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Posts Tagged ‘BP’


Wednesday, August 4th, 2010

The Obama Administration’s 18-month effort to pass significant climate and energy legislation effectively ended yesterday as Senate Majority Leader Harry Reid made it official that he will not introduce a truncated energy bill for a vote before the scheduled Senate August recess.

The anticipated bill had limited climate-related  aspects.  Its main concern was the BP oil spill — removing liability caps and tightening permitting for offshore drilling. The effect, according to Senators from the Gulf states, would be to turn the Administration’s temporary moratorium on drilling in the Gulf into a permanent state of affairs. Opposition from Republicans and Gulf State Senators convinced Reid he could not get the 60 votes needed to advance the bill.

Representatives of the offshore oil industry breathed a sigh of relief but said that the six-month moratorium on drilling imposed by the Obama Administration is already having a devastating impact. "This is a very competitive international market," said Jack Victory, a spokesman for Transocean, the Swiss company whose rig blew up at Deepwater Horizon. "These rigs are in demand all over the world.  Several have already left the Gulf for Egypt, Brazil and West Africa.  It’ll be a long time before they come back."

Although the drilling slowdown will not have any immediate impact, it could start to show up in diminishing production within a few years.  One-third of domestic oil production now comes from the Gulf and domestic production only provides one-third of the U.S.’s oil consumption.

Nuclear energy sources generally conclude that the demise of an energy bill with carbon pricing put more more pressure on a policy lift from federal loan guarantees, which also seem to be grinding to a halt as well. This week both NRG and Constellation Energy slashed plans for spending on new projects in anticipation that the Department of Energy would not be making any more awards in the near future.


Tuesday, June 29th, 2010

By William Tucker
As President Barack Obama meets with key Senators this morning to discuss energy, the number of scenarios that could unfold in the passage of an energy bill through Congress this year keeps multiplying.

As The New York Times suggests in a lengthy article this morning, one more possibility – besides the adoption by the Senate of some form of cap-and-trade – is that Senate Democrats may pass some deliberately weak bill and then count on it being strengthened in the conference committee. Anything the Senate passes would have to be reconciled with the stronger Waxman-Markey adopted by the House. Then an up-or-down vote on the conference bill could be postponed until after the November election.

Another scenario has the Senate adopting an oil-spill bill with an energy bill attached. The main body of the legislation would involve punishing BP and improving drilling safety. Since acting against BP would be popular, Republicans would find it hard to vote against any cap-and-trade or renewable portfolio requirements that might be attached. Democrats would label them friends of the oil industry.

Beyond these strategies, the big question remains what will happen with any bill's four major provisions:  1) carbon restrictions, 2) renewable portfolio standards, 3) nuclear loan guarantees, and 4) offshore drilling regulations. If the Democrats manage to assemble one big package, as they did with health care, they might force Republicans to accept some things they don't like.

A strong nuclear title will likely be part of any package. The Kerry-Lieberman bill is very strong on nuclear, with expanded loan guarantees and a section telling the Nuclear Regulatory Commission to speed up the licensing process. Its inclusion is more than likely since- miracle of miracles – nuclear power has become something of a favorite in Congress with few anti-nuclear representatives raising their voices.

Cap-and-trade would also favor nuclear, since it would act against nuclear's main rivals, coal and natural gas. The real danger to nuclear would be a strong renewable portfolio standard -17-percent-by-2020 as in Waxman-Markey, for instance – that would exclude nuclear. This would lead to a decade of misplaced investment in wind-and-sunshine that would probably push nuclear into the background. Several Senators are urging a carbon-free standard instead of a "renewable" standard, since that would put nuclear back into the picture. In fact it is something of a mystery how proposals to generate electricity with wood instead of coal on the grounds that wood is more "renewable" ever made it into bill aimed at reducing carbon emissions.

It's high drama, with both the election and the nation's energy future hanging in the balance. After the sneak-preview offered by today's White House discussions, prime time will begin on July 12 when majority leader Harry Reid brings his oil-and-energy offering to the floor of the Senate.

