oil

Denver Post Slams Romney’s ‘Drill-At-All-Costs’ Energy Policy

Colorado’s flagship newspaper, the Denver Post, is criticizing GOP presidential candidate Mitt Romney for promoting an energy policy that focuses almost exclusively on drilling for fossil fuels.

On Sunday, the Post published an endorsement of President Obama and lamented Romney’s “drill-at-all-costs” energy policy that treats public lands only as areas for resource extraction:

Romney notes correctly that North America is poised to become an energy exporter. But the drill-at-all-costs mantra he is pushing runs counter to the predominant view in Colorado, which is one that balances energy and environment — particularly when it comes to public land. And, unlike the Republican nominee, we believe our nation’s energy portfolio must include government investment in renewable sources such as wind and solar — both of which can become sources of more power and more jobs in the future.

The endorsement comes as Romney and his running mate Paul Ryan campaign in Colorado this week. Polls show that the race is a dead heat in the important swing state.

Since releasing his energy policy in August, Romney has come under fire for his narrow focus on fossil fuel extraction. Energy expert Michael Levi has called it a “pipe dream”; cleantech experts have called it a “political document not worthy of serious analysis; and Obama blasted Romney in the most recent presidential debate for letting “the oil companies write the energy policies.”

One of the pillars of Romney’s energy plan is to transfer federal public lands to the states in order to encourage more drilling and mining. As the New York Times has described, giving states exclusive control over these protected lands makes it very likely that they are used for fossil fuel extraction: “States, as a rule, tend to be mainly interested in resource development.”

The plan doesn’t just ignore renewable energy, it ignores the enormous value of protecting these lands for recreation and tourism. For example, a recent study showed that the newly-announced Chimney Rock monument in Colorado will double the amount of visitors to the site over the next five years, increasing the economic impact from $1.2 million to $2.4 million.

A number of other recent studies illustrate the economic importance of protecting public lands. Headwaters Economics found that Western non-metro counties made up of at least one third public lands saw employment increase 344 percent over the last 40 years; the U.S. Fish and Wildlife Service found that homes located near wildlife refuges have higher values; and the Interior Department found that recreation on public lands supported more than 2.4 million jobs and $385 billion in economic activity in 2011.

Regional Energy, National Solutions: A Real Energy Vision For America

by Kate Gordon

America’s energy future is at a crossroads. Everyone can agree that we must reduce our dependence on foreign oil while strengthening our economy and creating jobs. But how do we get there?

One path at first appears to be a shortcut: Exploiting our natural resources and drilling our way to an energy-independent future. But it’s a deceptive path, which disregards the long-term implications for our landscapes, environment, security, and economy. The alternative is a longer but more realistic path, one that continues to diversify and strengthen the economy through proactive solutions that move us toward sustainable energy independence and create the jobs of the future.

In that first vision—brought to us in ads, policy briefs, and conferences funded by billion-dollar energy companies—America is a land of fossil-fuel extraction, where every region makes its own contribution to a drilling-intensive future. Fossil fuel interests have spent an estimated $153 million in this year alone promoting fossil fuels and attacking clean energy industries, but perhaps the best articulation of this “drill baby drill” vision comes from the American Petroleum Institute, the oil and gas industry’s trade association. Its recent platform proposal to the Republican and Democratic party platform committees advocates drilling for oil offshore, for oil and gas onshore, for coal mining in general, and for building pipelines to transport all these dirty fossil fuels around the country. The industry institute applies this same backward-looking strategy to every region of the country, regardless of whether it’s the most effective method.

It is clear that this strategy enhances the profitability of big oil companies. But it’s much less clear that it enhances the interests of the American people.

And ultimately, it’s a mirage. The United States cannot achieve lasting energy and economic security through resource extraction alone. An energy plan based solely on drilling and mining for more and harder-to-reach fossil fuels squanders the opportunity to diversify and strengthen our economy, threatens our nation’s ability to lead in the global marketplace, and completely ignores the urgent need to combat climate change and reduce our dependence on fossil fuels. Furthermore, it dismisses the significant growth of the clean economy, a diverse set of industries that employs some 3.1 million Americans.

This report provides an alternative vision, a better approach for America and the planet we share. Broadly, we present a vision that:

• Recognizes that our earth is warming, and our resources are finite, which means we must swiftly enact measures to make us global leaders in the face of that reality
• Mandates investment in multiple forms of energy and fuel so we are never dependent on just one finite resource for electricity and transportation needs
• Understands the unique assets of each region of our country, whether they are natural resources or infrastructure and workforce investments
• Relies on ambitious, large-scale projects to create new jobs and anchor strong economic development strategies to ensure American economic competitiveness and true energy independence well into the future

The promise of the clean economy is not a mirage or a far-off goal. It is being felt right now across our country. In the second quarter of 2012 alone, more than 37,000 new clean energy jobs were announced in projects across 30 states. Recognizing the critical need to enhance our energy security, the U.S. military has become a major proponent of clean energy solutions such as biofuels, efficiency, and solar. The world’s largest investors agree that long-term climate change and clean energy policy is a tremendous investment opportunity, “providing a robust foundation for economic recovery and sustainable long-term economic growth.”

In Washington, however, clean energy solutions have become highly politicized, due in no small part to aggressive lobbying by the fossil fuel industries. The relentless public relations campaign by conservatives to deride the fossil fuel causes of global warming clearly is paying off. The endless drumbeat of conservatives in Congress bashing the high-visibility—but quite rare—public investment failures such as the solar company Solyndra enables them to argue that renewable technologies don’t work, and that any government action to promote them has no place in public policy. But this rhetoric is more than just false: It also denies the success of clean energy at the local level, often in the very states and districts from which these congressional naysayers hail. According to a new report, 7 of the 17 states with the fastest-growing green jobs numbers are swing states or “red states” (Republican-leaning in the lexicon of the political scientist)—and red states lead the top 10 states with the largest share of green jobs as a percentage of total jobs. The top three states in that category feature more clean-tech workers than the entire U.S. coal mining sector.

This politicization of energy has real-world consequences. Although investments in clean and sustainable energy systems have underpinned economic growth across America, political support for renewable energy, energy efficiency, and critical environmental protections is declining precipitously. Even policies that were originally enacted with bipartisan support have become almost impossible to move through Congress. Just one case in point: The production tax credit for wind energy is set to expire at the end of this year due to congressional inaction, even though both the House of Representatives and the Senate have introduced bipartisan bills during this session to extend the credit. Letters of support have poured into Congress from businesses across the country, yet political gridlock means project developers can’t get financing to put turbines in the ground, and turbine and tower manufacturers can’t count on new orders coming into their factories. Altogether, letting the production tax credit expire means that 37,000 Americans working in the wind energy sector will probably lose their jobs by early 2013—and that’s just one energy policy for one energy sector.

It’s not only renewable energy development projects that are on the chopping block. If passed by Congress and signed into law, the House appropriations bill for energy and water programs for fiscal year 2013 would slash funding for the Department of Energy’s overall research and development programs by 11.6 percent, undermining efforts by our national labs and universities to discover and commercialize the low-carbon technologies of the future.

When even relatively uncontroversial programs such as early-stage research and development are under fire, we know the politics of energy have changed for the worse. Paradoxically, though, the actual economics of energy have changed for the better. We’ve seen significant technological advancement in both fossil fuel development and in renewable and efficient energy solutions. Just a few short years ago, we couldn’t have dreamed of the vast shale oil-and-gas resources that would be opened up by new drilling and hydraulic fracturing, or “fracking.” We couldn’t have imagined the declining rate of coal as a percentage of our nation’s electricity mix as a result of these discoveries. We couldn’t have known that solar energy would have nearly achieved cost parity with more traditional forms of energy. And we couldn’t have predicted the meteoric advance of new vehicle technologies that would dramatically reduce our carbon footprint in the transportation sector because of dropping demand for gasoline.

