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Lost in Translation

Tuesday, July 13th, 2010

AP story out of Boston leads some to believe that Canadian premiers back a Low-Carbon Fuel Standard (LCFS) – but reports from Canada tell a much different story

“Governors, Canadian premiers agree on energy goals” – that’s the headline you’ll find in the Boston Herald today, attached to a quick dispatch from the Associated Press reporting on the 34th Conference of New England Governors & Eastern Canadian Premiers held in Lenox, Mass. earlier this week.

But exactly which energy-related goals were agreed upon by the audience of top government decision-makers from Canada and the United States? According to a press release issued by Massachusetts governor Deval Patrick, the group “agreed to examine implementation of a regional low carbon fuel standard — a market based, technology-neutral policy to reduce the carbon intensity (and greenhouse gas impact) of transportation fuels.”

Of course, you probably know the Low-Carbon Fuel Standard (LCFS) better as that policy which seeks to prevent sources of secure and affordable Canadian energy from crossing the border into the United States – forcing our country to grow its dependence on far-away, unstable energy to make up the difference (and costing lots of jobs in the process). So why would the Canadians support a policy like that? Short answer: They wouldn’t. And don’t – which is a fact made plain in today’s edition of the New Brunswick (Canada) Telegraph Journal. Below we compare and contrast.


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National, State Groups Join CEA in Efforts to Combat Job-Killing LCFS Schemes

Tuesday, March 16th, 2010

Here at Secure Our Fuels, we’ve been working hard to engage and educate concerned consumers, families and small businesses about the overwhelmingly negative economic and national security threats posed Low-Carbon Fuel Standard (LCFS) schemes.

In today’s LaCrosse (Wisc.) Tribune, CEA’s vice president, Michael Whatley, writes this in under the headline: “Proposed standard would hurt customers, manufacturers”:

Sold to the public as a plan to defy the laws of science by forcing a reduction in the carbon content of fuel (which the Environment Protection Agency says is constant), Mial’s reporting rightly calls out the LCFS for what it actually is: an attack on Wisconsin consumers and manufacturers by denying Wisconsin’s chief source of secure and affordable energy from crossing the U.S.-Canadian border. He also captures one of the fundamental realities that LCFS supporters would rather your readers not know; namely, that Wisconsin’s loss under such a policy might just turn out to be Asia’s gain, since it’s likely that far-away interests will “take every gallon” of energy that a Wisconsin LCFS would necessitate we leave behind.

Whatley adds this:

 Unfortunately, even as legislators from both parties in Madison have started to wake up to the harsh realities associated with an LCFS, a group known as the Midwestern Governors Association, of which Wisconsin’s governor is a member, continues down the road of LCFS study and implementation at breakneck pace. Later this year, the association expects to produce a final LCFS plan that states like Wisconsin will be asked to endorse in full. But that proposal won’t get far if more folks in the state take the time to read news items like this one.

Fortunately for the Badger State, the Wisconsin Manufacturers and Commerce (WMC) and the Wisconsin Petroleum Marketers Association (WPMA) have been actively working fend off job-killing LCFS scheme by educating key stakeholders about the host of negative impacts this proposal would have on the state. In fact, both WMC and the WPMA recently released straightforward documents about how an LCFS would hurt Wisconsin, its economy and its ability to compete.

With over 4,000 members statewide, WMC estimates that an LCFS would have the following effects:

The so-called Low Carbon Fuel Standard would cost Wisconsin motorists more than $3.2 billion in higher gas prices according to the WPRI study. This global warming gas tax could cost consumers as much as 61 cents per gallon according to a study by the Marshall Institute. All told, these expensive policies are projected to cost each Wisconsin family more than $1,000 each year by the time they are fully implemented.

In a separate LCFS overview document, the WPMA identifies some of the potential impacts on Wisconsin and other Midwestern states that depend on Canadian derived-fuel supplies to keep their economies moving:

If Wisconsin and other Midwestern states adopt a LCFS, existing and proposed pipeline infrastructure could be used to bypass the region. In addition, Canadian crude will likely be produced for export to developing nations such as China and India. These nations have lower environmental standards than the U.S., which means there would be a net increase in greenhouse gas emissions, and other air pollution, if that crude is ultimately refined elsewhere. It also would be less energy efficient and a potentially greater risk to the environment for Canada to transport its crude abroad by oil tanker versus keeping it in North America.

The Midwestern United States is the most efficient transportation destination and refiner of Canadian oil sands crude, which reduces its environmental impact. Oil sands crude oil is a growing resource that is attracting significant investment. If Wisconsin restricts Canadian crude oil, it will be used somewhere else in the world.

