Could Feds Slow Energy Development With A Dune Lizard?
Fox News by Joshua Rhett Miller. Deep-pocketed environmental groups are collecting millions of dollars from the federal agencies they regularly sue under a little-known federal law, and the government is not even keeping track of the payouts, according to two new studies.
Under the Equal Access to Justice Act, or EAJA — which was signed into law by President Carter in 1980 to help the little guy stand up to federal agencies — litigants with modest means who successfully show government agencies wronged them can get their legal fees back from the taxpayer.
(Link contributed today by California reader, BH)
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Commentary: Alaska's economy is almost completely based on oil, yet many of Alaska's leaders continue to demonize and criticize Alaska's most reliable and bountiful investors in order to build public support for keeping oil taxes among the highest in the free world. Keeping oil taxes high benefits liberal constituencies — environmental extremists and public works labor unions — for different reasons. It also benefits many constituencies via a vast wealth redistribution "Capital Projects Budget", which lures many private sector voters into the enticing web of the 'entitlement state'. But high taxes also make oil less competitive on the world market. As Richard Peterson's Op-Ed piece below points out, Alaska should be paying more attention to the shifting paradigms of world markets. Meanwhile, private environmental organizations are working hand in glove with the environmental activists embedded in the Obama administration to stop oil and mining activity wherever possible and delay projects. Congressman Doc Hastings' (NGP Photo) statement this morning mostly refers to anti oil federal policy, as does Virginia Governor McDonnell's Wall Street Journal Op-Ed piece last week, noting that, "Virginia is not alone in playing witness to the president's apparent disdain for domestic oil and natural gas production. The administration's perpetual slow-walk approach is especially noticeable in the Gulf of Mexico and off Alaska's coast."
| Groups like CEA are vigilant over all types of federal overreaching actions. Here, CEA urges Interior to not list the Dunes Sagebrush Lizard as 'endangered'. Texans are encountering with this possible designation the same threats to economic survival Alaskans face with federal critical habitat listings for the polar bear, steller sea lion and beluga whale, all of whose populations are actually increasing. -dh |
Honest, hardworking Alaskans and their private institutions could be forced out of Alaska's economy — if these state and federal policies don't change. Without a vibrant private sector, Alaska could once again — and soon — become a ward of the Federal government and its industries vulnerable to nationalization. We believe that is precisely what some special interests want. -dh
Good Bye to Alaska's Prosperous Economy
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Richard Peterson (NGP Photo)
(Commenting on Alaskanomics Reference Below)
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A blog posting by David Hackett examines the reasons behind the recent high prices of North Sea Brent Crude oil relative to West Texas Intermediate Crude (WTI), noting that these two crudes historically traded at close to the same price. The huge increase in oil production from North Dakota has disrupted traditional oil transportation and supply patterns – there is no efficient way to transport oil south of Oklahoma to the refineries on the Gulf coast. … Hackett predicts that the Canadian producers will work hard to move their oil to the West Coast, potentially displacing Alaska's crude. |
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For some time we have asked, “why is Alaska North Slope (ANS) crude oil selling for such a high price”. This article from Northrim Bank lays it out and while Alaskans have been basking in the $40/bbl premium soon Canadian producers will break out and reach the West Coast. We have been aware of a proposal to rail Canadian crude to Delta to ship in TAPS to Valdez. It doesn’t make economic sense unless you look at the differential. At $40/bbl even $20/bbl you can do strange things. We are aware of Bakken producers railing crude to the East and West Coasts. One just ordered 1200 new tank cars and will soon be flooding the West Coast with much cheaper oil. When Keystone is built part of the log jam will break. Another Canadian oil line will be expanded to Vancouver and the Puget Sound pipeline connecting it to Washington State refiners will also be expanded dumping hundreds of thousands of barrels per day into this market. When you realize that soon BP will be the only Washington State refiner with crude oil on the North Slope you can easily see why this will happen.
When these things happen ANS will drop $20 or more dollars per barrel but more importantly, ANS will be displaced from Washington State and maybe California refineries. Its only market, Southern California, will purchase oil at a steep discount. West Coast transport fuel prices will drop and for the first time in decades, West Coast gasoline and diesel may sell below that of Midwest and Texas. Adding insult to injury, it is likely to become cheaper for Tesoro to bring refined products from Seattle to Anchorage than oil from Russia to run its Kenai refinery. When all of this unfolds, Alaska will be running a large financial deficient and its Legislature will blame the oil producers instead of themselves.
With state policy forcing lower investment on state land and federal policy blocking most investment on federal lands, it is not exaggeration to say, "Good bye to Alaska's Prosperity."
-Richard Peterson submitted the above commentary as a longtime reader of Northern Gas Pipelines
“American offshore energy production plays a vital role in our country’s economic security. It supports over a million American jobs, accounts for 30 percent of our Nation’s oil production, reduces our dependence on foreign oil and generates billions of dollars in federal revenue.
Now more than ever, with gasoline prices still hovering near $4 a gallon and unemployment above 8 percent, the United States should be doing everything we can to ensure the timely and responsible production of our domestic energy resources.
Unfortunately, the Obama Administration is instead pursuing an agenda that keeps 85 percent of our offshore areas closed to new American energy production.
Every five years, the federal government releases a plan directing the development of our offshore resources. It includes specific locations and timelines for where and when energy production will occur. President Obama’s draft plan includes no new areas, no goals and no new energy resources. It’s a plan that reinstates the drilling moratoria lifted in 2008 and locks up vital American energy resources.
When President Obama took office, there was a plan in place to conduct lease sales in the new areas that were no longer under moratoria. Instead of seizing this opportunity to vastly increase American energy production, President Obama tossed aside that plan and canceled lease sales – including one off the coast of Virginia scheduled for 2011.
The draft plan released last fall from the Obama Administration closes the entire Atlantic and Pacific coasts to drilling, along with parts of the Arctic. The only areas this plan would allow energy production are in the Gulf of Mexico and, very late in the plan, small parts of Alaska – areas that have been open in some cases for decades.
President Obama claims to support expanded offshore drilling, but the reality is that no new drilling will occur anywhere during President Obama’s term in office, or if this plan is enacted, for the next half decade.
What’s even more troubling is that due to the Obama Administration’s delays, on July 1, 2012 the United States will have no plan to develop our offshore energy resources.
Offshore drilling plans are subject to multiple levels of public comment and review. One of the final steps is that the plan must be submitted to Congress for a 60-day review. That’s the law. In order to complete all the legally required steps to have a new plan in place by the time the current one expires on June 30th, the President would have had to submit his plan to Congress by May 1st.
The Obama Administration let that deadline come and go without any action. This will be the first time the U.S. will not have a plan in place since it became a requirement in the 1970s.
I also want to quickly address the Obama Administration’s deliberately misleading claim that their draft plan opens 75 percent of the known offshore resources. This is a calculated and outdated talking point meant to provide political cover for a failed record on offshore drilling.
The Obama Administration is using seismic data from the 1980s to estimate offshore oil and natural gas potential. Using scientific data from over 30 years ago to shape significant energy policy is not only completely unacceptable but shows a fundamental lack of understanding of offshore energy development. We don’t know the oil and natural gas potential of new areas offshore until we begin development.
For example, just over a decade ago, the USGS believed that the Undiscovered Technically Recoverable Resources of the Marcellus Formation was 1.9 trillion cubic feet of natural gas. Today, it is estimated that Marcellus has 44 TIMES that amount. We know that technology has come a long way in 30 years – certainly no one here is using a computer from 30 years ago – and the Obama Administration shouldn’t be relying on 30 year old data.
The United States’ economic competitiveness is at risk if we don’t act now to expand production of our resources. Last week, the Chinese announced an offshore plan to DOUBLE output by 2030. World markets are not waiting for us and if we don’t plan for increased energy production now, we will surely pay for it in the future through increased dependence and higher energy prices.
