Energy and Environment Experts

What's at Stake with Natural-Gas Exports?

Mon, 20 May 2013 10:00:00 GMT

What are the economic, environmental and geopolitical implications of the United States exporting a great deal more natural gas than it ever has before?

That's a question the Obama administration is seeking answers to right now as it considers whether to approve any of nearly 20 export applications pending at the Energy Department. It's also a question on the minds of almost everyone who operates in the energy and environment world. Natural gas is a diverse fuel whose renaissance of the last six years has upended decades of conventional wisdom about energy and environment economics and policy.

Even though the administration holds most of the decision-making power on the export issues, Capitol Hill is making sure its voice is heard. The Senate Energy and Natural Resources Committee on Tuesday holds the second of a series of forums on natural gas. This one deals exclusively with the export question. The House Energy and Commerce Committee held a similar hearing a couple of weeks ago. In addition to these official events, policymakers are holding briefings and other smaller events on the topic.

Why is this issue so important? What are the concerns Washington should focus on the most? Prices? Environmental and energy security? How can these seemingly competing concerns be appropriately weighed against one another?

Should Congress seek to pass legislation that changes the law governing exports? Should the administration seek to limit the number of export applications that it will approve? Or should the market be left alone to decide what's best?

Michael Schmidt responded to What's at Stake with Natural-Gas Exports? on May 22, 2013 07:33 AM

Fri, 17 May 2013 07:08:00 GMT

Debate is Microcosm of Energy Policy The gas export debate is a microcosm of our energy policy, which is far more all over the place than all of the above. The cheap gas we have seen since the last price peak in 2008 has been good for consumers and generally manufacturers, a bright spot during the recession. It prompted power generators to fuel switch from coal to gas, a net positive for air quality. And it has caused major companies in other geographies (namely Europe) to make investments here in the U.S. On the flip side, even with the growth...

Jack Rafuse responded to What's at Stake with Natural-Gas Exports? on May 21, 2013 06:25 PM

Fri, 17 May 2013 07:08:00 GMT

The LNG Export Conundrum: Dow Chemical DOE’s decision last week to grant an LNG export license to the Freeport Project was an important first step to advance US interests. But in order to avoid a regulatory morass like that of the 1970s, when price, export and import regulations drove down domestic natural gas and oil production, caused business disruption and consumer pain, and nearly crushed the economy, the Department must move to approve the dozens of other applications that await DOE. Thinking back to 1980, the damaging laws and regs were ended and the nation moved closer to free markets...

Bernard L. Weinstein responded to What's at Stake with Natural-Gas Exports? on May 21, 2013 04:14 PM

Fri, 17 May 2013 07:08:00 GMT

Export more LNG to fight climate change American consumers and businesses are currently reaping a windfall from the lowest natural gas prices in years. Cheap gas has reduced heating and electric bills for millions of households, while industries using natural gas as a feedstock or boiler fuel have realized huge production cost savings. But at the same time $4.00 gas at the wellhead, though double last year’s price, has caused many drilling companies to reduce production and move their rigs to more profitable oil plays. As with all commodities, the price of natural gas is determined by supply and demand....

Skip Horvath responded to What's at Stake with Natural-Gas Exports? on May 21, 2013 11:47 AM

Fri, 17 May 2013 07:08:00 GMT

Stick to Free Trade & U.S. Will Benefit With enough natural gas on tap in the U.S. to meet our needs for over 100 years, and so much production last summer that industry analysts fretted over where it could be stored, you’d think that the policy decision to allow us to sell liquefied natural gas (LNG) to trading partners around the world would be straightforward. We can benefit from our abundance of natural gas by selling it to friendly countries like Japan who have a scarcity of energy, thus bringing back dollars to the United States – and reducing our...

William O'Keefe responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 08:23 PM

Fri, 17 May 2013 07:08:00 GMT

LNG: A Rising Tide Does Raise All Boats Almost 240 years ago, Adam Smith wrote the Wealth of Nations, which among other things laid the foundation for free trade and also undercut the rationale for mercantilism. The current opposition to expanded natural gas exports shows how little some organizations and advocates understand about the benefits of trade. Quoting from the Adam Smith Institute, “Because trade benefits both sides, it increases our prosperity just as surely as do agriculture or manufacture. A nation’s wealth is not the quantity of gold and silver in its vaults, but the total of its production...

Marlo Lewis responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 05:16 PM

Fri, 17 May 2013 07:08:00 GMT

Central Planning: Bad Export Policy At the Energy & Commerce Committee’s May 7, 2013 hearing on U.S. energy abundance, former Sen. Bennett Johnston offered a history lesson in the folly of governmental attempts to “balance” competing uses of natural gas or hit a natural gas price “sweet spot.” Johnston chaired the Production and Stabilization Subcommittee of the Banking Committee, which had jurisdiction over President Nixon's 1971 wage-and-price controls. “Our hearings exposed the shortages, dislocations and distortions that the scheme produced,” he writes. “This disastrous experiment in central planning was soon abandoned and should stand as a reminder of the dangers...

Carl Pope responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 04:42 PM

Fri, 17 May 2013 07:08:00 GMT

The Big Lie on Gas Exports Last week the Department of Energy gave approval to the Freeport LNG export terminal. Combined with an earlier approval at Sabine Pass, the US has now committed the first 2.4 billion cubic feet of natural gas it produces each day over the next 20 years to foreign consumers – because under these LNG contracts exporters will be able to offer higher prices than any domestic user, regardless of the price of gas that results. These two terminals alone will divert enough energy to replace a half million barrels a day of oil. You may...

Michael Canes responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 03:11 PM

Fri, 17 May 2013 07:08:00 GMT

Economics And Politics of Gas Exports This week’s question regarding natural gas exports raises a conundrum that frequently surrounds questions of foreign trade. It’s relatively easy to identify who is harmed by trade, not always so easy to identify all who gain. In the case of natural gas exports, we could say that U.S. gas consumers lose while producers gain. Those who consume gas pay more. They see increased exports as a losing proposition so that, from their perspective, the less gas exported the better. On the other hand, opening up the world market to U.S. producers increases the demand...

