In the Pipeline: May 7, 2010

Washington, DC – The American Energy Alliance (AEA), a non-profit organization that educates and engages the public on benefits of market-based energy policy, today congratulated Senator Lindsey Graham (R-S.C.) for siding with his constituents and opting out of one of the most economically damaging pieces of legislation this country has ever seen.

“Senator Graham has spent nearly six and a half months negotiating behind closed doors with big business, special interests and rent-seeking lobbyists to increase the price of 85 percent of the energy Americans use daily,” said Thomas J. Pyle, president of AEA. “And the Senator should be congratulated today for apparently backing out of this job killing legislation.”

AEA was the first organization to launch a comprehensive media campaign in South Carolina shortly after Senator Graham announced his intent to draft a national energy tax with Senator John Kerry (D-Mass.). This campaign, which ran statewide, was the beginning of a multi-pronged strategy to educate Palmetto State voters on the negative economic impacts such a plan would have on their state. This proposal, while not yet revealed publicly, was reported  to have included a renewable electricity standard (RES), which is the mandated use of expensive forms of electricity and a increase in the federal gasoline and diesel tax, which some have coined the “Graham Gas Tax.” 

“By walking away from this effort, it is clear that Senator Graham chose to listen to his constituents, who urged him to stay away from this legislation. We hope that Senator Graham sticks to his guns and remains on the side of the American people who oppose cap-and-trade and a national energy tax,” concluded Pyle.

While 71 Percent of Americans Oppose an Increase in the Gas Tax, Senator Graham Proclaims, “I’m in this to win.” Win what we ask? New York Times/E&E News (5/6) reports, “Sen. Lindsey Graham doesn’t sound like someone who’s abandoned the push to pass a global warming bill. Standing in the Senate’s historic Kennedy Caucus Room, the site of hearings on the sinking of the Titanic and Watergate, the South Carolina Republican told a room full of environmentalists and Obama administration officials Tuesday night that he is still in the fight to enact legislation that caps greenhouse gases and expands domestic energy production.”I’m not playing the game to win 43 [votes],” he said, referring to the high-water mark of past Senate climate bill roll calls. “I’m not in this to make a statement. I’m in this to win.” Graham’s speech at the private event hosted by the Environmental Defense Fund took place in the same room he and Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) had reserved eight days earlier for a press conference to roll out their energy and climate bill — an event that got postponed when Graham protested over Democratic leadership’s insistence that immigration also belongs on the Senate agenda this year. Graham’s office didn’t comment as of press time on his status in the climate negotiations, leaving many to guess where he officially is. “I think it’s like the hokeypokey,” said Sen. Jon Cornyn (R-Texas). “You put your right foot in. You take your right foot out. I’m not sure where he is right now.” “He wants to do it,” said Sen. James Inhofe (R-Okla.), an outspoken skeptic of climate science who has clashed with Graham on the climate issue. Inhofe noted that Graham’s involvement on the climate bill, along with immigration and closing the Guantanamo Bay military prison, is “all McCain stuff…”

This Guy is All Over the Place. One Day He’s the Ring Leader, Next Day He’s Out and Now He’s “Pausing.” One Thing Remains Clear: He Authored The Graham Gas Tax. E&E News (5/7, subs. req’d) reports, “Sen. Lindsey Graham sees himself as a possible 60th vote on the comprehensive energy and climate bill. But the South Carolina Republican doubts the debate will even get that far, at least in the current political atmosphere that includes a ripening battle over immigration and uncertainty over the causes of the massive oil spill in the Gulf of Mexico. Graham two weeks ago threw a major league curveball into the prospects for the climate bill when he backed out of seven months of negotiations… He blames the Obama administration and Senate Majority Leader Harry Reid (D-Nev.) for playing politics on the climate bill… He also thinks the White House left him hanging when unnamed administration officials criticized what Fox News called “Graham’s gasoline tax gambit” — a reference to the “linked fee” idea that he had floated as a way to control greenhouse gas emissions from transportation fuels. For now, Graham says he has “paused” from the talks with Kerry and Lieberman… And that means he probably won’t be at the legislation’s unveiling, which is expected as early as next week. “He’ll be there in spirit and substance but probably not with us,” Lieberman said yesterday. On the oil spill, Graham said he is concerned the bill is losing ground because Sen. Bill Nelson (D-Fla.) earlier this week declared an expansion for offshore drilling “dead on arrival.” Graham said he is worried about the environmental catastrophe in the Gulf of Mexico, but he does not see it as reason enough to stop drilling altogether.”

And it Begins. Interior Cancels Virginia Lease Sale Scheduled for 2011/2012 (!), Tells Shell Final Permits for the Chukchi and Beaufort Are on Hold. The Hill (5/7) reports, “The Interior Department is formally suspending its planning for the sale of oil-and-gas leases off Virginia’s coast, underscoring new uncertainties about expanded drilling in the wake of the Gulf of Mexico oil spill. Interior’s Minerals Management Service is canceling three public “scoping meetings” for the lease sale that were scheduled later this month, and indefinitely postponing the public comment period. The action will be announced in Friday’s Federal Register. The lease sale, which covers tracts at least 50 miles off Virginia’s coast, is slated for 2011 or 2012. Interior Secretary Ken Salazar said Thursday that no new offshore drilling permits will be issued while Interior conducts a safety review the White House ordered in response to the Gulf of Mexico oil spill. Interior’s action could slow Shell Oil’s efforts to drill exploratory wells in Arctic waters off Alaska’s northern coast. The head of Interior’s Minerals Management Service informed Shell Thursday that the agency “will not make a final decision on the requested permits for the drilling of exploration wells in the Chukchi and Beaufort Seas until the Department of the Interior’s report to the President has been submitted and evaluated,” Interior said.”

