OVERNIGHT ENERGY: Oil industry to make economic argument against drilling fees

NEWS BITES:

Industry cheers (sort of) for Interior’s
drilling guidelines

The Interior Department’s plan to allow
some deepwater drilling projects to resume
without major new environmental reviews drew mixed reactions
Monday. National Ocean Industries Association President Randall Luthi
called it a “positive development for an industry that has been
anxiously waiting to get back to work developing the resources that
provide 30 percent of our nation’s oil and 13 percent of our nation’s
natural gas.”

But he added that much remains unclear on the path
toward actually getting approvals for projects to get going again.
“The companies impacted will each need time to evaluate today’s
announcement to determine what boxes remain to be checked in order to
obtain final [Bureau of Ocean Energy Management, Regulation and
Enforcement] approval to restart their projects,” Luthi said.

Another
industry source was even more cautious, claiming that while it appears
to be step in the right direction, it’s not clear how many companies
will actually be able to proceed under the new guidelines. This source
also called it another case of Interior Department regulators “changing
the rules midstream.”

Deepwater projects have been on hold since
shortly after the BP spill began, even though Interior lifted the formal
moratorium in October.

Senior Republican says Interior should
go further

Incoming House Natural Resources Committee
Chairman Doc Hastings (R-Wash.) wasn’t hugely impressed. He said in a
statement that he welcomes any new developments that will get Gulf of
Mexico oil workers on the job again, but that Interior should go
further.

“Today’s announcement … only ensures the possibility
that previous drilling activity can resume at some point in the future
if certain requirements are met,” Hastings said. “The Obama
Administration can prove it’s serious about resuming drilling in the
Gulf by actually issuing permits and allowing people to return to work.”

Green
group: Obama administration ‘reluctant’ to regulate oil companies

Miyoko
Sakashita, oceans director for the Center for Biological Diversity,
slammed Interior’s policy.

“Allowing yet more deepwater drilling
activities to continue without environmental review shows the
government’s continued reluctance to regulate the oil industry,” she
said in a statement to E2.

“The type of drilling being allowed to
go forward here without environmental review is the same that led to
the tragic Deepwater Horizon spill. While safety improvements are
important, there is still no commitment by the government to consider
the environmental consequences of risky drilling offshore,” Sakashita
added.

Energy Secretary hopes electric cars won’t just be
niche market

Energy Secretary Steven Chu told CNN Monday that
he’s hoping for an expanded market for electric cars like the new
Nissan Leaf and Chevy Volt. But hurdles remain. “Well, the hope is that
they can become more than a niche product in the near term future. By
near term, I mean three, four, five years,” Chu said.

“Certainly
the battery technology has to improve. But on the other hand, I’m seeing
a lot of great ideas in the development of new batteries and companies
like Nissan and GM and others are really betting that this battery
technology will improve greatly. The electric vehicles they’re
introducing today are great, but in the coming years, we’ll see even
better ones,” he added.

More Chu: Oil will rise

With
crude oil trading at its highest levels in two years, Chu said that
long-term it will keep going up — and that the U.S. has to be ready.
While prices are tough to predict in the immediate future, Chu said that
increasing demand from countries like India and China and the
difficulty of producing oil in more challenging physical environments
will push prices upward in the mid- and long-term.

“And I think
the United States should prepare for that and take the steps necessary
to use the oil we need as efficiently as possible and also to begin to
transition away from oil. For example, electrification of vehicles and
things like that,” he said.

Refiners sue EPA over higher
ethanol blends

A refining industry trade group on Monday
filed suit to overturn EPA’s decision that allows higher
amounts of ethanol in gasoline sold for use in late-model cars.
It’s at least the second lawsuit challenging EPA’s decision last year
to allow so-called E15 — which is 85 percent gasoline, 15 percent
ethanol — in cars and light trucks from model years 2007 and onward.
Auto and boating industry groups sued
in December.

The National Petrochemical and Refiners
Association — along with the International Liquid Terminals Association
and the Western States Petroleum Association — filed the latest suit in
the U.S. Court of Appeals for the District of Columbia Circuit.
Opponents of the higher ethanol blends allege there hasn’t been enough
testing and that there will be “misfueling” of engines that aren’t
approved for the increased levels, leading to damage.

IN CASE YOU MISSED IT…
 
E2 laid out five stories that flew under the radar in 2010. We told you about a report by the Congressional Research Service that says we may never know the exact fate of oil in the Gulf of Mexico. And, in what’s certain to be the most bizarre story on the blog this week, thousands of birds fell from the sky in Arkansas on New Year’s Eve.

We also previewed the wind industry’s agenda for 2011. And we reported that the Interior Department may allow some projects halted by the moratorium on offshore drilling to go ahead without having to submit their updated plans for additional environmental reviews. 

AROUND
THE WEB:

Report: Trauma killed falling birds

“The

thousands of birds that fell from the sky just before midnight New
Year’s Eve in Arkansas likely died from massive trauma, according to a
preliminary report released Monday,” CNN

reports.

Study finds ‘alarming’ bumblebee decline

“Four
previously abundant species of bumblebee are close to disappearing in
the United States, researchers reported Monday in a study confirming
that the agriculturally important bees are being affected worldwide,” Reuters
reports.

“They documented a 96 percent decline in the
numbers of the four species, and said their range had shrunk by as much
as 87 percent. As with honeybees, a pathogen is partly involved, but
the researchers also found evidence of inbreeding caused by habitat
loss.”