OVERNIGHT ENERGY: Senators weigh Keystone pipeline strategy

“I will have more to say about that down the road,” said Sen. Ron Wyden (D-Ore.), who said he’s concerned about the pipeline’s effect on prices and the possibility that the oil it brings could be exported.

“You can hold hearings, you can ask for various kinds of audits ... I am looking at a variety of approaches,” Wyden told reporters in the Capitol Thursday. He has been working with Sens. Bernie Sanders (I-Vt.) and Patrick Leahy (D-Vt.) to press for a new State Department environmental study.

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Pipeline critics oppose the project over greenhouse gas emissions from energy-intensive oil sands extraction and fears of spills into sensitive U.S. waters along the route, among other reasons.

Proponents — which include many Republicans, business groups and some Democrats — say the pipeline that would carry hundreds of thousands of barrels daily would enhance U.S. energy security and create scores of jobs. (Check out Wednesday's Overnight Energy for more on the Keystone battle.)

An aide to one senator opposing the project said if State won’t re-do the analysis, options include seeking hearings in committees with jurisdiction over various aspects of the project, including the Foreign Relations Committee and the Environment and Public Works Committee.

The aide floated the notion of asking for a Government Accountability Office investigation of State’s review process, which critics say has been too chummy with TransCanada. The aide also mentioned the possibility of legislation to require a new review, which would be a long shot for advancement but could spotlight the issue.

“I don’t think in any way that the tools are used up,” the aide said when asked about ways to combat the project in the Senate. “I think people are just starting to consider them.”

Critics of the project have a powerful ally in Senate Majority Leader Harry Reid (D-Nev.). A Washington Post story Thursday revealed that Reid wrote to Secretary of State Hillary Clinton on Oct. 5 expressing “serious concerns” with the project, and arguing that pipeline proponents should invest in clean energy instead of “dirty” oil.

It remains unclear if Reid’s opposition will go beyond the letter. His office did not respond to a request for comment Thursday afternoon.


NEWS BITES

Will Salazar go big on fracking rules? Interior Secretary Ken Salazar recently hinted that an upcoming proposal to regulate hydraulic fracturing — the controversial gas drilling method — on public lands could be more expansive than the chemical disclosure requirements he has mentioned.

ClearView Energy Partners expects Interior’s gas drilling regulatory proposal to be quite a bit broader. From their note to clients Thursday:

We believe the [Interior Department’s] Bureau of Land Management (BLM) could propose its own air, water, safety and disclosure regulations for shale gas production on federal lands in November, prior to the December 7, 2011 oil and gas lease auction in Ohio’s Wayne National Forest. Sources tell us these rules could essentially codify guidelines contained within past leases. If finalized, these standards would impact approximately 11% of U.S. unconventional production.

Romney’s Carol Browner? Don’t hold your breath: If he wins, don’t look for GOP White House hopeful Mitt Romney to have a Republican equivalent of former Obama energy czar Carol Browner in his inner circle.

Romney, at an Iowa event Thursday, said his White House would be a czar-free place.

“Czars that are, if you will, managing the Cabinet posts, that doesn't make a lot of sense to me,” he said, according to a transcript. “I don’t expect to appoint czars."

Oil-spill claims czar to testify before Congress next week: Kenneth Feinberg, the Washington lawyer in charge of doling out billions in compensation to the victims of last year’s massive oil spill in the Gulf of Mexico, will testify at a House Natural Resources Committee hearing next week.

Committee Chairman Doc Hastings (R-Wash.) and others have been critical of the compensation fund, known as the Gulf Coast Claims Facility.

“When President Obama announced the creation of this compensation fund, he assured families and businesses suffering in the Gulf that payments would be administered ‘quickly, fairly, and transparently.’ Nearly a year and a half later, as the Gulf economy continues to struggle, there are serious questions about the fund’s effectiveness,” Hastings said in a statement on the hearing Thursday.

Hastings said he’ll question Feinberg — who previously administered the 9/11 Victim Compensation Fund — about whether the program is adequately compensating spill victims.

The GCCF has doled out almost $5.4 billion

Feinberg has strongly defended the GCCF against criticisms, arguing that he has paid all legitimate claims. 

The hearing is scheduled for next Thursday.

Inhofe slams EPA plans for fracking rules ...: Sen. James Inhofe (R-Okla.), the top Republican on the Senate environment committee, isn’t pleased with EPA’s plan to create wastewater standards for natural-gas wells developed through hydraulic fracturing.

Inhofe, in a lengthy statement, argued that state-level oil-and-gas regulation works better. Here’s part of what he said:

Looking to reverse America's newfound status as the world's largest natural gas producer, many on the left are now pressing a sympathetic Obama administration to flex its regulatory muscles and expand its reach over America’s oil and gas industry, one that for decades has been effectively and efficiently regulated by states. From the EPA and DOE to the BLM and SEC, this administration has unleashed an unprecedented regulatory assault against one of America’s most productive job creating sectors.

. . . but Chu says they won’t stop development: Energy Secretary Steven Chu, meanwhile, said the planned EPA rules — which will create wastewater standards for shale gas and coalbed methane — exemplify the administration’s effort to ensure safe expansion of gas drilling.

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“Today's announcement by the EPA reflects the Administration's belief that domestic natural gas production should be a part of our energy future and that it should be done in a way that protects our environment. This is part of a broad effort to ensure that America can harness this valuable resource while at the same time ensuring safe, clean drinking water for our communities,” Chu said in a statement.

Gas drillers: Keep states in the driver’s seat: A bit more on the planned EPA natural-gas rules: America’s Natural Gas Alliance, a trade group of gas production companies, urged EPA to consider what states are already doing.

“Like all oversight of natural gas development, wastewater disposal is actively regulated at the state level. ANGA continues to believe that state regulatory professionals are best qualified to assess the unique geological characteristics of the shale plays in their region and the appropriate water disposal requirements that arise from those conditions. As EPA officials move forward we encourage them to partner with the states and take into serious consideration state regulators’ existing on-the-ground expertise and ongoing oversight activities,” said Dan Whitten, a spokesman for the group.


IN CASE YOU MISSED IT...

Here's a quick roundup of Thursday's E2 stories:

- Lawmakers look to ease Lacey Act regulations after Gibson Guitar raid
- House GOP: Energy isn't fully cooperating on Solyndra probe
- EPA plans new water standards for 'fracking'
- Nuke regulators toughen safety rules
- Energy Sec. Chu not slated to testify next week on Solyndra

Please send tips and comments to Ben Geman, ben.geman@thehill.com, and Andrew Restuccia, arestuccia@thehill.com.


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