Archive for November, 2009

JUST THE FACTS: Top Canadian Official, Wis. Manufacturers Underscore LCFS Threats

Monday, November 30th, 2009

Last week, former Vice President Al Gore sat down with The Toronto Star to warn Canadians about how the “dangers of the oil sands.”

But rather than focusing on and highlighting the positive economic and security benefits associated with Canada’s vast energy supplies – which provides American consumers, families and businesses more than 2.5 million barrels of petroleum each day and are considered one of the world’s largest known energy deposits – Gore claims that these abundant reserves will “jeopardize the survival of our species.”

Despite this rhetoric, and baseless claims that “Gas from the tar sands gives a Prius the same carbon footprint as a Hummer,” affordable energy advocates are getting the facts out.

Ed Stelmach, the Premier of Alberta, writes this in yesterday’s Toronto Star under the headline “Oil-sands hysteria only confuses climate debate”:

A realistic and reasonable discussion about oil-sands development must be based on fact. Sadly, Gore’s doomsday assertions about an industry that makes up less than one-tenth of 1 per cent of the world’s greenhouse gas emissions are neither realistic, reasonable nor factual.

The fact is, Alberta’s responsible energy development yields tremendous benefits for all Canadians. While the Canadian economy may not be important to Gore, it certainly is to Canadians. Alberta’s energy resources mean jobs for hundreds of thousands of Canadians across this country and, incidentally, thousands of Americans as well.

Critics of the oil sands, such as Gore, seem to dismiss the fact that 80 per cent of emissions from a barrel of oil come from the end use – the tailpipe. In reality, Ontario drivers produce more greenhouse gas emissions than the oil sands. Comprehensive and independent studies have shown that when considering the full life cycle of a barrel of oil – including getting the oil out of the ground, refining it, then transporting it to market – there is very little difference in greenhouse gas emissions from a litre of gas made from oil sands or Saudi crude.

But it’s not just secure energy advocates in government speaking out on this critical issue. Reliable, affordable energy is the linchpin to America’s manufacturing base. And their voice is being heard, too.

In a recent Milwaukee Journal Sentinel column, James Buchen, vice president of Wisconsin Manufacturers & Commerce, writes this about the dangers of an LCFS – which would effectively block over 50 percent of Wisconsin’s oil that currently comes from Canada:

A Low Carbon Fuel Standard sounds harmless enough, but this misguided policy would penalize Wisconsin’s dominant source of motor fuel: Canadian crude oil. Studies have shown that such a standard will raise gas prices; it’s a bit like a global warming gas tax. But it gets worse because an LCFS would also threaten many of our state’s family-supporting manufacturing jobs that supply the Canadian oil industry.

Today, more than 50% of our state’s motor fuel comes from Canadian oil…Because Canadian oil is located on our own continent and comes from one of our closest allies, it represents a stable and secure source of energy for Wisconsin. We refine this vital energy resource at our state’s only oil refinery in Superior, and President Barack Obama’s administration recently approved plans to expand the pipeline from Alberta to our state. Equally significant are the thousands of Wisconsin manufacturing jobs tied directly to the Canadian oil industry as suppliers of heavy equipment.

Driving up the cost of Canadian oil with an LCFS will punish Wisconsin consumers by hitting families, farmers, truckers and businesses with higher prices at the pump…We simply cannot afford to saddle consumers with higher energy costs as we struggle to emerge from a deep economic recession.

Earlier this year, Congress had the good sense to reject a national LCFS, recognizing it would harm consumers. Wisconsin lawmakers should follow suit. Any way you cut it, a Low Carbon Fuel Standard is a lose-lose proposition for Wisconsin consumers and workers.

Help keep America’s energy secure, affordable and reliable by telling Congress to oppose a job-killing LCFS. American consumers cannot affordable higher energy costs and an even deeper dependence on unstable regions of the world to fuel our economy.

As the LCFS Threat Continues to Grow, Secure Our Fuels Remains on the Offense

Friday, November 20th, 2009

Low-Carbon Fuel Standards (LCFS) are now being considered for adoption in Washington and in state capitals across the nation. And while everyday consumers may be largely unaware of the far-reaching consequences that such a mandate holds, our major global competitors are keenly aware – and excited – about the prospect of acquiring secure, affordable and reliable energy resources that have traditionally been directed to American consumers, businesses and manufacturers.

The Globe and Mail’s Nathan VanderKlippe reports this today under the headline “Pipeline to West Coast gains backing”:

Commercial support is building for a new pipeline to carry oil sands crude on its way to Asia, as Canada’s energy industry seeks diversification from the U.S. market and an escape valve from potentially punitive climate-change regulations.

