Fisker Automotive founder Henrik Fisker (C) testifies during a hearing by the House Oversight and Government Reform committee on Capitol Hill in Washington. For some, the company's decline is an example of flawed clean-energy policies that bet public money on losing technologies. (Kevin Lamarque/Reuters)

What does Fisker Automotive tell us about clean energy?

By David J. Unger, Correspondent / 04.25.13

Fisker Automotive's failure to make a loan payment to the US Department of Energy Monday is the latest evidence that the California-based electric carmaker is on the skids.

For some, the company's decline is an example of flawed clean-energy policies that bet public money on losing technologies.

The broader picture of the Department of Energy's loan guarantee program is more nuanced. High-profile flops can eclipse the quieter, less headline-worthy successes of the program, first enacted in 2005 under President George W. Bush.

But even when successful, the loan guarantee program's role in a company's profitability is subject to debate. Tesla Motors received $465 million from the Department of Energy and is exceeding sales targets and winning prestigious awards. Could they have done that with private investment alone, or was taxpayer money critical to their success?

"There are companies that would, and often do, receive investment from the private sector because their technology is profitable or because investors find their technology promising and want to pursue the risk," Nicholas Loris, an energy-policy analyst for the conservative Heritage Foundation, wrote in prepared testimony for a US House Oversight Committee meeting on Fisker Wednesday.  ( Continue… )

The Gannet Alpha platform in the North Sea, around 110 miles east of Aberdeen, Scotland. Statoil announced the discovery of a considerable new oil reserve in its Gullfaks license area in the Shetland Group/Lista Formation in the North Sea. (Ken Taylor/Shell/PA Wire/AP/File)

Statoil eyes major new North Sea oil discovery

By Jen Alic, Guest blogger / 04.24.13

Norway’s Statoil (STO) is sitting on a new discovery in the North Sea that could contain between 40 million and 150 million recoverable barrels of oil equivalent, the company said last week.

Statoil announced the discovery in its Gullfaks license area in the Shetland Group/Lista Formation in the North Sea. The Norwegian company is the operator of the license, with a 70% interest, in partnership with Petoro, a minority partner with 30%. 

The 40-150 million recoverable barrels estimate is still under a “high degree of uncertainty”, with additional appraisals ongoing to confirm the findings. (Related article: Developed Nations have Already Passed Peak Oil Demand)

According to Statoil, the Gullfaks finds are younger and shallower deposits compared to its Brent Group reservoir, which is the primary deposit in the license area.  ( Continue… )

Storm clouds form near a BP station in Alexandria, Va. Rising costs have forced BP to delay its newest oil-drilling project in the Gulf of Mexico and come up with a less expensive development plan. (Molly Riley/Reuters/File)

BP delays $10 billion Gulf of Mexico project due to rising costs

By Charles Kennedy, Guest blogger / 04.23.13

Industry-wide, rising development costs have forced BP to re-evaluate its $10 billion oil project in the Gulf of Mexico.

The Mad Dog 2 development was set to become BP’s largest new oil project in the Gulf of Mexico for over a decade. Construction was expected to begin this year with the first oil pumped before 2020, but the rising costs have now made this plan difficult to justify, and the company has had to return to the drawing board to come up with a new plan, which will most likely involve a delay of a year or so.

The oil field at Mad Dog 2 is estimated to contain four billion barrels of oil equivalent. The project will see a second platform constructed on the field, linked to 33 new subsea wells which will extract the oil. (Related article: Finding Good Investments in Areas with Growing Oil Production.)

BP released a statement to explain that “the current development plan for Mad Dog Phase 2 is not as attractive as previously modelled, due largely to market conditions and industry inflation. ( Continue… )

Swiss engineering group ABB (whose logo is pictured here in Zurich) has agreed to buy solar energy firm Power-One Inc for about $1 billion. (Michael Buholzer/Reuters/File)

ABB's 'blue jeans' strategy in solar

By Richard T. Stuebi, Guest blogger / 04.23.13

Over the weekend, ABB (NYSE: ABB) announced the $1 billion acquisition of Power-One (NASDAQ: PWER), which makes a wide spectrum of power conversion electronics equipment.

Notably, Power-One is a major player in the market for inverters, which convert DC power into AC power.  In turn, inverters are important for synchronizing DC-based technologies such as batteries, fuel cells and photovoltaics (PV) with the AC electricity grid.

While there may be other reasons underlying the acquisition, ABB singled out Power-One’s inverter lines for the PV market.  At first blush, this might seem surprising, because as most observers of the cleantech sector know too well, the PV sector has been brutalized in recent years.

