Natural Gas Sector Gets Congressional Action on LNG Tax Rate Drop

Liquefied natural gas (LNG) as a transportation fuel option is back on the competitive race track, thanks to a part of the temporary (three-month) highway funding bill passed by the U.S. Senate Thursday, according to natural gas vehicle (NGV) advocates. The House-passed version had a similar provision.

Image Source:  www.freightlinertrucks.com

Sourced through Scoop.it from: www.naturalgasintel.com

>” […] At a Congressional hearing last December, the global energy and procurement director for Atlanta-based UPS called for “removing barriers” to NGVs, adding that if Congress really wanted to accelerate the adoption of LNG use in heavy-duty trucks and more use of U.S.-produced natural gas supplies, it needed to eliminate “disproportionate taxing of LNG compared with diesel fuel.”

Noting that President Obama was expected to sign the latest measure, Newport Beach, CA-based Clean Energy Fuels Corp. said the new leveling provision will effectively lower the tax on LNG by 14.1 cents/gal. Twenty-six state legislatures have already taken similar action, a Clean Energy spokesperson told NGI.

Clean Energy CEO Andrew Littlefair said the use of LNG in heavy-duty trucks, locomotives and large marine vessels has been growing steadily in North America, and “anyone who cares about a cleaner environment and energy independence should be very grateful for what the U.S. Congress has done, making LNG much more competitive.”

Executives with America’s Natural Gas Alliance (ANGA), and the NGVAmerica and American Gas Association (AGA) trade associations echoed Littlefair’s sentiments.

“We applaud Congress for including language to equalize the federal highway excise tax on LNG,” said ANGA CEO Marty Durbin. “This provision has garnered strong bipartisan support over the years, and we are thrilled to see it become law.”

Calling the action a “common-sense change” that will mean greater fuel cost savings, NGVAmerica President Matt Godlewski said the passage of the LNG provision is great news for trucking fleets that are looking for clean-burning fuels. His calculation places the excise tax on LNG at 24.3 cents/DGE, compared to its current 41.3 cents/DGE level, Godlewski said.

“Currently, fleets operating LNG-powered trucks are effectively taxed for their fuel at a rate 70% higher than that of diesel fuel,” he said.

An AGA spokesperson clarified the number to point out that the current federal excise tax on both diesel and LNG is 24.3 cents/gallon, but because LNG does not have the same energy content/gallon of fuel, it takes 1.7 gallons of LNG to equal a gallon of diesel. “Since the excise tax is based on volume (gallons) — not energy content — LNG is taxed at 170% of the rate of diesel on an energy equivalent basis,” he said.

“This provision provides the level playing field that natural gas has needed to reach its full potential as a transportation fuel,” said Kathryn Clay, AGA vice president for policy strategy.

Each of the trade groups has been lobbying Congress for some time to take this corrective action on LNG. Under the new provision, the energy equivalent of a diesel gallon of LNG is defined as having a Btu content of 128,700, which AGA said is equal to 6.06 pounds of LNG.

Separately, the new measure defines the energy equivalent of a gallon of compressed natural gas (CNG) as having a Btu content of 115,400, or 5.66 pounds of CNG. […]”<

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The Hidden Costs of Fossil Fuel Dependency

It is estimated that 80 to 85 percent of the energy consumed in the U.S. is from fossil fuels. One of the main reasons given for continuing to use this energy source is that it is much less expensive than alternatives. The true cost, however, depends on what you include in the calculation, and there are so many costs not figured in the bills we pay for energy.

Source: www.huffingtonpost.com

>” […] Just last week, on May 19, a pipeline rupture caused over 100,000 gallons to spill into Santa Barbara waters. The channel where the spill occurred is where warm water from the south mixes with cold water from the north, creating one of most bio-diverse habitats in the world, with over 800 species of sea creatures, from crabs and snails to sea lions and otters, and a forest of kelp and other undersea plants; it’s also a place through which 19,000 gray whales migrate this time each year. […]

Hidden Costs of Using Fossil Fuels for Energy

It is estimated that 80 to 85 percent of the energy consumed in the U.S. is from fossil fuels. One of the main reasons given for continuing to use this energy source is that it is much less expensive than alternatives. The true cost, however, depends on what you include in the calculation. According to the Union of Concerned Scientists, there are so many costs not figured in the bills we pay for energy. The following includes just some of them:

  1. Human health problems caused by environmental pollution.
  2. Damage to the food chain from toxins absorbed and passed along.
  3. Damage to miners and energy workers.
  4. Damage to the earth from coal mining and fracking.
  5. Global warming caused by greenhouse gasses.
  6. Acid rain and groundwater pollution.
  7. National security costs from protecting oil sources and from terrorism (some of which is financed by oil revenues).

