Jim Tankersley of the Los Angeles Times reports - “The federal government has “significant gaps” in its strategy to cope with the increasing effects of climate change on the country, according to a White House report scheduled to be released Tuesday.

The report will call for better risk assessments, more thorough scientific research and improved coordination of federal and local governments in order to handle the effects of warming temperatures, according to a draft of the report.”

To read the rest of the story click here.

David Copley a petroleum geologist provides the following op-ed in in the Buffalo News.

“It’s impossible to overestimate the importance of natural gas production in the Marcellus Shale that underlies large parts of New York State and Pennsylvania.

Notwithstanding exaggerated fears of damage to ground water systems, the ramp-up in shale-gas production has been the best economic and environmental news in years. Thanks to the use of new drilling techniques combined with a decades-old process known as hydraulic fracturing, energy companies are now able to access deposits of shale gas that were considered out of reach a few years ago.

Until 2007, the story of natural gas production in the United States was one of decline. With gas supplies tight as a drum and domestic production unable to meet growing demand for the clean-burning fuel, plans were under way for dozens of liquefied natural gas terminals to handle imports from overseas.

Today domestic gas production is increasing, and shale gas accounts for 40 percent of the supply. Shale gas provides a significant boost for the economy, with thousands of new jobs, tax revenue for state and local governments, and income for property owners.”

To read the rest of the story click here.

Clean flowback water and new jobs are what is being produced in the AOP Clearwater water treatment plant that opened last November in Fairmont, West Virginia. They are using a distillation-crystallization process that cleans the brine from the flowback water and allows it to be used for further fracking jobs. The brine is then reused to treat winter roads. Trucks bring in full loads of frackwater, empty in 11 minutes then fill back up with clean water for another frack job in the same amount of time. Sixteen new jobs were created at this site. Regulators in West Virginia require producers to report the source, treatment and disposal of frack water and the plant is complying with the regulations.

One of the major arguments against drilling in New York is the issue of disposal of flowback water. The process is working in West Virginia and it would in New York as well. When the DEC finalizes the drilling regulations, I hope to see investment and development of similar water treatment facilities in New York State. Proven technology to treat flowback water is being utilized in West Virginia and the benefits are clean water, jobs and economic development. New York needs to embrace development of the Marcellus Shale and the many related business opportunities instead of continually erecting roadblocks to development.

David Robinson of the Buffalo News writes about the high taxes place on energy in New York and the effect they have on the economy.

“When you pay your electric bill this month, don’t think of it as paying New York State Electric &Gas or National Grid for keeping the lights on in your home.

Think of it as paying part of your taxes.

While you’re at it, you might as well consider your January and February electric bills as part of your overall taxes, too. Because that’s what they are.

The dirty little secret is that state and local taxes account for more than a quarter of a typical New York customer’s electric bill. Put another way, figure your January, February and March payments go straight to the tax man.

That tax burden zaps the state’s economy, channeling $6.4 billion to state and local governments last year, up 15 percent from the year before. And it’s a big reason why you and I—and everyone else in the state—pay the third-highest electric rates in the country…

Kenneth Adams, president and chief executive officer of the Business Council of New York State, says the “outrageously high” tax burden on electricity is a huge drain on the state’s economy, making it harder for businesses to compete and create jobs.

“These taxes drive jobs out of our state,” he said.

The Public Policy Institute, the Business Council’s research affiliate, released a report last week detailing how taxes are driving up our electric bills. Even more disturbing, the growing tax burden on electric bills negated the benefit from falling wholesale power prices, which dropped by 18 percent from 2000 to 2008, according to the New York Independent System Operator, which oversees the state’s power grid.

“We are just so uncompetitive now,” said Steven A. Taylor, the institute’s research director and the report’s author.

We’re uncompetitive because of high property taxes that account for more than half of the overall taxes collected on electricity, as well as the penchant of state officials for using utility bills to impose a stealth tax increase.”

To read the rest of the story click here.

