By Ben Geman and Andrew Restuccia - 03/18/11 12:17 AM EDT
In listening to each of the analysts highlight the factors he thought was important in explaining why crude oil prices are up to levels that we haven’t seen since 2008, I was struck by two explanations that have been advanced in many political speeches about oil and gas prices here that none of the expert analysts highlighted as important to current prices.
First, none of these experts highlighted the Administration’s permitting process in the Gulf of Mexico as being a significant factor in world oil markets. I asked the Dr. Newell whether the current pace of permitting had any implication for EIA’s short term price forecast, and his answer was refreshingly direct: he said, “No.” And I would point out that neither of his co-panelists disagreed with him.
Second, any anticipated Environmental Protection Agency (EPA) regulation of greenhouse gas emissions at refineries was not included in any of the presentations as a driver behind the current increased in prices. In fact, more broadly, neither the EPA nor any kind of U.S. regulatory actions were discussed as important to understanding world oil prices.
Bingaman notes the effects of turmoil in the Middle East and North Africa on oil markets. His speech notes that while increased U.S. oil production in recent years plays a role in world markets and aids energy security (he likes oil, noting “we need to keep drilling — we’re good at it”), it’s not significant enough to bring prices down.
The path to easing consumers’ burdens is to become less vulnerable to oil price changes over the medium- and long-term, he said. “The key to reducing our vulnerability to world oil prices and volatility is for us to find ways to use less oil. We need to diversify our sources of transportation fuel,” Bingaman said, concluding with a roadmap to what he wants the committee to focus on.
“First, we need to enable further expansion of our renewable fuel industry, which is currently facing infrastructure and financing constraints. Second, we need to move forward the timeline for market penetration of electric vehicles. Finally, we need to make sure we use natural-gas vehicles in as many applications as make sense based on that technology,” he said.
AROUND THE WEB:
Modest progress in Japan nuke crisis
“Japanese authorities claimed modest gains Thursday in their efforts to tame a heavily damaged nuclear-power plant that has caused worries around the world, but increasing international skepticism and troublesome levels of radiation on the ground underscored the ongoing difficulties,” The Wall Street Journal reports.
Interior drilling chief strikes back at Vitter
“Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, criticized Sen. David Vitter, R-La., for issuing an 'extraordinarily misleading' letter and press release Wednesday, suggesting the Interior Department was misrepresenting the number of pending drilling permits,” The New Orleans Times-Picayune reports.
Bromwich also told a House panel that more deepwater drilling permit approvals will occur in the next few days, Platts reports.
Tea Party groups call for end to energy subsidies
A coalition of groups including the Tea Party organizations like Americans for Prosperity and Freedomworks sent a letter to members of Congress Thursday calling for an end to all energy subsidies.
This includes, according to the letter, “direct subsidies, loan guarantees, capital subsidies, mandates, insurance subsidies, and spending through refundable credits in the tax code.”
“While some energy programs may enjoy broad public support, one thing is clear: The trajectory of federal spending to support economically suspect energy sources is unsustainable,” the groups said in the letter. “From direct payments and loan guarantees to mandates, neither the environment nor the American economy can afford to be hampered by these anti-growth, anti-competitive policies.”
Three’s a crowd in climate amendment battle
Sen. Max Baucus (D-Mont.) has added a new proposal to the various Senate efforts to limit, delay or simply scuttle EPA’s greenhouse gas rules.
The Finance Committee Chairman is floating an amendment to small business legislation that would essentially exempt agriculture from EPA climate regulation.
It would also codify EPA’s “tailoring rule” that seeks to limit regulation to only large pollution sources.
Senate Minority Leader Mitch McConnell (R-Ky.) is pushing a far more aggressive amendment that would strip EPA power to regulate greenhouse gases, but an expected vote this week never materialized.
Sen. Jay Rockefeller (D-W.Va.) is promoting a separate plan that would delay EPA regulation of sources like power plants and refineries for two years.
“Lots of senators are working on different versions of amendments to help enable EPA to do its job in a balanced and solid way,” Baucus told reporters in the Capitol Thursday, noting there is “a lot of discussion” underway and more to come as lawmakers prepare to get back to the small business bill after next week's recess.
ON TAP FRIDAY:
• Energy Secretary Steven Chu will deliver remarks to the National Coal Council, an Energy Department advisory group.
• The New America Foundation will hold a discussion called "China, India, and Energy in South and Central Asia."
IN CASE YOU MISSED IT…
Here’s a quick roundup of Thursday’s E2 posts:
-President Obama ordered a review of U.S nuclear plants
-The State Department planned evacuations of Japan
-The Union of Concerned Scientists gave U.S. nuclear oversight ‘mixed reviews’
-U.S. standards for nuclear meltdown evacuations are different than the U.S. recommendation in Japan
-Top Democrats stepped up their call for a broad review of U.S. nuclear plants
-The Nuclear Energy Institute said the crisis in Japan hasn’t changed the forecast for new U.S. nuclear plants
-U.S. officials continued to defend their assessment of the crisis in Japan