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Blog posts January 2012

Energy Update, January 27, 2012

January 27, 2012

State of the State Addresses

Of the 30 Governors who have given their State of the State addresses this year, 17 have specifically discussed energy issues, much of the time in the context of job creation and retention.  California Governor Jerry Brown, New York Governor Andrew Cuomo, and Vermont Governor Peter Shumlin said that renewable energy would bring green jobs to their states, while Virginia Governor Bob McDonnell, Alaska Governor Sean Parnell, and West Virginia Governor Earl Ray Tomblin each said that their states’ fossil fuel resources would bring more jobs.  Governor Tomblin praised recent oil, coal, and natural gas investments and the jobs they will bring while promising that “I will do everything in my power to make sure that West Virginia is positioned to take full advantage of this opportunity” to build an ethane cracker facility, which he said would bring thousands of manufacturing jobs.  Utah Governor Gary Herbert and Maine Governor Paul LePage said that new jobs would arise from low energy costs, New Mexico Governor Susana Martinez said that the key to economic growth and environmental protection is “sensible, predictable regulations” on energy production, and Georgia Governor Nathan Deal proposed eliminating a sales tax on energy used for manufacturing as a way to retain their business.

In the face of the slow economic recovery, several Governors have proposed ideas that require no state funds or attract new private investment.  For example, Hawaii Governor Neal Abercrombie proposed legislation to incentivize companies to invest in energy infrastructure that would integrate more renewable energy into the grid, saying that “there is no legislation more critical to our future."  New York Governor Andrew Cuomo proposed several new initiatives, including attracting $2 billion in private investment for grid infrastructure and a program to increase energy efficiency in State buildings to be paid for with savings in energy costs.  Utah Governor Gary Herbert proposed creating an “energy research triangle” that would pair universities and industry to research energy production technologies.  Maine Governor Paul LePage proposed lifting a restriction on the amount of hydroelectric power produced. 

Governors commonly reflect on the previous year in their State of the State addresses to evaluate the progress that has been made.  California Governor Jerry Brown said that his State’s goal of producing 20,000 megawatts of renewable energy by 2020 was ahead of schedule and that billions of private clean energy investments had been made.  Delaware Governor Jack Markell said that hundreds of jobs were created in his State last year due to upgrades and conversions of power plants to lower emissions.  Massachusetts Governor Deval Patrick cited his State’s policies on renewable energy in discussing that industry’s seven percent growth in 2011.  Colorado Governor John Hickenlooper and West Virginia Governor Earl Ray Tomblin referenced signing an agreement with other states to work with automakers on converting their vehicle fleets to run on natural gas.  Governor Hickenlooper also noted an agreement between energy companies and environmental groups to disclose materials used in the hydraulic fracturing process.

Some Governors used their speeches to urge federal government action on energy issues.  Utah Governor Gary Herbert said that the federal government needed to continue working with the State on siting and permitting of energy development.  Virginia Governor Bob McDonnell called on President Barack Obama and the U.S. Congress to accelerate the timetable for allowing oil and gas drilling off Virginia’s coast.  West Virginia Governor Earl Ray Tomblin said that he would continue to fight against attempts to increase regulation of coal and other energy resources.

The State of the State addresses announced a range of other proposals, including:

  • Washington Governor Christine Gregoire proposing a $1.50-per-barrel tax on oil produced in Washington that would be used to improve infrastructure such as roads and bridges.
  • Oregon Governor John Kitzhaber stating that his administration will adopt a ten-year energy plan this year.
  • Maine Governor Paul LePage proposing giving ratepayers a choice of whether to purchase renewable or traditional energy.
  • Missouri Governor Jay Nixon stating his intention to work with farmers to improve their energy efficiency in order to make the State’s agriculture industry more competitive.
  • Vermont Governor Peter Shumlin proposing an increase in the amount of renewable energy required in the State’s renewable energy portfolio to 75% by 2032.

Links to all of the Governors’ addresses can be found at the State of the State Speeches Calendar on Stateline.org

National News

President Barack Obama’s State of the Union address included an overview of his energy agenda for 2012, which he began to unveil in more detail after his speech.  In his remarks, President Obama announced that he is opening 75 percent of potential offshore oil and gas reserves to development and opening enough federal land to renewable energy development to power 3 million homes.  The Defense Department will purchase much of that new renewable energy.  He also said that his administration would help develop domestic natural gas resources and separately called on Congress to pass legislation to provide production tax credits for renewable energy.  In addition, The President called for the disclosure of chemicals used in hydraulic fracturing on federal lands and proposed providing energy-efficiency incentives to manufacturers.  Since the speech, President Obama has released a “blueprint” detailing these proposals, which he calls an “all-of-the-above strategy,” and has gone on a nationwide tour to promote it.  The blueprint includes a proposal to incentivize greater use of natural gas as a transportation fuel and calls for doubling the country’s clean energy output by 2035.  State of the Union Address TranscriptWhite House and Energy Blueprint Fact SheetWhite House and Obama pitches ‘all-of-the-above’ energy strategyNational Public Radio

