AP | By KEVIN BEGOS
PITTSBURGH (AP) — It sounds like a free-market success story: a natural gas boom created by drilling company innovation, delivering a vast new source of cheap energy without the government subsidies that solar and wind power demand.
“The free market has worked its magic,” the Barnett Shale Energy Education Council, an industry group, claimed over the summer.
The boom happened “away from the greedy grasp of Washington,” the American Enterprise Institute, a think tank, wrote in an essay this year.
If bureaucrats “had known this was going on,” the essay went on, “surely Washington would have done something to slow it down, tax it more, or stop it altogether.”
But those who helped pioneer the technique known as hydraulic fracturing, or fracking, recall a different path. Over three decades, from the shale fields of Texas and Wyoming to the Marcellus in the Northeast, the federal government contributed more than $100 million in research to develop fracking, and billions more in tax breaks.
Now, those industry pioneers say their own effort shows that the government should back research into future sources of energy — for decades, if need be — to promote breakthroughs. For all its success now, many people in the oil and gas industry itself once thought shale gas was a waste of time.
“There’s no point in mincing words. Some people thought it was stupid,” said Dan Steward, a geologist who began working with the Texas natural gas firm Mitchell Energy in 1981. Steward estimated that in the early years, “probably 90 percent of the people” in the firm didn’t believe shale gas would be profitable.
“Did I know it was going to work? Hell no,” Steward added.
Shale is a rock formation thousands of feet underground. Among its largest U.S. deposits are the Marcellus Shale, under parts of Pennsylvania, New York, Ohio and West Virginia, and the Barnett Shale is in north Texas. Geologists knew shale contained gas, but for more than 100 years the industry focused on shallower reserves. With fracking, large volumes of water, along with sand and hazardous chemicals, are injected underground to break rock apart and free the gas.
In 1975, the Department of Energy began funding research into fracking and horizontal drilling, where wells go down and then sideways for thousands of feet. But it took more than 20 years to perfect the process.
Alex Crawley, a former Department of Energy employee, recalled that some early tests were spectacular — in a bad way.
A test of fracking explosives in Morgantown, W.Va., “blew the pipe out of the well about 600 feet high” in the 1970s, Crawley said. Luckily, no one was killed. He added that a 1975 test well in Wyoming “produced a lot of water.”
Steward recalled that Mitchell Energy didn’t even cover the cost of fracking on shale tests until the 36th well was drilled.
“There’s not a lot of companies that would stay with something this long. Most companies would have given up,” he said, crediting founder George Mitchell as a visionary who also got support from the government at key points.
“The government has to be involved, to some degree, with new technologies,” Steward said.
By Saabira Chaudhuri Unit Corp. (UNT) has agreed to acquire oil and natural gas assets from Noble Energy Inc. (NBL) for $617.1 million in cash, significantly increasing its acreage and allowing it to grow its production in the oil and natural gas liquids-rich Anadarko Basin Continue reading
From the right side news
Our Northern Neighbor Moves to Cut Energy Taxes/Regulation to Boost Its Economy, But Not the U. S.
The United States should start taking lessons from Canada regarding oil development and its relationship to a pro-growth regulatory and tax structure. Continue reading
By Rob Moritz Arkansas News Bureau
LITTLE ROCK — If work on the Keystone XL oil pipeline does not begin soon jobs could be in jeopardy at a Little Rock plant that makes pipe for the project, two of Arkansas’ Republican congressmen warned here today. Continue reading
China will get the oil from Canada that could have come to the U.S.
At the NBC News/Facebook debate in Concord, NH Newt slams the EPA for its radical and anti-business regulations citing the EPA’s crazy comments on farm dust and dust in the desert. Its too bad we can’t have a debate that’s all about the EPA and its giving away taxpayer money to push the administration’s leftist radical agenda. See the additional reading below this post at our site for many examples of EPA tyranny.
