Tag: "federal government"

Available and Off-Limits Offshore U.S. Oil and Natural Gas Resources

Despite the fact that the federal government has made it clear that all oil and natural gas drilling along the Atlantic coast is off limits, oil and natural gas companies are still going ahead with seismic surveys to see just how much oil is resting off of our eastern coast.

Close to 87 percent of all federally controlled offshore acreage are off-limits to offshore oil and natural gas development. If included in the federal government’s next five-year leasing program and lease sales beginning in 2018, exploratory drilling could start the following year with commercial production expected as early as 2023.

Opening the Atlantic Outer Continental Shelf, the Pacific Outer Continental Shelf and the Eastern Gulf of Mexico to offshore oil and natural gas development could have remarkable benefits. By 2035, this opportunity could:

  • Create nearly 840,000 new jobs along coasts and across the country.
  • Add about 3.5 million barrels of oil equivalent per day to domestic energy production.
  • Generate more than $200 billion in cumulative revenue for the government.
  • Lead to nearly $450 billion in new private sector spending.
  • Contribute more than $70 billion per year to the U.S. economy.

Specifically, increasing access to offshore oil and natural gas resources in the Atlantic with an investment of an estimated $195 billion cumulative between 2017 and 2035, could by 2035:

  • Produce an incremental 1.3 million barrels of oil equivalent per day (MMboe/d).
  • Add nearly 280,000 jobs.
  • Contribute up to $23.5 billion per year to the U.S. economy.
  • Generate $51 billion in cumulative government revenue.

If seismic activity were to begin in 2017 and lease sales in 2018, first production could be expected as early as 2026.

Mar 30, 2016 | Leave a Comment | by

Obama Announces $98.1 Billion More Transportation Spending Waste

A major portion of the Administration’s proposed new transportation spending — 21st Century Clean Transportation Plan — is a series of proposals to expand transit systems (31 rail, bus and streetcar systems in 18 states costing $3.5 billion), revive the failed high speed rail initiative, modernize freight systems and provide grants to regional authorities to implement innovative “clean” technologies and “green” transportation programs. This new transportation spending is expected to cost $98.1 billion in just FY 2017.

The President just recently signed a groundbreaking transportation bill — the Fixing America’s Surface Transportation Act or FAST Act — that gave a longer temporary partial solution for the nation’s transportation infrastructure. However, the Fast Act and the new transportation proposal both fail to address several key problems with the Highway Trust Fund and the federal gas tax.

The new administration budget for transportation is a 60% increase over the current annual spending level. To partly pay for the new spending, the Administration is calling for a $10 per barrel tax on oil or a 25 cent/gallon increase in the price of gasoline at the pump which is estimated to bring in $650 billion over a decade.

Despite this, the administration’s budget request was declared dead even before its arrival on Capitol Hill, just like most of Obama’s previous transportation budget proposals.

 

Feb 24, 2016 | 1 comment | by

Cruz’s Victory Against Ethanol Cartel

Most presidential candidates in the past would go to Iowa, the first state to cast a ballot for President of the United States, and proudly, boldly support ethanol and the Renewable Fuel Standard (RFS) ‒ even if they talked badly about it everywhere else in the nation.

However, Senator Ted Cruz set himself apart from all the others. Cruz voted to repeal the Renewable Fuel Standard. He stood up to the ethanol cartel, while he was campaigning very hard in Iowa. In response, the cartel mobilized an army to fight him, and they were defeated Monday night when he took first place in the Iowa Caucus.

The Renewable Fuel Standard (RFS) is a law requiring traditional fuel to have increasing blends of ethanol and later, other biofuels. However, the RFS plan has already failed.

 

Feb 03, 2016 | 2 comments | by

Murkowski Outlines Senate Energy Plan

In the GOP weekly address, Sen. Murkowski describes the Energy Policy Modernization Act, which includes liquid natural gas (LNG) exports. Looks like it is still on the Senate calendar this week…although it may slip.

On LNG exports, the bill requires the Energy Secretary to approve or disapprove LNG export applications within 45 days, so the applications don’t linger. That’s for nations that don’t already have free trade agreements with us, since most free trade agreements already address expedited LNG exports. It also puts federal energy regulatory commission (FERC) in control of all federal LNG authorizations.

