E2 Morning Round-up: Texas attacks Obama on drilling ban, spill probe hits DC, Iran scales back natural gas projects, and more

Texas tussle over drilling ban

The Lone Star state is going after the Obama administration in court to overturn the federal six-month ban on deepwater oil-and-gas drilling that began in late May.

Here’s AP:

“The Texas attorney general sued the Obama administration Wednesday over its new deep-water offshore drilling moratorium, claiming it is unjustified and federal officials did not contact the state before issuing the ban.”

“Attorney General Greg Abbott filed the 18-page suit in federal court in Houston against Department of the Interior Secretary Ken Salazar. The ban halted the approval of any new permits for deep-water projects and shut down drilling at 33 exploratory ocean wells in the wake of the BP spill in the Gulf of Mexico.”

“In his lawsuit, Abbott called the ban ‘an unjustified, arbitrary and capricious policy that will inflict harm upon coastal communities.’ ”

There’s already a separate suit pending in a New Orleans federal court, where offshore oil services companies backed by Louisiana Gov. Bobby Jindal (R) are fighting the ban.

On tap Thursday: Probe of BP oil spill

A National Academy of Engineering/National Research Council committee opens a two-day hearing in Washington, D.C., as part of its inquiry into the BP oil spill and ways of preventing future accidents.

Witnesses at the meeting are slated to include Michael Bromwich, who heads the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement (the successor agency to the scandal-plagued Minerals Management Service).

It’s one of several ongoing probes into the spill.

Feds to BP: Pay up

The administration on Wednesday sent BP a fifth bill, this time for $167.9 million, to cover federal costs incurred during the oil-spill response and cleanup. 

“This invoice is based on specific Federal Government expenses that are subject to billing at this time, including expenses associated with the response of over two dozen Federal entities and agencies from four States, in accordance with the Federal On-Scene Coordinator request for assistance process,” the administration said, adding that more invoices are en route. BP and other parties have paid four other bills to the administration for a total of $222 million.

It’s a drop in the bucket compared to what BP has already spent overall and its future liabilities for the worst offshore oil spill in history. The disaster has already cost the oil giant billions of dollars, with more to come.

WSJ: Sanctions, tech woes hobble Iran’s gas projects

The Wall Street Journal reports Thursday that Iran is scaling back “once lofty” plans to become a big player in the liquefied natural-gas export market, “a reversal that energy executives and analysts tie to the country's difficulty accessing Western technology amid fresh international sanctions.”

“In several recent interviews with state-controlled outlets, Iranian energy officials have said they have suspended two of the country's big LNG projects. Tehran said it is shifting its focus to building more gas pipelines,” the Journal reports.

“Iran's energy industry has long been hobbled by sanctions, a lack of foreign and domestic investment and technical challenges. Energy analysts have, in particular, viewed Iran's timetable for becoming a major LNG power skeptically. Still, Tehran's recent public statements about the program mark a significant shift for a government that has for years trumpeted its intention to create a significant LNG industry.”

In case you missed it

On E2 Wednesday, we looked at problems with the FutureGen “clean coal” project, environmental groups worried about a potential Obama administration financial deal with BP, and why energy legislation isn’t on Capitol Hill’s front burner.

Federal cash for carbon storage

The joint federal-industry FutureGen project hit another snag Wednesday, but the long-troubled effort is hardly the only Energy Department (DOE) program trying to turn carbon capture and storage from a dream into something more tangible on a wide scale.

Those programs grew a bit more Wednesday. DOE announced 15 projects that will get a total of $21.3 million over three years to explore carbon storage in various types of geologic formations.

Here’s an example of the projects, from DOE’s announcement:

Advanced Resources International, Inc. (Arlington, Va.) — In this project investigators will assess factors influencing effective CO2 storage capacity and injectivity in selected Eastern gas shales. Project objectives include analyzing data on reservoir properties; developing a better understanding of the characteristics of shales that impact sealing integrity, storage capacity and CO2 injectivity; verifying this understanding through small-scale CO2 injection tests; characterizing the potential constraints to economic CO2 storage in gas shales; assessing approaches for development of cost-effective CO2 storage; and developing a basin-level characterization of the CO2 storage capacity and injectivity of selected Eastern shales. (DOE share: $1,345,541; Recipient share: $653,500; duration: 24 months)

Hotter temps, less food?


Time magazine’s Bryan Walsh has a good piece on the nexus between drought, heat waves and plummeting grain harvests in Russia, noting it could be a troubling sign of what’s to come in a hotter world.

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