Third Way Perspectives

Subscribe via RSS

Posts Tagged ‘oil’

Energy Policy after 2012

October 23rd, 2012

by and

Summary points

  • Thanks to continued partisan gridlock, major congressional action on energy is unlikely after the 2012 elections. However, this could change if there is a deal to address the budget deficit or if one party makes significant gains in seats.
  • Domestic oil and natural gas production will continue to grow under either Barack Obama or Mitt Romney.
  • A second Obama administration would be likely to seek to accelerate the commercialization and deployment of clean energy through a mix of tax incentives, encouraging private financing, and regulation of conventional and climate pollutants.
  • A Romney administration would be likely to focus on increasing domestic conventional energy production by reducing environmental regulation, particularly on coal-burning power plants, and opening more public land to oil and natural gas development. Excluding basic research, government incentives for clean energy would most likely be eliminated.

Introduction

In 2008, the price of natural gas in the United States was roughly $8 per thousand cubic feet (tcf), coal was used to generate more than 47 per cent of all electricity, and there was a consensus among Democrats and Republicans that climate change was real, caused by humans, and needed to be addressed immediately. It seemed only a matter of time before the country adopted a cap-and-trade system similar to one backed by both parties’ presidential nominees.

Four years later, the energy landscape has changed dramatically. Cap-and-trade is on the ash heap of history, and climate change and clean energy have become enormously politicized. The price of natural gas has dropped as low as $2.25 per tcf thanks to the hydraulic fracturing drilling process (fracking) that has given the United States access to more than 500 trillion cubic feet of natural gas and sent domestic coal use into a precipitous decline. That same fracking technology has led to a domestic oil boom, with imports dropping to 42 per cent of use, the lowest level in two decades. Clean energy, particularly wind and solar, also saw a boom in the early years of the Obama administration thanks to the American Recovery and Reinvestment Act of 2009 (ARRA).

The growth in domestic shale oil and gas production seems inevitable. But the broader future of US energy faces much more uncertainty. There are enormous differences in how the two candidates would approach regulation of energy production and generation, climate change and America’s competition in the global clean energy race. Polling shows that these issues will have little impact on the decisions voters make. But they will have enormous implications for the price and source of the energy Americans consume, the success of America’s energy industries and the fate of international efforts to stem climate change.

Read the rest of this entry »

Congress Stands in the Way of All of the Above

June 5th, 2012

by

By Ryan Fitzpatrick and Josh Freed

This piece was originally posted on the National Journal.

A more appropriate question this week could be, why are Republicans in Congress standing in the way of a booming American energy sector?

In the last three years, we’ve seen significant progress in the building of a modern, cleaner, and domestic American energy infrastructure. The license for the first new nuclear reactors in the U.S. in more than a generation was approved. Natural gas exploration and use has skyrocketed. Installed clean energy grew by 28% from 2006 to 2011 and the US ranked first in clean energy investment. Conventional cars in the US use less gasoline and American drivers can choose between a variety of hybrid and electric vehicles. Advanced research programs like ARPA-E have drawn private investment off of the sidelines and into the energy economy. Read the rest of this entry »

Plenty of Blame to Go Around

March 19th, 2012

by

This piece originally appeared in National Journal.

Who’s to blame for rising gas prices? No one. And everyone. The recent spikes we’re all seeing as we drive around are unavoidable. They are the consequence when there are no other widely available options to fuel our cars, trucks, and airplanes. As we noted in a recent paper, Why We Face More Pain at the Pump, current price spikes are the result of worries about renewed conflict in the Middle East, a growing global economy, and refineries going offline.

On the Middle East:

The oil market is spooked. Why? Tensions with Iran over their continued development of nuclear weapons, and Iran’s threats to cut off oil to Europe and close the Strait of Hormuz. Closing the Strait would shut off the shipping route for 20% of the world’s oil, dramatically curtailing supply. [Read more about the possible effects of war with Iran in our recent report Keeping Our Powder Dry] In 2011, the civil war in Libya had a similar impact on oil prices, despite the fact that Libya only accounted for 2% of global oil supply.

On the global economy:

Through the end of 2011, markets were frightened by the prospect of a Greek default pulling Europe, and the world, into a deep recession. This helped keep oil and other commodity prices down. In mid-February 2012, the European Union agreed to provide Greece an additional round of bailout funding to meet its debt obligations. With an economic crisis seemingly averted, economists anticipate that the global economy, and the demand for oil, will begin to grow more quickly in 2012.

On refineries:

Every year, domestic refineries take a time-out in the spring to perform maintenance and switch to a summer blend of gas. This year, a host of refineries began maintenance early, disrupting gas supplies earlier than usual. At the same time, several refineries are closing because high oil prices have destroyed their profit margins.

Our nation must begin to provide alternatives to gasoline. Whether the option is natural gas, electricity, or biofuels, forcing oil to compete for consumer dollars, would drive prices down. Will the price spikes caused by Middle East hostility, economic recovery, and refinery shortfalls be enough to move Washington to act? Only time will tell. I for one will be buying a Volt or Prius as soon as I can.