That comes amid a shifting of the landscape, as industry executives, politicians and economists increasingly promote the idea that it is risky to rely solely on the United States to buy Canadian crude, especially as the oil sands grow in importance and demand for oil stagnates south of the border.

“For sure, the U.S. isn’t going to like it,” Ms. Cooper said. “But that’s good, because it gives us more leverage with the U.S. For example, it makes it more difficult for the U.S. to threaten us with comments about dirty oil.”

The article also highlights the significant amounts of the reliable energy resources that Canada currently sends to U.S. consumers each day, and notes that China is eager secure as much of this energy as it possibly can:

In the second quarter of this year, Canada exported 1.76 million barrels a day to the U.S, but only 24,000 elsewhere. Several major pipelines to the U.S. will also provide ample capacity for years of oil sands growth.

However, new Asian oil sands entrants – including PetroChina and the Korea National Oil Corp. – have helped raise interest in shipping crude to Asia.

But Consumer Energy Alliance (CEA) continues to educate, inform and engage American consumers about the economic and national security threats that an LCFS poses. Under the headline “Talking low carbon fuel standards in Kalamazoo,” WWMT-TV – Kalamazoo’s CBS affiliate – reports this:

An environmental attorney heads to Kalamazoo Thursday to talk about federal energy legislation.

The main focus of the discussion is the Low Carbon Fuel Standard proposal.

The House originally included it in cap-and-trade legislation and senators added it to a climate change bill.

Critics argue it keeps Canadian and other sources of secure, North American energy from reaching consumers.

Lawyer Tom Mullikin says that could have a huge economic impact on Michigan because more than half of the state’s oil comes from Canada. He’s also concerned about security risks.

Also this week, in a column Missoulian column entitled “Be skeptical of bureaucratic fuel standard ratings,” Jan Rogers writes this about a nationwide, one-size-fits-all LCFS – which would effectively block 93 percent of Montana’s oil that currently comes from Canada:

LCFS would cause the U.S. to discriminate against the fuels most affordably available to us – domestic oil from California and Colorado, Mayan crude from Mexico and oil sands from Canada, our neighbor to the north and strongest trading ally in the hemisphere.

At the expense of our Canadian neighbors with whom we share a 545-mile border, proponents of an LCFS would rather give a competitive advantage to far-away dictators who will use these new mandates to expand their sphere of influence and share of the market in the United States. Are you shaking your head yet?

With budgets stretched thin and difficult decisions being made every day in these tough economic times, the people of Montana cannot afford even higher energy bills.

Consider: More than 90 percent of the oil Montana consumers depend on comes from across the border in Canada. Ninety-three, to be exact. An LCFS will dramatically impact our fuel supply, our jobs and our economy – there’s simply no way it can’t.

The Year of the Vulture: 5 Questions President Obama Should Ask in China about LCFS

Monday, November 16th, 2009

President’s Trip Will Allow Him to See Firsthand Where Secure, North American Energy Will End Up If Congress Passes Low-Carbon Fuel Standard

Tomorrow, President Obama will attend a state dinner in Beijing hosted by Chinese president Hu Jintao – an event held to highlight the extent to which emerging Asian markets and the economic well being and security of the United States have come to be inextricably linked.

But while some degree of interconnectivity is both inevitable and positive, the type of relationship between our two countries envisioned under a Low-Carbon Fuel Standard (LCFS) would actually threaten the energy security of the United States – in the process, handing over a secure, affordable stream of locally available energy to our competitors half-a-world away.

Thankfully, President Obama’s trip to China will allow him the opportunity to find out, once and for all, what China’s intentions are for the Canadian oil sands – a source of secure North American energy in which the government of China invested billions of dollars earlier this year.

Without an LCFS, much of that energy could be sent to markets in the United States, consumed by and for the benefit of U.S. consumers. Under an LCFS, though, that energy would be blocked from crossing the border – diverting as much as two million barrels a day of secure, previously American-bound energy to Asian markets.

In light of that reality, and in anticipation of the president’s meeting tomorrow, CEA today released a list of five critical questions that President Obama should ask President Hu Jintao before he returns home:

1)       Your government has demonstrated a relentless determination to go anywhere and do anything to secure energy resources needed to strengthen China’s global position. Recently, your state-owned oil company entered an agreement with Canada to invest $1.7 billion in the oil sands – right in America’s own backyard. Give it to me straight, President Hu:

How much of that oil do you plan to take back to China? And when should we expect construction to start on the Gateway pipeline that will allow you to take it there?

