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September 04 2012

18:09

Do as I Say, Not as I ...

The Energy Department fails to take some relatively easy low-cost steps to cut its energy consumption, an audit finds.

May 03 2012

18:01

Is Yucca Mountain Still Dead?

With President Obama allied with Senator Harry Reid of Nevada on stopping the nuclear waste project, which can go nowhere without a budget, the question is whether it matters what the law says.
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April 26 2012

17:32

Will The Stars Align for Small Nuclear Reactors?

Westinghouse has lined up a commercial partner for its small modular reactor, which gives it an advantage in seeking licensing approval and federal aid.

February 14 2012

13:11

Obama's Wish List for Energy

The proposed $27.2 billion budget request for the Department of Energy is mostly about nuclear weapons, including nonproliferation and cleanup efforts.

January 31 2012

21:54

December 19 2011

18:11

A Uranium Project in the Political Cross Hairs

The House speaker wants President Obama to make good on a campaign pledge to aid a uranium initiative in Ohio but stops short of backing an earmark for that purpose.

December 09 2011

16:25

Reining In the 'Soft Costs' of Solar

Estimating that 40 to 50 percent of the cost of owning and operating a rooftop solar power system is administrative expenses, the Department of Energy organized a competition to find the best ways of bringing those costs down.

November 17 2011

14:46

Chu to Testify on Solyndra's Collapse

"When it comes to the clean energy race, America faces a simple choice: compete or accept defeat," the energy secretary said in his prepared remarks on a loan to Solyndra.

November 16 2011

19:24

Senate Hearing Confirms Natural Gas Export Plans Will Raise Prices For Americans

Considering the rate at which natural gas resources are being developed, and the sudden push from industry to export the product, it might come as a surprise that the Senate’s Energy Committee hadn’t had a hearing on liquified natural gas (LNG) since 2005.

Last Tuesday, for the first time in six years, Senators brought the issue back to the Capitol spotlight, as they considered the impact of exporting LNG on domestic prices.

In order to export or import natural gas, companies can either transport it through pipelines, or ship it as liquefied natural gas (LNG). LNG is natural gas cooled to -260 degrees Fahrenheit, at which point the gas becomes a liquid. Back in 2006, LNG imports far outstripped exports, and industry used that trade deficit to push for a massive expansion of domestic drilling, relying heavily on the argument for American “energy security.”

Now that that expansion is well-underway, with the infamous Utica and Marcellus shales the frontier of rapid development, utilizing controversial fracking and horizontal drilling techniques, the industry is eager to start exporting LNG to international markets where the fuel fetches a much heftier price.

The Senate hearing comes in the wake of a massive 20-year, $8 billion deal between the British BGGroup and Houston-based Cheniere Energy.

The amount of LNG represented in that deal alone amounts to roughly 3.3 percent of all current U.S. natural gas consumption.There are currently four other export applications on the desks of the Department of Energy (Dominion Energy’s Jordan Cove project, which I wrote about here, is another), and together they would be the equivalent of 10 percent of current U.S. natural gas use, according to Chris Smith, a Deputy Assistant Secretary of Oil & Gas at the DOE.

Exporting that amount of LNG alone is, lawmakers worry, enough to impact domestic prices. Earlier this year, when the DOE approved  the export permit for the Sabine Pass LNG project in Louisaiana (where the Cheniere LNG would ship off towards Europe), the department admitted that the project would raise gas prices in the U.S. by more than 10 percent.

Speaking at the hearing last Tuesday, Senator Ron Wyden of Oregon put Smith on the spot as to the rational of that decision:

Clearly, the department believes that raising natural gas pries by 10 percent meets the public interest test required by the Natural Gas Act…My question is, does the department believe that raising gas prices by five times that amount would be in the public interest?

The agency must determine whether the export projects are in the “national interest” during the approval process.

These first five proposed export deals represent, as Reuters referred to the Cheniere deal, “a new  chapter in the shale gas revolution that has redefined global markets."

Many energy experts, environmentalists, and lawmakers like Senator Wyden are concerned that, despite the rhetoric, a massive expansion of natural gas drilling won’t actually improve America’s energy security or self-reliance, but will only help the gas companies reach more lucrative foreign markets, leaving Americans to clean up the mess and pay for any pollution, spills, or long-term ecosystem degradation, as well as paying higher natural gas prices.

