Blog posts February 2012
In the States
IL – Governor Pat Quinn said in his budget address that he would like to close a tax loophole that allows companies to avoid paying taxes on profits earned from selling oil and gas in Illinois that is extracted offshore in the Gulf of Mexico. Illinois’ current corporate tax law specifically excludes “exploration for or exploitation of natural resources” from anywhere outside the 50 states and the District of Columbia. Governor Quinn has stated that the loophole costs the State $75 million per year, though the oil industry disagrees with that estimate. The Governor raised this issue in 2009, but the State’s law was not changed; it still faces opposition today. Quinn wants to eliminate tax loophole that helps oil companies – Chicago Tribune
PA – Governor Tom Corbett has signed three energy-related bills into law. One would give counties the option of imposing an “impact fee” on wells producing natural gas from the Marcellus Shale. While the new law ensures that Pennsylvania is no longer the only natural gas-producing State without a tax on its production, the effective rate, if imposed by the county at all, would be far lower than any other State. Sixty percent of the revenues from the fees would go to participating local governments, while another portion would be used to purchase natural gas-powered vehicles for the State fleet. The other two laws signed by the Governor would allow utilities to raise rates to recover the costs of improvements prior to completion and provides tax incentives intended to help attract a new petrochemical refinery to western Pennsylvania that could create thousands of jobs and millions in new revenue to the State. Corbett signs 3 key energy-sector bills – Scranton Times-Tribune
President Barack Obama has released his annual budget request to Congress, which calls for $27.2 billion in funding for the Energy Department, a 3.2 percent increase. The President’s proposed budget for fiscal year 2013 would increase spending for energy efficiency, safety, conservation, renewable energy, and nuclear power, and would offset much of that expansion by ending $4 billion in tax breaks to oil and gas companies. Specifically, the budget would increase funding for a grant program to states for pipeline safety by 50 percent and the federal Pipeline and Hazardous Materials Safety Administration by 44 percent. The Office of Nuclear Energy would receive a total of $770 million, part of which would be used to research small modular nuclear reactors and nuclear waste research. Clean energy funding would increase by $580 million, or about 13 percent, and would include programs to make solar power more cost-competitive and research geothermal and offshore wind energy. Another research initiative, the Advanced Research Projects Agency – Efficiency (ARPA-E), would receive a 37 percent increase, bringing its funding up to $350 million. Funding for fossil fuels would increase as well, and would include research on methods of hydraulic fracturing that would be less harmful to the environment. A program to invest in energy efficiency in the Department of Defense would more than double, from $400 million to $1 billion. An agency-by-agency guide to Obama’s proposed budget for fiscal 2013 – Washington Post and Obama seeks clean energy, pipeline funds in budget – MSNBC
State of the State Addresses
Ten more Governors have given their State of the State addresses in the last two weeks, and the majority of them discussed energy issues, mostly in the context of attracting or retaining jobs in their respective states. Pennsylvania Governor Tom Corbett noted the jobs available in natural gas production and said that he is working to attract a natural gas processing plant to the Commonwealth, while Illinois Governor Pat Quinn said that he would like to permanently abolish the tax on natural gas in order to boost his State’s ability to compete for jobs. Oklahoma Governor Mary Fallin called energy “the back bone of our economy” and said that an agreement Oklahoma entered into with nine other states would lead result in the State purchasing thousands of vehicles for its vehicle fleet each year, which would help support jobs in Oklahoma’s natural gas industry. Ohio Governor John Kasich said that lower energy costs would promote business development.
Some Governors expressed their belief that increasing renewable energy and reducing energy use are also important goals. Governor Fallin asked the legislature to pass a bill that would reduce energy consumption in State buildings and higher education facilities 20 percent by 2020. Governor Kasich proposed using waste heat as an energy source and said he supports greater use of renewable energy so long as it does not raise energy costs. New Hampshire Governor John Lynch said that he supports renewable energy, including hydroelectric power, though he opposes a transmission line bringing hydroelectric power from Canada if it does not have sufficient local support. Maryland Governor Martin O’Malley said he supports the work that has been done to build an offshore wind farm, and noted a settlement with an energy company that requires an investment in solar and wind energy.
