Senator Murkowski Hails Final Energy Bill as Great Policy to Increase Production, Protect Environment, Aid Alaska
SENATOR MURKOWSKI HAILS FINAL ENERGY BILL AS GREAT POLICY TO INCREASE PRODUCTION, PROTECT ENVIRONMENT, AID ALASKA
Sen. Lisa Murkowski today announced the successful conclusion of the House-Senate energy bill conference. In approving a new energy bill, Congress is even closer to producing a sweeping national energy policy for the President's signature. The conference report is expected to be filed late tonight with a vote on final passage of the bill expected in the Senate by the end of the week.
"I'm proud of the work done by the Conferees," Sen. Murkowski said. "We set aside partisan differences to forge a bill that is balanced. It will help the nation both gain more domestic energy and develop renewable energy and alternative fuels, while advancing energy efficiency and aiding the environment. It will help us develop our oil, natural gas and coal resources and should help Alaska tap our huge gas hydrate reserves. It should advance a lot of exciting possibilities for Alaska's future." "Not only is this an energy bill, it is a jobs bill," Murkowski added. "Between all of the renewable requirements, which should produce over 500,000 jobs, and the jobs likely from construction of an Alaska gas line and the opening of ANWR, we are investing in the country's labor future as well as its energy future."
She added that the bill should provide a major boost to construction of a modern, less expensive power system in Alaska and further a variety of energy projects that could greatly aid the state's economy and employment in the future.
The Senator and Alaska Congressman Don Young, who served on the conference committee to develop final provisions in the bill, succeeded in protecting most all the Alaska provisions placed in the bill by the House and Senate earlier in the year - provisions highlighted by authorization of a $550 million rural energy development program. During the final day of the conference they also succeeded in reauthorizing the Oil Spill Recovery Institute (OSRI) that conducts research on ways to combat and prevent oil spills in northern climates. The OSRI was made permanent to conduct long-term research on spill impacts as long as oil development occurs in the state.
The roughly $11.5 billion tax title includes a tax production credit for wind turbines, geothermal energy and biomass that may make such projects more viable in Alaska. The bill includes a $400 million tax credit to help refineries afford the cost of producing ultra-clean diesel fuels in the future.
Murkowski also highlighted the bill's climate change title, the first ever crafted by Congress. The Senator was an original co-sponsor, with Sen. Chuck Hagel, R-NE., of several bills that were included in the final energy bill to address climate change. The final bill includes a series of efforts to reduce the intensity of greenhouse gases such as carbon dioxide, methane, hydrofluorocarbons, nitrous oxide, sulfur hexafluoride, and perfluorocarbons.
The bill also creates an Interagency Coordinating Committee on Climate Change Technology to create technology to help capture greenhouse gases and keep them out of the atmosphere. The bill also works to prevent developing nations from adding to greenhouse gas emissions by reducing trade barriers for the U.S. to export new technology to reduce gas emissions, and by authorizing overseas technology demonstration projects.
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The bill will also help to protect the environment by requiring that 7.5 billion gallons of ethanol be produced by 2015, reducing the need for nearly 80,000 barrels of oil a day for gasoline.
The bill provides incentives and tax credits for renewable energy sources: wind, solar, biomass and geothermal. Ocean generation from tidal, waves, current and thermal energy receives an incentive for production and a federal purchase credit provision to help make new projects economic. All of the renewables should create $6 billion of new investment.
The bill through its provisions and tax breaks should encourage industry to capture carbon through coal gasification plants, and also lock up - sequester -- 10 billion metric tons of carbon dioxide underground through enhanced oil recovery efforts. The bill provides $800 million of tax relief for coal gasification plants in coming years.
The bill also provides $3 billion to perfect hydrogen-fueled vehicles and to set up a fuel distribution system by next decade to dramatically cut future greenhouse gas emissions. The bill includes new energy efficiency standards for appliances, buildings, buses, trains, helps to reduce fuel consumption by planes, set up a national bicycle program, improves insulation in homes and doubles funding to $5.1 billion for the Low-Income Home Weatherization Program (LIHEAP).
Overall the efficiency provisions should save between 10 and 40 percent off anticipated growth of energy demand by 2015, according to the Alliance to Save Energy. That is the equivalent of saving 50,000 megawatts of peak electricity by 2020, the equivalent of 170, 300-megawatt power plants, according to the American Council for an Energy Efficient Economy.
Other Alaska specifics of the bill include: Rural Energy Assistance: The bill authorizes $550 million over the next decade for improvements to the state's energy infrastructure. Under the bill some $55 million yearly is authorized to the Denali Commission to be used to fund a host of projects including energy generation and development (through fuel cells, hydroelectric, solar, wind, wave, tidal and other alternative energy sources), transmission networks, interties, fuel tank replacement and cleanup, fuel transportation networks and related facilities and coal energy generation and alternative coal fuel projects.
Power Cost Equalization: The funding to the Denali Commission is also intended to provide up to $5 million a year for a decade to endow the Alaska Power Cost Equalization program. Currently the fund contains $185 million, whose interest is used to subsidize the first 500 kilowatts of electric usage by rural residents. The funding is intended to increase the size of the endowment so the fund can spin off more earnings to fully fund the program that this year is cutting the cost of power by between 20 and 30 cents per kilowatt hour in 175 rural communities.