By MATTHEW DALY, Associated Press
WASHINGTON (AP) — The Obama administration is banning new hard rock mining on more than a million acres near the Grand Canyon, an area known to be rich in high-grade uranium ore reserves.
The decision, announced Monday by Interior Secretary Ken Salazar, hands a victory to environmental groups and some Democratic lawmakers who had worked for years to limit mining near the national park, one of the nation’s most popular tourist destinations.
“When families travel to see the Grand Canyon, they have a right to expect that the only glow they will see will come from the sun setting over the rim of this natural wonder, and not from the radioactive contamination that comes from uranium mining,” said Rep. Edward Markey of Massachusetts, the senior Democrat on the House Natural Resources Committee.
But congressional Republicans and industry groups opposed it, arguing that Salazar was eliminating hundreds of jobs and depriving the country of a critically important energy source. The area near the Grand Canyon contains as much as 40 percent of the nation’s known uranium resources, worth tens of billions of dollars.
Sen. John McCain, R-Ariz., called the ban a “devastating blow to job creation in northern Arizona.”
McCain said the ban was “fueled by an emotional public relations campaign pitting the public’s love for the Grand Canyon against a modern form of low-impact mining that occurs many miles from the canyon walls.”
During a speech at the National Geographic Society, Salazar said he was “at peace” with the decision, one of the most high-profile actions of his three-year tenure at Interior. Salazar twice had imposed temporary bans on mining claims.
“A withdrawal is the right approach for this priceless American landscape,” Salazar said. “People from all over the country and around the world come to visit the Grand Canyon. Numerous American Indian tribes regard this magnificent icon as a sacred place, and millions of people in the Colorado River Basin depend on the river for drinking water (and) irrigation.”
The decision imposes a 20-year ban on new mining claims on federal land near the Grand Canyon. About 3,000 mining claims already staked in the area will not be affected, although officials expect fewer than a dozen mines to be developed under existing claims.
While uranium remains an important part of a comprehensive energy strategy, Salazar said, the Grand Canyon is a national treasure that must be protected. Salazar called the ban “a responsible path that makes sense for this and future generations.”
Uranium is used in nuclear power plants, which supplies about 20 percent of the nation’s electricity.
The national park attracts more than 4 million visitors a year and generates an estimated $3.5 billion in economic activity. About 26 million Americans in four states, including the cities of Phoenix and Los Angeles, rely on the Colorado River for clean drinking water.
Conservation groups called the 20-year ban a crucial protection for an American icon. Uranium reserves near the Grand Canyon pose a real and present threat to Grand Canyon National Park and its water supply, said Taylor McKinnon, public lands campaigns director at the Arizona-based Center for Biological Diversity.
McKinnon and other environmentalists disputed claims by the mining industry and some Republican members of Congress that the ban would hurt the state’s economy and the nation’s energy independence.
“The real economic engine in northern Arizona is not uranium mining. It’s tourism,” McKinnon said. “To jeopardize our economic engine with more toxic uranium mining is unacceptable.”
GOP lawmakers lambasted the ban, calling it an overreach that jeopardizes jobs for no proven reason. They cited a study showing that even a severe mining accident would increase uranium levels in the Colorado River by an amount undetectable over levels normally carried by the river from erosion of geologic deposits.
“It is unconscionable that the administration has yet again caved to political pressure from radical special interest groups rather than standing up for the American people,” said Rep. Rob Bishop, R-Utah. “Banning access to the most uranium-rich land in the United States will be overwhelmingly detrimental to both jobs in Utah and Arizona and our nation’s domestic energy security.”
Using modern techniques, mining does not affect drinking water from the Colorado River, McCain said.
The Bureau of Land Management said the 20-year ban on new mining claims would reduce overall uranium production by about 6 percent of current U.S. demand.
State, local and federal governments are expected to lose an estimated $16.6 million in annual tax revenue, and 465 jobs would not materialize.