Governors also highlighted some of the advancements made on energy issues over the past year. Governor Corbett said that natural gas development has lowered prices by 40 percent in the past year. Governor Lynch noted that many residents and businesses have benefitted from the State’s energy-efficiency fund, new production of wind turbines and biomass plants, as well as successful business expansions under the State’s Green Launching Pad program. Governor Quinn said that Illinois has the most wind turbines of any state and that universities and government facilities have been working together on creating energy-efficient batteries.
Links to all of the Governors’ addresses can be found at the State of the State Speeches Calendar on Stateline.org
In the States
MO – Governor Jay Nixon has added his voice in support of a proposed 600-mile oil pipeline from Illinois to Oklahoma. "We believe this proposal has tremendous potential to boost Missouri's economy, create construction jobs across our State and brighten America's energy future," Governor Nixon said. Since the pipeline would not cross an international border, it does not need the same federal approvals as the proposed Keystone XL project. Enbridge Inc., the Canadian company behind the pipeline, estimates that as many as 3,400 workers would be needed to build the pipeline and as many as 400 would be employed at related facilities like pump stations. Missouri Governor backs plans for new pipeline – CBS
UT – Governor Gary Herbert has announced an initiative that would ask residents and businesses to voluntarily reduce their emissions. The Governor said that “All of us can do something to improve Utah’s air quality,” but that it should not be done with “the heavy hand of government.” Currently, the initiative, known as Utah Clean Air Partnership, or U-CAIR, involves a website where visitors can sign a pledge to improve air quality by changing habits such as using a push lawn mower and keeping solvents in air-tight containers. While environmental activists were hoping the initiative would mandatory requirements rather than recommendations, Governor Herbert said “I think it’s better to do this voluntarily.” Governor announces clean air initiative – Deseret News
WV – Governor Earl Ray Tomblin criticized the U.S. Environmental Protection Agency (EPA) in a statement after it was announced that three of the State’s oldest and most polluting coal-fired power plants will be retired this year due in part to new EPA regulations limiting mercury and other toxic emissions. In his statement, Governor Tomblin said, "I urge the EPA to respectfully and accurately review the entire impact of their decisions -- from environmental to economical -- because individuals, families, and communities are forever changed by their short-sighted decisions." FirstEnergy, the company that owns the plants, said that 105 employees will be affected by the shutdown, but that some of these workers will be considered for positions at other plant locations. FirstEnergy to snuff Albright, Rivesville, Willow Island plants – State Journal and EPA causes power company to close plants – Legal Newsline
U.S. Interior Department Secretary Ken Salazar said that his department is “moving full-steam ahead to accelerate the siting, leasing, and construction of new” offshore wind farms. The agency within Interior that is responsible for offshore leases, the Bureau of Ocean Energy Management, has cleared the way for companies to bid for and lease parcels for wind farms in designated areas off the coasts of Virginia, Maryland, Delaware, and New Jersey after an assessment from that agency concluded that the wind farms would have no significant socioeconomic or environmental effects. Obama administration renews offshore wind power push – Wall Street Journal MarketWatch
The U.S. Nuclear Regulatory Commission (NRC) has granted a license to The Southern Company to build two new nuclear reactors in Georgia, the first new start for a nuclear reactor since 1978. The $14 billion project will be built at an existing nuclear facility near Augusta and will begin operating in 2016 or 2017. New safety features will be incorporated into the design that should simplify emergency operations in the event of a malfunction, and the reactors will be built to withstand earthquakes and plane crashes. Some anti-nuclear organizations oppose the new reactors because they believe that safety issues that surfaced in the recent Fukushima meltdown in Japan have note been adequately addressed. The NRC voted 4-1in favor granting the license; the lone dissenter was the Commission’s chairman, Gregory Jaczko, who opposed the license on the basis that not all requested safety features may be in place before operations begin. Federal regulators approve two nuclear reactors in Georgia – New York Times