The bill authorizes a new “e-prize” competition, which is basically an x-prize for energy. I’m seeing more and more of these x-prizes in public policy.

The section on nuclear power misses the opportunity to promote molten salt reactors, a nice byproduct of a robust rare earth element policy…but it does call for more nuclear reactor fusion and fission reactor prototypes, so that might encompass molten salt even if it isn’t listed specifically.

There are a ton of repeals and program eliminations, which is a good sign of conservative legislation.

  • Repeal of the methanol study.
  • Repeal of the weatherization study.
  • Repeal of various DOE programs.

Unfortunately, it also reauthorizes the Land and Water Conservation Fund, which is bad public policy.

Jan 25, 2016 | 1 comment | by

SOTU: President Obama’s Reckless Energy Policy

Last night, President Obama gave his final State of the Union (SOTU) address to the nation. He briefly discussed energy policy:

Seven years ago, we made the single biggest investment in clean energy in our history.  Here are the results.  In fields from Iowa to Texas, wind power is now cheaper than dirtier, conventional power.  On rooftops from Arizona to New York, solar is saving Americans tens of millions of dollars a year on their energy bills, and employs more Americans than coal – in jobs that pay better than average.  We’re taking steps to give homeowners the freedom to generate and store their own energy – something environmentalists and Tea Partiers have teamed up to support.  Meanwhile, we’ve cut our imports of foreign oil by nearly sixty percent, and cut carbon pollution more than any other country on Earth.

Gas under two bucks a gallon ain’t bad, either.

Now we’ve got to accelerate the transition away from dirty energy.  Rather than subsidize the past, we should invest in the future – especially in communities that rely on fossil fuels.  That’s why I’m going to push to change the way we manage our oil and coal resources, so that they better reflect the costs they impose on taxpayers and our planet.  That way, we put money back into those communities and put tens of thousands of Americans to work building a 21st century transportation system.

Seven years ago, President Obama said he would bankrupt the coal industry, he has come pretty close to doing just that. The American coal industry is on the verge of collapse, with around 50 companies out of business and stock prices of the big four companies have fallen as much as 99 percent! Most recently, the second largest coal company has filed Chapter 11 bankruptcy.

In addition to all the regulations placed on the coal industry by the Obama administration, natural gas has experienced a boom due to new discoveries and the advanced technologies of hydraulic fracturing and horizontal drilling. Natural gas recently passed coal as America’s top source of energy power.

Despite the President’s efforts and the natural gas boom, coal is still a major source of American energy power. While, renewable energy is only supplying 6 percent of our electric power.

Wind power and solar power are also not cheap, compared to energy options such as natural gas and coal. The savings that the President is referring to are the very high subsidies that both the federal government and some states have been giving to individuals for buying wind or solar. Also, I am sure he is adding in the possible savings over something like 20 or 50 years. Yet leaving out the very high initial installation and maintenance costs.

The President’s SOTU last night coverage a variety of topics, including the reckless energy policy over the past seven years. An energy policy that has unnecessarily put our coal industry on life support, at a high cost to taxpayers and energy consumers.

Jan 13, 2016 | Leave a Comment | by

WTO Ruling Forces the Repeal of Popular U.S. Law

‘Twas the night before Christmas in 2002 when I received notice the United States Department of Agriculture (USDA) had confirmed America’s first case of Bovine spongiform encephalopathy (BSE). At the time, I was an elected representative of the dairy industry in the Northwest, and random sampling found an infected slaughtered milk cow in Washington State.

More commonly known as mad-cow, BSE is a degenerative brain disease with 100% mortality rate. Although, not contagious it is transmittable through consumption of food containing ingredients from BSE-infected animals. An alarming linkage of BSE is the human variant, Creutzfeldt-Jacob disease (vCID), a horribly devastating and fatal illness that can have an incubation period of up to 8-years after consumption of meat from an infected animal.

Although confirmed BSE cases are world-wide, the greatest epidemic was in Great Britain. Incidentally, Britain also holds the distinction of having the highest number of human victims of vCID. During the British outbreak, BSE traveled to all regions of the world. Trade agreements facilitated the global spread of the disease as animals moved across borders with little to no inspection, quarantine, or tracking regulations. In fact, the 2002 Washington State BSE cow was shipped from Canada. Regardless, Japan, South Korea, Russia, Thailand and Hong Kong immediately banned imports of all U.S. beef and many countries followed. The trade embargos ultimately caused a near 80% drop in export sales.