The Bush administration had opened up land near the canyon to new mining claims. Salazar reversed the Bush policy in 2009 and called for a two-year moratorium on new mining claims around the canyon. He followed up with a six-month extension last year.
Supporters of the ban say any increase in mining jobs is not worth risks to the Colorado River, lands considered sacred by American Indian tribes or wildlife habitat. A mining mishap also could be disastrous for tourism.
Associated Press writer Felicia Fonseca in Flagstaff, Ariz., contributed to this report.
Follow Matthew Daly on Twitter: (at)MatthewDalyWDC
Copyright © 2012 The Associated Press. All rights reserved.
By Ben Geman
When it comes to energy, Friday’s hopeful new data on job creation is prompting lawmakers and interest groups to call for . . . what they were calling for before the new report.
House Republican leaders greeted the hiring data with calls for the Senate to approve a suite of House-passed bills, including measures to require a major expansion of offshore oil-and-gas leasing and block several EPA regulations.
“President Obama owes it to every small business, and to the millions of Americans still looking for work, to urge Senate Democrats to take action on these common-sense jobs bills as soon as possible,” said House Speaker John Boehner (R-Ohio) in a statement following news that the economy added 200,000 jobs in December.
House Natural Resources Committee Chairman Doc Hastings (R-Wash.), author of the drilling bills, struck a similar note in touting the legislation Friday. “It is good news that more jobs were added to the economy last month, however millions of Americans remain unemployed and there is still much more that needs to be done to revive our sluggish economy,” he said in a statement.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) reiterated his call for federal approval of a major proposed pipeline to bring Canadian oil sands to Gulf Coast refineries. “[N]o discussion of job-creation would be complete without acknowledging the tremendous jobs and energy security benefits that would come from approval and construction of the Keystone XL pipeline,” he said in a statement.
Elsewhere, the BlueGreen Alliance, which is a coalition of labor unions and environmentalists, called on Congress to “keep this momentum going” on jobs by bolstering federal support for green energy and passing a sweeping transportation bill.
Green energy advocates are seeking action to renew a stimulus-law grant program for renewable power projects, extension of clean energy tax credits and other policies.
“Winning economic strategies focused on the industries of the future and the $5 trillion clean-tech industry should be America’s focus in 2012. To do that, Congress must move forward with smart policies and strategic investments in renewable energy, energy efficiency and advanced vehicle technologies, the rebuilding of our transportation, energy and communications infrastructure, and the production of cleaner, safer chemicals,” said David Foster, the group’s executive director.
“One easy first step for Congress would be swift passage of a long-term reauthorization of the Surface Transportation Act. Through action like this, we can recreate the millions of jobs lost in the Great Recession and set America on the path to economic prosperity in the 21st century global economy,” he said.
by The Associated Press
WASHINGTON (AP) — President Barack Obama and Congress are starting the election year locked in a tussle over a proposed 1,700-mile oil pipeline from Canada to Texas that will force the White House to make a politically risky choice between two key Democratic constituencies.
Some unions say the Keystone XL pipeline would create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster.
A law Obama signed just before Christmas that temporarily extended the payroll tax cut included a Republican-written provision compelling him to make a speedy decision on whether to build the pipeline. The administration is warning it would rather say no than rush a decision in an election year.
It’s a dicey proposition for Obama, who enjoyed strong support from both organized labor and environmentalists in his winning 2008 campaign for the White House.
Environmental advocates, already disappointed with his failure to achieve climate change legislation and the administration’s decision to delay new smog standards, have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in the upcoming November election.
Some liberal donors even threatened to cut off funds to Obama’s re-election campaign to protest the project, which opponents say would transport “dirty oil” that requires huge amounts of energy to extract.
If he rejects the pipeline, Obama risks losing support from organized labor, a key part of the Democratic base, for thwarting thousands of jobs.
Obama appeared to have skirted what some dubbed the “Keystone conundrum” in November when the State Department announced it was postponing a decision on the pipeline until after this year’s election. Officials said they needed extra time to study routes that avoid an environmentally sensitive area of Nebraska that supplies water to eight states.
