Archive for the ‘Environment’ Category

As the White House, Congressional leadership and energy regulators at FERC are fast-tracking natural gas exports, they’re forgetting one important fact: it’s against the law. First, a little background. Less than a decade ago, natural gas prices were at record highs and folks like then-Federal Reserve Chair Alan Greenspan were saying that the US had to make it easier to permit Liquified Natural Gas (LNG) imports. Fast forward to today, where fracking has resulted in booming domestic natural gas production, fueling calls to make it easier to permit LNG exports. But fracking poses enormous risks to the environment, nullifying emissions benefits when it is burned as a fuel. We’ve raised these concerns about LNG exports in the past, but new research shows that exporting LNG is illegal.

In 1975, President Ford signed the Energy Policy & Conservation Act into law. In order to protect consumers, Section 103(b)(1) of the EPCA (S.622) directed the President of the United States “to promulgate a rule prohibiting the export of crude oil and natural gas produced in the United States, except that the President may…exempt from such prohibition such crude oil or natural gas exports which he [sic] determines to be consistent with the national interest.” While the Department of Commerce promulgated rules banning crude oil exports, the agency never got around to writing rules banning natural gas exports. This oversight not only means that proposed LNG exports are most likely illegal, but that consumers are at risk. That’s because of supply and demand: the more fracked natural gas we export, domestic supplies will get tighter, pushing up gas prices for households and businesses.

Public Citizen will ask the Department of Commerce to issue this long-dormant requirement to ban natural gas exports (stopgasexports.org)not just to protect consumers, but to discourage the additional fracking that would occur to meet expanded demand wrought by LNG exports.

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

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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

TysonRTfrackingI did an interview with RT discussing the growing problems that chemicals used in fracking oil & natural gas pose to the environment and public safety. First, the Associated Press reports that there have been hundreds of complaints of water pollution from fracking, most from methane but some from the chemicals used in fracking. But this AP report only tells half the story, as it simply documents the different ways in which states handle and record complaints when folks call in to a hotline or send an email. That’s good info, but not nearly as important as sending scientists to investigate the complaint. And there’s the rub: when confirmed fracking pollution occurs, oil & gas companies quickly settle with the affected landowners, and, in return for providing cash and drinking water supplies, force families to sign non-disclosure agreements, forbidding them from even acknowledging that fracking pollution ocurred, or in some cases, requiring families to sign statements proclaiming that pollution didn’t occur. We challenged Jack Gerard on this point when he spoke at our offices earlier this year, and he denied knowing anything about these common non-disclosure agreements. In one famous case, the natural gas company forced parents to guarantee that their two young children would never speak about fracking pollution on their farm for the rest of their lives. The proliferation of these non-disclosure agreements distorts the policy debate because they interfere with the collection of data needed to draw conclusions about the saftety of fracking. It is unacceptable for the industry to continue to say “Fracking is safe, evidenced by the lack of water contamination proof!” at the same time they’re forcing familes to give up their right to talk about pollution (or in same cases, forcing the families to lie in order to qualify for the financial compensation). A simple solution is to disallow non-disclosure agreements that mask information on drilling contamination.

A second issue involves transportation hazards posed by fracking chemicals. On December 30, Warren Buffet’s BNSF line was hauling 78,000 barrels of oil on 104 rail cars from the Bakken Shale to a refinery in Missouri when it was hit by another BNSF train carrying soybeans headed in the opposite direction, derailed, and started a massive fire. I spoke to ABC World News Tonight about this tragedy, and, as my friend Steve Horn reports, the crude oil was more volatile and dangerous because it was laced with fracking chemicals absorbed by the oil during the production process. Indeed, the Pipeline & Hazardous Materials Safety Administration just issued a warning that fracked oil is more chemically explosive. And corrosive agents used in fracking that are then absorbed by the oil, such as hydrochloric acid, “which federal investigators suspect could be corroding the inside of rail tank cars, weakening them.” This means that moving fracked oil by pipelines won’t be safer, since the caustic oil could corrode pipelines as well. Big oil is opposing federal efforts to retrofit the safety of rail cars hauling crude oil.

railAs I’ve written before, the fracking boom is failing to deliver affordable, safe or sustainable energy for America.

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

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