In the Republican response to President Obama’s State of the Union address, Indiana Governor Mitch Daniels criticized the President for rejecting the Keystone XL pipeline proposal, which he said was “perfectly safe” and “would employ tens of thousands.”  Governor Daniels called for a free-market approach to energy, with lower taxes and fewer loopholes, fewer regulations, and maximizing domestic energy production.  He also characterized the President’s energy policies as “pro-poverty” for increasing consumers’ costs while not improving public health or the environment.  Full text of GOP’s State of the Union responseMcClatchy

President Barack Obama’s State of the Union address included an overview of his energy agenda for 2012, which he began to unveil in more detail after his speech.  In his remarks, President Obama announced that he is opening 75 percent of potential offshore oil and gas reserves to development and opening enough federal land to renewable energy development to power 3 million homes.  The Defense Department will purchase much of that new renewable energy.  He also said that his administration would help develop domestic natural gas resources and separately called on Congress to pass legislation to provide production tax credits for renewable energy.  In addition, The President called for the disclosure of chemicals used in hydraulic fracturing on federal lands and proposed providing energy-efficiency incentives to manufacturers.  Since the speech, President Obama has released a “blueprint” detailing these proposals, which he calls an “all-of-the-above strategy,” and has gone on a nationwide tour to promote it.  The blueprint includes a proposal to incentivize greater use of natural gas as a transportation fuel and calls for doubling the country’s clean energy output by 2035.  State of the Union Address TranscriptWhite House and Energy Blueprint Fact SheetWhite House and Obama pitches ‘all-of-the-above’ energy strategyNational Public Radio

In the Republican response to President Obama’s State of the Union address, Indiana Governor Mitch Daniels criticized the President for rejecting the Keystone XL pipeline proposal, which he said was “perfectly safe” and “would employ tens of thousands.”  Governor Daniels called for a free-market approach to energy, with lower taxes and fewer loopholes, fewer regulations, and maximizing domestic energy production.  He also characterized the President’s energy policies as “pro-poverty” for increasing consumers’ costs while not improving public health or the environment.  Full text of GOP’s State of the Union responseMcClatchy

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Energy Update, January 13, 2012

January 13, 2012

In the States

CA – Governor Jerry Brown has proposed using half of the estimated $1 billion in revenues from the State’s cap-and-trade auctions to reduce California’s $9.2 billion deficit.  Funds from the cap-and-trade program are required to be spent on projects related to greenhouse gas emissions; the Governor has said that the money sent to the general fund will pay for existing greenhouse gas-related projects.  Some business groups oppose the move, saying that it is not authorized by the cap-and-trade law, and have said they will challenge the State in court if a budget passes in which auction proceeds pay for general fund projects.  Brown sees $500 million cap-and-trade fees for California budgetBloomberg and Gov. Brown’s cap-and-trade spending plan angers businessesLos Angeles Times

ME – In remarks to wood product industry representatives, Governor Paul LePage expressed his support for a proposed natural gas pipeline into central Maine.  Governor LePage said that while the State "is not in a position where it can help fund a pipeline," he assured companies interested in investing in the project that he would help streamline the approval process.  "There is a lot we're doing to try to encourage some natural gas here," he said.  During an earlier radio address, Governor LePage also said he does not endorse a citizens’ initiative to strengthen the State’s renewable energy portfolio, saying “It’s not good and I’m going to be fighting it all year.”  Governor LePage also vetoed a bill that passed the House and Senate unanimously that would have tightened energy efficiency standards for new state buildings; the veto, however, was later sustained.  LePage pledges to tackle energy costs to improve business climateBangor Daily News and LePage supports natural gas projectPortland Press Herald and Maine Senate sustains LePage vetoesLewiston Sun Journal

VA – Governor Bob McDonnell has unveiled his 2012 energy policy agenda that he says will help the State become the “Energy Capital of the East Coast.”  One of his proposals would direct $500,000 to wind energy research to help companies develop offshore wind farms when the federal government leases areas off the coast.  Another proposal would help fund conversion of some State vehicles to alternative fuels.  Other initiatives include strengthening oversight of wells and pipelines and increased investment in energy efficiency programs.  The Governor also called on the federal government to open up offshore areas to oil and gas exploration and drilling.  Va. Gov. McDonnell outlines energy agenda; slams U.S. limits on off-coast oil, gas explorationWashington Post

WV – Governor Earl Ray Tomblin’s office announced his administration is focusing on promoting the development of natural gas and coal resources rather than state initiatives to begin or expand renewable energy projects.  The Governor’s Chief of Staff, Rob Alsop, said that the Governor believes that natural gas will not only be a good source for energy, but its by-products will reinvigorate the manufacturing sector as well.  On wind power, Alsop said that it can be successful only with federal tax incentives and that state programs have little effect.  Governor’s office: State energy focus on gas and coalState Journal 

Federal News

President Barack Obama has signed a bill into law that will increase regulations on pipelines, following a series of pipeline bursts that have killed and injured people as well as caused environmental and property damage.  The new law, passed with bipartisan support, will require automatic valves where “feasible,” increase the number of pipeline inspectors, and increase the maximum fine for safety violations from $1 million to $2 million.  Obama signs pipeline safety law - UPI

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