This is a progress report on the NC H298 bill: Affordable and Reliable Energy Act. 

For those who did not attend, here is a video of that Commerce Committee hearing.

 

In it I provide some rarely reported information — like the problematic consequences of Rare Earth Elements (each turbine uses some 4000 pounds of REEs!). Few people are aware that one investigation concluded that wind turbine manufacture produces more radioactive waste material than results from the operation of a comparable nuclear facility!

Date:               January 24, 2012

To:                  Valero Employees

From:              Bill Klesse

Subject:          Keystone XL Pipeline Statement

As you know, the Obama administration decided last week to deny TransCanada’s application to ship crude oil via the Keystone XL pipeline from Canada to the Gulf Coast. Valero has planned to be a shipper and purchaser of that oil since 2008, and obviously we were disappointed in the decision. We issued a statement in response to questions from the media, and I wanted to share it with you in case you get questions from friends or business partners, and so that you would know why Valero supports the Keystone XL pipeline. This is the statement:

Despite the uncertainty and political fighting over the Keystone XL pipeline, Valero has continued to invest in its U.S. refining operation.  In 2011 we spent nearly $3 billion on projects, and for 2012 our capital expenditure budget is over $3 billion. These expenditures are keeping our employees on the job and putting additional people to work.  To reference two of our refineries, at Port Arthur, Texas, we have 1,600 contractors working on an expansion project, and at St. Charles Parish, Louisiana, we have another 1,000 contractors working on a separate project.  We need this kind of economic activity to accelerate to help all Americans.

With all the issues facing our country, it is absolutely unbelievable our federal government says no to a company like TransCanada that is willing to spend over $7 billion and put Americans to work on a pipeline.  The administration’s decision throws dirt into the face of our closest ally and largest trading partner.

The point above is that it is not about pipelines as many pipelines cross the Ogallala Aquifer, in the Great Plains region, and, in fact, there is already significant oil and gas production in the area covered by the aquifer. This is politics at its worst.

Thanks for your support.

Representative Walter Jones sent the email below with two articles on the Keystone Pipeline:

I thought you might be interested in seeing two editorials from today-one from the Wall Street Journal, and even one from the Washington Post-regarding President Obama’s decision to reject the Keystone XL pipeline.  The editorials do a great job of showing what is at stake with Keystone XL and why President Obama should reconsider.

It is incomprehensible for this president to spend so much time talking about jobs, and then to reject a proposal that would create thousands of jobs. Americans are tired of the lip service; we want action. Keystone XL has been studied to death. Even the president’s own State Department has twice determined that the project would have “no significant impacts” on the environment. It’s time for the president to stop the excuses and start creating jobs.

Thanks,

Walter

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Obama’s Keystone pipeline rejection is hard to accept

By Editorial Board, Published: January 18

ON TUESDAY, President Obama’s Jobs Council reminded the nation that it is still hooked on fossil fuels, and will be for a long time. “Continuing to deliver inexpensive and reliable energy,” the council reported, “is going to require the United States to optimize all of its natural resources and construct pathways (pipelines, transmission and distribution) to deliver electricity and fuel.”

It added that regulatory “and permitting obstacles that could threaten the development of some energy projects, negatively impact jobs and weaken our energy infrastructure need to be addressed.”

Mr. Obama’s Jobs Council could start by calling out . . . the Obama administration.

On Wednesday, the State Department announced that it recommended rejecting the application of TransCanada Corp. to build the Keystone XL oil pipeline, and Mr. Obama concurred. The project would have transported heavy, oil-like bitumen from Alberta — and, potentially, from unconventional oil deposits in states such as Montana — to U.S. refineries on the Gulf of Mexico coast.

Environmentalists have fought Keystone XL furiously. In November, the State Department tried to put off the politically dangerous issue until after this year’s election, saying that the project, which had undergone several years of vetting, required further study. But Republicans in Congress unwisely upped the political gamesmanship by mandating that State make a decision by Feb. 21. Following Wednesday’s rejection, TransCanada promised to reapply — so the administration has again punted the final decision until after the election.

We almost hope this was a political call because, on the substance, there should be no question. Without the pipeline, Canada would still export its bitumen — with long-term trends in the global market, it’s far too valuable to keep in the ground — but it would go to China. And, as a State Department report found, U.S. refineries would still import low-quality crude — just from the Middle East. Stopping the pipeline, then, wouldn’t do anything to reduce global warming, but it would almost certainly require more oil to be transported across oceans in tankers.

