Category Archives: energy policy

energy policy, fossil fuels, gulf of mexico clean-up, marine pollution, national ocean politics, natural resource management, offshore oil

Save the blue.org: Can We “Save the Blue” by Dumping Old Drilling Rigs into the Ocean? by Richard Charter

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http://www.savetheblue.org/articles-dumping-old-drilling-rigs-into-the-ocean.html

How Oil Companies Plan to Maximize Their Profits at the Expense of Our Coastal Waters

By Richard Charter, for the H2oover Foundation

Exploration of natural gas and oil brings with it numerous and diverse environmental and human health problems. With so much attention focused on a long list of issues including oil spills, tar sands, fracking, carbon emissions, etc., little attention is being paid to the removal of thousands of offshore oil and gas structures.

Removing disused offshore drilling rigs from U.S. federal waters after the economic life of a seafloor oilfield has concluded is established public policy. In the U.S. Exclusive Economic Zone, beyond state waters that extend for three miles from shore off most coastal states and for ten miles off Texas and Florida’s Gulf Coast, longstanding federal regulations have required full decommissioning and removal of obsolete oil platforms.

Drilling platform support “jackets” that are no longer in use have long been required to be disposed of by being cleaned of oils, cut up, and either recycled for metals or transferred to landfills, while any remaining seafloor oil well casings have had to be sealed and severed 15 feet below the mud line. In each of the original Outer Continental Shelf (OCS) lease contracts executed between the Department of Interior and the petroleum industry, the companies willingly agreed to carry out eventual terrestrial decommissioning as part of the legally binding terms of their lease. In certain sensitive areas off of Southern California, this written contractual commitment by industry to eventually restore the seabed to “as-near-prelease conditions as possible” played an instrumental role in enabling drilling to proceed in the first place.

Old non-producing platforms have logically been slated for removal because they can create serious safety, environmental, and navigational risks, and often deteriorate in ways making them more susceptible to structural failure, leading to substantial liability issues for the rig owner or the government agency administering the lease. On November 10, 2012 a barge loaded with five million gallons of fuel oil hit a submerged oil platform in the Gulf of Mexico, 30 miles south of Lake Charles, Louisiana. The platform had been damaged by Hurricane Rita and was marked with unlit buoys. The 150,000-barrel double-hull barge DBL 152 suffered a 35’×6′ gash in one of its cargo tanks after striking the West Cameron 229A platform, leaking an estimated 1.3 million gallons of oil into the Gulf. Efforts to remove remaining oil from the barge were still underway a month after the collision.

In the past, parts of the Gulf of Mexico have been littered with disused offshore drilling rigs. In some instances leftover damaged wellheads have continued to leak oil for years into the Gulf, and some are still leaking even now. In response to the problems created by these kinds of orphaned rigs in the Gulf, the Interior Department has had to initiate what it calls the “Idle Iron” policy, requiring removal and careful plugging and abandonment of old wells within a certain timeframe with penalties for noncompliance.

An Industry Dodging Fiscal Responsibility:

The immense potential cost savings to the petroleum industry to be gained by not removing old rigs that have made immense profits for companies over the decades has led oil interests to undertake a slick public relations campaign as they try to break their promises. Financially motivated to avoid about 50% of their obligated decommissioning costs, the drillers cleverly anointed their effort to circumvent federal decommissioning requirements with the name Rigs-to-Reefs. Thus altering the “life cycle costing” considerations for a company as it evaluates whether or not to bid on a particular future drillsite can change a bidding decision considerably when the drilling company knows it will not be required to remove and recycle the rig itself at the end of its useful lifetime. This means that sensitive waters like the Arctic Ocean, the California coastline, and Florida’s long-protected Gulf Coast and Panhandle, for example, will be placed at increased jeopardy as industry bids more aggressively on challenging or remote drilling targets with the foreknowledge that the company will ultimately be able to just cheaply discard a platform in the ocean near the drilling site.

The petroleum industry has spent a lot of money and focus group message-testing as part of their nationwide Rigs-to-Reefs greenwashing effort, aimed primarily at the recreational fishing industry and at policymakers, trying to gain federal approval for their proposal. Once the oil industry figured out how much money they could save by simply dumping their cut-off steel jackets – or even by cutting them off “in-situ” below the water line and leaving the wreckage in place on site – an elaborate promotional effort was put into motion. Sadly, some of the most vocal advocates for the Rigs-to-Reefs concept have apparently not turned out to be among the most responsible operators in the Gulf of Mexico.

In response to political pressure from the oil industry, the Interior Department has initiated its own version of a Rigs-to-Reefs program, designed to interact with state programs in states that have passed specific legislation to establish programs for dealing with old oil and gas platforms, including Louisiana, Texas, Mississippi, and most recently, California. Under certain limited conditions, the Interior Department can now waive existing federal law requiring full decommissioning and “donate” the spent rig to one of these states for offshore abandonment in a state-designated “reefing site”.

