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Energy Policy
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By Ed Burke, Dennis K. Burke Inc.
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announced their creation of a new Climate
Action Task Force to put the climate change
issue front and center.
Meanwhile, the president of the
American Petroleum Institute pledged that
the trade group would flex its muscle in the
2014 elections as it calls on lawmakers to
support “pro-growth energy policies.”
Outlining the labor organization’s
policies for the coming year, the head of the
AFL-CIO said they don’t support lifting the
ban on exporting crude, but they do sup-
port the construction of the Keystone XL oil
pipeline.
And, in a major break with the admin-
istration, a group of the nation’s leading
environmental organizations announced
that it will no longer support the President’s
“all of the above” energy policy.
So, how big of a role do you think energy
policy will play in the mid-term elections?
In January, the President issued a
Presidential Memorandum establishing a
Quadrennial Energy Review. “Affordable,
clean, and secure energy and energy services
are essential for improving U.S. economic
productivity, enhancing our quality of life,
protecting our environment, and ensuring
our nation’s security,” announced the
President. “Achieving these goals requires
a comprehensive and integrated energy
strategy resulting from inter-agency dialogue
and active engagement with stakeholders.”
The initial focus of the review will be on
the nation’s infrastructure for transporting,
transmitting, and delivering energy. The
memorandum added that our current
infrastructure is increasingly challenged
by changes in energy supply, markets,
and patterns of end use; issues of aging
and capacity; impacts of climate change;
as well as cyber and physical threats. The
first Energy Review Report would serve as a
roadmap to help address these challenges.
The inter-agency task force will develop
an integrated review of energy policy that
integrates stakeholder perspectives and
build on the foundation provided in the
Administration’s
Blueprint for a Secure Energy
Future
of March 30, 2011, and
Climate Action
Plan
released on June 25, 2013.
The task force will also offer recom-
mendations on what additional actions it
believes would be appropriate to address
the nation’s energy challenges and oppor-
tunities. The first report is expected in
January of 2015.
Although the Energy Review could
bring us closer to a realistic energy policy,
many believe this could also be a tactic to
delay decisions on crude exports and the
Keystone XL pipeline.
Crude Oil Exports:
There’s been a lot
of controversy over the 40-year-old ban
on exports of U.S. crude oil. With the U.S.
expected to become the world’s leading
oil producer in 2015, oil companies point
out that the scenario is very different from
when the ban was enacted in 1975.
While there’s no doubt that exporting
crude oil would be a great boost to the U.S.
economy and reducing the trade deficit,
there is a lot of disagreement as to which
direction domestic oil prices will go in the
long-term.
Pipeline Progress:
After five years and
15,000 pages of documents, a TransCanada
spokesman said he wouldn’t want to
speculate when there would be a decision
on the Keystone XL Pipeline by the State
Department.
The renewed lobbying on the pipeline
comes as TransCanada begins shipping
oil from the pipeline’s 485-mile southern
leg running from Cushing, Oklahoma to
the Gulf Coast. Once up to full speed, the
southern pipeline will be capable of moving
830,000 barrels a day. That’s about 4 per-
cent of daily U.S. oil consumption.
The Keystone comes online at a time
when U.S. pipeline capacity is stretched
thin from the oil shale booms in Texas and
North Dakota.
The $2.3 billion southern leg didn’t
require State Department approval because
it does not cross a U.S. border. The northern
segment would run 1,179 miles from
Alberta, Canada to Steele City, Nebraska.
The pipeline would connect to Cushing
through an existing 298-mile spur.
The State Department’s review is
expected to come after the President’s State
of the Union address, with a final decision
coming after that.
Final Rule on Tier 3:
In February, the
EPA is expected to release its final rule
on the Tier 3 standard. Starting in 2017,
Tier 3 would lower the sulfur content in
gasoline, and set new vehicle emissions
standards for passenger cars and light
trucks.
Changes in Renewables:
The tax
credits for biodiesel and cellulosic biofuel
expired at the end of 2013, but like a bad
penny, they keep coming back. In the past,
these credits were extended retroactively.
EPA is expected to release its final rule
soon on volume requirements for the 2014
Renewable Fuel Standard (RFS). EPA has
proposed reducing the 2014 volume obli-
gations from 18.5 billion gallons to 15.21
billion gallons of renewable fuels and
2.2 billion gallons for advanced biofuels.
EPA says the volume reduction will hold
ethanol blends in gasoline at the current
E10 level.
The proposal would be the first time
EPA has used its waiver authority to lower
the overall RFS volume mandate require-
ments.
New Opportunities:
As America deals
with its new role in the energy market,
I think we can all agree that abundant
energy is a good problem to have.