Jennifer Morgan responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 01:30 PM

Fri, 17 May 2013 07:08:00 GMT

US Natural Gas Exports and Climate Risks The U.S. Department of Energy made a big announcement last week, green lighting the country’s second liquefied natural gas (LNG) export project. Many argue that natural gas exports will bring economic and geopolitical benefits for the United States – with Japanese and French companies coming on board as key partners in the proposed export station. Indeed, natural gas can contribute to a lower-emissions trajectory – but only if it’s done right. With effective policies and standards in place, natural gas can help displace coal while complementing lower-carbon, renewable energy sources. But without...

Paul Sullivan responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 12:19 PM

Fri, 17 May 2013 07:08:00 GMT

Wake up to Competition and Opportunity There is a lot of talk about how exporting natural gas will increase the prices of natural gas. That should not be seen as a given long run fact. Simple economic analysis will show that this is not determined. As prices increase for the natural gas the investments and activities in exploration, production, processing, and infrastructure development will increase. This will tend to depress the price of natural gas. Also, when there are times of increased prices for oil, gas, coal, uranium, etc. more research and development funds are normally spent to improve technologies...

Jonathan Silver responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 11:00 AM

Fri, 17 May 2013 07:08:00 GMT

Nat Gas: Exports are Not the Only Issue With the discovery of vast quantities of natural gas in the last few years, the nation now turns its attention on how best to profit from this new resource. Not surprisingly, there are multiple points of view. On one side are those who favor exporting gas abroad. They argue that overseas sales could be significant and are good for the economy. After all, gas is about $4 a million Btu here and closer to $17 or so in Japan. Even when factoring in the expensive liquefaction processes required to ship gas, American...

Marty Durbin responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 09:13 AM

Fri, 17 May 2013 07:08:00 GMT

Pick Up the Pace On Export Approvals Friday’s news that the U.S. Department of Energy has conditionally granted natural gas export authorization to the Freeport LNG Terminal in Texas is a positive step. More approvals should follow, and the Administration would be wise to pick up the pace. Analyses from independent sources, ranging from the Brookings Institution to Deloitte to ICF and DOE itself, all conclude that natural gas exports provide a net benefit to our economy, while keeping prices stable and affordable for our domestic customers. Given this reality, selling natural gas to our allies in the global market...

Margo Thorning responded to What's at Stake with Natural-Gas Exports? on May 20, 2013 07:32 AM

Fri, 17 May 2013 07:08:00 GMT

Capitalize on Robust U.S. Natural Gas Sources DOE’s decision to allow Freeport LNG to export liquefied natural gas to countries that do not have a Free Trade Agreement(FTA) with the U.S. is to be commended. However, in order to ensure that the U.S. receives the maximum benefit from our vast supplies of natural gas, DOE and FERC should rapidly approve the remaining 20 export applications. New research shows that allowing larger amounts of LNG to be exported will generate an average of 73,100 to as many as 452,300 new jobs in the U.S. over the 2016-2035 period, thus a slow...

Should Washington Go Small on Energy and Climate Policy?

Mon, 13 May 2013 10:00:00 GMT

That's what policymakers are seeking to do right now, and with more success than in recent years. The House has overwhelmingly passed two pieces of legislation streamlining regulations on hydropower projects. Those measures were among the bills the Senate Energy and Natural Resources Committee approved last week, along with a bipartisan energy-efficiency bill. "Every time you pass bills like this, you put points on the board in the fight against climate change," said Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., after the markup. "And you do it in a bipartisan way." This legislative activity seems to be putting into action words that Obama uttered more than two years ago, when he said he would tackle energy policy in a "piecemeal" fashion.

But are small-ball measures like this enough to fight climate change? Over the past few years, lawmakers kept trying to "go big" on energy and climate, including enacting a cap-and-trade system. Are more sweeping policies like that and a carbon tax really what's needed to confront this global challenge and to show the rest of the world the United States is serious in its commitment? Or are smaller-ticket policies better than nothing, given that the politics in Washington aren't conducive to more-sweeping measures?

What other small-ball energy and climate policies could Obama and Congress pursue that could--as Wyden says--help put points on the board in Washington's efforts to address global warming?

Jack Gerard responded to Should Washington Go Small on Energy and Climate Policy? on May 17, 2013 11:03 AM

Wed, 08 May 2013 20:12:18 GMT

Minor Policies, Major Consequences Policy changes that seem small can come with extensive unintended consequences but little discernible environmental benefit. Consider EPA’s proposed Tier 3 rule. This rule would require refiners to reduce sulfur content in gasoline by an additional 6 percent beyond current Tier 2 standards. That may seem insignificant until one considers the context – and the costs. Refiners have already invested almost $10 billion over the past decade to reduce sulfur in gasoline 90 percent from 300 parts per million to 30 ppm. According to analysis by ENVIRON, removing the last bit of sulfur to reach 10...

Jonathan Silver responded to Should Washington Go Small on Energy and Climate Policy? on May 16, 2013 10:35 AM

Wed, 08 May 2013 20:12:18 GMT

Woefully Little, Better Than Nothing The chasm between the kind of legislation Congress can pass and the kind of action that is actually needed is immense. With Congress locked into a sort of hyper-partisan death spiral, small-bore legislation is about all one can hope for. On the other hand, it is not at all what we need. Big problems require big solutions. You cannot “incrementalize” your way to a solution to climate change. It does not actually matter much how greenhouse gasses got into the atmosphere; it matters enormously that they are there. With readings of 400ppm CO2 this week,...

Christine McEntee responded to Should Washington Go Small on Energy and Climate Policy? on May 16, 2013 08:50 AM

Wed, 08 May 2013 20:12:18 GMT

Big or Small, Science Informs Solutions Yes, there are “small-ball” bills that could serve as important steps in solving the nation’s energy and climate change woes. And yes, there are “go big” bills that could begin addressing these issues on the global scale at which they are occurring. Both of these things are important, and a long-term vision that does not include them both will surely be ineffective. So why should we settle for anything less than everything? As mentioned by others, some of the recent success smaller bills have enjoyed has included bi-partisan support – something that seems nearly...

