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Energy Update, April 20, 2012

April 20, 2012

In the States

AK – Governor Sean Parnell has called a special 30-day session of the State Legislature to address several matters, including tax incentives for oil production.  Both the Alaska House and Senate earlier considered legislation on this issue, but couldn’t reach agreement.  The Senate attempted in the regular session to overhaul current tax law but was unable to agree on how to address existing oil fields, and so provided incentives for only new fields. This approach was rejected by the House, which had passed its own package of incentives.  Governor Parnell said that he prefers a complete overhaul of the tax structure, including incentives for existing oil fields, because it would help speed up production from wells that are becoming less economically viable.  He estimated that the incentives could lead to an increase of 100,000 barrels per day in less than two years, while incentives for only new fields could take as long as 10 years to increase production.  Alaska Gov. Parnell introduces oil tax billFairbanks Daily News-Miner and Alaska Governor to introduce oil tax bill this weekFairbanks Daily News-Miner

NY – Governor Andrew Cuomo has announced a consolidation and expansion of programs administered by the New York State Energy Research and Development Authority, Long Island Power Authority, and the New York Power Authority, in an effort to double the amount of customer-sited solar energy production this year, and to quadruple that amount in 2013.  Governor Cuomo said that the NY-Sun Initiative “puts New York at the forefront of solar development and research, creating green jobs while containing energy costs for consumers.”  Part of the initiative involves the State’s Public Service Commission doubling funding for a program that provides incentives to homes and businesses to install solar panels on-site. These funds will be transferred from an existing program designed to subsidize larger renewable energy projects.  Other changes in the initiative include solar demonstration projects, expansion of research and development, an investment in cost-cutting strategies, a new program in which the Long Island Power Authority will install their solar panels on customers’ premises, and agencies working together to streamline the permitting and interconnection processes.  Governor Cuomo announces comprehensive NY-Sun Initiative to expand solar development in New YorkSaugerties Post Star and PSC approves doubling solar incentive fundsAlbany Times Union

VA – Governor Bob McDonnell has signed 13 energy bills into law that he says will help Virginia become “the energy capital of the East Coast.”  At a signing ceremony, Governor McDonnell said that the “legislative package strengthens and adds flexibility to the expansion of our energy infrastructure, which is a key component in attracting new economic development and jobs,” as well as expanding alternative energy.  Among the new laws are measures that would expand the production and use of natural gas, expand the definition, research, and use of renewable energy, improve electricity infrastructure, support energy efficiency, and convert the State’s fleet of automobiles to use alternative energy.  McDonnell signs energy billsAugusta Free Press and Gov. signs 13 energy billsCavalier Daily

National News

The U.S. Environmental Protection Agency (EPA) has released a final rule on hydraulic fracturing, which will require companies using the process to capture natural gas to implement procedures to help mitigate negative environmental effects.  The most stringent regulations, which will require rig operators to use “green completions,” which capture smog-producing gases upon initially tapping a well, will not go into effect until 2015; the initial proposed regulation would have required a 60-day implementation.  Until 2015, drillers will need to burn off the gases rather than capture them.  The gas industry, which had argued that supplies required to implement the new regulations would not be available within 60 days, called the delay an “important adjustment” that would allow compliance.  Many existing wells already use the technology required by the new rules, which the EPA estimates will make companies up to $11 million per year since they will be able to sell gases they capture instead of burning or releasing them.  Obama issues first pollution rules for gas wells, offers delayBloomberg

The U.S. House of Representatives has passed a three-month funding extension required to continue federal support for transportation projects that include roads, bridges, and transit systems.  Included in this version is language that would require the Federal Energy Regulatory Commission to approve the Keystone XL pipeline.  The pipeline is opposed by some environmentalists because the type of oil sent through it will generate more greenhouse gases than other types of oil; it is supported by unions because of the jobs it is expected to create and by others who believe it will lead to a reduced dependency on foreign oil.  The bill will now go to a conference committee to be reconciled with a bill passed by the Senate that does not include a provision on the Keystone pipeline.  President Barack Obama has vowed to veto the legislation if it includes a requirement to approve the pipeline.  House Republicans revive bid to advance Keystone pipelineBusinessWeek and House clears highway bill with Keystone pipeline mandate, thwarts Obama The Hill

 

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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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