Obama, in his eloquent victory speech last night said he wants to build a country "that isn't threatened by the destructive power of a warming planet,". This reference refers to an issue that the Administration has put in the closet for the past two years - Climate Change. It will be interesting to see what kind of emphasis the President's new administration will actually put on this hotly contested issue. The environmental community, who did a lot of work in behalf of President Obama, will no doubt put a lot of pressure on the Administration to address this issue which is hugely important to them.
Romney's energy strategy went nowhere - more coal and more drilling on federal lands did nothing for the electorate. On the other hand, Obama's focus on the wind energy production tax credit and the potential of renewable energy technologies to add to our economy and our efficiency might have had an impact on some voters.
The Hill has a great article on how the 2012 election results might affect energy policy. Wind energy tax credits are a clear survivor of the 2012 election. President Obama has been strong supporter of the PTC, while Romney was opposed. Many Republican Members of Congress in states with significant wind energy might now be free to vote for these credits. As I mentioned above, the President brought up climate change in his acceptance speech which means that climate issues could possibly be a talking point in the President's next year agenda. Senator Ron Wyden, as the next head of the Senate Energy and Natural Resources Committee, will set a new tone for the next Congress energy agenda. With the President's victory, the Oil and gas industry might lose some of the tax incentives that have been so dear to them in the past.
Congressman Henry Waxman very nearly lost his Congressional seat to a self funded challenger. His loss would have had huge implications for the House Energy and Commerce Committee.
A new study by ICF International for the American Clean Skies Foundation (ACSF) states that the revolutionary advances in oil and natural gas extraction technologies over the last five years have had an equally dramatic effect on state economies. Greg Staple, CEO and President of ACSF was scheduled to serve as a panelist on our panel: Hydraulic Fracturing: Risks and Opportunities which we had to cancel due to the weather impact of Hurricane Sandy. ICT states that their new data and analysis finds that the technology-driven changes in oil and gas production since 2007 will lead to 835,000 to 1.6 million new U.S. jobs by 2017 and increase the country's gross domestic product (GDP) by $167 billion to $245 billion on a net basis. The report, including more than 60 original maps, charts and tables, also shows the expected employment gains, by sector and state, for each additional increment of natural gas being produced to serve new demands. One startling piece of information in this report estimates that for every billion cubic feet (Bcf) of additional gas demand per day, there are 13,000 additional direct drilling and pipeline jobs, plus thousands more related to new chemical plants and other gas-using facilities. In turn, these jobs generate a further 10,000 to 30,000 induced indirect jobs in the manufacturing, retail and service sectors. U.S. production has increased by approximately 12 to 15 Bcf per day since 2007. The study shows that the economic impact extends far beyond the drilling pad. Jobs are being created in accounting, payroll services, at hotels and restaurants, and for architects, lawyers and engineers. Obviously this report defers to it's funder, however if just part of this is accurate, it portends a huge boast to our economy.
Natural Gas Benefits Felt in Key Election States – Additional details from the report highlight the surge in U.S. natural gas production has led to the construction of gas-fired power plants and a renaissance in petrochemicals, steel, polymers, glass, and ammonia plants. The benefits are widespread: Wisconsin, which has no drilling activity, has seen a “sand rush.” The sand is used as a proppant to hold open fissures created during the drilling process to release the gas. There are already 16 sand mines in Wisconsin and demand for sand drilling now exists in Arkansas and Missouri, too. Georgia has two ceramic proppant factories (an alternative to sand) and more facilities are planned. North Carolina and South Carolina are home to manufacturers of natural gas turbines but little natural gas. Iowa will host the first new nitrogen fertilizer factory in the U.S. in over a decade, providing Midwest farmers with a local source of fertilizer. Pennsylvania, which straddles the Marcellus shale gas region, won a competition for a new Shell ethane cracker plant with 400 employees. The plant will be the first of its kind in the northeastern United States. Three states competed for the plant, which is expected to play a large role in revitalizing the region. Ohio’s lagging steel industry received a boost when Vallourec & Mannesmann Holdings Inc. announced it would build a $650 million plant in Youngstown to meet demand for drilling materials such as steel pipe. U.S. Steel and Timken also have announced expansions in Ohio. Halliburton, Baker Hughes, and Select Energy Services -- all oil and gas service companies -- have announced construction of facilities within Ohio to meet the needs of drillers in Ohio’s Utica shale play.
