Five things for the week of January 25, 2015:
- The American Petroleum Institute Buys Superbowl Time
- The Senate Finishes Energy Debate on Keystone XL
- Liquefied Natural Gas (LNG) Export Legislation Sees Both House and Senate Action
- Federal Energy Regulatory Commission (FERC) Chairwoman Cheryl LaFleur Touches on Natural Gas
- The Colorado Oil and Gas Task Force Nears its Completion
Our interview this week is with Sarah Jane Kyle, a reporter for The Coloradoan, who has been covering the Oil and Gas Task Force.
1. American Petroleum Institute Defends Fracking During Superbowl
Today’s Super Bowl will feature an ad from the American Petroleum Institute, which will talk about how hydraulic fracturing has made the United States an energy superpower. It appears, however, that the ad will only run in the Washington, D.C. market.
2. The Senate Finishes Energy Debate on Keystone XL
On Thursday, January 29, the U.S. Senate passed its bill to speed up approval of the Keystone pipeline. After dozens of amendments, the bill garnered 62 “yes” votes. It presumably would have been 63, but Sen. Marco Rubio (R-FL) missed the vote. The bill will will now be sent to the House and then to the President.
Though the President is expected to veto the bill, the Senate debate brought several important energy issues into focus. One interesting debate was over climate change, with nearly all Senators agreeing it is real, but some disagreement on how much is caused by humans.
Liquefied natural gas (LNG) exports were also debated. Sen. Ted Cruz (R-TX) offered an amendment that would allow expedited exports to all countries that are members of the World Trade Organization (WTO). Since this includes nearly all possible trading partners for the U.S., the Cruz amendment would have effectively eliminated the Department of Energy’s (DOE’s) painfully-slow public interest reviews. Most the Senate appears afraid to go that far, and Sen. Cruz’s amendment failed on a party line vote of 53 for and 45 against (60 votes were needed).
Environmentalists have long complained that hydraulic fracturing operations are not governed by the federal Safe Drinking Water Act. The 2005 energy bill ensured that fracking operations would be regulated primarily at the state level. Sen. Gillibrand (D-NY) offered an amendment to reverse the situation and create federal control. The amendment failed badly, however. Only 35 democrats voted for the amendment. Meanwhile, 63 Senators voted against it, including eight democrats.
3. LNG Export Legislation Sees Both House and Senate Action
Also on Thursday, the U.S. Senate Energy and Natural Resources Committee held a hearing on legislation to speed up LNG export permits. The bill was sponsored by Sens. John Barrasso (R-WY) and Martin Heinrich (D-NM). It is a much less controversial bill than the Cruz amendment. The Barrasso-Hinrich bill would simply require that the DOE act within a timely manner after a project sponsor has cleared the main Federal Energy Regulatory Commission (FERC) hurdle.
Here is Sen. Barrasso:
And here is Sen. Heinrich:
Chris Smith, testifying for the DOE, said that the agency would be able to comply with the bill’s timeline:
Some Senators remain opposed to even this simple timeline change. Ultimately, no Senator outside the oil patch wants their fingerprints on something that could be blamed for driving up prices. Sen. Angus King (I-ME) best typified that view at the hearing:
The U.S. House of Representatives passed a very similar bill, with a slightly shorter timeline, on Wednesday. The vote in the House was 277 to 133, with almost all Republicans and 41 Democrats voting “yes.” Here is Rep. Bill Johnson (R-OH), the bill sponsor:
4. FERC Chair Cheryl LaFleur Touches on Natural Gas
Commissioner LaFleur gave a speech last week at the National Press Club. She highlighted the increased use of natural gas in electricity generation as one of the most important issues of the day. She said all energy issues come down to balancing reliability, cost, and the environment.
