Fracking Potential Moving Past Obstacles

story first appeared on usatoday.com

Political obstacles to oil and gas production are starting to fall away at the state and local levels as voters, elected officials and courts jump on the energy boom bandwagon.

Voters are rewarding local politicians who support production. Ballot measures are distributing potential tax windfalls broadly. And most state legislatures are focused on managing the economic and environmental consequences of hydraulic fracturing, or fracking, so the drilling boom can speed up rather than slow down.

The trend is crucial to the nation's energy future because oil and gas production is regulated and taxed almost entirely by state and local governments. The federal government's role is largely advisory, except on federal lands and on pipelines.

Most states were caught off guard when fracking turned Pennsylvania into a major natural gas producer in 2009. Fracking could produce oil or gas in as many as 36 states. Result: The USA will become the world's No. 1 producer of natural gas in 2015 and oil in 2017, overtaking Russia and Saudi Arabia, respectively, predicts the International Energy Agency.

Clearing the way:

Elections. Pro-drilling candidates are winning at the local level, including a sweep in southern New York. It is a hot issue, according to Broome County executive Debbie Preston, who won re-election Nov. 6. She's creating a department to help drillers. The state now has a moratorium on fracking.

Pipelines. The industry is winning approval to build pipelines. Williams Partners. the largest pipeline company, got a thumbs-up Nov. 7 to expand one pipeline and has applied to build another to move natural gas to Boston and New York City.

Even the controversial Keystone XL pipeline from Canada looks more likely. Pro-pipeline Democrat Heidi Heitkamp, winner in North Dakota's U.S. Senate race, predicts federal approval early next year.

Natural Resources Defense Council lawyer Kate Sinding says loopholes in federal law make it hard to stop fracking.

China Promoting Emerging Industries

Story first appeared in The Sacramento Bee

China's Cabinet said Wednesday it has approved plans to promote development of seven emerging industries including clean energy as it tries to restructure the economy and boost growth.

The announcement comes as Beijing is trying to fight an economic slump with spending on affordable housing and public works construction.

The Cabinet said it approved plans to launch 20 "major projects" for emerging industries but gave no details of what support they might receive. Previous technology development efforts have included subsidies, tax breaks and other support that trading partners including the United States complained violated free-trade principles.

Other emerging industries targeted for support include environmental protection, information technology, biology, advanced equipment manufacturing, new materials and new-energy vehicles, the Cabinet said.

Its statement said that development of emerging industries would help the economy while it faces "increasing downward pressure."

China's economic growth fell to a nearly three-year low of 8.1 percent in the first quarter. The International Monetary Fund is forecasting 8.2 percent growth for the year, and analysts say government efforts including spending on public works and Manufacturing Quality Assurance should help to drive an economic rebound in the second half.

Longer-term, Chinese leaders want to transform their low-wage economy of farmers and factory workers into a creator of profitable technology. Some fields such as renewable energy also serve strategic goals by reducing dependence on imported fuel.

Some previous government efforts to promote new industries such as solar and wind power have prompted complaints Beijing has used improper subsidies or trade barriers or pressured foreign companies to hand over technology.

The U.S. Commerce Department ruled this month that Chinese manufacturers were selling solar power equipment in the United States at unfairly low prices. Beijing fired back with a ruling by its own Commerce Ministry that U.S. government support for some renewable energy projects violated free-trade rules.

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Pleasing Environmentalists is Impossible

Story first appeared in The Columbian.

Recently, the EPA proposed new air quality regulations for power plants that activists say will finally kill King Coal.

The rule would require all new power plants to cut emissions of carbon dioxide, or CO2, by almost 44 percent. While natural gas plants can meet the standard with the help of a Natural Gas Expert Witness, coal-fired plants cannot without expensive carbon-capture and storage technology that is not commercially available.

While the EPA Administrator stresses that the standards will apply only to new power plants, some experts say the Clean Air Act explicitly requires the government to apply the standards to existing plants as well.

Environmental activists hailed the new standard and Rolling Stone reported, “For all intents and purposes, coal is dead as a new power source for 21st-century America.”

So, the question is, if not coal, what?

Coal currently supplies 40 percent America’s electricity and half the world’s electricity. Affordable, efficient and plentiful, coal use is expected to increase to meet growing global demand. Coal is an abundant resource in the world. It is imperative that we figure out a way to use coal as cleanly as possible.

Accordingly, the federal government has partnered with states, municipalities and private utilities to develop and test clean coal technology. The technology includes using superheated temperatures to reduce emissions, coal gasification, which turns coal into a form of natural gas, storing CO2 emissions from coal plants underground, and even turning coal into gas while it’s still underground, eliminating the need for coal mines.

You’d think environmental groups would support projects to reduce or eliminate greenhouse gas emissions from coal-fired power plants — especially low sulfur coal from southeast Montana and Wyoming — but they do not.

