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Blog posts April 2013

Energy Update, April 19

In the States

AK – A measure championed by Governor Sean Parnell that provides for a multibillion-dollar oil tax cut passed the State Legislature on the last scheduled session day. The bill, which the Governor hopes will spur more production and make Alaska’s oil industry more competitive, includes a 35 percent base tax rate and a $5 allowance per taxable barrel of oil produced in the State. A series of additional incentives could decrease the effective tax rate to as low as 14 percent. According to a fiscal analysis, the plan could cost the State up to $4.7 billion through 2019. Critics of the Governor’s oil tax cut bill are already organizing a referendum campaign to repeal the legislation and must collect at least 30,000 signatures within 90 days to place their repeal proposal on the August 2014 ballot. “I think the referendum was last November," Governor Parnell said. "I think the voters voted that it was time to stop studying the issue of declining oil production and do something about it." Critics of oil tax cuts move heads with referendum to repeal the legislationThe Anchorage Daily News and Legislature passes oil tax overhaulThe Juneau Empire

 CA – Governor Jerry Brown recently approved a proposal to connect California’s carbon cap-and-trade program to a similar system in Quebec. Officials and staff from the State Air Resources Board said the link to the Canadian province’s program would allow companies to trade carbon permits across the international border and increase investment in low-carbon technologies. A bill passed by the State Legislature last June requires the air board to gain the Governor’s approval before connecting the State’s cap-and-trade program to any other governments’ efforts or systems. The connection to Quebec’s system, according to Governor Brown, will not be completed until January 1, 2014. Both California and Quebec hope their respective cap-and-trade programs will reduce carbon emissions to at least 1990 levels by 2020. California Governor clears way for carbon market link to QuebecBloomberg

 DE – Governor Jack Markell joined executives from the Public Service Enterprise Group (PSEG) to dedicate a new solar farm in Milford, Delaware. The 80-acre, 61,896 panel farm is the largest solar project in the State, and can produce about 12,000 kilowatts of electricity, or enough to power approximately 9,000 homes at its peak output. The land on which the project sits was slated for residential development until investors in 2010 proposed to build a solar farm. In 2012, PSEG Solar Source, a subsidiary of PSEG, took over the project and within months, a solar grid was operating on the property. The Delaware Municipal Electric Corporation, according to Milford City Manager Richard Carmean, has agreed to purchase all of the site’s power production for the next 20 years. “This will allow our economy to compete for years,” said Collin O’Mara, secretary of the State’s Department of Natural Resources and Environmental Control. “This is something we’re really proud of,” said Governor Markell, “This will generate energy for a lot more than just the immediate needs.” City, state officials dedicate PSEG solar farm in MilfordThe Milford Beacon


The House of Representatives voted 416 to 7 in favor of exempting certain hydropower projects from environmental rules when housed or placed in water canals or pipelines controlled by the Bureau of Reclamation. The legislation additionally allows for the development of hydropower projects near the Bureau’s facilities. The bill, titled the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act, is similar to a bill passed last year by Congress with bipartisan support. Several House Democrats questioned the timing of the bill and maintained that a waiver of the environmental rules wasn’t necessary, and perhaps even a barrier to the legislation’s adoption by the Senate. House votes 416-7 in favour of easing barriers to hydropower developmentThe Hill

 Sally Jewell, the former chief executive of REI, an outdoor equipment company, was confirmed by the United States Senate 87 to 11 to serve as President Barack Obama’s Interior Secretary. Secretary Jewell, a former oil industry engineer and banker, will oversee the Department’s 70,000 employees and agencies, which include the National Park Service, the Bureau of Indian Affairs, and the Bureau of Land Management. Secretary Jewell replaced Ken Salazar, who served for the duration of President’s Obama first term. Both Sens. Ron Wyden (D-Ore.) and Lisa Murkowski of Alaska, the chair and the ranking member of the Senate Energy and Natural Resources Committee, respectively, praised Jewell for her leadership and experience. She has the “professional track record of actually bringing people together” on competing environmental and energy issues. REI’s Sally Jewell wins confirmation as Interior SecretaryThe Washington Post and Jewell sworn in as interior chief The Hill

 Following Secretary of State John Kerry’s visit with Chinese officials in Beijing, the United States and China announced they will form a working group to address climate change. The “Climate Change Working Group” will focus on how the two countries can “advance cooperation on technology, research, conservation, and alternative and renewable energy.” The group will be led by Todd Stern, the State Department’s special envoy for climate change, and Xie Zhenhua, vice chairman of China’s National Development and Reform Commission, and will present a report on their findings during the next meeting of the U.S.-China Strategic and Economic Dialogue. Secretary Kerry referred to the initiative as "the best of international and government-to-government cooperation.” China, U.S. form climate change initiative – UPI