The affected area stretches just 65 miles through the Sandhills region of northern Nebraska, but the concerns were serious enough that the state’s governor and senators opposed the project until the pipeline was moved.
Republican Gov. Dave Heineman, who opposed the initial route, says he supports efforts to accelerate the project, noting that provisions in the payroll tax bill allow the project developer to find a new route avoiding the Sandhills.
The new route would have to be approved by Nebraska environmental officials and the State Department, which has authority because the pipeline would cross an international border.
The pipeline would carry oil from tar sands in western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. The project’s developer, Calgary-based TransCanada, says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.
The payroll tax cut law gives the Obama administration 60 days to decide whether to allow construction of the pipeline.
An “arbitrary deadline” for the permit decision would compromise the process, short-circuiting time needed to conduct required environmental reviews and preventing the issuance of a permit, the State Department warned in a written statement on Dec. 12. Obama administration officials confirmed that view after the payroll tax bill was approved.
Republicans call the threat little more than an excuse that allows Obama to placate environmental groups while not rejecting the pipeline outright.
“The only thing arbitrary about this decision is the decision by the president to say, ‘Well, let’s wait until after the next election,’ ” said House Speaker John Boehner, R-Ohio.
Boehner and other Republicans say the pipeline would help Obama achieve his top priority — creating jobs — without costing a dime of taxpayer money. They hope to portray Obama’s reluctance to approve the pipeline as a sign he favors environmentalists over jobs.
Russ Girling, TransCanada’s president and chief executive, said his company would do whatever is necessary to make sure the project is approved.
“We’ve had more than enough surprises on this,” said TransCanada spokesman Shawn Howard.
In Nebraska, where the pipeline faces strong resistance, state officials are awaiting an environmental study that will determine a new route. Officials have said the review will take six to nine months.
Some landowners in the Sandhills celebrated the decision to reroute the project, but the pipeline’s strongest opponents say they still have concerns about the prospect of the government using its power of eminent domain to seize land, as well as liability issues in case of a spill.
“Republicans have bullied their way to get a reckless rider attached to a bill that was supposed to be about helping middle-class families,” said Jane Kleeb, executive director of the group Bold Nebraska, which opposes the pipeline.
With the bill signed into law, Obama “must do the right thing for our land, water and families’ health by denying the pipeline permit,” Kleeb said.
Project supporters say U.S. rejection of the pipeline would not stop it from being built. Canadian Prime Minister Stephen Harper has said TransCanada could pursue an alternative route through Canada to the West Coast, where oil could be shipped to China and other Asian markets.
“Canada is going to develop this no matter what, and that oil is either going to come to the United States or it’s going to go to a place like China. We want it here,” said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.
Opponents call the West Coast option farfetched, noting that Canadian regulators have announced a one-year delay for a similar project that would carry tar sands oil to British Columbia, on Canada’s western coast.
Native groups strongly oppose both the Keystone XL and the Northern Gateway pipeline proposed by TransCanada rival Enbridge. Canada’s First Nations have constitutionally protected treaty rights and unsettled land claims that could allow them to block or significantly delay both pipelines.
Unions are watching closely. Unemployment in construction is far higher than other industries, with more than 1.1 million construction workers jobless, said Brent Bookers, director of construction at the Laborers’ International Union of North America.
“For many members of the Laborers, this project is not just a pipeline, it is a lifeline,” Bookers said, adding, “Too many hard-working Americans are out of work, and the Keystone XL pipeline will change that dire situation for thousands of them.”
Roger Toussaint, international vice president of the Transport Workers Union, opposes the pipeline.
“The dangers of the pipeline are compelling, and no one should believe the claims of either the Republican leadership or the energy companies, with respect to the project being shovel ready or with respect to the number of jobs it’s going to produce,” he said.
Associated Press writer Grant Schulte in Lincoln, Neb., contributed to this report.