In the face of all this political dissention and technological upheaval, the question remains: What is America’s energy future?

This paper does not disregard the role of fossil fuels in the U.S. economy. It instead looks beyond the finite contributions that fossil fuels can ultimately make to our nation’s energy security and economic prosperity. It also challenges the idea that fossil fuels provide a one-size-fits-all answer to America’s energy needs. Every region of our nation has its own intrinsic resources and can contribute in its own way toward the overall movement away from a carbon-only energy future. This paper recognizes the inherently regional nature of energy and sustainability.

In contrast, the vision for America presented by the American Petroleum Institute and its supporters in Washington and across the country embraces a “drill-here, drill-now” agenda without regard to the long-term economic and environmental consequences or to the specific needs of America’s diverse regional economies. It ultimately is a shortsighted strategy that will not work. Diversifying away from these fossil fuels is an urgent and essential step to ensuring our long-term climate stability and economic competitiveness.

This report focuses on non-fossil-fuel-driven economic development strategies in six major regions of the country. Specifically:

• Offshore wind on the Atlantic Coast
• Coastal restoration in the Gulf Coast
• Energy efficiency in the Southeast
• Advanced vehicles in the Midwest
• Wind power and solar power development and distribution in the Mountain West
• Solar power innovation and installation on the Pacific Coast

Organizations and individuals intimately familiar with each region have contributed chapters that identify core strategies that will make that region more resilient to the impacts of climate change, while also creating jobs and economic growth. These energy and resiliency strategies mostly take the form of regional approaches to create low-carbon or no-carbon electricity or fuel to serve each part of the country.

For the Gulf Coast, however, the author focuses on the critical need to restore economically important coastal wetlands, which provide vital ecosystem services as storm surge buffers, pollution filtration systems, and fisheries nurseries. This report will show that this region, which has been paying the price for decades of oil-and-gas drilling and refining, can transition away from extraction to diversify and strengthen its economy.

For each region, the authors explain the economic and environmental rationale behind choosing one particular solution. There are shorter sections, as well, which highlight additional regions or strategies that are particularly important to the nation’s energy strategy. These additional sections of the report include the geographically distinct regions, including:

• Alaska, Hawaii, and New England, all of which boast particularly high energy costs and are all the more focused on energy diversity as a result
• The stellar wind energy region in Iowa, which has been a huge economic success story for that state
• Energy efficiency programs that are critical for every single state and region to pursue as they march toward greater energy independence

Although the authors tried to be as inclusive as possible, they haven’t addressed every region of the country. Nor have they identified every possible energy generation or resiliency solution for each region. Though the clean energy economy for each state and region is multifaceted, this report highlights specific projects that are currently in operation or that have proven and achievable potential to create significant jobs and sustainable industrial development.

These regions and strategies were chosen to expose a choice fundamentally critical for the future of the country and the planet. The path offered by the American Petroleum Institute and its supporters leads to a dead end—finite resources expended in blind disregard to environmental consequences.

The solutions presented in this report point to a different road—one that highlights clean energy and stewardship as economic drivers that are as powerful as the fossil-fuel industry, one that is available today and sustainable for tomorrow, and that bends us away from our current trajectory of global climate change and self-destruction.

This is a vision that is uniquely American. One of this country’s greatest strengths throughout its history has been its huge size and resource diversity, and by capitalizing on the unique strengths of each region, we can harness this diversity to move toward a brighter economic and energy future.

For another take on this report, see our earlier Climate Progress post.

Kate Gordon is the director of advanced energy and sustainability at The Center for the Next Generation in California, as well as a Senior Fellow at the Center for American Progress. Kiley Kroh is the Associate Director for Ocean Communications at the Center.

An Answer To ‘Drill, Baby Drill’: Countering The American Petroleum Institute’s Plan For Climate Disaster

The American Petroleum Institute's vision for America.

If you’ve turned on the television, walked by a bus stop, or visited a social networking site in the last 10 months, there’s a very good chance you’ve been targeted by the American Petroleum Institute’s “Vote 4 Energy” campaign. It’s one of the most prominent and consistent ad buys amongst the tidal wave of spending from fossil fuel groups this election season.

Launched at the beginning of the year, the campaign was rolled out in conjunction with an energy plan that calls for unrestrained oil and gas drilling in the Gulf of Mexico, Outer Continental Shelf, onshore and offshore in the Arctic, and public lands around the country. The plan also calls for developing the Keystone XL pipeline and increasing production of tar sands — one of the most environmentally-destructive and carbon-intensive resources — by 250 percent.

API’s vision, which brings “drill, baby, drill” to the absolute extreme, is a one-size-fits-all energy plan that treats fossil fuel extraction as the only solution to creating jobs and economic progress.

The plan isn’t just a high-end guidepost. It has been copied by Mitt Romney, who recently laid out an energy plan featuring virtually identical proposals.

Oil expert Michael Levi has called out this strategy for being a “pipe dream” based on false promises that an all-out approach to fossil fuel drilling will dramatically lower gas prices and make America truly energy independent.

Whether or not it’s realistic, API’s messaging has put President Obama on the defensive.

In the 2008 election, Obama was very blunt about the environmental imperative for transitioning away from fossil fuels: “We can’t simply drill our way out of the problem. And we’re not going to be able to deal with the climate crisis if our only solution is to use more fossil fuels that create global warming,” he said in a presidential debate against John McCain.

Today, as the oil and gas industry spends more than $150 million on the presidential campaign to promote fossil fuels, Obama has completely stopped talking about climate change and is battling Romney over who will promote more oil drilling. This stunning reversal is a direct consequence of API’s public campaign and private lobbying in Washington.

The saddest part of the whole exercise is that talk about climate change has been completely lost. Because when you actually factor in the pressing need to reduce greenhouse gas emissions today, the API plan is revealed for what it truly is: a climate disaster in the making.

By building out a massive new round of fossil fuel infrastructure that will last for many decades, we’re locking in gigatons of new carbon dioxide emissions that we simply can’t afford to emit. But somehow, an extreme energy plan that completely ignores the reality of global warming is now the “center” of the debate in Washington political circles.

That’s why I really like a new report released today by my colleagues at the Center for American Progress and the Center for the Next Generation. In an attempt to strike a new middle ground and counter API’s powerful messaging, the authors break down a more realistic approach to energy production and job creation through regional-specific solutions like efficiency, advanced automobiles, coastal restoration, and renewable energy.

The report isn’t meant to be a one-for-one jobs plan that directly counters every one of API’s employment assumptions. It also recognizes that fossil fuels are an enormously important part of our economy and will likely play a substantial role for some time to come. Instead, it tries to center our sights on a path forward that addresses environmental realities and recognizes the diversity of the American economy.

Here’s the basic premise:

The vision for America presented by the American Petroleum Institute and its supporters in Washington and across the country embraces a “drill-here,  drill-now” agenda without regard to the long-term economic and environmental  consequences or to the specific needs of America’s diverse regional economies. It ultimately is a shortsighted strategy that will not work. Diversifying away from these fossil fuels is an urgent and essential step to ensuring our long-term climate stability and economic competitiveness.

