Energy map developed
The country’s energy production and energy potential have become increasingly popular topics among politicians and industry leaders in recent years.
Domestic crude oil production has increased rapidly over the past five years, reversing half a century of declines.
At the same time, there has been increasing discussion about the country’s renewable energy potential.
To help the public better understand the issues, Oklahoma City communications firm Saxum created a map of the country’s energy production and potential.
“Our US of Energy map is intended to be a conversation starter — an opportunity to begin telling the awesome, positive story of America’s domestic energy revival,” Blake Jackson, vice president of digital at Saxum, said on the company’s blog.
A Saxum team spent five weeks researching and crafting the design before putting everything together.
“What began as a simple graphic showcasing America’s energy riches quickly grew into a two-sided, folded map concept displaying thousands of individual data points,” Jackson said.
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.
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.”
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.
Is a settlement near in OG&E rate case?
A settlement could be near in a long-running rate case for Oklahoma Gas and Electric Co.
The parties were scheduled to have a settlement conference this morning at the Oklahoma Corporation Commission. During a three-hour hearing Tuesday afternoon, commissioners asked several times about the possibility of a settlement in the case, which started last July.
Commissioner Bob Anthony asked if appointing a settlement judge or mediator could be helpful at this point in the rate case.
“Commissioner, I have to tell you that I think the realm of a potential settlement is relatively small, the moving parts are relatively small, so I frankly think bringing a third party up to speed might actually not be productive,” said OG&E attorney Bill Bullard. “The others may have a different view.”
Chairwoman Dana Murphy said she didn’t support a mediator at this point.
“I would not be in favor of that. I think the parties have really worked hard on it,” Murphy said of a potential settlement.
Attorneys for the parties were mum on a settlement after the hearing. They will tell you settlements are always a possibility in rate cases, although nobody talks on the record about the details. OG&E settled its last rate case in 2009 with a $48 million increase. That was offset by an unrelated fuel-cost reduction for customers. OG&E had asked for a $110.3 million rate increase in the 2009 case.
Tuesday’s hearing centered on responses to a May 30 administrative law judge report that recommended OG&E be given what amounts to a $19.2 million rate increase. Much of the testimony was technical in nature, but it boiled down to how much the electric utility should be granted on its “return on equity.” OG&E asked for an 11 percent return on equity, which would amount to a rate increase of $73.25 million. The administrative law judge, Jacqueline T. Miller, recommended a return on equity of 10.75 percent, or a rate hike of $19.2 million.
Several other parties in the rate case, including AARP, commission staff, the attorney general’s office and groups representing industrial users, want OG&E to lower its electric rates. They suggested cuts between $4 million and $57 million.
Because of the length of the rate case, OG&E tried to implement higher interim rates earlier this month. But commissioners rejected those interim rates and held OG&E’s attorneys to an earlier statement on the record in January that the company would not implement interim rates.
Guest post: Kylah McNabb at the American Wind Energy Association national conference
Note: The following is a guest post by Kylah McNabb, who is in the State Energy Office at the Oklahoma Commerce Department. Among her many duties, Kylah is the resident wind expert at the department. She attended this year’s AWEA conference in Atlanta.
Oklahoma showcases at national wind conference
This week brings the time of year that those of us in the wind industry come together for our annual Windpower conference, hosted by the American Wind Energy Association. We descend upon a major city–this year Atlanta–to discuss industry news, issues and conduct various business transactions. After 10 years in this industry, our wind power show still continues to amaze me each and every year. Walking the over 20 acres of exhibition floor, a variety of languages can be heard in conversations, showcasing the truly international element of the wind industry. Companies — from wind developers to wind turbine manufacturers and environmental consultants to economic developers – all work to secure business in the wind industry. Over 10,000 attendees from all walks of the planet share one goal: grow the wind industry in the United States.
Oklahoma has a lot to showcase this year. As of the 1st quarter in 2012, we have just under 2,200 megawatts of wind power capacity installed across 19 wind farms in the state. By the end of 2012, we should cross 3,000 megawatts of capacity, essentially meeting our Renewable Energy Goal of 15 percent renewable energy by 2015 three years ahead of schedule. Gov. Mary Fallin released the Oklahoma First Energy Plan, which includes wind as a member of Oklahoma’s family, and we continue to spread the message that Oklahoma is a great place to do business.