Look Out. While Enviros and Anti-Energy Politicians Look to Capitalize on Gulf Tragedy, the Blame Game/Finger Pointing Begins. Reuters (5/6) reports, “Oil giant BP Plc has been carefully playing the public relations game by saying it bore responsibility for the costs of the clean up of the oil that was shooting out of the damaged well a mile below the surface of the Gulf. But in recent days it has begun to point directly at driller Transocean Ltd as the main culprit. “This was not our drilling rig and not our equipment. It was not our people, our systems or our processes. Their systems, their people, their equipment,” BP Chief Executive Tony Hayward… Transocean, which is the world’s largest offshore oil driller, with rigs used by oil companies around the globe, fired back on Thursday.”It is inappropriate to speculate on what may have caused the catastrophic failure of a cased and cemented well in advance of that investigation,” Transocean Chief Executive Steven Newman told a conference call. Well drillers place cement around the casing in the wells to secure the pipes and prevent them from breaking or leaking — a job performed on the BP well by Halliburton Co, the world’s second largest oilfield services company. But Halliburton has said cementing was completed 20 hours before the accident and that testing had shown the work was done properly. Anadarko Petroleum, BP’s partner in the well with a 25 percent stake, is also on the hook for some clean-up liability, although the Woodlands, Texas company was quick to say it did not make any operational mistakes . “There’s going to be a lot of fingers pointing in a lot of different ways,” Robert Reeves, Anadarko’s general counsel said on a conference call on Wednesday.”

Hey Nick Jo and Ricky, What Took So Long to Respond? Five Weeks Ago, EPA Began the Formal Process to Bankrupt the Coal Industry, Yesterday; Coal Country Members Got Around to Responding. E&E News (5/6, subs. req’d) reports, “Democratic lawmakers from Virginia and West Virginia want U.S. EPA to rescind its new Clean Water Act standards for surface coal mining in central Appalachia. EPA’s guidelines fail to properly balance environmental protection and energy development and should be withdrawn while the Obama administration works with state agencies to develop new ones, Reps. Nick Rahall (D-W.Va.), Alan Mollohan (D-W.Va.) and Rick Boucher (D-Va.) said yesterday in a letter to EPA Administrator Lisa Jackson. Last month, EPA issued permitting guidelines that included the first-ever limit on the amount of salt that mines would be allowed to release into surrounding streams. To obtain permits, operators will have to demonstrate that their projects will not cause salt levels in surrounding streams to rise more than five times the normal level. The limit would ban filling streams with mining waste in nearly all cases, Jackson said. EPA said the limits are necessary in light of a growing body of evidence that surface coal mining is causing severe damage to the region’s environment and public health. The guidelines only apply to permits in Pennsylvania, Ohio, West Virginia, Virginia, Kentucky and Tennessee, a regional focus the representatives criticized.”

Americans Say Drill. New IBD Poll Shows that 59 Percent of Americans Still Support Offshore Energy Exploration. Investor’s Business Daily (5/6) Editorializes, “After BP’s oil spill in the Gulf of Mexico, federal and state governments moved quickly to shelve plans to drill off the U.S. coast. But a new poll taken after the spill suggests Americans still support drilling. Preliminary results of an IBD/TIPP Poll of 795 U.S. adults, taken from April 30 to May 5, show that a large majority — 59% — approve of “oil exploration and drilling in America’s national territorial waters.” Just 31% said they disapprove. The cold reality is we need oil. A retreat from drilling would be economically unwise. BP’s mess must be put into perspective. “We get more than a fifth of our domestic production of oil here in the U.S. from off the Gulf Coast, over a million barrels a day,” says the American Enterprise Institute’s Steve Hayward. “If we don’t continue that … we’ll be importing more oil to make up for it, even if consumption stays flat.” We need oil to fuel our economy — literally. Energy consumption directly correlates to GDP growth. Average Americans understand this. They know offshore drilling rigs have a far lower risk of oil spills than do tankers. And they probably also know that even if this spill exceeds the Exxon Valdez spill, it will still only be about the 40th worst in the last 40 years. The most tragic part of the April 30 accident was the death of 11 men. We mourn those lost. But the environment will heal. As for those who will exploit this to oppose drilling, we ask: What part of your modern life and comforts will you give up? Your car? Central heating? Refrigerator? Computer? Your food, shipped long-distance with oil and diesel burning trucks and trains?”

Here’s a Shocker; Five Enviro Groups File Lawsuit to Shut Down Energy Exploration in South-Central Wyo. The Associated Press (5/6) reports, “Five environmental groups sued Thursday to challenge a long-range U.S. Bureau of Land Management plan that has begun guiding oil and gas development over a vast area in south-central Wyoming. The groups say the BLM failed to protect undeveloped areas and didn’t sufficiently consider ozone pollution or climate change in approving a resource management plan for the BLM’s Rawlins Field Office in late 2008. The plan covers 3.4 million acres, or 5,300 square miles. The Wilderness Society, Natural Resources Defense Council, Biodiversity Conservation Alliance, Wyoming Outdoor Council and Wyoming Wilderness Association filed suit in U.S. District Court in Washington, D.C. An oil and gas industry representative called the lawsuit an attempt to shut down oil and gas development in the area. Kathleen Sgamma, director of government affairs for the Independent Petroleum Association of Mountain States, called it a “pretty standard lawsuit.” The BLM developed the plan over several years with participation from a variety of groups, Sgamma pointed out. “The groups suing are never satisfied with the balanced approach that BLM tries to take. It’s another way to try to shut down oil and gas,” she said.”

American Energy Alliance

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