Energy Tomorrow Blog
Posted May 20, 2015
The Wall Street Journal (Leon Panetta and Stephen Hadley): The United States faces a startling array of global security threats, demanding national resolve and the resolve of our closest allies in Europe and Asia. Iran’s moves to become a regional hegemon, Russia’s aggression in Ukraine, and conflicts driven by Islamic terrorism throughout the Middle East and North Africa are a few of the challenges calling for steadfast commitment to American democratic principles and military readiness. The pathway to achieving U.S. goals also can be economic—as simple as ensuring that allies and friends have access to secure supplies of energy.
Blocking access to these supplies is the ban on exporting U.S. crude oil that was enacted, along with domestic price controls, after the 1973 Arab oil embargo. The price controls ended in 1981 but the export ban lives on, though America is awash in oil.
The U.S. has broken free of its dependence on energy from unstable sources. Only 27% of the petroleum consumed here last year was imported, the lowest level in 30 years. Nearly half of those imports came from Canada and Mexico. But our friends and allies, particularly in Europe, do not enjoy the same degree of independence. The moment has come for the U.S. to deploy its oil and gas in support of its security interests around the world.
Posted May 18, 2015
Wall Street Journal: BRUSSELS—The European Union is increasing pressure on Washington to include an energy chapter in a planned trans-Atlantic trade deal that would allow U.S. exports of natural gas and oil and reduce the bloc’s dependency on Russia.
In an interview with The Wall Street Journal, Maros Sefcovic, the EU’s energy chief, said that easing flows of liquefied natural gas and crude oil from the U.S. to the EU is one of the bloc’s goals for the trans-Atlantic trade and investment partnership, or TTIP, that is currently under negotiation. The U.S. has so far resisted an energy chapter in TTIP, but the shale-gas boom in the U.S. and the EU’s trouble with Russia have pushed the issue into focus.
“We believe that the energy chapter in TTIP…could make a quite important contribution to the mutually beneficial trade exchange, but also to the energy security of the EU,” Mr. Sefcovic said.
Posted May 15, 2015
Bloomberg BNA: The chairman of the Senate Energy and Natural Resources Committee said May 14 that she is inclined to include standalone legislation that would end the 40-year ban on the export of domestic crude oil as part of a broader energy package the committee is drafting.
“I’d like to have it in there,” Sen. Lisa Murkowski (R-Alaska) told reporters. “It just makes sense in there, as part of the bigger, broader energy updating our architecture.”
The bill, the Energy Supply and Distribution Act of 2015 (S. 1312), released May 13, is scheduled to be the subject of a June 4 hearing on “energy accountability and reform,” along with other bills that could end up in the broader energy package, which is expected to be unveiled later this summer.
Posted May 13, 2015
The Hill: Sens. Lisa Murkowski (R-Alaska) and Heidi Heitkamp (D-N.D.) have introduced a bill to lift the 40-year-old ban on crude oil exports.
The bill would fulfill one of Murkowski’s biggest energy priorities and allow American oil companies to export crude oil as they do petroleum products. It would also allow exports of condensate, a type of light crude oil.
“America’s energy landscape has changed dramatically since the export ban was put in place in the 1970s. We have moved from energy scarcity to energy abundance. Unfortunately, our energy policies have not kept pace,” Murkowski said in a statement.
“This legislation builds from bipartisan ideas, linking energy security and infrastructure to expanding exports and helping our allies. Our nation has an opportunity to embrace its role as a global energy powerhouse, sending a signal to the world that we are open for business and will stand by our friends in need.”
Posted May 11, 2015
Breaking Energy Opinion (Thorning): The Department of Energy recently approved an application from Alaska LNG to export natural gas. But there’s a catch: these exports can only go to nations where the United States has a free-trade agreement in place.
Never mind the fact that the top markets for LNG are India, China, and Japan, where we don’t have free-trade agreements set up.So essentially, the company is stuck alongside the 20-plus U.S. natural gas companies that are awaiting approval to sell abroad. Some have been waiting for nearly three years.
Despite the rapid expansion of the American energy sector, the American regulatory apparatus hasn’t kept pace with the industry’s growth. New exploration techniques like fracking have opened up giant swaths of underground energy reserves in places like North Dakota and Pennsylvania. And the operations established to dig up the embedded oil and natural gas have created hundreds of thousands of new jobs and driven billions in new economic activity.
But now, unnecessary regulations are stifling firms with outdated rules. Most notably, the federal approval process energy producers have to navigate in order to sell in foreign markets is extremely restrictive. It’s needlessly difficult for firms to ship surplus oil and gas to eager customers abroad.
Posted May 8, 2015
The Hill: Sen. Lisa Murkowski (R-Alaska) took her biggest step to date toward a large-scale overhaul of federal energy policy on Thursday, introducing 17 bills she said could make up parts of an energy reform package this session.
The bills cover a myriad of topics, from electricity reliability to the Strategic Petroleum Reserve to the production of methane, hydropower or helium. Any of the bills could make up the backbone of a broad energy reform effort, something Murkowski, the chairwoman of the Senate Energy and Natural Resources Committee, has made one of her top priorities this session.
“Does this mean all of them are going to part of a broader bill? No,” she said at a briefing with reporters. “But does it mean these are my ideas I would like to have folks catch up on? Yes, absolutely.”
One high-profile piece of legislation missing from the slate introduced Thursday: a bill to lift the federal ban on crude oil exports. Murkowski said she will release that bill separately next week.
Posted May 6, 2015
The opportunity to stimulate increased domestic production of oil and natural gas, create jobs, spur the economy and enhance America’s ability to positively shape world events is at hand – waiting only on the stroke of a pen. Lifting the United States’ four-decades-old ban on crude oil exports could help advance all of the above, and it all could be launched with the stroke of a pen.
Encana President and CEO Doug Suttles and API President and CEO Jack Gerard emphasized the relative ease with which the 1970s-era export ban could be ended, as well as the building political momentum for action, during a conference call with reporters.
Gerard said the ban could be lifted through the exercise of presidential authority or by the president signing legislation from Congress. Gerard:
“There is a consensus building in the country. We see strong bipartisan support in the House and now rolling in the Senate. So overall, we think the momentum continues to build as people better understand all of the issues. … Job creation, benefit to our trade imbalance, revenues to government, lowering the price at the pump. … It’s just a matter of time now before that pen is deployed to allow this to happen.”
Posted May 6, 2015
BloombergBusiness: The U.S. will become one of the world’s largest oil exporters if domestic production continues to surge and policy makers lift a four-decade ban that keeps most crude from leaving the country, a government-sponsored study shows.
America would be capable of sending as much as 2.4 million barrels a day overseas in 2025 if federal policy makers were to eliminate restrictions on most crude exports, an analysis by Turner, Mason & Co. for the Energy Information Administration shows. That would make the U.S. the fourth-largest oil exporter, behind Saudi Arabia, Russia and the United Arab Emirates, based on 2013 EIA data. The report assumes domestic output rises by 7.2 million barrels a day from 2013.
The analysis is part of a series of studies the U.S. government is performing following a 71 percent surge in domestic oil production over the last four years. Drillers including Harold Hamm of Continental Resources Inc. and John Hess of Hess Corp. have been calling on the government to lift the ban on crude exports as they pump more light oil out of shale formations from North Dakota to Texas.
Posted May 5, 2015
During months of public discussion of improving the safety of transporting crude oil by rail, we’ve stressed the need to let science and fact-based analysis guide development of a holistic strategy that would have the best chance of producing tangible safety benefits.
Unfortunately, new rules published last week by the Transportation Department – featuring requirements for sturdier tank cars and electronically controlled pneumatic (ECP) brakes – are a mixed bag that will do little to prevent derailments in the first place.
Instead of working to ensure the integrity of the tracks and to eliminate human error as much as possible, both of which would help prevent accidents from occurring, it seems federal officials at times opted for the optics of appearing to make progress. In the case of the ECP brakes, it’s a technology that experts say doesn’t significantly improve safety – which is the goal. To add to the 99.99 percent safety record in the transport of hazardous materials by rail, a more comprehensive approach that focuses more attention on prevention is needed.
Posted May 4, 2015
USA Today: The U.S. economy may not be benefiting as much as anticipated from the collapse in oil prices over the past 10 months. In fact, for oil-producing states, the decline of some 50% is taking a toll.
But one thing seems clear: The nation as a whole is nowhere near as susceptible to sharp swings in oil prices — one way or the other — as it was for decades.
That was the message from Jason Furman, the chairman of the White House Council of Economic Advisers and President Obama's chief economist, at a New York forum held by the Columbia University Center on Global Energy Policy.
Furman spoke one day before the U.S. government reported an annual growth rate of just 0.2% for the nation's gross domestic production from January through March, down substantially from a 2.2% pace in the fourth quarter of 2014.
Among the factors was consumer spending, which rose by only 1.9% in the first quarter compared with a 4.4% increase in the previous quarter.
Consumers proved slow to spend their savings from lower gasoline prices, savings that economists estimate at $700 per household, as Furman pointed out. But that reluctance may change soon, to the benefit of the nation's economy, he added.