Monday, 3 May 2010

US energy sector reform to be affected by Louisiana oil spill

Proposed major reform of the US energy sector could be sidelined by the oil spill in the Gulf of Mexico.

By Alex Spillius in New York
Congressmen have signalled that they are considering withdrawing tentative support for the White House’s climate plans, which seek to limit emissions of carbon dioxide, because they currently includes offshore exploration plans.
A number of Democrats are among those threatening to take back their support, including two of New Jersey’s congressmen and both of its senators.

“I think that’s dead on arrival,” said Senator Bill Nelson, a Democrat from Florida, one of the states whose coastlines will be affected by the disaster.
The proposals could eventually become a bill, which is expected to be sponsored by Democrats and Republicans. They have already been watered down from an earlier version and were already not certain to pass Congress in their current form, as there is stiff opposition to proposed limits on carbon emissions within the legislature.
The proposals aim to cut US production of greenhouse gases to 17 per cent less than 2005 levels by 2020, and would also expand domestic production of oil, natural gas and nuclear power.
President Barack Obama has already made a considerable concession to the petroleum industry when he recently opened up 500,000 sq miles of America’s coastal waters to oil exploration, reversing a campaign promise in the process.
Though no further drilling had yet been approved, the White House has now emphasized that none will be until a thorough examination of what went wrong on the BP field has been carried out.
With the crisis escalating, environmental groups said the likelihood of further offshore exploration decreased by the day.
“When you’re trying to resurrect a climate bill that’s face-down in the mud and you want to bring it back to life and get it breathing again, I don’t think you can have offshore drilling against the backdrop of what’s transpiring in the Louisiana wetlands,” said Richard Charter, energy adviser to Defenders of Wildlife, an ecological campaign group.
“I think it’s flat-lined.”
David Jenkins, a spokesman for Republicans for Environmental Protection, said the politics were “changing by the minute” as the spreading slick threatens coastal states that traditionally support offshore drilling.
“If this plays out, how many politicians will be jumping up and saying they won’t vote for this because it doesn’t include offshore drilling?” Mr Jenkins said.
Senator Lindsey Graham, a Republican, however, said that he had not wavered in his support.
“We’ve had problems with car design, but you don’t stop driving,” he said.
A White House spokesman has said that Mr Obama remains committed, at least for now, to plans to expand drilling.