The solutions presented below point to a different road — one that highlights clean energy and stewardship as economic drivers that are as powerful as the fossil-fuel  industry, one that is available today and sustainable for tomorrow, and that bends us away from our current trajectory of global climate change and self-destruction.

This is a vision that is uniquely American. One of this country’s greatest strengths  throughout its history has been its huge size and resource diversity, and by capitalizing on the unique strengths of each region, we can harness this diversity to move toward a brighter economic and energy future.

The report looks at six regions and sectors: offshore wind on the Atlantic coast; energy efficiency in the Southeast; coastal restoration in the Gulf Coast; advanced vehicles in the Midwest; wind and solar in the Mountain West; and solar on the Pacific coast. It finds the potential for hundreds of thousands of jobs in these sectors — adding to the millions already found in the clean economy.

The report has its limitations. As a document designed to counter the narrative of API during the presidential election season, it was released too late. And as a true energy plan, it lacks a comprehensive strategy for transitioning us away from fossil fuels. (Organizations like the Rocky Mountain Institute are doing some fantastic number crunching in that area).

But there are some excellent solutions presented here with a proven ability to create jobs. And, in my opinion, the report does help establish a forward-thinking “middle” for discussing the future of energy policy.

Without tens of millions of dollars to spend flooding the airwaves and donating to campaigns, countering the messaging of powerful organizations like API is a daunting task. But analyses like this are a good start. And with enough collective work in this area, perhaps the political conversation can steer back to something a little more sane.

Obama Slams Romney For Letting ‘Oil Companies Write The Energy Policies’

Climate change was a no-show at the second presidential debate. But the candidates did get into a heated exchange over oil policies, prompted by a question on how to lower gas prices. Mitt Romney never answered how he would help with high gas prices because his solution to expand oil and gas drilling enriches oil but does virtually nothing to lower gas prices or protect consumers from price shocks.

At the debate, Obama pointed out that Romney’s energy plan “is to let the oil companies write the energy policies.” That is literally the case; from oil billionaire Harold Hamm to oil lobbyist Jack Gerard, Romney’s energy team is dominated by oil executives and lobbyists — and his energy policy is almost identical to the American Petroleum Institute’s.

Here’s what Obama said:

Now, Governor Romney will say he’s got an all-of-the-above plan, but basically his plan is to let the oil companies write the energy policies. So he’s got the oil and gas part, but he doesn’t have the clean energy part. And if we are only thinking about tomorrow or the next day and not thinking about 10 years from now, we’re not going to control our own economic future, because China, Germany — they’re making these investments. And I’m not going to cede those jobs of the future to those countries. I expect those new energy sources to be built right here in the United States.

After a year of disparaging American clean energy industries, Romney claimed the sector “will be an important part of our energy mix.” But Romney officially opposes policies like the wind production tax credit, which helps supports 37,000 wind jobs and has led to billions in private investment in the industry. Meanwhile, Romney favors oil industry tax credits and has endorsed the Republican plan to maintain $4 billion worth each year.

Romney has opened the door to the oil industry, which has rewarded him with financial support and campaign ads.

Groups backed by the oil industry have spent heavily, according to a ThinkProgress analysis of independent advertisements from Kantar Media’s CMAG system. These groups, American Energy Alliance, American Future Fund, Americans for Prosperity, Crossroads GPS, and Let Freedom Ring, have purchased at least $11.4 million worth in ads since April attacking Obama’s energy policies. The oil industry’s lobby, American Petroleum Institute, bought over $1.3 million ads since September 1, to promote fossil fuel policies. The Kochs have also personally pledged at least $60 million on Romney’s behalf.

Days before Romney released his drilling plan in New Mexico, he raised nearly $10 million campaigning for Texas oil money. That same plan included 154 mentions of oil, but just 24 mentions of wind and solar — 9 of them negative.

The Failure Of ‘Drill, Baby, Drill’: Wall Street Journal Reports ‘Oil Boom Providing Little Relief For Consumers’

U.S. oil production is on track to hit its highest level since 1993. What has that done to gas prices for consumers? Virtually nothing.

Yet again, analysts are pointing out the obvious: even with massive increases in domestic oil drilling, the impact on gasoline prices is minimal. That’s because oil is a global market and U.S. supplies — even with historic increases — still don’t make a major dent. The Wall Street Journal reports:

U.S. crude production is expected to rise 12% this year and 8% in 2013, when it will hit the highest level since 1993, according to government figures. The price of West Texas crude, the U.S. benchmark, has fallen 7% this year, held down by rising supplies from new drilling methods.

Yet gasoline prices currently average nearly $4 per gallon nationwide. Rising U.S. crude production may seem like an attractive antidote, but it is proving ineffective on its own at a time when the world’s appetite for energy remains voracious and Middle East tension is a reminder that supplies could be disrupted.

“Even the significant increase in U.S. production is a small part of the world oil market,” said Severin Borenstein, co-director of the Energy Institute at the Haas School of Business.

So what would happen if we built more pipelines to transport supplies around the country? Surely that would have an impact?

To be sure, unclogging the Midwest bottleneck wouldn’t necessarily have a big impact on retail gasoline prices nationwide, either. Even if far more Midwest oil could get to the wider market, the impact would be “in the pennies. A penny might be it,” said Mr. Borenstein.

Experts are saying, well, what experts have been saying for some time. Even if we opened up every inch of the U.S. to oil drilling, there would be minimal downward pressure on gas prices. According to a 2009 report from the Energy Information Administration, an aggressive offshore drilling policy would only lower the price of a gallon of gasoline by about three cents in 2030.

A recent investigation from the Associated Press found “no statistical correlation between how much oil comes out of U.S. wells and the price at the pump” when looking at more than three decades of data. The New York Times and the Wall Street Journal have also reported extensively on the failure of domestic oil drilling to lower gas prices.

However, reality can’t stand in the way of election-season posturing and gimmickry over gas prices. Last month, Americans for Prosperity held swing-state campaign events in which they offered consumers gasoline for $1.84 per gallon. The organization, which is backed by the oil baron Koch Brothers, absurdly claimed it is “Obama’s green energy policies” driving up the price of gas. In fact, we are drilling more oil under the Obama Administration than at any point under the George W. Bush Administration.

The evidence is clear. Despite what the oil industry and other interest groups representing fossil fuels claim, more domestic drilling is doing very little to help consumers.

House Republicans Claim New Limits On Oil Speculation Are A Waste Of Money

As part of the Dodd-Frank 2010 financial reform law, the Commodity Futures Trading Commission was directed to implement limits on oil speculation. Many analyses have shown that speculation has been a significant driver of recent spikes in oil prices.

A judge last week blocked the CFTC’s rules from taking effect on schedule, ruling in favor of a consortium of big banks and energy companies. The CFTC is considering appealing the ruling. However, Republicans are seizing on the judge’s ruling to claim that the CFTC’s efforts to limit oil speculation are just wasteful spending. Four House Republicans said in a letter:

Given the court’s finding that the CFTC failed to properly justify the rule, we are concerned that CFTC funds were prioritized to promulgate and defend a rule that was not central to the financial crisis…We are very concerned, in the wake of the financial crisis, that CFTC staff are using limited resources to pursue ideological and political goals rather than using the resources allocated by Congress to carry out the direct requirements of the agency.

These Republicans act as if the Dodd-Frank law did not instruct the CFTC to implement speculation limits, thus making it a “direct requirement” for the agency. But this is just part and parcel of the House Republican effort to scuttle Dodd-Frank by not providing regulators with enough funding to implement the law.

