Tag: domestic energy

The NRC Plans to Implement Report’s Suggestions before Substantial Deliberation

The U.S. Nuclear Regulatory Commission’s Fukushima Daiichi task force recently submitted a report to the congressional oversight committees on the first 90 days of its nuclear power plant review which examines the safety of nuclear energy facilities in the United States. The report also provides recommendations to improve the U.S. facilities’ safety procedures.

Since the report’s release last week, Chairman Jaczko has announced that the Commission should review the suggestions within 90 days; and, for the industry to implement those suggestions within five years. While the Chairman claims that the 90 day review is ample and just, many in the nuclear energy industry would argue otherwise. In fact, any speedy regulation for the sake of regulation will be a roadblock for further developing the U.S. nuclear energy industry.  Additionally, the negative economic impact of burdensome proposed regulations will not just kill existing jobs, but also preventing the creation of new ones.

Since the events at the Fukushima Daiichi plant in Japan, U.S. nuclear facilities have been in the forefront of providing support. Additionally, they have been examining their own plants to expand on the safety measures that are already in place. The industry as a whole has always been committed to safety and will continue to be in order to ensure consumers have access to safe, clean, dependable and affordable source of energy, particularly manufacturers that use nearly 30% of the nation’s energy.  As a result, the Commission should take its time in reviewing any suggestions by the report.  Furthermore, the Commission should allow for deliberations that include stakeholders’ input in order to make certain that any regulations moving forward are balanced and provide for increased safety without a negative economic impact to the industry that would result in job loss and increase the cost of energy.

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API – NOIA Study: Offshore Permitting Delays Stifles U.S. Job Creation

The Department of Interior (DOI) has been slow in issuing deepwater drilling permits for exploration and development in the Gulf of Mexico.  Since the moratorium on offshore drilling was lifted in November 2010, companies, who can afford to, have kept their lease and rigs “warm” and continue to do so. 

The Gulf of Mexico remains to be a great source for development and exploration of domestic energy.  It is also provides a tremendous opportunity for job creation and government revenue.  A study by the American Petroleum Institute and the National Ocean Industries Association estimates that by streamlining the permitting process 190,000 jobs can be created by 2013 and the capital expenditures could increase by 140%, reaching $15.7 billion.  Furthermore, spending by offshore oil and gas industry would increase by 70%, reaching $25.7 billion of investments, with total contributions to the nation’s GDP being nearly $45 billion.  

Mahta Mahdavi is Director of energy and resources policy, National Association of Manufacturers

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As Summer Heats up, So Do Discussions on Offshore Drilling and Job Creation

With the grim announcement today of the unemployment rate ticking up to 9.1 percent and only 54,000 jobs created in May, nearly 100,000 short of the estimated number, the issues of creating jobs by putting our domestic energy companies back to work is taking center stage in Congress.

Yesterday, in the House of Representatives, offshore drilling was the hot topic with three committees holding hearings on the issue. Manufacturers know that resuming drilling in the Gulf of Mexico and increasing domestic energy production will help invigorate our embattled economy and add more jobs to the payrolls.

The House Energy and Commerce Committee passed a measure yesterday to streamline permitting for offshore drilling operations and to eliminate the bureaucratic red tape that holds up new exploration and production. According to the Committee, the measure will help create jobs and increase domestic energy supplies.

In the House Oversight and Government Reform Committee, Chairman Issa released a report critical of the BP/Administration Response to the Gulf Oil Spill and also held a hearing assessing the recovery efforts after the spill. Mississippi Governor Haley Barbour and Director Michael Bromwich from the Bureau of Ocean Energy Management, Regulation, and Enforcement at the Department of the Interior, both testified.

And in round three of hearings, the House Natural Resources Committee , Subcommittee on Energy and Mineral Resources held a hearing on Alaskan oil and gas drilling, and the need for faster action in the permitting process. The subcommittee stressed the importance of expediting exploration and production to reduce dependence on foreign oil and create hundreds of thousands of jobs.

