Today we talk about five things in the news for the weeks of November 9 and 16:
- Dems on Climate v. Terrorism, and Help for Coal Miners
- Republicans Dabble In Climate Change Policy
- Pennsylvania Sees End of Budget Stalemate
- Monday Night Football Gets Gas Protesters
- Members Talk Energy With Visiting Europeans
My interview this week is with Lynn Lyon, the President of EnergyConnects.
1. Dems on Climate v. Terrorism, and Help for Coal Miners
Last week, terrorism was driven back to the forefront of our conscience by a series of terrible attacks in Paris. This brought the issue of climate change to mind for many, because of the international talks to be held in Paris next month and because President Obama and some others have recently begun to call climate change a greater threat than terrorism. At a debate held on Saturday the 14th, Bernie Sanders doubled down on that claim:
Bernie relied in part on the CIA to back up his claim, though the CIA’s climate change office created by Pres. Obama has been disbanded:
The creation of the office drew fire at the time from some Republicans, who said it was an unnecessary expense and a distraction from the agency’s focus on terrorism and other more immediate threats. The agency did not say whether the closing was related to budget constraints or other political pressures.
Beyond that statement in the opening moments, the debate sadly did not touch on energy very much. Another important note came in the days before, when Hillary rolled out her plan to help coal country.
Coal powered the industrial revolution, the 20th century expansion of the middle class, and supplied as much as half of US electricity for decades… But today we are in the midst of a global energy transition. The shale revolution, low-cost renewable energy, energy efficiency improvements, and pressing concerns about the impact of coal combustion on public health and the global climate are reducing coal demand both in the US and around the world. Coal now accounts for only one third of US power generation, with domestic consumption falling by 25% over the past ten years.
Building a 21st century clean energy economy in the United States will create new jobs and industries, deliver important health benefits, and reduce carbon pollution. But we can’t ignore the impact this transition is already having on mining communities…
The plan would cost about $30 billion, and would focus on protecting pensions and retraining miners for other jobs. It would also invest in clean coal technology and carbon capture and sequestration. She spoke about coal a few days earlier, while accepting the endorsement from the League of Conservation Voters. Another interesting note from that LCV speech, is that she also cited shutting down the arctic as an Obama climate success.
2. Republicans Dabble In Climate Change Policy
The Republicans also had a debate a few days ago, and it swerved slightly deeper into energy policy. Only one real energy question was asked, and Sen. Rand Paul (R-KY) used it to show some skepticism about climate change.
Another interesting exchange came when Sen. Marco Rubio (R-FL) cited cheap energy as a component to bringing back manufacturing. He also wants more welders and less philosophers. Ohio Gov. John Kasich and Donald Trump renewed their rivalry over how much credit fracking should get for Ohio’s economy (Kasich says not much). And, Texas Senator Ted Cruz wanted to kill the Department of Energy (and Commerce twice).
3. Pennsylvania Sees End of Budget Stalemate
In March, Pennsylvania’s newly-minted Democratic Governor, Tom Wolf, said “we are going to place a severance tax on natural gas.” The Wall Street Journal reports:
Though officials are still negotiating, representatives for both sides said they have a proposed budget deal that would boost the state’s sales tax to 7.25%, up from 6% currently, to generate $2 billion that would partly be used to offset property taxes for many residents.
The tentative deal would increase state education spending by at least $400 million, a priority for Gov. Tom Wolf. He agreed to give up a proposal to raise new taxes on natural gas drilling, which Republicans had said wasn’t going to happen.
4. Monday Night Football Gets Gas Protesters
MNF viewers were treated to an odd sight a couple weeks ago:
Off screen, the mystery was soon solved:
Fire crews were called in to retrieve two activists who rappelled from the press box of Bank of America Stadium in Charlotte, North Carolina, and unfurled a protest banner Monday night during the nationally televised National Football League game between the Carolina Panthers and the Indianapolis Colts.
The odd spectacle highlighted opposition to a liquefied natural gas project in Lusby, Maryland — a state in which neither of the two teams plays.
— SI Now (@SInowLIVE) November 7, 2015
As a side note, this is a long-existing development:
In the 1970s, the Consolidated Natural Gas Company, parent of what is now Dominion Transmission, partnered with the Columbia Gas System. Together, they built Cove Point to receive, store and process supplies of LNG from Algeria. Cove Point received ship-borne LNG imports from 1978 to 1980. At that time, increased natural gas production in the United States, spurred by wellhead price deregulation under the Natural Gas Policy Act of 1978, reduced the need for LNG imports, which were more expensive relative to the new domestic gas supplies.