2)       You may know that as a member of the U.S. Senate, I introduced my own LCFS plan – even though my home state of Illinois gets 55 percent of its oil from Canada. While it didn’t become law, Congress is now debating a climate bill that could include an LCFS. So let me ask you:

Would a self-imposed U.S. ban on accepting energy resources from Canada, called for under an LCFS, make it even easier for you to become a dominant player in the oil sands? By the way: You all plan on leaving at least a little bit of that energy for us, right?

3)       I’m sure you saw the recent Houston Chronicle article reporting on the new, $5 billion refining and chemical complex set to open in your Fujian province – a project that’s coming online even as major refineries in the United States are being forced to reduce their runs and even close their doors.

Do you expect to send the secure energy you’re taking from us in North America to these refining hubs in China? Would you be able to justify this refining expansion without an insurance policy like an LCFS – which will ensure you have these Canadian resources all to yourself?

4) President Hu, if you’ve been reading our newspapers, you know that some well-intentioned folks continue to base their support for an LCFS on that belief that it would reduce global greenhouse gas emissions. But several independent analyses – including one from my own advisor at the Department of Energy – found that an LCFS may actually increase the concentration of CO2 in the world’s air, since it’d force us to tanker that Canadian energy half-way around the world to you.

With Copenhagen coming up, will you commit today to include these extra emissions created under an LCFS as part of your country’s CO2 baseline?

5)       President Hu, more cars are being sold in China right now than in the United States, so I’m sure you know that 80 percent of the emissions from the transportation sector come from the combustion of fuel in our vehicles – a process that an LCFS would not impact in the slightest. So although an LCFS is being sold to my people as a way to reduce CO2 from the transportation, in reality, it’s just an inefficient and expensive way to nibble around the edges – all while handing over to you the energy and resources that make America strong and secure.

President Hu, Communist China celebrated its 60th anniversary last month – certainly no other country gave you as generous a gift as the American Congress appears willing to give with an LCFS, right?

CEA Analysis Finds LCFS a Bad Option for Northeast

Friday, November 13th, 2009

Consumer Energy Alliance analyzes Low-Carbon Fuel Standard compliance scenarios for 11 northeast states

WASHINGTON – A regional Low-Carbon Fuel Standard (LCFS) imposed on 11 Northeast and Mid-Atlantic states would result in prohibitively high gasoline, diesel and home heating oil prices, and would likely be logistically impossible to meet under any of the compliance scenarios currently being considered. That’s the conclusion reached in a new analysis produced by Consumer Energy Alliance (CEA) and submitted this week to the Northeast States for Coordinated Air Use Management (NESCAUM).

“Our analysis shows that under each of the compliance scenarios contemplated by NESCAUM, the imposition of an LCFS on the Northeast will lead to substantially higher prices at the pump and restricted access to essential fuels such as gasoline, diesel and home heating oil – without doing a thing to reduce global greenhouse gas emissions,” said CEA vice president Michael Whatley, who participated in two public meetings hosted by NESCAUM in Newark, N.J. and Boston last month.

Created in the 1960s to advocate for the Clean Air Act, NESCAUM is currently working to develop a framework to encourage Northeast and Mid-Atlantic states to adopt model LCFS requirements, thus creating the nation’s first regional standard.  At its core, an LCFS seeks to reduce greenhouse gas (GHG) emissions by restricting the use of conventional fuels such as gasoline and diesel, while increasing the use of alternatives.

In analyzing potential methods for designing an LCFS, CEA considered the consequences of two compliance scenarios reportedly under consideration by the group: 1) forcing fuel producers to meet LCFS mandates by injecting enormous amounts of corn-based ethanol into fuel stocks, or 2) forcing them to purchase carbon credits for the right to remain in business.

Under the ethanol compliance scenario, CEA found that in order to meet a 10 percent emissions reduction target, ethanol would need to comprise a full 50 percent of the region’s fuel supply. To handle this E-50 ethanol, every single car in the 11-state region would need to become a “flex-fuel” vehicle, a significant feat considering that today less than one percent of vehicles on the road meet that standard.

Logistics aside, the plan would also cost some serious money:

In order to handle gasoline with an ethanol blend over 10%, gasoline storage tanks and pumps … will need to be replaced with special tanks and equipment … currently projected to cost between $50,000 and $200,000 per location.