Surely, the PV industry has been beset by intense competition among module suppliers, stemming from global excess manufacturing capacity that has accumulated over the past few years.  This is bad news for module manufacturers, who have struggled to attain or maintain profitability.  However, it’s very good news for customers, as PV system prices have plummeted in recent years.  In turn, this has dramatically expanded the market for which PV installations are now economically competitive to grid-based power, and PV market growth rates are on a hockey-stick upward trend. ( Continue… )

A deepwater drilling rig operates near the site of the Deepwater Horizon disaster in the Gulf of Mexico. Lawmakers last week introduced legislation that would amend laws regarding the US continental shelf to make it easier for oil companies to work along the shared maritime border with Mexico. (Dave Martin/AP/File)

House aims to expand oil drilling in Gulf of Mexico

By Daniel J. Graeber, Guest blogger / 04.22.13

British energy company BP announced that its mega Mad Dog project in the Gulf of Mexico wasn't necessarily as attractive as once thought. Oil companies like BP are looking to get things moving again three years after the tragedy tied to the Deepwater Horizon oil rig. Members of the U.S. House of Representatives last week proposed legislation that would open up more areas for drillers offshore. Lawmakers say getting more work done in the Gulf of Mexico would ensure energy independence. The oil industry says U.S. oil production is setting records, however, so it's not yet clear what, if any, interest there is to return so quickly back to the Gulf of Mexico.

BP announced it was reviewing a decision to move ahead with its multibillion dollar Mad Dog development in the Gulf of Mexico. The company started production in the field in 2005 with a facility designed to process 80,000 barrels of oil and 60,000 cubic feet of natural gas per day. The entire field is estimated to hold 4 billion barrels of oil equivalent. BP said Friday it wasn't necessarily keen to move ahead with the second phase of development there, however. (Related article: Obama’s Budget Proposal Boosts Clean Energy at the Expense of Fossil Fuels)

"The current development plan for Mad Dog Phase 2 is not as attractive as previously modeled, due largely to market conditions and industry inflation," the company said in a statement.

Lawmakers in the House of Representatives last week introduced legislation that would amend laws regarding the U.S. continental shelf to make it easier for oil companies to work along the shared maritime border with Mexico.  The measure would facilitate the implementation of a bilateral agreement signed last year on transboundary resources. Under that agreement, roughly 1.5 million acres in the Gulf of Mexico would open up to energy explorers. The U.S. Interior Department's Bureau of Ocean Energy Management estimates the region may hold as much as 172 million barrels of oil and 304 billion cubic feet of natural gas.  ( Continue… )

A cooling tower at the Watts Bar Nuclear Plant in Spring City, Tenn. There are some very important questions about energy today, Holland writes, but we are doing a disservice to always talk about them in the context of ‘energy security.’ (Tennessee Valley Authority/AP/File)

The many empty meanings of 'energy security'

By Andrew Holland, Guest blogger / 04.19.13

Meaningless Buzzword

I work on energy policy for a national security think tank, so I am often asked to talk about energy security. Last week, I participated in a conference in which we were asked to comment on “U.S. Energy Security: How Do We Get There?” As I listened to the presenters at the conference, I realized that how you viewed the problem of ‘Energy Security’ depends on how you identify it. We all seem to have determined that energy security is a problem, but we each had different understandings of what the term ‘energy security’ actually means! Of course, that means there were very different prescriptions for how to ‘solve’ the problems of ‘energy security.’

In the absence of a definition, everyone defines energy security differently –both speakers and listeners. It is something like the late Margaret Thatcher said about the politics of consensus: “it is something in which no one believes and to which no one objects.” Along those lines, I believe that ‘energy security’ has devolved into simply a buzzword: a phrase that everyone favors, but defines differently. Pundits, politicians, lobbyists, industry, and campaigners from across the political spectrum cry ‘energy security’ because it polls better than their preferred policies. I have done it as well. Listeners, then, are misled because, really, who could actually be against ‘energy security?’ It is like being against mom, America, and apple pie.

As the Years Roll On

API uses ‘energy security’ to argue that we need to open more land to drilling. Proponents of Keystone XL argue that we need a new pipeline from Canada because of ‘energy security.’ Environmentalists argue ‘energy security’ to tell us why we need to build more windmills and solar power.  ( Continue… )

The skyline of downtown Los Angeles. Fuel switching is an interesting approach for Los Angeles considering clean coal technology enjoys majority support among California voters, Tracey writes. (Fred Prouser/Reuters/File)

How much will replacing coal cost Los Angeles? (Sponsor content)

By Evan Tracey, American Coalition for Clean Coal Electricity (ACCCE) / 04.19.13

In a story from yesterday’s Los Angeles Times, a city watchdog has attached a large price tag to the city’s initiative to move the city away from coal-based electricity.