As summer goes on and gas prices hover around four dollars a gallon, unemployment continues to tick up, the cost of goods and services rises, domestic energy production will continue to remain in the forefront of congressional debates.

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House Overwhelmingly Backs Offshore Oil, Gas Development

The House of Representatives this afternoon voted 266-149 to pass H.R. 1230, the Restarting American Offshore Leasing Now Act. That’s a huge bipartisan level of support for the bill, which directs the Secretary of Interior to move ahead with previously scheduled offshore oil and gas leases.

The overwhelming support came despite the White House issuing a formal Statement of Administration policy opposing H.R. 1230 and H.R. 1229, the Putting the Gulf of Mexico Back to Work Act.

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Gas Prices: Markets Will Respond to Increased U.S. Oil Production

One argument Americans do NOT need to hear in today’s House debate on H.R. 1230, the Restarting American Offshore Leasing Now Act, is encouraging domestic energy production will do nothing to lower high gas prices today because, after all, it will take years for any new drilling to produce oil and gas. That old argument is just an excuse for inaction.

And it is an old argument. As Rep. Doc Hastings (R-WA) observed on a conference call with bloggers Wednesday, opponents are always saying it will take 10 years or seven years to have impact, but they were saying 10 or seven years ago. With action then, we might not have this problem.

Hastings, chairman of the House Natural Resources Committee, then dared to cite market forces in his further rebuttal:

But to me, there’s a bigger portion to this, and that is, crude oil is a global commodity and that we know. Yet we are sitting on potential reserves here that are absolutely huge, and the world knows that. And if we send a signal to the markets that we’re going to go after the resources that we have in this country … — and keep in mind, OPEC controls about 45 percent of the market — I think that will send a signal to the market that we are very, very serious about utilizing our resources, and I think that will have a positive impact on driving the price of gasoline down.

As a matter of fact, that happened in 2008, if you recall. Because there was a congressional and a presidential moratoria [on outer continental shelf drilling] in 2008 going into the gas crisis, $4 a gallon in August of that year. Both of those moratoria went away, and you know, the gas prices dropped, and I think there’s no question about that, it was because there was a signal to the market….

A lot of people say there are other factors controlling prices, and my short answer to that is, sure there are other factors. It’s called OPEC. They’re a cartel….In any sort of cartel, if you want to beat a cartel, you increase the supply of whatever that cartel is controlling. So if we send a signal that we’re going to increase the potential supply of crude oil in the world, I think the market will respond accordingly.

The National Association of Manufacturers sent the House a “Key Vote” letter Wednesday endorsing H.R. 1230, as well as H.R. 1229, the Putting the Gulf of Mexico Back to Work Act.

News coverage …

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Manufacturers Support House Bills to Increase Domestic Energy

The House of Representatives today debates H.R. 1230, Restarting American Offshore Leasing Now Act, one of three bills House Republicans have proposed in their American Energy Initiative to increase the reliable production of domestic oil and natural gas. (House floor schedule)

The National Association of Manufacturers on Wednesday sent the House a “Key Vote” letter urging support for the bill, as well as H.R. 1229, the Putting the Gulf of Mexico Back to Work Act. Excerpt:

Manufacturers support energy policies that: 1) expand domestic supplies in an environmentally safe manner; and 2) lower costs for manufacturers, which use nearly one-third of our nation’s energy. Access to competitively priced energy helps manufacturers compete in the global economy and preserves high-paying jobs here at home.

Every day of unnecessary delay in permitting costs jobs and hurts America’s manufacturers and their employees. Thousands of jobs were lost during the 2010 offshore moratorium. Companies that make and supply equipment, services, engines, boats and materials such as steel and concrete suffered under the moratorium and continue to suffer.
(continue reading…)

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President Obama: Boost Oil Output, Just Someplace Else

From Associated Press,”Obama says he wants oil producers to boost output“:

Amid a surge in the cost of gasoline, President Barack Obama said Tuesday he is calling on major oil producers such as Saudi Arabia to increase their oil supplies and lower prices, warning starkly that lack of relief would harm the global economy.