Under the credit purchase scenario, fuel retailers would need to purchase credits from alternative energy producers to comply with an LCFS. However, given the relative lack of commercially available technology in this space at present, it’s not entirely clear how compliance could be met under this scenario — a fact that NESCAUM admits in its report (page 21):

While the outlook of these technologies is promising, the volumes that would be required in order to meet a 10 percent LCFS by 2020 greatly exceed the volumes that have been produced to date.

In formal comments submitted to NESCAUM following its LCFS meetings, CEA also analyzed policy alternatives that could achieve emissions reductions in ways that are cheaper and more efficient than an LCFS. Comparing these alternatives to current LCFS proposals, CEA concludes that an LCFS will raise fuel costs substantially higher than would be the case under new CAFE requirements or the implementation of Renewable Fuels Standards – and will achieve significantly lower emissions reductions.

On Message: Top official reminds us that Canadian energy is of “undeniable strategic energy importance” to US consumers

Thursday, November 12th, 2009

Earlier this week, Canada’s natural resources minister, Lisa Raitt, traveled to the US to meet with key stakeholders in New York City. We’ve blogged about Raitt’s work promoting commonsense energy policies on Secure Our Fuels before – but if you haven’t her in action yet, trust us: You will. Be hard-pressed to find folks more passionate and knowledgeable about the issues than her.

Despite the fact that the US receives more than 2.5 million barrels of petroleum each and every day from our neighbors and closest trading allies to the north, some in Washington – and in state capitals across the country – are working to ban this affordable and secure energy from reaching American consumers.

How is this possible? And why? Well, it’s called a Low-Carbon Fuel Standard, or LCFS. And some Washington politicians – who want you to pay more at the pump to make other more expensive and less reliable energy forms more competitive – are working to see this become a reality.

But defenders and advocates of reliable and affordable energy have a champion in Lisa Raitt.

E&E News reports this about her visit under the headline “Canada promotes oil-sands projects on Wall Street”:

The Canadian natural resources minister told Wall Street today that Alberta’s oil sands are of “undeniable strategic energy importance for North America” and there is little choice but to increase investments in oil extraction there.

“We are committed to developing this resource in a way that is more environmentally sensitive,” Raitt said.

Of the 13 percent of global oil reserves not monopolized by state-owned companies, about 42 percent is found in the Alberta oil sands, the Canadian government says. Total proven reserves in Alberta and parts of Saskatchewan are estimated to be 170 billion barrels, or roughly six times the amount found in conventional reserves in the entire United States and Canada.

Raitt touts her trip – which aimed to reinforce the critical trading partnership between the US and Canada, especially as it relates to affordable and reliable fuel resources – on her website. Under the headline “Minister Raitt Concludes Successful Visit to New York,” the natural resources minister says:

“Canada and the United States share the most successful trade relationship in modern economic history,” said Minister Raitt to an event co-hosted by the Canadian Association in New York, the Canadian American Business Council and Canada’s Consul General. “But a lesser-known fact is that Canada is the key to assuring North American energy security.”

If you agree with Lisa Raitt, and would prefer to continue to fuel America’s economy with North American energy rather than increasing our reliance and dependence on far-away, unstable regions of the world, then send Congress a message to stop an LCFS from becoming law.

Mich. Manufacturers: LCFS is Wrong for Our Security & Our Pocketbooks

Tuesday, November 10th, 2009

Last week, the Senate Environment and Public Works Committee cleared a sweeping global warming bill. And while a national, one-size-fits-all low-carbon fuel standard (LCFS) is not included in the bill (yet), many concerned consumers and policymakers are speaking out about the harmful economic and national security implications associated with the proposal.

In short, an LCFS would raise fuel prices, eliminate jobs and deepen America’s dependence on fuel from unstable regions of the world. But Consumer Energy Alliance (CEA) – and our broad coalition of partners – is working hard to get the facts out. The Financial Times reports this under the headline “Oil sands: Dirty fuel needs more than a bucket and spade”:

If adopted, such a standard would bar the US from importing crude produced from the oil sands … the Consumer Energy Alliance, a US group lobbying against the low-carbon fuel standard, asserts on its website that ‘without Canadian crude, US consumers would be forced to find those supplies elsewhere, forced to pay more to get them, and forced to rely on people and places halfway across the world whose values and interests don’t always align with our own”.

The Michigan Manufacturers Association (MMA) and its members understand the LCFS threat full well, too. Randy Gross, MMA’s director of environmental and regulatory policy, writes this in a column entitled “Michigan can’t afford low-carbon fuel rules” in the Detroit News:

Low-carbon fuel rules would make current fuels scarcer, more expensive and less available … This is an especially acute problem for Michigan, which relies on Canada for 63 percent of the oil we use each day.