Environmentalists and Nebraska politicians say that the route TransCanada proposed might threaten the state’s ecologically sensitive Sand Hills region. But TransCanada has been willing to tweak the route, in consultation with Nebraska officials, even though a government analysis last year concluded that the original one would have “limited adverse environmental impacts.” Surely the Obama administration didn’t have to declare the whole project contrary to the national interest — that’s the standard State was supposed to apply — and force the company to start all over again.

Environmentalists go on to argue that some of the fuel U.S. refineries produce from Canada’s bitumen might be exported elsewhere. But even if that’s true, why force those refineries to obtain their crude from farther away? Anti-Keystone activists insist that building the pipeline will raise gas prices in the Midwest. But shouldn’t environmentalists want that? Finally, pipeline skeptics dispute the estimates of the number of jobs that the project would create. But, clearly, constructing the pipeline would still result in job gains during a sluggish economic recovery.

The Anti-Jobs President

Obama rejects the Keystone XL pipeline and blames Congress.

The central conflict of the Obama Presidency has been between the jobs and growth crisis he inherited and the President’s hell-for-leather pursuit of his larger social-policy ambitions. The tragedy is that the economic recovery has been so lackluster because the second impulse keeps winning.

Yesterday came proof positive with the White House’s repudiation of the Keystone XL pipeline, TransCanada’s $7 billion shovel-ready project that would support tens of thousands of jobs if only it could get the requisite U.S. permits. Those jobs, apparently, can wait.

Unless the President objected, December’s payroll tax deal gave TransCanada the go-ahead in February to start building the pipeline, which would travel 1,661 miles from Alberta to interconnections in Oklahoma and then carry Canadian crude to U.S. refiners on the Gulf Coast.

The State Department, which presides over the Keystone XL review because it would cross the 49th parallel, claimed yesterday that the two-month Congressional deadline was too tight “for the President to determine whether the Keystone XL pipeline is in the national interest.” The White House also issued a statement denouncing Congress’s “rushed and arbitrary deadline,” which merely passed with overwhelming bipartisan support.

This is, to put it politely, a crock.

Keystone XL has been planned for years and only became a political issue after the well-to-do environmental lobby decided to make it a station of the green cross. TransCanada filed its application in 2008, and State determined in 2010 and then again last year that the project would have “no significant impacts” on the environment, following exhaustive studies. The Environmental Protection Agency chose to intervene anyway, and the political left began to issue ultimatums and demonstrate in front of the White House, so President Obama decided to defer a final decision until after the election.

The missed economic opportunity was spelled out Tuesday by Mr. Obama’s own Jobs Council, which released a report that endorsed an “all-in approach” on energy, including the “profound new opportunities in shale gas and unconventional oil.” The 27 members handpicked by the President recommended that he support “policies that facilitate the safe, thoughtful and timely development of pipeline, transmission and distribution projects,” and they warned that failing to do so “would stall the engine that could become a prime driver of U.S. jobs and growth in the decades ahead.”

Only last week the White House issued a “jobs” report praising domestic energy production, but that now looks like political cover for this anti-jobs policy choice.

State did give TransCanada permission to reapply using an alternate route, timetable indefinite. The construction workers, pipefitters, mechanics, welders and electricians who might otherwise be hired for the project—well, they must be thrilled with this consolation prize. Not to mention all the other Americans who might fill “spin-off” jobs on the pipeline’s supply chain like skilled manufacturers and equipment suppliers, or still others who might work in oil refining and distribution.

Environmentalists seem to think they can prevent the development of Canada’s oil-rich tar sands, and that their rallies against Keystone XL will keep that carbon in the ground. They can’t, and it won’t. America’s largest trading partner will simply build a pipeline to the Pacific coast from Alberta and sell its petroleum products to Asia instead, China in particular.

Such green delusions are sad, and Mr. Obama’s pandering is sadder, though everything the country stands to lose is saddest. If Mitt Romney and the other GOP candidates have any political wit, they’ll vindicate the Keystone’s “national interest” and make Mr. Obama explain why job creation is less important than the people who make a living working for the green anti-industrial complex.

On Tuesday, the Institute for Energy Research issued its North American Energy Inventory (.pdf link), a report which documents the government’s own estimates of oil, natural gas and coal resources for the U.S., Canada and Mexico. (The IER is a non-profit, non-partisan 501(c)3 organization that is dedicated to advancing America’s supply using free market principles.)

In a nutshell, North America contains a vast bounty of energy sources in the form of oil, natural gas and coal. Reports that we are “running out” of energy sources use semantics and terminology to play with the facts. Simply put, we have chosen not to exploit potential sources close to home, finding it more expedient or convenient to depend on faraway sources for our energy.

