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The U.S. is Energized About Energy and the Environment as we Move into 2014

Close up of White House

Whenever we enter a new year, it's always all about getting in shape.

Turning the page on the calendar is about new beginnings and it's no different when it comes to this country's energy and environment outlook.

With Congress unable to move much legislation, the Administration's energy and environment agenda is the most likely to move in 2014. And with the Congress unable to get together on oversight, that is advantage Obama regarding the climate agenda.

Here are some resolutions for the New Year that are likely to come to pass:

EPA--At the top of the list is the EPA action on climate regulation. EPA is supposed to finalize its greenhouse gas emissions rule for new electric power plants by June. When that is finalized the President as directed that it release its draft regulation for emissions from existing power plants.
Other issues to watch at EPA impacting power plants are new technology standards for cooling water towers at existing power plants as well as proposed waste regulations governing coal-ash - the byproduct of burning coal at power plants. Both are due in January under court- imposed deadlines.

The oil and gas industry needs to watch EPA as it considers disclosure rules for fraccing fluids.
In other court action, the Supreme Court heard a challenge to the Cross-State Air Pollution Rule, and coming up is a hearing on a limited challenge to EPA's authority to regulate greenhouse gases.

DOS--Other key Administration actions to watch in 2014 are at the State Department with dozens of applications pending, some since the beginning of the Obama administration ranging from technical changes to existing Presidential Permits for Border Crossing to new permit requests for pipelines including the Keystone XL pipeline. There has been such a bottleneck here, that a bipartisan bill to provide a legislated process for granting such changes has been authored by the Chairman of the Energy and Commerce Committee Upton (R-6th MI) and his colleague on the committee, Congressman Green (D-29th TX). A similar move may occur in the Senate as Senator Murkowski (R-AK), Ranking Republican on the Senate Energy and Natural Resources Committee has hinted of her interest. Right now under the President's Executive Order, the process is entirely subjective with no rules of the road providing a proper process with a timeline for action. This bottleneck is clearly adding to more product being moved by rail and by trucks.

DHS, DOL, EPA--Another Administration action to watch is the work of an interagency task force established by the President on August 1st, created to weigh new chemical safety regulations in response to the deadly explosion in Texas. It is considering a major overhaul of the way volatile substances are handled and stored. The Chemical Facility Safety and Security Working Group, a taskforce led by the secretaries of Homeland Security and Labor, along with the administrator of the Environmental Protection Agency (EPA), offer nine sets of options across several categories, including mandatory - rather than voluntary - new safeguards. The regulations could include a shift to inherently safer technologies and the creation of a third-party audit system. There is a 90 day comment period.

Included in the proposal are measures to tighten regulations for the storage and handling of ammonium nitrate, the chemical involved in last April's fertilizer plant in West, Texas, which killed 15 people and injured more than 200. The agencies are seeking information about the costs associated with implementing the measures under consideration. The proposal raised red flags within the industry, where businesses fear the working group will pursue actions that will further complicate an overly complex regulatory system. The agencies are considering a regulatory model that would add new regulatory authority instead of focusing on how to improve current programs. Supporting the efforts of the taskforce are more than 100 groups comprising the Coalition to Prevent Chemical Disasters, including Greenpeace, that praises the proposal as looking at regulatory gaps.

DOE, DOC--Another major area to watch Administration action on is natural gas and oil exports. DOE has been steadily making its way through applications to export liquefied natural gas to non-FTA countries. But the push for more LNG exports amid the U.S.'s production boom has plenty of backers - including President Barack Obama himself. And Energy Secretary Ernest Moniz stirred things up last month when he suggested revisiting the ban on almost all oil exports, something controlled by the Commerce Department. The lifting of the oil export ban is being touted by the industry from Continental CEO Harold Hamm to API CEO Jack Gerard. And with the announced support of Senator Lisa Murkowski for the ban being repealed the oil export ban may get revisited.

CONGRESS--Looking at the Congress, it is always difficult in an election year to pass much legislation. But wait a minute, with the biggest political question being what the makeup of the Senate will be, the recent announcement by Chairman Baucus that he is leaving the Senate early to be ambassador to China may change and energize the energy agenda for 2014. We will likely see Senator Ron Wyden. a big renewable supporter, move to head the Finance Committee which could change the tax agenda for renewables and impact the likelihood of tax reform. That would leave Mary Landrieu to take the Energy and Natural Resources Committee's gavel. If she demonstrates action and leadership on energy issues as Chairman by moving oil and gas friendly legislation, that could help her reelection efforts in oil-and-gas-dependent Louisiana. And with Senator Murkowski a kindred spirit on oil and gas, this could mean new support for speeding up LNG exports as well as lifting the oil export ban.