The House Republican budget, for instance, would force the CFTC to lay off 8 percent of its staff, while it already can’t handle its workload. “We’re way underfunded at the CFTC,” said Chairman Gary Gensler. “Imagine if, all of a sudden, there are eight times the number of teams on the [football] field, but only seven refs,” Gensler said. “There would be mayhem on the field. The fans would lose confidence.”

House Financial Services Chairman Spencer Bachus (R-AL) has even admitted that the agency doesn’t have the resources to do its job. But instead of providing those resources, it seems that the House GOP will be claiming that the rules themselves are a waste of money.

Why The ‘Get Rid Of All Energy Subsidies’ Argument Is A Political Distraction

Federal support for energy technologies has been a central piece of this year’s presidential and congressional campaigning. Since last week’s presidential debate, however, the issue become even more interesting.

Mitt Romney surprised many during the debate when he said that cutting billions of dollars in yearly tax breaks for the oil and gas industry would be “on the table.” Of course, he followed that up by grossly inflating federal investments for renewables and lying about the number of clean energy companies that went bankrupt.

Still, Romney’s statement is notable considering that he’s never said anything like it as a presidential candidate. (It’s also very likely that Romney — who once called himself “severely conservative” — made the comment only to Etch-A-Sketch himself back to being a centrist, as he tried to on almost every issue during the debate).

Yesterday brought another surprise comment on the issue from a prominent Republican. In a debate against his Democratic challenger last night, Fred Upton (R-MI), chairman of the House Energy and Commerce Committee, took Romney’s comments further and actually proposed an end to federal tax support for fossil fuels: “I’m for putting all of these on an even footing. Let’s look at the oil and gas subsidies, let’s take them away. Let’s let them compete just like everyone else at the same level.” Upton then went on to criticize government investments in renewable energy.

Like many other politicians who oppose federal support for clean energy, both Romney and Upton have previously protected tax breaks for the fossil fuel industry (Romney through his campaign, Upton through House votes). However, now that they’re being forced to message to the general electorate, both candidates are changing positions to make their opposition to renewable energy spending sound more reasonable.

Whether or not Romney and Upton are being sincere or just saying what may get them elected, they’ve added their prominent voices to a chorus of Republicans and conservative free-marketeers who want to see an end to all federal support for energy — mostly clean energy.

This argument is quickly becoming the new “center” of the debate. While a realistic conversation around how, how much, and how long to incentivize certain energy sources is absolutely necessary, it’s important that clean energy advocates not get pulled in to the question of if the government should lend its support to emerging industries.

As we’ve covered over and over, it’s preposterous to claim that the free market delivered us the energy system we have today. We’ve enjoyed cheap fossil fuels in part because of government’s attempts to bring the industry to scale. Over the last century, the federal government has practically given away land for extraction of coal, oil and gas; helped build infrastructure to transport fuels; and has provided a range of tax breaks, loan programs, and technical support for the fossil fuel industry. But now that the clean energy industry is asking for many of the same incentives in order to compete against an incumbent industry, hypocritical politicians call it “picking winners and losers.”

And that makes the second point so crucial. It’s important to remember why we’re putting federal and state support behind clean energy in the first place. We have to limit our use of fossil fuels within a pretty compressed time frame in order to transition to a low-carbon future and avoid irreversible climate change. Period. And that means providing support for renewable energy, efficiency and conservation while taking away support for the polluting resources causing the problem. Global warming pollution needs to be a loser since it is the greatest threat to human health and well-being. It’s as simple as that.

Of course, actual implementation isn’t so simple. Finding the appropriate level of federal support depends on where you sit on the political spectrum and how urgent you see the problem. But the problem is that politicians aren’t debating the most effective ways to support clean energy — they’re mostly just arguing about whether or not to support the sector at all. Therefore, the “middle of the road” political answer is to get rid of all support for energy. That’s a big mistake.

Clean energy advocates have reacted to this argument in a variety of ways. Grist’s David Roberts argues that it would be silly for the industry to give up support when fossil fuels have received a century of favorable treatment; prominent solar expert Jigar Shah believes that the renewable energy industry should gladly accept a phase-out or elimination of tax subsidies in exchange for the removal of federal tax support for fossil fuels; and Mark Muro of the Brookings Institution argued yesterday in the Wall Street Journal for a mid-term phase-out of clean energy incentives in order to maintain federal political support.

These three experts might disagree on the timing and extent of phasing out incentives. But they all agree that some level of support for clean energy is needed in order to address climate change.

And let’s not forget that a majority of Americans across the political spectrum support federal renewable energy investments and support putting a price on global warming pollution.

Moving forward, we must have a conversation around how to adapt federal support as the economics of clean energy continue to improve. But the “repeal all subsidies” argument is a political distraction from the real issue. We need to move away from fossil fuels, and we need to do so quickly — and that means continuing support for renewables and efficiency.

U.S. Oil Production Is At Highest Level Since 1997; Yet Gas Prices Remain ‘Stubbornly High’

American crude oil production is at its highest level since 1997, according to government figures reported today. The increase is being driven by innovations in hydraulic fracturing, which have allowed producers to access previously inaccessible oil deposits in shale formations.

This development is likely to be trumpeted by fossil fuel proponents as: a) the key to cheap gasoline prices; and b) a shining example of the free market working when government gets out of the way.

Don’t believe the hype.

Firstly, gas prices are still high, even with all this new crude output. Secondly, these hydraulic fracturing techniques driving the production boom didn’t just magically appear out of the free market — they were pioneered through many decades of government tax credits, loans, R&D programs, and mapping tools.

In other words, the two major talking points pushed by the fossil fuel industry (“cheap energy forever! Just let the free market decide!”) are proving to be vastly overblown.

Here’s the news on domestic production increases from Bloomberg:

Crude output rose by 3.7 percent to 6.509 million barrels a day in the week ended Sept. 21, the Energy Department reported today. America met 83 percent of its energy needs in the first six months of the year, department data show. If the trend continues through 2012, it will be the highest level of self- sufficiency since 1991. Imports have declined 3.2 percent from the same period a year earlier.

A combination of horizontal drilling and hydraulic fracturing, or fracking, has helped reduce America’s reliance on foreign oil. The same technology unleashed a boom in natural gas output from shale that pushed inventories to a record last year.

So domestic oil production is higher than when George W. Bush was ever in office. What has that done to gasoline prices? They’re still hovering at historic highs:

As a recent analysis from the Associated Press showed, there’s simply no correlation between increasing domestic oil production and falling gasoline prices. In March, AP took 36 years of Energy Information Administration production data and matched it with gas prices in the U.S. Here’s what they found:

Why do gas prices continue to rise even while domestic drilling increases? Because oil is a global market. Seth Borenstein and Jack Gillum of the Associated Press explain:

That’s because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.

When you put the inflation-adjusted price of gas on the same chart as U.S. oil production since 1976, the numbers sometimes go in the same direction, sometimes in opposite directions. If drilling for more oil meant lower prices, the lines on the chart would consistently go in opposite directions. A basic statistical measure of correlation found no link between the two, and outside statistical experts confirmed those calculations.

So therefore, you get what we see today: national average gas prices at $3.81 per gallon, even with stunning increases in domestic crude production.

“Prices are stubbornly high,” explained Tom Kloza of the Oil Price Information Service, speaking to Fuel Fix yesterday. “People are flummoxed.”

Gas prices are expected to drop a gradually this fall. But that decrease will be due mostly to extra refinery capacity coming online and a switch-over to cheaper winter-blend fuels.

That’s the statistically-proven reality. What does the Romney campaign think of it? Well, it has largely avoided the issue. Romney simply continues to claim that more domestic drilling will be the answer to higher energy prices.

