Morning Energy News – May 12, 2011
Only numbers I trust coming out of DC are the mile markers on I-95 — new report says increasing tax will not affect gas prices New York Times (5/11/11) reports: Senate Democrats have a new weapon in their escalating oil and gasoline war with Republicans, though some party members are none too happy with their leadership’s offensive against the major oil companies…Trying to counter Republican claims that ending some tax breaks for the five largest oil companies would ultimately hurt consumers, Democrats are now armed with a Congressional Research Service report that predicts a negligible impact on the price of gasoline if the changes are carried out…The document, sent to Senator Harry Reid, the Nevada Democrat and majority leader, said that with the cost of oil over $100 per barrel, “prices are well in excess of costs, and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.”…In a review of the five specific tax changes being advocated by Democrats, the research service also said that tightening the tax code would make a very small dent in the huge revenues of the industry and that the price of oil hinged on many other, larger considerations.
The oil tax increase was summed up by Sen. Landrieu in a word — “laughable” The Hill Sen. Mary Landrieu (D-La.) called the Democratic plan to scrap tax breaks for the big five oil producers to pay down the deficit “laughable” and derided states that complain about gas prices while producing no energy themselves…“I see what our states produce and these people produce nothing, or virtually nothing — and you ask me can I vote for a bill like this?” asked Landrieu from Senate the floor on Wednesday, comparing the major energy-producing states with non-energy producing states…“No,” said Landrieu, answering her own question. “Not only can I not vote for it. It’s laughable.”…The Democrats’ plan, which may come to the floor this week, was authored by Sen. Robert Menendez (D-N.J.). It would require oil companies to pay taxes for drilling on federal land and remove tax deductions for companies that drill in foreign countries. In all, it would raise about $20 billion, which would be directed toward deficit reduction….Louisiana is one of the highest energy-producing states in the nation and Landrieu argued that the Gulf’s oil industry would be adversely affected by the scrapping of the tax incentives.
Hallelujah! A permit for deep water exploration has been approved Wall Street Journal (5/11/11) reports: The U.S. approved a Royal Dutch Shell PLC plan to drill for oil in five locations deep under the Gulf of Mexico…The Shell proposal is the second deep-water exploration plan approved in the Gulf since the U.S. government lifted a moratorium on deep-water drilling in October. The moratorium was imposed following the BP PLC oil spill in April 2010. At least six other deep-water plans are pending for the Gulf…Companies apply for permits to drill after receiving approval for an exploration plan…The Shell plan approved Wednesday, for the so-called Appomattox discovery, includes five wells in about 7,200 feet of water roughly 72 miles, or 116 kilometers, off the Louisiana coast. Shell runs the Appomattox venture and holds an 80% stake. Nexen Inc. holds the remaining 20%…U.S. regulators assessed the plan and determined it met new safety standards instituted after the Gulf oil spill last year. The drilling “would not have a significant impact on the quality of the human environment,” according to a press release from the Bureau of Ocean Energy Management, Regulation, and Enforcement…Marvin Odum, president of Shell’s U.S. subsidiary, said the company was “pleased” with the news.
Get ‘er done! House passes a bill that will force Dept. of Interior to act on permit applications within 60 days New York Times (5/11/11) reports: Maneuvering on oil drilling, gas prices and industry profits intensified on Capitol Hill on Wednesday. House Republicans pushed through a bill to accelerate offshore oil and gas exploration as Democrats vowed action on measures to rescind billions of dollars in tax breaks for major oil and gas companies… The drilling bill was approved 263 to 163, with 28 Democrats joining unanimous Republicans, after the majority swatted down several Democratic amendments. The bill would force the Interior Department to act within 60 days on all applications for offshore drilling permits. The House then turned to a second Republican-sponsored bill that would open much of the Atlantic, Pacific and Arctic shorelines to new oil and gas exploration. A vote on that measure is expected Thursday…The Obama administration vigorously opposed both measures, but stopped short of threatening to veto them — in part because it is highly unlikely they will win enough votes in the Senate to overcome a filibuster…Meanwhile, House and Senate Democrats continued their push to repeal a variety of tax breaks enjoyed by the oil industry, some of them a century old and others that apply to all companies, not just petroleum concerns.
My favorite part? “Four Republicans crossed the aisle to vote for the earlier motion to remain in the program.” Because what is the point of owning a plantation if you don’t have house slaves? E&E News (5/11/11) reports: The New Hampshire Senate voted today to keep the state in the Regional Greenhouse Gas Initiative, a cap-and-trade program that many member states are trying to align with U.S. EPA’s new standards for carbon dioxide from the power sector…Earlier this year, the New Hampshire House of Representatives passed a bill that would withdraw the state from the program, which includes all of New England as well as New York, New Jersey, Delaware and Maryland. But the bill had drawn a veto threat from Gov. John Lynch (D), and the Senate lacked the votes to overcome it…An amendment approved today would tweak rather than scrap the program, though it would allow New Hampshire to pull out if another state with at least 10 percent of the RGGI program’s total power generation does it first. Introduced by Senate Majority Leader Jeb Bradley (R), it would also shift money to a fund that offers efficiency incentives and would provide rebates to ratepayers for all but the first $1 that is paid for each carbon credit…Though a motion to withdraw from RGGI had 15 supporters in the Senate today, it fell one vote shy of the number needed to rebuff a veto.
What’s $90 million between friends? Uncle Sam provides guarantee for Colorado solar project Businessweek (5/11/11) reports: Energy Department officials say a North Carolina energy producer has been offered a $90.6 million conditional commitment loan guarantee to help construct a solar generation project in southern Colorado…Department officials said Tuesday the loan will support Charlotte-based Cogentrix Energy LLC in developing the Alamosa Solar Generating Project. The company estimates the project will generate about 85 construction and operations jobs…U.S. Sen. Mark Udall of Colorado says the plant will be one of the largest and most innovative solar power plants in the country. The facility will create about 75,000 megawatt hours of renewable energy per year, enough for more than 6,500 homes