In Detroit, the Marathon refinery produces nearly 100,000 barrels of affordable, reliable fuel a day, and provides thousands of jobs that support families, pay pensions and provide good-quality health care. All that would be put in peril with a low-carbon fuel standard — not because the fuels it produces emit more carbon, but because the oil from which those fuels are derived happens to come from Canada. Right across the bridge.

[An LCFS] means more than six out of every 10 barrels of oil that arrive in Michigan today would be prevented from crossing the border.

The low-carbon fuel proposal is engineered to produce higher prices at the pump, higher unemployment for those who rely on Canadian energy, and expanded dependence on foreign, unstable regimes glad to step in and fill the breach.

Also last week, CEA’s in-house LCFS expert and vice president, Michael Whatley, corrects the record about misleading and outright statements that appeared in the Virginia Daily Press. Under the headline “Fuel Facts,” Whatley writes:

Your readers should know that an LCFS has nothing to do with converting “heavy oils to liquid fuels,” as Phillips claims. The aim of an LCFS is to effectively ban our most abundant, affordable and reliable fuels from reaching American consumers, clearing the way for “lighter” oil from the Middle East to take its place.

Philips deserves credit for acknowledging that an LCFS “would probably result in some increase in fuel costs.” He’s right. The independent George C. Marshall Institute determined that an LCFS could force gas prices for American consumers to rise by at least 41 cents a gallon.

What Phillips fails to acknowledge, however, is that an LCFS would do nothing to rein in global emissions of CO2. Sure, an LCFS would prevent American consumers from accessing stable Canadian energy — but it wouldn’t do a thing to prevent China from taking it. That’s a fact confirmed by the president’s own Energy Department policy experts; I invite Phillips and readers to read that report on our Web site, SecureOurFuels.org.

As the Senate continues work on cap and trade legislation, American consumers who oppose higher fuel costs and favor North American energy over imports from unstable regions of the world should send this message to Congress: LCFS is wrong for our national security and for our pocketbooks.

Hoosier State Rep., Environmental Attorney in TN Underscore LCFS Threats

Monday, November 2nd, 2009

While the US Senate continues to march forward with sweeping global warming legislation, many experts and policymakers outside of Washington are sounding the alarm about a national, one-size-fits-all low carbon fuel standard (LCFS). Over the weekend, Indiana state representative Dave Wolkins wrote a column entitled “Low-carbon fuel standard would hurt Indiana’s economy” in the South Bend Tribune. Wolkins, who represents Indiana’s 18th legislative district and serves as his party’s top member on the Environmental Affairs Committee, write this about an LCFS:

A new federal proposal threatens to raise fuel prices, strengthen our foreign energy dependence and cost us thousands of high quality jobs. With the current economic conditions and Indiana’s unemployment in the 10 percent range now is not the time for such a proposal.

[An LCFS] is not about making the fuel in your car today better, cleaner or more affordable; but it is designed to make the fuels we rely on today more scarce, more expensive and less available. To that end, it will be successful.

An LCFS will in fact give a competitive edge to far-away dictators and will increase our dependence on foreign oil. As a state that relies on energy production and refining jobs, Indiana cannot afford this costly job-killing mandate.

And last week, energy and environmental policy expert Tom Mullikin made his way from Nashville to Chattanooga, highlighting the economic and environmental threats that an LCFS presents. Mullikin’s presentation was covered by the Cleveland Daily Banner. The paper’s managing editor, David Davis, reports this under the headline “Mullikin: Climate policy can cause shift of jobs”:

Because more of the oil being produced in Canada is heavier, it will receive a higher carbon intensity score, which will discourage its use.

“By not using Canadian crude oil, we will put our country’s energy security at risk,” Mullikin said.

The low carbon fuel standard is an idea that originated in California that imports only about 1 percent of its crude oil from Canada. Nationally, however, the U.S. would be forced to rely on lighter crude from the Middle East. Canada is currently the top importer of crude oil into the U.S. An LCFS will also result in volatile gas and commodity prices, the loss of U.S. refinery and pipeline jobs, and an increase in global greenhouse gas emissions.

“Make no mistake, this crude oil will be used, even if we are prohibited from using it in the U.S. In August, a Chinese oil company made a major investment in a Canadian oil sands project. They clearly value this resource,” Mullikin said.

He said sending Canadian crude oil to countries like China, instead of the U.S., would increase global greenhouse gas emissions because it would be transported farther and processed by refineries in countries with weaker environmental regulations.

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