Energy Wars

Will the November 4, 2008, election doom the future of Nevada? That sounds ominous, I know, but this election could be a make-or-break moment in history for the Yucca Mountain Project. This is the ill-conceived plan to bury nuclear waste in Nevada's Yucca Mountain. Everyone in this state knows the problems inherent in this project and should be on alert. But also this should serve as a "heads-up" to everyone in the country.

California utility regulators conclude that a seven-year fraud by the company caused substantial harm to customers and could have diminished worker safety. The state Public Utilities Commission on Thursday levied a $30-million fine -- its largest ever -- against Southern California Edison and ordered the utility to refund more than $81 million to customers, concluding that a seven-year fraud caused substantial harm to consumers and could have diminished worker safety. Although the fine is a record for the PUC, it is $10 million less than what was ordered in late 2007 by a commission judge. The decision also substantially reduced the judge's refund order, cutting Edison's total price tag from the fraud to $146 million from $200 million.

Just two months ago, spiking petroleum prices were emboldening confrontational oil exporters such as Venezuela, Russia and Iran, fueling inflation anxiety at the Federal Reserve, raising expectations at American biofuel producers, and crimping the budgets of airlines and ordinary households alike.

OIL PRICES are plummeting, and the government ought to do something about it. You thought that the dramatic decline in the price of oil was one of the few good pieces of economic news lately? Well, in some ways of course it is. As the Post's Steven Mufson reported last week, the price of oil had dropped 38 percent since peaking two months ago.

Both The Hill and Politico.com have reported that a bipartisan "gang" of 20 Senators will not introduce a compromise energy bill before the election. You can read details of the original compromise here: The Gang-of-10 drilling deal is something for nothing. This is a huge triumph for McCain and major political blunder by Congressional Democrats. The original energy compromise was, I argued, "the best chance -- indeed, the only chance -- the Dems will have to simultaneously give the lie to McCain's faux bipartisanship and to expose the Big Energy Lie, the absurd notion that McCain and the Republicans believe in an all-of-the-above energy for dealing with our energy crises" (see "Gang-of-10 deal is a must for Dems").

An analysis has been completed of the global carbon cycle and climate for a 70,000 year period in the most recent Ice Age, showing a remarkable correlation between carbon dioxide levels and surprisingly abrupt changes in climate.

The prospect of U.S. regulation of climate-warming carbon dioxide has sparked a pre-emptive outcry from the Chamber of Commerce, which warned of bureaucratic gridlock if proposed limits are put in place.

From SUV's to long commutes, the American lifestyle is based on cheap gasoline. Cheap energy allows us to live far away from our jobs and to engage in conspicuous consumption contests based on who has the biggest automobile. Now, gas prices have skyrocketed, and higher prices at the pump are hitting us where it hurts. Since we also have a presidential election coming up in November, our pain at the pump has been hijacked and turned into a political issue. There are no quick-and-easy solutions to high gas prices, but the Republican candidate, John McCain, is promoting opening up our coasts to offshore drilling as just that: an easy solution that will result in immediate relief.

Costly as it may seem, California's mandate to cut climate-altering exhausts from vehicles and industry by nearly one-third in the next 12 years actually will boost the economy, a state analysis released Wednesday predicts. The improvements in fuel and energy efficiency and extra clean-technology jobs needed to achieve the required 30 percent emissions reduction would result in a net household savings of $400 to $500 a year and a net 0.2 percent or $4 billion gain in the total annual output of goods and services, according to the report.

U.S. Sen. Charles Schumer is pushing for municipalities that were hit hard by a questionable and costly energy-trading practice to be reimbursed. Schumer met Wednesday with Federal Energy Regulatory Commission Chairman Joseph Kelliher to find out how the recent energy problem occurred, who is accountable and how it can be corrected.

Gov. Dave Freudenthal urged federal land managers to proceed cautiously in developing rules for oil shale leasing, even though commercial development is likely many years away in Wyoming, if at all. "While oil shale is a technology that may one day be used for large-scale economic production, it is still an unproven and unknown resource and thus caution should be taken in its development," Freudenthal wrote to Bureau of Land Management Director Jim Caswell.