Additional Costs From Continued Subsidies

That’s not all. In addition to the above costs, each and every U.S. taxpayer has been subsidizing the oil industry since 1916, when the oil depletion allowance was instituted. Government subsidies in the U.S. are estimated to be between $4 billion and $52 billion annually. The worldwide figure is pegged between $775 billion and $1 trillion. Why don’t oil and gas companies and governments around the world divert at least some of these subsidies to invest in alternative clean energy sources? Rather than invest in the depleting and damaging energy sources of the past, isn’t it time to look to the future and stop “kicking the can down the road”?

More Hidden Costs

While some call it an urban legend, others say quite emphatically that the oil industry conspired with the automobile industry and other vested interests to put streetcars out of business so that people would be forced to use automobiles and buses to get from point A to B — selling more automobiles, tires, fuel, insurance, etc. Fact or fiction, many big cities (and especially Los Angeles, where alternatives are sparse) are choking from traffic gridlock. The first study on this subject determined that traffic congestion robbed the U.S. economy of $124 billion in 2013. That’s an annual cost of $1,700 per household. This is expected to waste $2.8 trillion by 2030 if we do not take immediate measures to reverse the situation. For those who are skeptical, visit Los Angeles and try to drive around. Even with Waze, much more time and energy is wasted sitting in traffic than you could ever imagine. A commute that formerly took five to 10 minutes can now take upwards of an hour.

There Is a Solution

The solution to many of the problems related to gridlock, damage to the environment and human health includes the following:

  1. Clean energy and storage. […]
  2. More effective and efficient transportation (clean and safe mass transit […]
  3. Better marketing of, and accounting for, the true cost of the alternatives.
  4. Investment to do it.
  5. Political vision and will to transparently tell the truth and make the investment.

Doing the Right Thing Is Rarely Easy

While what is most worthwhile is rarely easy, it is necessary for the planet and living things that call it home.  […]”<

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Cove Point LNG Project Obtains Federal Approval and Opposition

Initially, Cove Point helped the United States overcome what was then an energy shortage. Now that our nation is developing a burgeoning surplus of natural gas, Cove Point can help send a small portion of that surplus to allied nation’s looking for stable supplies of clean energy, supporting economic development and replacing coal as a fuel.

Source: www.fierceenergy.com

>” […] The project offers significant economic, environmental and geopolitical benefits. The construction of the approximately $3.8 billion export project will create thousands of skilled construction jobs, an additional $40 million in annual tax revenue to Calvert County, and millions of dollars in new revenues for Maryland and the federal government, as well as a reduction in the nation’s trade deficit by billions of dollars annually.

Dominion’s project has faced and will continue to face significant and widespread grassroots opposition. Despite these benefits, environmental and community groups are denouncing FERC’s approval of the controversial project, claiming that the facility will incentivize environmental damage from fracking across the mid-Atlantic region and, according to federal data, would likely contribute more to global warming over the next two decades than if Asian countries burned their own coal.

Environmental groups, including the Chesapeake Climate Action Network, Earthjustice, and the Sierra Club are poised to petition FERC and potentially to sue the agency to challenge on the basis of an inadequate environmental review. These groups are assessing the issue upon which to file a motion for a rehearing, which needs to occur before an appeal can happen.

The groups claim that in its Environmental Assessment, which was limited at best, FERC omitted credible analysis of the project’s lifecycle global warming pollution, including all the pollution associated with driving demand for upstream fracking and fracked gas infrastructure.

The Dominion Cove Point project would be the first LNG export facility to be sited so close to a residential area and in such close proximity to Marcellus Shale fracking operations, and could trigger more global warming pollution than all seven of Maryland’s existing coal-fired power plants combined, the groups contend.