“The best thing we can do to get the price of gas to be more moderate and not have to be dependent upon the cartel is: drill in the gulf, drill in the outer continent shelf, drill in ANWR, drill in North Dakota, South Dakota, drill in Oklahoma and Texas,” Romney continues repeating.

But we see right now that the “drill more, drill everywhere” plan isn’t working. According to the non-partisan Congressional Budget Office, the only way to protect consumers from higher energy prices is to use less oil through efficiency measures, conservation, and non-petroleum fuels:

Even if the United States increased production and became a net exporter of oil, U.S. consumers would still be exposed to gasoline prices that rose and fell in response to disruptions around the world.

In contrast, policies that reduced the use of oil and its products would create an incentive for consumers to use less oil or make decisions that reduced their exposure to higher oil prices in the future, such as purchasing more fuel-efficient vehicles or living closer to work.

Well, rats. Romney opposes those solutions.

One thing we know Romney loves is the “free” market. And throughout his campaign he’s tried to draw distinctions between the different energy sectors, claiming that that the boom in fossil fuel drilling is purely a product of free enterprise and the failure of a few government-backed clean energy companies is purely a product of “government picking winners and losers.”

“That’s what happens when government puts in hundreds of millions of dollars into an enterprise. They don’t understand how the free economy works,” Romney said in May, decrying a $535 million loan guarantee for the solar manufacturer Solydnra.

Of course, the story isn’t that simple. The fracking technologies enabling such a massive boom in domestic oil production were commercialized through tens of billions of dollars in government support over many decades. Following up on a recent Breakthrough Institute investigation, the Associated Press wrote a piece this week on the impact of federal investments:

“There’s no point in mincing words. Some people thought it was stupid,” said Dan Steward, a geologist who began working with the Texas natural gas firm Mitchell Energy in 1981. Steward estimated that in the early years, “probably 90 percent of the people” in the firm didn’t believe shale gas would be profitable.

“Did I know it was going to work? Hell no,” Steward added.

In 1975, the Department of Energy began funding research into fracking and horizontal drilling, where wells go down and then sideways for thousands of feet. But it took more than 20 years to perfect the process.

Alex Crawley, a former Department of Energy employee, recalled that some early tests were spectacular — in a bad way.

A test of fracking explosives in Morgantown, W.Va., “blew the pipe out of the well about 600 feet high” in the 1970s, Crawley said. Luckily, no one was killed. He added that a 1975 test well in Wyoming “produced a lot of water.”

Steward recalled that Mitchell Energy didn’t even cover the cost of fracking on shale tests until the 36th well was drilled.

“There’s not a lot of companies that would stay with something this long. Most companies would have given up,” he said, crediting founder George Mitchell as a visionary who also got support from the government at key points.

“The government has to be involved, to some degree, with new technologies,” Steward said.

Without consistent government support early on for a once “stupid” technology, the domestic oil boom we’re seeing today might not exist.

Fossil fuel interests have spent more than $150 million this year on the presidential campaign trying to convince Americans that we need to “let the oil companies do their thing” and we’ll all have endless, cheap energy. Those are nice, easy talking points. But they’re simply not based in reality.

American Wind Manufacturers Lay Off 1,100 Workers In One Month, Citing Expiring Wind Tax Credit

In just over one month, wind manufacturers in the U.S. have announced layoffs of more than 1,130 workers around the country. The layoffs come in states such as Colorado, Florida, and Iowa that are considered “battlegrounds” in national elections.

Every company shedding employees has blamed the looming expiration of the production tax credit for wind, which is set to lapse at the end of this year.

The latest announcement comes from LM Wind Power, a manufacturer based in North Dakota. The company said yesterday that it will lay off lay off 345 workers because of lagging demand for product. The company also cited the production tax credit, which Congress has failed to extend past 2012.

“It is important to emphasize that the challenging situation in the U.S. wind market is not specific to LM Wind Power, nor to Grand Forks manufacturing facilities,” said the company in an announcement. “The whole sector is affected.”

So far this year, companies in Arkansas, Colorado, Florida, Iowa, Kansas, North Dakota, Ohio, and Pennsylvania have all cancelled projects or laid off workers. In the last month alone, more than 1,334 manufacturing workers have lost their jobs. That tally comes from individual announcements made by companies since late August.

The world’s largest wind manufacturer, Vestas Wind, says it may lay off 1,600 American workers in the next year if the production tax credit is not extended. That temporary credit offers owners of wind farms 2.2 cents for every kilowatt-hour of wind generated. The American Wind Energy Association says the credit has helped raise $20 billion in private investment over the last five years, supporting 75,000 jobs.

However, according to analysis from a prominent consulting firm, the wind industry could shed up to 37,000 jobs if the wind tax credit is not extended past 2012.

As the layoffs continue, extension of the credit has become a major issue in the presidential campaign. President Obama wants to extend the credit; Republican challenger Mitt Romney wants to end it. Romney’s stance has raised major concerns from fellow Republicans who live in states where wind has been a major economic driver. According to the American Wind Energy Association, 81 percent of wind projects are installed in Republican districts.

Some voters are also saying that wind will play a role in how they cast their votes in the November elections.

The fight over wind credits has also uncovered major contradictions in national energy policy. While Congress continues to stall on extending the temporary production tax credit, many politicians opposed to federal wind investments continue to support permanent tax credits for the fossil fuel industry.

Earlier this month, 47 House Republicans sent a letter to House Speaker John Boehner (who’s home state supports more than 5,000 wind jobs) asking him to kill the production tax credit for wind. Out of the 47 Republicans calling for an end the wind investments, 46 voted last year against closing tax loopholes that let oil companies collect $4 billion in annual government support.

Fourth Largest Publicly Traded Oil Company Calls Arctic Offshore Oil Drilling A Potential ‘Disaster’

by Kiley Kroh

Total SA, the fourth largest publicly traded oil and gas company in the world, has become the first major oil producer to admit that offshore drilling in Arctic waters is a risky idea, telling the Financial Times yesterday that such operations could be a “disaster,” and warning other companies against drilling in the region.

The company’s CEO, Christophe de Margerie, said the risk of a potentially devastating oil spill was too high and that “a leak would do too much damage to the image of the company.” His note of caution marks the first time a major oil company has spoken out publicly against offshore exploration in the remote and fragile region.

Total’s message to a growing list of influential voices publicly expressing their opposition to offshore drilling in the Arctic Ocean.

• Last week a British parliamentary committee called for a halt to drilling in the Arctic Ocean until necessary steps are taken to protect the region from the potentially catastrophic consequences of an oil spill.  “The shocking speed at which the Arctic sea ice is melting should be a wake-up call to the world that we need to phase out fossil fuels fast,” said committee chair Joan Walley MP. “Instead we are witnessing a reckless gold rush in this pristine wilderness as big companies and governments make a grab for the world’s last untapped oil and gas reserves.”
• German bank WestLB announced it would not provide financing to any offshore oil or gas drilling in the region, saying the “risks and costs are simply too high.”
• Insurance giant Lloyd’s of London issued a report warning that responding to an oil spill in a region that is “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk.”

After spending nearly $4.5 billion and over five years pursuing exploratory drilling off Alaska’s northern coast, Shell Oil announced earlier this month that it would be forced to postpone exploratory drilling until next year after a series of mishaps with equipment and unpredictable sea ice in the region. But the debate is far from over. The company plans to use the remainder of the season drilling preparatory wells in order to resume exploratory operations as quickly as possible in 2013.