* Opens federal waters beyond 50 miles from shore along the Atlantic and Pacific coasts to oil and gas drilling, ending drilling bans that have been in effect for 26 years. States would have to agree to drilling for areas between 50 and 100 miles from land. * Rolls back $18 billion in tax breaks for the five largest oil companies and requires energy companies to pay billions of dollars in additional royalties from oil taken from the deep water areas of the Gulf of Mexico under questionable leases issued in the late 1990s. * Requires the release of 70 million barrels of oil from the government's Strategic Petroleum Reserve to put more oil on the market and lower gasoline prices. * Makes it a federal crime for oil companies holding federal leases to provide gifts to government employees, a response to a recent sex and drug scandal involving the federal office that oversees the offshore oil royalty program and energy company employees. * Provides tax credits for wind and solar energy industries, the development of cellulosic ethanol and other biofuels, and purchase of plug-in gas-electric hybrid cars. * Requires utilities to generate 15 percent of their electricity from solar, wind or other alternative energy source. * Gives tax breaks for new energy efficiency and conservation programs including the use of improved building codes low-interest loans for energy efficient homes, and for companies that promote their employees use of bicycles for commuting.

This week, the House of Representatives will consider the Comprehensive American Energy Security and Consumer Protection Act. The bill would protect our coasts up to 50 miles off shore, but then give states the option of allowing offshore drilling 50 miles off the coastline.

# The United States consumes nearly 21 million barrels of petroleum per day (7.5 billion barrels per year), one fourth the world total. (1) # Of the crude oil consumed in the U.S., 66 percent is imported. (2) # The U.S. is on pace to spend over $500 billion on petroleum imports in 2008. (3) # U.S. oil production currently occurs onshore in the lower 48 states (2.9 million barrels per day (mbd)), offshore (1.4 mbd, primarily in the Gulf of Mexico), and in Alaska (0.7 mbd). (4)

(1) Some of the organizations with problems were no doubt speculating in oil futures. Once the prices started to drop, the balance sheets of the organizations were affected, and they suddenly needed more capital. (2) As the companies who speculated in the oil market (all of them, not just the particular ones having problems today) try to unwind their positions because of margin calls, they drive down the price of oil in the futures market. That is likely why we are seeing declining oil prices, at a time when fundamentals would say they should be rising.

Gail's recent post on the fragility of the US distribution system and the shortages that will be imposed by refinery outages, is a reminder of our dependence on pipelines for supply. The dependence is not just in the US, though the debate over the reality of a new gas pipeline from Alaska to the lower 48 rumbles along as a part of the election debate.

To foster the creation of a local, sustainable economy in the Willits area by partnering with other organizations to watch for opportunities and vulnerabilities, incubate and coordinate projects and facilitate dialogue, action and education within our community.

Last week, Nate Hagens was interviewed by Jason Bradford on the "Reality Report". The radio program is about 47 minutes long, and Nate's interview is the last 40% of it. A link to his interview can be found here

A Sept. 17 House Workforce Protections Subcommittee hearing considered the impact of the Department of Labor's (DOL) worker health risk assessment proposal, a rule critics say was developed in secret and that could weaken and delay the enactment of future workplace health standards. "I have called this hearing today on the Department of Labor's proposed risk assessment regulation, because, quite frankly, I'm troubled by the agency's attempt to rush through this rule without a full consideration of its effect on the health and safety of the American worker," said Rep. Lynn Woolsey, D-Calif., in her opening statement.

US lawmakers Tuesday sought to overturn a decades-old ban on offshore drilling voting in favor of a new energy bill which has been spurred by spiralling oil prices. The new bill, which was put forward by the majority Democrats in the House of Representatives, was approved by 236 votes to 189. It would allow drilling off the US coastline up to a distance of between 50 to 100 miles (80 to 160 kilometers) overturning a 1981 federal moratorium.