“FERC’s decision to approve Cove Point is the result of a biased review process rigged in favor of approving gas industry projects no matter how great the environmental and safety concerns,” said Mike Tidwell, director of the Chesapeake Climate Action Network, in a statement. “FERC refused to even require an environmental impact statement for this $3.8 billion facility right on the Bay. We intend to challenge this ruling all the way to court if necessary…we will continue to fight this project until it is stopped.”

Dominion must now review and accept the order. Upon completion, Dominion will file an implementation plan describing how it plans to comply with the conditions set forth in the order. Dominion expects to ask the FERC for a “Notice to Proceed” at that time and plans to begin construction when the notice is received. This process – from Dominion review through FERC’s notice – is expected to take several weeks.

Cove Point is the fourth liquefied natural gas export project to receive approval to site, construct and operate and is the first LNG export project on the East Coast. “<

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Fossil Fuel Development in the Arctic is a Bad Investment

Source: www.earth-policy.org

>”Currently, about 10 percent of the world’s oil and one-quarter of its natural gas production come from the Arctic region, which has warmed by more than 2 degrees Celsius since the mid-1960s. Countries that border the Arctic Ocean are staking claims to expand their rights beyond the traditional 200-mile exclusive economic zone in anticipation of future oil and gas prospects. According to current estimates, the United States has the largest Arctic oil resources, both on and offshore. Russia comes in second for oil, but it has the most natural gas. Norway and Greenland are virtually tied for third largest combined oil and gas resources. Canada comes in fifth, with almost equal parts oil and natural gas.

In developing these resources, Russia is leading the pack. Production has started at almost all of the 43 large oil and natural gas fields that have been discovered in the Russian Arctic, both on land and offshore. Russia drew its first oil from an offshore rig in Arctic waters in December 2013. […]

[…] operating in the Arctic brings great risks. The shrinking Arctic sea iceallows waves to become more powerful. The remaining ice can be more easily broken up into ice floes that can collide with vessels or drilling platforms. Large icebergs can scour the ocean floor, bursting pipes or other buried infrastructure. Much of the onshore infrastructure is built on permafrost—frozen ground—that can shift as the ground thaws from regional warming, threatening pipe ruptures. Already, official Russian sources estimate that there have been more than 20,000 oil spills annually from pipelines across Russia in recent years.  Arctic operations are far away from major emergency response support. The freezing conditions make it unsafe for crews to be outside for extended periods of time. Even communication systems are less reliable at the far end of the Earth. Why take such risks to pursue these dirty fuels when alternatives to oil and gas are there for the taking?

Rather than searching for new ways to get oil, we can look for better ways to move people and goods. Bus rapid transit, light rail and high-speed rail can move more people for less energy than a car can. And for the cars that remain on the road, electric and plug-in hybrid electric vehicles—powered by a clean energy grid—are much more efficient than those with a traditional internal combustion engine. Encouraging bicycle use through bike lanes andbike-sharing programs gets people active and out of cars.

Natural gas, which is mainly used to produce electricity, can be replaced with power generated by wind, solar, and geothermal projects. Many countries are demonstrating what is possible with renewables. Denmark already gets one-third of its electricity from wind. Australia is now dotted with 1 million rooftop solar systems. Iceland generates enough geothermal power to meet close to 30 percent of its electricity needs. These are just a few examples of looking past the old familiar solution to a better cleaner one. The risky search under every rock and iceberg for oil and gas deposits is a costly distraction from investing in a clean energy future.”<

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Surplus fossil fuels expected to exceed carbon budget

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It won’t be difficult to blow by the 1-trillion ton threshold based on the amount of fossil fuels still in the ground. As Amy Myers Jaffe remarks, “scarcity will not be the force driving a shift to alternative energy. Climate and energy policy initiatives will have to take into consideration the possibility of oil and gas surpluses and lower fossil fuel prices.”

Duane Tilden‘s insight:

>The lesson here is that the economics are still in favor of producing fossil fuels. The cyclical nature of energy prices suggests that higher prices will spur development of technologies to reach more difficult energy deposits. This doesn’t mean that oil and natural gas prices will be low for the rest of time, but it does reflect how high energy prices in the 2000s led not only to funding and research in alternative fuels (particularly biofuels), but also in oil and gas technologies. This investment coupled with decades of U.S. government and academic research proved fruitful with the combination of horizontal drilling and hydraulic fracturing becoming a deployable technology.

