Archive for the ‘Climate Change’ Category

TysonCNBCRecently I appeared on CNBC to discuss whether to lift the 39-year old ban on exporting US produced crude oil. Ending the ban is bad policy for 5 reasons.

I. Allowing the export of crude oil will raise gasoline prices for American consumers. As I’ve argued before, while the oil boom can’t lead to affordable energy for Americans, it has led to a very slight discount for US refiners, which in turn lowers gasoline prices just a tad.

II. It doesn’t make sense to start exporting crude oil when we’re still importing 7.6 million barrels of oil every day, and we’ll continue to be dependent on imports for a long time.

III. Exporting crude will provide incentives to produce more oil, further straining environmental concerns from fracking and deepwater drilling, and exacerbating the impacts of global climate change from its overseas consumption. While we are currently exporting record amounts of refined petroleum products like diesel and gasoline, allowing the export of the raw crude oil will significantly increase the rate at which we export domestically produced oil. That’s because right now crude oil producers must first ship their product to a refiner, where it can take a while to turn the crude into end products. Allowing for direct crude exports will allow producers to bypass the refineries altogether, and will expand the number of export ports from which to unload the crude.NA-BZ765_OILEXP_G_20140122181803

IV. Crude oil exports won’t be effective as a diplomatic tool to counter influence of, say, Russian or Saudi energy exports because the United States simply lacks adequate spare capacity to meaningfully dilute those countries’ dominance over certain markets.

V. Focusing on whether to export crude oil or not misses the larger point: we can’t have this debate in a vacuum separate from the need to establish a national energy and climate policy that comprehensively establishes a clear path for consumers to enjoy access to affordable, reliable and sustainable energy for generations to come.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum

This weekend I was honored to speak at the 2014 Public Interest Environmental Law Conference at the University of Oregon along with my colleague Scott Nelson. My presentation is here, and it details how hundreds of millions of dollars were spent by SuperPACs and other dark money groups focusing on ads and other strategies to attack EPA regulations and/or promote expanded fossil fuel production. While some wealthy climate activists, like Tom Steyer, are trying to keep up with the Koch’s and other fossil fuel-backed spenders, it’s clear that the solution is not trying to match them in an arms race, but rather focus on building the grassroots. For example, the amazing activists protesting the Keystone XL pipeline have, despite no big money ad campaign, managed to force the President to frequently address what otherwise would be an obscure pipeline permitting process. This kind of inspiring feat is what Steyer should be building, rather than spending $100 million on pricey consultants, advertising agencies and TV stations. In the meantime, let’s support Public Citizen’s Democracy is for People campaign to get unregulated corporate money out of our political system.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum

TysonFoxWarmingFolks in the Northeast US are being subjected to some serious plummeting Polar Vortex temperatures. It’s so cold out that escaped convicts are turning themselves in to prison to stay warm. It’s so cold in DC my phone’s weather app is displaying temperature in Kelvin. No surprise then that climate change deniers are out in full force, claiming that the current cold temperatures must be proof that climate change is a hoax. Sadly, this isn’t new. Three winters ago I appeared on Fox when much of the Northeast was buried under blizzards and freezing temperatures, and the fact-challenged host tried to assert that the cold snap proves climate change doesn’t exist. Curl up with your favorite quilt, a mug of hot chocolate and watch my interview where I calmly discuss how cold weather doesn’t invalidate science. Or as climate scientist Michael Mann says, “We climate scientists actually have a technical term for this phenomenon: it’s called winter.” And be careful walking out there, because the “polar vortex causes hundreds of injuries as people making snide remarks about climate change are punched in the face.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum

A version of this appears on National Journal’s Energy Insiders blog.

You wouldn’t know it because it still costs you more than the GDP of Burundi to fill up your Ford F150 at the pump, but the US is awash in crude oil. We’re producing so much fracking oil in places like Bakken and Eagle Ford that by 2015 no other country on Earth will produce more oil than us. I call it the Sarah Palin Effect, after the Vice-Presidential Candidate’s rousing chants of “Drill Baby Drill” on the 2008 campaign trail. The takeaway from Palin’s mantra was the more oil America drills, the lower the prices we pay for gasoline.

exportsObama’s Cabinet is embracing Palin’s Petroleum Plan with gusto, but with a twist: “Export Baby Export”. His Energy Secretary, Dr. Ernest Moniz (who looks like he stepped off the set of American Hustle), cribbed from her notes when he recently told reporters that the 39-year-old ban on exporting American-Made oil is outdated. I can still hear the popping of Big Oil’s champagne corks, because lifting the ban on crude oil exports will mean two things: higher gasoline prices for US drivers, and fatter profits for oil companies.

First, we need to understand why Palin’s Petroleum Proliferation hasn’t resulted in dramatically lower gasoline prices (gasoline prices during Obama’s Oil Boom have actually increased 54% since 2009). Global oil infrastructure makes it relatively easy to physically deliver the commodity in most parts of the planet, so there are generally prevailing universal benchmark prices. As a result, Wall Street traders price oil based on global events and trends, and right now they’re chasing Chinese demand rather than bulging US production. That’s because as America approaches the title of The Planet’s Largest Producer, it’s still only a puddle in the sea of global supply and demand. Even if we open all federal onshore and offshore areas to new drilling, it will have an “insignificant” impact on gasoline prices.