“We are in a lot of conversations with the major oil producers like Saudi Arabia to let them know that it’s not going to be good for them if our economy is hobbled because of high oil prices,” Obama said in an interview with a Detroit television station.

One would have thought the President would urge Saudi Arabia to discourage oil production and move quickly to a “clean energy” economy.

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On Oil, Instead of Raising Costs Through Taxes, Increase Supply

Jay Timmons, president and CEO of the National Association of Manufacturers, issued a statement in response to President Obama’s letter to Congress calling for higher taxes on domestic oil and gas production. Excerpt:

That misguided policy would result in more inflation, higher prices at the pump for already beleaguered Americans, and increased costs for products consumers need and use every day.Manufacturers support efforts to increase the use of clean energy sources and are helping to lead the way in meeting future energy demands with new energy sources. Until those alternative sources are cost-competitive with oil and gas and sufficient to meet this country’s demand for energy, manufacturers believe the United States should expand access to domestic energy by opening additional areas of the country – offshore and onshore – to exploration and development.

Timmons concluded: “President Obama wants to raise taxes on energy companies and, at the same time, reduce the cost of gasoline. He can’t have it both ways.”

John Felmy, chief economist of the American Petroleum Institute, had several pithy comments for the reporters. From USA Today, “Obama, Republicans tangle over oil subsidies“:

This is a proposal born of desperation that would do nothing to reduce gasoline prices,” said American Petroleum Institute chief economist John Felmy. “It would reduce investment in new oil and natural gas projects, cost new jobs and decrease oil and natural gas production.” (continue reading…)

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President Obama: Eliminate Oil Subsidies (That Don’t Really Exist)

President Obama has made criticisms of the U.S. energy industry a feature in his recent public appearances, especially the campaign fundraisers, and today he elevated the political misdirection with a “Letter from the President to Congressional Leadership Regarding Oil Subsidies.”

While there is no silver bullet to address rising gas prices in the short term, there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.   One of those steps is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil. Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsized profits this quarter.

We must raise taxes on domestic oil and gas production in order to reduce our dependence on foreign oil! Is that really a serious argument?

No. No it’s not. Just as the President’s repeated attacks about “subsidies” and “tax breaks” for Big Oil are not serious arguments.

The American Petroleum Institute explains the realities of energy taxation in the United States in this fact sheet. Good to actually see some actual facts in this important policy debate.

The U.S. oil and natural gas industry does not receive “subsidized” payments from the government to produce oil and gas. However, there are many provisions in the tax code that allow companies to recover their costs. The oil and gas industry are eligible for these deductions, which are similar to, if not the same as, deductions available to many other industries.

Tax deductions should in no way be confused with subsidies. A fundamental pillar of the U.S. income tax system is that businesses are taxed only on net income. This means that there needs to be some practical and fair method for businesses to recover costs. The policies underlying cost recovery provisions in the tax code legitimately utilized by the oil and natural gas industry are no different than those for any other industry, and are necessary to insure that our industry is treated no differently than any other. (continue reading…)

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No Permitorium for Cuba

From TWN, AFP, via China Post, “Cuba reveals plans to drill 5 new oil wells in the Gulf of Mexico by 2013“:

HAVANA — Cuba on Tuesday announced plans to drill five deep-water oil wells in the Gulf of Mexico beginning this summer, expressing confidence that its efforts will be rewarded with major new energy finds.

“We’re about to move to the drilling phase,” said Manuel Marrero, an official with the government authority tasked with overseeing Cuba’s oil sector. “We’re all really hopeful that we will be able to discover large reserves of oil and gas,” said Marrero, who added that the ventures would be undertaken with the help of unspecified foreign companies.

There’s a new pitch: End Cuba sanctions so U.S. can import its oil!

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