Impossible to please
The Sierra Club, which vows to “retire one-third of the nation’s aging coal plants by 2020,” makes no distinction on its hit list between aging plants and new high-tech projects, proclaiming “victory” at stopping plants designed to use the latest carbon capture technology. The website notes, “106 retired, 416 to go.”

Some analysts say the demise of coal will not be a problem because of the growing supply of cleaner, affordable natural gas. But many of the same environmental protesters targeting coal are also working to stop natural gas projects.

So, if not natural gas, then what?

Environmental groups would certainly support wind power as an alternative, wouldn't they? Not necessarily. A U.S. Chamber of Commerce database includes scores of wind farm projects delayed or derailed because of disputes over their impact on scenic areas and migrating birds. Electricity from wind is all right as long as they don’t have to look at a ridge dotted with wind mills.

In any event, renewable energy alone is not the answer. The Energy Secretary notes that, even at full build out, utilizing every type of alternative energy in every possible location, renewable sources could supply only 20-30 percent of our energy needs.

If opponents succeed in their campaigns to eliminate oil, coal, natural gas and nuclear power, where will the other 70 to 80 percent come from?  Will we be expected to power our cars with foot power, like the Flintstones? Or maybe hamsters running on a wheel under the hood of our cars?


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China Rebukes U.S. over Trade Inquiry

NY Times

 

BEIJING — China sharply rebuked the Obama Administration on Sunday for opening an inquiry into Beijing’s subsidies to clean-energy industries, charging that American own industrial subsidies far exceed China’s and warning bluntly that Washington “cannot win this trade fight.”

In an abruptly scheduled news briefing here, a senior Chinese economic official, Zhang Guobao, dismissed the Administration’s inquiry as election-season politics, and accused American trade officials of repeatedly delaying talks over the same issues that the White House now wants to probe.

“I have been thinking: what do the Americans want?” said Mr. Zhang, the vice chairman of the government’s National Development and Reform Commission. “Do they want fair trade? Or an earnest dialogue? Or transparent information? I don’t think they want any of this. I think more likely, the Americans just want votes.”

In an American election season defined by bleak economic and employment statistics, candidates in both parties have increasingly blamed Chinese trade tactics for slowing the United States’ recovery from the 2008 economic meltdown. The White House has ratcheted up criticism of China in recent weeks even as it dispatched senior officials to China to defuse trade tensions.

Mr. Zhang’s comments signaled that those tensions are continuing to rise, not only over trade issues but over longstanding claims that the Chinese artificially depress the value of their currency. He is widely seen in the West as China’s top energy policymaker because he also heads China’s National Energy Administration.

Mr. Zhang was reacting to an announcement on Friday that the United States Trade Representative’s office would investigate Chinese government support for companies that make wind turbines, solar-energy products, energy-efficient vehicles and advanced-technology batteries.

The United Steelworkers trade union filed a complaint on Sept. 9 accusing China of ignoring World Trade Organization rules that prohibit excessive subsidies of those markets. The trade representative’s inquiry, in reaction to the Steelworkers’ complaint, is potentially a first step toward filing formal charges against China in the World Trade Organization.

On Sunday, Mr. Zhang called the Steelworkers’ complaint unfounded, saying that American subsidies to clean-energy industries proposed by the Obama Administration total $60 billion, and the American government has slapped domestic-content provisions — so-called “Buy American” clauses — on certain clean-energy products.

In contrast, he said, “as far as I know, Chinese subsidies coming from all sectors, including taxes, are nominal,” and China is a major buyer of American clean-energy products. For example, he stated that while Chinese exports of wind turbines to the United States were small in 2009, Chinese manufacturers had imported key technologies and ingredients for those turbines from American manufacturers, from technologies to components to lubricants.

“What America is blaming us for is exactly what they do themselves,” Mr. Zhang said. “Chinese subsidies to new energy companies are much smaller than those of the U.S. government. If the U.S. government can subsidize companies, then why can’t we?”

Should American officials pursue the Steelworkers’ complaint, he added, “the only ones who will be humiliated are themselves.”

The Steelworkers’ complaint, however, echoes charges by other manufacturers outside China who argue that China gives hidden subsidies like free land and low-interest loans to its clean-energy industries, while dramatically restricting access to its domestic market by foreigners. They also accuse China of depressing its currency so exports of clean-energy products will sell cheaply abroad, while foreign imports will seem artificially expensive.

China said last summer that it would allow its currency, the renminbi, to appreciate. But its value has risen at a glacial pace, and only during intense pressure from its trading partners.

The United States’ economic stimulus legislation included a so-called “Buy American” provision requiring that recipients of stimulus money only purchase steel and other construction materials, like solar panels, that were manufactured in the United States or in other countries that have signed the W.T.O.’s side agreement requiring free trade in government procurement.

