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As California Goes, So Goes the Rest of the Country (for Worse)

Wednesday, May 19th, 2010

Following the recent introduction of climate legislation in the U.S. Senate that did not contain provisions to enact a Low-Carbon Fuel Standard (LCFS), former U.S. Rep. and President of the Center for North American Energy Security (CNAES), Thomas Corcoran, penned a column in The Daily Caller titled, “Low-carbon fuel standards may be closer than you think” about the numerous state efforts that are under way to pass harmful LCFS policies across the U.S. Here are key excerpts:

While they may not know it yet, the decision to leave the LCFS on the cutting room floor is a rare spot of good news for a broke and broken American public. After all, ever since the governor of California signed an executive order in 2007 setting his state down the LCFS path, those of us who have seen this movie before began to brace for the inevitable national standard from Washington—part of the less-than-implicit pact we have with the world’s eighth largest economy to bail it out anytime it bites off a mandate too big for it to chew.

But given a second glance at the legislative movement taking place throughout the country, perhaps we’ve been duped. True, it’s unlikely that an LCFS will be resurrected as part of the Kerry-Lieberman bill. But that doesn’t mean it’s prepared to stay in the grave forever. Right now, in more than 20 states across the country, efforts are under way to copy the California model and paste it into statute—with or without the consent of the legislature. And while you may think you’d be safe if you happen to live in one of the remaining 30 states, it’s time to think again.

Corcoran continues with a summary of current state LCFS efforts:

The rest of the West Coast has caught on as well. In Washington, final recommendations on the provisions of the state’s LCFS are due to the Department of Ecology by November. And in Oregon, proposed changes to House Bill 2186, which would enact an LCFS there, are due by year’s end. So if all goes as planned, the entire western coast could be under an LCFS regime before the ball drops on 2011.

One state, however, has recently bucked the trend. In reviewing the Clean Energy Jobs Act brought before the state legislature, Wisconsin lawmakers moved to drop the LCFS provisions originally included in the bill, citing concerns over costs, particularly to the manufacturing sector that is essential to the state’s economic livelihood.

In the case of an LCFS, which effectively bans stable and reliable forms of North American energy,  American consumers can only hope that these states don’t continue to take their cues from the Golden State. In fact, before moving any further in their LCFS process, states may want to pay attention to a recent article from Environment and Energy News, titled “Calif. will suffer if it acts alone on GHGs — state auditor.”

In this article, E&E Reporter, Colin Sullivan, reports that California’s legislative auditor recently found in an analysis that “if California proceeds on greenhouse gas curbs without regional involvement, the state’s economy is likely to suffer short-term harm as electricity prices rise and business flees to neighboring states.”

Sullivan also reports:

“These adverse effects will occur in large part through economic leakage, as certain economic activity locates or relocates outside of California where regulatory-related costs are lower,” analyst Mac Taylor wrote in a letter to a California lawmaker dated May 13.

The nonpartisan legislative auditor specifically examined the effects of A.B. 32 if the Western Climate Initiative, or WCI, fails to coalesce when California launches its cap-and-trade program in 2012. WCI had been on track to move forward with California but lately has suffered defections. Recent reports indicate only New Mexico and a few Canadian provinces will be prepared to implement the law’s far-reaching emissions cuts.

Nonetheless, Taylor in his letter to Logue said the climate law would cause the price of goods and services to rise; lower business profits; and reduce production, income and jobs. Taylor said A.B. 32 would likely create green jobs but not enough to offset the economic losses.

After seeing the potential economic harm that California may suffer through if they continue on their path implementing A.B. 32 and the law’s LCFS provisions, states would clearly be wiser to say no to the prescription laid out by an LCFS—higher fuel costs and increased imports from unstable regions of the world.

States should instead follow the lead of the Badger State by rejecting harmful LCFS schemes due to concerns about the extreme economic hardship that such policies could bring upon its citizens. With the economy still rebounding and national unemployment stuck around almost 10%, now may not be the best time for states to follow California’s lead off of an economic cliff.

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Message From the Husky State: Low-Carbon Fuel Standard Will Hurt Washingtonians

Monday, May 17th, 2010

The topic of a Low-Carbon Fuel Standard (LCFS) is heading up across Washington state. At the beginning of April, Consumer Energy Alliance (CEA) president David Holt sent a letter to the state’s governor, Christine Gregoire, urging her to fully consider the harmful effects that an LCFS could have on the state. And on the heels of CEA’s call for commonsense energy policies, a major organization from the Husky state recently emerged to voice its opposition to the implementation of a California-style LCFS which would effectively ban stable forms of Canadian energy from reaching Washington consumers.

Lea N. Wilson – executive director of the Washington Oil Marketers Association – recently penned a Bellingham Herald column entitled “Low-carbon fuel standard would hurt Washingtonians.” Here are key excerpts:

There’s a lot more than weather and wine that makes Washington different from California. But judging by Gov. Chris Gregoire’s recent legislative intentions, Washington may start to look a lot more like our coastal neighbor – and not to our benefit.

In short, an LCFS will only make the fuels in our tank harder to find and more expensive to purchase. And supporters of the initiative admit that if successful, an LCFS will make traditional energy sources so expensive that we Washingtonians will learn to favor those alternative sources that have yet to reach maturation and availability. Does your car run on hydropower? Mine doesn’t, and probably won’t for a long time.

Wilson continues:

And this will only hurt what has become a healthy and burgeoning trade relationship between Washington and our border neighbors to the north. Canada imports almost $6.6 billion worth of goods from Washington, including refined oil products. But with the burden of increased transportation costs lingering under LCFS provisions, we stand to lose much of that revenue.

Certainly our governor must know that Washington derives its energy from different places than California does – and further, that an LCFS scheme conjured up by consultants in Sacramento might not achieve its desired effect here in the Evergreen State. Unfortunately, it doesn’t appear as if that knowledge is making a shred of difference.

Gov. Gregoire’s administration is charging toward its July deadline, when it is set to fully assess what an LCFS would bring to Washington. But what we outlined here leaves little to assess: an LCFS will increase the cost of fuel during an economically challenging time, and make us ever more energy dependent.


Wilson is correct in voicing concerns about Governor Gregoire’s fast approaching July deadline and the fact that Washington’s fuel supply would be threatened under an LCFS policy. While Washington’s economy, and its consumers and small businesses, does rely on oil from Saudi Arabia, Angola and Argentina, more than 25 percent of its crude comes from Canada. Therefore, over a quarter of the state’s secure, affordable oil supply would be threatened under an LCFS.

Additionally, about 10 percent of the state’s gasoline – refined in Montana, but derived from Canada’s oil sands – could be prevented from crossing its eastern border. The consequences are far greater and more profound for the state’s workforce. Discrimination called for under an LCFS against Canada’s energy could also impact many jobs in the state, since refiners in Washington directly employed more than 2,000 workers in 2007 (latest numbers), and indirectly supported another 20,000 – paying out more than $400 million in wages.

Regrettably, Washington isn’t the only state in the nation that is currently considering adopting a California-style LCFS – which would effectively ban stable and reliable forms of North American energy from reaching U.S. consumers. The American people oppose higher fuel costs and increased imports from unstable regions of the world. Unfortunately, the real-life outcome of an LCFS will lead to higher prices at the pump and a deeper and more dangerous dependence on unstable regions of the world to ensure that our economy continues to move and grow.

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CEA at North American Energy Security Summit: Energy Not “Incidental” to U.S.-Canadian Partnership, But “Fundamental”

Tuesday, May 11th, 2010

Last week Consumer Energy Alliance (CEA) vice president Michael Whatley joined the U.S. State Department, Alberta’s premier, and top U.S. and Canadian energy experts for a North American Energy Security Summit hosted at the Canadian Embassy in Washington, DC.

Alberta premier Ed Stelmach reinforced the fact that Canada stands ready, willing and eager to build upon the unique and valuable relationship that exists with the United States to leverage energy resources into jobs, security and opportunity on both sides of the border. And following his remarks, David Goldwyn – a senior State Dept. advisor – weighed in regarding America’s historic partnership with Canada on issues related to energy security, affordability, and reliability, describing this strong and strategic relationship as a “model” for others to follow.

ClimateWire highlights Mr. Goldwyn’s remarks in story entitled “With offshore oil spilling, Alberta pushes its inland”:

“Having technically recoverable petroleum reserves that are on our border, and they’re delivered by pipelines that are controlled by a stable democracy and an ally and a friend in an open and transparent regulatory regime enhances … global energy security today and into the future,” David Goldwyn, who oversees international energy issues at the U.S. State Department, told an audience at the Canadian Embassy yesterday.

Following remarks from Stelmach and Goldwyn, CEA’s Michael Whatley added this about the importance of North American energy security:

Canada is our closest trading partner in the world and our most important strategic ally in the hemisphere. Energy isn’t merely incidental to that relationship; it’s fundamental to it. No nation in the world sends more energy to the United States each day than Canada. And if we expect to have even a fighting chance at reducing our nation’s dangerous dependence on far-away, unstable energy in the future, Canadian energy will have to play an even more active role in helping us get there.

Nick Snow of the Oil & Gas Journal reports this under the headline “Forum showcases benefits of Alberta oil sands development”:

The US Environmental Protection Agency’s effort to limit GHG emissions under the Clean Air Act poses the biggest threat, added Michael Whatley, vice-president of the Consumer Energy Alliance. “Demand has rebounded since the economy hit bottom in 2008 and 2009. China and India are trying to get more supplies than ever out of world markets,” Whatley observed. North America has sufficient energy supplies to meet growing demand, but US policies restricting access and mandating low-carbon fuels restrict their development, he said. “Let’s be clear: Demand is going to increase,” Whatley said. “Taking North American energy resources off the table will affect consumer prices and hurt the economy.”

Hosted by the Center for North American Energy Security (CNAES), the day’s event drew broad participation, including a number of U.S. and Canadian energy, economic and environmental experts. The discussion and debate throughout the day ranged from the capacity and permitting of local pipelines, to federal procurement rules for accessing oil sands-derived energy, all the way through to the political debate surrounding Low-Carbon Fuel Standard (LCFS) proposals, a policy that would severely restrict American access to secure and affordable sources of energy from Canada.

Canwest News Service’s Sheldon Alberts captured the possible threat of an LCFS in an article under the headline “Gulf spill makes oilsands more appealing”:

Still, oil sands supporters remain suspicious of the Obama administration and fear it will seek a low carbon fuel standard (LCFS) targeted at carbon-intensive energy sources like the oil sands. Michael Whatley, vice-president of … Consumer Energy Alliance, said it was ‘no coincidence’ that an early version of U.S. climate change legislation from the House of Representatives included plans for a low carbon fuel standard. Whatley said there’s also concern the Obama administration could target the oilsands through the Environmental Protection Agency … ‘The LCFS is a high priority for this administration,’ Whatley said at the Canadian Embassy. ‘They can move down that road. We are very concerned that they will.’

And under the headline “After spill, Stelmach touts oil,” the Globe and Mail reports this:

Mr. Stelmach said he’s only trying to ensure the oil sands gets fair treatment in the face of a wave of federal and state efforts that threaten to penalize Alberta’s heavy crude and other high-carbon fuels. Pending regulations from the U.S. Environmental Protection Agency – which is poised to cap greenhouse gases since Congress won’t – threaten to cut off the sale of oil sands crude from Alberta to refineries south of the border. And dozens of states are moving ahead with regulations that would penalize carbon-intensive fuels and spur use of greener alternatives. Major U.S. energy consumers, meanwhile, worry that a low-carbon fuel standard may be inevitable in the United States. “We’re very concerned,” said Michael Whatley, vice-president of the Consumer Energy Alliance, a broad coalition of major U.S. energy consumers.

Given the recent announcement that climate change legislation may be introduced very soon in the U.S. Senate, CEA will continue to remind policymakers about the dangerous consequences of imposing an LCFS in the U.S., as well as the importance of our closest trading partner and the barrels of secure and reliable fuel Canada sends the United States each day.

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CEA Continues Fight Against Job-Killing LCFS, as China’s Appetite for Canadian Energy Resources Grows

Monday, May 3rd, 2010

Last week, the Globe and Mail reported that Enbridge plans to file next month for a permit from the National Energy Board (NEB) to build an oil pipeline to the West Coast. According Enbridge chief executive Pat Daniel, the NEB process is expected to take about two years and Alberta bitumen could begin flowing to Pacific Rim markets by 2015. Mr. Daniel also said refiners in Asia have expressed interest in receiving these Canadian secure energy resources.

You’d be hard-press to find a U.S. policymaker that would disagree with the fact that we need to lessen our dependence on fuel from the Middle East. Here at Consumer Energy Alliance (CEA), we agree believe that we need to use every bit of energy we have more wisely, and at the same time, responsibly increase access to our most stable and affordable forms of energy.

Some elected leaders, however, are mistakenly advocating policies that would force the U.S. to accepting stable, North American fuels from Canada and Mexico – which help more well over 20 percent of our daily demands.

Haven’t heard of this well-intended (perhaps) yet terribly misguided proposal? It’s called a Low-Carbon Fuel Standard (LCFS). Unfortunately, proponents of LCFS policies aren’t telling the American public that this dangerous scheme – which targets fuel sources that are more energy-intensive to producer, transport, refine and deliver to market – will result in higher prices at the pump for U.S. consumers, and a deeper, more dangerous dependence on some of the most unstable and unfriendly regions of the world to keep our economy fueled.

California was the first state to mandate an LCFS. Other states are also trying to enact similar polices. And in Congress, proposals that would place a one-size-fits-all LCFS across the entire nation are also being considered. As we mentioned earlier, other nations – many of whom the U.S. competes with directly – recognize these LCFS efforts as a major and strategic window of economic opportunity to secure Canadian energy resources that would have been otherwise directed to American consumers.

In fact, the Financial Post recently reported this under the headline “China’s clout draws oil sands IPO:”


Sunshine Oilsands Ltd., which snapped up more than a million acres of oil-sands leases between May 2007 and October 2008, is ready to launch a steam-assisted gravity-drainage pilot project. The Calgary company is looking to raise hundreds of millions of dollars on Hong Kong’s stock exchange, a first for a Canadian energy company that highlights just how anxious Asian investors are to grab a slice of the oil sands.

China has already shown fierce interest in Canada’s energy. Sinopec Corp., an oil company controlled by the Chinese government, struck a deal April 12 to buy a 9.03% stake in Syncrude Canada Ltd. for $4.56-billion. The deal is subject to regulatory approval, and could prove a test of Canada’s will to cede a significant amount of oil production to China. Sinopec also controls 50% of the Northern Lights oil sands project, with its partner Total SA, the France energy giant, owning the rest.

Last year, PetroChina International Investment Co., another state-controlled outfit, bought a 60% stake in two of Athabasca Oil Sands Corp.’s projects for $1.9-billion. A third government company, CNOOC Ltd., owns 16% of MEG Energy Ltd., a private oil sands player. Meanwhile, also last year state-owned Korea National Oil Co. purchased all of Harvest Energy Trust in a deal worth $4.1-billion.

Like many American consumers, CEA is concerned that China’s insatiable appetite for stable energy resources to continue to aggressively grow its economy, coupled with the consideration of job-killing LCFS proposals in the U.S., could send a troubling message to our strongest and most important trading partner to the north.

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CEA to State, National Policymakers: Follow Wisconsin, Reject LCFS Proposals

Friday, April 23rd, 2010

Last week Wisconsin media reported that a Low-Carbon Fuel Standard (LCFS) provision was dropped from a comprehensive energy and environment bill being considered in the legislature. In a statement following this victory for Wisconsin consumers, David Holt, Consumer Energy Alliance (CEA) president, says this:

“The removal of the economy-killing LCFS is good news for consumers in the Badger State and we are pleased that Wisconsin’s legislators have woken up to the harsh realities associated with this dangerous proposal. By discriminating against Canadian fuels, an LCFS would restrict Wisconsin fuel supplies, raise gas and diesel prices at the pump and expand our dependence on energy from some of the most unfriendly regions of the world.

 “Unfortunately, the threat of an LCFS still exists in many other parts of the country, including those states that comprise the Midwestern Governors Association (MGA), of which Wisconsin’s governor is a member. CEA encourages the members of the MGA to understand that discriminating against Canadian fuel supplies is bad energy policy.”

However, Wisconsin consumers are not out of the woods yet. The Badger State remains an active member of the MGA, which is currently engaged in promoting an LCFS. In fact, MGA is expected to issue comments on its draft LCFS framework soon — releasing its final draft recommendations by June, and rendering its final recommendations to MGA member states by the end of 2010.

This issue is crucial to the Badger State since nearly half of Wisconsin’s oil comes from Canada, some through the Lakehead Pipeline System, and some via Illinois and Minnesota – two other mid-western states that rely heavily on secure, Canadian energy to keep their economies running. You see, under an LCFS regime, these stable supplies of Canadian crude would find themselves on the chopping block in the Midwest, casting serious doubt as to how states like Wisconsin would make up the difference in displaced supply.

Worse yet, Wisconsin isn’t the only state that is currently considering an LCFS. There are also efforts in the Northeast and Mid-Atlantic to pass a one-size-fits-all LCFS.

In Pennsylvania, former Illinois congressman Thomas Corcoran of the Center for North American Energy Security recently took to the pages of the Wilkes-Barre Times Leader to highlight the devastating effects that an LCFS could have on the Keystone State. In a column entitled, “Low-carbon pact will only lead to higher energy prices,” Corcoran writes:

 It’s ironic that LCFS advocates cite the imperative of combating greenhouse gases and curbing energy costs as reasons to support such a program. Not only are both assertions untrue, but they represent the direct inverse of what the program will actually achieve. Independent studies have determined that gas and diesel prices would increase, as would overall global greenhouse gas emissions because nations like China – our chief competitor in the global economy – are already working to secure Canadian supplies in the event that we block imports to the United States.

The former U.S. congressman and energy experts adds this in this column:

Pennsylvanians cannot afford higher energy prices. With gas prices steadily climbing toward $3 a gallon and home-heating costs on the rise, Gov. Rendell and leaders in Harrisburg should be working day and night to develop policies that will reduce energy prices rather than supporting an LCFS that will prohibit imports of abundant and secure North American energy resources, drive fuel prices even higher and increase worldwide carbon emissions.

CEA is encouraged by the decision in Wisconsin to drop the LCFS provisions and hopes that more state and national policymakers will take notice and follow Wisconsin’s lead by rejecting these misguided proposals. CEA will continue to educate the public about the dangers of an LCFS, and tirelessly advocate for commonsense policies that aim to keep energy prices stable and affordable by promoting more energy of all forms, and using what we have more wisely at the same time.

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On a Roll: State Dept. One Step Closer to Expanding US-Canadian Energy Partnership

Monday, April 19th, 2010

Just as Reuters reported that China is snapping up resources assets across the globe — including a recent deal to buy ConocoPhillips’ stake in the huge Syncrude project in Canada’s oil sands for $4.65 billion – the U.S. State Department released a Draft Environmental Impact Statement (DEIS) on the proposed TransCanada Keystone XL pipeline project. The State Department’s report concludes that the delivery of secure, affordable supplies of Canadian energy to American consumers would have minimal impacts on the environment.

While a final decision by the State Department has not been made on the Keystone Pipeline, this is positive news for American consumers, and here’s why.

The project will consist of three new pipelines – one from Morgan, Montana to Steele City, Nebraska; another from Cushing, Oklahoma to Nederland, Texas; and the final one, from Liberty County, Texas to Moore Junction, Texas. The Keystone will initially carry 700,000 barrels of crude per day, eventually increasing to 900,000 barrels — significantly strengthening America’s energy and economic security, as well as creating hundreds of high-paying, family supporting jobs along the way.

Last year, the U.S. imported 1.5 million barrels of oil a day derived from the Canadian oil sands. Projects like the Keystone XL present the potential to increase North American energy access for U.S. consumers to 4.3 million barrels a day over the next two decades – additional energy that we will no longer be forced to buy from far unstable, unfriendly OPEC nations.

Considering the economic and energy security benefits of Canada’s vital resources, state and national policymakers should work to expand America’s access to secure and affordable energy supplies to help ensure improved stabilize prices for consumers.

Unfortunately, under a Low-Carbon Fuel Standard (LCFS), Canada would intentionally be singled out for exclusion. In fact, a nationwide LCFS could shut down the Keystone XL and Alberta Clipper projects altogether – jeopardizing countless high-wage jobs and billions in economic activity. An LCFS would also be a major blow to U.S. energy security.

Despite the State Department’s positive draft decision on the proposed Keystone XL pipeline, CEA’s nearly 260,000 grassroots supporters and 130 affiliates will continue to be active contributors to the ongoing debate about commonsense energy legislation can create jobs and help drive down prices at the pump, and how misguided LCFS proposals threaten our nation’s energy security.

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Message from US Consumers to Wash., Mich., NY: Consider the Impacts an LCFS Could Have on Energy Costs, Security

Monday, April 12th, 2010

In a letter last week Washington governor Christine Gregoire, Consumer Energy Alliance (CEA) urges her to fully consider the harmful effects that a Low-Carbon Fuel Standard (LCFS) could potentially have on the state. Signed by president David Holt, CEA’s letter comes almost one year after Governor Gregoire issued an executive order to begin the process of determining whether Washington should implement a California-style LCFS, or a similar proposal.

This from Holt’s letter to the governor:

Adopting a California-style LCFS, aimed at restricting the state’s use of Canadian oil, makes no sense for the state of Washington. Unlike California, Washington receives more than 25 percent of its crude from Canada. An LCFS would not only inhibit the state from obtaining and using that crude, but it would also restrict your state’s access to more than 10 percent of its current gasoline supply, which is refined in Montana and derived from Canada’s oil sands.

Indeed, to replace the supply lost under an LCFS, Washington will likely need to increase crude shipments from the Middle East, leading to additional energy security concerns. And as mentioned, as it relates to the imperative of reducing GHGs, several prominent studies have found that an LCFS may actually generate greater net emissions compared to the reference case (no LCFS) by requiring imports from distant, unstable countries instead of relying on crude from our North American neighbors such as Canada and Mexico. Under this scenario, not only would an LCFS increase our nation’s dependence on foreign energy sources, but it would also add significantly to global GHG concentrations.

As Holt notes, Washingtonians – including the governor and elected state leaders – should understand that an LCFS will not reduce greenhouse gas emissions. In fact, such a misguided policy could lead to severe economic and security consequences for consumers across the state.

Unfortunately, Washington isn’t the only state that is currently considering adopting an LCFS. There’s even efforts underway in Washington to pass a national, one-size-fits-all LCFS.

The Michigan Manufacturers Association (MMA) has been a dogged advocate for policies that aim to reduce and stabilize energy costs for consumers and small businesses across the state. Randy Gross – director of environmental and regulatory affairs at MMA – recently penned a column entitled “LCFS targets U.S. economy”  in the Traverse City Record-Eagle. He also recently wrote a Muskegon Chronicle letter to the editor under the headline “Canadian crude oil, Michigan economy in the crosshairs”. Here are key excerpts:

Most folks may not know how critical our Canadian neighbors are in fueling the Michigan economy. Indeed, more than 63 percent of our state’s gasoline and diesel fuel begins its life as unrefined oil in Canada. Unfortunately, efforts under way in the capital right now threaten that critical relationship — and the millions of people on this side of the border whose jobs and livelihoods depend on continued access to this secure, affordable and reliable energy.

For example, in Detroit the Marathon refinery produces almost 100,000 barrels of a day of gasoline and diesel fuel derived from Canadian energy — energy that provides thousands of good-paying jobs to Michigan families, as well as pensions and health care. In this troubled economy, why would any lawmaker in Michigan even consider putting those jobs on the line?

Our leaders in both Lansing and Washington, D.C., need to say “no” to an LCFS. The people of Michigan cannot afford to adopt a policy that will lead to higher prices at the pump, fewer American and Michigan jobs and threatened energy security. We need legislation that will improve Michigan’s competitiveness, nationwide and worldwide.

And in New York, former Illinois congressman Thomas Corcoran of the Center for North American Energy Security recently took to the pages of the Buffalo News to highlight the devastating effects that an LCFS could have on the Empire State. In a column entitled, “Low-carbon fuel standard would hurt New Yorkers,” Corcoran writes:

Under the standard, secure sources of oil from Canada and even our own Gulf Coast score much worse than sources of crude from Saudi Arabia and Nigeria. Just about every bit of New York’s 75 million- barrel reserve would be targeted for elimination under the low-carbon fuel standard. The Northeast would have to import more light crude from unstable and unfriendly regimes found in the Middle East, Africa and Libya.

The standards could also impact heating oil from New York refineries. Since about one-third of New York households use fuel oil as their primary energy source for home heating and the Empire State required more than $537 million last year in federal funding from the Low Income Heating Energy Assistance Program, restricting New York’s availability and use of home heating fuel just doesn’t make sense.

CEA will continue to lead the drumbeat of support for commonsense energy policies that encourage more energy production of all forms – especially stable and secure North American supplies derived from Canada. At the same time, we will continue to fight for smart conservation measure that will help drive down our demand and overall energy use. We must continue to use what we have more wisely, while working to balance our needs with the energy that we have here at home and in North America.

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LCFS in KGL: Prescription for Higher Fuel Costs and Increased Imports from Unstable Regions of the World

Wednesday, April 7th, 2010

With the recent news that Senators Kerry, Graham and Lieberman are aiming to release their draft climate change legislation sometime in the next month, many policymakers and key stakeholders in Washington, D.C. are speculating about what that bill will actually look like, and what its potential effects may be. While it’s still too early to tell if a national, one-size-fits-all Low-Carbon Fuel Standard (LCFS) will be included in the legislation, Consumer Energy Alliance (CEA) is working tirelessly to educate the public and lawmakers about the harmful economic and national security implications associated with this job-killing proposal.

Thomas Pyle, president of the Institute for Energy Research (IER), writes this in a recent Daily Caller column entitled ”Energy and climate, March Madness-style” about pending Senate legislation, including LCFS provisions:

H.R. 1787 (Inslee LCFS bill): Perhaps not as well known to a broader national audience, the Low-Carbon Fuel Standard (LCFS) bill authored by Rep. Jay Inslee (D-Wash.) is seen by many as a dark horse candidate for advancement—assuming early upsets of stiffer competition. Having toiled this past year in the obscurity that comes with being a mid-major, the Inslee LCFS bill has nonetheless pulled together an impressive resume of support, with more than 20 states currently considering a version of the Inslee plan that seeks to creatively (if not entirely effectively) achieve its emissions reductions by putting the kibosh on energy derived from Canada’s oil sands.

States often serve as indicators – or incubators – for federal policy. In the case of an LCFS, American consumers can only hope that Congress doesn’t take their cues from California – the first state to implement such a mandate. This from a recent Climatewire article about efforts underway in the Golden State to move forward with an LCFS:

Gov. Arnold Schwarzenegger (R) sent a letter to California Air Resources Board (CARB) Chairman Mary Nichols on Wednesday arguing that the state should give most allowances away in the early years of a cap-and-trade program and allow generous use of offsets…”As we have discussed many times, California’s goal is to implement A.B. 32 in such a way as to mesh our program as seamlessly as possible into a comprehensive national strategy,” [Schwarzenegger said.]…CARB spokesman Stanley Young echoed Schwarzenegger. “The crucial determining factor here is what’s happening in Washington, because our goal is to develop a program that will meld seamlessly into a federal program,” he said. “This is about considering the future in terms of how California can become part of a comprehensive national program.”

But do American consumers really want California’s LCFS mandate – which effectively bans stable and reliable forms of North American energy – to be the law of the land from coast to coast? We can’t say for sure.

But what we do know is that the American people oppose higher fuel costs and increased imports from unstable regions of the world. Unfortunately, that is the prescription laid out by an LCFS.

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Student Becomes Teacher: How the U.S. May Develop Its Own Oil Sands, And Face Denial By An LCFS

Wednesday, March 31st, 2010

Here at Secure Our Fuels, we talk a lot about how America’s relationship with our friends in Canada helps further key national priorities related energy, security, and the economy. Few examples better illustrate this phenomenon than our continued partnership on the oil sands, a secure and abundant source of energy that policy initiatives such as the Low-Carbon Fuel Standard (LCFS) seek to destroy.

But Canada’s oil sands isn’t the only stuff that an LCFS is setup to demolish. It’s also no friend of energy resources produced and developed here. Turns out, Canada’s not the only country in the world blessed with the promise and potential of oil sands. Turns out we’ve got some of the stuff right here in America as well.

Here’s how the Salt Lake Tribune handled the story:

Utah is more willing to lease its state lands, and Earth Energy joins a neighbor on state lands, Salt Lake City-based Red Leaf Resources Inc., which is working on a small scale to develop the region’s oil-shale reserves. Red Leaf also is looking for investors to ramp up production.

Wringing oil from hard rock or oil sands is technically possible, but nobody has proven it economical on a large scale yet … Earth Energy Resources “wants to be the first to do it.”

There you go – that’s the spirit. Used to be a time when nations of the world commissioned the work of these explorers, financed it, hailed it, and held up those who proved successful at doing it as heroes. Today? Let’s just say that times have changed – the evidence of which can be seen with each new state embarking down the dangerous path of the LCFS. 

The good news, if there’s any of which to speak, is that an oil sands project in the United States may prove tougher to defeat than an oil sands project in Canada. But make no mistake: The LCFS doesn’t discriminate. And as we work together to advance the imperative of secure and affordable energy supply for American consumers, neither should we.

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We Hear Ya: Top Alberta Energy Official Says “We Need to Keep up the Campaign” For Secure, North American Energy

Friday, March 26th, 2010

Let’s face it, the U.S. and global economy are experiencing challenging and difficult times. With nearly 1 out of every 10 Americans still without work, and gas prices on the rise, glimmers of economic hope are too few. Many economists don’t expect the U.S. economy to grow substantially anytime soon, either.

But there is a rare economic bright spot up in Canada: Alberta’s oil sands. In fact, the Edmonton Journal reports that, according to the Canadian Manufacturers and Exporters (CME), the total value of economic activity expected over the next 10 years from the oil sands in Alberta is more than $1 trillion. That’s nearly 75 percent of Canada’s GDP! This is good news for the U.S., too, since more than 2.5 million barrels of oil derived from Canada’s sands are directed to American consumers each and every day in the form of secure and stable North American energy supplies.

This from the article:

In 2009 alone, energy companies poured $30 billion into the oilsands. About 60 per cent of that went into maintenance and supplies, the rest into new project development. Even that’s a hefty sum. CME president Jayson Myers says $30 billion exceeds the value of any government stimulus package for any given year in any state or province in North America.

“As Canadian companies look at new business opportunities and at reducing the risks they’re seeing in the U.S. market, and in their traditional supply chains, the oilsands remain a very attractive business opportunity — even more so as we see project investments begin to increase again,” he says.

And while the U.S. is unquestionably Canada’s strongest and most strategic trading partner, other nations from around the globe also understand the economic benefits associated with access to stable and reliable energy reserves. So it’s no wonder why Petrochina – the Chinese government-owned energy firm – has aggressively invested in Canada’s oil sands. In fact, Bloomberg reports this:

“PetroChina Co. Chairman Jiang Jiemin plans to step up overseas oil and gas acquisitions after teaming up with Royal Dutch Shell Plc to buy Australia’s Arrow Energy Ltd. for $3.2 billion this week. “We will take advantage of opportunities in developing oil, gas and energy sources in all areas of the world,” Jiang said at a media briefing in Hong Kong yesterday, after the Beijing- based company reported a 9.7 percent decline in full-year profit. The Arrow deal followed at least $5 billion of purchases in Canada, Kazakhstan and Singapore in 2009 to meet demand in the fastest-growing major economy. PetroChina last year purchased a stake in a Canadian oil sands project for $1.7 billion, a refinery in Singapore and spent about $1.4 billion on a stake in an oil venture in Kazakhstan.”

So as China – a top competitor in the global economy – continues to secure steady streams of affordable energy, like those produced from Canada’s sands, leaders in the United States are pushing for a one-size-fits-all Low-Carbon Fuel Standard (LCFS), which would effectively ban these secure, affordable, North American energy resources from reaching American consumers, middle-class families and senior citizens.

But not every nation – or groups of nations – share the belief that Canada’s oils sands can and must play a critical role in providing stable energy to those who need it most. Under the headline “Minister says EU was behind oil sands opposition,” Reuters gets Alberta’s energy minister, Ron Liepert, on the record in response to efforts from the European Union to erect trade barriers aimed at Canada’s oil sands:

The European Union is the organization he referred to when he asserted that some international groups were using the environment as a guise to erect trade barriers. … Canada has warned that draft EU standards to promote greener fuels are too unwieldy and would harm the market for oil sands crude.

The EU apparently noticed his warning, since they have now dropped references to oil sands. And just today, under the headline “E.U. may remove oil sands restrictions from environmental standards”, Climatewire reports this:

The European Union may weaken proposed environmental standards for fuel, responding to the Canadian government’s efforts to protect Canada’s oil sands. … Alberta Energy Minister Ron Liepert said he was pleased that the government’s efforts were having an impact. “We’ve managed to convince the New Democrats to quit calling it tar sands and start calling it oil sands. We’ve got the European Union starting to look at the need to reassess some of the initiatives they’ve taken, based on, I would say, not the best information, so we need to keep up the campaign.”

Canada’s not alone in working to get the facts out about its vast oil sands, and how essential these job-creating resources are to American consumers. Consumer Energy Alliance will continue to educate the public about the dangers of an LCFS, and tirelessly advocate for commonsense energy policies that aim to keep prices stable and affordable by promoting more energy of all forms, and using what we have more wisely at the same time.

Unfortunately, discriminating against Canada’s abundant and secure energy – the very core of an LCFS – would only deepen our energy dependence on unfriendly regions of world and hit struggling consumers in their pocketbooks at a time when they can afford it least.

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