It is with a tinge of regret that I announce my departure from NDN/New Policy Institute in the next few weeks. I have greatly enjoyed my time at NDN as the Director of the Clean Energy Initiative. Our president, Simon Rosenberg, has been 110% supportive of this program and I think we got an awful lot done here over the past few years.
Looking back, I am proud of our accomplishments, particularly our Clean Energy Solution Series, which with over more than a dozen events showcased the leaders, companies, ideas and policies hastening our transition to a cleaner, safer and more distributed energy paradigm. We have also been on the front end of emerging energy policy, including hosting a panel discussion after FERC Order 1000, spotlighting Gina McCarthy to discuss EPA’s first ever national standards on mercury, and highlighting the implications of Department of Commerce tariffs on Chinese solar panels. We have literally had dozens of the smartest and most important people in the country working on these issues participate in our events these last few years. I know I learned a lot throughout all of this – and I hope you did too.
Personally, one of the most rewarding things about my time at NDN has been the opportunity to work with these thought leaders and so many other remarkable people. It has been the community we’ve built, tied together through their passion for this work and for a better day, which has been the most rewarding part of my time here at NDN.
It has been an honor to be a part of the quality group that makes up the NDN team lead by our president, Simon Rosenberg. I will miss working with everyone immensley. In the meantime, for the next few weeks, I will be working with Simon to find a replacement to take over the Clean Energy Program.
Shortly, I will depart for New Orleans, LA where opportunities await. I will greatly miss our nation’s capitol, a stunningly beautiful and thrilling place to live. On the other hand, New Orleans, aptly nicknamed ‘the big easy’, is brimming with good food and delicious music. I look forward to my next adventure.
The big news in the energy arena is that New York City Mayor Michael Bloomberg endorsed the candidacy of President Barack Obama. In a statement on his website, he said that although he has not been the biggest fan of the President, after the weather impacts of Hurricane Sandy, "We need leadership from the White House - and over the past four years, President Barack Obama has taken major steps to reduce our carbon consumption, including setting higher fuel-efficiency standards for cars and trucks. His administration also has adopted tighter controls on mercury emissions, which will help to close the dirtiest coal power plants (an effort I have supported through my philanthropy), which are estimated to kill 13,000 Americans a year." This has a lot of chatter among energy community. One reason is because NO ONE has had the courage to bring up the term "climate change" since legislation addressing carbon crashed and burned in Congress during the summer of 2010. Bloomberg, in his third term as mayor and with substantial wealth backing him up, marches to his own independent drummer. Another is that, in a race this close, an endorsement from the Mayor of New York could make a difference. Perhaps. On the other hand, the citizens of New York were going to vote for Obama anyway and people who don't live in New York, don't much care about Mayor Bloomberg's endorsement. I am going out on a limb and say that the biggest impact of this endorsement is that Bloomberg uttered the term, "climate change".
The Solar Foundation has some good news to announce for the solar industry. In their 2012 National Solar Jobs Census, the U.S. solar industry employs 119,016 American workers. This figure represents an addition of 13,872 new solar jobs and a 13.2% employment growth rate over 2011. In fact, given the fact that employment in the overall economy is growing at 2.3%, the solar industry has grown almost six times faster. In other words 1 in 230 jobs were created nationally over the last year in the solar industry.
Opower has an absolutely fascinating piece on electricity efficiency and voting behavior. Using their warehouse which has access to 50 million households which they linked to election data, they found that Americans who vote more often use 7-10% less electricity. Using a western state and an eastern state and zeroing in on 137 households whocse electricity consumption data they matched with publically available voting rec ords , , they found that each ballot that a voter cast between 2004-2010 is associated with an amazing incremental 66 kilowatt hour reduction in the voter's average annual household electricity usage.