FERC has a major role in the implementation of the President’s Clean Power Plan, which aims to reduce climate pollution from electric power plants. She said that new infrastructure will be needed to make the plan successful. She noted that FERC permits and sets rates for gas pipelines and compressor stations. The largest amount of carbon reduction in the Clean Power Plan is expected to come from additional use of natural gas. Commissioner LaFleur expects this will lead to an increase in natural gas powerplants. She said the Administration’s climate goals are very reliant on “abundant and affordable” natural gas in America. She highlighted the challenge of building new infrastructure with environmental activists putting a focus on stopping pipelines. She noted that the FERC’s role does not include review of climate impacts.
In response to questions, Chair LaFleur said FERC has consulted with the Environmental Protection Agency (EPA) on the Clean Power Plan. She said she would welcome energy legislation from Congress, but is content to work within FERC’s existing authorities. She said that pipelines are challenged by several types of objections. Some objections, she said, relate to pipelines themselves and those concerns are best addressed by keeping high standards. Some individuals simply object to a pipeline in their backyard. Those are best addressed by siting a pipeline in a way to avoid as many conflicts as possible. Some individuals are looking to block all pipelines, and those issues are for policymakers and not FERC. She also said that FERC’s process does not consider impacts of fracking.
Here on some key excerpts:
5. Oil and Gas Task Force Nears End of Colorado Fracking Debate (Starts at 34:45)
The Colorado task force was formed on September 8, 2014, as part of a deal by Gov. John Hickenlooper, Rep. Jared Polis (D-CO), and other stakeholders to remove contentious ballot measures from the election. After several months of work, the task force is nearing its February 27, 2015, deadline to provide recommendations to the Colorado legislature. The ultimate issue at hand is how much control local governments can have over oil and gas operations. The task force will meet again this week, but from the public information that is available, it can be hard to see how the task force will complete its work.
I had an opportunity to discuss the task force with Sarah Jane Kyle, a reporter for The Coloradoan who has covered several task force meetings. She is fairly new to covering energy and environment issues, but grew up in Colorado and has seen the impact of the oil and gas boom over the last few years. The Coloradan is trying to make environmental issues more relatable to the general public, and Sarah said she does hear a lot of concern about fracking. She said that most individuals are not sure that fracking causes problems, but they are often worried about impacts that they do not fully understand. Sarah said she hears skepticism about the task force from all sides.
Sarah explained the general flow of a task force meeting. In some locations the group has started off with a tour of relevant local sites. Then, the group typically gathers in a meeting of the full group. The full meetings generally have a lot of back and forth on various topics related to their work. Topics can include anything from general logistics to personal experiences of the board members. Sarah recalls hearing one member talk about his child getting cancer and not being sure if oil and gas drilling was the cause. A lot of the talk also focuses on additional research that task force members feel is needed.
Overall, Sarah said she has found the proceedings to be fairly civil. Protesters generally gather outside, but do not get too out of hand. The protestors are generally environmentalists. Sarah said a common objections she hears is that individuals do not want to be an experiment, meaning the first ones to prove fracking is harmful. And she often hears claims that government officials are controlled by the oil industry. Citizens often expect their local government to fight to stop drilling, but local governments find themselves unable to grant those wishes. Sarah said she hears from a few people in the industry who want to tell a positive story, but most industry groups tend to be quiet.
Much of the task force’s work appears to take place in panel discussions. Audio of these meetings are generally not provided. So Sarah provided some background on what is going on. The proceedings sound similar to a Congressional hearing. Several witnesses give presentations to the task force, and then the task force can ask questions. The public is generally not involved. Sarah attended a panel discussion on public health and safety that focused on air pollution. The panel mostly talked about the lack of data and identified areas where the task force should recommend funding for research. The group may also argue for a health registry to track individuals that say they have been harmed by drilling.
Ultimately, the task force mission is to broker some kind of truce between the state government’s tendency to allow drilling, and local governments’ frequent desire to stop drilling. Sarah’s perspective is that the task force is still talking a little bit about everything, but the group has a rolling list of issues they may want to address in their recommendations. While most work so far has been information gathering, Sarah seemed to think the group is remaining focused on finding a balance between state and local control. Their recommendations are expected to be reported to the legislature around the end of the month. It will be very interesting to see what they come up with.