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Gulf royalties targeted again
David Ivanovich, Houston Chronicle
The House on Friday resurrected a plan to go after scores of oil and gas companies that have been pumping crude in the Gulf of Mexico royalty-free.
By a vote of 231-191, the House approved a massive farm bill designed to funnel billions of dollars in aid to American farmers.
The legislation would provide $2.4 billion over five years to promote greater use of clean energy sources such as wind, solar and biomass.
These provisions, argued Andy Olsen, senior policy advocate for the Chicago-based Environmental Law & Policy Center, would help address energy security and environmental and rural economic development concerns.
To help pay for these measures, the bill reaches back to a portion of an energy bill the House passed in January soon after Democrats took control.
That language tries to address an error by the U.S. Minerals Management Service that already has cost federal coffers over $1 billion. The agency neglected to include price triggers in lease agreements signed in 1998 and 1999, which would have forced operators to pay royalties when oil and natural gas prices reached certain thresholds.
While some of these companies have reached new agreements with the federal government, others have not.
(27 July 2007)
Coal’s doubters block new wave of power plants
Rebecca Smith, Wall Street Journal
From coast to coast, plans for a new generation of coal-fired power plants are falling by the wayside as states conclude that conventional coal plants are too dirty to build and the cost of cleaner plants is too high.
If significant numbers of new coal plants don’t get built in the U.S. in coming years, it will put pressure on officials to clear the path for other power sources, including nuclear power, or trim electricity demand, which is expected to grow 1.8 percent this year.
… as plans for this fleet of new coal-powered plants move forward, more and more are being canceled or delayed. Coal plants have come under fire because coal is a big source of carbon dioxide, the main gas blamed for global warming.
Recent reversals in Texas, Florida, North Carolina, Oregon and other states have shown coal’s prospects are dimming. Nearly two dozen coal projects have been canceled since early 2006, according to the National Energy Technology Laboratory in Pittsburgh.
It’s hard to say how many proposed plants never will be built. Some projects suffer deaths when permits are denied. Many more wither away, lost in the multiyear process of obtaining permits, fending off court challenges and garnering financing.
…For now, coal companies haven’t taken steps to ratchet back production or big projects because of coal plant delays. They believe that in a time of global energy concerns, U.S. coal supplies will be seen as too important to dismiss. The U.S. has the world’s largest coal reserves and is sometimes called “the Saudi Arabia of coal” by energy industry observers.
Roadblocks for coal put greater attention on other energy sources. The U.S. power industry is exploring building more nuclear plants. But those plans are several years away, and nuclear power currently provides only about a fifth of U.S. needs. Other sources, like wind, don’t provide around-the-clock energy, while solar is expensive and isn’t yet capable of producing large amounts of electricity.
That puts the focus on natural gas. “Gas is the bridge fuel” that will step in if coal stumbles, said Marc Spitzer, a member of the Federal Energy Regulatory Commission, regulator of the nation’s wholesale gas and electricity markets.
(29 July 2007)
To dismay of power utilities, coal emissions are under fire
Albert Raboteau, Roanoke Times (Virginia)
The emergence of global warming as a mainstream concern has altered the political landscape for coal – the abundant domestic fuel that provides half the nation’s electricity and is a major driver of the economy of far Southwest Virginia.
Just two months ago the U.S. Department of Energy issued a report highlighting coal’s “resurgence” in electricity generation. In recent years, natural gas-fired power plants have been more likely to be built, but that fuel has become more expensive. The report predicted coal would account for 59 percent of new generation between 2005 and 2030.
But increasing worries about global warming caused by emissions from power plants, automobiles and other sources could pose a roadblock for the roughly 150 coal-fired power plants that have been proposed to satisfy rising electricity demand. This month, Citigroup downgraded coal company stocks, citing the politics of global warming among other factors.
Power companies are coal’s largest customers, so new laws would make it more expensive to burn coal relative to other fuels, especially natural gas, and could have a major impact on the industry.
Several states have taken steps to make it tougher to build conventional coal-fired plants, and there are multiple bills intended to curb carbon dioxide emissions circulating on Capitol Hill.
One of coal’s defenders in Washington has been U.S. Rep. Rick Boucher, a Democrat representing Virginia’s 9th District, which covers much of Southwest Virginia. Boucher heads the House Subcommittee on Energy and Air Quality. He is working on a bill that would phase in restrictions on carbon emissions in a way that would maintain coal’s attractiveness to utilities.
“It is critically important that we retain the complete ability of electric utilities to burn coal now and in the future in whatever quantities they desire,” Boucher said, “and that ability is not inconsistent with making a substantial contribution as a nation to reducing greenhouse gas emissions.”
(29 July 2007)