Bernard L. Weinstein responded to Should Washington Go Small on Energy and Climate Policy? on May 15, 2013 04:48 PM

Wed, 08 May 2013 20:12:18 GMT

No-ball makes more sense than small-ball Several weeks ago, the Department of Energy reported that greenhouse gas emissions in the U.S. were 8.5 percent lower in 2011 than in 2005. This drop occurred despite America being a non-signatory to the Kyoto Protocol and an economy that had grown 11 percent in real terms over the six year period. By contrast, the European Union, home to the planet’s most comprehensive carbon pricing scheme and with an economy that hasn’t grown at all, recorded only a 7.9 percent decline. In terms of tonnage, emissions were down 509 in the U.S. compared to...

Kate Offringa responded to Should Washington Go Small on Energy and Climate Policy? on May 15, 2013 04:34 PM

Wed, 08 May 2013 20:12:18 GMT

Going "Small" is Going Big The answer to the question “Should Congress and the Administration pursue ‘small’ gains in energy policy?” is: “Absolutely!” And the exclamation point is not an accident. Much is at stake. There’s nothing small about “going small” in energy policy. America can save invaluable amounts of energy, create tens of thousands of manufacturing, construction, and retrofitting jobs, protect the environment, and take important strides toward achieving energy independence, all by promoting a deeper reliance on energy efficiency. The watchwords that drive a renewed emphasis on energy efficiency are simple: No matter how or where Americans get...

Kathleen Sgamma responded to Should Washington Go Small on Energy and Climate Policy? on May 15, 2013 10:48 AM

Wed, 08 May 2013 20:12:18 GMT

Small Government Works The experience of the last several years in which the oil and natural gas industry has put the nation on a path to true energy security while simultaneously reducing greenhouse gas emissions has clearly shown that small government is the way to go with energy policy. Even as the federal government was trying to discourage oil and natural gas development while spending billions on stimulus for “green energy,” the oil and natural gas industry, responding to market signals and continued consumer demand for affordable energy, has shown how free markets operate more effectively than command-and-control government policies....

Josh Freed responded to Should Washington Go Small on Energy and Climate Policy? on May 14, 2013 04:52 PM

Wed, 08 May 2013 20:12:18 GMT

Stick to Targeted and Discrete Policies SUBMITTED BY JOSH FREED ON BEHALF OF RYAN FITZPATRICK, SENIOR POLICY ADVISOR FOR CLEAN ENERGY AT THIRD WAY Energy policy is difficult to move, in part because there’s really no such thing as a “must-pass” energy bill. It doesn’t carry the same urgency or institutionalized process as certain annual taxing and spending bills, and it certainly doesn’t generate the same passion in the electorate as health care, immigration, or other social policy priorities. Let’s face it…energy policy is the stowaway, not the train. You can slip a discrete energy policy into a...

Jacqueline Savitz responded to Should Washington Go Small on Energy and Climate Policy? on May 14, 2013 03:40 PM

Wed, 08 May 2013 20:12:18 GMT

400 (ppm) Reasons for Small Steps Now Last week, for the first time in history, the Earth’s atmospheric carbon dioxide levels reached 400 parts per million (ppm). This ominous milestone is a stark reminder of what our stubborn dependence on fossil fuels is doing to the planet we call home. Such dangerous levels of carbon dioxide in the atmosphere are bringing us ever closer to the point of no return and we are already witnessing its disastrous effects. Extreme weather events like hurricanes, tornados, tropical storms, and “superstorms” are becoming even more severe and damaging. Not only have these...

Brigham McCown responded to Should Washington Go Small on Energy and Climate Policy? on May 14, 2013 12:42 PM

Wed, 08 May 2013 20:12:18 GMT

'Consumer Choice' is the Answer The threshold question we should all be asking is whether it is the government’s role to pick ‘winners and losers’ for the energy industry in America. Take for example the slew of government subsidized businesses that have filed for bankruptcy. First it was Solyndra, then Beacon Power, and most recently, Abound Solar. Together, these businesses have spent over $639 million taxpayer dollars. The more the government tries to micro-manage, the worse it seems to get. To be fair, will 100% of businesses succeed? No of course not, but let’s face it; the government’s climate...

Michael Canes responded to Should Washington Go Small on Energy and Climate Policy? on May 13, 2013 03:52 PM

Wed, 08 May 2013 20:12:18 GMT

Singles and Doubles in Energy Policy This week’s question relates to the current politics of energy and climate change. Should lawmakers be swinging for the fences, or should they choke up on the bat and seek one- or two-base hits? Where is the public on energy and climate change policy right now? Focused on other things, for the most part. Their jobs. Their incomes. Educating their children. Personal safety. If they’re focused on national matters at all, it’s mainly domestic terrorism, gun control, immigration policy, gay marriage, things like that. Not much incentive there for lawmakers to pass difficult-to-achieve, far-reaching energy or climate legislation. How about the media...

Manik Roy responded to Should Washington Go Small on Energy and Climate Policy? on May 13, 2013 12:25 PM

Wed, 08 May 2013 20:12:18 GMT

Small steps needed, but still not enough Hats off to anybody trying to navigate a clean energy bill through this Congress. Hats off to the House for passing a hydropower bill with more than 400 votes, and to the Senate Energy and Natural Resources Committee for passing that bill and another to advance energy efficiency. Hats off to the Senate Finance Committee for considering tax incentives for clean energy technologies. (Our favorite would expand the use of carbon dioxide in enhanced oil recovery to advance development of carbon capture and storage technology.) Double hats off to anybody who succeeds...

William O'Keefe responded to Should Washington Go Small on Energy and Climate Policy? on May 13, 2013 09:13 AM

Wed, 08 May 2013 20:12:18 GMT

Go Small, Go Right The whole premise behind the “go big” approach to climate change is that we face an impending disaster caused by humans using fossil fuels to power factories, operate businesses, heat and light our homes, and to gain the benefits of mobility. But, the premise is not a fact, it is a theory and with time the theory looks more and more suspect. Fifteen years of a halt in warming, a growing understanding of solar activity, and climate processes like the Pacific Decadal Oscillation are clear and empirical evidence that the models on which the “theory” are...

