Obama Administration Looking to Curb Fossil Fuel Giveaways
Oil shale (National Archives photo)
One of the odder things about the tendency of politicians who like to espouse free market principles to oppose efforts to reduce American dependence on dirty energy sources is that the way the status quo works is that fossil fuel producers are actually pretty heavily subsidized. And, naturally, it got worse while George W. Bush was in office. Jim Tankersley and Josh Meyer report for the LA Times:
The Obama Interior Department is reviewing a decision made by the Bush administration in its final days that attempted to lock in lucrative royalty rates and favorable regulations for oil companies holding leases for oil-shale development on public lands.
The decision, which came in the form of amendments to existing leases, drew little public notice at the end of the Bush administration in January. But since then, congressional watchdogs, environmental groups and state officials in Colorado, where most of the leases are located, have denounced the amendments as a massive giveaway to the oil industry.
Any time you talk about oil shale it’s also a reminder that though messages about “energy independence” tend to poll well, it can be a risky gambit for clean energy advocates to rely too heavily on talking points that can also support very dirty undertakings.
18 Responses to “Obama Administration Looking to Curb Fossil Fuel Giveaways”
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October 16th, 2009 at 10:10 am
I’ve been distracted by Acorn and a fake pimp and ho, but isn’t it alleged that those last minute decisions were influenced by corruption — in particular by Gale Norton getting a job in exchange.
Is it imaginable that a judge might cancel the leases as ill gotten gains ? I mean do we maybe maybe get a do-over ?
Guess no point in wondering. It would go up to the Roberts court and no way will they take away the ill gotten gains of corporations.
October 16th, 2009 at 10:32 am
So which is it Matt?
Do you want those leases canceled or to just get more money on them so the Loonie Left can spend another trillion bucks to create 30,000 temporary government jobs?
And why oh why Matty are you not banging the nuclear drum every day?
I’ll see your Frenchyfied medical care and raise you their power system.
October 16th, 2009 at 10:42 am
sure he is. Just like he’s out for banking reform… that immunizes 90% of all banks from any regulation. And Health Insurance Reform that doesn’t have any teeth.
At this point, if Obama proposes a reform, it’s a good bet that his real intention is to make things a whole lot worse. He also makes nice sounding noises and then tells congress to gut the whole package.
October 16th, 2009 at 10:54 am
If you’re offering that as a package deal, I’ll take it.
October 16th, 2009 at 10:56 am
The problem is that greater energy independence isn’t just a talking point, but an actual meritorious goal in its own right. So if you are running into a situation where policies supporting greater energy independence conflict with your emissions goals, you have to do more than just stop talking about the issue–you are going to need to make a choice between the now-competing goals and be prepared to defend that choice on the merits.
October 16th, 2009 at 11:09 am
By the way, the U.S. actually produces substantially more nuclear power in gross terms than France–it just adds up to a much lower percentage of domestic usage (around 20% versus almost 80%) because we are much bigger electricity users. In fact if we had actually added to that total as much new nuclear power as France has added in the last 25 years, that would still only account for another 10% or so of our current electricity usage (so getting us to around 30% from nuclear as of today).
All this is relevant because there are some fundamental supply constraints in the nuclear power plant industry that will limit the pace by which we can add new nuclear power over the next few decades, particularly if we are not the only ones in the market for new nuclear power. So it is fine in my view to advocate for adding more nuclear power as a complement to variable renewable sources like wind or solar, but the idea that we could flip a switch and get to something like 80% from nuclear power any time soon is very ill-conceived.
October 16th, 2009 at 11:24 am
Some oil shale is so gooey with oil you can just break off a chunk and burn it. So it looks like it would be a valuable energy source. Except it would take lots and lots and lots of water to get it into a liquid, and where there’s lots of oil shale there’s not much in the way of water.
From time to time, oil companies start up oil shale pilot projects only to close them down. I don’t think it has anything to do with the price of oil. The water constraint just can’t be overcome.
And think of the talings. Someone can check my math and assumptions here. I read somewhere (IIRC) that Mt. Everest weighs around 100,000,000 tons. We put 4 gigatons of carbon into the atmosphere every year. So, we’re going to chew up all that shale and extract oil from it. For convenience sake, imagine that there’s no change to the weight of the shale after the oil has been extracted. 4 gigatons of carbon would demand 40 Mt Everests of oil shale. Each year. Numbers that big make my brane hurt. I’m sure they’re wrong. The production of oil starts to resemble a vast horde of Doozers just making stuff. Or a huge scale version of the Micky Mouse/broomstick section of Fantasia.
October 16th, 2009 at 11:53 am
Your estimate for Everest is off by a factor of 1000.
October 16th, 2009 at 11:59 am
Why is energy independence a meritorious goal in its own right? What harm is there in importing energy from Canada if it is cheaper and less environmentally destructive than producing it here? I would understand not wanting to trade with a few countries which do things we don’t like, but 1) that’s a far thing from energy independence 2) nations collapsing into poverty and unemployment is not usually stabilizing anyways.
October 16th, 2009 at 12:37 pm
I would like to see energy independence defined more narrowly, because there’s one particular form of energy that seems politically and economically destabilizing: petroleum. It’s the most volatile in price, it seems conducive to oligarchy and thus it tends to be located under the sands of people who annoy us, and our transportation sector is uniquely dependent on it. It encourages our own imperial ambitions–if not to secure our own supply of it then to prevent our enemies from securing their supply. So long as ordinary people are encouraged to own internal combustion engines, then it’s also the form of energy that’s easiest to demagogue about, and therefore our oil dependency is the greatest political obstacle to protecting the climate even if it isn’t actually the greatest source of emissions.