Ready-to-Tweet: Recent Actions to Reduce the Burden of Gas Prices

March 15th, 2012

by

Increasingly, important and complicated policy debates in Washington are being reduced to sound bites or even tweets. The debate over skyrocketing gas prices is no exception. As we outlined in a recent memo, there is not much that can be done to reduce the immediate impact of high gas prices. There is, however, a lot that can be done to kick the oil habit once and for all over the long-term. We’ve included a list of steps the government has taken over the last three years below, in a handy Tweet-able format.

Kicking the Oil Habit with Alternative Fuels

The US SuperTruck program will save trucks $15,000 in fuel costs every year http://tinyurl.com/7j4vesb

Increased tax breaks to families and companies that buy alternative fuel vehicles up to $10000 from last year’s $7500 http://tiny.cc/min4aw

Feds getting off of oil: By 2015, 100% of government vehicles to run on alternative fuels http://tiny.cc/3en4aw

Save money at the pump, go electric: Feds and private sector to develop car battery that’s ½ price, 300 miles/charge http://tiny.cc/cln4aw

4 commercial biorefineries are 1 year ahead of schedule. Will produce nearly 100 million gallons of biofuels/year http://tinyurl.com/8xkhu52

Recovery Act grant recipients purchased 1,286 buses and vans powered by clean tech like biodiesel and natural gas http://tiny.cc/0qn4aw

Increasing Domestic Oil and Gas Production

Domestic oil production has increased every year President Obama has been in office http://tinyurl.com/7reblq8

Since 2009, the United States has been the world’s leading producer of natural gas http://tiny.cc/u1n4aw

Currently, the U.S. has a record number of oil and gas rigs operating – more than the rest of the world combined http://tiny.cc/p9n4aw

We have already cut net imports of oil and gas by ten percent – 1 million barrels a day – in the last year alone http://tinyurl.com/8ywheaw

Last year the US was a net exporter of refined petroleum products for the first time in sixty years http://tiny.cc/jco4aw

In 2008, US imported 11 million barrels of oil/day. By end of last year, that number fell to 8.4 million barrels/day http://tiny.cc/oeo4aw

Natural Gas STAR Program encourages companies to adopt safe practices and technologies to reduce methane emissions http://tiny.cc/kjo4aw

Natural Gas STAR partners reported domestic emissions reductions of 86 Bcf, worth over $421 million, in 2009 http://tinyurl.com/2bnwwk

Rapid development of oil and gas spurred by shorter lease terms http://tinyurl.com/6rj73so

The Administration has tied lease-extensions for oil and gas to lessee investment in exploration and development http://tinyurl.com/5ubvep8

New Admin proposal would reward rapid development of oil and natural gas through new royalty structures http://tinyurl.com/769qbup

Increasing Fuel Efficiency

Higher fuel standards mean filling up less often – by middle of next decade cars will average almost 55 miles/gallon http://tiny.cc/lno4aw

The Obama Administration has put in place the first-ever fuel economy standards for heavy-duty trucks http://tiny.cc/mqo4aw

New CAFE standards for passenger vehicles will save drivers more than $8000 in fuel costs http://tiny.cc/iso4aw

Heavy duty fuel economy standards will reduce oil consumption by over 500 million barrels http://tiny.cc/ruo4aw

Election Offers Opportunity

January 10th, 2012

by

This piece was originally posted in National Journal

This year’s election is an opportunity to ditch the snake oil and talk straight to voters about gas prices, an issue which keeps taking a bigger bite out of Americans’ budgets. After a decade of hearing about short-term solutions that are only as good as the last price on the gas station sign, the driving public is ready for something different; putting us on the path for a real choice in the fuels we use offers that.

Read the rest of this entry »

Conservatives, Media Missing the Boat on Clean Energy

November 18th, 2011

by

This piece was originally posted on the Huffington Post.

Demand for energy resources in the rest of the world, and especially developing nations, is growing rapidly. Like Willie Sutton robbing banks because “that’s where the money is,” emerging economic powers like China and India are racing to secure the oil, coal, and natural gas they use because that’s where the economic growth is. But as this competition for limited fossil fuel resources heats up, the media and conservative politicians are increasingly questioning federal investments in clean energy. Using selective facts and a very narrow definition of national interest, they argue that public incentives for clean energy are a bad bet.

The criticisms of investing in clean energy ignore that our nation is on an unsustainable energy path and that for our economy, national security, public health and, yes, environmental interests, we must diversify our energy portfolio. Our nation’s energy infrastructure today is essentially reliant on coal, oil and natural gas — three natural resources that are in dramatically increasing demand around the world. This has nothing to do with peak oil. The world is racing headlong into a bidding war for energy. The only entity both able and empowered to halt the march is the federal government. Read the rest of this entry »