And speaking of tax reform, the changing of the guard at Finance Committee could impact the timing of legislation moving as Chairman Baucus was the impetus in the Senate for quicker action. This may mean a less ambitious bill or no bill this year, which could provide momentum for a big push for a business extenders bill instead of wrapping that up in tax reform as Baucus and House Ways and Means Committee Chairman Camp have advocated. Senate Democrats made a quick attempt to do tax extenders before the break, but a serious effort will likely have to come within the next few months. That leaves lawmakers searching for a must-pass vehicle to latch onto, since stand-along tax extenders have little chance of clearing the House.

Other energy issues to watch in Congress are whether the bipartisan energy efficiency legislation by Senators Shaheen (D-NH) and Portman (R-OH) will get floor time again this year.
Finally, major changes to the Renewable Fuels Standard may still be considered in 2014. Although EPA scaled back on the blending requirement, there is still a bipartisan push on both sides of the hill to make changes here. Chairman Boxer's lack of interest in doing so may tip the scale against action, but it is an issue to keep an eye on.

We're all familiar with the usual New Year's resolutions: lose weight, stop smoking, join a health club, be a better person, yadda, yadda, yadda. We all want to do the right thing, which is why we resolve to do better. But frankly, it's not very realistic. Hopefully, the aforementioned items have a realistic chance of coming to pass.

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Ferdinand E. Banks's picture
Ferdinand E. Banks on Feb 12, 2014 7:00 pm GMT
This is an interesting article for a brilliant energy economicst - ME - but I have a problem with one item, which is exporting a portion of what some people call America's energy advantage.

You say that President Obama is positive, but in matters of energy economy the prez is completely and totally ignorant, and Dr Moniz is not much better. The U.S. is overpopulated to begin with, and with about one-sixth of the population candidates for the poor-house, and Another sixth about to reserve a Place in those accomodations, every BTU above the present export level should be kept in the U.S.

By the way, I am in the process of polishing up a long (130 page) compendium that I will use in my teaching at some Point in the future. It is non-technical (no math) and free, and eventually I could send one to genuine and make-Believe energy economics students. I have to propose though that even if it is free of charge, but if you want to send someone some Money, send it to Bill Gates and tell him that he can use your Money and his to do something about those schools in the US.

Michael Keller's picture
Michael Keller on Feb 12, 2014 7:00 pm GMT
Hopefully, the stunning energy stupidity of the administration will continue to be attacked on numerous fronts, with legal actions fouling up the regimes utter disregard for the rule-of-law. Further, the driving forces behind the stupidity and nonsense (man-caused-climate-change-catastrophe and a leftist agenda) will continue to be unmasked for what they really are: (1) a hysterical overreaction to some very poor climate simulations that simply do not track reality; (2) attempt to use force, distortion, deception and outright lies to fraudulently induce acceptance of a fundamentally anti-american agenda.
Michael Keller's picture
Michael Keller on Feb 17, 2014 7:00 pm GMT
OK Fred, what is LMAO?

The US was founded upon the principal of the rule-of-law. If you simply subvert and ignore the laws, that makes you at odds with the fundamental precepts of the nation. That makes you anti-American, although you may live here. For example, if you are a communist but live here and attempt to subvert the nation, you are not pro-american, but anti-American. If you live here, but disagree with the way things are done but obey the laws, you are not anti-American.

Ferdinand E. Banks's picture
Ferdinand E. Banks on Feb 19, 2014 7:00 pm GMT
Funny Fred Linn, but I thought that we taught you something in this forum.

The people who shipped the jobs to China are the dumbest president in the recent history of the US, George W. Bush, and the most ignorant, Barack Obama.

jim hammock's picture
jim hammock on Feb 20, 2014 7:00 pm GMT
For the US to have a growing economy we need trade with China and the rest of the world. If producer and consumer goods made in China, Mexico, Canada or anywhere else can save the US consumer capital then the US consumer benefits. When we purchase from other countries, they must purchase from us, it's not one-way benefitting one party, it's trade, i.e. value for value. A growing economy based on innovations, inventions and ideas are the only way out of our national economic problems; and our Government does somehow find its way back to supporting wholly free-market capitalism, then world trade will be absolutely necessary. I know that gets away from the author's letter so regarding EPA, DOE, DOS, Congress etc.; we need clean air, clean water and a health economy; those are not mutually exclusive unless solutions are dictated from Government. If we handle them by supporting wholly the American entrepreneurs, ideas and innovations then the future is bright for the US.
Ferdinand E. Banks's picture
Ferdinand E. Banks on Feb 20, 2014 7:00 pm GMT
If "World trade" includes the US exporting its energy advantage (and Sweden exporting its electricity because incurably dumb academic Economists thought that it was cute), then I say to the devil with it. If you are really concerned about the future of the US Mr Hammock, tell them to Close the borders, and try to make the US secondary schools the best in the World. Note the Word 'try'. That is the first step in getting the necessary result.
jim hammock's picture
jim hammock on Feb 22, 2014 7:00 pm GMT
By exporting US energy advantage I'll asssume you mean selling coal to China as we are net importers of oil, natural ga, and even electricity from Canada. It's unfortunate but most of our refineries are not designed to take advantage of the current sweet crude supply boom that's unexpectedly occured but rather are designed for imported sour crude. Leaving the extroidanarily complex economic decisions associated with the oil and gas situation to Governement is unthinkable; only the millions of individuals making the best decsions for themselves based on their limited scope of knowledge will produce the best path forward. Whether that's export, import, re-tool factilities, build railroads, invest in new pipelines or build nuclear plants i don't know. I do agree with you that our elementary and secondary schools are failing future generations.
Malcolm Rawlingson's picture
Malcolm Rawlingson on Feb 22, 2014 7:00 pm GMT
All of the above are based on the precept that the amount there is limited supply of everything. What is missing is technology. I think you would all agree that the technology of fracking has changed the energy picture of the USA. So now we go about pontificating based on the now known technology of fracking without due consideration of the technologies that are about to become mainstream that will dramatically increase recoverable reserves of oil, natural gas and natural gas liquids.