Though Total plans to continue with its natural gas ventures in the Arctic, saying gas leaks are easier to contain than oil spills, de Margerie’s warning should not be taken lightly. In addition to severe and unpredictable weather and the gaps in our scientific knowledge about oil spills there, the region also lacks the basic infrastructure necessary to respond to a disaster.

Watch a short documentary on the lack of infrastructure:

If the challenges posed by the fragile and untested Arctic — coupled with the warnings of major insurers, financiers, and legislative bodies — aren’t enough to hit the pause button on exploratory drilling in the Arctic Ocean, then perhaps a fellow oil company expressing its concern is final proof that the risks are too great to rush into drilling the world’s last unspoiled frontier.

Kiley Kroh is the Associate Director of Ocean Communications at the Center for American Progress.

Romney’s Adviser Complains About Company’s High Taxes — But It Pays Just 2.2 Percent

In a congressional hearing Thursday, Continental Resources CEO and Mitt Romney’s chief energy adviser Harold Hamm asked to preserve the oil industry’s billions in tax breaks, although his company pays little in federal taxes. The oil firm has earned more than $1.8 billion profit over five years by dominating the oil shale boom in North Dakota.

In his prepared testimony, Hamm defends tax breaks by pointing to his own company, saying, “Continental’s effective tax rate is 38%!” But according to Citizens for Tax Justice, Continental paid an average 2.2 percent tax rate, or $40 million, over five years.

Hamm claims a higher tax rate by including deferred taxes the company hasn’t paid. It’s a popular tactic, used by oil companies and the American Petroleum Institute. CTJ shows that Continental Resources has paid federal income taxes as low as 0.1 percent in the last five years:

While oil executives complain that they are “the highest taxed industry,” in reality, the two most profitable oil corporations pay less taxes than the average American. Hamm stands to financially benefit from the Romney’s policies, which preserves tax breaks for oil companies and may even allow drilling in national parks.

T. Boone Pickens Blasts Romney’s Energy Plan: ‘All They Talk About Is Oil’

Mitt Romney’s new energy plan amounts to “drill, baby drill” on America’s public lands and shores. His vision for energy follows that of his oil donors and chief energy adviser, shale oil baron Harold Hamm. Meanwhile, it neglects other sources of American energy, especially the growing wind and solar industries: The League of Conservation Voters counted Romney’s plan includes 154 mentions of oil, but just 24 mentions of wind and solar, 9 of them negative.

On Thursday, appearing on Morning Joe, billionaire investor T. Boone Pickens criticized Romney’s sharp focus on an oil-above-all strategy, at a time when the industry has never been better:

They missed the mark. All they talk about is oil. Oil, drill off the East Coast, West Coast, federal lands, everything [...] But our industry, in America, has done a fabulous job. I mean, we’re number three in the world on oil production: Saudi Arabia, Russia, United States. And here we are, our industry’s has done a fabulous job. And they don’t mention natural gas, in the whole release, it’s all about oil.

Watch the video:

Pickens, unhappy the Romney camp overlooks the country’s natural gas boom, pointed out that the oil industry is doing very well for itself. In 2011, five oil companies alone netted a record-breaking $137 billion profit. This year, domestic oil production reached its highest level in eight years, and imports have fallen to under 50 percent.

Romney’s single-minded focus on oil highlights his ties to oil billionaires like the Koch brothers, who are personally spending over $60 million on Romney’s behalf. Pickens, who has fueded with the Kochs before, called Koch Industries the “biggest deterrent to an energy plan in America.” The plan could deliver huge benefits to Hamm too, who is Romney’s chief energy adviser, his major super PAC donor, and worth billions from drilling in North Dakota.

Carbon: The Biggest Overlooked Fossil Fuel Subsidy

Figure 1: Global fossil fuel subsidies in billions of dollars per country from National Geographic.

by Dana Nuccitelli, via Skeptical Science

The International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subsidies than renewable energy in 2010. However, it appears that the IEA survey only included data from the countries with the largest fossil fuel subsidies, which are mainly developing countries whose economies largely depend on fossil fuel production.  National Geographic’s The Great Energy Challenge also includes fossil fuel subsidy data from developed countries (Figure 1), bringing the total global value close to $500 billion for 2010.

Bear in mind that exactly what is defined as a “subsidy” can be rather subjective, so these are just rough estimates.

It’s worth noting that this trend is changing.  For example, in the USA in 2011, fossil fuel subisidies in the form of tax breaks were down to $2.5 billion while renewable energy and energy efficiency programs received $16 billion in subsidies.  Even many developing countries like Iran (with the largest orange circle in Figure 1 at over $80 billion in 2010 fossil fuel subsidies) dramatically reducing their subsidizing of fossil fuels (in 2011 Iran’s subsidies were down to $20 to $30 billion).

Nevertheless, despite the movement in the right direction, global fossil fuel subsidies are still much higher than renewable energy subsidies, despite the fact that fossil fuels and associated technologies have been established for decades to centuries.  Fossil fuels also receive another massive subsidy which is rarely taken into account in these types of calculations – carbon emissions.

Social Cost of Carbon

As we know, carbon emissions impact people and our economies through their contribution to climate change through the increased greenhouse effect.  The climate change associated with these emissions has a myriad of effects (i.e. rising temperatures, changing precipitation patterns, more frequent extreme weather events, etc.), many of which result in bad effects on people.

It’s very challenging to quantify the total dollar impact of these changes, but economists try to estimate the economic damage done by a each ton of carbon (or carbon dioxide) emissions, which they have termed the “social cost of carbon” (SCC).  SCC is effectively an estimate of the direct effects of carbon emissions on the economy, and takes into consideration such factors as net agricultural productivity loss, human health effects, property damages from sea level rise, and changes in ecosystem services.

SCC estimates generally range from $5 to $68 per ton of CO2 emitted, though a few more conservative ecoomists put the figure lower, and some economists argue it could potentially be much higher in the near future.

The Huge, Overlooked Fossil Fuel Subsidy

Global CO2 emissions from fossil fuels in 2011 totalled 31.6 billion tons.  Given the SCC range of $5 to $68 per ton of CO2, those emissions correspond to a cost of $158 billion to $2.1 trillion per year, globally – roughly $23 to $300 per person.  Note that the IEA and National Geographic listed global fossil fuel subisides at $400 to $500 billion.  The central estimate of the social cost of carbon emissions is roughly twice that total.

These carbon emissions may reasonably be considered a subsidy because they impose various costs on society (on agricultural productivity, property damage, human health, etc.), but since most countries don’t yet put a price on carbon emissions, these costs are not reflected in the fossil fuel market price.  Rather than fossil fuel producers and consumers paying these costs, society as a whole picks up the tab.  Therefore, fossil fuel prices are kept artificially low (Figure 2), which is generally the purpose of subsidies.

Figure 2: Average US coal electricity price vs. Muller, Mendelsohn, and Nordhaus (2011) and Epstein (2011) best estimate coal external costs.

Fossil Fuel Industries Benefit, You Pick Up the Tab

However, with all subsidies, somebody has to pick up the tab.  Usually it’s taxpayers who provide the funds to implement the subsidy, but in this case it’s everyone who is adversely impacted by climate change, which is basically everybody in one form or another.  For example, you pay higher food prices as climate change impacts agriculture (i.e. wheat prices rose as a direct consequence of the 2010 record Moscow drought, heat wave, and wildfires).

Worse yet, as Samson et al. (2011) showed, the countries with the lowest CO2 emissions will generally experience the largest associated climate impacts (Figure 3).