With the exception of Florida, the Gulf Coast states that are still reeling economically from the disastrous BP Gulf Oil Spill find the powerful combination of the long-entrenched political persuasion of the petroleum industry and the pressure from the similarly influential sportfishing lobby combine to force them to embrace Rigs-to-Reefs with little objective scientific scrutiny, since few studies are available that have not been designed and paid for by the oil companies. First dozens, then hundreds, and eventually thousands of offshore rigs and related subsea pipelines and other petroleum infrastructure facilities will eventually need to be decommissioned, with Rigs-to-Reefs representing a potential savings to the industry amounting to billions of dollars. Even for the 23 rigs nearing obsolescence and facing near-term abandonment in federal waters off of California, the lure of potential future state funding that might someday be derived from even a fraction of industry’s cost-savings motivated the state legislature and former Governor Arnold Schwarzenegger’s administration to gloss over what was admittedly only a cursory literature review and become the latest guinea pig for the Rigs-to-Reefs scheme. California’s petroleum interests, joined by well-compensated sportfishing lobbyists and at least one normally-cautious conservation group, managed to dominate the debate and to obscure legitimate public concerns about the plan. Going forward, at least California agencies will supposedly be required to perform a case-by-case evaluation for each of the discarded rigs off the state’s coast, some of which are immense structures located in 400 to 1000 feet of water.

Hidden Adverse Impacts:

There are several underlying problems inherent in enabling the industry to avoid their prior requirement for full decommissioning of spent platforms. At the site of many offshore drilling rigs in relatively shallow water, seafloor obstructions consisting of drill mud mounds containing toxic substances often remain behind. Studies conducted around offshore drilling rigs in the Gulf of Mexico have revealed small amounts of mercury with the potential to bio-accumulate in the fisheries food chain leading to humans. This mercury pollution is thought to originate from mercury contained in spent barite drill muds used to cool and lubricate the drill bit, after which the used muds are discharged into the water column and dumped on the seafloor. Other toxic, carcinogenic, and mutagenic chemicals often remain in the seafloor wastes accumulated from years of drilling and oil production. Concentrations of these discharged oil-related pollutants do not need to be particularly high to be of serious biological concern. Research on oil pollution in Alaska’s Prince William Sound since the 1989 Exxon Valdez oil spill has provided compelling evidence that very low levels of PAH compounds (polycyclic aromatic hydrocarbons) associated with the spilled oil are causing life-cycle mutagenic damage to the eggs of Pink salmon at levels of two parts-per-billion. Dilution, it turns out, is not the solution for toxic pollution that bio-concentrates in the marine food chain.

Beyond the toxic chemical components found in the mud mounds, these seafloor snags also represent physical obstructions to the activities of commercial fishermen.

Can Oil Companies Really “Improve on Nature”?

There is also an ongoing dispute about the efficacy of the much-touted “artificial reef” functions supposedly provided by abandoning discarded drilling rigs in the marine environment. The oil industry’s Rigs-to-Reefs advertising claims that the dumped rigs reliably attract fish in various ecological settings. The state of current science, however, provides ample contrary evidence indicating that while their abandoned drilling structures might sometimes attract certain species of fish, in many locations these fish are not necessarily “new” fish biomass, but are instead coming from natural hard-rock seafloor substrate or other nearby natural habitat. Certain species are simply being aggregated around the dumped rig components in a manner that makes the fish easier prey for sportfishing interests normally precluded from fishing in close proximity to an active rig due to the usual closure zone surrounding an operating platform. There is no evidence that either operational or discarded platforms provide net ecological benefits to the marine ecosystem as a whole, relative to parts of the ocean left in a natural state.

Each proposed platform abandonment location in the Gulf of Mexico and off of Southern California is necessarily unique in terms of ecological setting and the specific types of marine species found in surrounding waters. No matter how carefully considered, not all artificial reefs are functional contributors to marine health. A 176-acre rocky-bottom fish habitat that Southern California Edison Company built a half-mile off San Clemente in 2008, supposedly “replacing” fish lost due to operations at the company’s nearby nuclear power plant, has recently been found to be failing to propagate enough fish to meet the agreed-to mitigation requirements.

The vision of a restored ocean returning to vibrant and healthy productivity after offshore rigs are removed is proving an elusive one in the face of a lopsided debate being dominated by petro-dollars, but for many states and for much of the American ocean, the fate of our marine environment is yet to be decided.

Promises Not Kept:

The word “ecosystem” finds its meaning in the Greek word oikos, defining a “house, dwelling place, or habitation.” The ocean is a key part of our collective home. In ecosystems, diversity is closely connected with network structure. A diverse ecosystem is resilient because it contains many species with overlapping ecological functions that can partially replace one another. We ourselves are living with, and literally living as part of, the Earth’s ocean ecosystem.

Left alone by human intervention and absent polluting activities, the ocean environment can prove to be a powerful and pervasive self-healing mechanism, and the case could be made that the ecosystem design that preceded the age of offshore oil development was likely the most successful biological niche that could have evolved in a particular location. Ultimately allowing the marine environment to restore itself was the stated rationale for the decommissioning contracts that the drillers originally accepted and signed when they began to explore and develop the offshore sites now in question, and there is no conclusive evidence that Rigs-to-Reefs is a beneficial use of spent drilling rigs for anyone but the accounting department of an oil company.

If our society allows the petroleum industry and their captive scientists to determine the fate of our sustaining hydrocommons in the oceans, decisions made by this special interest lobby will not be in the public interest, but made instead in the interest of maximizing industry profits by avoiding remediation of corporate messes and by circumventing willingly-accepted corporate responsibilities for rig removal.

In the event that we arbitrarily extend the duration of the impacts of the industrial detritus of the fleeting carbon age in our oceans, we are denying our grandchildren the possibility of experiencing the ocean we inherited from our ancestors. We are instead allowing the ocean itself to become a vast corporate chemical and biological experiment, with no coherent vision or sound science to tell us what the results might turn out to be over the long term.

Enabling the drilling industry to avoid keeping their solemn promise of full decommissioning of spent rigs, aside from the trail of pollution that would be left behind, particularly endangers ever more sensitive places in our coastal waters by making them more economically attractive for exploitation while arbitrarily incentivizing their unnecessary sacrifice. Our ocean, while appearing deceptively uniform when viewed from above the sea surface, actually embodies a wide diversity in seafloor habitats, species composition, and water column conditions, and an approach to dealing with obsolete drilling infrastructure that might at first appear to be effective in one location may not work at all elsewhere. The petroleum industry has an obligation to society to follow the precautionary principle that they themselves often espouse and to honor their original agreements to remove spent drilling rigs and restore the seafloor as much as possible to pre-drilling conditions when an oil field is depleted, lest Americans someday wake up to a polluted ocean haunted by thousands of dumped rigs comprising an offshore junkyard of epic proportions.

Richard Charter is a Senior Fellow with The Ocean Foundation and has worked for 35 years on offshore drilling safety, oil spill response, and ocean protection issues with local and state governments and the conservation community. Richard currently serves on the Methane Hydrates Advisory Committee to the U.S. Department of Energy and on NOAA’s Gulf of the Farallones National Marine Sanctuary Advisory Committee.

“The wise use of water is quite possibly the truest indicator of human intelligence, measurable by what we are smart enough to keep out of it. Including oil, soil, toxics, and old tires.”
-David Orr, Reflections on Water and Oil

climate change, energy policy, fossil fuels, fracking, Keystone XL, national ocean politics, natural resource management, renewable energy, tar sands

Rolling Stone Magazine: Obama and Climate Change: The Real Story by Bill McKibben

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http://www.rollingstone.com/politics/news/obama-and-climate-change-the-real-story-20131217

The president has said the right things about climate change – and has taken some positive steps. But we’re drilling for more oil and digging up more carbon than ever

stone
Illustration by Victor Juhasz
By Bill McKibben
December 17, 2013 9:00 AM ET

Two years ago, on a gorgeous November day, 12,000 activists surrounded the White House to protest the proposed Keystone XL pipeline. Signs we carried featured quotes from Barack Obama in 2008: “Time to end the tyranny of oil”; “In my administration, the rise of the oceans will begin to slow.”

Global Warming’s Terrifying New Math

Our hope was that we could inspire him to keep those promises. Even then, there were plenty of cynics who said Obama and his insiders were too closely tied to the fossil-fuel industry to take climate change seriously. But in the two years since, it’s looked more and more like they were right – that in our hope for action we were willing ourselves to overlook the black-and-white proof of how he really feels.

If you want to understand how people will remember the Obama climate legacy, a few facts tell the tale: By the time Obama leaves office, the U.S. will pass Saudi Arabia as the planet’s biggest oil producer and Russia as the world’s biggest producer of oil and gas combined. In the same years, even as we’ve begun to burn less coal at home, our coal exports have climbed to record highs. We are, despite slight declines in our domestic emissions, a global-warming machine: At the moment when physics tell us we should be jamming on the carbon brakes, America is revving the engine.

Greenland Melting: Climate Change’s Disasterous Effects

You could argue that private industry, not the White House, has driven that boom, and in part you’d be right. But that’s not what Obama himself would say. Here’s Obama speaking in Cushing, Oklahoma, last year, in a speech that historians will quote many generations hence. It is to energy what Mitt Romney’s secretly taped talk about the 47 percent was to inequality. Except that Obama was out in public, boasting for all the world to hear:

“Over the last three years, I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75 percent of our potential oil resources offshore. We’ve quad­rupled the number of operating rigs to a record high. We’ve added enough new oil and gas pipeline to encircle the Earth, and then some. . . . In fact, the problem . . . is that we’re actually producing so much oil and gas . . . that we don’t have enough pipeline capacity to transport all of it where it needs to go.”

Actually, of course, “the problem” is that climate change is spiraling out of control. Under Obama we’ve had the warmest year in American history – 2012 – featuring a summer so hot that corn couldn’t grow across much of the richest farmland on the planet. We’ve seen the lowest barometric pressure ever recorded north of Cape Hatteras, North Carolina, and the largest wind field ever measured, both from Hurricane Sandy. We’ve watched the Arctic melt, losing three quarters of its summer sea ice. We’ve seen some of the largest fires ever recorded in the mountains of California, Colorado and New Mexico. And not just here, of course – his term has seen unprecedented drought and flood around the world. The typhoon that just hit the Philippines, according to some meteorologists, had higher wind speeds at landfall than any we’ve ever seen. When the world looks back at the Obama years half a century from now, one doubts they’ll remember the health care website; one imagines they’ll study how the most powerful government on Earth reacted to the sudden, clear onset of climate change.

The Fossil Fuel Resistance

And what they’ll see is a president who got some stuff done, emphasis on “some.” In his first term, Obama used the stimulus money to promote green technology, and he won agreement from Detroit for higher automobile mileage standards; in his second term, he’s fighting for EPA regulations on new coal-fired power plants. These steps are important – and they also illustrate the kind of fights the Obama administration has been willing to take on: ones where the other side is weak. The increased mileage standards came at a moment when D.C. owned Detroit – they were essentially a condition of the auto bailouts. And the battle against new coal-fired power plants was really fought and won by environmentalists. Over the past few years, the Sierra Club and a passel of local groups managed to beat back plans for more than 100 new power plants. The new EPA rules – an architecture designed in part by the Natural Resources Defense Council – will ratify the rout and drive a stake through the heart of new coal. But it’s also a mopping-up action.

Obama loyalists argue that these are as much as you could expect from a president saddled with the worst Congress in living memory. But that didn’t mean that the president had to make the problem worse, which he’s done with stunning regularity. Consider:

• Just days before the BP explosion, the White House opened much of the offshore U.S. to new oil drilling. (“Oil rigs today generally don’t cause spills,” he said by way of explanation. “They are technologically very advanced.”)

• In 2012, with the greatest Arctic melt on record under way, his administration gave Shell Oil the green light to drill in Alaska’s Beaufort Sea. (“Our pioneering spirit is naturally drawn to this region, for the economic opportunities it presents,” the president said.)

• This past August, as the largest forest fire in the history of the Sierra Nevadas was burning in Yosemite National Park, where John Muir invented modern environmentalism, the Bureau of Land Management decided to auction 316 million tons of taxpayer-owned coal in Wyoming’s Powder River basin. According to the Center for American Progress, the emissions from that sale will equal the carbon produced from 109 million cars.

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Even on questions you’d think would be open-and-shut, the administration has waffled. In November, for instance, the EPA allowed Kentucky to weaken a crucial regulation, making it easier for mountaintop-removal coal mining to continue. As the Sierra Club’s Bruce Nilles said, “It’s dismaying that the Obama administration approved something even worse than what the Bush administration proposed.”

All these steps are particularly toxic because we’ve learned something else about global warming during the Obama years: Most of the coal and gas and oil that’s underground has to stay there if we’re going to slow climate change.

Though the Copenhagen climate conference in 2009 was unquestionably the great foreign-policy failure of Obama’s first term, producing no targets or timetables or deals, the world’s leaders all signed a letter pledging that they would keep the earth’s temperature from rising more than two degrees Celsius. This is not an ambitious goal (the one degree we’ve raised the temperature already has melted the Arctic, so we’re fools to find out what two will do), but at least it is something solid to which Obama and others are committed. To reach that two-degree goal, say organizations such as the Carbon Tracker Initiative, the World Bank, the International Energy Agency, the Intergovernmental Panel on Climate Change, HSBC and just about everyone else who’s looked at the question, we’d need to leave undisturbed between two-thirds and four-fifths of the planet’s reserves of coal, gas and oil.

The Powder River Basin would have been a great place to start, especially since activists, long before the administration did anything, have driven down domestic demand for coal by preventing new power plants. But as the “Truth Team” on barack obama.com puts it, “building a clean future for coal is an integral part of President Obama’s plan to develop every available source of American energy.”

And where will the coal we don’t need ourselves end up? Overseas, at record levels: the Netherlands, the U.K., China, South Korea. And when it gets there, it slows the move to cleaner forms of energy. All told, in 2012, U.S. coal exports were the equivalent of putting 55 million new cars on the road. If we don’t burn our coal and instead sell it to someone else, the planet doesn’t care; the atmosphere has no borders.

As the administration’s backers consistently point out, America has cut its own carbon emissions by 12 percent in the past five years, and we may meet our announced national goal of a 17 percent reduction by decade’s end. We’ve built lots of new solar panels and wind towers in the past five years (though way below the pace set by nations like Germany). In any event, building more renewable energy is not a useful task if you’re also digging more carbon energy – it’s like eating a pan of Weight Watchers brownies after you’ve already gobbled a quart of Ben and Jerry’s.

Let’s lay aside the fact that climate scientists have long since decided these targets are too timid and that we’d have to cut much more deeply to get ahead of global warming. All this new carbon drilling, digging and burning the White House has approved will add up to enough to negate the administration’s actual achievements: The coal from the Powder River Basin alone, as the commentator Dave Roberts pointed out in Grist, would “undo all of Obama’s other climate work.”

The perfect example of this folly is the Keystone XL pipeline stretching south from the tar sands of Canada – the one we were protesting that November day. The tar sands are absurdly dirty: To even get oil to flow out of the muck you need to heat it up with huge quantities of natural gas, making it a double-dip climate dis­aster. More important, these millions of untouched acres just beneath the Arctic Circle make up one of the biggest pools of carbon on Earth. If those fields get fully developed, as NASA’s recently retired senior climate scientist James Hansen pointed out, it will be “game over” for the climate.

Obama has all the authority he needs to block any pipelines that cross the border to the U.S. And were he to shut down Keystone XL, say analysts, it would dramatically slow tar-sands expansion plans in the region. But soon after taking office, he approved the first, small Keystone pipeline, apparently without any qualms. And no one doubts that if a major campaign hadn’t appeared, he would have approved the much larger Keystone XL without a peep – even though the oil that will flow through that one pipe will produce almost as much carbon as he was theoretically saving with his new auto-mileage law.

But the fight to shut down the pipeline sparked a grassroots movement that has changed the culture of environmentalism – but not, so far, the culture of the White House. For me, the most telling moment came a month or two ago when it emerged that the president’s former communications director, Anita Dunn, had taken a contract to flack for the pipeline.

The reason for fighting Keystone all along was not just to block further expansion of the tar sands – though that’s required, given the amount of carbon contained in that expanse of Alberta. We also hoped that doing the right thing would jump-start Washington in the direction of real climate action. Instead, the effort necessary to hold off this one pipeline has kept environmentalists distracted as Obama has opened the Arctic and sold off the Powder River Basin, as he’s fracked and drilled. It kept us quiet as both he and Mitt Romney spent the whole 2012 campaign studiously ignoring climate change.

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We’re supposed to be thrilled when Obama says something, anything, about global warming – he gave a fine speech this past June. “The question,” he told a Georgetown University audience, is “whether we will have the courage to act before it’s too late. And how we answer will have a profound impact on the world that we leave behind not just to you, but to your children and to your grandchildren. As a president, as a father and as an American, I’m here to say we need to act.” Inspiring stuff, but then in October, when activists pressed him about Keystone at a Boston gathering, he said, “We had the climate-change rally back in the summer.” Oh.

In fact, that unwillingness to talk regularly about climate change may be the greatest mistake the president has made. An account in Politico last month described his chief of staff dressing down Nobel laureate and then-Energy Secretary Steven Chu in 2009 for daring to tell an audience in Trinidad that island nations were in severe danger from rising seas. Rahm Emanuel called his deputy Jim Messina to say, “If you don’t kill Chu, I’m going to.” On the plane home, Messina told Chu, “How, exactly, was this fucking on message?” It’s rarely been on message for Obama, despite the rising damage. His government spent about as much last year responding to Sandy and to the Midwest drought as it did on education, but you wouldn’t know it from his actions.

Which doesn’t mean anyone’s given up – the president’s inaction has actually helped to spur a real movement. Some of it is aimed at Washington, and involves backing the few good things the administration has done. At the moment, for instance, most green groups are rallying support for the new EPA coal regulations.

Mostly, though, people are working around the administration, and with increasing success. Obama’s plan to auction Powder River Basin coal has so far failed – there aren’t any bidders, in large part because citizens in Washington state and Oregon have fought the proposed ports that would make it cheap to ship all that coal to Asia. Obama has backed fracking to the hilt – but in state after state, voters have begun to limit and restrict the technology. Environmentalists are also taking the fight directly to Big Oil: In October, an Oxford University study said that the year-old fight for divestment from stock in fos­sil-fuel companies is the fastest-growing corporate campaign in history.

None of that cures the sting of Obama’s policies nor takes away the need to push him hard. Should he do the right thing on Keystone XL, a decision expected sometime in the next six months, he’ll at least be able to tell other world leaders, “See, I’ve stopped a big project on climate grounds.” That could, if he used real diplomatic pressure, help restart the international talks he has let lapse. He’s got a few chances left to show some leadership.

But even on this one highly contested pipeline, he’s already given the oil industry half of what it wanted. That day in Oklahoma when he boasted about encircling the Earth with pipelines, he also announced his support for the southern leg of Keystone, from Oklahoma to the Gulf. Not just his support: He was directing his administration to “cut through the red tape, break through the bureaucratic hurdles and make this project a priority, to go ahead and get it done.”

It has: Despite brave opposition from groups like Tar Sands Blockade, Keystone South is now 95 percent complete, and the administration is in court seeking to beat back the last challenges from landowners along the way. The president went ahead and got it done. If only he’d apply that kind of muscle to stopping climate change.

This story is from the December 19th, 2013 – January 2nd, 2014 issue of Rolling Stone.
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energy policy, fossil fuels

Los Angeles Times: New campaign for a California oil extraction tax underway

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http://www.latimes.com/local/lanow/la-me-ln-new-campaign-for-california-oil-extraction-tax-underway-20131216,0,3099963.story

By Phil Willon
December 16, 2013, 4:04 p.m.
San Francisco Bay Area hedge fund manager Tom Steyer on Monday launched a statewide campaign, aimed at prompting action by state lawmakers, to impose a new extraction tax on oil produced in California.

Steyer said California imposes only a 14-cent per barrel fee and that, even when property, income and corporate taxes are factored in, the state collects far less per barrel that states such as Texas and Alaska – a claim that oil industry representatives disputed.

1386832_fi_monterey_shale_ALS

A wireline operator prepares a slick line at an oil pump jack site in the oil fields near Bakersfield. (Al Seib / Los Angeles Times / March 18, 2013)

The extraction tax could produce billions of dollars in much-needed revenue for the state, Steyer said.

“It’s an obvious thing to do,” said Steyer, a billionaire who has been a leading campaigner against the proposed Keystone XL pipeline, designed to carry oil extracted from Canada’s tar sands to refineries along the Gulf Coast.

Tupper Hull, spokesman for Western States Petroleum Assn., said an industry-supported analysis done two years ago found that oil companies already pay more than $6 billion a year in taxes to state and local governments. Hull said Steer’s assertion that the industry is under-taxed is “erroneous” and that imposing a new extraction tax would result in a decline in oil production in California and the loss of jobs.

“He supports a lot of policies that, intended or not, will make it harder and more costly to deliver petroleum energy to consumers in California and the rest of the country,” Hull said.

Rock Zierman, chief executive of the California Independent Petroleum Assn., said a state oil extraction tax could also siphon away tax revenue that oil companies pay to local governments.

The oil extraction tax proposal is similar to one voters defeated at the ballot box in November 2006.

Proposition 87 would have imposed an extraction tax and used the revenue generated to fund research and development of alternative fuels. The oil industry spent just over $100 million to defeat the ballot measure. Recent legislative efforts to impose an extraction fee also have failed.

Steyer and his political committee, NextGen Climate Action, are launching a statewide media campaign to raise awareness about the issue and, hopefully, prompt the state Legislature into action, he said. The organization also will conduct public opinion research.

Steyer declined to say how much of his own money he expected to spend on the effort.

http://www.latimes.com/local/lanow/la-me-ln-new-campaign-for-california-oil-extraction-tax-underway-20131216,0,3099963.story#ixzz2nh6eBIdw

Special thanks to Richard Charter

energy policy, fossil fuels, fracking

CREDO action: Tell the White House: Don’t silence key advisor John Podesta on the presidential decision on Keystone XL

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http://act.credoaction.com/go/2918?t=5&akid=9619.2084550.ch6_vb

The petition reads:
“Advisors or contractors with a financial stake in the outcome of Keystone XL – like TransCanada-linked contractor ERM – should recuse themselves from the White House decision on the tar sands pipeline. But a key advisor like John Podesta who has a fact-based track record opposing climate change and raising concerns about Keystone XL should not be silenced now that he has accepted the position of White House counselor. The White House should encourage John Podesta to provide his best counsel in deliberations on the presidential permit TransCanada requires to build Keystone XL.”

Automatically add your name to sign the petition below.

Free John Podesta

Apparently in the White House, having common sense now constitutes a conflict of interest.

John Podesta is the highly respected founder of the Center for American Progress and recognized as a uniquely effective chief-of-staff to President Clinton. He announced yesterday he’ll be going to work as a top advisor to the president.

That should be good news. But because he has a fact-based track record on climate change and has publicly and truthfully criticized the Canadian tar sands for being a highly inefficient and environmentally irreconcilable source of energy, the White House has already announced Podesta will recuse himself from participating in the decision on whether or not to award a foreign oil company the presidential permit necessary to build the Keystone XL pipeline across our northern border.1

It’s simply shameful. Podesta has no financial interest in the Keystone XL decision. Meanwhile, key players allied to the oil industry with massive conflicts of interest are playing a major role in Keystone XL decisionmaking. State Department contractor ERM is writing the key environmental impact statement for the State Department, an analysis on which the White House will base its decisionmaking, despite ERM’s having direct financial ties to TransCanada.

Tell President Obama: If anyone should be recused from discussion of Keystone XL, it’s the ethically compromised ERM, not John Podesta. Don’t silence key White House advisors who tell the truth about tar sands and climate change. Click here to automatically sign the petition.

Oil-industry contractor ERM has direct financial ties to the builder of the Keystone XL pipeline. That’s as direct a conflict of interest as you can get. But instead of recusing ERM from involvement in the decision when this information came to light, the State Department literally attempted to cover it up!2

Podesta will be a valuable advisor on the Keystone XL decision precisely because he doesn’t have compromising ties to the fossil fuel industry. On the contrary, he has issued honest, straight ahead indictments of their worst products. This perspective has been marginalized at high levels of the Obama administration, even in the face of overwhelming evidence that climate change poses serious dangers to our national interest through heatwaves, fires and superstorms, not to mention escalation of overseas conflicts that are exacerbated by drought, devastating floods and the refugee crises they provoke.

That’s why after three years we’re still fighting a pipeline whose approval the president’s own leading climate scientist declared would help lead to “game over for the climate.” This decision, which is President Obama’s alone, should have been a non-starter given President Obama’s previous commitments on climate change and dirty oil.

Far from a radical environmentalist, Podesta has touted a widespread embrace of natural gas – something we disagree with. Still, in a White House that has sorely lacked in prominent climate champions, his employ is a welcome addition. And the decision to silence him on what may be the single most closely watched decision of the Obama presidency is a shameful indication that the White House is not yet ready to face the challenge before us as a generation and embrace the climate leadership he promised and we so desperately need.

Tell President Obama: We need climate leadership in the White House! Let John Podesta speak on the Keystone XL decision. Click the link below to automatically sign the petition:

http://act.credoaction.com/go/2918?t=5&akid=9619.2084550.ch6_vb

Thanks for taking action.

Elijah Zarlin, Campaign Manager
CREDO Action from Working Assets

1. “John Podesta Recuses Himself From Keystone Issue, White House Aide Says,” Reuters, December 11, 2013.
2. Andy Kroll, “EXCLUSIVE: State Dept. Hid Contractor’s Ties to Keystone XL Pipeline Company,” Mother Jones, March 21, 2013.

clean energy, energy policy

Huffington Post: The Koch Brothers Are Still Trying to Break Wind

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http://www.commondreams.org/view/2013/12/10-1
Published on Tuesday, December 10, 2013
by Elliott Negin

As Congress dithers for the umpteenth time over extending a key subsidy for wind energy, the industry once again is up in the air. Called the production tax credit (PTC), the subsidy helps level the playing field between wind and fossil fuels and has proven to be critical for financing new projects, helping to make wind one of the fastest growing electricity sources in the country. Given the planet needs to transition as quickly as possible away from coal and natural gas to carbon-free energy to avoid the worst consequences of climate change, who would be against renewing wind’s tax credit?

Charles G. and David H. Koch — the billionaire owners of the coal, oil and gas Koch Industries conglomerate — have enlisted their extensive network of think tanks, advocacy groups and friends on Capitol Hill to spearhead a campaign to pull the plug on the PTC. Never mind the fact that the oil and gas industry has averaged four times what the wind tax credit is worth in federal tax breaks and subsidies annually for the last 95 years.

The Koch network is fighting the wind industry on a number of fronts. Last month, Koch-funded Congressman Mike Pompeo (R-Kansas) sent a letter signed by 52 House members to the chairman of the House Ways and Means Committee, urging him to let the PTC expire. Meanwhile, a coalition of some 100 national and local groups organized by the Koch-founded Americans for Prosperity sent a letter to each member of Congress asking them to do the same. And earlier this month, the Koch-funded Institute for Energy Research launched an anti-PTC ad campaign and released a report claiming that only a handful of states actually benefit from the subsidy.

Malcolm Gladwell didn’t include this battle in his new book David and Goliath because, given the odds, it’s more like Bambi versus Godzilla.

The Kochs’ Man in Congress

The fact that Kansas Rep. Mike Pompeo is the Kochs’ point man to scuttle the PTC in the House is a bit ironic given his state is a wind energy leader. Kansas has the second highest wind potential in the country, it has already attracted more than $5 billion in wind industry investment, and last year wind generated 11.4 percent of its electricity. With stats like that, the industry has broad bipartisan support. Kansas Gov. Sam Brownback and Sens. Jerry Moran and Pat Roberts — all Republicans — are big fans.

Pompeo, who has been in Congress since only 2011, would argue that he’s against all energy tax credits. For the second year in a row, he has introduced a bill that would eliminate tax breaks that benefit oil, natural gas, coal, nuclear, electric vehicles, alternative fuels, solar and wind, including the PTC, which gives wind developers a tax credit of 2.3 cents for each kilowatt-hour of electricity they produce.

But there’s a catch. Although it appears evenhanded, Pompeo’s bill would severely hamper wind and solar but preserve a number of oil, gas and coal subsidies, including the percentage depletion allowance, the ability to expense the costs of exploration, and the accelerated depreciation of certain kinds of “geologic property.” These and other tax breaks he left out of his bill would be worth about $12.5 billion to the oil and gas industry from 2011 through 2015, according to a March 2012 Congressional Research Service report.

Why is Pompeo so down on wind? Perhaps it’s because Koch Industries is headquartered in Wichita, smack-dab in the middle of his district — and the fact that the company is by far and away his biggest campaign contributor. Since 2010, Koch Industries has given him $200,000, more than four times what his second highest contributor kicked in. Besides Koch Industries, three other oil companies are among Pompeo’s top five contributors — McCoy Petroleum, Mull Drilling and Richie Exploration — and they’re also based in Wichita.

What about the other 51 House members who signed Pompeo’s letter? As it turns out, 65 percent of them received contributions from Koch Industries during the last two or three campaign cycles, according to Federal Election Commission data compiled by the nonpartisan Center for Responsive Politics. A quarter of them, meanwhile, cashed checks from ExxonMobil. And except for two congressmen who didn’t take any energy industry money, the signatories received sizable contributions from a number of other corporations that compete with wind, including coal barons Arch Coal and Alpha Natural Resources; oil and gas giants Chesapeake Energy, Chevron, ConocoPhillips and Valero Energy; and Exelon, which owns the most nuclear reactors in the country.

Americans for (Koch) Prosperity Weighs In

Pompeo’s letter came on the heels of a letter from the Kochs’ flagship advocacy group, Americans for Prosperity, calling for Congress to kill the PTC. AFP’s letter, which was signed by 102 organizations, claims that “the wind industry has very little to show after 20 years of preferential tax treatment” and declares that “Americans deserve energy solutions that can make it on their own in the marketplace — not ones that need to be propped up by government indefinitely.”

Is that right? Little to show? Preferential tax treatment?

In fact, until Congress left the wind industry hanging late last year, it had been doing quite well. Even with a deep recession and slow recovery, over the previous five years — with the help of the PTC, stimulus spending and state renewable electricity standards — the industry doubled its electricity output, employment and private investment. In 2012, domestic manufacturers produced roughly 72 percent of the wind turbine equipment erected across the country — nearly triple the percentage in 2006 — and more than 13,000 megawatts of new wind generation capacity was installed. By the end of last year, there were enough wind turbines to power 15 million typical American homes — without toxic pollutants or carbon emissions.

But AFP’s complaint that the wind industry has been on the dole far too long is even more galling. What about the oil and gas industry? It’s been feeding at the federal trough since 1918! On average, the industry has benefited from $4.86 billion in tax breaks and subsidies in today’s dollars every year since then, according to a 2011 study by DBL Investors, a venture capital firm. Renewable energy technologies, meanwhile, averaged only $370 million a year in subsidies between 1994 and 2009. The 2009 stimulus package did provide $21 billion for wind, solar and other renewables, but that support barely begins to balance the scales that have tilted toward nuclear power for more than 50 years, oil and gas for 95 years, and coal for more than two centuries.

So who signed the AFP letter? About half of the signatories are local tea party affiliates and anti-wind NIMBY groups of indeterminate size and funding. The other half are, for the most part, relatively obscure national groups, but there are a few that have attracted attention over the years for their contrarian views on climate science and renewable energy. Like AFP, those groups are awash in petrodollars. The American Energy Alliance (and its parent, the Institute for Energy Research), Competitive Enterprise Institute, Freedom Works, Frontiers of Freedom and Heritage Action (and its parent, the Heritage Foundation) collectively have received millions of dollars from Koch family foundations, ExxonMobil and the American Petroleum Institute, the oil and gas industry’s premier trade association.

The Institute for Energy Research’s Questionable Research

On December 3, the Institute for Energy Research and its political arm, the American Energy Alliance, sponsored what they dubbed the “wind welfare” summit in Washington, D.C., featuring IER founder and CEO Robert Bradley Jr., a Koch network veteran. AEA announced it would spend $40,000 on print and digital ads calling for an end to the PTC and is flying in anti-PTC advocates for meetings on Capitol Hill.

Bradley presumably highlighted the findings of a report IER released the day before claiming that a small number of states with wind resources — Iowa, North Dakota, Oklahoma and Texas — are reaping the benefits of the PTC while 30 states and the District of Columbia are “losing millions” to fund it.

The report’s findings, however, don’t hold up to scrutiny. Mike Jacobs, a senior energy analyst at the Union of Concerned Scientists, pointed out in a recent blog that IER ignored the fact that a number of the states it identified as “net payers” are home to wind industry manufacturing facilities. There are 62 companies in Ohio making turbine components, for example, 40 in Michigan and 21 in California. Jacobs also discovered that IER downplayed the fact that “the PTC benefits consumers where wind-generated electricity adds to the supply and lowers the price of electricity, landowners who receive lease payments from the wind turbines, and local communities that collect tax payments on installed wind farms.”

Jeff Spross, blogging on the Center for American Progress’ ThinkProgress website, also chided IER, pointing out that most industries are not equally distributed across the country. “The oil and gas industries, for instance, benefit from a wealth of federal tax carve-outs,” he wrote, “but the economic activity they generate is concentrated in just a few key states.”

In other words, it’s disingenuous to single out the wind industry.

Twisting in the Wind

While Congress has generously provided the fossil-fuel and nuclear-energy industries a number of permanent subsidies, it has typically granted the wind industry the PTC on a short-term basis and then wavered over renewing it. Last year the PTC expired on December 31, but as part of the “fiscal cliff” budget deal the next day, Congress extended it for the seventh time since it debuted in 1992 — for only one year.

This uncertainty over the PTC’s status has put wind developers at a distinct disadvantage, making it difficult to attract investors and plan ahead. Last year’s cliffhanger, for example, definitely did a number on the industry. Wind farm construction has fallen off dramatically compared with 2012: Only one utility-scale wind turbine was installed in the first six months of this year. Business picked up somewhat in the third quarter, with 68.3 megawatts installed, according to the American Wind Energy Association, but that’s far below the average of more than 1,000 megawatts that the industry constructed in most quarters in recent years.

Given that it takes years to plan, finance and construct a wind farm, Congress is again undermining the industry’s potential by slow-walking the PTC extension this year. And that potential is tremendous. Wind currently generates about 4 percent of U.S. electricity, but by 2030 it could produce more than 20 percent, according to the U.S. Department of Energy. The DOE’s National Renewable Energy Laboratory also is bullish on wind and renewables writ large. Last year, it published a report that concluded today’s commercially available renewable technologies could easily generate 80 percent of U.S. electricity by 2050, with nearly half coming from wind. If the Koch brothers and their allies have their way, however, it likely will take a lot longer to get there — and it will cost a hell of a lot more.

Elliott Negin is the director of news and commentary at the Union of Concerned Scientists.