Interestingly, some of these same concerns were identified in a recent letter from Thomas Corcoran, executive director of the Center for North American Energy Security (CNAES) — which urges the nation’s governors to oppose an LCFS that would discriminate against affordable and secure fuels, such as those from Canada’s oil sands or other non-conventional sources. In this letter, Corcoran writes this:

 Such a proposal would be misguided for many reasons. First it would not result in any reductions of GHG emissions, but it is likely to increase them. The effect would be to discourage imports to the Northeast of fuels derived from oil sands and other conventional resources in North America, such as the oil sands in Canada or oil shale in the Western U.S. Fuels barred from the Northeast would simply be sold elsewhere in the world, where controls may be more lax and emissions from fuel transportation increased.

 While the debate over an LCFS scheme continues in Wisconsin, it’s clear that the more consumers learn and understand about this job-killing proposal, the more the opposition continues to grow. Unfortunately, the threat of an LCFS still exists in many other states, regions and in Washington. As CEA continues to educate the public about the dangerous realities of adopting LCFS schemes, hopefully more state and national policymakers will take notice and follow WMC’s, WPMA’s and CNAES’s lead by rejecting these misguided proposals.

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Fmr. NHL Goalie Takes Slap Shot Directly at U.S. Energy Security

Thursday, February 25th, 2010

Remember the 1994 Stanley Cup finals? As you may recall, Mike Richter – the goalie then for the New York Rangers – played a significant role in securing Lord Stanley that year, bringing a close to the fabled “Curse of 1940.” In fact, in an action-packed, edge-of-your-seat Game 4 shoot-out, Richter famously shut down Pavel Bure – the Vancouver Canucks sharp-shooting, fast-flying forward.

And while Richter effectively handled the “Russian Rocket” in ’94, raining on the parade of Canadian hockey fans, the U.S. Hockey Hall of Famer is now working to undercut our nation’s energy security.

Taking to the pages of Minnesota’s largest newspaper, Richter – the outreach chair on the Sierra Club’s National Advancement Council – writes this in a recent Star Tribune column under the headline “Of Canada, the Olympics and dirty oil”:

If we allow Canada’s oil sands project to creep across our border, it will lock our nation into dependence on yet another foreign source of oil, just as our local clean-energy industry is beginning to thrive.

However, Canada currently helps meet nearly 17 percent of the total fuel demands that keeps the American economy running each day. In fact, Canada – not Middle Eastern oil, or oil derived from other unstable, unfriendly regions of the world – is our nation’s top oil provider. So how much of Minnesota’s oil comes from Canada’s sands? 83 percent. And why does Mr. Richter support denying Minnesota consumers, manufacturers, families and seniors living on fixed-incomes access to these affordable North American energy reserves? You should ask him.

Richter adds this in his column:

Right now, we are poised to become a leader in the global clean-energy economy. By taking the steps to ensure that we are the leader of the next industrial revolution, we can reignite our economy, bolster national security and improve the health of our people.

One of the most important things we can do to demonstrate that leadership is to say no to Canada’s oil sands. For now, the decision rests with the Obama administration. By denying permits for pipelines and refineries in the United States, President Obama can signal to the world that we are serious about fighting climate change and helping American clean-energy technologies thrive.

Everyone – including Mr. Richter – is entitled to their own opinion. However, no one is entitled to their own set of facts.

Consider this: If the federal government, or individual states, were to ban Canadian oil from reaching American consumers – as a Low-Carbon Fuel Standard (LCFS) seeks to achieve – where would the fuel come from to meet our nation’s growing energy needs and to help drive economic activity and growth?

Lighter forms of crude are generally found and produced in some of the most hostile regions of the world. Understanding that the Energy Information Administration (EIA) – the U.S. Energy Department’s statistical and analytical agency – has determined that our nation will continue to rely on oil until at least 2035, is it responsible or commonsense policy to turn our backs on Canadian oil to meet these rising demands, and to favor oil from faraway, hostile regimes?

But assuming that the U.S. adopts the misguided policies that Richter is advocating for, what are the ultimate consequences? Who are the winners and losers?

American consumers – who will be forced to pay even higher prices at the pump – are the ultimate losers.

And if the U.S.  banned Canadian energy, does that mean global greenhouse gas (GHS) emissions will decrease? Absolutely not. China – our chief competitor in the global economy – is working aggressively to secure access to Canada’s oil sands. Some independent experts – and even a top advisor to President Obama – have determined that GHGs would actually increase under such a unilateral ban on these resources from the U.S.

