Recap of the OSU Energy Conference
Oklahoma State University held its 7th Annual Energy Conference on Tuesday in Oklahoma City, and our man Jay F. Marks (@okenergybeat) was a tweeting machine. You can read his dispatches below and check out Energy Editor Adam Wilmoth’s recap of the conference here. For the speaker presentations, go here.
IRS clarifies rules on construction to qualify for wind tax credit
Congress granted the wind industry a one-year extension of a critical production tax credit in the deal cut at the end of 2012 on the so-called “fiscal cliff.”
But the extension also changed the trigger on when the tax credit can be claimed. Previously, wind farms or other renewable facilities had to be producing electricity to claim the credit. Now, the extension requires them only to “begin construction” before Jan. 1, 2014. How you define “begin construction” has made the situation murky for many wind developers and put some projects on hold.
That changed Monday when the Internal Revenue Service issued 13 pages of rules on what it considers to be construction “by starting physical work of a significant nature.” Wind developers can either meet those construction milestones or spend at least 5 percent of the total project cost by the Jan. 1, 2014, deadline.
The rules say construction has to be related to the actual project. Developers can’t build an access road for construction and expect that the project will qualify by the deadline. But if that road is integral to the operation of the wind farm, then it likely will qualify.
“I think they’ve found the right combination that gives developers an appropriate amount of flexibility for a broad range of project and construction scenarios,” Jacob Susman, founder and chief executive officer of OwnEnergy Inc., a Brooklyn-based builder of wind farms, told Bloomberg. The ruling also protects taxpayers “by ensuring that real projects that have legitimately begun construction will qualify.”
The incentive now gives producers a 2.3 cent per kilowatt hour tax credit, up from 2.2 cents. Along with state renewable energy standards, the tax credit helped push U.S. wind installations to more than 60,000 megawatts by the end of 2012. Oklahoma ranks sixth in the country in wind power capacity with more than 3,100 megawatts, according to the American Wind Energy Association.
[VIDEO] Watch California city implode old power plant
If you’re a fan of watching things blow up, then have I got a video for you. The Los Angeles Times has a great video of a power plant in Chula Vista, Calif., being demolished over the weekend in a controlled implosion. A Tulsa-based company, Dykon Explosive Demolition Corp., was one of two companies in charge of the demolition.
The newspaper said the plant was built by San Diego Gas & Electric Co. and came online in 1960. The 700-megawatt generating station burned fuel oil and was shut down in 2010. Developers are hoping to turn the site into a park and resort hotel. Read more from the Los Angeles Times here.
Wind power association ramps up effort to renew tax credit
Worried that its renewal could be lost in the shuffle in congressional negotiations over the so-called “fiscal cliff” package of spending cuts and tax increases, the American Wind Energy Association has released a new video explaining the importance of the production tax credit to the wind industry.
You can check out the video below:
The association last week released a new analysis that called for the renewal of the 2.2 cent per kilowatt hour tax credit with its eventual phaseout by 2019. That study was among the last actions by outgoing CEO Denise Bode, a former Oklahoma Corporation Commissioner. Bode, who has been with AWEA for four years, said she will leave the association Jan. 1 to return to private practice as a tax attorney. Rob Gramlich, AWEA’s senior vice president for public policy, will be interim CEO as the association searches for a new CEO.
Wind power association has plan for phaseout of federal tax credit
The American Wind Energy Association said a new analysis shows the industry could prosper without federal help in six years.
The group said a renewal and phaseout of the federal production tax credit would allow wind producers to save an estimated 37,000 jobs at risk when the credit expires Dec. 31. Its renewal is just one of the many tax credits up for negotiations between Congress and President Barack Obama on the so-called “fiscal cliff.”
Denise Bode, the association’s CEO, sent a letter to congressional leaders Wednesday outlining a phaseout plan for the production tax credit. The incentive currently provides wind producers with a 2.2 cent per kilowatt hour tax credit.