Scott Sklar responded to Should Washington Go Small on Energy and Climate Policy? on May 13, 2013 06:14 AM

Wed, 08 May 2013 20:12:18 GMT

Lack of Consensus Effects Political Outcomes NOAA just published this week measurements of global carbon hitting 399.58 ppm, on the threshold of 400 ppm of which some climate scientists have said is “the point of no return”. But there seems more interest in past actions in Benghazi than a fundamental breakdown of earth’s ecosystems. As much as this pains me, the US political system is incapable of addressing these issues. Some State governments are far ahead of the Washington, DC political establishment which has been lavishly financed by the coal, petroleum, and utility industries. That said, the hydropower bill was a good incremental...

What Do Technology Innovations Mean for Washington?

Mon, 06 May 2013 10:00:00 GMT

The federal government doubled the amount of oil and tripled the amount of natural gas estimated to be stored deep under the Dakotas and Montana. In an announcement last week, Interior Department officials cited the advent of two types of technologies as key reasons for this impressive leap in oil and gas reserves: horizontal drilling and hydraulic fracturing.

This announcement comes ahead of the conference that starts in Houston this week--one of the world's biggest meetings devoted to the latest innovations in offshore energy technologies.

America's oil and natural-gas industry isn't the only sector innovating. The Energy Department, especially its Advanced Research Projects Agency, is partnering with universities and private companies on renewable-energy technologies to ensure the United States doesn't relinquish innovations to China and other Asian countries.

What do private-sector technological innovations across the energy sector mean for Washington's efforts to enact energy and climate-change policy? For renewable energy especially, what's the right balance between government involvement and other stakeholders when it comes to innovating technologies?

Does the oil and gas boom put Washington in a reactive, instead of proactive, legislating mode? Why or why not?

When looking at the broad spectrum of energy resources, what technology innovations are the most promising?

Phyllis Cuttino responded to What Do Technology Innovations Mean for Washington? on May 10, 2013 02:39 PM

Wed, 01 May 2013 17:54:17 GMT

Federal R&D Spurs Innovation The U.S. government has long encouraged technology innovation in the service of our country’s economic and national security aims. NASA and the U.S. military have been world leaders in research and development, helping to advance many technological innovations—from computers to the Internet to GPS—that have served our national security interests as well as commercial and consumer interests. In the 21st century, U.S. research and development investments and partnerships with industry are as important as ever in areas such as telecommunications and energy. Ongoing energy innovation will foster private investment, job growth, and competitive success in the...

Jack Gerard responded to What Do Technology Innovations Mean for Washington? on May 10, 2013 10:57 AM

Wed, 01 May 2013 17:54:17 GMT

Technology Outpaces Policy Few predicted today’s oil and natural gas bonanza, but vast domestic energy resources are being discovered and produced through new technologies that are light years ahead of what was available fewer than 10 years ago. The revised estimates of the size of oil and natural gas reserves in the Bakken and Three Forks formations do not demonstrate improved measurement capabilities, but what technology can achieve. A new assessment shows that these formations beneath the Dakotas and Montana are home to twice the amount of technically recoverable oil (7.38 billion barrels) and three times the amount of natural...

Mike Duncan responded to What Do Technology Innovations Mean for Washington? on May 7, 2013 05:30 PM

Wed, 01 May 2013 17:54:17 GMT

New Technologies Demand Better Policies When it comes to coal, technology is a game-changer. Over the past several decades, emissions from American coal plants are down 90 percent thanks to the more than $100 billion dollars invested in new technologies by America’s coal industry. Unfortunately, the policies coming out of the federal and many state governments do not reflect the transformation occurring in our industry. The EPA and some state agencies frequently take the bait laid by special interest groups promoting a political agenda that ignores the role that technology has played in making sources such as coal cleaner than...

Alex Trembath responded to What Do Technology Innovations Mean for Washington? on May 7, 2013 05:04 PM

Wed, 01 May 2013 17:54:17 GMT

Lessons for Public-Private Innovation This post was co-authored by Max Luke, program associate at the Breakthrough Institute. The ongoing oil and gas boom in the United States reveal the scale of progress that can be achieved when industrial entrepreneurialism combines with public research agencies, policy support, and shared knowledge and technical resources for innovation investments. The technological innovations that led to today’s oil and gas boom — hydraulic fracturing in shale and horizontal drilling — have accelerated the modernization and decarbonization of the American energy system. The Breakthrough Institute published the first major account of the development of shale fracking...

Michael Canes responded to What Do Technology Innovations Mean for Washington? on May 6, 2013 04:20 PM

Wed, 01 May 2013 17:54:17 GMT

How to Encourage Energy Innovation In some ways, technology innovation in the energy area is like a siren song to the political sector, something that appears highly attractive but which often turns out to have nettlesome consequences. Why is such innovation so attractive from a policy maker’s perspective? Because in the world as we know it, tough tradeoffs have to be made. Consume more coal because it is cheap, but adversely impact the environment. Produce more oil and free ourselves of dependency on foreign sources, but worry about impacting attractive ecologies. Produce more natural gas and encourage domestic manufacturing, but...

Manik Roy responded to What Do Technology Innovations Mean for Washington? on May 6, 2013 04:16 PM

Wed, 01 May 2013 17:54:17 GMT

Today's Brainteaser Today’s Brainteaser: You are a refugee in a country whose language and ways you don’t understand. The country has, however, issued you an ATM card, and a social worker has shown you through sign language how to use the card to withdraw the money you need to feed and shelter yourself – for now. Unfortunately, you can’t tell how much money you have left in the account, and every day you see fellow refugees who have exhausted their accounts carted off to prison as indigents. You fear this could happen to you and your children at any moment. One day,...

William O'Keefe responded to What Do Technology Innovations Mean for Washington? on May 6, 2013 09:30 AM

Wed, 01 May 2013 17:54:17 GMT

DC Should Start with Lessons Learned The core lesson to be learned from the development of horizontal drilling and hydraulic fracturing technologies is that the government’s role is limited beyond supporting basic research which provides the foundation for innovation. In the case of horizontal drilling and “fracking”, the innovation came from the private sector using private capital. DOE provided supporting research to complement the “ fracking” development by Mitchell Energy. The private sector has strong incentives to innovate as a means of increasing market share, capturing the benefits of owning property rights, and increasing profitability. Looking back over the past...