Virtually all industrialized countries have signed the government procurement agreement, which calls for signatories to open most government contracts to bids from other signatory countries. China promised to sign the side agreement “as soon as possible” when it joined the W.T.O. in 2001.

But municipal and provincial governments in China, particularly in inland provinces, have strongly opposed opening their procurement projects to international competition. So China has not yet signed the agreement, although some Chinese executives have begun advocating that it do so in the interests of helping Chinese companies export more goods to foreign governments.

The dispute over clean energy with the United States could also affect China’s relations with Japan. Since Sept. 21, Chinese customs officials have prevented the shipment of containers of rare earth minerals to Japan, and they have continued to block shipments through this weekend, although some smuggling has taken place, according to rare earth industry officials. A trickle of rare earths, needed for high-tech products from hybrid cars to mobile phones, is still reaching Japan because of smuggling.

The Japanese government has threatened to lodge a formal protest with China on Monday unless exports are allowed to resume. But even when exports resume, they may only last for another month or so, as the 32 authorized exporters of rare earths in China had used three-quarters of their export quotas for this year by the end of August.

U.S., Europe Look to China for Clean Energy Sales

Associated Press

BEIJING — U.S. leaders want China's clean energy boom to drive technology exports and are sending a sales mission to Beijing this week. But Beijing wants to create its own suppliers of wind, solar and other equipment and is limiting access to its market, setting up a new trade clash with Washington and Europe.

China passed the United States last year as the biggest clean power market, stoking hopes for Western sales of wind turbines, solar cells and other gear. But U.S. and European companies find that while Beijing welcomes foreign technology, it wants manufacturing done here and know-how shared with local partners. In the wind industry, foreign suppliers with factories in China say they are shut out of major projects.

"China is very keen on being able to depend on themselves," said Frank Haugwitz, a renewable energy consultant in Beijing.

U.S. Commerce Secretary Gary Locke says clean energy sales to China can help fulfill President Barack Obama's pledge to double U.S. exports over the next five years and create 2 million jobs. Locke is leading a group of 24 American suppliers to Beijing and Shanghai this week to drum up business.

"There is an incredible opportunity for companies all around the world to help China meet its energy goals of reducing greenhouse gas emissions, becoming more energy efficient," Locke said in Hong Kong Sunday at the start of the trade mission.

"China, given the incredible challenges that it has, should be, in my view, taking the best technology from wherever — whether it's China, the United States, Europe, Japan or anywhere else," he said. "Of course, we believe that in many areas, the United States is the world's leader in some of this technology."

But Chinese leaders want clean energy to be one of a series of emerging industries with their companies playing a leading global role. They are using regulations to ensure the bulk of Chinese sales go to local producers.

"There is a clash there that I think is going to become more and more prominent unless both sides come to some agreement," said Jim McGregor of APCO Worldwide Inc., a consulting firm, and a former chairman of the American Chamber of Commerce in China.

China already is embroiled in an array of disputes with Washington, Europe and others over currency, trade in goods from steel to shoes to chicken and Beijing's industrial policies that favor Chinese companies in areas including computer security and telecoms at the expense of foreign competitors.

Washington and Beijing have so far avoided a formal dispute over clean energy and have pledged to cooperate in research.

The potential Chinese market is huge: Beijing invested $34.6 billion in renewable energy last year, nearly double U.S. spending of $18.6 billion, according to a report by the Pew Charitable Trusts.

Foreign suppliers range from General Electric Co. and Europe's Siemens AG to Denmark's Vestas Wind Systems A/S and smaller startups. Products run the gamut from 20-story-tall wind turbines to generators powered by chicken manure.

"Low-carbon development in China represents an enormous opportunity for American businesses," said David Sandalow, an assistant U.S. energy secretary, in an April statement to the U.S.-China Economic and Security Review Commission.

The biggest impact of China's industrial curbs has been in wind. Beijing has declared it a strategic industry and wants to build local turbine producers such as Goldwind Science & Technology Ltd. and Sinovel Wind Co. into global players. Chinese companies also get grants and tax breaks to develop solar, biomass, fuel cell and other technology.

The foreign share of China's wind turbine market plunged from 70 percent in 2005 to 12 percent last year, according to the European Union Chamber of Commerce's Renewable Energy Working Group. The chamber complains that Chinese authorities help local companies by basing purchases on upfront prices and ignoring a project's lifetime cost, where more durable foreign equipment wins.

Beijing has aggressive plans to promote renewable energy to curb pollution and reliance on imported oil and gas, which communist leaders see as a strategic weakness.

A 2005 government plan called for at least 15 percent of China's power to come from wind, solar and hydropower by 2020.

"China is emerging as the world's clean energy powerhouse," said the Pew report.