Mark Scheer of the Niagara Gazette writes - “Like most people in Niagara Falls, Ferry Avenue resident Aurelia Martin gets a bill from National Fuel every month.

Generally, it runs about $200.

Sometimes it’s a little higher.

Either way, Martin knows she can’t afford not to pay it.

“The way they do it, it’s hard to gauge by your bill,” Martin said. “I don’t even really try to understand what it’s all about.”

Martin’s not alone in that respect. When it comes to paying for a vital service like home heating, it’s not uncommon for National Fuel customers to simply send a check, not knowing exactly what they are getting for their money.

So what happens to the average customer’s payment?

A portion of the proceeds are returned to the company in the form of profit. The largest portion covers the cost of the fuel, delivery of the product and the company’s operational expenses. A rather hefty chunk actually gets sent to the state of New York to cover sales tax and other fees.

Where does the money go?

According to National Fuel, every dollar of revenue received from the average customer is split up into five major categories — gas purchased, other operating costs, taxes, earnings and interest charges.

The largest percentage is devoted to the cost of the actual fuel and the price for delivering it to homes and offices. ”

To read the rest of the story click here.

Comptroller Wins Battle as SEC Rejects Cabot Bid to Block Shareholder Vote

In a press release issued Thursday March 4 2010:

“New York State Comptroller Thomas P. DiNapoli today said the $129.4 billion New York State Common Retirement Fund (Fund) will continue to press energy companies to disclose to their shareholders the environmental and regulatory risks associated with unconventional natural gas extraction including hydraulic fracturing.

“Natural gas stores locked in dense shale formations like the Marcellus Shale in New York are an important source of energy, but there are reasonable concerns about the environmental impact and potential liabilities inherent in its development,” DiNapoli said. “Investors need to have quality information so they may weigh the risks and rewards of the companies they invest in. The development of the Marcellus and other shale gas plays must be done the right way. As shareholders, we want these companies to assure us that they have a full and complete appreciation of the liability risk, and that they’re taking steps to mitigate those risks.”

DiNapoli, as trustee of the Fund, has filed resolutions with five companies – Chesapeake Energy Corp., XTO Energy Inc., Range Resources Corp., Hess Corp., and Cabot Oil & Gas Corp. The resolutions request company boards to summarize for shareholders: the environmental impact of their unconventional natural gas operations; potential policies for the company to adopt, above and beyond regulatory requirements, to reduce or eliminate hazards to air, water, and soil quality from operations including those from hydraulic fracturing; and, other information regarding the scale, likelihood, or impacts of potential material risks, short or long term, to the company’s finances or operations, due to environmental concerns regarding fracturing.

One of the companies, Cabot Gas & Oil, attempted to block the resolution from a shareholder vote. DiNapoli prevailed when the Securities and Exchange Commission in late January issued a letter disagreeing with Cabot that the company had legal grounds to keep the resolution off the shareholder ballot at its annual meeting this spring.”

This raises some very interesting questions. 1. Is this standard practice for the Comptroller? If the fund holds stock in Coca Cola, does he ask Coke to “summarize for shareholders” the health impact of the product? We all know it rots our teeth and makes us fat. 2. The Comptroller is not an environmental regulator. The DEC is best equipped to monitor and regulate energy companies. 3. If the Comptroller has such misgivings about these energy companies or any other stock in the pension fund he should sell the stock.

The energy companies that wish to do business in New York already apply best practices and operate with great care. Requiring them to meet additional requests seems redundant and unnecessary. I don’t know if other states make the same demands on energy companies doing business in their states but I would guess not. New York seems to go out of its way to make it as difficult as possible to do business in the state. We should be encouraging the energy companies to do business in New York under the DEC’s proposed comprehensive regulatory safeguards, not presenting them with another business obstacle.

In a release put out today the Independent Power Producers of New York, Inc., President and CEO Gavin Donohue reacts to a report by the Public Policy Institute of New York State.