The winners? Well, those who have an economic and financial interest in ensuring that our most affordable, reliable and secure forms of energy become prohibitively expensive. Say, for example, a venture capital firm that invests in alternative forms of energy that simply cannot compete with more affordable forms, such as Canada’s oil sands. That’s funny, because Mr. Richter is the founding partner of Environmental Capital Partners (ECP) — a firm that does just that. Coincidence? We’ll let the American consumers decide.

As U.S. consumers continue to weather these terribly difficult and challenging economic times and hardships, and more and more jobs continue to be lost, leaders in Washington and in state capitols must focus on advancing energy policies that aim to keep prices stable and affordable by promoting more energy of all forms, and using what we have more wisely at the same time. Regrettably, banning Canada’s oil – the core of a LCFS – would only deepen our dangerous dependence on oil from unfriendly regions of world, and severely hit struggling consumers in their pocketbooks at a time when they can afford it least.

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JUST THE FACTS: Efforts to Block Canadian Energy Bad News for US Consumers, Christmas Early for China

Tuesday, February 23rd, 2010

Last week, following the announcement that Whole Foods and Bed Bath & Beyond intend to turn their corporate backs on secure, affordable, North American energy derived from Canada’s oil sands for their transportation fleets, a host of stories from both Canadian and U.S. news outlets quickly surfaced. However, Bed Bath & Beyond is beginning to hedge its position, understanding full-well how critical the U.S.-Canadian trading partnership is, especially as it relates to affordable energy. BNET reports this:

 Turns out, though, that boycotting oil sands also puts your brand at risk. Just one day after the big announcement BB&B distanced itself from the boycott, Alberta consumers and businesses called for a boycott of BB&B stores in the province in response to the attack on oil sands, the Globe and Mail reported.

Consumer Energy Alliance’s (CEA) fired off a statement shortly have last week’s misguided Whole Foods announcement, which was highlighted in a Calgary Herald article:

 CEA flooded the media with an e-mailed statement by its vice-president, Michael Whatley, saying the Whole Foods boycott is “hypocritical in the best case and downright disingenuous in the worst.” As Whatley said of the Whole Foods situation: “We recognize this may be an opportunity to work with these companies to educate them on what the oil sands are really about, and how they can be used to create jobs here at home and strengthen America’s energy security, all while protecting and preserving our environment.”

Globally, the thirst for affordable energy continues to swell, especially in developing and emerging nations, such as China. Whole Foods’ objective – to ban Canadian oil sands, which would be achieved under a federal, one-size-fits-all Low-Carbon Fuel Standard (LCFS) – will result in higher prices at the pump for U.S. consumers, and a deeper, more dangerous dependence on some of the most unstable and unfriendly regions of the world to keep our economy fueled.

As it relates to China’s strategic positioning to secure Canada’s job-creating energy reserves, BNET reports:

The industry is already preparing for the possibility of a real threat from U.S. businesses and government policies that would reduce use of oil sands: They’re looking east to China. PetroChina recently acquired a majority share in two oil sands projects — an investment that required Canadian government approval. “There will definitely be more,” Prime Minister Stephen Harper told the Guardian.” 

And under the headline “China eyes tar sands as Western firms back off,” Greenwire reports:

As U.S. and European companies scale back investment in oil sands due to environmental and cost concerns, Chinese oil companies are making their largest investments to date. “Expect more Chinese investment in the resource and energy sectors,” Canadian Prime Minister Stephen Harper said.

“There will definitely be more.” Peter Tertzakian, chief energy economist at ARC Financial Corp. in Calgary, said China’s investments currently appear to be a “token toehold” in the market. He said the Canadian government appears to have become more willing to accept Chinese investment in the oil sands. “From a continental energy security perspective, of course there is a little more hesitation when emerging powers come here, but the Canadian government has over the last year indicated more willingness to do business with China,” Tertzakian said.

Like many American consumers, CEA is concerned that China’s insatiable appetite for energy resources to continue to aggressively grow its economy, coupled with the consideration of job-killing LCFS proposals across the U.S. and in Washington, could send a troubling message to our strongest and most important trading partner to the north.

 Interestingly, this important topic will likely be discussed later this week in Washington when the nation’s governors and seven of Canada’s premiers meet at the National Governor’s Association (NGA) conference. The Canadian Free Press’ Lee-Ann Goodman reports this under the headline “Premiers, governors talk tough topics; Energy, trade, environment lead agenda”:

 The premiers of Ontario, Quebec, Saskatchewan, Manitoba, Nova Brunswick, Nova Scotia and Prince Edward Island were scheduled to meet U.S. governors for an hourlong session entitled Common Border, Common Ground at the winter meeting of the National Governors Association, an influential get-together that often influences policy for both the White House and Congress. The premiers aren’t exactly on the same page on environmental issues. Charest has criticized Ottawa for insisting that Canadian greenhouse gas policy must be in lockstep with the Americans, while Wall and other oil-producing provinces are in agreement with the feds that the U.S. and Canada must be in synch. 

With the threat of an LCFS being adopted in a host of states and regions throughout the U.S., including the Mid-West, the Northeast and the Mid-Atlantic, policymakers must engage in a strong dialogue about the critical role that Canada continues to play in ensuring that energy prices remain stable and affordable for consumers, families, seniors and small businesses – especially during this time of generational economic downturn.

Hopefully, and for the sake of struggling consumers across the nation who cannot afford higher prices at the pump, this week’s meeting in Washington will shed like on and underscore the dangerous economic and security realities associated with an LCFS.

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N-O Canada! Whole Foods Bows to Pressure Groups on Canadian Oil-Sands, Provides China with New Opening to Claim U.S-bound Energy

Thursday, February 11th, 2010

WASHINGTON, D.C. – It may be true that energy resources derived from Canada’s oil-sands today are 33 percent less carbon-intensive than they were a decade ago. It may be true that emissions from the oil-sands are lower than heavy oil production in many U.S. states. And it also may be true that diverting millions of barrels a day of secure, oil-sands energy to far-away China may actually increase global GHG emissions – all while costing Americans their jobs, and expanding our already dangerous dependence on energy from the Middle East.

Unfortunately, for executives at Whole Foods and Bed Bath & Beyond, none of that seems to matter.

Following the announcement yesterday that these two companies — in partnership with the environmental pressure group ForestEthics — will attempt to purge oil sands-derived energy from their transportation fleets, Michael Whatley, vice-president of Consumer Energy Alliance and a leading American expert on the oil-sands, released the following statement:

“The anti-oil sands position taken by these companies fails to take into account that GHG emissions from oil sands are comparable to other U.S. crude oil imports – and continue to go lower every year,” said Whatley. “More than that, it fails to recognize that turning our backs on this secure, affordable, North American energy resource will simply allow our competitors in China and elsewhere to claim energy that would’ve otherwise come to us — rendering our country even more dependent on the Middle East for its energy.”

According to a story posted yesterday by the Canadian Press, Whole Foods’ master plan to purge its transportation fleet of energy derived from the oil-sands appears to be focused on a single refinery in a single state – begging the question of how the company intends to apply this new policy to its remaining 288 locations spread across three countries. Also left unaddressed is how Whole Foods locations in states such as Montana, Wisconsin, Minnesota, Michigan and Illinois can possibly expect to comply with this stricture – given that more than 50 percent of petroleum supplies available in these states come from Canada.

“These announcements send a troubling message to our closest strategic and trading ally,” Whatley added, citing our nation’s long-time partnership with Canada. “One can only assume these companies will also boycott heavy oil produced in places like California, Mexico and Venezuela – as well as crude produced in the Middle East, and then shipped over 10,000 miles to get here. Otherwise, this exercise seems fairly hypocritical in the best case, and downright disingenuous in the worst.”

The announcements will certainly be welcome news to our competitors in China, who would like nothing more than to claim for themselves the secure, affordable, North American energy resources that would have otherwise be sent to consumers here in the U.S. In particular, Whatley pointed to the recent investment by the Chinese government of nearly $2 billion to purchase oil-sands concessions in Alberta – the clearest indication yet that the Chinese are actively working to secure these resources for themselves.

Independent analyses have also confirmed this plan. According to a report compiled by President Obama’s top energy analyst at the U.S. Department of Energy, closing off U.S. markets to oil-sands energy would simply open up new opportunities for China to send that energy thousands of miles abroad, potentially increasing global greenhouse gas emissions while rendering the United States even more dependent on unstable Middle East oil to run its economy.

“While CEA stands four-square against the decision made by these firms this week, we also recognize this may be an opportunity to work with these companies – and others that might be considering a similar course of action – to educate them on what the oil-sands are really about, and how they can be used to create jobs here at home and strengthen America’s energy security, all while protecting and preserving our environment,” Whatley concluded.

READ MORE

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CEA Continues LCFS Battle by Taking California’s LCFS to Court

Tuesday, February 9th, 2010

Consumer Energy Alliance (CEA) filed legal action last week in Fresno, California’s federal district court, requesting an immediate injunction on the state’s Low-Carbon Fuel Standard (LCFS) until a number of substantive legal concerns can be addressed. In its complaint, CEA states that the LCFS violates federal law by attempting to regulate “commerce and conduct” outside of the state, while imposing a mandate that even regulators admit will result in “little or no net change” to the carbon intensity of fuels on “a global-scale.”

Michael Whatley, vice president of CEA and former chief counsel for the U.S. Senate subcommittee on clean air and climate change, says this in a release regarding the suit:

“The practical outcomes of the California LCFS are higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy. More relevant to today’s filing, the California LCFS also actually violates federal law – and stands in direct contravention of key consumer protections and safeguards enshrined in the U.S. Constitution.

“Perhaps it wasn’t the state’s intent, but as written, the California LCFS is an example of parochial protectionism run amok. But make no mistake: This isn’t the type of protectionism that will benefit California consumers; it’s the type that will ensure sources of essential energy are harder to find in the future, and much more expensive to purchase.”

In fact, in a recent analysis by the California-based Sierra Research, analysts determine that an LCFS would increase the cost of fuel in Golden State by $3.7 billion over the next decade – all while producing “no detectable change in climate.”

Newspapers from coast to coast took notice of CEA’s commonsense efforts to help thwart higher prices at the pump, including the Los Angeles Times,  Associated Press, Energy Daily, ClimateWire and the San Francisco Chronicle. The Sacramento Bee’s Dale Kasler reports this under the headline “Oil and trucking industries challenge state’s fuel standard”:

The oil and trucking industries went to court today to challenge California’s low-carbon fuel standard, a massive set of regulations aimed at combating global warming. The standard will mean “higher fuel costs for consumers, dramatic reductions in the availability of those fuels, and a rapid expansion of the state’s already unacceptable level of dependence on foreign, unstable regimes for its energy,” said Michael Whatley of the Consumer Energy Alliance, one of the groups filing suit. The group said the standard will cost Californians billions while doing little to actually fight climate change.

Interestingly, President Obama’s cabinet also recently announced an initiative to increase the use of biofuels across the nation, which some say may lead the administration to eventually develop a federal LCFS. James Tankserly of the Los Angeles Times reports this:

The Obama administration today will unveil a revamped strategy to ramp up the nation’s use of biofuel in hopes of fixing a government effort that officials admit has fallen short in its attempts to wean cars and trucks away from fossil fuels and move toward ethanol, biodiesel and other crop-based fuels. Under the new approach, federal agencies will start from the 2022 goal and work backward, setting milestones for progress to ensure the effort is on track. The White House plans to pitch the effort as a job-creator in rural communities. But biofuels are not without their controversies.

Critics say increased fuel production could push food prices higher, and the administration is mulling a so-called “low-carbon fuel standard” that could penalize some forms of ethanol production for resulting in relatively high amounts of greenhouse gas emissions.

Despite the fact that an LCFS proposal was not mentioned during the Obama Administration press conference, Biodiesel Magazine quotes officials from the National Resources Defense Council:

Director of the National Resources Defense Council Nathanael Greene said, “The final rule confirms that some biofuels reduce global warming and some pollute more than gasoline and diesel. This proves how important it is to put policies in place to make sure public dollars go to support real renewable energy instead of going after options that do not work and could actually do more harm than good.” He added that a reform to the bio tax credits and a low carbon fuel standard like California’s are “best next steps.”

While the fight in California is far from over, it is clear that the threat still exists with many states and regions across the nation that are working to pass LCFS proposals, including policymakers in Washington, D.C., the Mid-West, the Northeast and the Mid-Atlantic.

With more than 260,000 grassroots supporters and 130 affiliates representing both the major consuming and producing segments of the U.S. energy sector, CEA has many battles ahead and will continue to be an active contributor to the national debate on LCFS.

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Governator Touts Copenhagen as ‘A Success’; LA Times Hat-Tips CA’s LCFS-Ban on Affordable, Reliable Energy

Tuesday, December 15th, 2009

Policy Could Death-Blow to Alaska’s Economy, US Energy Security

Tens of thousands of world leaders, policymakers and members of the media have barnstormed Copenhagen, Denmark this week in an effort to craft an international agreement on climate change. As the debate continues to heat up, and discussions move forward, some key players are speaking out forcefully.

Earlier today, California Gov. Arnold Schwarzenegger delivered a fiery speech, labeling Copenhagen “a success.” He also encouraged the UN to convene a future global warming summit in the Golden State.

And while many believe that the jury is still out as to whether Copenhagen will in fact be a success, California’s largest newspaper – the Los Angeles Times – took the opportunity to highlight the state’s Low-Carbon Fuel Standard (LCFS), which will effectively ban stable, reliable and affordable Canadian and other heavier forms of crude from reaching families, seniors and businesses.

This from a Greenspace blog post entitled “Copenhagen: Californians make a splash” today:

As the world’s seventh-largest economy, California attracts attention. But what Golden Staters are boasting about here is the state’s first-in-the-nation economy-wide climate legislation, its first-in-the-world low-carbon fuel standard, and its highest-in-the nation renewable-energy requirements.

In California, said Gov. Arnold Schwarzenegger, who arrived Monday, “we’ve proven that a sub-national government has the power to drive change across the nation and the world.”

Yes, California is the first state take a serious step toward implementing an LCFS. And while it’s true that California doesn’t receive much of its oil from Canada – LCFS’s most familiar target – it does receive a good bit of energy from … wait for it … California. Why is that important? Well, a large swath of the oil produced in-state happens to be classified as “heavy” – and thus, targeted for elimination under an LCFS.

Imagine that: The state of California imposes a regulation from which it thinks it will be immune, and then, right when they get close to actually implementing it, folks start to wake up to the reality that an LCFS would actually restrict California refiners from buying oil from California energy producers. Irony, you are a fickle mistress, indeed. No word on whether Gov. Schwarzenegger mentioned any of this in his speech in Denmark.

Meanwhile, up in Alaska, a considerable amount of its energy – especially along the North Slope – is heavier crude, which, as we’ve noted, is targeted for restriction under an LCFS. And the folks up there understand full-well what’s best for Malibu is not necessarily what’s best for North Slope Borough.

The Fairbanks Daily News-Miner reports this under the headline “Heavy oil might be the future of Alaska petroleum development”:

“Heavy oil is traditionally more expensive to extract and refine than light oil,” said Robert Dillon, an energy spokesman for Sen. Lisa Murkowski. Dillon said much of the environmental community objects to the prospect of developing heavy oil deposits because doing so creates more greenhouse gases than many other energy processes. “There are a number in Congress, mainly Democrats, who oppose heavy oil production and would like to combine climate legislation with a low carbon fuel standard.”

The Associated Press also reports on this critical issue in an article entitled “‘Heavy oil’ may be future of North Slope”:

The Fairbanks Daily News-Miner reports heavy oil may be the future of Alaska’s petroleum development, despite higher costs and more environmental concerns. It’s likely to be part of state lawmakers’ discussions about the oil business when they meet in Juneau.

State Sens. John Coghill and Joe Paskvan say heavy oil should be included in a review of energy policies.

“Oil is still precious up there,” said John Coghill, R-North Pole. “Heavy oil needs to be included in the discussion.”

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Copycats in Husky-Land

Thursday, December 10th, 2009

Classified memo to Gov. Gregoire reveals true intent behind Washington’s rush to copy California LCFS

There’s no truth to the rumor that the 5,000-mile flight from Olympia to Denmark is direct (or comfortable); but at least once Washington governor Chris Gregoire arrives at the Copenhagen climate summit this weekend, she’ll be greeted by plenty of familiar faces.

One of them will belong to the governor of California, on-hand to update conference-goers on the implementation of a first-of-its-kind Low-Carbon Fuel Standard (LCFS) in his state. It’s a plan of which Gov. Gregoire is reportedly well enamored. But Washington isn’t California. And the imposition of California-style fuel mandates on Washington will not be done without exacting a heavy, prohibitive toll on consumers and motorists in the state.

To understand why that is, first you have to know a little about where each state gets its energy. In California, a plurality of the state’s oil comes from overseas – with Saudi Arabia accounting for the largest share of imports. This oil is classified as “light” and is favored under an LCFS, even though it has to travel more than 12,000 miles to get there.

Washington gets some of its oil from Saudi Arabia as well, but more than 25 percent of its total haul comes from Canada. The chart below captures the relevant percentages:
WA_energy

On its face, that would seem to be a good thing, right? Canadian oil is closer, cheaper, and infinitely more secure than crude from the Middle East. Amazingly, though, Saudi Arabian oil receives a better score under an LCFS than its Canadian counterpart. California gets virtually none of its oil from Canada. Now you know why its governor supports an LCFS.

But why does Washington’s? Not only would a quarter of the state’s oil supply be threatened under an LCFS, but 10 percent of the state’s gasoline – refined in Montana, but derived from Canada’s oil sands – would also be prevented from crossing the eastern border. The effect this would have on local gas and diesel prices isn’t hard to predict: less supply means higher costs, and potentially even greater dependence on foreign regimes.

And what about jobs? Refiners in Washington directly employed 2,003 workers in 2007 (latest numbers), and indirectly supported another 20,000. They paid out more than $400 million in wages. And they sent nearly that same amount to Olympia in the form of sales, excise, occupation and sundry other taxes.

The scary thing is: Gov. Gregoire knows this. And so does her new chief-of-staff. His name is Jay Manning, and back in May while serving as the state’s top environmental regulator, he penned a confidential memo to the governor – released just this week by the Washington Policy Center – that recommends a full-steam-ahead approach to enacting an LCFS through executive decree; legislature be damned.

Sure, Mr. Manning acknowledges — the move might strike some as “controversial.” But the more punitive we make our state LCFS, the better chance we have of “increas[ing] the regulated community’s interest in getting a national program in place.”

Catch that? The Washington LCFS (borrowed from California) isn’t actually about Washington at all – it’s about coercing support for a federal, nationwide fuels mandate. And according to Mr. Manning, that federal mandate is right around the corner: “We, of course, expect a national program to be established.”

Two weeks after Mr. Manning wrote that memo, Gov. Gregoire issued Executive Order 09-05 – directing her cabinet to “assess whether the California low-carbon fuel standards … would best meet Washington’s greenhouse gas emissions reduction targets.” Consultants were hired and public workshops were scheduled. And even though serious questions remained unanswered (“Is the policy ahead of the science?” asks one agency PowerPoint), Washington was off to the races. The governor is expected to announce what comes next in July.

In the meantime, the state’s consultants are hard at work trying to determine whether an LCFS “would best meet” Washington’s “emissions reduction targets.” If they do their job right, the answer they’ll find is that it doesn’t.

Why’s that? Because an LCFS can’t change the carbon content of oil, or gasoline, or any other fuel – that’s constant. It also can’t change the fact that more than 80 percent of transportation sector emissions come from our fuel’s combustion – not the things an LCFS seeks to restrict.

And it can’t change the fact that Canada’s abundant and affordable oil reserves are going to be developed whether Washington’s governor allows her state’s citizens to access them or not. If they don’t go to Whatcom or Skagit Counties, they’ll just be sent to Beijing instead. And according to a report published in the American Economic Journal this year, that fact alone might actually render an LCFS a net-increaser of carbon emissions.

Higher prices at the pump, expanded dependence on foreign, unstable regimes, and the potential for even greater carbon emissions in the future. An LCFS might pass as sensible energy policy in California, but it shouldn’t in Washington.

More from SecureOurFuels.org:

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JUST THE FACTS: Top Canadian Official, Wis. Manufacturers Underscore LCFS Threats

Monday, November 30th, 2009

Last week, former Vice President Al Gore sat down with The Toronto Star to warn Canadians about how the “dangers of the oil sands.” 

But rather than focusing on and highlighting the positive economic and security benefits associated with Canada’s vast energy supplies – which provides American consumers, families and businesses more than 2.5 million barrels of petroleum each day and are considered one of the world’s largest known energy deposits – Gore claims that these abundant reserves will “jeopardize the survival of our species.”

Despite this rhetoric, and baseless claims that “Gas from the tar sands gives a Prius the same carbon footprint as a Hummer,” affordable energy advocates are getting the facts out.

Ed Stelmach, the Premier of Alberta, writes this in yesterday’s Toronto Star under the headline “Oil-sands hysteria only confuses climate debate”:

A realistic and reasonable discussion about oil-sands development must be based on fact. Sadly, Gore’s doomsday assertions about an industry that makes up less than one-tenth of 1 per cent of the world’s greenhouse gas emissions are neither realistic, reasonable nor factual.

The fact is, Alberta’s responsible energy development yields tremendous benefits for all Canadians. While the Canadian economy may not be important to Gore, it certainly is to Canadians. Alberta’s energy resources mean jobs for hundreds of thousands of Canadians across this country and, incidentally, thousands of Americans as well.

Critics of the oil sands, such as Gore, seem to dismiss the fact that 80 per cent of emissions from a barrel of oil come from the end use – the tailpipe. In reality, Ontario drivers produce more greenhouse gas emissions than the oil sands. Comprehensive and independent studies have shown that when considering the full life cycle of a barrel of oil – including getting the oil out of the ground, refining it, then transporting it to market – there is very little difference in greenhouse gas emissions from a litre of gas made from oil sands or Saudi crude.

But it’s not just secure energy advocates in government speaking out on this critical issue. Reliable, affordable energy is the linchpin to America’s manufacturing base. And their voice is being heard, too.

In a recent Milwaukee Journal Sentinel column, James Buchen, vice president of Wisconsin Manufacturers & Commerce, writes this about the dangers of an LCFS – which would effectively block over 50 percent of Wisconsin’s oil that currently comes from Canada:

A Low Carbon Fuel Standard sounds harmless enough, but this misguided policy would penalize Wisconsin’s dominant source of motor fuel: Canadian crude oil. Studies have shown that such a standard will raise gas prices; it’s a bit like a global warming gas tax. But it gets worse because an LCFS would also threaten many of our state’s family-supporting manufacturing jobs that supply the Canadian oil industry.

Today, more than 50% of our state’s motor fuel comes from Canadian oil…Because Canadian oil is located on our own continent and comes from one of our closest allies, it represents a stable and secure source of energy for Wisconsin. We refine this vital energy resource at our state’s only oil refinery in Superior, and President Barack Obama’s administration recently approved plans to expand the pipeline from Alberta to our state. Equally significant are the thousands of Wisconsin manufacturing jobs tied directly to the Canadian oil industry as suppliers of heavy equipment.

Driving up the cost of Canadian oil with an LCFS will punish Wisconsin consumers by hitting families, farmers, truckers and businesses with higher prices at the pump…We simply cannot afford to saddle consumers with higher energy costs as we struggle to emerge from a deep economic recession.

Earlier this year, Congress had the good sense to reject a national LCFS, recognizing it would harm consumers. Wisconsin lawmakers should follow suit. Any way you cut it, a Low Carbon Fuel Standard is a lose-lose proposition for Wisconsin consumers and workers.

Help keep America’s energy secure, affordable and reliable by telling Congress to oppose a job-killing LCFS. American consumers cannot affordable higher energy costs and an even deeper dependence on unstable regions of the world to fuel our economy.

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On Message: Top official reminds us that Canadian energy is of “undeniable strategic energy importance” to US consumers

Thursday, November 12th, 2009

Earlier this week, Canada’s natural resources minister, Lisa Raitt, traveled to the US to meet with key stakeholders in New York City. We’ve blogged about Raitt’s work promoting commonsense energy policies on Secure Our Fuels before – but if you haven’t her in action yet, trust us: You will. Be hard-pressed to find folks more passionate and knowledgeable about the issues than her.

Despite the fact that the US receives more than 2.5 million barrels of petroleum each and every day from our neighbors and closest trading allies to the north, some in Washington – and in state capitals across the country – are working to ban this affordable and secure energy from reaching American consumers.

How is this possible? And why? Well, it’s called a Low-Carbon Fuel Standard, or LCFS. And some Washington politicians – who want you to pay more at the pump to make other more expensive and less reliable energy forms more competitive – are working to see this become a reality.

But defenders and advocates of reliable and affordable energy have a champion in Lisa Raitt.

E&E News reports this about her visit under the headline “Canada promotes oil-sands projects on Wall Street”:

The Canadian natural resources minister told Wall Street today that Alberta’s oil sands are of “undeniable strategic energy importance for North America” and there is little choice but to increase investments in oil extraction there.

“We are committed to developing this resource in a way that is more environmentally sensitive,” Raitt said.

Of the 13 percent of global oil reserves not monopolized by state-owned companies, about 42 percent is found in the Alberta oil sands, the Canadian government says. Total proven reserves in Alberta and parts of Saskatchewan are estimated to be 170 billion barrels, or roughly six times the amount found in conventional reserves in the entire United States and Canada.

Raitt touts her trip – which aimed to reinforce the critical trading partnership between the US and Canada, especially as it relates to affordable and reliable fuel resources – on her website. Under the headline “Minister Raitt Concludes Successful Visit to New York,” the natural resources minister says:

“Canada and the United States share the most successful trade relationship in modern economic history,” said Minister Raitt to an event co-hosted by the Canadian Association in New York, the Canadian American Business Council and Canada’s Consul General. “But a lesser-known fact is that Canada is the key to assuring North American energy security.”

If you agree with Lisa Raitt, and would prefer to continue to fuel America’s economy with North American energy rather than increasing our reliance and dependence on far-away, unstable regions of the world, then send Congress a message to stop an LCFS from becoming law.

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