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Energy Update, May 18, 2012

May 18, 2012

In the States

OK – Governor Mary Fallin has signed a bill into law that directs State agencies and educational institutions to reduce energy use 20 percent by 2020, a measure expected to save the State as much as $500 million over 10 years.  Citing a national study by the American Council for an Energy-Efficient Economy that ranked Oklahoma as the fourth worst state in energy efficiency, Governor Fallin said, “We can do better…and today marks that new day that we are going to do better.”  The Governor added, “Not only have we been wasting our precious natural resources of energy, but we've also been wasting hundreds of millions of dollars in the process.  That's money that we could be using for ... essential government services, such as education, health and human services, public safety, and transportation.”  Oklahoma law directs state agencies, colleges to save energyThe Oklahoman

VT – Governor Peter Shumlin has signed a bill into law that bans the practice of hydraulic fracturing, also known as fracking, as well as the importation of hydraulic fracturing wastewater and storage of hydraulic fracturing waste in Vermont.  Governor Shumlin said that although there is currently no drilling taking place in Vermont for the purpose of hydraulic fracturing, the ban would “ensure we do not inject chemicals into groundwater in a desperate pursuit for energy.”  Those opposing the new law, including the American Petroleum Institute, have raised concerns that the law may be unconstitutional under the interstate commerce and supremacy clauses because it bans the importation of hydraulic fracturing materials.  The Vermont Attorney General’s Office, however, issued a letter to legislators after reviewing the bill that concluded the risk of the law being found unconstitutional was low.  Vermont governor signs bill banning hydraulic fracturingBurlington Free Press

WY – Governor Matt Mead has filed formal comments with the U.S. Bureau of Land Management (BLM) in opposition to a proposal that would reduce the amount of land available for oil shale research and development in Wyoming.  The BLM recently proposed reducing available acreage for such development from the 2 million acres approved by the previous Bush administration to 460,000 acres in three states – Colorado, Utah, and Wyoming – with about 175,000 acres located in Wyoming.  The BLM maintains this is action is necessary to protect sage grouse areas, areas of critical environmental concern, and potential wilderness lands.  In his comments, Governor Mead argued that instead of imposing a blanket exclusion in these areas, the BLM should allow local resource management plans to determine where oil shale development occurs.  Some environmental groups, including Biodiversity Conservation Alliance, disagree and argue that it isn’t feasible to transform oil shale into transportation fuel. The BLM is expected to issue a final determination in the fall.  Wyo. Gov opposes BLM's oil shale leasing cutsBloomberg BusinessWeek

Regional News

The U.S. Interior Department is allowing a project to move forward that could lead to the construction of an underwater electricity transmission line from Virginia to New Jersey, making it easier to transfer power produced by offshore wind farms onto land.  Because the Department determined that no competitors have offered proposals, the project has saved at least a year’s worth of time by bypassing an auction process.  Construction of the 380-mile long line, which could begin as early as 2014, would eventually allow the transmission of 7,000 megawatts of electricity, powering about 2 million homes.  While today there is no commercial wind power produced offshore the U.S., the Cape Wind project in Massachusetts may begin producing electricity by 2014.  Investors, including Google, have pledged up to $5 billion for a network of transmission lines for offshore wind farms over the next decade.  Google-backed offshore wind project moves forward; underwater line would run from NJ to VAWashington Post

National News

The U.S. Interior Department has issued a proposed rule that would require disclosure of the chemicals used in hydraulic fracturing on Federal or Indian lands.  The rule would also add new testing of oil and gas well construction and require management plans for water used in the fracking process.  Environmental groups praised the rule, but would like to see disclosure of the chemicals used in hydraulic fracturing prior to drilling rather than after the fact, as proposed in the rule.  The oil and gas industry is wary of Federal government oversight of the drilling process and generally believes states are in the best position to regulate hydraulic fracturing.  Obama administration tightens fracking rulesCNNMoney

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Energy Update, April 6, 2012

April 6, 2012

In the States

CA – Governor Jerry Brown has said that he is considering allowing wider use of hydraulic fracturing in California as a means of obtaining oil from shale.  Governor Brown says that he is not considering new taxes on the procedure and did not comment on legislation that would require companies to disclose the site locations or chemicals used in the process, but said the process would self-regulate due to the State’s “very vigorous tort system.”  According to a U.S. Energy Department estimate, California has two-thirds of the country’s oil shale, which is enough to supply every west coast refinery for 17 years.  California’s Brown says he’ll consider fracking standardsBloomberg BusinessWeek and Gov. Jerry Brown says he’s studying ‘fracking’ in CaliforniaLos Angeles Times