Hurricane Sandy inevitably brings up the issue of climate change. Former President Bill Clinton, had the best comment. Taking a swipe at at Mitt Romney's position on climate change in the aftermath of Sandy, President said that Romney " ridiculed the president - ridiculed the president for his efforts to fight global warming in economically beneficial ways. He said 'Oh, you're going to turn back the seas,'' Clinton said. 'In my part of America, we would like it if someone could've done that yesterday.'
Speaking of Hurricane Sandy, President Obama had a conference call with top utility executives to "underscore that restoring power to the millions of Americans who lost electricity during Sandy is a top priority." Also on the call were Energy Secretary Stephen Chu and FEMA Administrator Craig Fugate.
With polls on the Presidential campaign tightening to a draw, Jim O'Sullivan has an intriguing article in the National Journal about what a Romney Administration would look like. In terms of energy, he speculates that the Department of Energy Department’s role would likely diminish significantly in a Romney administration. DOE would go back to it's original role of monitoring nuclear energy and the green programs would gradually be defunded. Many of Romney's fellow Republicans want to eliminate this Department, but most likely the budget will be cut drastically. James Connaughton, the former head of George W. Bush’s Council on Environmental Quality and currently the executive vice president of Exelon, the nation’s largest electricity generator. Connaughton has a good relationship with Romney, but his affiliation with the Bush administration—and possibly his moderate views on climate change—may hurt his prospects. Since leaving the Bush White House, Connaughton has been active in conversations about global warming, and he traveled to the 2009 U.N. climate-change summit in Copenhagen. Jack Gerard, President of the American Petroleum Institute and a big energy player is someone who is a good friend of Romney and has been mentioned as another potential candidate for Secretary of DOE, although his deep ties to the oil industry might be held against him by the Democrats.
Under a President Romney, the EPA administrator would be tasked with trying to delay or abolish the accomplishments of the Obama Administration - importantly the regulations controlling greenhouse-gas emissions and mercury pollution from coal-fired power plants. Campaign sources say that at least four officials from the George W. Bush administration are in the running for the top post at EPA: Susan Dudley, who was the administrator of the Office of Information and Regulatory Affairs in the White House’s Office of Management and Budget from 2007 to 2009; Ann Klee, who was EPA general counsel from 2004 to 2006; James Connaughton, who was director of the White House’s Council on Environmental Quality from 2001 to 2009; and Jeff Holmstead, who was EPA assistant administrator for air and radiation from 2001 to 2005.
Since Romney has catagorically stated his support for more energy expansion and drilling on federal lands, the Department of Interior will be important to him. Often it is a Western governor who fills this spot, and according to Romney insiders say Gov. Brian Sandoval, of Nevada a rising star in the party, fits the bill perfectly. Governor Susana Martinez of New Mexico is another possibility. Another bet is Bob Beauprez of Colorado is working hard with the Romney campaign to deliver his state in November; if he succeeds, one GOP insider says, “a substantive role at Interior is his.”
The Wall Street Journal continues their run of energy articles with one today on the economic boost of natural gas shale on the Pennsylvania economy. The Marcellus Shale, a huge formation of gas bearing rock that underlies much of Pennsylvania has been a game change for the state. The article focuses on a proposed multibillion dollar chemical plant to be located in Beaver County, PA. Natural gas is spurring hopes of a industrial renaissance in this once thriving industrial area. This plant would take ethane gas - a hydrocarbon found in natural gas deposits - and turn it into ethylene, the first step in making many plastics. This ethane would come from the Marcellus Shale and provide roughly 400 new jobs and many others during the construction process.
This scenario is happening in other rust best areas. Between 1998 and 2004, fertilizer producers—which use natural gas to make ammonia, the key component in nitrogen fertilizer—shut down more than two dozen U.S. plants. Some facilities were literally taken apart and shipped overseas, where gas was cheaper. But that trend is reversing -in September, Egyptian industrial giant Orascom Construction Industries announced plans for a $1.4 billion fertilizer plant in Iowa, which the company says would be the first large-scale fertilizer facility built in the U.S. in more than 20 years. But there is uncertainty about the long term direction of natural gas prices and this remains a big obstacle to a gas driven renaissance. But other companies are a little more sure-footed. The Chemical industry - which also sent production overseas during the past 15 years is now coming back to the United States. Dow Chemical and Chevron Phillips are planning to build multibillion dollar chemical plants in Texas and Louisiana. In fact these projects have a bigger long term economic impact than drilling itself. The gas boom has led to new demand for drilling pipe and other metal products further boosting the companies' prospects. Near Beaver County, Allegany Technologies is building a new $1.1 billion mill to produce metals for chemical plants and the oil and gas industry which uses high tech alloys in its pipes and drilling equipment.
