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The title sort of speaks for itself, but my latest piece* covers the recent appointment of Amos Hochstein to become the United States' top energy diplomat for the U.S. State Department. He will likely now be a key point man for the State Department's team in its work hammering out a U.S. position for climate change negotiations that are ongoing at the UN summit in Lima, Peru.
Earlier on in his career, Hochstein lobbied for Marathon Oil, which in fact meant lobbying on behalf of the Qaddafi dictatorship in Libya, a tie he shares with the former person who had his gig at the State Department under Hillary Clinton, David Goldwyn. He will also head up the State
Department's Global Shale Gas Initiative/Unconventional Gas Technical Engagement Program, what I've called a "fracking missionary force" run by the State Department.
That and more can be found within the piece. Any help passing it along on Facebook or Twitter would be greatly appreciated, as well.
Cross-posting of the article also welcome, but please direct URL link to the original on DeSmogBlog if you do.
Hi All:
My latest piece is now up on DeSmogBlog.*
Lost in the comments President Obama offered this week on The Colbert Report about the future of the northern leg of Keystone XL, which excited some, is another pipeline system he's permitted into existence.
That is, the one we've been calling Enbridge's "Keystone XL Clone" on DeSmogBlog. It is now open for business and has hundreds of thousands of barrels of tar sands flowing through it straight to the Gulf of Mexico to the same areas of southern leg of Keystone XL also brings tar sands to.
Put another way, lots more tar sands is now "Texas Bound and Flyin'," to quote from the country song by Jerry Reed. It was akin to the elephant in the room as Obama talked about climate change concerns for future generations as it pertains to Keystone XL on Colbert.
Any help passing along this piece on Facebook or Twitter would be greatly appreciated. Cross-posting also welcome, but please direct URL link to the original on DeSmogBlog if you do.
Thanks much! Excerpt below.
Florida PSC gives approval for FPL to invest in natural gas fracking
The Public Service Commission gave approval Thursday to a request by Florida Power & Light to charge customers for its exploration of natural gas using fracking technologies.
The panel concluded that the project, which allows the company to invest $191 million in a joint venture with PetroQuest Energy, Inc., would help to stabilize volatile energy costs and save customers more than $100 million over 30 years – about two cents a month -- and stabilize a fraction of the company's energy costs.
The measure was opposed by the lawyers who represent the public in rate cases, as well as the state’s largest industrial energy users, the Florida Retail Federation and several environmental groups. The PSC postponed a decision until March on the question of whether FPL will be allowed to charge customers up to $750 million a year in similar projects without PSC approval.
The opponents argued that there was no guarantee that the risk of shouldering the costs of oil and gas drilling in an uncertain regulatory environment would produce benefits for ratepayers and could backfire in higher costs. They argued the decision to allow the company to use customer dollars for speculation was something that should be left to the Legislature.
“FPL will shift all risks of investing in gas reserves to the customers in exchange for promises of potential customer fuel savings and guaranteed trued-up profits (or returns) for shareholders,’’ the public counsel said in its brief. It noted that it is not opposed to guaranteeing fuel savings to customers however, "FPL simply cannot guarantee those savings to customers over the next 50 years.”
The ruling could be the beginning of a trend as Duke Energy, the largest utility in the Tampa Bay market, said it is also considering asking for permission to charge its customers for fracking exploration.
Currently, utility companies are allowed to pass along all of their fuel costs to customers but are obligated to try to hedge the impact of fluctuating prices. FPL argued that because it purchases more natural gas than any utility in the nation, it had an economic interest in finding ways to reduce the impact of the volatile natural gas costs.
Commissioner Eduardo Balbis, who led the debate to endorse the proposal, called it “an effective form of hedging in that it reduces volatility.’’
He said that because of federal regulations which are reducing the use of coal-burning power plants, most of the company's fuel comes from natural gas and 70 percent of that comes from fracked wells.
Hydraulic fracking is a technology that involves injecting large volumes of water, sand and chemicals at high pressures to release oil and natural gas from rock caverns deep underground. On Wednesday, New York became the second state to ban hydraulic fracturing in because of concerns over health risks, including water contamination and air pollution. Vermont has also banned the practice.
“If customers are going to pay for gas that comes from unconventional sources, they will get it cheaper’’ this way, Balbis said.
Commissioner Julie I. Brown said she supported the proposal for similar reasons.
“Let’s face the reality here,’’ she said. “We are becoming more and more dependent on natural gas and we will only continue to become more natural gas dependent.”
Commissioner Lisa Edgar defended the proposal and said it had been misunderstood by many in the public. “It’s not about fracking in Florida,’’ she said. “Fracking in Florida will be a policy decision by the Legislature.”
The proposal was also not about drilling in the Everglades, decreasing conservation or renewable energy and “it’s not about drilling exploration in a greenfield site,” she said.
Instead, the reality is that the need for natural gas is growing and that “most of the natural gas used to provide to Florida businesses is currently coming from fracking areas across the country,” Edgar said.
Commissioner Ronald A. Brisé said he opposed the idea but voted for it anyway to follow the majority.
"The question really boils down to a policy hurdle: do we want utilities to get into the production business,'' he said. "What risks and challenges are assocated with that? Do we as a commission have the tools to look at that and ensure that our customers would be getting the best deal all of the time?”
The panel modified FPL’s request by suggesting that the company be required to hire an independent auditor to monitor the books of PetroQuest, since the PSC will not be allowed to see how much ratepayers are being charged for the exploration process.
The PSC decision was unusual in that it was made without the aid of a formal recommendation from the PSC's staff. PSC Chairman Art Graham concluded that FPL needed the ruling decided soon, although nothing in the record indicated the need for urgency. A staff recommendation, however, might have included elements that were not suitable to FPL, forcing the regulators to contradict their staff.
Regulators will return in March to address the broader policy question about whether to expand this proposal to include agreements with other companies. That will include a staff recommendation, which will be released in February.
A proposal to ban fracking in Florida, similar to New York's, has been filed in the Florida Legislature.
The fast-track approval may have set a new speed record on the PSC – going from hearing to final report in two weeks. There was nothing in the record that indicated that FPL’s partner in the deal would back out if the ruling wasn’t completed quickly.
As with all PSC proceedings, the record is lengthy – involving interrogatories, discovery documents, pre-hearing and hearing transcripts, briefs and motions. In it all, the PSC’s professional staff was involved at great taxpayer expense.
In the October earnings call report, FPL’s parent company, NextEra Energy, told Wall Street investors the PSC would come “either late this year or early next year.”
CFO Moray Dewhurst also reported that the company has ample latitude with regulators. He cited FPL’s court victory in prevailing to get an automatic rate hike for customers without input from the public counsel and predicted the company would continue to get unfettered favorable treatment from the regulatory board:
“The Court's order comprehensively rejected all the arguments raised by the Office of Public Counsel and made it very clear that, as long as the PSC follows appropriate procedures, as it did in 2012, it has wide latitude to determine whether a settlement agreement is in the public interest, taking account of all the prevailing facts and circumstances,’’ he said. “We believe this is a very positive development that will encourage and support efforts to negotiate future settlement agreements that, like the 2012 agreement, have new and innovative elements in them.”
The fracking proposal is not a settlement agreement but it has been called by PSC chairman Graham “unchartered territory” and, like the settlement, allows the PSC to continue to expand one initiative without asking regulators for permission.
Balbis, one of the most independent-minded members of the commission, also used the meeting to give his farewell after serving for four years on the PSC. His term expires at the end of the year and he surprised many when he chose not to seek another term.
[Last modified: Saturday, December 20, 2014 11:18am]
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