Scott Sklar responded to What Do Technology Innovations Mean for Washington? on May 6, 2013 07:34 AM

Wed, 01 May 2013 17:54:17 GMT

Innovations Prolific In Renewable Energy While the national media and Congress are focused on the advanced fracturing of rock to release natural gas or process oil-laden rock for shale oil, similar advances are commercially ‘in play’ for high-value energy efficiency and renewable energy technologies. These innovations are being driven due a renaissance in material science, biomimicry, nanotechnology, and supercomputing. These innovations are driving down costs by double digits, increasing technology life by decades – and providing consumers with pollution-free technologies using minimal water and generating minimal wastes. Examples are prolific and too numerous to cover, but highlights make the...

How Can Congress Boost Renewable-Energy Investments?

Mon, 29 Apr 2013 10:00:00 GMT

Editor's note: Sen. Christopher Coons, D-Del., is guest-moderating and providing the question this week. Coons is a member of the committees on Budget; Energy and Natural Resources; Judiciary; and Foreign Relations.

There has been an escalating discussion about how tax policy treats traditional energy and renewable energy interests. This is critical in terms of driving investment, economic growth, and environmental performance. Senate and House tax committees are talking more publicly about broader tax reform, but will this be achieved within this Congress?

While oil and gas and renewables have often been pitted against each other, Sen. Coons, Rep. Ted Poe, and other colleagues introduced bipartisan legislation known as the Master Limited Partnerships Parity Act this past week in the spirit of the all-of-the-above energy approach.

If this bill passes, what will be the effect on the renewable-energy industry in terms of attracting new investment and creating jobs? How will renewable power and fuels sources take advantage of the MLP structure if it were to become law?

What legislative pathway do you see as most likely for the MLP Parity Act in light of tax-reform discussions? Is there a path for passing this bill other than absorbing it into comprehensive tax reform?

What would be the likely outcome for the continued utilization of clean-energy tax credits and oil and gas tax treatment?

Will renewable-energy projects use the "exit MLP"--financing projects through debt and then "dropping them down" into MLPs to spin them off? Will other creative structures emerge?

There are several new resources and technologies made eligible in the MLP Parity Act, including carbon capture, biochemical, and energy-efficient buildings. Do you see the MLP tax structure as working well for these approaches?

Jim Collins responded to How Can Congress Boost Renewable-Energy Investments? on May 3, 2013 06:39 PM

Thu, 25 Apr 2013 15:04:34 GMT

MLPs for Rapid Deployment of Renewables Senator Coons has it right. We applaud his leadership and that of his Senate and House colleagues for advancing the Master Limited Partnership Parity Act – a bill that will facilitate more rapid deployment of renewable technologies. In essence, extending the MLP tax structure for renewables will help put these technologies on equal footing with oil and gas technologies from an investment perspective. In particular, I see MLPs as quite relevant to the rapidly commercializing renewable fuels and biomaterials industries. In many ways these businesses have supply chains that resemble those in the oil...

Jim Collins responded to How Can Congress Boost Renewable-Energy Investments? on May 3, 2013 06:35 PM

Thu, 25 Apr 2013 15:04:34 GMT

Jack Gerard responded to How Can Congress Boost Renewable-Energy Investments? on May 3, 2013 02:14 PM

Thu, 25 Apr 2013 15:04:34 GMT

Unworkable Mandates Undermine Renewables As one of the renewable energy sector’s biggest investors, the oil and natural gas industry supports commonsense, market-driven policies to improve renewables’ viability. Between 2000 – 2010, the U.S.-based oil and natural gas industry invested $71 billion in technologies that reduce greenhouse gas emissions -- far more than the federal government ($43 billion) and almost as much as the rest of private industry combined ($74 billion). The nation’s energy and economic interests are best served by a renewable energy policy that reflects market realities. Unfortunately, many renewable energy mandates are developed and enacted with no consideration...

Kate Offringa responded to How Can Congress Boost Renewable-Energy Investments? on May 2, 2013 01:57 PM

Thu, 25 Apr 2013 15:04:34 GMT

Energy Efficiency:Small Pain, Much Gain Senator Chris Coons (D-DE) should be commended for broaching one of the thorniest questions in the entire debate over energy policy. Namely: In an era of increasing austerity and skepticism over the utility of federal intervention in the marketplace, how can America get additional bang for its buck in renewable energy? There’s no easy answer. We do know that many renewables bring with them a hefty price tag. Certain technology remains unproven; other renewables may not be suited for the real-world marketplace. But there’s no doubt about the marketplace utility of the consummate renewable: ...

Kateri Callahan responded to How Can Congress Boost Renewable-Energy Investments? on May 2, 2013 12:09 PM

Thu, 25 Apr 2013 15:04:34 GMT

High time to extend the MLP Act The Alliance to Save Energy applauds Sens. Chris Coons, Jerry Moran, Debbie Stabenow and Lisa Murkowski and Reps. Ted Poe, Mike Thompson, Peter Welch and Chris Gibson for their bipartisan leadership in introducing the Master Limited Partnerships Parity Act. It is high time that the strange arbitrary bar to MLPs investing in clean, widely available energy resources such as energy efficiency be lifted. The MLP structure is a proven, successful vehicle for attracting capital from investors large and small to fund important energy and resource projects. These investments have been mainly in the...

Phyllis Cuttino responded to How Can Congress Boost Renewable-Energy Investments? on May 2, 2013 10:06 AM

Thu, 25 Apr 2013 15:04:34 GMT

MLPs Will Expand Investment Options Last year, The Pew Charitable Trusts organized roundtable discussions across the country to gather input from clean energy industry leaders on strategies for enhancing U.S. competitiveness in this key sector of the global economy. Throughout these discussions, we heard from business leaders, investors, and innovators about the importance of eliminating barriers to competition and low-cost capital for clean energy technology development. The Master Limited Partnership Parity Act, or MLP Parity Act, provides an opportunity for U.S. businesses to mobilize private capital and better compete. Our research indicates that nations with consistent, transparent clean energy policies...

Arno Harris responded to How Can Congress Boost Renewable-Energy Investments? on May 2, 2013 12:47 AM

Thu, 25 Apr 2013 15:04:34 GMT

A Level Playing Field for Renewables Renewables, particularly wind and solar, have made tremendous strides in recent years. Massive cost reductions are enabling them to play an increasingly mainstream role in conventional power markets. These industries now stand ready with the manufacturing capacity necessary to deliver hundreds of gigawatts of clean power plants. Delivering that kind of scale in electric power requires significant investment. So it is important to note that renewables have already begun earning the trust of private investors. Of the $269B that Bloomberg reports was invested in renewables last year, the largest portion came from conventional project...

