Salazar Announces Change from 'Headlong Rush' into Offshore Drilling
From the Wonk Room.
Announcing that “the time for reform has arrived,” Secretary of the Interior Ken Salazar set aside the Bush administration’s “midnight timetable” for offshore drilling. “On Friday, January 16, its last business day in office,” Salazar explained in his Feburary 10th press conference, “the Bush Administration proposed a new five year plan for offshore oil and gas leasing.” The Bush plan called for the completion of meetings and hearings by March 23. Salazar decried this “broken process”:
It was a headlong rush of the worst kind. It was a process rigged to force hurried decisions based on bad information. It was a process tilted toward the usual energy players while renewable energy companies and the interests of American consumers and taxpayers were overlooked.
Salazar announced he “will extend the public comment period by 180 days, get a report on offshore energy resources, hold regional conferences and expedite rulemaking for offshore renewable energy resources.”
Salazar made it clear that his definition of “energy independence” does not mean a “drill only” future. He rebuked the “oil and gas or nothing” approach of the Bush administration, who ignored the Energy Policy Act of 2005’s mandate to develop regulations for offshore renewables:I intend to do what the Bush Administration refused to do: build a framework for offshore renewable energy development, so that we incorporate the great potential for wind, wave, and ocean current energy into our offshore energy strategy. The Bush Administration was so intent on opening new areas for oil and gas offshore that it torpedoed offshore renewable energy efforts.
Continuing Resolution To Drop Drilling Moratorium; GOP Celebrates Democratic 'Capitulation'
A 26-year ban on offshore oil drilling will be dropped as part of a year-end spending bill, said House Appropriations Committee Chairman David Obey.Obey celebrated the closed process of developing the CR:Eliminating the ban will allow the measure, which funds government operations through March 6, to get through Congress and be signed into law by President George W. Bush, Obey said.
“At least temporarily, the moratorium is lifted,” Obey told reporters. “This next election will decide what our drilling policy is going to be.”
The announcement was hailed by Republicans. “House Republicans have fought for months to lift these outdated bans on American energy production, and the capitulation by Democrats today is a big victory for working families, seniors, and small businesses struggling with record gasoline prices,” said House Republican Leader John Boehner, of Ohio.
The legislation, slated for a House vote tomorrow, will also include a $25 billion loan package for the auto industry, $23 billion in disaster assistance, an additional $2 billion for Pell education grants along with the annual defense, homeland security and veterans’ affairs appropriations bills.
Asked if the process of has been secretive, Obey said: “You’re damn right it has because if it’s done in the public it would never get done.” He said he wanted to avoid his colleagues’ “pontificating” on the content of the legislation, saying “that’s what politicians do when this stuff is done in full view of the press.” He said, “We’ve done this the old fashioned way by brokering agreements in order to get things done and I make no apology for it.”
Update: The bill also kills the oil shale leasing moratorium.
NWF Opposes "All Of The Above" Bill; LCV Opposes Even More Industry-Friendly Motion To Recommit
The public, including National Wildlife Federation’s four million members and supporters, wants Congress to take the urgent and necessary steps that will give consumers better energy choices, cut oil dependency and cut global warming pollution. While we favor many provisions in the Comprehensive American Energy Security and Taxpayer Protection Act (H.R. 6899), especially when compared to the expected motion to recommit, we oppose the bill because of its provision allowing commercial oil shale leasing. As a result of this provision, the bill fails to address the fundamental challenge of avoiding significant new increases in global warming pollution and protecting important wildlife habitat on our public lands.League of Conservation Voters President Gene Karpinski issued the following statement opposing the Republican motion to recommit:
Drilling is no longer the issue – unfortunately, both H.R. 6899 and the motion to recommit include drilling. The issue today is whether or not each Member of Congress will stand up for the American people or stand with the oil industry lobbyists.All summer, Republicans have called for an ‘All of the Above’ plan on energy. Now, presented with a compromise that gives them everything they’ve asked for, the Republican leadership refuses to support it. Instead, they offer a motion to recommit, which will remove every provision from the bill that Big Oil doesn’t like: provisions that reduce tax breaks to Big Oil and extend them to renewable energy companies, increase efficiency, and create the first national renewable energy standard.
How each member votes will highlight the real differences between those in Congress who support clean energy as central to America’s energy future, and those who remain tied to big oil and want to keep us stuck in the past. LCV opposes the motion to recommit and calls on the Members of Congress who support it to stop working for the oil companies and start working for the American people.