Figure 3: Top Frame - National average per capita CO2 emissions based on OECD/IEA 2006 national CO2 emissions (OECD/IEA, 2008) and UNPD 2006 national population size (UNPD, 2007). Bottom Frame: Global Climate Demography Vulnerability Index. Red corresponds to more vulnerable regions, blue to less vulnerable regions. White areas corresponds to regions with little or no population (Samson et al 2011).

Carbon – the Forgotten Fossil Fuel Subsidy

It’s rather rermarkable that everyone tends to overlook this immense fossil fuel subsidy, which amounts to somewhere in the ballpark of $1 trillion per year at present, globally.  It’s certainly a difficult figure to quantify with a large possible range of values, but it’s also a huge cost which fossil fuel producers and consumers do not directly pay.  While the market price of fossil fuels remains artificially low, we all pick up the tab to the tune of approximately $150 per person per year, on average, though those costs are unevenly distributed.  However, Economics 101 says that the people who benefit from those emissions (fossil fuel consumers) should be the ones paying their cost through a price on carbon emissions.

Climate contrarians in particular tend to neglect this huge fossil fuel subsidy in two main ways.  First, they claim that developing nations need “cheap” energy (a favorite argument of John Christy, for example), when fossil fuel energy is not actually cheap, and in fact poorer nations tend to pay the lion’s share of the associated climate costs (Figure 3).  Second, they claim that it will be cheaper to adapt to climate change than to mitigate carbon emissions (i.e. Monckton, Michaels and Cato, and the CEO of ExxonMobil have recently made this argument).  In this context, “adaptation” means continuing the economic drain of these hundreds of billions to trillions of dollars of fossil fuel subsidies every year, which is several times higher than the cost of climate mitigation.

Most importantly, until we put a price on carbon emissions (and to their credit, a few countries and regions have), fossil fuels will remain extremely heavily subsidized at a time when we need to be quickly phasing out our reliance on them.

This piece was originally published at Skeptical Science and was reprinted with permission.

Economists: Iran’s Oil Revenues Could Fall By Half Under New Sanctions

Yesterday, new U.S. sanctions kicked-in barring global financial institutions from doing oil business through Iran’s central bank. On Sunday, a total European Union embargo on Iranian oil comes into effect. The world has, more or less, lined up behind these measures.

Now, economists are saying that these latest rounds of international sanctions could gut Iran’s oil-revenue-based economy. Jamie Webster, a senior manager of the Markets and Country Strategies Group at PFC Energy, told RFE/RL’s Golnaz Esfandiari:

A lot of these countries have already started to back out and essentially completed the backing out of that crude. So that’s around 600,000 barrels a day. Previously, before all of this latest rash of sanctions, Iran was exporting around 2.2 million barrels a day, so that is affecting them…

Another energy economist, Robin Mills, told Esfandiari that European firms’ refusal to insure Iranian oil tankers will also hurt Iranian oil sales to Eastern countries such as Japan and China, perhaps costing Iran another 400,000 barrels a day of exports. With prices of crude oil falling, that could mean Iran’s oil revenues fall by half, Mills said:

[O]il prices, which were very high in March, have fallen back quite significantly, so that’s a kind of a double impact.

So it could be that Iran’s oil revenues which were perhaps something like $100 billion to $110 billion during the last Iranian year, in this year they could be down to $45 billion to $50 billion, so the oil revenues could be cut in half overall with the combination of lower exports and lower prices.

Iran hawks in the U.S. calling for confrontation won’t even acknowledge that exports are down. Forget that the U.N.’s energy agency says Iran’s exports are down 40 percent, the stance that sanctions have no teeth willfully ignores even pronouncements by an Iranian official that exports are down between 20 and 30 percent. (The Iranians rarely acknowledge any economic pain at all, let alone from sanctions.)

The dual-track of pressure and diplomacy pursued by the Obama administration is based on the notion that a potential Iranian nuclear weapon is widely considered a threat to both the security of the U.S. and its allies in the region, as well as the nuclear non-proliferation regime. U.S., U.N. and Israeli intelligence estimates give the West time to pursue an approach other than war. Questions about the efficacy and potential consequences of a strike have led U.S. officials to declare that diplomacy is the “best and most permanent way” to resolve the crisis.

Obama Administration’s Plan For Arctic Offshore Drilling Safety: ‘I Believe There’s Not Going To Be An Oil Spill’

With virtually no infrastructure available to clean up an oil spill in the sensitive Arctic, the Obama Administration is still pushing to get offshore drilling projects developed in the region.

What’s the messaging strategy from the Administration? Trust Shell.

Talking to reporters about exploration permits for Arctic waters yesterday, Interior Secretary Ken Salazar summed up the Administration’s approach: “I believe there’s not going to be an oil spill.”

Really?

Shell has faced more legal prosecutions for safety and environmental transgressions than any other major oil company drilling offshore in the North Sea.

And let’s remember, the Arctic is a place where the Coast Guard has warned “if [a spill] were to happen … we’d have nothing. We’re starting from ground zero today.”

Heck, even one of the world’s largest insurance pools refuses to back offshore drilling operations in the Arctic, saying the environment is “highly sensitive to damage” and that the risk is “hard to manage.”

Discussing the technique of foreshadowing, Russian playwright Anton Chekhov once wrote: “If in the first act you have hung a pistol on the wall, then in the following one it should be fired.”

As we see in the graphic below, Obama already proved himself a master of foreshadowing in the lead up to the Deepwater Horizon disaster. Let’s hope Salazar doesn’t do the same. (Hat tip to Greenpeace’s Joe Smyth for the image).

Why All Oil Is Foreign

Golson, via Flickr

by KC Golden, via the GRIP blog

When the political class focuses on the perils of fossil fuel dependence, they almost always use the word “foreign” before “oil”.  This is redundant.  Oil is inherently foreign.  All of it.

Oil is foreign to democracy. In an election cycle flooded by unrestricted political money, oil money stands out as the biggest gusher.  The Supreme Court struck down Montana’s law limiting corporate spending on campaigns yesterday, so the blowout of oil’s influence will remain uncapped for the foreseeable future.   In America and around the world, oil and freedom do not mix.  Because it concentrates wealth, facilitates abuse of power, breeds dependence, and crushes democracy, oil is fundamentally foreign to the American creed.

Oil is foreign to the atmosphere, air, and water. Burning oil releases about 85 billion pounds of CO2 to the atmosphere per day, all of which has been foreign to our climate for many millions of years.  The planet that existed when that carbon was aloft was a very different place, as foreign as, oh, Jurassic Park.  And some oil doesn’t get burned because it leaks out along the way, causing the waterways of home to turn toxic, hostile, and foreign (see Inside Climate’s blockbuster story on the underreported ”Dilbit Disaster” in Michigan.)

Oil is foreign to economic security. The U.S. has less than 5% of the world’s population, about 2% of proven conventional oil reserves, and consumes about 20% of the oil produced.  Prices are set on world markets and heavily influenced by oilogopolistic producers, regardless of where the oil comes from.  Those producers have us over a barrel as long as we need the stuff.

Oil is foreign to local economic vitality. The overwhelming majority of Americans live in communities that are hemorrhaging economic resources in order to pay for oil.  Here in King County Washington, for example, our economy will lose north of $5 billion this year to fetch oil – roughly the size of the entire County budget.  A tiny handful of Americans live in communities where oil brings in more money than it sucks out.

Oil is foreign to the intergenerational contract. Any economic value derived from expanded oil trafficking is confiscated from the many generations who will have to pay the exorbitant costs of living in an unstable climate.  They will not be amused.  Estimates of the economic value of unchecked climate change are enormous but fuzzy; there is no satisfying way to monetize the intergenerational abuse.