Domestically, citizens had little confidence in the safety of their meat purchases. The USDA assured the public the risk was minimal, and the beef industry urged American’s to clear the inventory by eating more beef. But, unlike fruits, vegetables, nuts, fish, and seafood meat products did not carry labels identifying the country of origin. Shoppers understood the infected animal came from Canada, yet, they had no information on the origin of shelved meat. Had meat products been readily identified by its source country consumers could have made an informed choice. Likewise, merchants could have quickly pulled the Canadian-originated products from store shelves. Actions that would have assisted in assuring the public and reducing the market impact for beef producers.

It was the 2002 Canadian mad-cow case that triggered the push for meat products to carry a country-of-origin-label (COOL) as is required for other foods. The development of the meat version of COOL was not a hurried, or imprudent process. What began in 2002 became effective in 2009 after years of analysis, public comments, reviews, challenges, and extensions. The rule went through a rigorous legislative process, as well as legal challenges, and survived the daunting review of the Administrative Procedures Act.

With 90% public support according to USDA surveys, the reported “little economic benefit to consumers,” does nothing to hamper its popularity. After all, the demand for the labeling had little to do with food costs and everything to do with the right of a consumer to know where their food originates. When fully informed, the choice is then left to the buyer, a free-market principle.

Few laws or regulations are as publicly beneficial or as broadly popular as the COOL programs. Yet, on December 18th, nearly thirteen years after the Canadian mad-cow incident, Congress passed an omnibus bill that contained the repeal of COOL for beef and pork products.

The ultimatum to end the mandatory labeling came from the World Trade Organization (WTO) after Mexico and Canada argued the program discriminated against their imported meats. The WTO found the mandatory use of COOL violated three technical barriers to trade (TBT). Also, they ruled the U.S. Secretary of Agriculture, Tom Vilsack, violated General Agreements on Tariffs and Trade (GATT), Art. X:3(a), by sending an explanatory letter to only domestic meat producers, thereby giving special/unequal treatment. In its ruling against the U.S., the WTO approved retaliatory export tariffs $1 billion (Canadian) equivalent to 100% of U.S. export sales to Canada and Mexico if mandatory labeling continued.

Key considerations regarding this issue:

  • An unelected, international tribunal effectively dictated the U.S. must reverse part of a well processed, legitimate, and popular piece of domestic legislation.
  • COOL provided for quick identification and tracking of meats, facilitating efficient recall in the event of safety concerns.
  • Consumers’ right-to-know was not a consideration in the WTO decision.
  • Congress over-acted by repealing the entire labeling program as opposed to merely the mandatory aspect of labeling muscle meat.
  • Processors can continue to label their products as U.S., but only voluntarily. A practice the consumers should demand.
  • The ruling has the precedents setting potential to impact other origin labels for fruits, vegetables, nuts, fish and seafood?
Dec 30, 2015 | Leave a Comment | by

Transportation Bill Gives Longer Temporary Partial Solution

The Fixing America’s Surface Transportation Act, or the FAST Act was approved by the Senate 83-16, the House on a 359-65 vote and formally signed by the president. The bill reauthorizes the collection of the 18.4 cents per gallon gas tax that is typically used to pay for transportation projects, and also includes $70 billion in “pay-fors” to close a $16 billion deficit in annual transportation funding that has developed as U.S. cars have become more fuel-efficient.

The new law, paid for with gas tax revenue and a package of $70 billion in offsets from other areas of the federal budget, calls for spending approximately $205 billion on highways and $48 billion on transit projects over the next five years. It also reauthorizes the controversial Export-Import Bank’s expired charter until 2019. The bill is paid for by:

  • Raising revenue by selling oil from the nation’s emergency stockpile.
  • Taking money from a Federal Reserve surplus account that works as a sort of cushion to help the bank pay for potential losses.
  • Cutting the dividend paid to banks with assets of at least $10 billion, reinstating a controversial offset that had been eliminated by the House, but narrowing the set of banks to which the cut would apply.
  • Preserving a measure intended to raise money by hiring outside debt collectors to collect unpaid taxes.
  • Increasing the fees paid by travelers who go through customs.
  • Directing to the Highway Trust Fund penalties paid for motor-vehicle safety violations.