The Comprehensive American Energy and Security, Consumer Protection Act 1
Reps. Nick Rahall (D-W.V.), Gene Green (D-Texas), George Miller (D-Calif.), and John Dingell (D-Mich.) have unveiled the House Democratic “all of the above” energy package, The Comprehensive American Energy and Security, Consumer Protection Act (H.R. 6899), which lifts the moratorium on offshore drilling and calls for massive investments in natural gas, oil, and coal, as well ethics reform for the MMS, support for public transit, and a suite of energy efficiency and renewable energy incentives and standards paid for by eliminating some oil subsidies.
Many elements are drawn from previous House bills—H.R. 5351, H.R. 3221, H.R. 6, H.R. 4520, H.R. 6578, H.R. 6078, H.R. 6052, H.R. 6515.
RENEWABLE ENERGY FUTURE, CREATING AMERICAN JOBS
- Renewable Energy and Efficiency Tax Incentives. Extends and expands tax incentives for renewable energy, including incentives for plug-in vehicles, and retains and creates hundreds of thousands of American jobs. It expands and extends tax incentives for renewable electricity, (such as solar and wind) and fuel from America’s heartland, as well as for plug-in hybrid cars, and energy efficient homes, buildings, and appliances. Investments in renewable energy create three to five times as many jobs as investments in fossil-fuel energy. (H.R. 5351)
- Renewable Electricity Standard (RES), Electricity from Clean Renewable Sources. Requires utility companies to generate 15 percent of electricity from renewable sources – such as wind power, biomass, wave, tidal, geothermal and solar – by 2020. A 15 percent Renewable Electricity Standard will reduce global warming emissions and lower energy prices, saving consumers $13-18 billion cumulatively by 2020. It permits utilities to meet up to 4 percent of their target through energy efficiency. (H.R. 3221)
- Investing in Renewable Energy, Energy Efficiency and Home Heating Assistance (LIHEAP), Paid for by Making Oil Companies Pay their Fair Share for Drilling on Public Lands (98/99 leases). Creates a Strategic Renewable Energy Reserve to invest in clean, renewable energy resources and alternative fuels, promote new energy technologies, develop greater efficiency and improve energy conservation. It will also fund home heating assistance, weatherization, the Land and Water Conservation Fund, and carbon capture and sequestration. (H.R.6)
LOWERS COSTS TO CONSUMERS & PROTECTS TAXPAYERS
- Royalty Reform: Making Oil Companies Pay Their Fair Share for Drilling on Public Lands. Ensures that oil companies pay their fair share of royalties on flawed leases granted in 1998 and 1999. Oil companies holding 70 percent of these leases issued in the Gulf of Mexico from 1998 and 1999 pay no royalties on this oil, costing American taxpayers about $15 billion.
- Repeal of Tax Subsidies. Repeals a giveaway in the 2004 international tax bill (H.R. 4520) for the Big Five oil companies. (Small, independent oil and gas companies would continue to benefit from the deduction at the current rate.) It also closes a foreign tax loophole for large oil companies. These will pay for critical investment in American renewable energy. (H.R. 5351)
- Releasing Oil from the Strategic Petroleum Reserve. Temporarily releases nearly 10 percent of the oil from the government’s stockpile (known as the Strategic Petroleum Reserve (SPR)), and replaces it later with heavier, cheaper crude oil. Past releases have brought down prices by as much as 33 percent. (H.R. 6578)
- Mineral Management Service Ethics Reform. Take aggressive steps to crack down on the extreme misconduct at the Mineral Management Service—the agency charged with collecting royalties from oil and gas companies, which is one of the largest sources of revenue for the federal government. The Interior Department’s Inspector General just reported on a range of illegal and unethical behaviors plaguing the MMS, including accepting gifts, meals, and alcohol from industry representatives; instances of illegal drug use among employees; sexual relationships between MMS employees and representatives of oil and gas companies; and violations of federal procurement regulations, which clearly put taxpayer dollars at risk, such as steering lucrative contracts to former colleagues in the private sector.