Follow Matthew Daly on Twitter: (at)MatthewDalyWDC
New limits on power plant emissions of mercury and other air toxics and a three-year compliance timeline remain essentially as proposed in March in a long-expected U.S. Environmental Protection Agency rule issued Dec. 21.
“With these standards that were two decades in the making, EPA is rounding out a year of incredible progress on clean air in America with another action that will benefit the American people for years to come,” said EPA Administrator Lisa P. Jackson. “The Mercury and Air Toxics Standards will protect millions of families and children from harmful and costly air pollution and provide the American people with health benefits that far outweigh the costs of compliance.”
The MATS rule — also known as the Hazardous Air Pollutants rule for utilities and the Utility Maximum Available Control Technology rule — establishes the first national standards to limit toxic air emissions from power plants.
The rule is expected to cut mercury emissions by 90 percent and also to cut emissions of arsenic, chromium, nickel, and acid gases including hydrochloric and hydrofluoric acid. The technology that controls those emissions also will reduce fine particulate matter.
Mercury is a neurotoxin to which fetuses and children are particularly susceptible, while other targeted emissions cause cancer, chronic and acute respiratory disorders, and other illnesses.
The compliance deadline is Jan. 1, 2015.
Changes in the Final Rule
The rule was issued several days after it was expected on Friday, Dec. 16, leading to speculation that it was being weakened in the final hours.
Changes, however, were minor and kept the emissions limits and the three-year timeline essentially as proposed.
Most notably, estimated costs and benefits dropped — from costs of about $11 billion per year in the proposed rule and benefits of up to $140 billion, to $9.7 and up to $90 billion in the final rule — but that’s not the result of weakening, according to Jackson.
Costs dropped due to efficiencies suggested by some of the 900,000 commenters on the proposal, she said. Benefits were reduced because analysis showed that some of the benefits will be realized through the Cross-State Air Pollution Rule issued earlier this year.
MATS benefits occur primarily through as many as 11,000 premature deaths avoided per year but also through the avoidance of 4,700 non-fatal heart attacks, 130,000 cases of respiratory illness including aggravated asthma and acute and chronic bronchitis, and 540,000 days of missed work, according to the EPA.
In addition, the EPA’s jobs analysis finds a net gain of 46,000 short-term jobs as pollution control technologies are installed and 8,000 long-term jobs to operate and maintain those technologies.
Plant Closures Expected
Based on the draft rule and other environmental rules expected or already out, utilities have said they would close some plants that are too small and old to merit expensive retrofits. More than 30 plants in a dozen states likely will be retired and another 34 may retire, according to an Associated Press survey based on the draft rule and reported on Dec. 19.
In West Virginia, AEP has said it expects this rule, with other EPA regulations, to lead to the closure of its Philip Sporn plant in Mason County, Kanawha River plant in Kanawha County and Kammer plant in Marshall County. Those three plants amount to 2,200 megawatts of older coal-fired generating capacity — 12 percent of the state’s generating capacity but only about one-tenth of 1 percent of generation in 2010.
FirstEnergy has not yet announced its plans.
“We would need some time to evaluate what the final rules are and how they might impact our operations,” said FirstEnergy spokesman Mark Durbin. “At this time, no final decisions have been made on the future of our fossil generating plants.”
A state regulator has suggested that FirstEnergy’s small, old Albright, Rivesville and Willow Island plants may be retired. Those total about 600 megawatts of capacity and represented much less than one-tenth of one percent of generation in 2010.
Utilities, regulators and electric trade organizations raised concerns that the combined capacity of plant retirements expected from the proposed rule and the tight timeline could lead to reliability problems.
The AP concluded after its survey that the concern likely was overblown; however, the EPA provided in its final rule for a fourth compliance year for technology installations and further flexibility for localized reliability problems.
The National Mining Association belittled the flexibility as inadequate.
“The modest adjustment to the compliance timeline in the MACT standard merely papers over a deeply flawed rule,” said NMA President and CEO Hal Quinn in a media release.
But PJM Interconnection, which manages the grid in a 13-state region that includes West Virginia, supported the flexibility measures.
“We at PJM are pleased that the EPA administrator has included the key elements of our proposed process to preserve reliability into documents accompanying the final rule,” the organization wrote in a media release.
The Sierra Club applauded the rule as a “milestone.”
And the sustainability advocacy group CERES said the rule would “unleash investment” in infrastructure and create jobs up and down the supply chain.
Soon after the EPA made its announcement, Rep. Nick Rahall, D-W.Va., issued a statement in which he said he had “serious concerns” about the new rules.
“In fact, I have voted in Congress to prevent their implementation in the near term. The rules are likely to drive up energy prices for American consumers and result in the loss of jobs for coal miners while doing nothing to address the growth in global emissions,” he said. “It certainly makes more sense to me to be investing in American-made technologies to help American utilities upgrade to more efficient, cleaner ways of using domestic coal, rather than putting the rulemaking hammer to American plants and forcing our coal to be shipped overseas where emissions will be even greater. From the standpoint sufficiency of our energy supply and protection of our global atmosphere, we ought to be looking creatively at coal power, rather than instituting policies that force coal out of our energy sector.”
Sen. Joe Manchin, D-W.Va., also was critical of the rules.
“Today’s announcement of yet another onerous rule by the EPA completely ignores the devastating impact these regulations will have on jobs and our economy, not only in West Virginia but across this nation,” he said. “The Utility MACT Rule, combined with the Cross-State Air Pollution Rule that was finalized earlier this year, are two of the most expensive regulations ever to be imposed, and every American should be concerned about their effect on energy prices, the reliability of our power supply, our coal mining industry and most importantly our families,” Senator Manchin said. “I believe we can find a responsible and reasonable balance when it comes to the environment and our energy needs as a nation. My desire to achieve this balance is why my Republican colleague Dan Coats of Indiana and I introduced the Fair Compliance Act – a commonsense, bipartisan piece of legislation that would create a fair timeframe to comply with new rules. I hope that Congress will address these regulations, and take up the Fair Compliance Act as soon as possible, to prevent the potential loss of a million jobs, increased utility rates, and more damage to our economy.”
The shale gas boom has been a rare bright spot in the U.S. economy, so much of the country let out a shudder two weeks ago when the Environmental Protection Agency issued a “draft” report that the drilling process of hydraulic fracturing may have contaminated ground water in Pavillion, Wyoming. The good news is that the study is neither definitive nor applicable to the rest of the country.
“When considered together with other lines of evidence, the data indicates likely impact to ground water that can be explained by hydraulic fracking,” said the EPA report, referring to the drilling process that blasts water and chemicals into shale rock to release oil and natural gas. The news caused elation among environmentalists and many in the media who want to shut down fracking. Continue reading
By Nicolas Loris
Abstract: The Obama Administration has announced that it will delay the decision to approve or reject construction of the proposed Keystone XL oil pipeline until after the presidential elections in 2012. The pipeline would carry oil from Canada to U.S. refineries on the Gulf Coast—creating jobs, supplying energy from a secure and friendly source, and spurring much-needed economic growth. The State Department has thoroughly studied potential environmental impacts of the Keystone pipeline, and found minimal risk to soil, water, air, and animal life. Still, environmentalists oppose construction of the pipeline in force. Congress should reject unrealistic claims and authorize construction of the pipeline. Continue reading
By: Lori Ann LaRocco
A new study by the Institute for Energy Research is reporting America is not only exporting a record amount of gasoline, but the country is also brimming with what’s being called, “vast quantities” of natural resources.
The IER complied the study which looks at “recoverable” energy (which is energy that could be harnessed in America) and the government regulations that are impacting such production. Dan Kish, Senior Vice President for policy at IER broke down the results of their study over the phone.
LL: How much energy is considered “recoverable?” Continue reading