US energy subsidies: measuring apples to apples?

Whenever discussing federal energy subsidies, I typically think of the ethanol industry. But lately I find myself wondering about how to accurately compare subsidies and tax credits across fuel types.

This question stems from recent publicity about extensions for production tax credits (PTC) for wind power. The US Energy Information Administration reports PTC significantly encouraged wind capacity growth.

During 1999-2007, wind power was the only primary energy source for which production increased each year, EIA said. Wind producers received an estimated $666 million in PTC during fiscal year 2007. This was distributed over 27.7 million Mw-hr.

EIA reports the US government spent an estimated $16.6 billion in energy subsidies and support programs during 2007. Only $4.9 billion of that went toward renewable energy. Certain fossil fuels also were heavily subsidized.

I have yet to find any cost comparisons per btu between various types of subsidized fuels.

Credibility of CSR reports studied

A growing number of oil companies issue Corporate Social Responsibility (CSR) reports, which sometimes are called sustainability reports. These reports provide a company's stakeholders with nonfinancial information about corporate risk mitigation on social and environmental issues.

All types of industries file CSR reports, most of which are not independently verified. CSR reports worldwide disclose a wide range of information that varies widely between companies and also between countries. Naturally, this begs the question of whether any particular report can be believed.

Of oil and gas companies that publish CSR reports, 35% have their reports externally assured for accuracy, said a new study entitled Assure View. The study used CSR report archives from CorporateRegister.com Ltd., an online directory of CSR reports.

The study was sponsored by firms that conduct these external assurances. Study sponsors are SGS, KPMG, LRQA, and The Reassurance Network.

The study notes a relatively new approach is for a company to invite various individuals or organizations to form an independent advisory board or panel. Royal Dutch Shell PLC was among the 11 companies that issued panel reports last year.

Oil companies and power plants

As a writer for the Oil & Gas Journal, I find myself starting to report more about power plants because oil companies are getting involved in sequestration projects

Shell Oil Co. is contributing $1 million to help finance a planned carbon dioxide underground storage pilot program. The donation is being made to a field test project that will be managed by the West Coast Regional Carbon Sequestration Partnership (WESTCARB), a group of 70 organizations led by the California Energy Commission.

Clean Energy Systems Inc. of Rancho Cordova, Calif., will supply CO₂ to test and monitor the long-term effectiveness of sequestration.

Clean Energy Systems has a 5-MW power plant on the Kern County, Calif., site and plans to build a 50-MW plant. The project will inject CO₂ into porous rock 7,000 ft underground over 4 years, beginning in 2011.

WESTCARB is one of the US Department of Energy’s seven partnerships, involving 41 US states and four Canadian provinces. The partnerships are in Phase Three, which focuses on large-scale storage tests involving 1 million tonnes/year or more.

“We live in a world that demands more energy, but less carbon dioxide,” said Edward Hymes, Shell project manager, who added that Shell is looking to “to strike this critical balance.”

Earlier this year, the International Energy Agency concluded the partnerships are unique in that no other country or region has initiated such an ambitious carbon capture and storage effort as the DOE’s sequestration partnerships.

Could Australia become a green superpower?

A climate change scientist suggests Australia could take the lead among developed countries in promoting renewable energy.

Barry Brook recently wrote an online column saying Australia has plenty of wind, geothermal, and solar resources to move away from fossil fuels. He is director of the Research Institute for Climate Change and Sustainability at the University of Adelaide.

He compares Australia's opportunity to develop its solar resources to the economic transformation the world experienced with widespread production and exportation of Middle Eastern oil.

“When the Seven Sisters oil companies exploited that resource the global energy system changed forever,” Brook recently wrote. “Today, Australia has all the makings of a global green energy superpower.”

Compared with debate about peak oil and peak coal, Brook believes scarcity is not a problem for renewable energy sources. He notes the costs for renewable energy are dropping because of rapid technological development.

Carbon trading could provide tens of billions of dollars to invest in cleaner energy sources, Brook advocates. Whether the Australian government will promote this green superpower idea remains to be seen. It also remains to be seen whether any developed country actually can move its economy away from fossil fuels any time soon.

Brook’s full comments can be found in a column published by News Ltd. Australia.
(http://www.news.com.au/story/0,23599,24430472-5007146,00.html).

Houston mayor takes new approach to refinery benzene emissions

Houston Mayor Bill White is trying to get help from the state of Texas in setting limits for benzene emissions from refineries. It’s his latest strategy in 2 years of lobbying about the need for better air quality along the Houston Ship Channel.

Specifically, White asked the Texas Commission on Environmental Quality to grant an administrative hearing on LyondellBasell’s application for renewal of its flexible permit at its Houston refinery.

A flexible permit allows a company to determine its pollution controls provided that emissions remain below certain limits. Lyondell received the permit in 1999 and is seeking a 10-year renewal. A TCEQ spokesman said it’s too early to say if Lyondell’s application will receive an administrative hearing.

Refineries are one source of benzene emissions. It’s well documented that Mayor White is concerned about emissions from Houston-area refineries. The snag is that some refineries are outside city limits. Hence, White now is trying to address his concerns via the state permitting process.