GREATER ENERGY EFFICIENCY AND CONSERVATION
- Strengthen Energy Efficiency in Buildings to Bring Down Costs. Could save consumers as much as $210 billion in energy costs through 2030 by updating energy codes for new buildings. New residential and commercial buildings will have to realize a 30 percent improvement in energy efficiency by 2010, and 50 percent by 2020. The building sector alone accounts for approximately 48% of all energy consumed in the United States and of all U.S. greenhouse gas emissions. (H.R. 3221)
- Incentives for Energy Efficient Homes. Provides incentives to lenders and financial institutions, including the Federal Housing Administration, to provide lower interest loans to consumers who build, buy or remodel their homes to improve their energy efficiency. The average American consumer spends 9.7% of their annual income on energy, while low-income households spend more than 16%. (H.R. 6078, Rep. Perlmutter)
- Saving Energy Through Public Transportation Act. Reduces transit fares for commuter rail and buses and expands service. The average commuter can save up to $8,000 a year riding public transit, based on today’s gas prices. (H.R. 6052)
EXPANDING DOMESTIC OIL AND GAS SUPPLY
- Responsible Compromise on Drilling on the Outer Continental Shelf. Because of recent actions by President Bush, the 27 year bipartisan legislative moratorium banning offshore drilling, keeping oil spills and polluters off America’s coastlines, will end on September 30th, allowing drilling to take place as close as 3 miles offshore.
- The compromise would permit leasing between 50 and 100 miles offshore if a State ‘opts-in’ to allow leasing off its coastline by enacting state law.
- Environmental Protections: National marine monuments and national marine sanctuaries are permanently withdrawn from oil and gas leasing. All leasing activities must protect the coastal, marine and human environment of the State coastal zones and OCS. DOD authority to designate national defense areas remains in force and leasing must also take place in accordance with a Memorandum of Agreement between the Defense and Interior Departments.
- The compromise adheres to the 2006 law protecting parts of the eastern Gulf of Mexico from drilling until 2022.
- The remaining Outer Continental Shelf beyond 100 miles would be open to oil and gas leasing.
- Require Oil Companies to use the 68 Million Acres of Federal Lands They Already Control. Strengthens requirements that oil companies produce oil on federal lands leased for drilling during the initial term of their lease. (DRILL Act, H.R. 6515).
- Increase Domestic Oil Production in Alaska. Mandates annual lease sales in the National Petroleum Reserve in Alaska, which has more oil than the Arctic Wildlife Refuge; also the oil can be brought to market sooner. Also requires the Bush Administration to facilitate completion of the oil pipeline infrastructure into the Reserve and the construction of the Alaska Natural Gas Pipeline, which could create up to 100,000 jobs, while banning export of Alaskan oil outside the U.S. (DRILL Act, H.R. 6515)
- Promote Natural Gas, E-85 Infrastructure. Includes incentives and financing mechanisms for installing natural gas pumps in service stations and homes and requires service stations owned by Big Oil to install at least one “alternative fuel pump”such as natural gas or E-85. Natural gas costs 40 percent less than gasoline, is 33 percent cleaner and is produced in North America.
- Carbon Capture & Sequestration. Advances the development and deployment of carbon capture and storage (CCS) technologies to come up with a cleaner way to use coal by using funds from the 1998/99 royalty reform to invest in this critical technology.
Gang of Ten Reveals Legislation
At Climate Progress, Joe Romm reviews the full text of the draft “Gang of Ten” energy legislation, now unofficially co-sponsored by ten Democrats and ten Republicans. The original ten senators are conservative and industry-friendly. Highlights of Romm’s review:
- Title II makes clear that the “consumer tax credits for advanced vehicles” is focused on plug-in hybrid electric vehicles (PHEV), see Section 202 (page 17). The tax credit is “$2,500, plus $400 for each kilowatt hour of traction battery capacity in excess of 4 kilowatt hours” with a cap at $7,500. A midsized PHEV might consume 0.3 to 0.4 kilowatt-hours per mile when it runs on electricity (yes, Toyota may well do better than that, but I doubt GM will).
So a PHEV20 (one with a 20-mile range running only on electricity) might have a battery capacity 7 kwh, and get a $3700 tax credit. The Chevy Volt is supposed to be 40-mile electric range and get about $6500.
- Section 254 (page 114) has a geothermal heat pump tax credit up to $2000 and Section 282 (page 168) has a 2-year accelerated depreciation period for geothermal systems.
- Title IV, Subtitle B “Coal-to-Liquid” (page 191) is a tad confusing, but it doesn’t look to me like it’s going to jumpstart the industry, since it requires carbon capture and storage and requires lifecycle greenhouse gas emissions from liquid coal to be no greater than that from conventional petroleum — a very high bar to jump.
- Subtitle C “Nuclear Power” (page 203) has a bad provision that says the Secretary of Energy “shall begin construction of a spent fuel recycling research and development facility not later than 1 year after the date of enactment of this Act.” Recycling is of course a euphemism for reprocessing.