GA – Governor Nathan Deal welcomed PyraMax Ceramics, a company that manufactures ceramic pellets used in the hydraulic fracturing process, to the State, along with the estimated 60 jobs the company plans to establish at the plant it is building in Jefferson County.  PyraMax will save an estimated $1 million per year in taxes – due to a recently-enacted law exempting manufacturing companies from energy sales taxes – and will receive employee training benefits from the State.  The company chose the site due to the benefits that Georgia offered, as well as the availability of kaolin -- a soft white clay used to make the pellets -- and assistance provided by State officials to complete the permitting process and secure contracts from natural gas and electricity companies.  Governor Deal said, “Now that Georgia knows that Jefferson County can make something happen, we look forward to future opportunities to work with other new industries like PyraMax Ceramics that the state of Georgia brings.”  Gov. Deal welcomes PyraMax Ceramics to GeorgiaAugusta Chronicle and Pellet plant bringing jobsGeorgia Public Broadcasting

VA – Governor Bob McDonnell has announced the approval by the Virginia Marine Resources Commission of a proposal from Gamesa Energy USA, in partnership with Huntington Ingalls Newport News Shipbuilding, to build and install a prototype wind turbine in the Chesapeake Bay.  While Gamesa will use this project primarily to ensure optimal performance and reliability of its technology, the turbine will also produce five megawatts of clean, renewable wind power. In discussing the project in the context of his “all of the above” energy approach, Governor McDonnell said:  “This is an important next step in developing all of Virginia’s domestic energy resources to help power our nation’s economy and puts Virginia at the forefront of clean energy technology development.” The turbine will stand 479 feet tall and will be located about three miles off the coast near the town of Cape Charles on the Eastern Shore.  It is expected to be in service in 2013, which would make it the first offshore wind turbine in the country.  However, the project still needs the approval of the U.S. Army Corps of Engineers and review by the U.S. Coast Guard.  State approves construction of bay wind turbineLuray Page Free Press

National News

Ten Federal agencies and five U.S. States have signed a memorandum of understanding (MOU) creating the Great Lakes Offshore Wind Energy Consortium that will help coordinate permitting processes and expedite the development of wind power off the coasts of those states.  The MOU, which is modeled after a similar agreement involving Atlantic coast states, was signed by Governors from Illinois, Michigan, Minnesota, New York, and Pennsylvania as well as the U.S. Departments of Energy, Defense, and the U.S. Army, among other Federal agencies.  Nancy Sutley, chairwoman of the White House Council on Environmental Quality, another signatory, said the goal of the MOU “is to cut through red tape” in order to “create jobs and reduce pollution.”  Pennsylvania Governor Tom Corbett said, “This agreement will enable states to work together to ensure that any proposed offshore wind projects are reviewed in a consistent manner, and that the various State and Federal agencies involved collaborate and coordinate their reviews.”  Feds, 5 states to push for Great Lakes wind farmsAlbert Lea Tribune

U.S. Secretary of Interior Ken Salazar has announced that companies will be allowed to perform seismic mapping surveys off the Atlantic coast between Delaware and Florida to determine the location and scope of offshore oil and gas reserves early next year.  The surveys could pave the way for expanded offshore drilling by providing oil and gas companies updated information they can use in deciding where to drill.  Seismic testing could also be used to determine the most suitable locations for wind turbines and other renewable energy projects, locate sand and gravel for restoring eroding coastal areas, and identify cultural artifacts such as historic sunken ships. Some environmental groups, including the Sierra Club’s Virginia chapter, objected to the surveys because of their concern that the requisite sonic booms emitted by air guns will harm marine life, including endangered species like whales.  Virginia Governor Bob McDonnell said the announcement is “a small step forward in the development of our offshore energy resources,” but also criticized the Obama administration for not allowing offshore oil exploration off the coast of Virginia last year.  Drilling off the Atlantic coast moves a step closerWashington Post

The U.S. Environmental Protection Agency (EPA) has issued a proposed rule that would limit the amount of greenhouse gases that new power plants can emit.  Existing plants are exempt from the rule, which requires plants to emit less than 1,000 pounds of carbon dioxide per megawatt-hour of energy produced.  The rule also allows new coal plants to begin operation and implement carbon restrictions later, as long as they meet the required limit on emissions on average over a 30-year period.  Newer natural gas-fired power plants generally meet the emissions limit, but coal-fired plants would need to use a method of lowering emissions such as carbon capture and sequestration, in order to comply with the proposed rule.  Most environmental groups expressed support for the rule, but some also want emission limitations applied to existing plans.  Republicans in Congress criticized the proposal and Senator Jim Inhofe (R-OK) indicated he would seek a Congressional Review Act vote to stop the rule before it is implemented.  EPA unveils green house gas standard for new power plants - Politico and For new generation of power plants, a new emission rule from the EPANew York Times