Consolidated in 1988 sold its interest in the terminal and the Cove Point pipeline to Columbia. In 1995, Columbia Gas reopened the facility for storage and peak-shaving operations. The facility was used to liquefy, store and distribute domestic natural gas for use in the growing Mid-Atlantic region. Williams purchased Cove Point from Columbia in 2000.
Dominion subsequently purchased Cove Point from Williams in 2002 for $217 million. Dominion Cove Point received its first LNG shipment in the summer of 2003.
What is happening now is an expansion:
Dominion is constructing liquefaction facilities for exporting liquefied natural gas (LNG), at its existing Dominion Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Md. The proposed liquefaction facilities, combined with existing facilities, will provide a bi-directional service of import and export of LNG at the Dominion Cove Point LNG Terminal. Dominion started construction on the 5.25-MTPA (million tons per annum) facility in 2014 and plans to put the liquefaction facilities in service in 2017.
5. Members Talk Energy With Visiting Europeans
A couple weeks ago, the House Energy and Power Subcommittee held a roundtable discussion with some European leaders:
The Transatlantic Legislators’ Dialogue (TLD) was officially launched by delegations of the European Parliament (EP) and the U.S. House of Representatives at the 50th interparliamentary meeting in 1999, although semi-annual meetings between Congress and the EP have taken place since 1972. The two delegations meet twice a year, once in Europe and once in the U.S., with the goal to strengthen and enhance the level of discourse between legislators.
The Republicans leading the committee put the focus on energy security:
Much of the discussion between U.S. and EU legislators regarding energy has focused on promoting more open and competitive markets and facilitating increased fuel and supply diversity. Europe is looking to the U.S. to help it diversify its energy supply.
The Europeans strongly backed up this claim, claiming that access to U.S. energy exports was important and urging America not to be “protectionist” with its policies. Though Republicans did not mention it, the Europeans were also very concerned about climate change.
Interview with Lynn Lyon of EnergyConnects
Lynn grew up in West Virginia with coal-miner father, so she has been involved in the energy industry for a long time. She studied political science and then went to work for a string of consulting companies. One of her early clients was the Department of Energy in Washington, D.C., where she worked on alternative-fuel vehicles. Eventually, her work moved to Dallas and one of her biggest clients was Pioneer Natural Resources. In 2005, she moved in house and became an employee of Pioneer, where she stayed until the downturn last year.
She said it was fascinating to be with Pioneer at a time when the company was both making the right decisions and getting lucky. Pioneer cut its international operations after the 2008 crash and focused its efforts on the Eagle Ford and Permian. Those areas were both at the heart of the shale boom and are some of the more resilient areas right now. Lynn spent much of her time at Pioneer promoting natural gas vehicles, and towards the end of her time she had the opportunity to participate in a study on natural gas and hydrogen fuel cell vehicles with the Sandia National Lab, Toyota, and America’s Natural Gas Alliance. The study helped her explore some new applications for natural gas.
EnergyConnects is Lynn’s new project. EnergyConnects says it “accelerates market development, promotes collaboration with innovative results, and provides insight into ever changing energy options.” Lynn spends her time thinking big. She finds little interest from the business community in converting one Honda civic at a time. Instead, she has focused on companies that spend a lot of their money fueling high-horsepower engines. To that end, she is currently working on a study in collaboration with
Texas Christian University and ANGA on natural gas applications including marine, rail, and oil and gas production.
The shipping industry is a great area for natural gas conversions. Most ships run on “bunker fuel” right now, which is not a particularly clean fuel. As a result, ships are a major driver of emissions not only for carbon, but also for traditional pollutants. Port cities like Houston are increasingly concerned about maritime pollution and the EPA is increasing regulation. Cleaner natural gas can replace bunker fuel with minimal changes to a ship’s existing engine. Ships can be converted to be dedicated to natural gas use, or they can be converted to use both natural gas and bunker fuel if a company is concerned about access to natural gas refueling. Ships need liquefied natural gas (LNG) and there is a limited number of refueling stations around the world. Texas now has three refueling facilities and more are are on the way worldwide.
Rail is another area of growth for natural gas. BNSF and other companies are making long-term investments in powering locomotives with natural gas. A locomotive can run for 30-50 years, so these investments reflect that those companies are confident in natural gas prices remaining stable for decades.
Stationary engines are also ideal users of natural gas, because they are not concerned at all about weight. Oil and gas operations are great examples. While Lynn was at Pioneer, she studied every engine the company had and recommended that nearly all of them be converted to natural gas. That may not have been the best choice after the drop oil prices, but the company did convert three drilling rigs to natural gas as a pilot project. Another huge advantage in an area like Texas is its pipeline infrastructure, which allows an engine to tap right into an existing fuel source.