WASHINGTON, April 21, 2015 – Yesterday Senate Energy Committee Chair Lisa Murkowski, R-Alaska, announced she will write new energy legislation to stop “allowing our policy and our future to be decided by regulators and courts.”Today the Obama administration unveiled its own broad energy policy plan in its 368-page, first-ever Quadrennial Energy Review (QER).
Apparently planning to rely on Energy Department regulations more than on legislation, the QER focuses on energy TS&D (transportation, storage and delivery). The administration plan is designed to modernize every part of the nation’s energy delivery system: the electric grid, electric power plants, natural gas pipelines, railroad and waterways logistics and safety, and the Strategic Petroleum Reserve. Key to the recommended changes is making every part of the delivery system more efficient and better able to recover from any shocks -including climate-driven extreme weather events, cyber security breaches, terrorist attacks or even solar storms.
A White House statement today explained that the QER’s aim is “to modernize the Nation’s energy infrastructure to promote economic competitiveness, energy security, and environmental responsibility and take full advantage of American innovation and the new sources of domestic energy supply that are transforming the Nation’s energy marketplace.”
House Energy and Commerce Committee ChairFred Upton, R-Mich., and Energy and Power Subcommittee Chair Ed Whitfield, R-Ky.,welcomed the QER. In a joint statement, the congressmen said they are reviewing the QER’s full recommendations “but we have already found areas of common ground where we will work together.”
“The QER’s findings underscore the urgent need to update our nation’s energy policy and modernize our energy infrastructure. The current energy policy written in a time of scarcity just isn’t cutting it in today’s era of abundance,” the two GOP congressmen said. “While we share our differences with this administration regarding energy policy, when it comes to the transmission, storage, and distribution of our resources, we can all agree that targeted changes to our laws and policies are necessary. We need a modern and resilient energy infrastructure that will meet tomorrow’s energy challenges.”
Clearly the administration will need to work closely with Congress in order to implement the QER recommendations because the QER calls for more than $15 billion in new spending over the next decade to modernize and harden the nation’s energy delivery system.
Proposed spending includes an estimated $3.5 billion to modernize the electric grid’s network of transmission power lines. Those lines now will need to reach into more “off the grid” areas to deliver wind and solar power to metropolitan centers. As much as another $3.5 billion could be needed to replace aging natural gas pipelines and add many new pipelines now that more electricity generation is switching from coal to natural gas and now that fracking is producing natural gas in remote areas not yet served by pipelines.
The White House points out that there is a job-creation benefit from the $15 billion it proposed to invest in the nation’s outdated energy infrastructure. It estimates that “there is the potential to support 1.5 million additional energy sector jobs for the transmission, storage, and distribution segment alone.”
Commenting on the QER, American Petroleum Institute (API) Executive VP Louis Finkel said the administration’s report “highlights the need to invest in our nation’s energy infrastructure, which will create jobs, enhance energy security and enable a cleaner energy future.”
The QER itself focuses attention on the rapid growth of wind and solar energy and the need to integrate these new power sources with the electric grid. API’s Finkel, however, emphasized that “The QER reflects the Department of Energy’s own prediction that by 2040 Americans will still need oil and natural gas to meet more than 60 percent of their energy needs.” He explained that “If the president wants to achieve our nation’s full energy potential and play a key role in this equation, he should put this industry to work.”
API, along with Senator Murkowski and other oil industry champions, have long argued that federal permitting rules must be streamlined to end costly delays and release the full potential of America’s oil and gas industry. In a possible response to these concerns about permitting, the QER acknowledges that “it is essential to promote more timely permitting decisions while protecting our Nation’s environmental, historic, and cultural resources.”
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