- Subtitle D “Tax Provisions” (page 218) has a short section on enhanced oil recovery that I think is the worst provision in the bill.
Download the full draft.
House Energy Bill On Tap
- Expansion of OCS leasing to include areas off the coasts of the Carolinas, Virginia and Georgia, and possibly the eastern Gulf of Mexico as well. A bipartisan Senate plan known informally as the “Gang of 10” proposal would allow drilling in these regions no closer than 50 miles from shore. But House lawmakers and aides did not say how close to shore their plan would allow drilling.
- New revenues from oil companies. A Democratic leadership aide said the bill may include provisions to ensure payment of royalties from late-1990s deepwater Gulf of Mexico leases that currently allow royalty waivers regardless of energy prices. The absence of price-based limits on these royalty waivers could cost the Treasury as much as $14.7 billion over 25 years, according to the Government Accountability Office. The bill may also include the repeal of the Section 199 tax deduction for major oil companies. This plan, past versions of which have also frozen the deduction at 6 percent for non-majors, raises roughly $13.6 billion over a decade, the Joint Committee on Taxation estimated in June.
- A so-called renewable electricity standard that requires utilities to supply escalating amounts of power from sources like wind and geothermal power. The House Democrats plan to include a standard of 15 percent by 2020, an aide said, akin to a measure the House approved last year that did not survive negotiations with the Senate. The plan allows roughly a fourth of the standard to be met with efficiency measures.
- Extension of renewable energy and energy efficiency tax credits.
This could also be part of an economic stimulus package being prepared or the continuing resolution to extend government spending beyond the Sept. 30 end of the fiscal year, she said.
House Democrats Develop "All of the Above" Energy Agenda in Response to Republican Attacks
Top House Democrats say that shortly after Congress reconvenes, they will put on the floor a piece of legislation that will include an expansion of offshore drilling but also a renewable electricity mandate, energy-efficiency standards for buildings and oil industry tax provisions.
Rep. Ed Markey (D-Mass.) described the plan as “a political reverse takedown on the Republicans,” by calling the GOP bluff on their calls for an “All of the Above” energy agenda. David Sandalow, an adviser to Sen. Barack Obama (D-Ill.), told E&E News: “We’ll see whether the proponents of all of the above can take yes for an answer.”
Renewable electricity standards, building efficiency standards, and oil tax provisions have repeatedly passed the House over Republican opposition, but have died in Republican filibusters in the Senate.
The legislative plan will represent a compromise from the agendas of the various national lobbying campaigns by outside organizations:- Al Gore’s We Campaign’s call for a 100% renewable electricity standard by 2018;
- Newt Gingrich’s American Solutions For Winning the Future’s call for expanded drilling;
- T. Boone Pickens’ call for new grid development, tax incentives for wind and solar, and subsidies for natural gas;
- The coal industry’s American Coalition for Clean Coal Electricity’s call for increased advanced coal technology subsidies.
ACCCE and Pickens each have had a significant presence at the national conventions.
On a lighter note, as Open Left’s Matt Stoller found, the people employed by ACCCE to spread the “clean coal” message in Denver weren’t necessarily all up to speed.
Bush Exploits Hurricane Gustav To Demand More Offshore Drilling
From the Wonk Room.
President Bush exploited this morning’s press briefing on the “follow-up efforts” to Hurricane Gustav to attack Congress about lifting the offshore drilling moratorium. Stating that “what happens after the storm passes is as important as what happens prior to the storm arriving,” he made the declaration that “our discussion here today is about energy.” Bush wasn’t referring to the 1.4 million Louisianans who have lost power due to the storm’s destructive force, and chose not to mention the 102 deaths caused by Gustav. Instead, he went on the attack:I know that Congress has been on recess for a while, but this issue hasn’t gone away. And, uh, this storm should not cause members of Congress say well, we don’t need to address our energy independence. It ought to cause the Congress to step up their need to address our dependence on foreign oil. And one place to do so is to give us a chance to explore in environmentally friendly ways on the Outer Continental Shelf.Watch it:
MSNBC’s Mika Brzezinski and Joe Scarborough were both floored by Bush’s decision “to use another hurricane in Louisiana to promote offshore drilling at this point,” after he “performed so poorly during Hurricane Katrina.”
Bush’s tasteless politicization of an ongoing civil emergency repeated tired right-wing talking points. As Van Jones told the Wonk Room last week, Bush is selling false solutions and more pollution:Let’s be very clear. Number one: There’s no such thing as American oil any more. These are multinational corporations. If you let multinational corporations drill all this oil, they’re going to sell it to the highest bidder, whether it’s China, or India, it doesn’t matter. Why would we throw away America’s beauty chasing the lost drops of oil, so multinational corporations can sell it to India and China?And people also got to remember, we didn’t stop this as an environmental issue. We didn’t stop offshore drilling for the duckies and the fishies. We stopped it because coastline communities were suffering. Because the property owners, the children who live in those coastline communities – not when there were oil spills – but every day, when your child goes out to swim, he comes back covered in oil, you have to use gasoline to get the oil off your child. That was happening coast to coast
Transcript:
BRZEZINSKI: Okay, that was President Bush giving reporters an update on the situation to the hurricane. And nicely weaving in a little pitch for off-shore oil drilling!SCARBOROUGH: I was going to say, Mika. Anybody, anybody that thought this would be the warm and fuzzy George Bush, who would have a tear in his eye and say, “You know, maybe we didn’t have everything right last time, but this time we are worried about the Americans who have,”—no, he turned it around, “Drill now.”
BRZEZINSKI: Drill, drill, drill.
SCARBOROUGH: Drill here, drill now.
BRZEZINSKI: But in all seriousness, at the top of the hour we’ll be hearing from the director of homeland security as well as governor Bobby Jindal.
...
SCARBOROUGH: I’ve got to agree with the mayor. For this president, that performed so poorly during Hurricane Katrina to use another hurricane in Louisiana to promote offshore drilling at this point…
BRZEZINSKI: (Laughing) It was like going from music to news to the top of the hour.
SCARBOROUGH: You know who was screaming the loudest?
BRZEZINSKI: Who?
SCARBOROUGH: The McCain campaign …
BRZEZINSKI: (Sighing) Ohhh…
SCARBOROUGH: ...while they were watching the president. “Just stop, just stop!” Not warm and fuzzy.
National Conservation, Environment and Energy Independence Act introduced in US House: oil drilling, coal-to-liquid, Renewable Energy Reserve Fund planned 3
22 members of the US House of Representatives have introduced the National Conservation, Environment and Energy Independence Act that would lift many restrictions on offshore oil drilling, while providing a projected $2.6 trillion in lease and royalty payments that would generate $390 million for a Renewable Energy Reserve Act. The bill introduced by 11 Democrats and 11 Republicans would open up all protected Outer Continental Shelf lands and end the oil shale leasing moratorium. The bill is in sharp contravention of Democratic leadership but in line with Republican demands.
The leaders of the effort were John Peterson, R-Pa.; Neil Abercrombie, D-Hawaii; Thelma Drake, R-Va.; Tim Walz, D-Minn.; Jim Costa, D-Calif.; and Dan Burton, R-Ind.
A group of ten senators is working on a similar plan. “There’s going to be substantially more drilling and substantially more conservation,” Sen. Mary L. Landrieu (D-La.) said of the Senate plan.
The House bill includes:- Ending moratorium on Outer Continental Shelf, Gulf of Mexico, and oil shale lease sales: funds apportioned 30% to general treasury, 30% to states, 8% to conservation, 10% to environmental restoration, 15% to renewable energy, 5% to CCS/nuclear waste, 2% to LIHEAP
- Repealing the Waxman provision (Section 526)
- 6-year extension of renewable energy/energy efficiency tax credits
- Drawdown of light grade petroleum from the Strategic Petroleum Reserve, with $100 million going into LIHEAP, $60 million for university research, $15 million for wind research, $30 million for solar research, $30 million for hydro research, $40 million for automotive research, $110 million for industrial emissions research, $70 million for building efficiency R&D, $30 million for geothermal R&D, $30 million for smart grid R&D, $385 million for CCS R&D, $65 million for natural gas extraction research, $5 million for a hydrogen prize, $100 million for battery research
House GOP to Unveil 'American Energy Act'
Today at 2 PM, the entire House GOP caucus is holding a Capitol rally to support their drill-drill-drill bill, dubbed the “American Energy Act” (H.R. 6566) and being promoted as an “all of the above” approach to energy policy. Their memo, acquired by the Wonk Room, reveals their plans to promote the bill as a panacea for high gas prices.
Read the full text of the legislation.
As Center for American Progress Action Fund’s Daniel Weiss points out, however, the House GOP is pushing a number of misleading or false talking points. In particular, they grossly overestimate the expected returns on drilling offshore, opening the Arctic Refuge, or mining oil shale—and fail to mention that any such returns would only be noticeable in decades.