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Blog posts February 2013

Energy Update, Feb. 22

In the States

HI – Governor Neil Abercrombie signed an executive order creating an oil refinery task force in hopes of reducing Hawaii’s dependence on imported oil and to find the “best solutions for Hawaii’s energy needs.” The Governor first announced the creation of the task force during his State of the State address. The 29-member task force, which will include energy industry leaders and state government officials, will assess the impact of the closure of Tesoro’s Corp.’s Hawaii refinery – one of two such facilities in the State – and will research clean and alternative energy production. “We can no longer view energy production or distribution in an island-by-island context,” said Governor Abercrombie, “we must be united on a statewide basis.” Hawaii governor established refinery task forceBloomberg BusinessWeek

 NV – Governor Brian Sandoval’s state energy office is asking state lawmakers to expand a property tax rebate program for green buildings to allow rehabilitation projects focused on older buildings to qualify for the tax credit. A 2011 law allows only new buildings, with certain exemptions, to qualify for “green building tax abatements” while the existing building rebate expired in 2011. It is estimated the program currently costs the state a total of almost $6 million a year in tax credits for 29 approved projects, which involve businesses paying a combined almost $44.5 million in taxes. “The idea is to stimulate existing buildings to retrofit, by offering them a small tax incentive,” said Stacey Crowley, director of the Nevada State Office of Energy. Sandoval’s energy office seeks to expand green building tax rebate programThe Las Vegas Sun

 OR – In a speech during the conference of the American Wind Energy Association in Portland, Governor John Kitzhaber called for the development of a federal energy policy that will help to decrease the use of traditional energy sources in Oregon. Joined by Seattle Mayor Mike McGinn, Governor Kitzhaber also criticized the potential ramifications of several proposed coal export terminals in Oregon and Washington. Governor Kitzhaber also referenced his 10-year energy blueprint, which he revealed last summer, and pointed to his continued support of clean and renewable energy technology. “What does it mean for the United States to become a major energy exporting nation?” said Governor Kitzhaber, “…And how does that decision, which is being driven only by short-term profit, provide transition for a lower carbon future for the United States?” Gov. Kitzhaber, Mayor McGinn: No to coal exports – The Seattle Post-Intelligencer

 VA – Governor Bob McDonnell signed legislation repealing certain financial incentives for electric utility companies that derive a certain percentage of their energy from renewable energy sources. Virginia Attorney General Ken Cuccinelli, also a Republican candidate for Governor, first proposed the repeal after a report last year determined the incentives increased customer bills while not yielding the intended positive environmental effects. It is estimated the repeal with save consumers more than $40 million annually. Often called “adders,” financial incentives will only remain, though at a reduced rate, for nuclear and offshore wind power. The legislation, however, does not repeal the state’s voluntary goal that utilities derive 15% of their power from renewable energy sources by 2025. Governor signs repeal of renewable energy incentivesThe Virginian-Pilot


The Interior Department has created a task force to investigate coal exports, specifically to determine whether mining companies are avoiding royalty payments by underestimating the value of coal unearthed from federal and tribal lands. A January letter to Interior Secretary Ken Salazar by Senators Ron Wyden (D-Oregon) and Lisa Murkowski (R-Alaska), chairman and ranking member of the Senate Energy and Natural Resources Committee, respectively, requested the Secretary to examine the royalty assessment process. According to the Senators, the federal government may be losing out on revenue, which totaled approximately $898 million in 2011 from coal mining on federal and tribal lands. The Interior Department will begin with a review of coal-mining contracts between 2009 and 2011 from certain parts of Montana and Wyoming while the Department’s Inspector General will examine any potential regulatory or legal violations. Interior Department to investigate coal exportsThe Hill

Throughout his State of the Union address this year, President Barack Obama discussed energy, natural resources, and the environment and announced his administration’s intent to pursue several new energy initiatives while cutting bureaucratic red-tape. Though the President did not propose a comprehensive energy plan, he spoke about his administration’s efforts to help the United States “to control its own energy future.” One of the new initiatives he hopes to pursue includes the creation of an Energy Security Trust, which would use federal oil and gas revenues to find “new research and technology to shift our cars and trucks off oil for good.” President Obama also noted that domestic oil production along with clean energy technology and jobs have increased, and specifically cited the importance of wind energy, which he asserted “added nearly of all new power capacity in America” last year. President Obama also announced his support for faster permitting for renewable energy projects, pipelines, and infrastructure, including highways, bridges, and ports, and also for new oil and gas projects. Giving the Republican response to President Obama’s address, Florida Senator Marco Rubio (R) said the government should open up more federal lands for exploration rather than waste “more taxpayer money on so-called ‘clean energy’ companies.” Obama’s 2013 State of the Union AddressThe New York Times

Federal energy regulators announced they do not yet plan to release new rules requiring the reporting of market-specific physical gas transactions made by natural gas companies. The Federal Energy Regulatory Commission (FERC) is considering requiring natural gas market participants to report a series of items – how gas trades were executed, names of any brokers used, price of any trades, and the names of the companies and exchanges or indexes involved – in order to lessen market manipulation and promote transparency. Several trade associations submitted comments to the FERC insisting any new rules would “harm transparency.” Federal energy regulators give no timelines on nat gas rulesReuters