However, the bill was rushed and failed to address several key problems with the Highway Trust Fund and the federal gas tax. The federal gas tax clearly requires major reforms to work efficiently again. Some proposed reforms include:

  • Eliminating the Mass Transit Fund and all other non highway funding through the Department of Transportation, saving $16 billion annually that could be used for additional highway funding.
  • Raising the federal gas tax to compensate for inflation since it was last raised in 1993, and adjusting for future inflation, which would bring in 40 percent more, or $10 billion a year.
  • Repealing the Davis-Bacon Act, saving $11 billion annually in construction costs.

The Fixing America’s Surface Transportation Act, or the FAST Act was rushed and gave a five year extension to a partially funded federal highway system, while missing out on key Highway Trust Fund and federal gas tax collection reform elements.

Dec 16, 2015 | Leave a Comment | by

New EPA Employee Bonuses Spark OIG Investigation

Back in the day, if you needed to relocate for a new job, you could elicit the aid of a few strapping young men for little more than the cost of a pizza and a six-pack of beer. Add the cost of a rental truck, and you could probably recoup your expenses after the first paycheck.

Today, the same could probably happen, unless you’re a newly hired Environmental Protection Agency (EPA) Director of Finance, in Research Triangle Park (RTP), North Carolina. As detailed in a November 30th investigative report by the Office of Inspector General (OIG), the OIG hotline received an anonymous call stating a new EPA Director in the RTP Finance Center requested a $250,000 reimbursement of relocation costs. The complainant alleged that on the new Director’s behalf, the Office of the Chief Financial Officer (OCFO) intended to award the funds.

The subsequent investigation found that the new Director had inquired about relocation reimbursement during the interview process and was informed the hiring package did not include such a benefit. However, shortly after she accepted the position, she approached the OCFO, again asking for relocation reimbursement. Thus began the tale of the North Carolina EPA Financial Director’s money chase.

Facts at a glance

10/2014

EPA posts job announcement for Director of Finance.
02/05/2015 The subject employee agrees to accept job with no relocation reimbursement per HR denial citing agency rules.
02/25/2015 OCFO contacts HR after being asked by subject employee to revisit the issue as a relocation “incentive” as opposed to relocation “reimbursement.”
03/09/2015 OCFO submitted request for a relocation incentive to HR for $15,000 representing estimated moving and storage costs.  Again, the request denied.
04/02/2015 HR denied two subsequent revised requests from the OCFO for the subject employee’s relocation incentive.
04/05/2015 Subject employee begins working as New Director with no reimbursement or incentive for relocation.
04/21/2015 Hotline call to OIG regarding OCGO’s intent to give new Director a total of $250,000 compensation for relocation.
05/13/2015 OCFO awarded new Director $4,500 bonus (6 weeks after start)
06/25/2015 OCFO awarded another $4,500 bonus (12 weeks after start)
07/07/2015 The OIG began its audit and investigation as a result of the hotline call. During the audit, OIG learned another bonus was forthcoming. That order was withdrawn as a result of the notice of the investigation.

The OIG concluded its financial audit on September 22, 2015, noting in the report the new Director never received the proposed $250,000 relocation reimbursement.  However, the two $4,500 bonuses within 3-months of her start date were unprecedented and represented approximately 25 percent of her salary for the 3-months covering the time period of her employment.

Upon conclusion of the investigation, the OIG recommended the EPA’s Deputy Administrator revisit the awards made to the new Director, RTP Finance Center, to determine whether the awards are reasonable and properly justified and, if needed, take appropriate action. In addition, for future awards, EPA should establish and require a proper level of management review for multiple awards that total in excess of $5,000 during a fiscal year to ensure that awards are reasonable and justified in comparison to other awards.

