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Posts Tagged ‘Center for North American Energy Security’

CEA, Labor, Local Gov’t Officials Turn Out at State Dept. to Lend Support to Keystone Pipeline

Wednesday, July 7th, 2010

CEA’s Whatley on hand to participate in forum, submit comments in support of expanded Canada-to-USA pipeline

WASHINGTON – Is the U.S. government ready to take meaningful steps toward reducing America’s reliance on far-away, unstable energy while leveraging secure, proximate energy sources to create jobs and opportunity here at home? That’s the conversation that took place today at the U.S. State Department, as the agency held another in a series of public forums on whether to grant a final permit in support of the Keystone XL pipeline project, which, upon completion, is slated to deliver 900,000 barrels of affordable Canadian energy a day to consumers in the U.S. who need it.  

“Some might consider the State Department an unlikely setting for a discussion on energy in the United States,” said Michael Whatley, vice president of Consumer Energy Alliance (CEA) and on hand today to provide comments in support of the Keystone project for CEA. “But actually, the Keystone pipeline project is right up State’s alley – especially since the project has the potential to advance key national imperatives related to energy security, affordability and access for millions of Americans. The best part is: It has the potential to do all that without bringing harm to the environment. That’s why CEA supports the project, and that’s why we will continue to work with all stakeholders involved to ensure it happens swiftly and responsibly.”

Once completed, the Keystone XL project will consist of three new pipelines spanning roughly 1,380 miles across the United States from Canada, with the capacity to deliver roughly 900,000 barrels of secure, affordable Canadian energy to American consumers over the long-term. Despite that reach, the actual environmental footprint involved in executing the project is minimal – with the total disturbed area for the project only expected to be 150 square miles. Because the pipeline originates in Canada and crosses into the United States, State Department approval is required.

In addition to CEA, a number of organizations representing consumers, organized labor, and state and local governments appeared at today’s forum to lend their unique perspectives on why the Keystone project is so important to them and their constituents.

“We came here today to show our strong support for the TransCanada Keystone XL pipeline,” said Russ Breckenridge, a legislative representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada. “Right now the construction industry is currently facing on average 20 percent unemployment, and in some areas our members are facing 40 percent. The TransCanada pipeline will begin to put our members back to work with high-quality jobs, with full benefits and worker protection.”

Added Breckenridge: “Our organization wouldn’t be supporting this project if safety was any concern. … As President Obama has told our organization many times, his number one priority is creating jobs and turning the economy around. The Keystone project will achieve these two goals.” (audio)

Richard Moskowitz, vice president and regulatory affairs counsel for the American Trucking Associations – a CEA member – told the forum that the trucking industry supports the use of renewable and alternative fuels in the transportation sector, but “for the foreseeable future we will be dependent on diesel fuel to deliver virtually 100 percent of the consumer products in the United States.”

Moskowitz also addressed concerns related to the carbon output of fuels expected to be delivered by the pipeline: “The carbon required to transport that oil from Alberta down to Houston is going to be less than the amount of carbon required to transport that oil across Canada, load it on super-tankers, and bring it to China – which is what will happen if we don’t use that oil here in the United States.” (audio)

Additional resources and audio files available from today’s State Dept. event:

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Help Secure America’s Energy Future! The U.S. Department of State Needs to Hear from You!

Tuesday, June 8th, 2010

As issues related to energy and climate continue to be debated in the nation’s capital, policymakers would do well to keep top-of-mind the importance of reliable, affordable resources from Canada Given the 2.5 million barrels of petroleum that Canada sends our way each and every day, our neighbors to the north clearly play a unique role for the U.S. as our closest, strategic trading partner in the world.  In fact, every barrel of crude oil the United States imports from Canada is one less barrel being purchased from people and places in the world whose interests don’t align with ours.

Since IHS Cambridge Energy Research Associates (CERA) recently released a report highlighting that Canadian oil sands production is expected to grow from 1.34 million barrels a day to between 3.1 million and 5.7 million barrels a day by 2030  (which could make up as much as 36 percent of United States oil imports by 2030),  it is essential that we have the infrastructure in place to handle those volumes.

To build this needed expansion, Consumer Energy Alliance supports the proposed TransCanada Keystone XL pipeline project and the recently released U.S. State Department’s  Draft Environmental Impact Statement (DEIS) – a statement that confirms the delivery of secure, affordable supplies of Canadian energy to American consumers can be done without bringing harm to our environment. But wait: Don’t tell us you missed your chance to weigh-in on the proposed Keystone pipeline with Secretary Clinton? The deadline, after all, was June 1. Or at least it was. Good news is, this week it was announced the deadline will be extended to June 16, 2010 – and CEA is asking for your help to communicate your support for the project to the U.S. State Department by clicking HERE.

Securing stable and affordable energy from our North Aerican allies through projects such as the Keystone Pipeline is in our national interest. While a final decision by the State Department has not been made on the Keystone Pipeline, what we’ve seen so far portends 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 thousands of family supporting jobs along the way. In fact, it is projected that during construction, Keystone XL will create more than 13,000 jobs funded with private investment, as well as additional revenue for local governments from the economic activity associated with construction and from pipeline property taxes.

Considering the economic and energy security benefits of Canada’s vital resources, policymakers should continue to expand America’s access to safe, affordable energy supplies to help ensure improved energy security and stable prices for consumers.

However, as CEA’s Michael Whatley recently mentioned at the Center for North American Energy Security’s energy summit, under a Low-Carbon Fuel Standard (LCFS), Canada would intentionally be singled out for exclusion. As a result, a nationwide LCFS would shut down projects like the Keystone XL and Alberta Clipper altogether – jeopardizing thousands of jobs and billions in economic activity.

Despite the State Department’s positive draft decision on the proposed Keystone XL pipeline, CEA’s grassroots supporters and 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. Please click HERE make your voice heard on this vital project.

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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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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: Energy Not Merely “Incidental” to U.S. Relationship with Canada, But “Fundamental”

Friday, May 7th, 2010

CEA joins State Department, Premier of Alberta, Top U.S. and Canadian Energy Experts for North American Energy Security Summit at Canadian Embassy


WASHINGTON – America’s historic and ongoing partnership with Canada on issues related to energy security, affordability, and reliability is a “model” for other nations to follow, a senior advisor from the U.S. State Department said today at the Canadian Embassy – and according to Alberta premier Ed Stelmach, Canada stands ready, willing and eager to build upon that existing relationship and leverage those resources into jobs, security and opportunity on both sides of the border.

 

“Canada is our closest trading partner in the world, and our most important strategic ally in the hemisphere,” said Michael Whatley, vice president of Consumer Energy Alliance and a panelist at today’s summit. “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.”

 

This morning’s summit, hosted by the Center for North American Energy Security (CNAES) and held at the Canadian Embassy in Washington, D.C., drew the participation of a number of U.S. and Canadian experts on energy, the economy and the environment – addressing issues ranging 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 the Low-Carbon Fuel Standard (LCFS), a policy that would severely restrict American access to secure and affordable sources of energy from Canada.  

 

Addressing the summit earlier today, both Stelmach and senior U.S. State Department official David Goldwyn agreed that the energy resources made available to U.S. consumers today by way of the oil sands have strengthened our nations’ existing strategic partnership and contributed to robust economic development both in Canada and here in the United States. Stelmach additionally provided summit-goers with an update on the latest technological advances being deployed to develop the oil sands in an environmentally sensitive way, technology that has helped producers reduce the sands’ carbon emissions by nearly 40 percent over the past two decades.

 

Added Tom Corcoran, executive director of CNAES and a former member of Congress from Illinois: “As the energy and climate change debate continues to take shape in the U.S., policymakers should remember the 2.5 million barrels of petroleum Canada sends the United States each and every day — and the unique role that Canada plays both as America’s largest fuel supplier and its closest friend.”

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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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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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National, State Groups Join CEA in Efforts to Combat Job-Killing LCFS Schemes

Tuesday, March 16th, 2010

Here at Secure Our Fuels, we’ve been working hard to engage and educate concerned consumers, families and small businesses about the overwhelmingly negative economic and national security threats posed Low-Carbon Fuel Standard (LCFS) schemes.

In today’s LaCrosse (Wisc.) Tribune, CEA’s vice president, Michael Whatley, writes this in under the headline: “Proposed standard would hurt customers, manufacturers”:

Sold to the public as a plan to defy the laws of science by forcing a reduction in the carbon content of fuel (which the Environment Protection Agency says is constant), Mial’s reporting rightly calls out the LCFS for what it actually is: an attack on Wisconsin consumers and manufacturers by denying Wisconsin’s chief source of secure and affordable energy from crossing the U.S.-Canadian border. He also captures one of the fundamental realities that LCFS supporters would rather your readers not know; namely, that Wisconsin’s loss under such a policy might just turn out to be Asia’s gain, since it’s likely that far-away interests will “take every gallon” of energy that a Wisconsin LCFS would necessitate we leave behind.

Whatley adds this:

 Unfortunately, even as legislators from both parties in Madison have started to wake up to the harsh realities associated with an LCFS, a group known as the Midwestern Governors Association, of which Wisconsin’s governor is a member, continues down the road of LCFS study and implementation at breakneck pace. Later this year, the association expects to produce a final LCFS plan that states like Wisconsin will be asked to endorse in full. But that proposal won’t get far if more folks in the state take the time to read news items like this one.

Fortunately for the Badger State, the Wisconsin Manufacturers and Commerce (WMC) and the Wisconsin Petroleum Marketers Association (WPMA) have been actively working fend off job-killing LCFS scheme by educating key stakeholders about the host of negative impacts this proposal would have on the state. In fact, both WMC and the WPMA recently released straightforward documents about how an LCFS would hurt Wisconsin, its economy and its ability to compete.

With over 4,000 members statewide, WMC estimates that an LCFS would have the following effects:

The so-called Low Carbon Fuel Standard would cost Wisconsin motorists more than $3.2 billion in higher gas prices according to the WPRI study. This global warming gas tax could cost consumers as much as 61 cents per gallon according to a study by the Marshall Institute. All told, these expensive policies are projected to cost each Wisconsin family more than $1,000 each year by the time they are fully implemented.

In a separate LCFS overview document, the WPMA identifies some of the potential impacts on Wisconsin and other Midwestern states that depend on Canadian derived-fuel supplies to keep their economies moving:

If Wisconsin and other Midwestern states adopt a LCFS, existing and proposed pipeline infrastructure could be used to bypass the region. In addition, Canadian crude will likely be produced for export to developing nations such as China and India. These nations have lower environmental standards than the U.S., which means there would be a net increase in greenhouse gas emissions, and other air pollution, if that crude is ultimately refined elsewhere. It also would be less energy efficient and a potentially greater risk to the environment for Canada to transport its crude abroad by oil tanker versus keeping it in North America.

The Midwestern United States is the most efficient transportation destination and refiner of Canadian oil sands crude, which reduces its environmental impact. Oil sands crude oil is a growing resource that is attracting significant investment. If Wisconsin restricts Canadian crude oil, it will be used somewhere else in the world.

Interestingly, some of these same concerns were identified in a recent letter from Thomas Corcoran, executive director of the Center for North American Energy Security (CNAES) — which urges the nation’s governors to oppose an LCFS that would discriminate against affordable and secure fuels, such as those from Canada’s oil sands or other non-conventional sources. In this letter, Corcoran writes this:

 Such a proposal would be misguided for many reasons. First it would not result in any reductions of GHG emissions, but it is likely to increase them. The effect would be to discourage imports to the Northeast of fuels derived from oil sands and other conventional resources in North America, such as the oil sands in Canada or oil shale in the Western U.S. Fuels barred from the Northeast would simply be sold elsewhere in the world, where controls may be more lax and emissions from fuel transportation increased.

 While the debate over an LCFS scheme continues in Wisconsin, it’s clear that the more consumers learn and understand about this job-killing proposal, the more the opposition continues to grow. Unfortunately, the threat of an LCFS still exists in many other states, regions and in Washington. As CEA continues to educate the public about the dangerous realities of adopting LCFS schemes, hopefully more state and national policymakers will take notice and follow WMC’s, WPMA’s and CNAES’s lead by rejecting these misguided proposals.

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CEA: California LCFS Bad for Consumers, Bad for Producers, and Violates Federal Law

Tuesday, February 2nd, 2010

Consumer Energy Alliance files complaint with District Court in Fresno asking for immediate injunction on Low-Carbon Fuel Standard

FRESNO – California’s recently implemented Low-Carbon Fuel Standard (LCFS) violates federal law by attempting to regulate “commerce and conduct” outside of the state, while imposing a mandate that even regulators admit will result in “little or no net change” to the carbon intensity of fuels on “a global-scale.” Such is the formal complaint filed by Consumer Energy Alliance (CEA) in the U.S. District Court for the Eastern District of California today, asking the court to suspend the imposition of a statewide LCFS until a number of substantive legal concerns can be addressed.

“The practical outcomes of the California LCFS are higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy,” said Michael Whatley, vice-president of CEA and former chief counsel for the U.S. Senate subcommittee on clean air and climate change. “More relevant to today’s filing, the California LCFS also actually violates federal law – and stands in direct contravention of key consumer protections and safeguards enshrined in the U.S. Constitution.”

Formally adopted last month after the state’s Office of Administrative Law (OAL) issued its final approval, the California LCFS, according to its authors, seeks to reduce the carbon-intensity of fuels included in the state’s transportation mix “while stimulat[ing] the production and use of alternative, low-carbon fuels.” But under the bizarre accounting methodology of the plan, energy sources with physically identical chemical properties and carbon contents can – and, in fact, must be – treated differently under the law, with in-state sources significantly advantaged over resources that are found and produced outside California.  

“Perhaps it wasn’t the state’s intent, but as written, the California LCFS is an example of parochial protectionism run amok,” added Whatley. “But make no mistake: This isn’t the type of protectionism that will benefit California consumers; it’s the type that will ensure sources of essential energy are harder to find in the future, and much more expensive to purchase.”

In support of that statement, Whatley pointed to a recent analysis of the proposed state LCFS completed by California-based Sierra Research. In that study, analysts from Sierra found that an LCFS will increase the cost of fuel in California by $3.7 billion over the next decade – all while producing “no detectable change in climate.”

With more than 260,000 grassroots supporters and 130 affiliates representing both the major consuming and producing segments of the U.S. energy sector, CEA has been an active contributor to the national debate on LCFS – including the proceedings in California – for the better part of the last two years.

Last August, the Washington, D.C.-based Center for North American Energy Security, a CEA member, sent a letter to the California Air Resources Board (CARB) detailing the myriad short-comings with the LCFS, and several CEA members (including the National Petrochemical & Refiners Association and the American Trucking Associations – which joined CEA in filing the complaint today) have lodged formal comments with CARB objecting to the plan as well. In addition, CEA wrote directly to U.S. Sen. Barbara Boxer (D-Calif.) in October identifying several significant consequences that consumers should expect to encounter under the initiative.

What follows are several key excerpts taken from the CEA complaint filed in Fresno this morning:

42.        Because “carbon intensity” is designed to account not only for a fuel’s physical characteristics, but also the energy necessary to bring the transportation fuel to market in California, chemically identical fuels are assigned different carbon intensities under the LCFS.  LCFS  § 95486(b), Tables 6–7. 

44.        By regulating the “fuel pathway” of transportation fuels – i.e., the manner in which transportation fuels are produced and ultimately reach the California market – the LCFS directly regulates interstate commerce and conduct occurring outside of California.

47.        CARB has admitted that, because no other states have adopted a similar standard, “fuel producers are free to ship lower-carbon-intensity fuels to areas with such standards, while shipping higher-carbon-intensity fuels elsewhere.”  CARB, California’s Low Carbon Fuel Standard: An Update on the California Air Resources Board’s Low Carbon Fuel Standard Program (Oct. 2009) at 1. 

48.        According to CARB, “[t]he end result of this fuel ‘shuffling’ process is little or no net change in fuel carbon-intensity on a global scale.”  Id.

49.        In fact, the “fuel shuffling” promoted by the LCFS likely will lead to an overall increase in GHG emissions, because it will mean redirecting fuels and feedstocks destined for California to other states through less efficient and redundant supply lines.  Id.; see also CARB, Final Statement of Reasons (Dec. 2009) at 234–35.

50.        The burdens imposed by the LCFS on the interstate market for transportation fuels and fuel feedstocks in California are clearly excessive when measured against the putative local benefits of the LCFS in California. 

More from Consumer Energy Alliance’s Secure Our Fuels campaign:

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