Mary Rosenthal responded to How Can Congress Boost Renewable-Energy Investments? on May 1, 2013 06:43 PM

Thu, 25 Apr 2013 15:04:34 GMT

MLPs – A Masterful Approach to Parity With the introduction of the Master Limited Partnerships Parity Act (MLPPA), Senator Chris Coons and his co-sponsors hope to accelerate the commercialization of the next generation of domestically-produced, sustainable energy and fuels. In doing so, this very simple piece of legislation will have significant benefits to our economy, our environment and our national energy security. By giving renewable fuel projects the same tax incentives and treatment that fossil fuel projects have enjoyed for decades, the MLPPA will help biofuel companies overcome the so-called valley of death – the space between successful pilot or...

Josh Freed responded to How Can Congress Boost Renewable-Energy Investments? on May 1, 2013 02:10 PM

Thu, 25 Apr 2013 15:04:34 GMT

MLP Bill, With or Without Tax Reform By Kimble McCraw and Josh Freed Comprehensive tax reform is long overdue, but it’s also going to be difficult and may not happen during this, or even the next, session of Congress. In the meantime, we can’t hold up other tax code fixes, especially in vital areas, such as energy. The MLP Parity Act, a fix to our unequal tax code, shouldn’t be delayed just because it doesn’t fix all of the problems with our current tax code. As it stands now, the government is implicitly telling investors what to invest their...

Sen. Christopher Coons, D-Del. responded to How Can Congress Boost Renewable-Energy Investments? on May 1, 2013 12:48 PM

Thu, 25 Apr 2013 15:04:34 GMT

Bill Is Not Substitute For Other Policies Thank you for your comments regarding the bipartisan, bicameral legislation that we introduced last week. As mentioned in several comments, our policy approach is a new element in an ongoing debate about the appropriate role for federal tax policy mechanisms in the energy sector. Progress in developing new energy resources and improving the technology to take advantage of them is essential for improving our lifestyle here in the U.S. and enhancing our competitiveness in international markets. The government has long played an important role in moving us forward on this front – every...

Eli Hinckley responded to How Can Congress Boost Renewable-Energy Investments? on April 30, 2013 06:19 PM

Thu, 25 Apr 2013 15:04:34 GMT

MLPs for Renewables is a Great Idea The expansion of MLPs (and for that matter REITs) to clean energy investors absolutely makes sense. The cost of long-term project capital for renewable energy projects remains high relative to projects with similar risk profiles in large part because the industry has not yet developed consistent low-cost sources of funding due to complex deal structures (forced by the use of tax-based incentives) and lack of widespread investor knowledge. MLPs could provide a filter from the complexity, while providing an important educational outreach tool for the renewables industry. While the expansion of MLPs (and...

Chase Huntley responded to How Can Congress Boost Renewable-Energy Investments? on April 30, 2013 05:30 PM

Thu, 25 Apr 2013 15:04:34 GMT

Putting Renewables on Level Footing The United States has historically used tax breaks and other financial incentives to spur energy resources and technology. The tax code can boost certain types of energy production so that Americans always have access to cheap and reliable forms of energy. However, the time has come for a rethinking of how we prioritize energy in the 21st century. Oil and gas have had access to various forms of tax subsidies since early in the 20th century. Since that time, the oil and gas industry has grown into a mature, multi-trillion dollar industry, and the public...

Rhone Resch responded to How Can Congress Boost Renewable-Energy Investments? on April 30, 2013 03:46 PM

Thu, 25 Apr 2013 15:04:34 GMT

Coons Bill is a Step Forward for Solar Senator Coons’ bill is an important first step toward leveling the playing field between clean, renewable energy and long-entrenched energy sources in America, by providing the solar energy industry and other renewables with access to private capital in the same manner enjoyed by the oil and gas industry for almost 30 years. Today, demand for solar energy is growing rapidly, while costs to American consumers are dropping. Senator Coons' MLP proposal would build on this tremendous success, and SEIA applauds him for putting forward an idea that has the potential to...

Brooke Coleman responded to How Can Congress Boost Renewable-Energy Investments? on April 30, 2013 01:44 PM

Thu, 25 Apr 2013 15:04:34 GMT

Taking Bias Out of Federal Tax Code Any conversation about boosting renewable energy investments starts with reforming the federal tax code. Why? Because the tax code provides substantial government support for oil, gas and nuclear without doing the same for renewables. You do not need a degree in economics to know that if the tax code de-risks a $100 million investment in deep water drilling but does not do the same for a similar investment in cellulosic biofuels, investors are going to gravitate to the safer investment when trying to unearth the next gallon of motor fuel. That is...

Brent Erickson responded to How Can Congress Boost Renewable-Energy Investments? on April 30, 2013 08:51 AM

Thu, 25 Apr 2013 15:04:34 GMT

Level the Playing Field It is important to understand that the oil market is not truly a free market. First there is the OPEC cartel that sets the price of oil through agreed-on production levels, and then there are U.S. regulations and infrastructure, built up over the past century, that heavily favor incumbent fossil fuels. So it’s no surprise that capital markets also favor fossil fuels. Moreover, fossil fuels enjoy a number of unique, long-term tax credits that are written into the code and don’t have to be renewed by Congress each year. To truly level the playing field in...

Amy Harder responded to How Can Congress Boost Renewable-Energy Investments? on April 29, 2013 06:24 PM

Thu, 25 Apr 2013 15:04:34 GMT

Bipartisan Bill Would Fight Climate Change (These comments were submitted by Richard Caperton, managing director of energy at Center for American Progress.) Thanks to Senator Coons and a diverse group of original co-sponsors for introducing a bill that would lower the cost of capital for clean energy, a critical piece of deploying clean energy at the scale needed to fight climate change. The Master Limited Partnerships Parity Act would allow renewable energy and energy efficiency to access the MLP structure. The MLP Parity Act is a common-sense bill with bipartisan, bicameral support that simply levels the playing field for clean energy. When...