Dec 07, 2015 | Leave a Comment | by

U.S. House Energy Bill Debate Today

The House of Representatives starts the debate today on 38 amendments out of an original 103 submitted for H.R. 8 —North American Energy Security and Infrastructure Act of 2015 — and concludes discussion tomorrow. The 2015 energy bill would modernize energy infrastructure, build a 21st century energy and manufacturing workforce, bolster America’s energy security and diplomacy, and promote energy efficiency and government accountability.

Despite the President’s threat to veto the House bill, lawmakers from both parties have over one hundred amendments to the Energy and Commerce Committee’s broad energy bill to discuss in this week’s floor debate.

The amendments included many policy recommendations relating to energy, natural resources, infrastructure and grid security. Below are a few of the 38 amendments to be debated:

  • Rep. Joe Barton (R-Tex.) has filed an amendment to repeal the crude oil exports ban.
  • Sean Duffy (R-Wis.) is proposing to require the Secretary of Energy to collaborate with the Secretariat of Energy in Mexico and the Ministry of Natural Resources in Canada when developing guidelines to develop skills for an energy and manufacturing industry workforce.
  • Rep. Gene Green (D-Tex.) has offered an amendment that would establish a permitting process within DOE, the Federal Energy Regulatory Commission and the State Department for cross-border infrastructure projects.
  • Rep. Scott Peters (D-Calif.) has an amendment that includes energy storage as a form of energy that DOE should consider to enhance emergency preparedness for energy supply disruptions during natural disasters.
  • Rep. Trent Franks (R-Ariz.) has an amendment that secures the most critical components of America’s electrical infrastructure against the threat posed by a potentially catastrophic electromagnetic pulse.
Dec 02, 2015 | Leave a Comment | by

Renewable Fuel Standard Mandates, or Not?

The Renewable Fuels Standard (RFS) provisions of The Energy Independence and Security Act of 2007 (EISA), mandates an increasing blend of renewable products into our domestic fuel supply. The law amends the Clean Air Act, and allows for an initial blending of food-based ethanol (corn), beginning in 2008. In subsequent years, the blend was to transition towards satisfying the annually increasing volumes with non-food “second stage” cellulosic ethanol, referred to as RFS2. The cellulosic, or advanced biofuels, are derived from biological materials such as wood shavings, leaves, corn cobs and grasses. In addition to the blend provisions, the law requires the program to achieve a 20% reduction in greenhouse gas emissions. Unfortunately, the costly experiment has failed to meet several goals, including air quality and the defined blend requirements.

To explain, in 2008 Congress mandated the EPA to set the RFS at a 10% blend of corn ethanol. Drivers then began to see labels informing them of E10 in fuel pumps. By 2010, the law states we were to move towards the use of non-food products (the second-stage RFS2), to fill the increasing blend requirements. However, in 2010 and 2011, no cellulosic biofuel was available to fill the volume requirements. Similarly, in 2012 and 2013 the available production did not amount to 1% of the mandated levels. As a result, the EPA adjusted the blend formulas allowing for first stage corn-based ethanol to fill the void.

In 2011, the EPA approved the blend increase to E15 (15% ethanol). An increase mandated to include cellulosic renewables (non-food) as opposed to corn. Now, several years into the program, cellulosic biofuels are still not available. Nevertheless, the EPA should not continue to adjust the volumes between ethanol and biofuels. It was at the onset of the program in 2007 that the Department of Energy (DOE), assured the taxpayers cellulosic ethanol would be ready and cost competitive with gasoline by the year 2012. Again, yet another goal the program failed to meet. Incidentally, that promise accompanied an astounding $385 million federal investment in six privately owned plants.

Unfortunately, at this time technological realities and market fundamentals simply do not support large-scale production of cellulosic biofuels and the industry is not near capable of meeting the RFS2 mandates. The creation of a law does not guarantee that science and economics will cooperate. As we look at the legal requirements and limits of alternative fuels made from wood chips and corn cobs, one thing is wholly apparent. We can’t get there from here.

So then, where are we? In regards to the ethanol mandate, we are quite possibly near the end. It was a poorly drafted piece of legislation that is not sustainable without government backing. Aside from corn farmers and their lobbyist, there is little support for continuing the project. Unfortunately, and unavoidably, the same corn farmers who benefited from the program will suffer the greatest financial impact upon its demise.

Nov 30, 2015 | 6 comments | by
Next Page »