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Energy Update, March 9, 2012

March 9, 2012

In the States

NM – Governor Susana Martinez has signed a bill into law that will streamline the permitting process for companies seeking to develop geothermal energy.  Under the new law, geothermal developers are able to bypass the process of obtaining additional permits from the State in certain cases, though there are also protections for groundwater and the holders of water rights.  Governor Martinez said that she hopes the bill will increase the production of renewable energy in New Mexico.  N.M. streamlines geothermal permittingAlbuquerque Journal

OH – Governor John Kasich has proposed raising taxes on oil and natural gas liquids to potentially collect over $1 billion in additional revenue for the State by 2016.  The additional revenues would be used to lower taxes on individuals and small businesses.  If the proposal is approved, it would change the current rate structure of 20 cents per barrel of oil and no tax on natural gas liquids to 1.5 percent of market value for oil and natural gas liquids, which would be raised to four percent by 2014.  The current rate of three cents per 1,000 cubic feet would remain for natural gas, unless it is extracted through hydraulic fracturing, which would trigger a one percent tax.  The proposed increased rates are still lower than those of larger oil-producing states such as Texas, and would apply only to new horizontal-drilling sites and, in the case of natural gas, sites that produce over 10,000 cubic feet of natural gas per day.  Governor Kasich is expected to revisit his already-announced budget to include the new taxes, as well as regulations on hydraulic fracturing.  Kasich said to plan raising Ohio drilling tax as high as 4%Bloomberg and Kasich to propose fee on frackingToledo Blade

WA – Governor Christine Gregoire has signed a bill into law that broadens the type of energy production facilities that are considered to be renewable energy under a voter-approved initiative that requires 15 percent of the State’s electricity to come from renewable sources by 2020.  The new law allows biomass energy production facilities older than 13 years old to count toward the requirement.  While opposition from environmental groups stalled the bill this year and kept it from passing last year, opposition was dropped when the definitions of renewable energy were more narrowly defined.  Washington state plan expands renewable energy lawNews Tribune

National News

Two separate bills are making their way through the House and Senate that would extend highway and transit funding beyond its current March 31 deadline, and Senators and Congressman are currently debating what will be included in the version from each chamber.  Senate Republican amendments were voted down this week that would have bypassed the Obama Administration in the Keystone XL tar sands pipeline permitting process, required changes in new pollution regulations on industrial boilers, and encourage offshore oil drilling.  That two-year, $109 billion transportation bill without those amendments is opposed by House Speaker John Boehner, who is currently gathering support for the House’s own five-year, $260 billion proposal.  The House bill includes many of the provisions struck down in the Senate, but has stalled mainly due to the large price tag.  Speaker Boehner warned Republican House members this week that if the House does not pass the measure, they will need to take up the Senate’s bill, pass a short term extension, or risk shutting down the transportation projects funded by the government and losing many jobs.  Senate rejects GOP proposals that would overturn Obama environment, energy policiesWashington Post and House speaker gives Republicans highway ultimatumReuters and Boehner’s highway bill plea to GOP doesn’t deliverPolitico

The U.S. Department of Energy is soliciting proposals from companies that wish to bid for a newly-announced six-year $180 million demonstration project to develop offshore wind power.  Energy Secretary Steven Chu announced the new program, saying that the initiative was designed to “catalyze the development of offshore wind in America” and help developers “design and demonstrate next generation wind energy technologies.”  Of the funds, $20 million will be available to up to four companies in 2012, with the rest becoming available over the next five years.  DOE launches 6-year, 180m offshore wind development initiativeCleanTechnica and Offshore wind gets $180 million boost from DOE (press release)Energy Department

Senator Jeff Bingaman (D-NM), who chairs the Senate Energy and Natural Resources Committee, has released a long-awaited proposal for a federal clean energy standard.  The proposed legislation would require that 84 percent of the nation’s electricity produced by large utilities would be required to come from wind, solar, nuclear, natural gas, or coal with carbon capture and sequestration by 2035.  Senator Bingaman acknowledged the challenges the bill will face in the current Congress, saying, “Getting substantive legislation through both houses of Congress to the president’s signature is very difficult in this Congress.”  While the White House expressed support for the measure, which resembles the president’s proposals in the two most recent State of the Union addresses, opponents say that the bill would raise energy costs.  Senator Bingaman says that a U.S. Energy Information Administration analysis shows that the standards would have little or no impact on the economy.  Bingaman launches uphill battle with ‘clean’ power proposalThe Hill