Still, you can’t help but notice an air of concern around conference attendees this year. It stems from the fact that the federal production tax credit for wind power is set to expire at the end of 2012. An industry that employs over 75,000 people directly and tens of thousands more indirectly feels the strains like so many of a cautious economy. Tuesday morning’s general session first featured executives from the industry, most with over 30 years experience and each speaking to the importance of continued technology advancements and the need for stable national energy policy. Following them, there was a great discussion led by former Oklahoma Corporation Commissioner Denise Bode with Karl Rove and Robert Gibbs. While Rove and Gibbs are on opposite sides of the fence on most topics, ensuring America’s energy security by growing wind power across the nation is one topic that all sides can agree on.
Tuesday afternoon put Oklahoma in the spotlight as Secretary of Energy Michael Ming served on a speakers’ panel and delivered a presentation on “A Natural Partnership for Economic Development: Wind & Gas.” Oklahoma is blessed with an incredible natural gas industry that serves our state in many roles. It is our rich history and experience in energy industry that has enabled wind power to become a national leader in wind development. We look forward to the potential the future holds as we utilize our native energy sources.
Even though the Windpower 2012 show ended on Wednesday, on Thursday work continues as the Department of Energy’s Wind Powering America program hosts its annual All-States Summit. It is an honor to serve as the Oklahoma representative to this event, as we take a deep-dive analysis into the wind market and what each of us can do as states and regions to continue growing our industry. Oklahoma again is seated well. We have a top-notch wind resource; good policies such as our renewable energy goal and the zero emissions tax credit; progressive work in the building of transmission lines; and a strong, supportive business environment. But we have so much more to do. Oklahoma wind power is proving its national prominence in saving consumers’ money. One wind project in Oklahoma is a national example of investment taking place within our state borders and the power being sold to another state. The project involving Alabama Power Company is expected to save its customers money on their electric bills. This is just the first step in how we can add to the $3 billion of wind investment in Oklahoma and, like our energy partners, serve others with Oklahoma-based energy.
Finally, I cannot help but mention how much support comes to our great Thunder team from this part of the nation. Whether it was walking through the Centennial Olympic Park downtown, visiting the amazing Georgia Aquarium, or the World of Coca-Cola here in Atlanta, when you mention you are from Oklahoma, the first response is how excited they are for the Oklahoma City Thunder and how much everyone wants them to win. While we proudly wear our Thunder gear and cheer on our team from afar, we love and proudly welcome all the people who join us in cheering on our team! Go Thunder!
Rig worker snaps picture of Oklahoma tornado
No one ever said working on an oil rig wasn’t a potentially dangerous job, but a NOMAC Drilling crew encountered an unusual threat last week.
One of the workers on NOMAC 29 in Woods County snapped a scary looking picture of a nearby tornado.
The picture was posted Tuesday on Twitter by Michael Kehs, vice president of strategic affairs and public relations at NOMAC parent company Chesapeake Energy Corp.
Kehs justifiably used the hashtag “brave crew” on his Tweet.
UPDATE: A cell phone video shot by one of the NOMAC workers has been posted on YouTube.
Report: Oklahoma ranks 8th for wind projects under construction in 2012
The American Wind Energy Association released its annual market report today on wind projects. Oklahoma ranks No. 8 for the amount of megawatts under construction this year.
Here’s the Top 10, according to the report:
Top ten states for wind projects under construction in 2012:
1. Kansas: 1,189 MW
2. Texas: 857 MW
3. California: 847 MW
4. Oregon: 640 MW
5. Illinois: 615 MW
6. Pennsylvania: 520 MW
7. Iowa: 470 MW
8. Oklahoma: 393 MW
9. Michigan: 348 MW
10. Washington: 331 MW
As far as wind generation as a percentage of electricity, Oklahoma ranks 10th in the nation with 7.1 percent. Here’s the Top 10:
Top states for wind generation as a percentage of their portfolio
1. South Dakota: 22.3%
2. Iowa: 18.8%
3. North Dakota: 14.7%
4. Minnesota: 12.7%
5. Wyoming: 10.1%
6. Colorado: 9.2%
7. Kansas: 8.3%
8. Oregon: 8.2%
9. Idaho: 8.2%
10. Oklahoma: 7.1%
Of course, the projections for wind expansion in 2013 are uncertain right now. The industry is facing a big drop off in construction next year if a federal tax credit isn’t renewed by Dec. 31. A recent report for the industry by Navigant Consulting found an estimated 37,000 jobs are at risk if the credit isn’t renewed.
“In hard economic times we’re creating jobs and delivering clean, affordable electricity,” AWEA’s CEO Denise Bode said in a statement. “But we will lose all these consumer benefits and a brand new, growing manufacturing sector if Congress allows the Production Tax Credit to expire. Businesses need certainty. That is why it is urgent that Congress extend the PTC now, or risk losing a bright new manufacturing sector.”
