US Senator: Presidential action, not words, needed on Gas – Platts Energy Week
Also , AGA and Doc Hastings on gas & more; Update on US-China coal cooperation
Washington - January 30, 2012
The ranking Republican on the US Senate Energy and Natural Resources Committee said that while she was impressed by President Barack Obama's stated commitment to sharply increasing U.S. natural gas use to displace oil, the president's words alone would not accomplish his goals, according to Sunday’s Platts Energy Week, an all-energy news and talk program.
In his State of the Union address to Congress Tuesday, Obama said US gas supplies "can last America nearly 100 years" and two days later called the US the "Saudi Arabia of natural gas." He called for increased use of gas as a transportation fuel, especially in truck fleets.
“I didn't feel there is a consistency between [Obama's] words and what we have seen come out of the administration, through the agencies particularly," Senator Lisa Murkowski told program host Bill Loveless in an interview aired Sunday.
"I'm hopeful that he recognizes there may be an inconsistency and works to cure that."
While Murkowski cited an "inherent conflict" in the Obama administration's strong commitment to natural gas and its emphasis on producing it safely – the president in his State of the Union address said he was "requiring all companies that drill for gas on public lands to disclose the chemicals they use" – she agreed "it is important to recognize that there have been small steps made that cause us to look at how we might use natural gas, particularly for fleet vehicles and increase the demand that way."
Speaking of a US Clean Energy Standard (CES) mentioned by Obama in his speech, an effort that would have 80% of the electricity produced in this country by relatively clean fuels by 2035, Murkowski said similar legislation was introduced into the Senate in 2011 and went nowhere.
“It did fall flat," Murkowski said. "He did not advance it. Senator Bingaman (Energy committee Chairman Jeff Bingaman, Democrat-New Mexico) and I actually came together, asked for some comments on what a CES might look like and got some pretty broad range of ideas out there."
"But what became clear to me was that there is no real consensus as of this point in time on how to move forward," she added. "Senator Bingaman has indicated that he is going to try to advance something. But from the administration, we really haven't seen much of anything, other than two mentions in two consecutive State of the Unions."
MISSED KEYSTONE OPPORTUNITY
Murkowski said Obama "missed an opportunity" by not bringing up the controversial Keystone XL oil pipeline in his State of the Union address.
Obama January 18 rejected developer TransCanada's permit application for the project. The rejection came about a month after Congress in December gave the president 60 days to make a decision on the proposed 700,000 barrels-per-day (b/d) pipeline.
The Keystone pipeline would bring crude 1,700 miles from the Alberta oil sands region to Texas Gulf Coast refineries. A U.S. State Department permit is necessary because the pipeline would cross the U.S. - Canada border.
Keystone XL has drawn the wrath of environmentalists because they say crude produced from Alberta oil sands would cause an immense amount of emissions and because part of the pipeline's route would take it through the Sandhills region of western Nebraska, where it would overlie the crucial Ogalla aquifer. The second concern has also brought opposition from ranchers and farmers in the Nebraska Sandhills.
"I don't understand why there has been such incredible opposition to this," Murkowski said. "We here on Capital Hill talk about jobs with every breath that we take. This not only helps facilitate a resource from our friend and neighbor Canada, but it also helps us move all of the oil that is coming out of North Dakota," she said, referring to ever increasing oil production from the Bakken Shale.
"This is going to be critical," she added.
Offering that while environmental concerns should be considered, Murkowski said the environmental consequences of not building Keystone XL would be worse.
ALASKA GAS PIPELINE
"You need to look at the full life cycle of the Canadian oil sands," the senator continued. "If the United States doesn't take this and put it in a pipeline, the most safe way to deliver to our refineries, where we have tighter regulations than any other refineries in the world, it's going to be put in a pipeline to British Columbia, put in tankers that are owned by the Chinese, that are single-hulled tankers, coming through the Gulf of Alaska, going to China and refineries that are not as environmentally regulated. So, from an environmental perspective, the safe way, the smart way is to the Lower 48."
Murkowski was less strident about the TransCanada/ExxonMobil pipeline proposal to bring Alaska North Slope gas to the US Lower 48 states. The low cost of gas in the U.S. has made those pipelines less economically feasible than earlier thought and state officials have recently expressed more optimism about piping that gas to southern Alaska for use there and where it could be liquefied and put onto liquefied natural gas (LNG) tankers to Asia.
"Our market may not be in the Lower 48," Murkowski said. "It may be an export market," she said, adding this is "probably more likely" now.
Murkowski said she was "very committed to making sure that Alaskans gain access to our gas as well. We're paying some of the highest energy costs of anybody in the entire country. But we have so much that we're going to have the opportunity to share and trade."
Echoing initial but cautious praise for President Obama’s pro-natural-gas stance was Dave McCurdy, president of the American Gas Association (AGA) and the former president of the Alliance of Automobile Manufacturers. He warned that much remains to be spelled out before any conclusions can be drawn as to what the Obama support will mean to the natural gas sector and those dependent on it. McCurdy is a former Democratic congressman from the gas-producing state of Oklahoma. Access the full interview at this link.
This week’s “Market Spotlight,” featuring Platts Associate Editor Geoff Craig, explored the impact of low natural gas prices on the renewables sector.
Elsewhere in the program, energy leasing was a key focus. Loveless spoke with U.S. Representative Doc Hastings, chairman of the US House Natural Resources Committee, about proposed legislation that would expand federal oil and natural gas leasing and earmark those proceeds for construction of bridges and roads.
In a segment on clean coal cooperation between the United States and China, Platts Energy Week featured Chris Poirier, CEO of Massachusetts-based CoalTek, the first company to sign a deal under a 2009 US-China energy agreement. Poirer offered his company’s new venture, which will turn low-grade brown coal from Inner Mongolia into cleaner-burning fuel, as proof that break-through US-China agreements are indeed possible when the two nations work closely together, as they did in 2009.
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