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Energy Update, February 24, 2012

February 24, 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 companiesChicago 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 billsScranton Times-Tribune

National News

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 2013Washington Post and Obama seeks clean energy, pipeline funds in budgetMSNBC

 

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Energy Update, February 10, 2012

February 10, 2012

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 pipelineCBS

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 initiativeDeseret 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 plantsState Journal and EPA causes power company to close plantsLegal Newsline

National News

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 pushWall 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 GeorgiaNew York Times

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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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Energy Update, August 26, 2011

August 26, 2011

In the States

WY – Governor Matt Mead, in a speech to the Petroleum Association of Wyoming, said that he rejects the notion that environmental protection and energy development are mutually exclusive.  The Governor said that “we need a global approach to environmental concerns” and that the U.S. already has many controls in place to protect the environment.  And while Governor Mead also made the point that energy development is a national security issue, he cited a study showing that $160 million in revenue per year was lost by oil and gas companies doing business in the State due to requirements for environmental studies and permits.  Mead says Wyo. can have energy and conservation – Wyoming Business Report

A bipartisan coalition of Governors from 24 States recently sent a letter to President Obama urging him to focus on wind energy development.  The letter, which was signed by the coalition’s chair, Lincoln Chafee of Rhode Island, and Vice Chair, Terry Branstad of Iowa, said that the production tax credit and investment tax credit programs for renewable energy should be extended for seven years.  It also called for the creation of a state-federal task force, greater state collaboration with the U.S. Department of Energy (DOE), accelerated development of offshore wind power, identification of transmission priorities, and a release of U.S. DOE renewable energy information.  24 Governors urge White House to focus on wind power development – SustainableBusiness.com and Letter to President Obama – Governors’ Wind Energy Coalition

Federal News

The U.S. Energy Information Administration (EIA) has cut its estimate of how much recoverable natural gas is available in the Marcellus Shale by nearly 80 percent.  Earlier this year, the EIA, which is responsible for estimating oil and gas deposits underground, said it believed 410 trillion cubic feet of the fuel was available in the rock formation that stretches from New York to Virginia.  But the agency revised that number to 84 trillion as a result of a new U.S. Geological Survey study that relied on the expertise of geologists whom the EIA considers to be “the experts on this matter.”  The large discrepancies between the estimates have caused some business leaders and members of Congress to question the accuracy of such studies.  A 2002 study by the Geological Survey estimated that two trillion cubic feet could be extracted from the Marcellus Shale, but that was before advancements in extraction technology made much more natural gas available for extraction.  Geologists sharply cut estimate of shale gas – New York Times

The U.S. Interior Department has opened an area off the coasts of Massachusetts and Rhode Island to leasing for wind farm developments.  Energy companies are now submitting proposals to the Interior Department, which will use the proposals to conduct coordinated reviews of the proposals and streamline the leasing process.  Environmental reviews would still need to be conducted on the proposed developments.  Similar areas were designated for offshore wind farms earlier this year off the coasts of Virginia, Maryland, Delaware, and New Jersey, and leasing is expected to begin as early as next year.  In contrast, it took 10 years to obtain permits for the Cape Wind project in Massachusetts.  U.S. seeks offshore wind bids in Rhode Island, Massachusetts – San Francisco Chronicle

 

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Energy Update, July 15, 2011

July 15, 2011

In the States

HI – Governor Neil Abercrombie has signed a bill into law that will require the State’s Public Utility Commission to study and, if practicable, implement a program that would allow homeowners to finance the upfront costs of home-based renewable energy and efficiency projects through savings realized in utility bills.  This “on-bill financing” option would allow many homeowners to bypass the often unaffordable initial cost to take advantage of renewable energy and allow them to own the equipment outright once the costs are paid down through savings credits on their utility bills.  Electric customers could get a financing break with new lawHawaii News Now

NH – Governor John Lynch has vetoed a bill that would have withdrawn New Hampshire from the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade consortium comprised of ten States in the Northeast and Mid-Atlantic.  The Governor explained his veto by saying the legislation would “cost our citizens jobs, both now and into the future, hinder our economic recovery and damage our state's long-term economic competitiveness.”  While the House passed the bill with a veto-proof majority of over two-thirds, the Senate did not.  The Governor also said that a withdrawal from RGGI would cost ratepayers $6 million in additional costs and the State would forego $12 million per year in sales of emissions permits.  Supporters of the bill have said that RGGI has increased energy costs.  House Speaker William O’Brian released a statement calling RGGI a “failed policy” that has raised New Hampshire’s electricity rates 149 percent above the national average.  Citing jobs and economic growth, NH Gov. vetoes bill to exit RGGIReuters