In Texas right as we speak a technology that involves the injection of high pressure Carbon Dioxide into fracked wells is about to turn fracking on its head. What is not commonly known is that fracking can only get at 10% or so of the reserves in any given formation. In other words it is a terribly inefficient process since 90% of the reserve is still underground. New technology will be able to extract 90% of the reserves which means that each and every already drilled shale well has the potential to yield nine times more product than it already has.

I am always doubtful of predictions based on existing technology that assumes nothing will ever change. It is straight line thinking and it is invariably wrong. So many times that has proved to be so wrong it is almost laughable. We did not reach "peak whale" because we moved from burning whale oil to burning kerosene. Whales did not become extinct (although nearly). We did not reach "peak wood" because we burned coal instead of wood. We did eliminate lots of trees though. We are not going to reach peak oil or peak gas or peak anything else because technology will replace our old knowledge with new knowledge that will make all our assumptions about the future wrong.

Getting back to hydrocarbons, the USA as Canada will be able to export as much as the world wants until the world finds it does not need it any more. We only assume that the world will continue to need hydrocarbons for fuel but it is by no means certain that will be the case. We assume it because all we know is our present technology. We do not know the future technology which is why we continually and throughout history make the same mistake.

If we made our ships of oak there would be a world shortage of oak. We don't do that any more as some nit wit invented steel. 200 years ago the idea of a floating steel vessel would have seemed preposterous. Who thinks it is now.

If there is one thought I would leave you with it is that the world is not running out of anything. It is only short on technology.


Don Hirschberg's picture
Don Hirschberg on Feb 23, 2014 7:00 pm GMT
Malcolm, we see far different worlds. Yours is far better

I would have named the Industrial Revolution the Age of Coal. Everything that has happened since starting to use coal has been a derivative of this plentiful energy source. And I say we are still in the Age of Coal, or if you prefer the Age of Fossil Fuels.

I am looking at plots of World Energy Consumption over time. Coal consumption has almost caught up with oil in the last10-12 years. The curve for coal shows acceleration, not those for oil and gas. Fossil fuels are about 85%of our energy sources. Of course the percentage is not the problem, the mass is. And the mass is dependent on population.

Only Nuclear answers to new technology. So-called renewable combined (except hydro) still all crawl along the x-axis. Coal, oil and gas set new records every day. And as your arithmetic demonstrated we have more people with little or no electric service every day.

Alas, real problems are not like text book problems with answerer in the back of the book. And further, problems and answers are not created in sets. There are not necessarily answers. One of the beauties of Thermodynamics is that it tells us what is possible and what is not possible with paper and pencil.

Ferdinand E. Banks's picture
Ferdinand E. Banks on Feb 23, 2014 7:00 pm GMT
I'm sorry Mr Hammock, but if you are really concerned with the American future you would not let Daddy Warbucks or Mr Moneybags export America's energy advantage. Yes, where coal is concerned, the U.S. can export more if the get the chance, although I wont try to figure out how much more. But not oil and gas, because the lies and misunderstandings being circulated about those tell me that we need to wait a while Before we listen to people like dumb Moniz.

But of course, that issue can almost be overlooked in the light of what has happened to America's schools. The totally ignorant Obama comes from a part of Chicago with rotten schools, but he Thinks about sending marines to Australia. What he should have been thinking about from his first day in office was getting the schools in order, and closing the borders.

And Don, I was first in my thermodynamics class, but the only thing that taught me was that I was lucky to be dumped from IIT after my first year, following which I Went to the army and found out what Life was really all about. I remember how my teacher at IIT talked about the research he was doing, which made me wonder if he expected to rediscover the first law of...of...

Malcolm Rawlingson's picture
Malcolm Rawlingson on Feb 23, 2014 7:00 pm GMT
Agreed Don, The primary energy source for the world is coal and it will be that way for the foreseeable future.

Only nuclear can produce energy in sufficient amounts without burning oxygen so agree it is the only "new" technology we have.

We just need to build 1 plant aweek....can't see that happening any time soon.


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