Beijing has faced complaints by the United States, Europe and others over its efforts to promote Chinese companies and press foreign suppliers to hand over technology in other areas including computer security and mobile phones.

Until last year, Beijing required that wind turbines sold in China contain 70 percent Chinese-made parts. That rule was scrapped in September but only after GE, Vestas and others had set up factories in China.

Beijing can limit access to government-financed projects because it has yet to sign the Government Procurement Agreement, a treaty that extends World Trade Organization free-trade rules to official purchases and would require it to treat suppliers equally.

In a written response to questions, the U.S. Embassy in Beijing said Washington has not received formal complaints from American companies about China's wind policies and they are not considered a trade issue.

In solar power, China already is a top exporter of photovoltaic cells but its factories rely on foreign-made production machinery. Beijing is promising Chinese companies support to develop their own.

"This dependency is something China would like to reduce," said Haugwitz.

Beijing's vision of the foreign role in its industry is reflected in a plan by Phoenix, Arizona-based First Solar Inc., the leading maker of solar cells, to build the world's biggest solar power project on 25 square miles (65 square kilometers) of China's northern grasslands.

First Solar says it will manufacture equipment in China using new "thin film" technology that local rivals have yet to develop and will train Chinese partners.

"The government's position is, you can come in but you have to offer us something more advanced than we already have or it's going to be more difficult," said Damien Ma, an analyst for Eurasia Group in Washington.

Industry analysts point to Chinese-foreign joint research as a possible way to ease trade strains and maintain access to China's market.

The U.S. and Chinese governments agreed to last year to launch a joint $150 million research venture on clean vehicles, more efficient buildings and other technologies.

Last year, Germany's SolarWorld AG agreed to provide technology to China's Suntech Power Inc., the second-biggest maker of solar cells after First Solar. General Motors Co. and others have research ventures with Chinese companies and universities on alternative fuels and other fields.

Beijing's need for technology means foreign companies are likely to continue to get market access in exchange for it, Ma said.

"There is no way they are going to fully close the sector," he said.

Green Means Gold In North Carolina
Story from iStockAnalyst.com

Clean energy companies have been creating jobs in North Carolina at more than twice the rate of the rest of the economy, a new report finds.

And the real boom is just about to sound, predicts Rusty Stephens, president of Wilson Community College.

Green jobs are "the one bright spot in an otherwise difficult economic landscape," Stephens said this week.

The report, "The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America," was released Monday by The Pew Charitable Trusts. It looks at jobs created by environmentally friendly products and services.

Between 1998 and 2007, jobs in North Carolina's clean energy economy grew at a rate of 15.3 percent while overall jobs in the state grew by 6.4 percent, the analysis found.

As of 2007, 1,783 clean energy business in the state employed 17,000 North Carolinians. More than $82 million was invested in those companies between 2006-2008.

"Those investments, along with North Carolina's renewable energy and energy efficiency policies, should help the state's clean energy economy expand even further," said Morgan Jackson, N.C. representative for the Pew Environment Group.

"I've said before, and I will say again: Green is gold for North Carolina," Gov. Bev Perdue said Monday in a statement. "To get green right, we must build on our strengths that attract green companies -- a well-trained, educated workforce; existing relationships between businesses and research institutions; and a strong link between energy policy and economic development."

Stephens, who has championed green energy during his presidency at WCC, said the Pew report bears out what he's seeing at his campus.

"The time has come for large jumps in demand for these jobs," Stephens said Monday. "There's tremendous opportunity."

Nationally, jobs in the clean energy economy grew at a rate of 9.1 percent while total jobs grew by only 3.7 percent, between 1998 and 2007

The college recently hosted a meeting for employers to talk about the need for workers who are trained to retrofit residential and commercial properties for lower energy consumption. WCC is now developing a weatherization certification program for students.

The federal American Recovery and Reinvestment Act includes money for weatherization work, Stephens said. But there is also a need to conserve energy from a resource management angle.

"There's still so much money to be saved on the efficiency side," he said.

Making buildings more efficient would cut the country's energy consumption, lessening the need for new power plants and the use of fuels that create greenhouse gases, Stephens said.

Perdue's energy plan includes the use of $18 million in federal recovery funds to create an Energy Investment Revolving Loan Fund. The fund will provide low- and no-interest loans, up to $1 million, to finance energy-saving projects at businesses, schools, nonprofits, state agencies and local governments.

She also proposes another $10 million to expand the state's Green Business Fund to provide support to new, emerging and expanding green economy businesses.

North Carolina ranked among the top 12 states for green job growth. Nationally, jobs in the clean energy economy grew at a rate of 9.1 percent while total jobs grew by only 3.7 percent, between 1998 and 2007.

The complete study is available online at www.pewtrusts.org/cleanenergyeconomy .

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