NJ – Governor Chris Christie has proposed revisions to the State’s master energy plan, last revised by former Governor John Corzine in 2008, that are intended to lower electricity rates for residents and businesses by eliminating some of the incentives and subsidies currently offered to promote clean energy.  The Governor says that New Jersey has some of the highest energy costs in the country and that he wants to make rates more comparable to other states in order to promote economic growth and reduce financial burdens on rate-payers.  The revisions would also lower the State’s renewable energy use goal from 30% to 22.5% by 2021.  However, Governor Christie is also proposing the development of large solar generation projects on brownfield sites and landfills, as well as the codification of statutory provisions intended to promote the development of offshore wind energy.  Opponents say the changes may jeopardize green investments and green job growth.  While Matt Elliot, clean energy advocate for Environment New Jersey, acknowledges that renewables currently have higher costs, he also argues that fossil fuels benefited from subsidies and that prices for solar energy and other renewables are becoming more competitive every year.  Advocates say changes threaten New Jersey’s green energyAsbury Park Press

Regional News

At meeting in Halifax, Nova Scotia, a group of New England Governors and Canadian premiers have discussed a new transmission line from Canada that would bring clean hydroelectric power to major population centers in New England States.  Vermont Governor Peter Shumlin discussed the plan with reporters in a teleconference call, saying it is too soon to know whether the transmission line will be routed through Vermont, but that any State willing to host it could expect to receive preferential rates.  Governor Shumlin also discussed proposals from two Canadian companies to purchase the State’s largest utility.  Group looks to bring more Canadian power to New EnglandVermont Public Radio

National News

U.S. Senators Jim Webb and Mark Warner of Virginia have introduced legislation that would allow for offshore oil and natural gas drilling in federal waters off the Virginia coast.  The bill requires half of leasing revenues to go to the State to be used for renewable energy development, conservation, and infrastructure.  Senator Warner cited the large amount of money sent to unfriendly oil-rich nations and Senator Webb said the drilling would bring more domestic energy and an improved economy.  Governor Bob McDonnell said the proposed legislation is a “common-sense proposal” that would bring “much needed jobs and revenue.”  The Director of Sierra Club’s Virginia chapter sad the plan will not reduce costs or dependence on foreign oil and that the efforts would be better spent on renewable energy.  Webb, Warner introduce bill to allow offshore drillingRichmond Times Dispatch

The U.S. Environmental Protection Agency (EPA) has released a final rule that requires power plants in 27 states to reduce emissions that contribute to pollution in neighboring states.  The EPA estimates the rule will save hundreds of billions in health care costs due to a reduction in chronic health problems caused by the pollution, and prevent tens of thousands of premature deaths in 2014 but will cost around $800 million per year.  The rule, which goes into effect January 1, 2012, has received mixed reactions from States.  Governor Rick Perry of Texas called the rule “another example of heavy-handed and misguided action from Washington, D.C.” that would have negative consequences for residents in his State.  However, Vermont Agency of Natural Resources Secretary Deb Markowitz, the State’s top environmental official, believes the rule will greatly help Vermont since it has had difficulty attaining federal air quality standards because of emissions produced in other nearby states.  "By reducing ozone and fine particle pollution, EPA's new rule will protect the health of Vermonters, saving lives and preventing illnesses," Markowitz said.  New EPA rule aims to reduce pollution across State bordersPittsburgh Post-Gazette and Texas Governor bashes new federal environmental regulationsNew Orleans Examiner and Vermont environment chief hails new EPA ruleBoston Globe

 

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Energy Update, March 11, 2011

March 11, 2011

In the States

OR – In a speech to an audience of 700 at a luncheon in Portland, Governor John Kitzhaber provided his vision for the future of Oregon, including some new energy policies and projects.  One of these is the “Cool Schools” project, which would utilize energy savings bonds to weatherize older schools and increase their energy efficiency and replace inefficient boilers with new biomass-burning models.  The bonds would be repaid with energy cost savings realized by the schools over time.  Governor Kitzhaber’s allies in the legislature are confident that the measure will receive bipartisan support.  Kitzhaber: Oregon needs sweeping changesPortland Business Journal and Oregon hashes out green schools planSustainable Industries

State of the State Addresses

Nearly all of this year’s State of the State addresses have now been delivered.  Most Governors did not propose new energy policies during their addresses and about half did not even mention energy at all.  In almost every case, any mention of energy came in the context of jobs or the economy.

Florida Governor Rick Scott and Illinois Governor Pat Quinn praised companies that produce energy or manufacture energy-producing parts that moved to or started operations in their States.  Oklahoma Governor Mary Fallin said that her State is “helping to power our nation with the extraction of oil and gas and by harnessing the wind,” while Texas Governor Rick Perry said that while energy is an important part of his State’s economy, its “strength is built on a much broader base” than just energy.  

Pennsylvania Governor Tom Corbett and Kentucky Governor Steve Beshear praised the development of fossil fuels in their Commonwealths while Maryland Governor Martin O’Malley promoted offshore wind energy.  Governor Corbett spoke about the need to develop the Marcellus Shale – and keep that development free of new taxes – in order to create new jobs.  Governor Beshear said that coal has allowed Kentucky to grow a manufacturing sector and that he would “fight” the federal government to ensure the continued mining and use of coal.  Governor O’Malley asked his legislature to pass the Maryland Offshore Wind Energy Act, saying that it would create thousands of manufacturing and servicing jobs through offshore wind farms.  

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

National News

The Obama Administration is considering opening a portion of the strategic oil reserves (SPR) in the event that oil supplies are disrupted as a result of an ongoing conflict in Libya.  Selling some of the reserves could lead to lower crude oil prices – and gasoline prices – in the short term, which have been rising quickly in recent weeks.  Three House Democrats have written to the President asking him to “consider utilizing the SPR now” in order to “counter supply disruptions and combat crippling price hikes in the short term.”  Senate Energy and Natural Resources Committee Chairman Jeff Bingaman agreed that it “would make sense for the President to begin selling oil from the SPR.”  The Administration has said that any decision it makes will not be due to simply to the price of oil – though that may be part of it – but also whether the flow of oil is significantly interrupted, an issue that may be offset by an increase in supply from Saudi Arabia in response to the shortage from Libya.  Democratic lawmakers urge Obama to tap oil reserveWashington Post

 

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Energy Update, February 25, 2011

February 25, 2011

In the States

MD – Governor Martin O’Malley recently proposed legislation that would require utilities in the State to purchase wind energy generated off the coast of Ocean City.  The Governor’s plan calls the development of an offshore wind farm that would provide enough energy to power half the homes in Baltimore and could create as many as 2,000 construction and manufacturing jobs.  Legislators generally approve of the plan, but are concerned about potential additional costs to ratepayers, which are expected to average $1.44 per month.  The U.S. Interior Department, which is attempting to streamline offshore wind development, has said the required leases could be issued by the end of the year.  Environmental groups back O’Malley’s offshore wind planWashington Post

WY – Governor Matt Mead has filed three petitions in the U.S. Circuit Court against the U.S. Environmental Protection Agency (EPA), claiming that the federal agency moved too quickly in imposing a federal plan to regulate greenhouse gases.  The suit was filed, at least in part, because of what Governor Mead called “unreasonable deadlines” the EPA gave the State to revise it’s permitting system to comply with federal requirements; while the EPA often gives States three years to revise their rules, Wyoming was given only nine days.  Wyoming joins Peabody Energy, the National Mining Association, and the State of Texas in suing the U.S. EPA over the regulations.  Wyo. Joins Texas in suing EPA over rollout of greenhouse gas regulationsNew York Times

National News

The U.S. EPA has made several changes to a rule on industrial boilers and incinerators that will cost industry half as much for compliance as originally estimated.  Operators of the boilers and incinerators will collectively pay $1.8 billion less per year because of exemptions for clean-fuel burning plants and greatly reduced compliance requirements for smaller boilers.  The EPA, responding to opposition in Congress and an executive order from President Barack Obama requiring a review of regulations that could slow job growth, said that 2,200 jobs would be created through the updated regulations, which are intended to reduce mercury and other emissions.  While acknowledging the changes included in the proposed rule made sense boiler and incinerator operator groups would like to see further modifications that would mitigate the fiscal impacts on manufacturers, universities, and industrial energy providers after additional public comments are filed.  EPA trims costs to control toxic air pollutionWashington Post

 

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Energy Update, February 11, 2011

February 11, 2011

In the States

MO – The Missouri legislature has passed legislation that keeps the voter-approved requirement that 15% of Missouri’s electricity come from renewable sources by 2021, but eliminates the requirement that utilities purchase energy from producers located in the state or directly from sources outside Missouri.  Governor Jay Nixon has not commented on whether he will sign or veto the measure, which would allow utilities to instead purchase renewable energy “credits” rather than require them to obtain energy from renewable projects.  Proponents of the bill say that loosening restrictions gives utilities greater flexibility to meet the renewable standard, while opponents say the legislation will result in the same rates for electricity, but none of the environmental or economic benefits from requiring the utilities to obtain a portion of their power generation from renewable sources.  Missouri General Assembly kills two rules on renewable energy sourcesKansas City Star

NH – Governor John Lynch has written a letter in opposition to a bill in the New Hampshire State House that would end the State’s participation in the Regional Greenhouse Gas Initiative (RGGI), the Northeast’s cap-and-trade system.  The bill, which was introduced in the House Committee on Science, Technology, and Energy, says that the permits required by RGGI have “increased consumer costs for electricity, fuel, and food.”  Governor Lynch wrote that prices would not fall after withdrawing from the program since rates are set regionally, but that the State would lose all income from the sale of the permits, about $12 million per year.  New Hampshire Governor backs Northeast’s carbon dioxide marketBloomberg and Governor Lynch opposes RGGI repealOffice of Governor John Lynch

WI – Legislators will not take up a bill proposed by Governor Scott Walker that would have increased property setback requirements where wind turbines are built.  However, the Joint Committee on Administrative Rules is holding a hearing on a rule that would allow property owners to build wind turbines only 1,250 feet from their property line, as previously proposed by the State’s Public Service Commission.  This rule could either move forward or be blocked by a vote of the legislature.  Governor Walker’s bill proposed that turbines be set back by at least 1,800 feet and he has said he wants “to see the wind industry, like every other industry, be effective here in the state of Wisconsin,” but that promoting this industry must also be balanced with property rights.  Legislature won’t take up Walker’s wind-siting billMilwaukee Journal-Sentinel

Some States, facing record deficits for the past few years, are seeking to ensure that no revenue is lost due to technological and environmental advances.  Since owners of electric cars use the same roads as gas-powered cars, but do not pay a gas tax that funds those roads, lawmakers in Oregon and Washington have introduced legislation that would charge drivers of electric vehicles either a flat fee or a mileage tax in order to make up for this lost revenue.  Oregon’s bill would impose a per-mile tax of 0.6 cents or about $90 per 15,000 miles driven (about the equivalent of the gas taxes paid for a hybrid), while the bill in Washington would impose a flat fee of $100 when registering an electric car with the State.  Proposal would charge drivers of electric carsRegister-Guard and Electric car owners might face $100 State feeSeattle Times

National News

In an effort to support President Obama’s stated goal of deriving 80% of electricity from renewable sources by 2035, the Departments of Energy and Interior released a joint plan to spur quick development of offshore wind farms, which includes up to $50.5 million of funding incentives.  The funding will be allocated over the next five years and split into three separate initiatives: developing better tools to study and implement offshore wind systems; improving the design of drivetrains inside wind turbines; and removing barriers to the marketplace.  The plan also identifies 911 square nautical miles off the coasts of New Jersey, Delaware, Maryland, and Virginia that will undergo early environmental reviews to expedite the process of approving offshore wind development.  U.S. selects zones in four States to accelerate offshore wind energyBloomberg and Salazar, Chu announce major offshore wind initiativesEERE News

Administrator of the U.S. Environmental Protection Agency (EPA) Lisa Jackson testified for more than two hours before the House Energy and Commerce Committee’s Subcommittee on Energy and Power, in part to defend her agency’s actions in regulating greenhouse gases under the Clean Air Act.  Subcommittee Chairman Ed Whitfield (R-KY), who is sponsoring a draft bill that would revoke the EPA’s ability to regulate greenhouse gases, said that "Congress intends to reassert itself in the statutory and regulatory process at EPA and specifically the Clean Air Act."  Administrator Jackson said that the Clean Air Act and scientific evidence of global climate change compelled her agency to move forward with regulating greenhouse gases and that the proposed legislation “would eliminate portions of the landmark law that all American children and adults rely on to protect them from harmful air pollution." Global warming heats up Republican attacks on EPAWashington Post

 

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Energy Update, January 31, 2011

January 31, 2011

In the States

MN – Several bills have been drafted that would repeal, to differing degrees, a 2007 bipartisan law that bans new coal-fired power plants and the importing of coal-powered electricity until carbon offsets or a plan to lower emissions are in place.  Sponsors are saying that the law places unnecessary burdens on industry, slowing economic recovery once the recession is over.  Governor Mark Dayton has not said yet indicated whether he will veto any particular repeal bill, but he did campaign in part on maintaining a moratorium on new nuclear power plants that is a part of the same law.  Minn. Republicans hope to undo clean energy policiesMinnesota Public Radio

NM – A State Supreme Court ruling has reversed an order by Governor Susana Martinez that blocked publication of regulations aimed at reducing emissions from utilities and dairies within the State.  One of the regulations requires a three percent cut in greenhouse gas emissions every year.  The Court ruled that the regulations must be published in the State’s register, but opponents of the regulations plan to work with the Governor and the State legislature to change the rules.  Court reverses New Mexico Governor on environmental rulesNew York Times

State of the State Addresses

While approximately half of the Governors have given their State of the State or State of the Commonwealth addresses, the realities imposed by the financial downturn caused most Governors to focus their speeches on addressing fiscal difficulties and job creation rather than energy issues.  Still, some Governors incorporated energy plans tied to job creation and retention.

Several Governors cited recent energy business investments that would help lead their States to better fiscal times, including South Dakota Governor Dennis Daugaard, Nebraska Governor Dave Heineman, Colorado Governor John Hickenlooper, Connecticut Governor Dan Malloy, and Delaware Governor Jack Markell, all of whom who noted recent increased renewable energy investments or improvements.  Missouri Governor Jay Nixon said that Nordic Windpower USA’s new plant will create 200 jobs, and proposed to create more through the construction of a new nuclear power plant.  Mississippi Governor Haley Barbour noted several investments in his State, including coal, oil, nuclear, LNG, solar, ethanol, coal-to-liquids, and carbon capture projects. 

A few Governors called for increased domestic renewable energy production.  For example, Hawaii Governor Neal Abercrombie expressed support for accelerating renewable energy projects in his State, and improving Hawaii’s energy security.  Nevada Governor Brian Sandoval called for more renewables on federal lands, saying, “I support all efforts to make Nevada the renewable energy capital of the country.” 

Some Governors discussed a mix of fossil fuels and renewable energy resources available to their states.  Virginia Governor Bob McDonnell said he hoped to make Virginia the “Energy Capital of the East Coast” by investing, in part, in solar, wind, waste-to-energy, and biomass, and promoting offshore wind by leasing offshore parcels for wind energy production and serving as headquarters for the Atlantic Offshore Wind Energy Consortium.  But he also called for increasing oil, coal, gas, and nuclear energy production.  While Alaska Governor Sean Parnell said that investments in hydroelectric power and renewable energy grants in his State would create jobs and help the State meet his goal of 50% renewable power by 2025, he also wants to lower taxes on oil production in order to create more jobs.  Wyoming Governor Matt Mead discussed “value-added” projects such as combing wind power with gas-fired turbines, as well the manufacturing of wind turbine components.  In addition, he supports continued use of coal while making it a cleaner fuel through carbon capture and sequestration, and also advocates greater use of carbon injection technologies for enhanced oil extraction, as well as coal gasification.  

In discussing his State’s abundant fossil fuel resources, West Virginia Governor Earl Ray Tomblin said he will aggressively pursue the State’s lawsuit against the U.S. EPA over mountaintop removal regulations, and that he supports development of the Marcellus Shale in West Virginia and carbon capture and sequestration.  

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 gave his annual State of the Union speech to Congress last week, during which he issued a challenge of producing 80% of electricity from clean energy sources by 2035.  President Obama said that all forms of energy production are needed to meet this goal, and mentioned nuclear power, clean coal, and natural gas in addition to wind and solar.  U.S. Rep. Paul Ryan, who gave the Republican response to the State of the Union, emphasized the need for less government spending and a more limited government rather than new investments.  Several high-ranking Democrats expressed support for the idea of a broader clean energy mandate while most Republicans remained skeptical about incentivizing one energy type over another or imposing mandates on the private sector.  Senators laud “clean energy” pushPolitico and State of the Union (Transcript)White House and State of the Union Response (Transcript)House Budget Committee

According to a new report commissioned by the federal government as required in the 2009 Defense Authorization Act, the United States military would not receive any significant benefit from greater use of alternative fuels.  The study, performed by the RAND Corporation, said that focusing on energy efficiency would have a greater impact on lowering greenhouse gases.  The report received criticism from Deputy Assistant Secretary of Energy for the Navy Thomas W. Hicks, who said he was not consulted by RAND, and that the report ignores energy security issues, and from environmental groups, biofuels proponents, the Algal Biomass Organization, and others.  RAND says that while the military is a major consumer of liquid fuels, it still only uses two percent of the country’s daily intake, and since some biofuels are still in their infancy, the money spent on alternative fuels in the military would have a small effect on greenhouse gas emissions.  Alternative fuels don’t benefit the military, a RAND report saysNew York Times

 

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