Based on the ongoing tangible successes in North Dakota and Pennsylvania, one would think that the jobs/growth potential presented by aggressive energy development would tantalize any politician who is truly interested in helping the economy. One would think.

The following video will give you a quick run-down of the key points of the report, but I would encourage anyone interested to download and read the full report. It is extremely well-documented and although it is chock-full of facts and figures, I found it to be an easy read.

Excerpt from the report’s executive summary:

The amount of oil that is technically recoverable in the United States is more than 1.4 trillion barrels, with the largest deposits located offshore, in portions of Alaska, and in shale in the Rocky Mountain West. When combined with resources from Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels.

That is more than the world has used since the first oil well was drilled over 150 years ago in Titusville, Pennsylvania. To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves. For comparative purposes, the technically recoverable oil in North America could fuel the present needs in the United States of seven billion barrels per year for around 250 years.

Moreover, it is important to note that that “reserves” estimates are constantly in flux. For example, in 1980, the U.S. had oil reserves of roughly 30 billion barrels. Yet from 1980 through 2010, we produced over 77 billion barrels of oil. In other words, over the last 30 years, we produced over 150 percent of our proved reserves. …

Proved reserves of natural gas in the United States and throughout North America are enormous, and the total amount of recoverable natural gas is even more impressive. The EIA estimates that the United States has 272.5 trillion cubic feet of proved reserves of natural gas. The total amount of natural gas that is recoverable in North America is approximately 4.2 quadrillion (4,244 trillion) cubic feet.

Given that U.S. consumption is currently about 24 trillion cubic feet per year, there is enough natural gas in North America to last the United States for over 175 years at current rates of consumption.

A key point of the IER report: We have been told repeatedly by our President, liberal members of Congress and our environmental community that the U.S. consumes 24% (or somesuch) of the world’s energy, but we have only 2% (or somesuch) of the world’s proved reserves. It’s just not fair!

However, IER explains how lying liars lie:

RESOURCES AND RESERVES: WHY TERMS MATTER WHEN JUDGING ENERGY POTENTIAL

A frequent source of confusion about America’s energy potential is the terminology used, primarily the enormous yet poorly understood difference between “resources” and “reserves.” The term “reserves” typically refers to a country’s known, proved and presently economic energy supplies, but a country’s resources are much larger, representing a nation’s total potential energy. The debate over whether a country has only a few years’ supply of a particular energy source or centuries’ worth can hinge upon the terms employed. It is merely semantics—not a scientific assessment of what America has the capacity to produce—that allows critics to claim repeatedly that America is running out of energy.

Carolina Journal Exclusives

Measure would allow oil and natural gas production offshore and inland

RALEIGH — Republicans believe they will have enough votes when they return to session in November to override Gov. Bev Perdue’s veto of legislation both opening North Carolina’s coastal waters to natural gas drilling and authorizing hydraulic fracturing to recover inland shale gas deposits.

“We’ve been working very hard to get the votes and we’re close,” said Sen. Bob Rucho, R-Mecklenburg, a primary sponsor of Senate Bill 709, the Energy Jobs Act. “I think it’s within one or two votes,” and House Speaker Thom Tillis, R-Mecklenburg, and Senate President Pro Tempore Phil Berger, R-Rockingham, are working with Rucho to secure more votes.

“The other day the governor said she’s starting to get her interest piqued in energy jobs,” Rucho said. “I talked with her one time in the last month about the fact we really do need to sit down and talk about what huge benefits there are for the state. I hope that she will recognize that … and move forward with this diversification of our industries.”

Rucho said the bill delivers jobs and economic development. A report by the Southeast Energy Alliance found that offshore gas production would create more than 6,700 new jobs and boost the state’s gross domestic product more than $659 million annually over 30 years. It could create another $10 billion in cost sharing of government revenues, or $484 million per year on average.

Inland shale gas production would add still more revenue and jobs, Rucho said. “Other states that are doing this, Texas and Louisiana and Pennsylvania, are having the least economic pain from the recession,” Rucho said. “Why not North Carolina?”

Opponents of the measure, led by environmentalists, claim that the hydraulic fracturing process that could be used to free inland energy reserves, aka fracking, poses dangers to groundwater. They also argue that oil and gas companies may be engaging in predatory practices as they seek to gain access to landowners’ mineral rights.

“We’re certainly working to sustain the governor’s veto,” said House minority leader Joe Hackney, D-Orange. “I know the speaker is working [the other side], so we’ll see what happens.

“I think the prevailing opinion is go slow, do a thorough study and make sure that our water is not impacted.” That was the approach written into House Bill 242, said Hackney, whose legislative district spans three counties that would be affected by shale gas production. “Most Democrats feel that way.”

