Power Lines

The matter of carbon allowances for the power industry appears to be a tough problem. The Edison Electric Institute's split-the-baby solution, which congressman mostly accepted in the Waxman-Markey cllimate change bill, has come under enormous challenge from coal-intensive utilities and their US senators.

EEI's compromise solution, giving coal-heavy companies not enough to cover all their emissions while giving non-emitting utilities a goodly share, is unfair, the coal utilities say. And with 14 senators vowing to support their position, the EEI allocation formula looks to be on the skids.

But Exelon's John Rowe doesn't think so.

While fuming about assaults on the oil and gas industry, US Representative Dan Boren, a devout Blue Dog Democrat from Oklahoma, told the Natural Gas Roundtable why his quest to fend off tax hikes is personal.

"If you took away intangible drilling costs, it would decimate the industry. If you took away the depletion allowance, it would be terrible," he said at this week's roundtable session. For the uninitiated, intangible drilling costs are expenses incurred while exploring for gas and oil. Federal tax law lets producers write off those costs. The depletion allowance includes deductions from gross income that are allowed by the federal tax code to investors in commodities like oil for the depletion of the minerals deposits.

If it's to be a slap fight, then bring it on. We may have an entertaining season to look forward to.

Natural gas: It's the bridge fuel. No, it's crack cocaine. And now it's the fuel that's a bit "bitchy." That is what Exelon chief John Rowe felt comfortable enough to say this week, when state utility regulators had their annual meeting in the company's home city, Chicago.

For conservationists, it's a pretty picture: California just became the first state to adopt energy-efficiency standards for televisions.

Needless to say, TV makers are giving the new rules a bad reception.

Under the policy adopted by the California Energy Commission on Wednesday, all new 42-inch TV sets sold after January 1, 2011, must use less than 183 watts; by 2013, that drops to 116 watts. By comparison, according to the CEC, a 42-inch plasma TV sold in 2007 uses about 313 watts, while a 42-inch LDC set uses 232 watts.

That didn't take long.

Only two and one-half hours after Devon Energy announced Monday morning that it would put it billions of dollars of Gulf of Mexico deepwater assets and some foreign fields up for sale to focus on US shale gas, the New York Times brought back the ghost of the China National Offshore Oil Corporation to haunt the story.

Under the headline "Devon Energy's Asset Sale May Draw China's Interest," the newspaper reports that CNOOC might be a logical bidder for Devon's Gulf properties.

Government-controlled CNOOC got a short, sharp lesson in US energy nationalism in 2005 when it bid $18.5 billion for California-based Unocal and its GOM fields, topping Chevron's bid by a few billion (back when billions with a "b" meant something).

Is there any other universe in which people talk about non-zero-dollar penalties?

A zero-dollar penalty requires enough thought process, thank you. It just seems like too much work to parse a sentence about a non-zero-dollar anything. Power system reliability is already hard enough.

The recent verbal and non-verbal jousting over who owns what oil and natural gas in the Arctic Ocean is better than Ice Station Zebra, the 1960s Cold War thriller that was played out near Santa Claus' abode near the North Pole.

The Associated Press recently reported that Russia is planning extensive research over three years to support its claim to a broad swath of energy-rich territory beneath the Arctic Sea, a top official of the nation's icebreaker fleet said Friday. Moscow claims a large part of the Arctic seabed as its own, arguing that it is an extension of Russia's continental shelf. In 2007, scientists staked a symbolic claim by dropped a canister containing the Russian flag onto the seabed from a small submarine.

Dr. Doom doesn't give a fig for your commodities exchange traded funds.

In an interview with the Hard Assets Investor website ("Common Sense on Commodities"), Dr. Nouriel Roubini, who called the top on the market in 2005 with predictions of, well, doom by 2008, said speculators pouring cash into commodities funds were to blame for oil prices near $100/barrel and above.

What we have here is a failure among gas industry advocates to sing the same song from the same song book.

The Dallas Morning News reported Friday that T. Boone Pickens said US natural gas supply will probably dry up in about 30 years. After that, the country will need some other transportation fuel, such as fuel cells or batteries.

"Natural gas is just a bridge," he said in a speech at the University of Texas. "Twenty-five, 30 years is what we're going to get out of it." He said pretty much the same thing a few weeks ago at the first meeting of the House Natural Gas Caucus.

Cape Cod ocean vista lovers have no monopoly on wanting to preserve their views. In the middle of the country, where oceans of prairie are envisioned bearing the weight of a wind-powered future, some people don't think much, either, of turbine-crowned horizons.

The Kansas Supreme Court has now upheld a county government decision banning utility-scale wind farms, which the county commissioners determined "would be incompatible with the rural, agricultural and scenic character" of the place.