The letter touts the progress of the wind energy in meeting renewable energy targets and its creation of manufacturing jobs across the country. Uncertainty over its future has plagued the tax credit since its creation in 1992. Congress has let it expire and then renewed it three times. Bode mentioned that uncertainty in the letter:
Time and again the industry has made the case to Congress for a PTC renewal, and with overwhelming bipartisan support, the credit has been extended in order to drive more efficient, cheaper and cleaner energy. Still, the stop-start nature of short-term extensions has made it difficult to get the industry to a place where it can be fully cost-competitive. Policy certainty is the only way the industry will be able to make long-term investment decisions that can solidify this American success story.
AWEA proposed continuing the credit at 100 percent for 2013. It would then fall by 10 percentage points each year until it hits 60 percent in 2017 and 2018. The credit would end in 2019.
“We began this process in order to be a part of the solution on our nation’s fiscal challenges, while creating needed stability for wind industry development, both of which are concerns for our industry,” Bode said in a news release. “We wanted to take this head-on, as part of our patriotic duty as well as our duty to the industry. We completed the analysis, and this is what it identified as necessary for at least a minimally viable industry.”
Oklahoma utilities send crews to help Hurricane Sandy power restoration
Satellite view of Hurricane Sandy on the Eastern United States on Oct. 29, 2012. Image courtesy of NOAA.
Crews from a couple of Oklahoma electric utilities are headed east to help with power restoration in the wake of Hurricane Sandy.
Oklahoma Gas and Electric Co. sent a 60-person storm team to help Maryland’s Baltimore Gas and Electric Co. earlier this morning, said OG&E spokesman Brian Alford. OG&E also mobilized 69 contract lineman and 90 tree trimmers.
Public Service Co., a unit of Ohio-based American Electric Power, sent about 70 employees and contractors from Tulsa, McAlester and Lawton over the weekend to Wytheville, Va. They are expected to arrive this afternoon or evening and receive their assignments there, said Stan Whiteford, PSO’s spokesman.
Meanwhile, energy monitoring firm Genscape has opened up its proprietary system to the public during the storm for updates on electricity, power plants and refinery outages.
While Sandy has yet to come ashore, the effects of the storm are already being felt along the Mid-Atlantic and into New England. One estimate from engineers at Johns Hopkins University said up to 10 million people could lose power from the storm.
VIDEO: Chesapeake CEO Aubrey McClendon on CNBC
In case you missed it, here’s Chesapeake Energy Corp. CEO Aubrey McClendon talking to Jim Cramer on CNBC last night.
Federal Energy Department highlights energy efficiency at Oklahoma City school
An exterior shot of Oklahoma City’s Harding School from 2004.
An energy efficiency effort at Oklahoma City’s Harding Charter Preparatory High School has been highlighted by the federal Energy Department.
The department said Harding took advantage of funding from the State Energy Program to upgrade light bulbs, put in a new heating and air conditioning system and replace older entry doors with new energy-efficient models.
Energy-efficient upgrades to Harding Charter Preparatory school are expected to save nearly 2 million kWh of electricity and more than 1,000 MMBtus of natural gas annually — reducing the school’s energy costs by about $45,000 a year.
Photo courtesy of John Winkel, Energy Department
Documentary “Switch” takes balanced look at global energy needs
A new documentary on energy, “Switch,” is getting good reviews from both environmentalists and those in the energy industry.
I had the chance to see it last night at a screening in Oklahoma City. (It continues tonight and Thursday.)
I’ve seen the controversial fracking film “Gasland” and the energy industry’s response, “Truthland,” so my tolerance for talking points on both sides of the debate was fairly low. I was pleasantly surprised by the depth and measured tone of “Switch.”
The movie, which was made with the help of the American Geosciences Institute foundation, follows geologist and University of Texas professor Scott Tinker around the world as he explores where and how our energy is harvested. It includes some spectacular shots of massive coal mines in Wyoming, hydro projects in the fjords of Norway and wind farms in Texas.
“Switch” also features a short interview with Chesapeake Energy Corp. CEO Aubrey McClendon and follows a Chesapeake “fracking” crew out in the field. The documentary doesn’t shy away from discussing the public concerns about hydraulic fracturing and has interviews with environmentalists, policy makers and industry officials.
But “Switch” is more than just fracking. It takes a comprehensive look at the world’s energy needs, with a particular emphasis on the rapidly growing demand for energy in China, India and other developing countries. The takeaway? Those countries will be using coal and oil to meet their future energy needs, and there’s little the developing world can do about it.
It doesn’t take long for serious discussions about energy to get complicated, but “Switch” boils down all the talk of megawatts and BTUs to a simple unit: the amount of energy an average person uses in a year. (If you’re curious, Tinker defines it as about 20 million watt-hours of energy.) From an oil platform in the Gulf of Mexico to a concentrated solar plant in Spain, the movie defines the energy produced in terms of how many people it would power.
For all the technology improvements in energy, “Switch” makes it clear that it comes down to scale. A technology advancement or discovery might be great, but if you can’t scale it up to serve large numbers of people, then it will remain a niche solution. Through a combination of renewables and nuclear power, the film estimates the world will reach a “switch” point in 2064. That’s when the use of renewables and nuclear will match the use of “foundational” fuels coal and oil.
The last part of “Switch” focuses on energy efficiency and what individuals can do at home to save money–and energy. The efficiency side of the equation is often forgotten about in the political fights over energy policy, but the film makes it clear that the energy we waste is just as important as the energy we create use.
If you can’t make it to the remaining screenings in Oklahoma City, check out the “Switch” website, which has short videos and some highlights from the documentary.
Harold Hamm heads to Capitol Hill to testify on energy independence
Continental Resources Inc. founder and CEO Harold Hamm is expected to testify Thursday morning before a House subcommittee in Washington, D.C.
Hamm plans to talk about the potential for North American energy independence, opening up federal lands to oil and gas drilling and the importance of tax credits for the oil and gas industry, according to his prepared testimony.
I am excited about our energy future and therefore our economic future. But I am equally concerned about federal policies that could cost us that future.
Just a few years ago, America was importing 60 percent of its oil. But with technological advances in horizontal drilling over the last 15 years, we now import less than 45 percent of our oil. Just a few years ago we estimated our nation’s natural gas reserves at seven years. We now have natural gas reserves of over a century. With this extraordinary advance in technology we can now access the immobile oil and natural gas of the world. Previously to this point we were only able to produce the world’s mobile oil and natural gas. There is about 1/3 more immobile oil and natural gas than the mobile oil and gas we have produced for over a century. The technology that allows us to drill two miles down, turn right, go another two miles and hit a target the size of a lapel pin has unlocked the resources that make energy independence a reality.
This paradigm shift in American oil and gas exploration brings with it high-paying jobs, increased tax revenues and economic growth, while lessening our dependence on foreign oil.
Hamm also serves as the head of energy advisory committee for GOP presidential candidate Mitt Romney, whose energy plan touches on similar subjects as Hamm’s prepared remarks. But Hamm emphasizes in his testimony he’s there as a private citizen:
But I am not here representing Continental Resources, any political campaign or political party. I am here as an American patriot that loves my country and a person that is grateful for the opportunities I have been given by being an American. Only in America can the thirteenth child of a sharecropper turn a one-man, one-pump-truck operation into one of the nation’s largest oil companies.
Meanwhile, the folks at the Think Progress environmental blog have several hypothetical questions for Hamm ahead of his testimony. They are skeptical of the claims of energy independence and want more details on which federal lands might be opened for oil and gas exploration.
In his hearing testimony, Hamm supports opening federal lands and offshore areas for drilling, but claims it “would impact my company very little” because “we mainly work on private lands.” But Hamm holds a number of permits to drill on public lands, including recent permits for Montana and North Dakota. Romney’s plan would likely boost Hamm’s profits, but potentially at the risk of Americans’ national parks.