Dennis McGinn responded to How Can Congress Boost Renewable-Energy Investments? on April 29, 2013 01:13 PM

Thu, 25 Apr 2013 15:04:34 GMT

Congress Can Jolt Renewable Energy The Master Limited Partnerships Parity Act, introduced last week by Sen. Christopher Coons and 15 bipartisan co-sponsors is a strong signal that Congress is serious about promoting America’s renewable energy future. The American Council On Renewable Energy applauds Sen. Coons’ leadership and calls on Congress to quickly pass Master Limited Partnership (MLP) legislation. By doing so, Congress can help level the playing field and promote greater private investment in our nation’s abundant and affordable renewable energy resources and fuels. There are two important, straightforward points to understand regarding renewable energy investment. First, opening the MLP...

William O'Keefe responded to How Can Congress Boost Renewable-Energy Investments? on April 29, 2013 09:00 AM

Thu, 25 Apr 2013 15:04:34 GMT

Parity with What? Providing potential investors in wind, solar, and biofuels the same investment mechanisms available to other energy sources ought to be a no brainer. However, claiming that access to Master Limited Partnerships (MLP) is needed to achieve parity with fossil energy would be comical if it wasn’t likely to be another mechanism to create incentives for self -enrichment. Alternative energy sources are the beneficiaries of lavish subsidies, which are a waste of tax dollars trying to produce low or no carbon energy sources that are not commercially viable. They are not new technologies. The fact that after...

James Valvo responded to How Can Congress Boost Renewable-Energy Investments? on April 29, 2013 08:28 AM

Thu, 25 Apr 2013 15:04:34 GMT

Capitalize Renewables in NY, not DC This response was originally published on Americans for Prosperity's blog: It’s time to treat renewable energy providers just like everyone else. In many ways, the playing field is dramatically tilted in their favor, with myriad tax credits, grant programs, loan guarantees and purchase mandates. However, federal policy still excludes renewables, coal-fired electricity production and nuclear from an important business structure from which other forms of energy have benefited. Congress should expand access to this business structure and put renewables on a level playing field with other forms of energy. At the same time,...

What's Holding Back Energy & Climate Policy?

Mon, 22 Apr 2013 10:00:00 GMT

The amount of change happening in Washington right now is impressive. Congressional leaders are debating immigration reform and gun control, and lawmakers from both parties are voicing support for gay marriage. Why isn't this kind of sea change happening right now with energy and climate policy?

Whether or not Congress ends up passing meaningful legislation on immigration and guns, and regardless of how the Supreme Court rules on two related gay-marriage cases this summer, the stage has clearly been set for meaningful legislative and public-discourse momentum on these trio of issues.

Why is the momentum in favor of change on immigration, gun control, and gay marriage, but not on major energy and climate-change policy? Or do you dispute that premise?

Should Washington instead try to move forward in the area of energy and climate policy in a piecemeal fashion, as President Obama has said before? Or, does this big policy area require big solutions?

Amy Harder responded to What's Holding Back Energy & Climate Policy? on April 26, 2013 10:37 AM

Mon, 22 Apr 2013 07:06:08 GMT

Front Groups Drive Anti-Clean Energy Efforts Fossil fuel industry money. (These comments were submitted by Gabe Elsner, Director of Checks & Balances Project, a pro-clean energy watchdog group focused on exposing fossil fuel-funded front groups and attacks on clean energy.) It's may appear to be a simple answer, but it goes beyond the campaign contributions and lobbying expenses that fossil fuel interests are pouring into Washington. Although, money in our elections impacts our ability to move climate and energy policy. The fossil fuel industry spends a lot of money on elections and candidates that outspent their opponents won 95% of...

Allen Schaeffer responded to What's Holding Back Energy & Climate Policy? on April 24, 2013 05:42 PM

Mon, 22 Apr 2013 07:06:08 GMT

Not all black and white, shades of green The climate debate has unfortunately been framed as an all-or-nothing, either-or proposition on many levels; either you believe absolutely in climate change and the science or you don't; either you believe in the need for carbon controls (taxes), or you don't, which in turns gets defined as action or inaction; defeat or failure and in our political world, actual or perceived risk of re-election or losing a seat. This absolutism ensures gridlock, and that seems unfortunate because rarely do we deal in a world of absolutes- black and white. There are many shades of gray and ... green and...

Frances Beinecke responded to What's Holding Back Energy & Climate Policy? on April 24, 2013 02:52 PM

Mon, 22 Apr 2013 07:06:08 GMT

We Can Cut Carbon with Existing Laws A sea change is underway in the energy and climate arena. U.S. carbon dioxide emissions have declined 12 percent since 2005. Wind energy now accounts for nearly half of all new installed electricity capacity and the price of photovoltaic modules has dropped by more than 75 percent in the last 5 years. Efficiency measures, meanwhile, are saving Americans billions of dollars and cutting energy demand. Congress may not be debating climate legislation right now, but that doesn’t mean America can’t keep reducing carbon pollution. Quite the contrary: we can confront climate change using...

David Holt responded to What's Holding Back Energy & Climate Policy? on April 24, 2013 02:06 PM

Mon, 22 Apr 2013 07:06:08 GMT

Whatever the Vehicle, Balance is Key Despite dramatic advances in energy production in the last several years, the United States continues to a lack a clearly defined national energy policy. Lack of sustained activity at the congressional level has effectively forced policy making in to the hands of federal regulators, many of whom remain constrained by limited resources and near constant litigation by groups opposed to energy production (of any kind). This situation is not only undesirable; it imperils the short- and long-term availability of dependable, affordable energy for consumers. Implementing a balanced energy policy has less to do with...

Craig Rucker responded to What's Holding Back Energy & Climate Policy? on April 24, 2013 11:00 AM

Mon, 22 Apr 2013 07:06:08 GMT

A recipe for continued economic malaise “We can’t have an energy strategy that traps us in the past,” President Obama proclaimed in March 2012. “We need an energy strategy for the future – an all-of-the-above strategy for the Twenty-First Century that develops every source of American-made energy.” At first blush, this sounds like common sense. A 2005 Congressional Research Service report noted that the U.S. economy and lifestyle "depends on inexpensive and plentiful energy," yet people tend to forget this until world events cause a rise in gasoline prices. When that happens, the report noted, Washington reacts - hence...