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Energy Update, Feb. 8

In the States

IL – Governor Pat Quinn recently announced that Illinois has become a national leader in green buildings. In a report released by the U.S. Green Building Council, Illinois was ranked fourth out of all states, behind only Virginia, Colorado, and Massachusetts. Illinois completed 156 Leadership in Energy and Environmental Design (LEED) certifications last year and has a total of 140 million feet of LEED-certified space. According to several state officials, at least 50 more projects are scheduled to meet LEED certification requirements this year. "I'm proud to have the U.S. Green Building Council recognize the success of our efforts to make sure sustainable practices are implemented in homes, schools, and businesses throughout Illinois,” said Governor Quinn. Illinois ranked 4th for green-certified buildingsThe Houston Chronicle and State ranks in green building listThe Southwest City News Herald

 MS – Governor Phil Bryant has released his plan to restore Mississippi’s coastal areas that were affected by the 2010 Deepwater Horizon oil spill. The Governor’s report was presented to the GoCoast 2020 Commission, which Governor Bryant created to advise on how to spend money received under the federal Resources and Ecosystems Sustainability, Tourist Opportunity, and Revived Economies of the Gulf States Act of 2011 (RESTORE Act). The RESTORE Act mandates that 80% of the Clean Water Act fines from the oil spill be distributed to the five states bordering the Gulf of Mexico. The final report, the first released by any state, focuses on workforce development and training programs, and additionally recommends the improvement of Internet access and the relocation of certain railroad tracks along the coast. “GoCoast 2020 will make sure this effort is coast-driven," Bryant said. “It should not be run from Jackson; it should not be run from Washington, D.C." Miss. Gov. Bryant releases plan to spend BP oil spill moneyThe Clarion-Ledger

 State of the State Updates – Governor Paul LePage of Maine, in his State of the State speech earlier this week, discussed Maine’s perceived unfriendly business environment and high energy costs and called for increased natural gas production and an expedited approval and permitting process. In Minnesota, Governor Mark Dayton focused on environmental stewardship, stating that “a healthy life starts with, and depends upon, clean air to breath, clean water to drink, protected natural environments to enjoy, and a secure ecological future.” Illinois Governor Pat Quinn stated he will work to increase renewable energy capacity, and mentioned the growth of the battery industry and energy research in Illinois. Governor Robert Bentley of Alabama stated he intends to keep energy costs down by using natural resources, including coal, natural gas, nuclear, and hydro-electric power to meet Alabama’s energy demands.


Federal energy regulators have ordered several energy companies, including Chevron, Royal Dutch Shell, and Transocean, to stop work aboard oil exploration rigs this week due to defective bolts that connect drilling tubes to safety gear and the seafloor. The defective bolts, used in equipment manufactured by General Electric, were discovered last month. At the time of the announcement, it was estimated that almost 30% of all the active drilling wells in the Gulf of Mexico utilized the flawed bolts. According to some experts, installing new bolts and resuming drilling operations may take as long as three weeks for each rig. The Energy Information Administration states that 20% of total U.S. crude output is a result of oil production in federal waters in the Gulf. U.S. halts drilling on Gulf wells with flawed boltsBloomberg

 President Obama has nominated Sally Jewell, the CEO of Recreational Equipment Inc. – known as REI – to become the Secretary of the Department of the Interior. If confirmed, Ms. Jewell will replace Secretary Ken Salazar, a former United States Senator who has led the department since 2009. A former commercial banker and oil company engineer, Jewell is often considered a champion of conservation and preservation. Ms. Jewell’s nomination breaks with the recent tradition of nominating a western United States politician to lead the Interior Department. Her nomination is the first of several expected energy-related nominations in the coming weeks, including those for the Departments of Energy and Transportation in addition to the Environmental Protection Agency. Energy Secretary Steven Chu, the first scientist to lead his department, and Transportation Secretary Ray LaHood, the Cabinet’s only Republican, announced their intentions to step down last week. Obama’s choice to lead Interior Dept. has oil sector and conservation credentialsThe New York Times

 Senators John Barrasso (R-Wyoming) and Mark Begich (D-Alaska), together with several other Senate colleagues, including two centrist Democrats, introduced a bill to guarantee federal approval of liquefied natural gas (LNG) exports to NATO countries and Japan. The bill mirrors a late 2012 push by former Senator Dick Lugar (R-Indiana) to provide automatic approval for LNG exports to NATO members. Specifically, the bill would treat NATO allies and Japan as any other formal free-trade partner. The proposed legislation additionally instructs the Department of Energy to expedite approval of any export application to countries deemed important to U.S. security interests after consultation with the Departments of State and Defense. “The U.S. and Alaska have plenty of natural gas to sell to Japan and our NATO allies, and I can’t think of a better place to sell it than to our strategic and economic partners,” Senator Begich said. Senate bill would greenlight natural gas exports to US alliesThe Hill 

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