As proof of the industry’s intention to tie into a global market, Wyden held up a graph of LNG prices worldwide, showing that prices are up to three times higher overseas than they are in the United States.

(DeSmogBlog has contacted Senator Wyden’s office for a clearer copy of that graph, and will post it when we receive it.)

Showing the graph, Wyden warned, "Exports in the United States are going to make natural gas like the oil market. That’s why I’m concerned about what these price hikes could mean for our businesses and our consumers.”

Some other interesting bits from Wyden's testimony:

“I’m trying to get my arms around where the department is going to draw the line. Given the fact that prices overseas are many times higher than North American prices, my question really deals with how high do you think the price of the natural gas in the United States can go up as a result of these exports and still meet the public interest test?
Is there anything else you can tell me about how the department is going to draw the line so we can tell American businesses and consumers that they’re going to be able to get affordable natural gas as a result of this new export policy?”
“We’re going to be looking at impact on GDP. We’re going to be looking at jobs. We’re going to be looking at impact on a balance of trade. Some of those factors will be affected by the price itself. So we understand the importance that price holds.
“We also understand that natural gas at these export levels remains an inherently local domestic commodity. Prices are higher in Asia, but if you compare natural gas with oil, oil is a globally fungible commodity where you have enough transportation infrastructure to move oil from market to market. Whereas the ability to couple prices in the United States with prices in Asia, there simply isn’t the infrastructure that would allow you to do that at this point in time.”

Also providing testimony was Jim Collins, director of underground utilities for the city of Hamilton, Ohio. Collins argued that exporting LNG would tie the country to international markets, and would increase domestic prices and cause Americans’ utility bills to rise. Collins is no anti-gas crusader. He supports the use of natural gas as a transportation fuel and electricity producer, but is worried that the export strategies of gas companies will leave Americans worse off.

Today, the vast  majority of natural gas exports from the United States travel through pipelines into Mexico and Canada. Only about 5 percent of natural gas exports currently leave our borders as LNG from coastal ports. (I dug deeper into the natural gas trade numbers in this earlier post.)

As of last year, there were 11 LNG terminals in the United States, only one of which — Sabine Pass — is approved for exports. That the industry is lobbying so hard to open up other terminals for overseas shipping is proof that the "energy security" claims they're making to rally favor around rapid shale gas development are disingenuous at best.

It's worth noting that natural gas imports are still far greater than exports, and current natural gas demand still outstrips domestic supply. If "energy security" were the real goal, then the companies should be content closing the gap of domestic supply and demand.

But because the gas industry intends to tie into the more lucrative foreign markets as soon as possible, Americans will wind up paying higher energy bills, and will be left with all the risk, and cleaning up all the industry's pollution and waste. Which is why so many energy experts, environmentalists and lawmakers see natural gas exports as a lose-lose for America.

November 10 2011

17:17

September 14 2011

17:54

Administration Rushed Solar Guarantee, Republicans Say

Documents released by a House subcommittee suggest that Obama administration officials rushed a review of loan guarantees for a solar company that later declared bankruptcy.

September 12 2011

11:16

How Dead Is Yucca Mountain?

Does a vote taken on Friday by the Nuclear Regulatory Commission seal the waste repository's fate or keep it alive? Or is everything up in the air, legally speaking?

July 14 2011

19:54

June 15 2011

23:14

President Obama’s Fracking Panel Unmoved By Pennsylvanians’ Water Concerns

On Monday, the Natural Gas Subcommittee, from Energy Department Secretary Stephen Chu’s Energy Advisory Board (SEAB), held its second public meeting.  Around 400 people packed a cramped auditorium at Washington Jefferson College in western Pennsylvania to discuss the effects of hydraulic fracturing (a.k.a. fracking) on water supplies, air quality and other threats from the controversial practice.

The crowd split into two camps, those opposing and those supporting the highly contentious drilling method which has spread across Pennsylvania. Fracking opponents argued that fracking is a dangerous and destructive process that must be banned immediately, while those in favour yelled out “drill, baby, drill.”