Hackney said his constituents have been vocal.

“Mostly emails, lots, most all of them on one side,” he said. “Either they don’t want it at all or they want to go very slowly.”

“We are opposed to that bill. We are working pretty hard with other groups, cities and communities across the state,” said Derb S. Carter Jr., director of the North Carolina/South Carolina office of the Southern Environmental Law Center in Chapel Hill, who urged lawmakers to go slowly.

“The real concern here is the contamination of drinking water supply, both groundwater and surface water,” Carter said. “There are about 2.7 million North Carolinians whose drinking water would be affected if fracking were to occur. There’s nothing to harm a community more than to have their drinking water in jeopardy.”

The largest of the state’s three Triassic basin bands of shale where gas may be found stretches in a southwesterly direction from Granville County near the Virginia border through Durham, Wake, and Orange counties all the way to the South Carolina border. Smaller deposits exist in Rockingham and Davie counties.

Hydraulic fracturing is a process by which large volumes of water, sand, and a small amount of lubricating chemicals are pumped at high pressure into shale, helping to open small fissures in the rock so the gas can escape.

Carter said some chemicals used are known to be toxic, and companies sometimes refuse to disclose what chemicals are injected “because they contend they are proprietary information, trade secrets.”

Aside from the chemicals, the possibility of spills and a dearth of existing treatment plants in North Carolina for the used water, there could be danger to downstream water supplies, to aquatic life and chronic, long-term health and environmental impacts that may take years to surface, Carter said.

Jordan Treakle, mineral rights project coordinator at Rural Advancement Foundation International, a Pittsboro-based nonprofit working with farmers and landowners, said farmland could be taken out of production to accommodate the large volume of acreage needed for frackng. Chemical spills could make farmland unusable, many roads would be cut through fields and forests to set up wells and the volume of truck traffic over local and state roads would be heavy.

“Environmentalists just say no. No nothing. No jobs and no low energy costs,” Rucho said. “We did a lot of due diligence to make sure that we not only are opening up the energy sector but that we are protecting ourselves and protecting the citizens of the state,” Rucho said. That included looking at best practices from other states and studying environmental issues that have arisen.

“If we can’t find a safe way to do that, it isn’t going to be done,” Rucho said. “There were a lot of precautions in that bill,” including a $500 million fund for any emergencies that may arise.

The Senate bill also incorporates H.B. 242, requiring a comprehensive environmental analysis. A report of the findings is due in May. The first preliminary public hearing to gather information will be held tonight at 6:30 at the Lee County Agricultural Extension Center.

Aside from environmental concerns, Treakle said there is evidence some energy-related leasing companies are conducting predatory practices, paying between $1.00 and $25 per acre in up-front bonuses while landowners in Louisiana receive from $2,500 to $25,000.

“Our concern is that these landowners are signing these contracts . . . without the help of an attorney and may not know what they’re signing up for” in terms of liability or fair compensation, Treakle said.

“I know that the (state) Attorney General’s Office has expressed interest in this issue. The North Carolina Department of Justice also has had some concerns. They have spoken to us about the issue and we have given them our concerns,” Treakle said.

“We’ve focused our efforts in Chatham, Lee, and Moore (counties) because that’s where these companies have been most active,” Treakle said. Leases have been signed for “between 9,000 and 9,400 acres” in Lee County, where there are up to 30,000 acres of gas-bearing shale. No leases have been filed yet with government agencies in Moore and Chatham counties.

Ted Feitshans, a mineral rights lawyer and extension specialist at North Carolina State University, said the No. 1 issue for landowners to be concerned about is whether they actually own the mineral rights. Some may have been transferred away during the state’s 1799 gold rush, he said.

“The company that they signed the lease with, at least theoretically, could sue them for damages. If they already started pumping the gas and somebody else owns the gas, it could be a very messy lawsuit,” Feitshans said.

“You could end up with abandoned equipment and partially drilled wells” if the company that signed the lease goes belly up, Feitshans said.

Leases could hold landowners liable for damages, fines and cleanup on their property and neighbors’ land.

Feitshans urges landowners to “Hire an oil and gas attorney who’s had some experience in negotiating gas leases. Unfortunately, we don’t have a lot of attorneys with experience with this in North Carolina.”

He’s holding a training session for attorneys for the North Carolina Bar Association Dec. 8 at its center in Cary.

Dan Way is a contributor to Carolina Journal.

The Senate is nearing a vote on the McConnel Amendment that would restrict EPA from legislating through regulation. Here is some info on the issue and amendment: