In the final actions of the year, the House and Senate passed a spending bill with a big gift for Big Oil. By permanently lifting the longstanding crude oil export ban, Congressional Republicans made sure it will be Christmas all year round for their oil industry allies. But their gift-giving didn’t extend to renewables. Instead the wind and solar tax breaks are temporary – lasting only for a few years and phasing down beginning as early as the end of 2016. These energy provisions are a potential double whammy for consumers and the offshore wind industry in Massachusetts.
For consumers, the spending bill rolls back longstanding U.S. law and will allow the oil industry to sell American crude oil overseas for the first time in more than 40 years. Allowing American crude to be sold overseas to the highest bidder could be a disaster for consumers in our region.
Crude oil exports would raise U.S. oil prices and could cause the region to lose upwards of 55 percent of our refining capacity on the East Coast. This would make us more reliant on other regions of the country and foreign nations for our gasoline, heating oil and diesel fuels. The Department of Energy has said that losing these refineries on the East Coast could lead to “higher prices,” “higher price volatility” and the potential of “temporary [supply] disruptions” in our region.
Consumers are projected to save $700 this year on gasoline and $500 on heating oil because of low oil prices. That is a stimulus for working and poor families. Allowing exports could wipe out this economic stimulus for consumers in Massachusetts and across the country.
And for our clean energy economy in Massachusetts, these energy provisions could mean that we kill the offshore wind industry in our country before it even gets off the ground. Under this bill, the tax breaks for wind begin phasing out at the stroke of midnight on December 31, 2016. By the end of 2019 they will be completely gone.
That means that these tax credits, which are essential to make offshore wind economically viable in New England and up and down the East Coast, will phase down and expire before we are able to even get offshore wind deployed on a large scale. This could end our nascent offshore wind industry before it even truly begins.
In Massachusetts, we are the home to the “perfect storm.” We know the power of the wind off our coastlines. We are the Saudi Arabia of offshore wind in New England. But this could endanger that potential before it even starts spinning.
I will continue to fight in the Senate to reinstate these tax credits for our offshore wind industry, which has the potential to create thousands of jobs in Massachusetts and along the East Coast. And I will continue my fight to ensure that consumers in our region are protected from the price increases at the pump that could result from exporting American oil and undermining our East Coast refineries.
The energy provisions in the government spending and tax package are a poison pill in otherwise important legislation for students and hard-working Massachusetts families that I have long supported. Using this must-pass spending bill to jam through this massive, permanent giveaway to the oil industry is just plain wrong.
…when we also need to import to meet our own needs? Seems to me if we have a certain resource we would first serve ourselves what we need then export the excess. As long as we don’t have enough for ourselves as indicated by a need to import, exporting what we already have makes no sense. Am I missing something in this equation?
1. Oil isn’t homogeneous. Essentially, we might export flavor A while importing flavor B.
2. The U.S. isn’t a single place with a single port. We might export from port A while importing at port B.
Nationally, I suspect that this won’t have a dramatic effect on prices. However, some specific locations may see much larger increases, and I don’t have enough industry knowledge to predict where those places would be.
Andrei Radulescu-Banu says
If you pick any one feature of this bipartisan Omnibus bill, you can find something objectionable against it. But overall this was a good deal, widely praised. Sen Markey was one of the six Dems in Senate to vote against it.
Offshore wind is much needed, but the promise of thousands of jobs is questionable. The benefit would be to the environment, not to the job market. Heavy industry has all but vanished from the state, and high energy costs are part of the reasons.
Closure of Pilgrim means loss of the only scalable source of scalable clean energy in the state, and will be a loss of jobs in an economically struggling part of the state. Yet we hear nothing from the Senator – if anything, he seems to be concerned that it should be closed quicker.
You seem to be making random anti-renewable talking points rather than responding to the topic of this thread.
Exporting crude oil will do nothing to improve the job market, will not help heavy industry return to Massachusetts, and will increase — rather than lower — energy costs. There is nothing scalable about Pilgrim — it is an aging reactor with increasing safety issues. The closure of Pilgrim was already announced before this bill was passed, and is irrelevant to this thread.
This comment is an irrelevant and unfounded attack on alternative energy. Resuming the export of crude oil is a short-sighted paean to right-wing climate change denial.
At least we agree that offshore wind will be good for the environment. However many jobs offshore wind creates, no jobs will be created here by resuming the export of American crude oil.
America is still spiraling ever-downward in a climate-change denier induced coma. This bill doubles-down on gifts to our fossil-fuel community, betraying the empty promises Barack Obama made in trumpeting the tepid (in comparison to the need) Paris Agreement.
Democracy in America is broken. We are making ever-worse decisions that threaten the very lives of ourselves and of the world.
Andrei Radulescu-Banu says
> You seem to be making random anti-renewable talking points […] This comment is an irrelevant and unfounded attack on alternative energy.
Anti-renewable”? This goes to show how much confusion there is on this topic. Congress has approved oil exports, and this passed with large Democrat majorities. One can always debate the merits, but this hardly represents “a short-sighted paean to right-wing climate change denial.”
> There is nothing scalable about Pilgrim
You are misinformed. Pilgrim represents 20% of state electricity production, 100% carbon free.
> The closure of Pilgrim was already announced before this bill was passed, and is irrelevant to this thread.
The Senator’s position on Pilgrim is not irrelevant. Why was Pilgrim not given the support to solve its issues? There is plenty of support for other types of renewable energy, that scale a lot less than nuclear. This has to do more with politics and public perception than with what is good for the environment.
> However many jobs offshore wind creates, no jobs will be created here by resuming the export of American crude oil.
Moving back and forth and making this an argument sometimes about the environment, sometimes about jobs, sometimes about low heating costs or low gasoline costs at the pump muddies the waters considerably. In reality, these are four policy goals often at odds.
I don’t think anyone knows how many jobs will be created or lost in Massachusetts by resuming crude exports. But it’s pretty clear that the impact will be small here, and perhaps large in other states.
It could be a net positive for jobs where production is done, and maybe a loss where refining is done. It is worth drilling down on this particular point, because there is a lot og confusion here. Notice that the EIA report about refining capacity linked by the Senator is from 2012, long before the recent oil boom, and the refineries that may have closed (in 2012) were Sunoco Philadelphia, Sunoco Marcus Hook, ConocoPhillips Trainer, all in Philadelphia. I’d waiting to hear more about this, but a quick read indicates that the types of refined oil produced in many of these refineries is peculiar to the US, and cannot be easily imported. Thus, need for refineries (and the refining jobs the Senator seems to be referring to) is driven by need of finished product more than by availability of crude.
In all, I am glad the Senator is posting his talking points here, which means these are open for debate rather than being top down directives. There is much to discuss here, and there are already many clues for me that some of the arguments marshaled are good for neither the environment, nor for low consumer energy costs, nor for the wider economy.
The attitude is, however, that of positive discussion, and I am glad that the Senator is making a habit of opening the discussion thread on BMG. I don’t have to agree with him on all points as long as his arguments are solid. …But are they?
First, I was responding to you (andreiradulescubanu), not Mr. Markey.
>This goes to show how much confusion there is on this topic. Congress has approved oil exports, and this passed with large Democrat majorities. One can always debate the merits, but this hardly represents “a short-sighted paean to right-wing climate change denial.”
The GOP has no lock on climate-change denial. The fact that this passed with large Democratic majorities demonstrates how little those Democrats know about the reality of climate change, and about the reality of alternative energy. Resuming the export of petroleum fails on the merits, and it is because it fails on the merits that it is, in fact, as I characterized it. I’m heartened that Mr. Markey agrees with me.
I stand by my phrase “a short-sighted paean to right-wing climate change denial”.
>You are misinformed. Pilgrim represents 20% of state electricity production, 100% carbon free.
I’m well aware of how reliant we are on Pilgrim. That does NOT make it scalable. That term (“scalable”) means, to me, “readily expandable”. Nuclear power does not meet that description.
>Why was Pilgrim not given the support to solve its issues? There is plenty of support for other types of renewable energy, that scale a lot less than nuclear.
Because there is no known solution, at any price, for the issues that plague Pilgrim. Most importantly, the on-site storage of spent fuel is a catastrophe waiting to happen. The world learned this from the Fukushima disaster — a disaster caused by the catastrophic failure of THE SAME GE MARK 1 Boiling Water reactors installed at Plymouth. A disaster enabled by the same on-site storage of nuclear waste that Plymouth is dependent on. A disaster caused by the failure of the active on-site cooling system for that nuclear waste — the same active on-site cooling system that Pilgrim depended on until the initiation of the very expensive conversion to “dry-cask storage in 2013.
The plain truth is that there IS NO cost-effective way to continue operation Pilgrim, and that is why it is being decommissioned. Continuing the operation of Pilgrim would consume ENORMOUS funding, and the result would be THE SAME generating capacity it already has — no new energy capacity would be created.
It makes no sense to pour money into an aging, obsolete, failing, and increasingly dangerous nuclear power plant.
Fukushima was real, it happened, and Pilgrim is vulnerable to similar catastrophic failure. No amount of hand-waving or posturing will change that reality.
>… But it’s pretty clear that the impact will be small here, and perhaps large in other states.
Agreed. The impact of investing in offshore wind will have a significantly larger positive impact in Massachusetts — for jobs, for the environment, and for reducing heating costs.
Lowering or even preserving the current artificially low gasoline costs is not and should not be a goal of any sustainable energy plan. It works against environmental goals, raises heating costs, and is likely to destroy as many jobs as it creates. Instead, we should be investing heavily in expanding and improving public transportation, especially public rail transportation. We should be investing in regional development strategies to reduce our demand for gasoline rather than worsening that demand by continuing to maintain artificially low prices.
I join you in welcoming Mr. Markey’s contributions here. The arguments he offers are, in my view, far more persuasive than the commentary you’ve offered here.
>I don’t have to agree with him on all points as long as his arguments are solid. …But are they?
Yes, in fact, they are solid.
Andrei Radulescu-Banu says
> You seem to be making random anti-renewable talking points […] I stand by my phrase “a short-sighted paean to right-wing climate change denial”.
You saw a witch, she spoke tongues. Sorry, Tom. Tar and feather is so 18th century.
> The GOP has no lock on climate-change denial. The fact that this passed with large Democratic majorities demonstrates how little those Democrats know about the reality of climate change, and about the reality of alternative energy.
Some are indeed in denial about climate change. Others are in denial about what alternative energy can actually do. For the sake of the environment, this discussion be better grounded in reality. The crux of the problem is that, in reality, no alternative energy has been invented to scale up and eliminate carbon emissions. Except, of course, nuclear.
> The plain truth is that there IS NO cost-effective way to continue operation Pilgrim…
How much did the state and the federal government provide in incentives and subsidies to Pilgrim, 20% of the electricity production in Mass, 100% carbon free? And how much was provided to solar, which after years of expansion still produces ten times less? These figures are never reported anywhere.
I doubt if even the politicians voting these subsidies into state and federal law really know what these incentives and subsidies are.
> the result would be THE SAME generating capacity it already has — no new energy capacity would be created.
That’s because there is little willingness to build new nuclear plants, but problem is political, not technical.
> That term (“scalable”) means, to me, “readily expandable”. Nuclear power does not meet that description.
From a technical angle, nuclear is the only readily expandable, scalable solution. Solar is not scalable – it serves as a nice addition to the mix, it has the virtue of being more politically palatable (little NIMBY resistance) but it barely moves the needle in solving the problem of carbon emissions. Wind is more scalable than solar, but is politically acceptable at this point only offshore, and has to be complemented with natural gas or coal generation.
Nuclear is politically difficult, more because of irrational public fear than because of real risks. After all, countries like France are able to get 75% of electricity from nuclear. That’s where one would expect for leadership from people like Sen. Markey and other environmentalists.
> Lowering or even preserving the current artificially low gasoline costs is not and should not be a goal of any sustainable energy plan. It works against environmental goals, raises heating costs, and is likely to destroy as many jobs as it creates.
This merits some closer parsing. Heating costs go down, not up, if heating oil costs goes down, and heating oil more or less tracks gasoline cost. The economy overall creates jobs when energy costs are low – producers spend less on energy and have more money to invest in their businesses. But that can go at cross purpose with sustainability. As explained above, some of the goals can be at cross purpose. But nobody serious, not even the Senator in his op/ed will argue today that they would favor policies to increase the price of gasoline. Which means in effect that they put priority on economic development over sustainability.
Look, one can always set the goal for full sustainability – but the trick is to achieve that without wrecking the rest of the economy, and especially the rest of the manufacturing sector, which relies to a larger extent on energy costs. The manufacturing sector has already been much maligned.
I don’t see any “witches” here.
Your commentary about nuclear and solar power is, well, incorrect. Repetition does not enhance it.
Safe nuclear power is extraordinarily expensive and decades away. A simple marginal-cost analysis, comparing the amount of usable clean energy gained for each dollar invested in various energy technologies, blows nuclear completely out of the ballpark. A public dollar spent on conservation (caulking windows!) yields far more usable energy than that same dollar thrown at nuclear.
Lower gasoline costs increase gasoline demand. Increased gasoline demand encourages the industry to divert more refining capacity towards gasoline, adding more upward pressure on heating oil prices. Gasoline is also more profitable than heating oil, increasing the effect. The European nations have been maintaining HIGH gasoline costs for decades. They outstrip the US in economic development and are far ahead of America in sustainable energy. Workers in European nations have better health care, better transportation systems, better educated children, and more money in their pockets than their counterparts here.
In New England lower natural gas prices (driven in no small part by our misguided federal policy of encouraging fracking while ignoring the associated environmental impacts) are shifting the region away from oil and towards natural gas for home heating. I agree that lower gasoline prices have little effect on natural gas prices.
There was a time when whale oil was a vital energy commodity. There were certainly job losses in that industry when whale oil became obsolete. The collapse of the whale oil industry did not halt the economic development of America.
The best way to achieve continued economic development and sustainability is to recognize that they need not be in conflict. A cap-and-trade system is one way to encourage both.
There are others.
Andrei Radulescu-Banu says
> Safe nuclear power is extraordinarily expensive
That is because regulation is unreasonably entangled – which keeps it prohibitive to upgrade the technology. This is where Messr. Markey could play a role, in streamlining the regulation. You are pointing out Europe workers get a better deal in terms of health care, salaries, transportation. Why not take the example of France for nuclear, then, if we’re willing to take the same example in other areas?
By the way, transportation is a subject of its own. Part of the problem in America is suburban and exurban sprawl. That makes it expensive to build public transportation outside of the inner cities. 2nd part of the problem is people find driving more convenient – this is a cultural trait that, good or bad, is here to stay. 3rd part of the problem is that governance in transportation, in the state at least, is broken, an procurement costs end up being ridiculous. This 3rd aspect, governance and procurements, one suspects is a problem for nuclear as well – but you would not know it, because there is little of substance reported in the press to guide this particular public debate.
You write “regulation is unreasonably entangled”.
In my view, that regulation is our safeguard against catastrophes like Chernobyl and Fukushima — I’m extraordinarily glad it’s there.
You cite France. It is true that France made a stronger commitment to nuclear power three decades ago. It is also true that France sees, today, the same issues with nuclear power that the rest of the world sees.
Some relevant excerpts from the above link (emphasis mine):
The French experience with nuclear power demonstrates several points:
– Nuclear power is NOT scaleable. It cannot be dialed up and down as demand changes. Instead, it takes a long time and huge investment to build, and once built is economical only if it is run constantly at its “baseload” level.
– Regulation is not causing the issues with nuclear power today in France.
– Nuclear waste management is a major issue world-wide.
I also note that nuclear power in Europe is beset by safety issues similar to those experienced here — such as the fire that shut down Belgium’s Tihange power station two days ago. Safety issues rear their head in Europe as well (emphasis mine):
There are no such safety issues with renewable energy sources, those sources are naturally more scaleable, and require far less regulation to site, build, and safely operate.
Your comment about transportation assumes away the issue that can and should be addressed — the “cultural trait” you cite results in large numbers of the American public believing that they are entitled to low-cost high-impact gasoline. That ignorance and denial MUST BE reversed. It is the result, in large part, of generations of government and industry manipulation of gasoline supplies and prices while simultaneously “externalizing” and simply lying about the many environmental impacts.
The “suburban and exurban sprawl” of the current US is a direct consequence of badly misguided regional planning and government policy. Government subsidies of automobile use (direct and indirect) created the illusion that people could live 80-100 miles from their job and drive to and from work every day. Our gasoline addiction destroyed the fabric of cities, towns, and villages that once existed, wrecking the economy of huge swaths of America in the same way that the heroin or cocaine addiction of a mother or father destroys the fabric of their family. The first step of recovery is to kick the drug habit — America must kick our gasoline habit.
There is a very bright future that is starkly different from the grim and false choice that you propose. The enormous wealth of America COULD be used to rebuild our rail transportation infrastructure. It COULD be used to replace our fossil-fuel based heating and cooling requirements with solar, wind, and geothermal — that build-out creates millions of jobs and itself returns prosperity to millions of working-class families. This new direction COULD rejuvenate the desperately struggling cities and towns orphaned by the automobile and the interstate system. The technology to replace gasoline with hydrogen as a primary fuel for automobiles, especially in combination with hybrids and all-electric vehicles, can preserve the autonomy and flexibility of the automobile without the catastrophic environmental consequences of dumping all that carbon.
America COULD lead the world into a new and prosperous sustainable energy future. Nuclear power, as it is known today, is not a part of that vision. Even more importantly, leaving our obscene wealth concentration in place, so that nearly all the wealth ALREADY ON HAND to realize this vision remains in the control of a few hundred or thousand of our wealthiest men and women, guarantees that this sustainable future won’t happen.
America HAS the wealth, we have the resources, we have the knowledge, we have the technology. What we lack, until now, is the political courage to take back that wealth from the 1% and use it make this vision real and, literally, concrete.
Andrei Radulescu-Banu says
Selective quoting from the Scientific American article, my friend…
An interesting point in the article is that nuclear requires expertise, and expertise is gained when the industry is expanding (instead of shrinking). That is a real problem indeed, not just in France, but here in the US as well.
Another point is that nuclear is steady on and can’t be used to regulate online/offline wind and solar capacity. Right now, that is regulated by natural gas, coal and diesel generators… Switching from nuclear to wind & solar would thus represent a considerable increase in emissions. Therefore, this quote, right from the Scientific American article:
“With climate change looming larger as an energy concern, France’s nuclear drawdown is raising eyebrows. “It is a bit ironic the one advanced economy that has decarbonized its power grid would choose to put that in reverse,” said Armond Cohen, executive director of the Clean Air Task Force. “It seems like there is a lot of optimism about the ability to fill that gap.””
What’s troubling in this BMG thread (and in Mr. Markey’s talking points, and in newspaper coverage…) is the unwillingness to talk about the bottom line when comparing solutions. And the bottom line is how much carbon you are emitting. All the explanations, all the hand wringing, all the politicking are not worth much if in the end you continue to emit carbon at the same level as before, and you shut off the very technology that verifiably could make a difference.
Trickle up says
A wind farm is pretty scalable. If one unit goes down, the rest stay online. A distributed network is even more scalable. You can add on to it in small units. Its one reason why there is such a boom in distributed generation.
A leaky and obsolete nuclear power plant is not remotely scaleable. It is either on or off. Its lack of scalability adds to the region’s reserve requirement, because you have to have backup power to cover for when those 600 MW are offline.
A new nuke would cost the moon and be ready to save the world (or destroy it) sometime around 2028. Maybe.
The only way Pilgrim might be scalable is, sometimes it might have to operate at partial power because of a problem. Or its owners might go to federal regulators and say, Please give us permission to operate this leaky old nuke over specified capacity, and the regulators will say, Sure, what could possibly go wrong?
Peter Porcupine says
Was any provision made to repay/replenish the Strategic Oil Reserve before export would be allowed? Or at least give the government a right if first refusal?
The reserves were released to domestic consumption with great fanfare but there seems to be no plan to build it back up. That would have been an easy condition to insert given the hunger of the industry to get export approvals.
I recall the release, but have no idea if any of it has been replenished incrementally since then as supplies have risen and prices fallen.
Peter Porcupine says
My suspicion is no. But either way a right of first refusal could not hurt.