Regardless of where they poke the holes, oil is not yours.  It’s not mine.  It’s ExxonMobil’s and OPEC’s and the Koch’s.  Wherever the next fix happens to come from, they will use it to extract record profits, destroy the climate, and maul our democracy.

Drill here, drill there, it doesn’t matter. The whole damned business is foreign to our national interests, to our values, to our future.

KC Golden writes for the GRIP blog. This piece was originally published at the GRIP blog and was reprinted with permission.

Dept. Of Interior Finds 72 Percent Of Offshore Acreage Leased By The Oil Industry Is ‘Idle’

by Daniel J. Weiss

The Department of Interior released an updated analysis of fossil fuel leases today, finding that more than two thirds of offshore leases and half of onshore leases are sitting idle — “neither producing nor under active exploration.”

The report, “Oil and Gas Lease Utilization, Onshore and Offshore Updated Report to the President,” explained that oil and gas companies hold thousands of undeveloped leases. Despite holding these inactive leases, the oil industry continues to demand the opening of new, previously protected federal lands and waters areas to drilling.

The report found that:

More than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.

In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.

According to the Energy Information Administration, total federal oil production (offshore and onshore) has increased by 13 percent during the first three years of the Obama administration combined, compared with the last three years of the previous administration. According to independent analysis, the total number of active rigs operating on the U.S. outer continental shelf was higher in January 2012 than any time since May 2010.

The American Petroleum Institute – Big Oil’s lobbying arm — claims that the Department of Interior ignores exploratory work on leases; however, that is clearly included in DOI’s assessment above.

API recently demanded that the Obama Administration open up the North Atlantic to “seismic exploration” for oil. This is an area that supports vital American fisheries.

In addition to holding thousands of undeveloped leases while lobbying to drill in the Arctic National Wildlife Refuge, off the New England Coast, and in the Eastern Gulf of Mexico, the big five oil companies produced 12 percent less oil in 2011 than in 2006 — all while making record profits.

Daniel J. Weiss is Director of Climate Strategy at the Center for American Progress Action Fund.

Inhofe Staffer Asks Oil Lobbyist ‘Partners’ For ‘Better Coordination And Communication’

Republicans are the default choice for oil and gas dollars, having received 88 percent of the industry’s political contributions in 2011. In return, House and Senate Republicans block regulations the industry deems a potential threat.

In an April 23 e-mail acquired by National Journal, a staffer for Sen. James Inhofe (R-OK) called on the industry to utilize their partnership to coordinate attacks on the White House:

Senate Republicans, who led a successful fight this spring against Obama’s proposal to repeal billions of dollars in tax subsidies enjoyed by major oil companies, felt betrayed by the industry’s collaboration with the White House on fracking regulations. The e-mail to top oil and gas lobbyists made that unhappiness clear, and it suggested that the industry was being duped.

“Moving forward, we—your partners—would kindly ask for better coordination and communication from you to prevent the Obama administration from pulling similar stunts in the future,” wrote Inhofe aide David Banks in the 800-word e-mail to two dozen lobbyists.

Some lobbyists apparently “cringed” at the wording. But coordinated attacks on behalf of Big Oil interests are nothing new, even if lawmakers don’t usually use such frank language. A host of EPA pollution regulations have faced congressional opposition, including Inhofe’s resolution to prevent new limits on mercury pollution in power plants. Inhofe, a well-known climate denier, is also one of the top recipients of oil and gas contributions with well over $1 million for his career.

Earlier this year, the Republican-Big Oil partnership played out in the Senate’s vote on oil subsidies, when 47 Senators — mostly Republican — blocked the vote. Those Senators over four times the oil and gas money than lawmakers supporting an end to the oil industry’s permanent tax breaks.

CBO Report: Boosting Oil Production Won’t Protect Americans From Gasoline Price Shocks

More domestic drilling does not make America less susceptible to global supply disruptions or protect consumers from gasoline price volatility, according to a new analysis from the Congressional Budget Office.

The CBO report reviewed different policies intended to make the country more energy secure, concluding that the only effective tool for shielding businesses and consumers from price spikes is to use less oil.

Because oil is sold on the global market, CBO concludes that increasing domestic oil production would do little to influence rising gas prices in the U.S.

These findings back up historical experience. According to an analysis of 36 years of gasoline prices and domestic oil production conducted by the Associated Press, there is zero statistical correlation between increased drilling and lower prices at the gas pump.

The CBO report creates a dilemma for drilling proponents. Even if increased drilling did substantially lower gas prices — which it has not –  the agency says those lower prices would actually make the country less secure from price shocks:

Policies that promoted greater production of oil in the United States would probably not protect U.S. consumers from sudden worldwide increases in oil prices stemming from supply disruptions elsewhere in the world, even if increased production lowered the world price of oil on an ongoing basis. In fact, such lower prices would encourage greater use of oil, thus making consumers more vulnerable to increases in oil prices. Even if the United States increased production and became a net exporter of oil, U.S. consumers would still be exposed to gasoline prices that rose and fell in response to disruptions around the world.

In contrast, policies that reduced the use of oil and its products would create an incentive for consumers to use less oil or make decisions that reduced their exposure to higher oil prices in the future, such as purchasing more fuel-efficient vehicles or living closer to work. Such policies would impose costs on vehicle users (in the case of fuel taxes or fuel-efficiency requirements) or taxpayers (in the case of subsidies for alternative fuels or for new vehicle technologies). But the resulting decisions would make consumers less vulnerable to increases in oil prices.

The solution is clear: the only way to make America more energy secure is to use less energy.

Even Mitt Romney understood this in 2007 when he admitted that “these high gasoline prices are probably here to stay” and advocated 50-mpg fuel efficiency standards, public transportation, electric vehicles, and renewable alternatives.

However, today, Romney champions opening up virtually every possible area of the U.S. to oil drilling — disingenuously claiming it will make consumers more secure.

“The best thing we can do to get the price of gas to be more moderate and not have to be dependent upon the cartel is: drill in the gulf, drill in the outer continent shelf, drill in ANWR, drill in North Dakota, South Dakota, drill in Oklahoma and Texas,” Romney said at a recent campaign stop.

Even as the analysis piles up showing that increased domestic drilling is not an effective solution to high gas prices or energy security, political leaders continue to repeat these false claims.

We need creative, proven ideas to help us make America more efficient and less dependent on oil — not a hollow Drill-Baby-Drill mantra that does nothing to address the problem.

Related Posts:

• Murdoch’s Wall Street Journal and Koch-Fueled Cato Agree: “It’s Not Obama’s Fault That Crude Oil Prices Have Increased”
• GOP: ‘You Think We’re Going To Have A Press Conference Now To Congratulate The Administration For Decreasing Gas Prices?’

Iran Stores Oil In Tankers As Sanctions Tighten

Reuters estimates that 56 percent of Iran’s oil tankers — a capacity of 33 million barrels — are being used to store crude offshore as buyers cut back because of sanctions. Sources familiar with Iran’s main oil export terminal tell Reuters that 14 of National Iranian Tanker Company’s (NITC) fleet of 25 “very large crude carriers” each with a capacity of about 2 million barrels, are now anchored as floating storage. Five of Iran’s Suezmax tankers, with capacity of one million barrels per ship, are also parked offshore. The use of oil tankers as floating storage would indicate that Iran is experiencing increasing difficulty in finding customers for its crude as international sanctions tighten on Iran’s oil exports.