Now is the time to make these important decisions and set the stage for an energy renaissance in the United States.”
Virginia Could Be an Energy Power—If Washington Would Let It
In 2010, my state was poised to become the first on the East Coast permitted to produce oil and natural gas offshore. Then politics intervened.
When President Obama endorsed an "all of the above" energy strategy in this year's State of the Union address, he gave the impression that he was finally adopting an aggressive policy. Unfortunately, the president's words are worlds apart from his actions—especially when it comes to developing our nation's abundant offshore oil and natural gas resources.
To see that disconnect in action, look at the Commonwealth of Virginia. In 2010, Virginia was poised to become the first state on the East Coast permitted to produce oil and natural gas offshore. In 2007, the federal government had designated certain offshore areas as available for oil and gas leases, raising the prospect of thousands of new jobs and significant new revenues for the state and local governments.
However, our opportunity was extinguished and the lease sale canceled after November, when the Obama administration abruptly dropped Virginia from the government's latest leasing plan, with little explanation and even less regard for the strong bipartisan and public support for the offshore initiative. At a moment when we should be looking for every opportunity to safely produce more domestic energy, the Obama administration unilaterally declared a seven-year timeout.
Three months later, the president announced federal approval of leasing plans for wind-power development off the coast of Virginia. This was a welcome development; we are strong supporters of doing all we can to maximize our offshore wind opportunities in the Commonwealth. Taken together, however, the two decisions reflect a discordant approach to energy policy. There is no reason, other than political calculation, that we couldn't have been home to the East Coast's first offshore oil and natural gas development as well.
Virginia is not alone in playing witness to the president's apparent disdain for domestic oil and natural gas production. The administration's perpetual slow-walk approach is especially noticeable in the Gulf of Mexico and off Alaska's coast.
In the Gulf, delays in permitting have resulted in dramatically reduced investments. The Energy Information Administration projects that Gulf production will decrease by over 200,000 barrels per day in 2012 compared with levels before the president assumed office. Some studies, including one published last year by the energy research firm IHS CERA, have indicated that closing this gap could provide between 110,000 to 230,000 jobs across a multitude of sectors.
Meanwhile, in Alaska's Beaufort and Chukchi Seas, Shell, for instance, has been forced to spend $4 billion over five years on plan-development costs and other expenses of dealing with repeated permitting delays. These were not the result of deficiencies in proposed operational plans. They were caused by challenges and legal actions by environmental groups to delay or invalidate the proposed permits—actions that the current administration could review but did little to oppose.
It shouldn't take a herculean effort to approve a project that the host state strongly supports and that could generate 55,000 new jobs per year for 50 years, along with $145 billion in new payroll and $193 billion in additional government revenues over the same period.
If an "all of the above" energy strategy—one that includes offshore oil and natural gas development—is what the administration seeks, there is an organization willing to work with the president. The Outer Continental Shelf Governors Coalition is comprised of the governors of seven coastal states, including Virginia, Texas and Alaska.
In a letter to the president last month, the coalition outlined a number of steps that can be taken immediately to incorporate offshore energy production into a comprehensive national energy policy. They include increasing the speed and predictability of permitting and expanding access to new reserves. The president can implement all of these recommendations with the stroke of a pen. To date, he has not acknowledged our outreach.
During my term as governor, we have focused on making Virginia the energy capital of the East Coast. In just two years our state has taken aggressive actions to harness the power of offshore wind and promote greater utilization of solar energy. Had the president not stopped Virginia's offshore oil and gas efforts, a portion of the revenue from those efforts would have gone—under a law passed during my term of office—to renewable energy research.
We remain committed to developing Virginia's offshore oil and gas. Energy is the lifeblood of our nation's economic growth. More energy means more jobs and we need to use all of our domestic energy resources.
Mr. McDonnell is governor of Virginia and chairman of the Republican Governors Association.
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