Policy Could Death-Blow to Alaska’s Economy, US Energy Security
Tens of thousands of world leaders, policymakers and members of the media have barnstormed Copenhagen, Denmark this week in an effort to craft an international agreement on climate change. As the debate continues to heat up, and discussions move forward, some key players are speaking out forcefully.
Earlier today, California Gov. Arnold Schwarzenegger delivered a fiery speech, labeling Copenhagen “a success.” He also encouraged the UN to convene a future global warming summit in the Golden State.
And while many believe that the jury is still out as to whether Copenhagen will in fact be a success, California’s largest newspaper – the Los Angeles Times – took the opportunity to highlight the state’s Low-Carbon Fuel Standard (LCFS), which will effectively ban stable, reliable and affordable Canadian and other heavier forms of crude from reaching families, seniors and businesses.
This from a Greenspace blog post entitled “Copenhagen: Californians make a splash” today:
As the world’s seventh-largest economy, California attracts attention. But what Golden Staters are boasting about here is the state’s first-in-the-nation economy-wide climate legislation, its first-in-the-world low-carbon fuel standard, and its highest-in-the nation renewable-energy requirements.
In California, said Gov. Arnold Schwarzenegger, who arrived Monday, “we’ve proven that a sub-national government has the power to drive change across the nation and the world.”
Yes, California is the first state take a serious step toward implementing an LCFS. And while it’s true that California doesn’t receive much of its oil from Canada – LCFS’s most familiar target – it does receive a good bit of energy from … wait for it … California. Why is that important? Well, a large swath of the oil produced in-state happens to be classified as “heavy” – and thus, targeted for elimination under an LCFS.
Imagine that: The state of California imposes a regulation from which it thinks it will be immune, and then, right when they get close to actually implementing it, folks start to wake up to the reality that an LCFS would actually restrict California refiners from buying oil from California energy producers. Irony, you are a fickle mistress, indeed. No word on whether Gov. Schwarzenegger mentioned any of this in his speech in Denmark.
Meanwhile, up in Alaska, a considerable amount of its energy – especially along the North Slope – is heavier crude, which, as we’ve noted, is targeted for restriction under an LCFS. And the folks up there understand full-well what’s best for Malibu is not necessarily what’s best for North Slope Borough.
The Fairbanks Daily News-Miner reports this under the headline “Heavy oil might be the future of Alaska petroleum development”:
“Heavy oil is traditionally more expensive to extract and refine than light oil,” said Robert Dillon, an energy spokesman for Sen. Lisa Murkowski. Dillon said much of the environmental community objects to the prospect of developing heavy oil deposits because doing so creates more greenhouse gases than many other energy processes. “There are a number in Congress, mainly Democrats, who oppose heavy oil production and would like to combine climate legislation with a low carbon fuel standard.”
The Associated Press also reports on this critical issue in an article entitled “‘Heavy oil’ may be future of North Slope”:
The Fairbanks Daily News-Miner reports heavy oil may be the future of Alaska’s petroleum development, despite higher costs and more environmental concerns. It’s likely to be part of state lawmakers’ discussions about the oil business when they meet in Juneau.
State Sens. John Coghill and Joe Paskvan say heavy oil should be included in a review of energy policies.
“Oil is still precious up there,” said John Coghill, R-North Pole. “Heavy oil needs to be included in the discussion.”