According to the article, “Fred Pickel, the ratepayer advocate at the Department of Water and Power, said Monday that eliminating coal from the utility’s power mix ahead of a state-mandated deadline is projected to cost more than $600 million. What that could mean for ratepayers’ electricity bills is unclear, he said.”

At a meeting of the City Council’s Energy and Environment Committee on Wednesday, Pickel said he would urge city officials to look for ways to lower the costs. “The question is, can we do this cheaper?” he said.

Two coal plants currently provide nearly 40 percent of the city’s energy. Under the new plan, the city would supplant most of that with power produced by switching to natural gas.

Fuel switching is an interesting approach for Los Angeles considering clean coal technology enjoys majority support among California voters. It is especially noteworthy that this support is broad-based, encompassing majorities of Republican, Democratic and voters declining to state a party affiliation. Given that the most important issues to California voters are “jobs and the economy,”voter sentiment that the state’s energy policies have made it less competitive should be a red flag to Sacramento legislators.

In a recent survey of California voters, nearly 57 percent answered yes when they were asked “Do you support or oppose developing new clean coal power plants in California?” When asked the question, “Do you think that California’s energy policies have made the state more or less competitive?”, more than 43 percent answered yes. And particularly telling is the fact that nearly one-quarter of California voters feel that the state’s energy policies have made the state far less competitive.

These numbers are in stark contrast to comments recently made recently by Los Angeles Mayor Antonio Villaraigosa when he announced that the city will become the only city in America that won’t get any electricity from coal by the year 2025.

Coal-based electricity is one of the least expensive, most reliable means of producing electricity, and it’s a central part of the American energy portfolio. Not only that, coal has a long history of providing energy to Americans.

America has depended on the reliable and abundant coal that comes from our land and powers our lives for more than a century. With the energy in America’s coal reserves being roughly equal to the world’s known oil reserves, it’s clear that coal should continue to be a reliable source of electricity for all of us.

The proposed Keystone XL pipeline would run through this snow-covered field near Bradshaw, Neb. The pipeline serves as a proxy for a broader argument over the role of energy and environment in America's future. (Nati Harnik/AP/File)

Nebraska hearing vitrifies Keystone XL pipeline debate

By David J. Unger, Correspondent / 04.18.13

For half a decade, Americans have debated the potential risks and rewards of a pipeline that would carry oil from Canada to refineries in Texas. The back-and-forth comes to a head Thursday in Grand Island, Neb., as the State Department holds a public hearing on the Keystone XL pipeline.

Even heavy, late-season snow couldn't keep pipeline supporters and critics from making their voice heard. They lined up outside the hearing hours in advance Thursday morning, according to the Lincoln Journal Star.

If the passionate, opposing sides agree on anything, it's that the debate is about more than just a pipeline.

Keystone XL rests squarely at the intersection of energy security, environmental stewardship, and economic growth, making it a useful proxy for a broader argument over the role of energy and environment in America's future.

The sluggish economy has only cemented Keystone's symbolic role. Environmentalists seize upon the carbon-intensive project as a way to keep environmental concerns part of a political discussion dominated by fiscal cliffs and sequestration. Keystone supporters say the White House's failure to approve the $7.6 billion line more than a year ago is one example of how the Obama administration has missed opportunities to boost the economy by encouraging fossil fuel production. ( Continue… )

Wind turbines of the Smoky Hill Wind Farm dot the countryside near Ellsworth, Kan. Kansas legislators rejected an effort to weaken a state policy that requires utilities to generate 20 percent of their electricity from wind and other renewable resources by 2020. (Orlin Wagner/AP/File)

Climate change deniers strike out – even in energy-rich Kansas

By Kevin Knobloch, Guest blogger / 04.18.13

Despite the evident risks of climate change – from sea-level rise and coastal flooding to crippling drought – Congress has been slow to respond.  Fortunately, states have given us reason for optimism by taking the lead on reducing heat-trapping emissions from fossil fuels.

California, for instance, just launched its cap-and-trade system for reducing global warming pollution. The program was passed under a Republican governor and is being implemented by a Democratic one. The state also has the country’s most ambitious renewable electricity standard, which requires utilities to provide 33 percent of their electricity from renewable sources by 2020.

Such renewable electricity standards are now commonplace: 29 states and the District of Columbia have them. These standards, which were often adopted on a bipartisan basis, have been crucial for making renewables the leading source of new US electricity generating capacity in 2012.

The standards are also consumer-friendly. For example, the Lawrence Berkeley National Laboratory found that as utilities in 14 states complied with renewable electricity standards, they increased rates just 1.5 percent or less. In Minnesota, Xcel Energy – the state’s largest utility – reported that renewable energy investments actually lowered prices in 2008 and 2009 by 0.7 percent. ( Continue… )