Oil is the greatest source of our political and economic problems, foreign and domestic. Ultimately, a successful project to control emissions requires global cooperation and stability. Which means that freeing the globe from the tyranny of oil has to come before saving the climate–not because it’s more important, but because it’s a prerequisite.
October 16th, 2009 at 12:54 pm
MY “though messages about “energy independence” tend to poll well, it can be a risky gambit for clean energy advocates to rely too heavily on talking points that can also support very dirty undertakings.”
Coal liquefaction on massive scale would make the United States energy independent overnight and allow the US to become the largest oil exporting nation on the planet.
The US sits on top of 300 billion metric tons of coal, or 25% the world’s coal reserves. In other words, the United States possesses the the world’s largest known oil reserves, a much larger reserve in fact than than the known oil reserves of all the OPEC nation’s of the middle east combined.
It would take the United States more than 150 years to burn through its coal reserves if they were used for both coal and oil production; meaning coal liquefaction on a grand scale would eliminate the need to prepare for such dread scenarios as peak oil and the potential economic calamities brought on by future oil shocks. In fact, the mass production of this almost unlimited supply of coal/oil would lock in reasonably steady energy prices within the United States for decades, if not longer.
Coal liquefaction is cheap, coal/oil can be produced cheaper than the current price of oil -hovering around $75/barrel. The coal liquefaction process is well understood. It has been around for almost 100 years and one large nation in history already applied the technology -65 years ago- to meet 80% of its oil needs over an extended period -Nazi Germany.
BUT, coal liquefaction without carbon storage is UNBELIEVABLY DIRTY, aside from perhaps nuclear, it is the dirtiest of all energy sources. There are some very hard choices ahead.
October 16th, 2009 at 1:08 pm
Coal liquefaction on massive scale would make the United States energy independent overnight and allow the US to become the largest oil exporting nation on the planet.
Even if we produced more oil than we exported, unless we passed a law banning export of oil we’d still be affected by price shocks overseas, wouldn’t we? The only real way I see to be independent of oil is to stop burning it, at least in cars.
October 16th, 2009 at 1:57 pm
Why is energy independence a meritorious goal in its own right?
Note I wrote “greater energy independence”, which means not necessarily full energy independence.
Anyway, in quick summary form, the rationales include:
What harm is there in importing energy from Canada if it is cheaper and less environmentally destructive than producing it here?
With global markets in energy it often doesn’t make much sense to think in such terms. That said, maybe a more independent North American energy region would be sufficient for the purposes described above.
nations collapsing into poverty and unemployment is not usually stabilizing anyways
However this happens is going to be a fairly slow process, and conversely the nations in question are going to have to figure out a different long run plan anyway, because one way or another the status quo isn’t sustainable indefinitely.
October 16th, 2009 at 3:37 pm
With global markets in energy it often doesn’t make much sense to think in such terms.
I agree. By exactly the same argument, with global markets in energy it doesn’t make sense to think in terms of energy independence either. Unless we’re actually at war with a good portion of the world, energy markets are entirely global, and producing energy in the US is worth exactly the difference between the production cost and the global price. Increasing US energy production has precisely the same effect on both Saudi Arabia and the US as increasing Venezuelan energy production.
As for protecting against supply shocks, I think US production is worth just as much as one additional trading partner of equal size. Diversity of sources is important, but there’s no reason that diversity has to be produced at home.
It is certainly true that the status quo is unsustainable. But if (entirely hypothetically) the Saudis and Iranians found a way to export cheap and clean energy to the world, I don’t think we should view the choice of accepting it as a conflict between the competing goals of energy independence and clean energy.
October 16th, 2009 at 4:25 pm
The fact that we’d run out of coal (for oil) in 150 years, doesn’t exactly eliminate the need to prepare for peak oil.
October 16th, 2009 at 4:53 pm
[quote]As for protecting against supply shocks, I think US production is worth just as much as one additional trading partner of equal size. Diversity of sources is important, but there’s no reason that diversity has to be produced at home.[/quote]
A trading partner’s production isn’t the same thing as domestic production for the purposes I listed because in a dynamic situation the producers and consumers will experience different effects.
Consider, for example, a sudden 100% increase in the global price of energy. Your argument would appear to be that it doesn’t matter whether a country is a net energy producer or consumer in such a situation. I tend to think otherwise.
October 16th, 2009 at 4:53 pm
Sorry for the bad tags (wrong forum + failure to preview).
October 16th, 2009 at 11:51 pm
@15 daveNYC: “The fact that we’d run out of coal (for oil) in 150 years, doesn’t exactly eliminate the need to prepare for peak oil.”
Even if world consumption of coal does not increase but instead remains on the same yearly pace as now, the planet will still use up all its known coal reserves in less than 200 years. China, for example, is on pace to use up every last ounce of coal it possesses by no later than the end of the century, and probably much sooner.
Natural oil reserves, unless you believe oil bubbles up from the center of the earth, have a much shorter half-life than coal. Personally, I believe we are PAST PEAK and possibly can suck oil out of the earth for no more than another 50 years. Time is running is out.
I am NOT in favor of coal liquefaction. I bring it to attention because it is already being looked at by policy makers as the easy way out. And, it is. There is no doubt about it. COAL LIQUEFACTION IT IS THE EASY WAY OUT.
Me? I am a wind and solar man.