Jack Gerard responded to What's Holding Back Energy & Climate Policy? on April 24, 2013 10:27 AM

Mon, 22 Apr 2013 07:06:08 GMT

Policy Should Continue Industry Progress If Congress had passed comprehensive energy legislation 10 years ago, the goals would probably look insignificant compared to the ones already achieved by the oil and natural gas industry over the past decade. Technological advances have spurred an American energy revolution, bringing us closer than ever to energy security. Due to technologies like hydraulic fracturing and directional drilling, access to domestic natural gas reserves has increased exponentially while oil production is up over 1.6 million barrels per day since 2009. We now lead the world in natural gas production and the International Energy Agency says...

Arno Harris responded to What's Holding Back Energy & Climate Policy? on April 23, 2013 05:55 PM

Mon, 22 Apr 2013 07:06:08 GMT

Gridlock Doesn't Mean Stalemate As the recent failure on gun control showed, favorable public opinion does not translate into legislative success in a divided Congress. Despite the fact that study after study demonstrates large majorities of Americans favor action on climate change and they want more clean energy, we’re unlikely to see legislation pass anytime soon. We won’t get comprehensive climate change legislation until a majority of House members and a supermajority of Senators not only see it in their political interest to take action, but also come to general agreement on what the shape of action should look like....

Manik Roy responded to What's Holding Back Energy & Climate Policy? on April 23, 2013 04:37 PM

Mon, 22 Apr 2013 07:06:08 GMT

Small steps now, or big solutions? Both. Climate change is like these issues in some respects and unlike them in others. Tragic precipitating events have moved gun control to the fore, and personal experience (i.e., knowing a family member or friend who is gay) has changed public attitudes towards gay marriage. Both precipitating events and personal experience are brought together in climate change, with wildfires, floods, droughts, heat waves, and major storms touching the lives of millions of Americans over the past couple years. This may be why polling is showing an increasing awareness that climate change is real,...

Jamie Rappaport Clark responded to What's Holding Back Energy & Climate Policy? on April 23, 2013 03:58 PM

Mon, 22 Apr 2013 07:06:08 GMT

Congress: Think Ahead on Climate! It’s no secret Congress is gridlocked on climate change. Climate change challenges the sources of energy that fueled the industrial revolution and our current standard of living. Shifting to new sources of energy is a big deal, with lots of special interests with high stakes in the outcome. We have to change. And we can. Think of the amazing technological revolutions we have seen in just the last decade. Yes we are powering 21st century technology with 19th century energy. There simply has to be a better way. It has become clear that we can’t...

William O'Keefe responded to What's Holding Back Energy & Climate Policy? on April 23, 2013 05:57 AM

Mon, 22 Apr 2013 07:06:08 GMT

The Illusion of Progress? 0 0 1 701 4002 george c marshall institute 33 9 4694 14.0 Normal 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Bangla MN";} What seems to be progress and a sign of bi-partisanship may just be an illusion. Immigration, gun control, and gay marriage are issues that are emotional at their core. Climate change and energy policy are economic issues that only rise on the publics priority list when either prices rise or there...

Marlo Lewis responded to What's Holding Back Energy & Climate Policy? on April 22, 2013 08:09 PM

Mon, 22 Apr 2013 07:06:08 GMT

Explaining Energy Gridlock Why is there is no momentum in Congress for the “comprehensive energy and climate legislation” once proudly championed by the Obama administration and environmental activists? Starting with the most obvious reasons, 29 Democrats who voted for the Waxman-Markey cap-and-trade bill in June 2009 got pink slips from their constituents in November 2010. Key to defeating Waxman-Markey was its exposure as a stealth energy tax. This prompted a search for “other ways to skin the cat,” but finding other ways to fool the public was not easy. With few options to pick from, some climate activists now advocate...

Michael Canes responded to What's Holding Back Energy & Climate Policy? on April 22, 2013 03:25 PM

Mon, 22 Apr 2013 07:06:08 GMT

Politics Favors Small, not Large Actions Energy and climate policy are two very different things. Of course there is a nexus between the two, but if we take them up separately the answers become clearer. Energy is provided in private markets which generally function pretty well. There is no obvious reason for policy intervention except for national security or environmentally-related reasons. There also is not much record of government success from such policy intervention, nor does there seem to be public clamor for the government to do something right now. Perhaps a sudden, sharp rise in energy prices would yield such a clamor,...

Kevin Kennedy responded to What's Holding Back Energy & Climate Policy? on April 22, 2013 03:10 PM

Mon, 22 Apr 2013 07:06:08 GMT

The Race Against Climate Change We are in race for sure, but it is not a race among various national issues. It’s a race to slow the pace of our rapidly changing climate. The planet is warming faster than previously thought, and we cannot afford to wait for national politics to align to make progress in slowing the dangerous rate of warming. Recent events, like the tragedy at Sandy Hook elementary school, propelled gun control front and center. Last year’s elections shifted the national conversation on immigration. Climate change, too, should demand the attention of our national leaders. The evidence...

Scott Sklar responded to What's Holding Back Energy & Climate Policy? on April 22, 2013 07:04 AM

Mon, 22 Apr 2013 07:06:08 GMT

Climate Bill Third In Line The push on a healthcare bill in President Obama's first term, doomed passage of a climate bill. Similarly in this second Obama term, we have two priority legislative pushes, besides an agreement on the budget, which is immigration reform and gun legislation. These priorities will prevent consideration of any climate agreement, I believe, for the next two years. The moves by the Obama Administration to negotiate international agreements between the major greenhouse gas emitters also will set the stage for a later legislative play, possibly a legacy play by the Obama Administration. The National Post...

Bernard L. Weinstein responded to What's Holding Back Energy & Climate Policy? on April 22, 2013 07:02 AM

Mon, 22 Apr 2013 07:06:08 GMT

Absent a Crisis, We Should Think Long-Term Congress and the White House typically shift into overdrive only when confronted with a crisis. This has certainly been the case with gun control, the budget, and the debt ceiling. Immigration reform, which has been on the Congressional agenda for a decade, is an exception to the rule. During the election campaign, and in his State of the Union address, President Barack Obama indicated climate change and energy policy would be at the top of his legislative agenda during his second term. But because there is no perception of a “crisis” either...