We have now entered a period of energy surplus where we produce energy from “unconventional sources” using technological breakthroughs like horizontal drilling and hydraulic fracturing in places like North Dakota, south Texas, Lousiana, and Pennsylvannia. (and soon to be California?).<

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Climate change & Global warming: IPCC issues warning to Governments

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Call to ‘stop dithering about fossil fuel cuts’ as expert panel warns entire globe is affected

Duane Tilden‘s insight:

>The scientists’ warning – the most comprehensive and convincing yet produced by climate scientists – comes at a time when growing numbers of people are doubting the reality of global warming. Last week, the UK Energy Research Centre (UKERC) published a survey showing that the proportion of British people who do not think the world’s climate is changing has almost quadrupled since 2005.

Asked if they thought Earth’s climate was changing, 5% of respondents said “no” in 2005, a figure that rose to 11% last year and reached 19% this year.

But as the IPCC report underlines, scientists are becoming more and more certain that climate change poses a real danger to the planet.

Many believe the disconnection between popular belief and scientific analysis has been engineered by “deniers” explicitly opposed to the lifestyle changes – including restrictions on fossil fuel burning – that might be introduced in the near future.

“There are attempts by some politicians and lobbyists to confuse and mislead the public about the scientific evidence that human activities are driving climate change and creating huge risks,” said Stern.

“But the public should be wary of those who claim they know for certain that unmanaged climate change would not be dangerous. For they are not only denying 200 years of strong scientific evidence – the overwhelming view of the world’s scientific academies and over 95% of scientific papers on the subject – but they are often harbouring vested interests or rigid ideologies as well.”

The report will be discussed this week by political leaders meeting in Stockholm. The study – the work of more than 200 scientists – outlines the physical changes that are likely to affect Earth’s climate this century.<

See on www.theguardian.com

The Obama Administration Proposes $8 Billion in Loans for ‘Clean’ Fossil Fuel Technologies

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As part of President Obama’s new energy initiative, the U.S. Department of Energy has proposed $8 billion in loan guarantees for fossil fuel technology projects that are able to reduce the country’s greenhouse gas emissions.

Duane Tilden‘s insight:

> […]the U.S. Department of Energy has proposed $8 billion in loan guarantees for fossil fuel technologies to reduce the country’s greenhouse gas emissions. The proposal would fund schemes such as waste heat recovery and carbon dioxide capture, however it has unsurprisingly received criticism as it would draw focus away from green technology projects such as renewable energy and electric vehicles.

Speaking about the new proposal, Energy Secretary Ernest Moniz stated:  “Coal and fossil fuels still provide 80% of our energy and 70% of electricity, and they will remain an important part of our future, as the president noted.”<

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The Amazing Energy Race

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The United States is falling behind. To catch up, we need to reorder our priorities, find cleaner and smarter fuels and develop new technologies.

Duane Tilden‘s insight:

>“In reducing coal’s historic dominance, the president is formalizing a market trend that was already taking shape,” remarked Andy Karsner, who was an assistant secretary of energy in the last Bush administration. His bigger message, though, was “no matter where you find yourself on the political spectrum, it’s useful for the nation to discuss, debate and consider a strategy for climate change. The consequences of inaction are potentially greater than all the other noise out there.”<

See on www.nytimes.com

Wind Power Urged to Compete with Fossil Fuels Head-on: Scientific American

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The industry must fight the perception that wind energy cannot compete with fossil fuels

Duane Tilden‘s insight:

>Borrowing a page from environmentalists

To that end, some wind power advocates argued that the industry should borrow a page from the environmental movement by challenging renewable energy naysayers head on and ratcheting up its rhetoric on wind energy’s environmental benefits relative to fossil fuels rather than seeking to peacefully coexist alongside the oil, coal and gas sectors.

Larry Schweiger, president of the National Wildlife Federation and one of several high-profile environmental leaders addressing the Chicago conference, told AWEA members that they represent “an insurgent industry” that is “taking on an incumbent industry that plays hardball.”

“I would urge you all to become more aggressive,” he added, “because if you don’t be more creative, more aggressive, more willing to take risks, this industry will move along at a pace that will not solve our problems.”

See on www.scientificamerican.com