“Independent Power Producers of New York, Inc. (IPPNY) today expressed their strong support of the Public Policy Institute’s latest findings exposing how energy taxes contribute to high electricity rates for New York State energy consumers and further weaken the state’s economy. Earlier today, the Public Policy Institute, the research affiliate of The Business Council of New York State, Inc. unveiled a new report, entitled Short-Circuiting New York’s Recovery, How Energy Taxes Contribute to High Electric Rates in New York, which highlights the direct relationship between New York State’s record high taxes on its energy industry and the subsequent increased cost passed on to consumers through their electricity rates…

“This report further supports IPPNY’s position that the state needs to find alternative approaches for meeting its revenue needs, without increasing energy costs for consumers and hampering the ability of power producers to continue to make needed investment in reliable energy supplies,” said IPPNY President and CEO Gavin Donohue. “I applaud the Public Policy Institute for their initiative and efforts to display the out of line tax structure that exists in New York and the resulting increase in costs that are ultimately borne by New York’s consumers.” He continued, “Although the report highlights the layering on of taxes by the state it is important to consider that New York’s energy industry is subjected also to the layering on of additional non tax related regulations and fees that further exacerbates the negative economic impact on electricity consumers. The report paints a bleak picture of New York State’s future if these policies continue.”

To read IPPNYS’s press release click here.

To read the PPI report click here.

State and local government taxes make up more than a quarter of New York electric bills, according to a new report by the Public Policy Institute, the research affiliate of The Business Council of New York State, Inc. entitled “Short-circuiting New York’s Recovery-How Energy Taxes Contribute to High Electric Rates in New York”.

New York’s power industry paid an estimated $6.367 billion in state and local taxes, assessments and fees in 2009. The figure is $853 million higher than the total the industry paid in 2008. The increase is notable: in 2009 state and local governments in New York raised taxes on electricity by more than 15% — and did this during the worst economic crisis since the Great Depression.

State and local governments have turned the energy industry in New York into a tax collecting operation leaving rate-payers with ever-growing bills even when energy commodity prices fall. On average, more than one-quarter of customers’ electric bills in New York is made up of state and local taxes. Increased taxes and fees have more than made up for the 18 percent drop in wholesale electricity costs since 2000.

To read more click here.

To read the full report click here.

The Sunday Washington Post ran an editorial highlighting the importance of natural gas in the climate debate.

“The resurgence of gas comes through the discovery of massive deposits in Appalachian shale [Marcellus Shale] formations and elsewhere — a reserve that offers the prospect of stable domestic supplies and relatively low prices. Since burning natural gas produces half the emissions of burning coal, switching the two fuels could put a significant dent in America’s carbon footprint.”

So far, despite rumors, the Administration has not backed a switch from coal-fired to natural gas-fired power plants.

Our national leaders need to embrace domestically produced natural gas and replace outdated and dirty coal-fired power plants with gas-fired plants. According to the Post piece, “existing gas-fired plants are running at only about 25 % capacity, in part because many are switched on only when demand spikes.” We know where the gas is and we have the technology to safely and responsibly harvest it. We have an infrastructure in place to deliver the gas to the marketplace. Existing gas-fired power plants, running at 25% capacity, have the present ability, without costly infrastructure investment, to support the nation’s drive for environmentally responsible energy independence. What we lack is the political will at both the national and state levels to make it happen.

Update from The Business Council of New York State and MACNY on Energy Chair Cahill Introduction of Economic Development Power Program

Today, Assembly Energy Chair Kevin Cahill (D-Kingston) introduced legislation that would create a new a long term economic development power program for New York State. The legislation intends to replace the current Power for Jobs and other economic development power programs, which are slated to expire May 15th, 2010.

When Assemblyman Cahill assumed the leadership role of the Assembly Energy committee, he committed to proposing a long term power program as a solution to the current short term extensions of New York State’s power discount programs that many manufacturers and businesses have come to depend on in order to remain competitive.

To read more click here.