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Energy Update, April 5

In the States

NY – Governor Andrew Cuomo and the State’s Energy Research and Development Authority announced awards totaling $46 million for 76 large-scale projects in the first round of funding under the Governor’s solar program. The new projects represent 52 megawatts of new solar capacity, or enough to power 9,000 homes. Governor Cuomo’s solar program, titled the NY-Sun Competitive PV Program, seeks to deliver affordable solar power to large energy consumers such as businesses and public buildings and to quadruple the amount of solar photovoltaic capacity in New York. In this first round of funding, awards are capped at $3 million a project and are also leveraging $100 million of private financing to support the new projects. New York Solar Projects to get $46 million in state funding Bloomberg BusinessWeek and Gov. Cuomo’s NY-Sun competitive solar program off to a bright startThe Fort Mill Times

 OK – Governor Mary Fallin and General Electric Company Chairman and CEO Jeff Immelt announced the creation of a new global research center in Oklahoma City. The $110 million project is expected to create 125 new high-paying engineering jobs. The new center will at first focus on “unconventional fuels” such as shale gas and will employ individuals skilled in mechanical and electrical operations and also experts in systems and software engineering. Several considerations, according to Mr. Immelt, led Connecticut-based GE to expand its Oklahoma operations, including the State’s energy sector, which ranks fourth in the nation in natural gas and fifth in crude oil production. Governor Fallin also invested $3 million from a state economic development closing fund to attract GE’s research center to the State. "Our state is nationally and even internationally recognized as a leader in energy and the home of a dynamic and robust economy," Fallin said. "Whether it's international powerhouses like GE or small businesses, Oklahoma is a fantastic place to locate and to invest in." GE to build global research center in OklahomaThe Connecticut Post

 WA – Governor Jay Inslee signed a measure he promoted into law this week that will study the best practices for reducing greenhouse gas emissions. The law requires an independent consultant to review the State’s efforts to decrease carbon and other emissions and report back to the governor and a group of legislative leaders, who will then create a full report to present to the state legislature by the end of this year. A 2008 state law requires Washington State to reduce emissions to 1990 levels by 2020, and advocates believe the new law will help the State achieve its target. According to the most recent figures, the State emitted 101 million metric tons of carbon dioxide in 2008, about 2.3% less than in 2007 but approximately 9% more than in 1990. "This bill is a collaborative, bipartisan step forward that will allow us to seize the environmental and economic opportunities of addressing climate change," said Governor Inslee in a written statement. Wash. State climate change bill signed into lawThe Seattle Times


The U.S. Department of Energy could lose $192 million on a department loan to Fisker Automotive, a maker of hybrid sports cars that recently retained Kirkland & Ellis, which specializes in bankruptcy law. The company, according to reports, is seeking new investment partners but retained the firm to review its corporate business options. Fisker Automotive stopped making its only model, the $110,000 Karma, following the bankruptcy filing of A123 Systems, Inc, which made the company’s lithium-ion car battery. Fisker Automotive is looking to raise $500 million to restart its production of its Karma model. The federal government has frozen the automaker’s line of credit and the company has furloughed its entire U.S. staff of 200 employees. As potential investors back away, Fisker retains bankruptcy law firmThe Los Angeles Times

 Democratic Senator Bob Casey of Pennsylvania introduced new legislation to renew tax incentives for natural gas as a fuel for vehicles. The proposal would extend the existing 50-cent per gallon alternative fuels excise tax credit for liquefied natural gas (LNG) in addition to an extension of tax credits for the installation of refueling stations for natural gas, hydrogen, and other alternative fuels. The legislation also establishes a rebate of 30% for the purchase of natural gas-powered school and transit buses. Senator Casey is a member of both the Senate Finance Committee and also an active member of the bipartisan Senate Natural Gas Caucus. “When you have an opportunity like natural gas development in Pennsylvania, you have to be thoughtful in how you put into place a strategy that will lead to job growth,” Senator Casey said. Casey introduced natural gas powered billThe Beaver County Times

 The Environmental Protection Agency (EPA) is planning to reduce the amount of sulfur in gasoline to an average of 10 parts per million (ppm), a drop from the current standard of 30ppm, and impose additional pollution limits by 2017. Sulfur, a natural ingredient in crude oil, reduces the performance of a car’s catalytic converter, an integral part of its emissions-control equipment. According to the Obama administration, the EPA rule would add less than a penny a gallon to the cost of gasoline while having a positive environmental impact equivalent to removing 33 million cars from the nation’s roads. Oil industry officials, however, argue the new standard will increase gas prices by 9 cents per gallon and lead to $2.4 billion in annual compliance costs. Obama administration moves ahead with sweeping rules requiring cleaner gasolineThe Washington Post  and EPA plans to require cleaner carsThe Wall Street Journal

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