Read more at the New York Times


Thursday, June 17th, 2010

By Steve Hedges

WASHINGTON — Amid the chatter about the BP oil spill, lost jobs, billion-dollar escrow funds and political fallout, The Wall Street Journal’s Rebecca Smith notes in a story today something that people in the nuclear industry have been talking about ever since the first hint of the Deepwater Horizon explosion and underwater gushers:
Why doesn’t the oil business have something like the Institute of Nuclear Power Operations – the industry oversight arm that was established after the 1979 Three Mile Island incident?

It’s a good question, especially given the long-lasting effects of the 1989 Exxon Valdez spill. Government regulations on tankers and oil operations were revamped after Valdez. But the oil industry itself, as the fallout from the Deepwater Horizon spill in the Gulf of Mexico has shown, hasn’t done enough to police its own work, especially when it comes to the deep-water technology involved in offshore drilling.
The lackadaisical testing of the blow-out preventers that are designed to stop deep sea gushers is just the start. Until now, most environmentalists might have guessed that the petroleum industry had better internal oversight than America’s nuclear power grid.
They’d be wrong.

As the Journal story notes:

“William K. Reilly, a Republican and former administrator of the Environmental Protection Agency under the first President Bush, said an organization modeled on ‘Inpo’—the Institute of Nuclear Power Operations—wouldn't be a substitute for stronger federal oversight but could "create the safety culture that's needed" in offshore drilling.
“Atlanta-based Inpo was created in 1979 following the nuclear accident at the Three Mile Island plant in Pennsylvania. Today its inspection teams conduct regular evaluations of nuclear plants and assess training programs. It is credited with improving plant safety and performance. A nonprofit corporation, it is funded by $100 million a year in industry fees.”

The key elements of INPO are that it is industry driven, funded and managed. That, and the fact that it works, as the Journal story notes. People have lost their jobs after poor INPO inspections.

The nuclear industry realized quickly after Three Mile Island that the high stakes of an accident or even a minor incident: the risk of unnecessary and even permanent shutdown, increased and highly-politicized government scrutiny, higher operating and recovery costs and long-lasting damage to community trust.
BP is living that nightmare scenario right now. But the oil industry appears content to have let BP flop around the oily deck of its own disaster. While environmentalist and oil industry opponents are talking about stronger offshore drilling regulations or even halting offshore work for good, few in the business are suggesting something like INPO, an “in-house,” self-regulatory process will make things safer for all oil producers.

As in other industries where safety, technology and regulation meet – Aviation comes quickly to mind – reasonable, industry-wide precautions taken by solid operators can prevent disasters like the Deepwater Horizon explosion and spill.

Read more at the WSJ:

Bromwich named to head oil regulator

Obama: BP will pay for the damage it has done

Obama's political oil fund


Wednesday, June 16th, 2010

To those who thought the Obama Administration was making progress in incorporating nuclear power into its energy plans, the Presidents speech last night came as a sobering wake-up call.
Once again, as in his Inaugural Address, the President was singing the virtues of wind and solar energy with nary a mention of nuclear. Twice he enumerated what he considers the clean energy economy and nuclear was not part of it.
Of course the Presidents mention of anything to do with generating electricity was controversial because, as commentators are already pointing out, putting electrons onto the grid has nothing to do with putting gasoline in your tank unless we are to start migrating to a fleet of electric cars, which is still far in the future. Strangely, the President didn‚t even mention biofuels, which however dubious their contribution is still the number-one renewable strategy for replacing oil.  In the Inaugural, it was "energy from wind, sun and soil."  Last night biofuels didn't even make the cut.
Fortunately, none of this will make much difference in policy. The $54 billion in loan guarantees are still in effect, site clearance at the Vogtle plant in Georgia continues and the Nuclear Regulatory Commission is starting to feel the heat about getting some licenses out the door. The Kerry-Lieberman Energy Bill, which will presumably be the focus of any action in the Senate, contains a very powerful nuclear title.
Still, as the President continues to speak to the American people about all the difficulties we face in providing ourselves with enough energy, it would be nice to hear him utter the word "nuclear" once in awhile.

Read the whole speech at Reuters