Given the circumstances it was not surprising that the pro-frackers won the evening. This was due, in large part, to the work of gas industry front-group Energy in Depth who sent out emails to Pennsylvania and New York residents supportive of fracking, offering them airfare, hotels and meals to attend. Tickets to see the Pittsburgh Pirates play the New York Mets were even offered, although later retracted. <!--break-->

The mandate of the SEAB Natural Gas Subcommittee focuses on supporting the President’s “Blueprint for a Secure Energy Future,” and will make recommendations within the next months on how to “improve the safety and environmental performance of shale gas extraction processes” [pdf]. A fracking ban, or even a slowdown in gas development will not be considered.

The pro-oil and gas biases of the Subcommittee members have been heavily scrutinized since their appointment earlier this year. The Environmental Working Group (EWG) notes that six of seven members have a considerable financial interest in the oil and gas industry. For instance, Subcommittee Chairman John Deutch, sits on the board of Houston-based Cheniere Energy Inc., and was paid some $882,000 for his services between 2006 and 2009. He also earned around $563,000 in 2006 and 2007 for serving on the board of Schlumberger Ltd., one of the world’s three largest fracking companies.

Nadia Steinzor, who is a Marcellus Shale representative for EARTHWORKS Oil & Gas Accountability Project (OGAP), believes that it is unconventional gas profits, and not the interests of affected residents, that will be best represented on the panel. Josh Fox, who made the fracking documentary Gasland, called last night’s events a sham.

EWG Senior Counsel Dusty Horwitt has gone even further in demanding wholesale changes to the panel and its purposes, given the heavy representation of oil and gas interests on the Subcommittee:

“John Deutch must step down from the panel.”

“…The panel must be chaired by an impartial person and must also be expanded to include independent experts.”

Trusting the oil and gas industry to police themselves poses tremendous risks to public health and safety as well as effective environmental protections.

Time and again, drillers have acted carelessly placing the lives of residents at risk.

In this instance, the oil and gas industry is being handed the proverbial keys to the city since running such an important committee will help to determine drilling and environmental policies for years to come.

The President and the DoE have also undermined the authority of the Environmental Protection Agency (EPA) by convening this industry focus group to study unconventional gas fracking. Something Rep. Fred Upton and his fellow Republicans have been trying so hard to do, though largely unsuccessfully

In fact, the EPA initiated a four year study of fracking’s impacts to freshwater last year, with preliminary results expected late in 2012. The existence of a separate fracking panel will probably have little effect on the discussions within the EPA’ Science Advisory Board Hydraulic Fracturing Study Plan Review Panel, which meets again on June 21st. But when it comes time to produce an initial report in 2012, the possibility that the Natural Gas Subcommittee has ruled that fracking is not a danger will definitely have an effect. Policy will already be set.

EWG’s Dusty Horwitt also questions the Natural Gas Subcommittee’s impacts on the EPA for similar reasons:

"We were surprised that this panel was created at all, especially with the EPA study already going on."

"So we're concerned that this panel will come out with findings in 90 days -- that's essentially early August at this point -- that some people could hold up as the Obama administration's definitive view on the issue."

The next SEAB, Natural Gas Subcommittee public meetings will take place on June 28th and July 13th, at the main office for the U.S. Department of Energy in Washington, DC.

June 14 2011

18:57

Political Volleys Over Nuclear Waste

At a subcommittee hearing, House members assert that the chairman of the Nuclear Regulatory Commission blocked a waste depository at Yucca Mountain for political reasons. Others counter that the House's long-ago choice of Yucca was political to begin with.

May 06 2011

14:22

Fracture on Fracking

Energy Secretary Chu names a panel to study the controversial practice of hydraulic fracturing, drawing fierce criticism from some Republican lawmakers.

April 15 2011

21:03

April 12 2011

12:05

Clean Energy Loan Program at Risk in Budget Talks

The program has provided guarantees and commitments to a wide spectrum of energy projects, from clean coal to biodiesel refining and large-scale solar power.

March 30 2011

21:04

March 29 2011

14:32

Live-Blogging a Senate Briefing on Nuclear Safety

As anxiety grows over Japan's troubled effort to stem the release of radiation at the Fukushima Daiichi plant, the Senate hears testimony from experts on the situation and on steps to improve safety at nuclear plants in the United States.
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