To Drill or Not to Drill, That is Not the Only Question
Most recent coverage of energy policy has focused on the issue of conventional drilling for oil in the Arctic National Wildlife Refuge and on the continental shelf, but there is much, much more that is in play in our national debate about sensible energy policy.
A bipartisan group of U.S. Senators, the so-called “Gang-of-10”, have responded to the Congressional Republican floor revolt against the Democratic leadership’s refusal to allow a vote on domestic drilling with a compromise called “the New Energy Reform Act” which includes new drilling with a host of other items. The House Republican Conference has responded with a comprehensive proposal of their own, “the American Energy Act” which includes encouraging alternative fuel development, making better use of petroleum resources and encouraging conservation in addition to new drilling.
The key differences between the proposals are…
- The Gang of 10 proposal is much heavier into subsidies, direct money spent on R&D and things like “workforce training” (that don’t really produce any energy), partially paid for with new taxation on oil and gas companies, while the House Republican Conference program has more focus on getting government out of the way of improved energy production by reducing regulations on new refineries, nuclear plants, oil shale, etc.
- More importantly, the Gang of 10 wants to limit new drilling to a few states, but has not provided any sensible geologic or economic criteria for the ones they’ve chosen. The Republican plan opens up all of the continental shelf and Alaska so that drilling sites can be chosen on the basis of — get this crazy criteria — whether there’s oil there!
Allow development of our nation’s shale oil resources, which could provide an additional 2.5 million barrels of oil per day, as proposed in H.R. 6138 by Rep. Fred Upton (R-MI).The technology for extracting oil from oil shale is still under development, so it is difficult to pin down the exact quantity of oil that is extractable from shale within the United States, but conservative estimates put the figure at over 1 trillion barrels. For comparison, Saudi Arabia’s oil reserves are estimated to be in the vicinity of 200-300 billion barrels.
But in 2007, Congress (with the support of Congressmen Patrick Kennedy and James Langevin) voted to prohibit the development of oil-shale on Federal lands, where about 70% of America’s useable shale is estimated to reside. There should be no “cost” in higher taxes or increased subsides like the kinds in the New ERA that should be needed to reverse bad decisions like this one.
The major provisions of both the New ERA and the AEA are listed below the fold. Can you assemble your own comprehensive energy proposal for lower gas prices and reducing American dependence on foreign oil that’s better than what Congress can come up with?
- Provides a CO2 sequestration credit for use in enhanced oil recovery to increase production from existing oil wells while reducing greenhouse gas emissions
- Opens additional acreage in the Gulf of Mexico for leasing (in consultation with the Defense Department to ensure that drilling is done in a manner consistent with national security) and allows Virginia, North and South Carolina and Georgia to opt in to leasing off their shores
- Provides grants and loan guarantees for the development of coal-to-liquid fuel plants with carbon capture capability. Plants must have lifecycle greenhouse gas emissions below those of the petroleum fuels they are replacing
- Supports nuclear energy by increasing staff at the NRC, providing workforce training, accelerating depreciation for nuclear plants, and supporting R&D on spent fuel recycling to reduce nuclear waste.
- $7.5 billion for R&D focused on the major technological barriers to alternative fuel vehicles, such as advanced batteries
- $7.5 billion to help U.S. automakers and parts makers re-tool and re-equip to become the world leader in making alternative fuel vehicles
- Consumer tax credits of up to $7,500 per vehicle to incentivize Americans to purchase advanced alternative fuel vehicles (those that run primarily on non-petroleum fuels) and up to $2,500 to retrofit existing vehicles with advanced alternative fuel engines.
- Extending renewable energy, carbon mitigation and energy conservation and efficiency tax incentives, including the production tax credit, through 2012 to create greater certainty and spur greater investment
- New consumer tax credits of up to $2,500 to purchase highly fuel efficient vehicles, to help Americans reduce their annual gas costs and reduce oil imports;
- Extending and expanding the $2,500 tax credit for hybrid electric vehicles;
- $500 million for R&D into new materials and other innovations to improve vehicle fuel efficiency;
- $2.5 billion in R&D on next generation biofuels and infrastructure;
- Tax incentives for the installation of alternative fueling stations, pipelines and other infrastructure
- Expanding transmission capacity for power from renewable sources
- New dedicated funding for the weatherization assistance program.
The American Energy Act, proposed by the House Republican Conference…
- Open our deep water ocean resources, which will provide an additional three million barrels of oil per day, as well as 76 trillion cubic feet of natural gas, as proposed in H.R. 6108 by Rep. Sue Myrick (R-NC). Rep. John Peterson (R-PA) has also worked tirelessly on this issue.
- Open the Arctic coastal plain, which will provide an additional one million barrels of oil per day, as proposed in H.R. 6107 by Rep. Don Young (R-AK);
- Allow development of our nation’s shale oil resources, which could provide an additional 2.5 million barrels of oil per day, as proposed in H.R. 6138 by Rep. Fred Upton (R-MI);
- Increase the supply of gas at the pump by cutting bureaucratic red tape that essentially blocks construction of new refineries, as proposed in H.R. 6139 by Reps. Heather Wilson (R-NM) and Joe Pitts (R-PA)
- Provide tax incentives for businesses and families that purchase more fuel efficient vehicles, as proposed in H.R. 1618 and H.R. 765 by Reps. Dave Camp (R-MI) and Jerry Weller (R-IL)
- Provide a monetary prize for developing the first economically feasible, super-fuel-efficient vehicle reaching 100 miles-per-gallon, as proposed in H.R. 6384 by Rep. Rob Bishop (R-UT); and
- Provide tax incentives for businesses and homeowners who improve their energy efficiency, as proposed in H.R. 5984 by Reps. Roscoe Bartlett (R-MD), Phil English (R-PA), and Zach Wamp (R-TN), and in H.R. 778 by Rep. Jerry Weller (R-IL). l
- Spur the development of alternative fuels through government contracting by repealing the “Section 526” prohibition on government purchasing of alternative energy and promoting coal-to-liquids technology, as proposed in H.R. 5656 by Rep. Jeb Hensarling (R-TX), in H.R. 6384 by Rob Bishop (R-UT), and in H.R. 2208 by Rep. John Shimkus (R-IL);
- Establish a renewable energy trust fund using revenues generated by exploration in the deep ocean and on the Arctic coastal plain, as proposed by Rep. Devin Nunes (R-CA);
- Permanently extend the tax credit for alternative energy production, including wind, solar and hydrogen, as proposed in H.R. 2652 by Rep. Phil English (R-PA) and in H.R. 5984 by Rep. Roscoe Bartlett (R-MD); and
- Eliminate barriers to the expansion of emission-free nuclear power production, as proposed in H.R. 6384 by Rep. Rob Bishop (R-UT).