In recent years new advances in technology have changed our understanding of our nation’s energy future. “Hydraulic Fracturing” is a perfect example and offers America tremendous opportunity to have greater control of our own energy destiny. The potential is huge, but of course, like any new advance, there are risks. On September 25, we will host a panel discussion to help us better understand both the opportunities and challenges of these new technological advances and the potential of natural gas and oil shale. Among the panelists joining our moderator Kyle Simpson, Senior Energy Advisor for Hogan Lovells, LLC will be Dr. Mark Zoback, Professor of Earth Science, Stanford University, well known for his work in seismic imaging, Melanie Kenderdine, Executive Director of the MIT University Energy Initiative, Greg Staple, CEO of the American Clean Skies Foundation andAmy Mall, Senior Program Analyst, Land and Wildlife Programs for National Resources Defense Council.
Join us Wednesday, October 31st, for a lunchtime discussion at the NDN event space located at 729 15th Street on the first floor. Lunch will be served at 12:Noon and the program begins at 12:15pm.
Please RSVP today and feel free to invite others you think might be interested!
Energy issues have taken a central role in this 2012 Presidential election. Given that energy encompasses our nation's concerns about the economy, the environment and our national security, this is not surprising.
Van Ness Feldman, LLC has put together an excellent comparison of the Obama Administration Agenda vs. Governor Mitt Romney's Energy Platform, It is informative, thorough, and concise - something I would expect from the crackerjack team that makes up the Van Ness energy sector. Click here to see how the Obama and Romney energy plans compare.
Speaking of the energy and the 2012 campaign, The New York Times has an extensive article today about the positions President Obama and Governor Mitt Romney hold on the pressing energy issues before our country today. The article points out that the irony of the current energy debate is that fossil fuels have eclipsed renewable energy technologies and climate in our national discussion. Oil and shale gas drilling are reshaping the map of America. As the President repeatedly points out, domestic oil production has been rising to the point where oil imports are now only 40% of domestic supplies - down from 60 % and domestic natural gas production has risen by 15% which has brought down the price of natural gas and resulted in plentiful cheap natural gas. This has hindered the renewable industry and cut our consumption of coal. Even so, electrical generation from wind, solar, geothermal, and biomass have expanded to 5.8% of our electricity - up from 31% since Obama took office - this is due in part to the stimulus package and tax incentives. Romney trumps his 'energy independence' plan which includes the Keystone XL Pipeline from Canada and removing federal regulations on coal which he says will bring many U.S. jobs. Romney has said he wants to expand state regulatory control over drilling and mining on federal lands. In other words, Romney is following the fossil fuel talking points.
While Romney favors burning more coal, Obama would phase out coal fired electrical generation. The NYT rightly points out that coal actually has a pretty bleak future in the U.S. - with or without a Presidential coal agenda. The biggest difference between the two candidates is on coal. Having said that, the fact is that coal as an energy source appears to be on a downward slide. There are 600 coal plants in America and roughly a third of these plants are over 50 years old. According to many experts, these plants will be out of service within the next 20 years or so. For the most part, the new plants that will be built are gas fueled plants which can produce electricity for less than one half what it costs to run a coal fired unit because of the huge amounts of natural gas.
Indeed, according to the New York Times, Romney's promise of more coal jobs is eclipsed by jobs generated by the natural gas industry. Drilling and support jobs have increased by nearly 25% since the first half of 2008 to nearly 200,000 jobs and this is in spite of our recession. The average pay on these jobs are $34.50/hour. According to the NYT, a refinery boom based on production of new oil and gas has made the U.S. a net exporter of refined petroleum for the first time since Truman. There are plans to build several petrochemical plants on the Gulf of Mexico and the steel plants in the Midwest are adding shifts to build oil and gas pipelines.