Ending the four-decade-strong ban on exporting US produced oil will raise prices for households and small businesses. While the domestic oil glut isn’t moving global benchmark prices, it is keeping US gasoline prices down a tad, as the excess capacity means it’s cheaper for US refiners to access select US landlocked crude (Light Louisiana Sweet, Mars and Bakken Clearbook) and turn it into useful products like gasoline. But these savings are being offset by record exports of refined petroleum products, which are exempt from the export ban. Because the ban only applies to crude oil, there’s no restrictions on exporting refined petroleum products, which is why they are now the largest physical export in the US economy, as we’re exporting more than 3 million barrels of refined petroleum like gasoline and diesel every day. A Public Citizen analysis finds that, absent increased exports of refined gasoline, average U.S. gasoline prices over the past year would have been as much as 3.5% lower. We predict that if the oil can be exported without first refining it, we will likely see a higher rate of exports, and a bigger price increase for American motorists. So if the millions of barrels of American oil were now free to be sold outside our borders, our refiners will be competing with China for our oil, and we’ll see prices increase.

So why would ObamaPalin support overturning a law that protects consumers? Because Big Oil’s influence on our political system is extreme: their lobby arm, the American Petroleum Institute, spends more than $200 million annually to influence how Americans think about energy policy, and companies like Exxon and Shell are spending even more to do the same.

Exporting fracked oil, or opening millions of new acres to drilling in our oceans and in our federal parks won’t produce enough extra oil to lower global prices, but the additional hundreds of thousands of barrels of daily production will mean huge profits to the companies extracting it. And central to their strategy is moving this oil out of America and into more lucrative global markets. But what’s good for Big Oil isn’t OK for households and small businesses, as there will be a net job loss from exports, with any additional oil jobs trumped by losses incurred by non-oil businesses, both large and small, due to higher gasoline prices.

Sarah Palin’s – whoops I mean President Obama’s – focus on oil is ultimately misguided. As our current domestic oil boom painfully illustrates, the US cannot produce its way to affordable gasoline, because the underlying commodity price is set by factors outside our borders. As long as we remained tethered to oil, we won’t be able to deliver affordable or sustainable energy for our families. Renewable energy, energy efficiency, the electrification of the transportation sector and other investments in a sustainable energy infrastructure are the only options.

NA-BZ765_OILEXP_G_20140122181803Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum

A version of this appears at National Journal’s Energy Insiders blog.

In the history of capitalism, when an industry loses its edge to more nimble competition, it often turns to politicians on its payroll to convince its depleted workforce that their ills are the fault of politics rather than a failure to innovate. That’s the case of coal, where annual production is as high as it’s ever been, production has been steady over the last decade, but coal mining employment has dropped meteorically from its height in the 1920s. The mechanization of mining, and not the EPA, declared war on coal since the Roosevelt Administration. You didn’t see rallies in the 1980s by the typewriter industry attacking Bill Gates and Steve Jobs. Innovate or go home. Coal’s share of electricity production falling from 53% to 43% in the last two decades has a lot more to do with natural gas’ ascension than EPA regulation.

Some state officials and members of congress allege a “war on coal” by the EPA. But EPA’s rules not only follow the John Roberts’ Supreme Court mandate to regulate greenhouse gas emissions, but recognize that competing technologies have eclipsed coal in terms of efficiency. A new combined cycle natural gas plant features capital costs of $764 million and levelized generation costs of $50.24/MWh—that’s capital costs 75% cheaper than scrubbed pulverized coal and 43% less expensive levelized generation costs than coal. Coal was the workhorse of the power industry for so long because it was cheap and more efficient than its rivals, and because we didn’t care about or fully understand the environmental costs. But new coal is no longer competitive, and these EPA rules simply enshrine the Supreme Court mandate for coal to better account for its environmental costs.

Natural gas is problematic too. It’s imprudent policy to assume that gas will remain cheap, or even affordable for that matter. While we most likely have a few more years of moderately-priced natural gas, we will see a return to the Bad Old Days of natural gas price volatility as soon as emerging and proposed infrastructure changes accelerate. Natural gas’ emissions benefits are no match for zero-emission competitors, but today’s cheap gas prices are luring crucial support away from the long-term renewables solution, and the detrimental impact of fracking on water and emissions can’t be ignored.

Some utilities, with management styles enshrined with state utility commissions, lack the acumen to efficiently respond to changing market dynamics. They remain beholden to outdated supply chains that led them to believe that they must continue to stick with coal, economics be damned. Maximizing investment in a decentralized electricity structure has to be a significant part of policy going forward. Indeed, FERC Chairman Jon Wellinghoff promoted the idea of replacing centralized, baseload generation with small-scale, distributed renewable energy in an April 2009 interview. Solar PV costs are plummeting, from $3.80/watt in 2008 to $0.86/watt in mid-2012.

Economic transitions can be devastating to vulnerable populations and wreak havoc on hard-working communities. Politicians representing these areas can either manufacture political boogeymen, and promise an era that never can return again. Or they can talk about the benefits of a clean energy transition, where these communities become the center of wind and solar PV manufacturing and where every household and business has rooftop solar. Of course, honesty and facts are in short shrift with too many members of congress, so here come the boogeymen—and silly me thought Halloween was over.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum.

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