Will 2015 Be The Year Of Renewable Fuel Standard Reform?

The Senate Homeland Security and Government Affairs Committee attacking the Environmental Protection Agency’s (EPA) management—er, mismanagement—of the federal renewable fuel standard (RFS) is indicative of growing frustration over both the agency and the RFS itself.

At the June 18 hearing, Senators grilled EPA’s Acting Assistant Administrator, Janet McCabe. Senator James Lankford (R-OK), who chaired the Subcommittee on Regulatory Affairs and Federal Management, opened the hearing by calling the RFS “unworkable in its current form.” In her comments, Senator Heidi Heitkamp (D-ND) claimed that the EPA’s management of the RFS ignored “congressional intent,” while creating “uncertainty” and costing “investment.”

In addressing concerns from a different energy era, Congress passed the Energy Policy Act in 2005, which established the first renewable-fuel volume mandate. Two years later, through the Energy Independence and Security Act, the RFS program was expanded.

The EPA administers the RFS and is required to finalize proposed fuel volumes by November 30 of each year—something it has failed to do every year since 2009.

One day before the hearing on “Re-examining EPA’s Management of the RFS Program,” the American Petroleum Institute held a press call in which an unlikely coalition of RFS opponents—the American Motorcyclist Association, the Environmental Working Group, and the National Council of Chain Restaurants—sounded optimistic that 2015 is the year for RFS reform.

While the EPA’s renewable-fuel volumes, released May 29, don’t meet the law’s target of 22.25 billion gallons for 2016, they do increase year after year—with the 2016 target being an increase over current use. Addressing the EPA’s new numbers, USNews reports: “The update calls for a 27 percent increase in what the EPA calls ‘advanced biofuels’ from 2014 through 2016, a catch-all category that includes cellulosic ethanol made from corn stalks, husks and other leftovers from a harvest, plus fuel converted from sugar cane, soybean oil, and waste oils and greases, such as from fast-food restaurants. Combined with conventional corn ethanol, the proposed volumes overall rise 9 percent.”

In pressing McCabe on the RFS and the consistently missed deadlines, Lankford asked: “How does RFS get back on schedule? Or, has Congress put a requirement on EPA that it can’t fulfill?” McCabe promised they were working on it and offered some vague explanations. Lankford then asked: “I assume you would agree there’s no chance we will hit the target for 2017 based on the statute required for 2017, so we’ll have to reset it…unless there is a tremendous amount of cellulosic ethanol that comes on board.” Lankford continued, discussing the way the law was written to decrease corn ethanol use and increase cellulosic fuel, which he pointed out isn’t “possible based on production.” McCabe agreed that the cellulosic number would need to be decreased by at least 50 percent.

Later in the hearing, Lankford called cellulosic fuels “great in theory,” but acknowledged that “No one has been able to make it in a quantity that is affordable yet.” He alluded to the fact that the cellulosic industry has struggled—with the largest manufacturer of cellulosic product going bankrupt. He said: “No one can seem to crack the code to be able to make this in a way that’s actually affordable.”

Clearly, the RFS is a program that can’t be fulfilled. No wonder it has so many who see the EPA’s failures as proof that 2015 is the year for RFS reform. Senator Jim Inhofe (R-OK), chairman of the Environment and Public Works Committee, says: “The mandate is in need of significant reform and oversight.”

Maybe 2015 will be the year.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

To Win, Republican Candidates Must Be Strong On Energy

New polling indicates large majorities of Republicans favor key energy issues—but voters of every ideological stripe say energy will be an important part of their voting decisions.

Hickman Analytics Inc., for the Consumer Energy Alliance (CEA), has done polling on energy issues in several key states: Iowa, New Hampshire, North Carolina, South Carolina, Virginia, and West Virginia. While the questions asked are not identical in each state, the responses are so similar that assumptions can be made.

For the 2016 presidential candidates, lessons should be learned—to win, Republican candidates must be strong on energy.

In all states polled, the majority of respondents indicated that energy issues will be at or near the top when asked: “Looking ahead, how important are energy issues in terms of how you will vote in the Presidential election next year?” In each state, except West Virginia, 80 percent or more answered: “very important” or “somewhat important.” In West Virginia, while still a majority, the percentage is 54—though a smaller percentage of West Virginians, 10 percent, claim energy issues will be “not very important” or “not important at all.”

The polling took place in Iowa and New Hampshire in April, South Carolina in May, and in Virginia, West Virginia, and North Carolina in June.

In Iowa, New Hampshire, and South Carolina, Hickman asked residents how they feel about “allowing offshore oil and natural gas drilling north of Alaska, in U.S. waters inside the Arctic Circle.” Overall, a majority of registered voters support it; but opposition is higher among Democrats.

The numbers on Arctic drilling break out this way:

  Iowa New Hampshire South Carolina
Republicans 74% support, 10% oppose 70% support, 18% oppose 76% support, 16% oppose
Independents 48% support, 38% oppose 54% support, 35% oppose 60% support, 32% oppose
Democrats 34% support, 49% oppose 34% support, 54% oppose 51% support, 29% oppose

 

In Virginia, West Virginia, and North Carolina, Hickman asked about the Atlantic Coast pipeline project—a 550-mile pipeline that will bring natural gas from West Virginia through Virginia and North Carolina—and found that support is strong and extends across almost every group. As with Arctic drilling, Hickman found that support for this important energy infrastructure project is stronger among Republicans; but even among those who self-identify as liberal, more support than oppose it.

Here are the numbers on the Atlantic Coast pipeline project:

  Virginia West Virginia North Carolina
Republicans 74% support, 12% oppose 79% support, 12% oppose 76% support, 9% oppose
Independents 54% support, 24% oppose 66% support, 25% oppose 56% support, 25% oppose
Democrats 43% support, 38% oppose 67% support, 20% oppose 41% support, 37% oppose

 

When asked why they support the Atlantic Coast pipeline project, “jobs” was mentioned most frequently, with “a positive impact on the economy” being next. “Contribution to energy independence” was also mentioned.

Presidential candidates can learn from the Virginia, West Virginia, and North Carolina numbers; and a similar response could be assumed in Iowa, New Hampshire, and South Carolina—though they were not asked a parallel question on Arctic drilling.

Republican and Independent voters understand that energy projects create jobs as well as help the economy and energy security.

In Virginia, West Virginia, and North Carolina, Hickman asked about other energy issues, such as coal-fueled power plants, the Keystone pipeline, offshore drilling, and hydraulic fracturing. Again, support among Republicans and Independents is strong on a wide range of energy issues.

As we head into the important 2016 election, it is imperative that whoever becomes the 45th president understands energy. Gratefully, as the Hickman/CEA polling indicates, the American public understands the importance of energy and is prepared to vote accordingly.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

The Ex-Im Bank: By Doing Nothing, Congress Sides With Taxpayers And Basic Market Principles

After more than three-quarters of a century, the Export-Import Bank (Ex-Im) could close its doors on June 30.

Ex-Im was created by Executive Order in 1934 by Franklin D. Roosevelt. With the Export-Import Bank Act of 1945, Congress made Ex-Im an independent agency and required that Ex-Im be reauthorized every four to five years. Ex-Im’s current authorization expires at month’s end.

Ex-Im has historically enjoyed bipartisan support. However, the need to cut spending—coupled with watchdog reporting—brings reauthorization into question. Under the Obama Administration, Ex-Im lending has increased 248 percent. Taxpayers now hold nearly $140 billion in Ex-Im exposure.

The Ex-Im website states: “EXIM Bank is more critical than ever to small businesses.” However, a recent report from American Transparency (AT), the Federal Transfer Report – Export- Import Bank, found that while 90 percent of Ex-Im loans do go to small businesses, 85 percent of the money goes to big business—10 percent of the transactions get 85 percent of the money.

The AT report, released on May 30, analyzed the $172 billion in Ex-Im loans, guarantees, and activity since 2007.

Boeing is Ex-Im’s number one customer.

However, a just-released addendum to the AT report highlights Ex-Im’s involvement in funding many of the green-energy projects I’ve covered in the past few years.

The addendum points to $3 billion green energy companies received from Ex-Im. There are more than $140 million worth of failures within the financial transaction portfolio—though “additional time, resources and further research would turn up much more.”

Solyndra is on the list. Just six months before its infamous bankruptcy, Ex-Im approved $10.3 million in long-term credit to Solyndra’s exports to Belgium.

Spanish solar company Abengoa, which is under investigation for a variety of violations, has an interesting connection to Ex-Im: former New Mexico governor Bill Richardson is an advisory board member to Ex-Im and sits on Abengoa’s advisory board. The addendum states: “Abengoa has obligations of over $225 million in Ex-Im support.”

Other examples include Amonix, Evergreen Solar, Abound Solar, SolFocus, Calisolar/Silicor Materials, and Willard & Kelsey Solar Group—all received Ex-Im support and failed.

But, our taxpayer dollars didn’t just go to failing green-energy projects; they also went to foreign companies. In addition to Spain-based Abengoa, Germany-based Siemens Energy has been the recipient of $709.53 million in Ex-Im financing. Switzerland-based ABB got $89.22 million. France-based Areva Solar North America received nearly $54 million in Ex-Im support. China’s troubled Hanergy owns MiaSole, which received $9 million in “working capital” funding from Ex-Im.

Green-energy companies are not the only ones in the energy sector to take advantage of the low-cost, taxpayer-funded financing. Multinational oil company Exxon Mobil and oil industry service companies Halliburton and Schlumberger also received billions.

It is tough to chastise these companies for making wise business decisions in finding low-cost funding—but we can criticize Congress for allowing our taxpayer dollars to be given to them.

Ex-Im supporters claim that failure to reauthorize would threaten jobs. Siemens, GE, ExxonMobil, Halliburton, and Schlumberger—just to mention some of the big businesses in the energy sector—should all be able to continue without Ex-Im.

Addressing Ex-Im’s future, Adam Andrzejewski, Chairman of American Transparency and the report’s author says: “The fate of the bank is an important test that will show whether Congress is on the side of taxpayers, and basic market principles, or special interests that are capable of bending markets in their direction.”

Ex-Im is one case where a “do-nothing Congress” is a good thing. If they do nothing, Ex-Im’s authorization expires on June 30; and we, the taxpayers, will no longer be responsible for funding this corporate welfare.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

A Taste Of Things To Come For Electricity Consumers And Generators

One year ago, Gina McCarthy, Environmental Protection Agency (EPA) Administrator, announced the controversial centerpiece of the Obama Administration’s climate change legacy: the Clean Power Plan (CPP)—slated for finalization this summer.

Unions have protested against it. The North American Electric Reliability Corporation believes it risks the reliability of the grid. States, encouraged by Senate Majority Leader Mitch McConnell, are boycotting it. Yet, the EPA is pushing ahead, touting the plan’s built-in flexibility for individual states in devising a compliance plan—uniquely suited to each specific state. If states, as McConnell advocates, refuse to comply, the EPA will impose a Federal Implementation Plan.

While no one knows what the final plan will be, we can be sure that, at the least, it aims to severely reduce coal-fueled power generation and dramatically increase the implementation of renewables such as wind and solar. Industry experts expect the CPP will possibly force the premature closure of hundreds of coal-fueled power plants—and that, alone, without factoring in the higher-cost renewables, will raise costs to ratepayers.

The anti-fossil fuel movement would like us to believe we are just replacing one power source with another. The problem, however, is far bigger—as the real-world experience in New Mexico makes clear.

In New Mexico’s Four Corners region, negotiations regarding bringing the San Juan Generating Station (SJGS) into compliance with Regional Visibility Rules under the Clean Air Act have been underway for more than a decade—with the bulk of the shenanigans taking place during the past five years. There have been State Implementation Plans, Federal Implementation Plans, lawsuits, back room deals, and hearings and protests. Yet, there is still no definitive solution. (Read a full timeline here: http://responsiblenergy.blogspot.com/2015/05/backgrounder-on-closure-of-san-juan.html)

Most recently, in January 2015, the New Mexico Public Regulatory Commission (PRC) held hearings on the plan almost everyone agreed on.

In April, a hearing examiner advised the PRC to reject the plan unless changes were made. Some of his concerns, according to the Associated Press report, were in part because the Public Utility Company of New Mexico (PNM) didn’t have a “contract to provide coal for the plant beyond 2017.” The coal mine adjacent to SJGS is the subject of negotiations between current owner BHP Billiton and several proposed new owners.

On May 5, a deal was struck. Westmoreland Coal Company would purchase the mine and take over operations—resulting in $300 million in savings over the next six years for PNM and its customers. However, the PRC must approve this deal before the sale goes through. On May 27, to give PNM more time to finalize an ownership restructuring agreement, the deadline was extended to July 1.

This New Mexico story is about just one power plant in one state, trying to meet just one EPA regulation dealing with regional visibility—even though improvements will not be detectable to the human eye. (The American Lung Association’s 2015 State of the Air report just ranked Farmington number 1 for cleanest metropolitan areas in the country for 24-hour particle pollution and number 2 for cleanest metropolitan areas in the country for annual particle pollution.)

Under the CPP, expect similar scenarios in every state, over every coal-fueled power plant—not with just one regulation, but with a massive plan designed to transform the entire energy sector.

The CPP, which is not yet final, is supposed to be implemented in less than five years.

This story is a taste of what is to come: years of legal wrangling, cost increases for consumers, and a loss of good-paying jobs—for reductions in CO2 emissions that will make virtually no temperature difference on a global scale.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

Another Domino Falls For Anti-Fossil Fuel Crusaders

Throughout the United States, especially in communities with existing or potential oil-and-gas development, outside groups have moved in with a vengeance and agitated the population—resulting in bans against all exploration for hydrocarbons and/or the use of hydraulic fracturing. Expensive lawsuits have been filed, and courts have repeatedly declared such bans as “unconstitutional.” The newest domino to fall is in Texas, where Governor Greg Abbott, on May 18, signed House Bill 40 (HB40)—also known as the Denton Fracking Bill—which clarifies that an “oil and gas operation is subject to the exclusive jurisdiction of the state.”

As was the case in Mora County, New Mexico, the Pennsylvania-based Community Environmental Legal Defense Fund participated in pushing Denton, Texas’ fracking ban—passed in November by 59 percent of the voters. In Mora County, a federal judge declared its drilling ban “unconstitutional.” Courts have handed down similar decisions against attempts to ban fracking in Colorado and Ohio. But the Texas legislature didn’t wait for the courts to decide in the challenges to the Denton ban.

Lawmakers introduced a total of 11 bills aimed at confirming that regulating oil-and-gas activity is the province of the Texas Commission of Environmental Quality and the Texas Railroad Commission. HB40 emerged as the final word—making Texas the first state to pass specific legislation limiting, not eliminating, local control. The Oklahoma legislature has passed a similar bill, and Governor Mary Fallin is expected to sign it. In New Mexico, the House passed a preemption bill–but it was never brought up for a vote in the Senate.

The Texas law allows communities to impose commercially reasonable ordinances that regulate above ground oil-and-gas activity such as traffic noise, lights, and setbacks—but do not “effectively” prohibit resource extraction.

Denton, Texas, sits on top of one of Texas’ biggest natural gas reserves: the rich Barnett Shale— producing $1 billion in mineral wealth, according to the Associated Press, and pumping more than $30 million into city bank accounts.

In Texas, thanks to fracking, according to the Wall Street Journal, oil production has tripled in the past five years. The increase benefits Texas by providing the state with almost $6 billion worth of revenue in fiscal year 2014 through severance taxes. But it is not just fracking—which has been done safely and successfully for the past 65 years—that has created the new American energy abundance. It is fracking combined with horizontal drilling. But horizontal drilling doesn’t sound bad, and fracking does. Plus, the general population doesn’t know what fracking, short for hydraulic fracturing, really is—making it easy to scare the public with fear, uncertainty, and doubt.

Supporters of the ban try to claim that it is not a drilling ban, but just a fracking ban. However, since the natural resource underneath Denton is shale gas—meaning natural gas is trapped in tight little pockets within the rock—the shale must be fractured to allow the gas to flow out. Conventional drilling methods don’t work with shale. A ban on fracking is a ban on drilling.

While the Legislature has acted and the Governor has signed HB40, we likely haven’t heard the last of municipal fracking bans—despite courts repeatedly shooting them down.

Earthjustice attorney Deborah Goldberg, in a CommonDreams.org story on the Texas legislation, says the people of Denton are not ready to give up yet: “We have been proud to represent the proponents of Denton’s ban and we know they will regroup and fight back against this legislative over-reach.”

When Oklahoma Governor Mary Fallin signs its “preemption” bill into law, it will be the next domino to fall.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth