Energy Tomorrow Blog
Posted November 27, 2014
Happy Thanksgiving everybody.
When it comes to energy there’s much for which Americans can give thanks.
We have plentiful and accessible reserves of oil and natural gas that fuel healthy, mobile, modern lifestyles.
We enjoy safe and secure crude oil imports from Canada, our neighbor and ally and No. 1 source of imported oil.
Our country is served by a vibrant, modern industry – one that’s second to none in the use of safe, hydraulic fracturing and horizontal drilling, offshore development and environmental awareness.
America keeps running thanks to a vast pipeline network and the world’s biggest, most-efficient refineries. And there’s more.
Posted November 24, 2014
For months we’ve been pointing out the brokenness of the Renewable Fuel Standard (RFS), the federal law requiring ever-increasing use of ethanol in the nation’s fuel supply.
We’ve written about the impending “blend wall,” the point where the RFS would require blending more ethanol into gasoline than could be safely used as E10, potentially putting motorists at risk for damage to vehicles while also potentially risking small-engine equipment and marine engines. We’ve written about RFS-mandated use of “phantom” liquid cellulosic biofuels – a fuel that hasn’t been commercially available despite the recent inclusion by EPA of landfill bio gas in that category (more about that in a future post). And we’ve written about how the 2014 requirements for ethanol use were months and months late from EPA, caught up in election-year politics.
The RFS is indeed broken. Late last week EPA basically agreed, announcing it’s waving the white flag on trying to issue ethanol-use requirements for 2014, which has just a little over one month to go. Instead, the agency said it will complete the 2014 targets in 2015 “prior to or in conjunction with action on the 2015 standards rule.”
Posted November 17, 2014
Saw a tweet last week from Jalopnik, a website “obsessed with the cult of cars and everything that moves you,” and it reminded me of an important point in the Renewable Fuel Standard (RFS) debate.
First, Jalopnik doesn’t actually do a car-of-the-year award because it considers them to be so much media hype. The tweet was a little jab at car awards. Still, Matt Hardigree, the site’s editor-in-chief, says the ’94 Miata really is a great, classic car.
Which leads to our point about the RFS: If you’re a lucky owner of a vintage Miata, don’t let E15 anywhere near its fuel tank.
Posted October 28, 2014
Real Clear Politics: Few policy objectives over the last half-century have proven as tantalizing for presidents as the call to achieve energy independence.
In 1973 -- as a gasoline shortage consumed the nation -- President Richard Nixon outlined Project Independence 1980, “a series of plans and goals set to insure that by the end of this decade, Americans will not have to rely on any source of energy beyond our own.” Gerald Ford, in his 1975 State of the Union address, called for “a massive program” to ease demand and increase supply “to achieve the independence we want by 1985.” Jimmy Carter, more modestly, aimed for the United States to cut its dependence on foreign oil by half by the end of the 1980s.
Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama all set similar goals at different points in their presidential campaigns or presidencies. Typically, their political opponents did too. Little serious progress toward those goals was achieved during most of their terms in office.
Posted October 23, 2014
On Jan. 1, California is scheduled to include gasoline, diesel and propane in its three-year-old, first-in-the-nation program that requires companies to buy carbon permits to cover their emissions of greenhouse gases. Yet a new report warns that design flaws in the cap-and-trade program could negatively impact markets that serve consumers.
Authored by Jean-Philippe Brisson, a carbon markets expert with the Latham and Watkins law firm in New York, the report commissioned by the Western States Petroleum Association (WSPA) cautions that design flaws “can result – and have resulted – in catastrophic implications for environmental markets around the globe.”
Posted October 20, 2014
The Obama administration is trying to balance its support for renewable fuels with awareness of infrastructure constraints at gas stations as it finalizes targets for 2014 biofuel use, agency officials said on Tuesday. But with only 11 weeks left in the year, the administration also needs to weigh oil refiners' ability to comply with the long-delayed requirements, one official told the Reuters Global Climate Change Summit.
The article goes on to quote Janet McCabe, who leads EPA’s division overseeing the biofuels program:
(McCabe) acknowledged that delays in setting the targets, formally called the Renewable Fuel Standard (RFS), should be taken into account. "We need to be mindful of where we are in the year," McCabe said …
Reuters reports that EPA had proposed lowering ethanol mandates for 2014 because the U.S. was on a collision course with the 10 percent blend wall – the point where RFS mandates will require ethanol to be blended into gasoline at levels higher than the 10 percent fuel (E10) for which most of today’s vehicles were designed.
Posted October 14, 2014
A new study by the Aspen Institute joins a series of analyses concluding that one benefit from exporting U.S. crude oil would be lower gasoline prices here at home. Aspen’s projected reduction of between 3 and 9 cents per gallon parallels findings in previous major studies by ICF International (3.8 cents per gallon), IHS (8 cents) and Brookings/NERA (7 to 12 cents) that exports would lower pump prices.
Aspen and the other studies project other benefits from exporting crude oil, including broad job creation, economic growth and increased domestic energy production. Yet the solidifying consensus that consumers also would benefit is critically important as the public policy debate on oil exports continues.
Posted October 13, 2014
Detroit Free Press: Ground zero for America's "shale revolution" in gas and oil production, North Dakota is also the reigning title-holder for lowest unemployment among the 50 states.
There were more unfilled jobs in September than job applications within the state, where oil field workers can make six-figure salaries and even the fast-food restaurants dangle hiring bonuses of $300 or more. The state has been recruiting specifically from Michigan for workers of all stripes and skill levels — hoping to entice entire families to relocate and grow roots.
North Dakota's official 2.8% jobless rate in August is essentially full employment, allowing just about anyone who wants a job to get one. At the same time, Michigan's rate of 7.4% was stuck above the 6.1% national average. (The national rate was 5.9% in September.)
North Dakota's roaring economy has been the envy of state governors and, for proponents of fracking, a shining success story for how an energy boom can produce a job boom, even for workers in professions that aren't directly related to extracting natural gas and oil.
Posted October 9, 2014
Columbus Dispatch: Consumers are starting to catch a serious break for a change on energy costs.
Gasoline prices in central Ohio are at their lowest level in nearly four years, while the outlook for home-heating costs this winter is better than a year ago.
“There’s definitely more money in my pocket,” said Kathy Bury, 58, of Blacklick, in eastern Franklin County.
She tends to buy gasoline $20 at a time. At current prices, that’s three-fourths of a tank, which is much more than a month ago, a contrast that “makes me happy,” she said.
Posted October 8, 2014
Others are picking up on how late EPA is in setting this year’s ethanol use requirements – as well as how political calculations appear to be affecting the administration’s management of the Renewable Fuel Standard (RFS). Politico (subscription required) has this:
The Obama administration is nearly a year late in setting its 2014 biofuels mandate, but both ethanol supporters and critics say with politics at play, the White House may delay its decision until after the midterm elections.
Several sources following the issue closely say that the White House hoped that boosting the overall volumes would be enough to act as a boon to (Democrat Bruce Braley in Iowa’s U.S. Senate race). But renewable fuels advocates in the state aren’t happy with that compromise, so anything short of a clear victory for ethanol makers could hurt Braley’s campaign. … “If they increase the number, but it’s still tied to the (ethanol) blend wall, in our view, they will have killed the program, and that will be seen as a huge loss for Braley, and they’ll wait until after the election,” said one person in the biofuels industry. “If it’s good for Braley, it’ll be before the election. If it’s bad for Braley, it’ll be a punt. And people will see the punt.”
Indeed they will. They can’t help but see energy policy being contorted to serve political ends. It’s no way to conduct energy policy, and it’s no way to treat Americans who ultimately could be impacted by decisions (or the lack thereof) under the RFS.