appeared at the Southern States Energy Board (SSEB) Governors Energy Summit to discuss regional and state energy issues.  Governor Bentley noted last year’s oil spill in the Gulf of Mexico, but said that while we should learn lessons from the spill, oil drilling should proceed.  Governor Bentley also said that “if we’re going to take the responsibility of having to clean up our coasts and having to lose money because of any spill, then we ought to be able to get money from” federal revenues collected from offshore energy production.  Governor Haley Barbour said that he would like to see a second nuclear power plant built in his State, saying “we don’t have ‘not in my backyard,’ we have ‘please, in my backyard.’”  Governor Bob McDonnell called for the federal government to allow more offshore oil drilling along the East Coast and also expressed support for more nuclear energy development.  Governor McDonnell said he believed in an all-of-the-above approach to energy development, including renewable energy, but focused his comments on coal, oil, natural gas, and nuclear energy development.  While Governor McDonnell said he did not expect any major changes in Washington, he did say that the SSEB would entertain three proposed policy statements at the group’s annual meeting later this month that would urge the Obama administration to loosen current regulations to allow more offshore oil drilling.  Gov. Robert Bentley: Oil spill shows need for state revenue from drilling in federal watersAL.com and Gov. Haley Barbour: ‘We’d love to have another nuclear power plant’GulfLive.com and McDonnell blasts Obama at energy summitWashington Examiner and Governors asked to help revive offshore leasing at energy summitOil & Gas Journal

Federal News

The U.S. Department of Defense (DoD) has committed to obtaining 25 percent of its energy from renewable sources by 2025 and expanded its funding for renewable energy from $400 million in 2006 to $1.2 billion in 2009.  This goal does not apply to vehicles operated in theaters of military operations such as tanks.  The Pentagon has offered economic and security concerns as reasons for the shift, but not environmental.  For every one dollar added to the price of a barrel of oil, DoD spends an additional $30 million per year, so diversifying energy sources is being employed as a cost containment strategy.  With regard to security issues, Navy Secretary Ray Mabus, who says that renewable energy sources will make the Navy and Marines “better war fighters,” cited the statistic that one Marine is either wounded or killed for every 50 fuel convoys that supplies the war in Afghanistan.  When asked about greenhouse gas emissions, Secretary Mabus said “it’s a good byproduct, but it’s a byproduct.”  Not all fuel sources in the military will be cut equally or on the same schedule; for example, fossil fuel use in non-combat vehicles operated by the Navy and Marines will be cut 50 percent by 2015, but fuel consumption on ships will be cut by 15 percent by 2020.  Military spearheads clean-energy driveWashington Post

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