National Petroleum Reserve Oil-Gas Leasing Changes: This provision allows oil leases to be extended for 10 years and perhaps longer to give lease holders more time to develop oil inside the 23.3-million acre petroleum reserve, which is forecast to hold up to 10.6 billion barrels of oil and 73 trillion cubic feet of natural gas. It also allows for more expeditious lease sales, gives authority for reduced lease royalties if needed to stimulate production, allows for unit agreements to speed oil or gas field development and allows the Secretary to waive administration of oil and gas leases when the subsurface estate is held by Arctic Slope Regional Corporation. It also creates the North Slope Science Initiative to fund better scientific research into the effects of oil and gas leasing in northern Alaska authorizing future funding for the effort.
Alaska Offshore Royalty Suspension: This provision allows the Secretary of the Interior to suspend federal royalty requirements in Outer Continental Shelf lease planning areas in Alaska where the aid is needed to encourage oil and gas production. The authority is the same that the Secretary enjoys in other areas nationwide and is intended to help increase Alaska OCS production - a significant potential benefit to the state since the revised bill provides $250 million of guaranteed funding to producing states based on production over the next four years. Alaska would be guaranteed a minimum of $2.5 million from the funding.
Gas Hydrate Research and Development Assistance: The measure, authored by Murkowski, Senators Ted Stevens and Daniel Akaka of Hawaii, is designed to continue research and expand efforts to develop a commercial process for producing natural gas from methane hydrates - gas locked in ice and permafrost. The nation is estimated to contain a fourth of the world's total reserves of methane hydrates - about 200,000 trillion cubic feet - with Alaska holding about 15 percent of the nation's resource, 600 trillion cubic feet on-shore and 32,000 trillion cubic feet offshore. The measure will fund a test well in Alaska.
Cook Inlet Carbon Dioxide Oil Enhancement Program: Murkowski won an amendment that will permit the Department of Energy to determine the feasibility of using carbon dioxide to increase oil returns from the maturing Cook Inlet oil field. The U.S. Department of Energy last month issued a report that indicated the nation could recover up to 43 billion additional barrels of oil from aging oil fields, if carbon dioxide were pumped into the fields to force more oil to the surface. The report indicated that up to 12 billion of the barrels could come from Alaska, about 670 million barrels, potentially being available from the aging Cook Inlet reservoirs near Kenai.
Indian Energy Assistance: The bill provides grant assistance and up to $2 billion of loan guarantees to help Natives nationally and tribes and Alaska Native corporations develop energy resources on their lands. The bill gives priority for federal funding to projects that will utilize new technology, such as coal gasification, carbon capture and sequestration and renewable energy-based electricity generation like wind turbine generation.
Healy Clean Coal Loan: The bill provides the Secretary of Energy the authority to make a loan of up to $80 million to fund improvements to get the Healy clean coal power plant up and running. The nearly $300 million clean-coal technology power plant has not operated since its testing period because of concern over the reliability of the plant. The loan will allow the plant's eventual owner/operator to make whatever equipment upgrades are necessary to get the plant operating. It is owned by the Alaska Industrial Development and Energy Authority.
Renewable Energy Provisions: The bill provides assistance to renewable energy projects, a production incentive and a federal purchase requirement, teamed with the continuation of the production tax credit for wind, solar, biomass and geothermal energy. The biomass provision gives a preference for grants to development of power from biomass obtained from disease-infested timber, which could be of particular importance to the Kenai Peninsula where roughly 5 million acres of spruce have been killed by the spruce bark beetle in the past decade.
Coal Production Assistance: The bill includes $200 million per year in aid for projects to utilize the nation's coal resources, with the aid especially intended (70 percent) to help construction of clean coal gasification combined cycle plants. Alaska, with an estimated 160 billion short tons, leads the nation in known reserves of low-rank, low-sulfur coal that such plants could make economic for production. The bill also provides potential aid for development of low-rank coal water fuel projects. The state has two such projects under potential development, one intending to use Beluga coal - the Silverado Green Fuels -- project to make boiler fuel for export to the Pacific Rim, and a second project that intends to use Healy coal to make aviation and diesel fuels for use in the Alaska market.
Alaska Natural Gas Pipeline Provision: Building on last year's success in winning loan guarantees and two tax deductions for pipeline segments and a North Slope gas conditioning plant, the bill includes a provision requiring the Department of Energy to write a progress report every six months on how work is proceeding on an Alaska gas line - a provision designed to help maintain momentum for the project.
Israeli-U.S. Energy Cooperation: The measure also includes a provision that extends an agreement between Israel and the United States to cooperate on energy research and development activities.
Alaska Hydropower Bill: The measure, sought by the State of Alaska, includes a clarification to 2000 legislation that allowed the State's Regulatory Commission of Alaska (RCA) to take over from the Federal Energy Regulatory Commission the licensing of small hydroelectric projects in Alaska that produce less than 5 megawatts of power. The new clarification makes it clear that the state has the same authority as FERC in reviewing agency recommendations concerning the impacts of hydro projects and it should help small hydro to be built more quickly and at less cost. Arctic Engineering Research Center: The bill includes $3 million annually for five years originally sought by Senator Murkowski and this year by Congressman Don Young to fund research into ways to protect roads, bridges, rail lines and related transportation infrastructure and residential, commercial and industrial buildings in the Arctic in the face of climate change. The money will go to the center to be established at the University of Alaska Fairbanks.
Barrow Geophysical Research Facility: And the bill includes a $61 million authorization sought by Sen. Ted Stevens for a Barrow Geophysical Research Facility to provide a home for climate and other research in the Far North
http://murkowski.senate.gov/pressapp/record.cfm?id=241618