You see that enormous cloud of dust on the horizon?
On Tuesday, fat cats from the oil industry’s top five companies descended on Washington, D.C. to discuss the Gulf of Mexico oil disaster, deepwater drilling safety standards and emergency response plans.
And they were quick to pile on BP…
- Take Exxon Mobil CEO, Rex Tillerson, for example. He chastised BP for negligence: “It appears clear to me that a number of design standards that I would consider to be the industry norm were not followed.”
- John Watson, Chevron’s CEO, chimed in, too: “It appears that not all the standards that we would recommend – or that we would employ – were in place.”
- And Marvin Odum, President of the Houston arm of Royal Dutch Shell, weighed in by saying: “It’s not a well that we would have drilled.”
Ah, hindsight – what a wonderful thing. But if those BP-bashing comments made the CEOs feel better, consider this: If you own shares in any of the above companies, all five of them have nearly identical spill response plans. Plans that we now know are woefully inadequate to deal with the continuing disaster in the Gulf or another one like it.
BP = Big Payments
On Tuesday evening, President Obama made it clear that “we will make BP pay for the damage their company has caused.”
That’s the right thing, of course. But I’m not so sure whether his speech made much difference to the folks who make their living off the Gulf of Mexico. Damages to the fishing, shrimp and tourist industries are incalculable at this point.
Nevertheless, BP officials met with Obama and his staff at The White House on Wednesday morning, with BP agreeing to set up a $20 billion escrow fund to pay for the cost of the spill. BP also said it will cancel its $10 billion quarterly dividend for the next three quarters and dispose of some assets quicker than planned in order to raise additional cash, cash it will clearly need to manage the aftermath of a spill that’s still largely out of control.
The interesting thing about Obama’s speech wasn’t that he gave it, or even its content. It was the reaction to it – or rather, the lack of reaction…
While Congress Sleeps, States Get Moving
With 60,000 barrels a day still spewing into the Gulf, there’s little political opposition – by either party – to clean energy policy wonks or the ideas they’re proffering.
But we need firm action. Silence and dithering from Congress won’t get us off of our oil dependence. It will take a courageous, bipartisan effort. However, unless I’m missing something, that just isn’t in the cards anytime soon.
So what’s the solution? Well, for some time now, individual state and local governments have quietly enacted legislation that nudges the United States in a different direction. And that direction is toward natural gas…
A Gas-Filled Future
It’s becoming clearer by the day that America’s energy problems aren’t going to be solved by Congress. States and local municipalities know it, too…
Earlier this week, the seventy-eighth annual meeting of the U.S. Conference of Mayors was held in Oklahoma City. This 1,200-member non-partisan group represents cities with populations over 30,000. And the slumbering, inactive Congress got a sharp call to action from Conference President and Mayor of Burnsville, Minnesota, Elizabeth Kautz: “It’s time for federal action and we urgently call on both parties to lay down their political swords and work together for the common good of American families who are struggling to make ends meet.”
One of the more interesting actions at the Mayors’ meeting was to adopt a resolution calling on Congress to get its act together with respect to energy. Specifically, to accelerate three natural gas-related policy issues:
- Enact a new bill – the “New Alternative to Give Americans Solutions”((NATGAS)).
- Enact “The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users Act.” This provides a tax credit of $0.50 per gasoline-gallon-equivalent of Compressed Natural Gas (or liquid gallon of Liquefied Natural Gas) for the sale of CNG and LNG in motor vehicle fuel.
- Expand federally funded Research, Development and Demonstration (RD&D) programs to expand natural gas engine usage in the transportation sector.
The energy problem isn’t lost on states and municipalities. Quite the opposite, actually: They’re tired of hanging around for the Feds. So even with the situation struggling to pick up momentum at the federal level, states are doing it for themselves.
36 Down… 14 to Go
On June 1, Oklahoma became the thirty-sixth state to pass clean energy laws. How popular was it? The vote was 91-2 in favor.
After signing the bill, Oklahoma Governor Brad Henry said, “This legislation advances our nation’s energy security, improves the environment and enhances Oklahoma’s economic development potential.”
Oklahoma gets the natural-gas-as-a-transition-fuel thing, too. Its legislation states that by 2015, it must have at least one CNG fueling station for every 100-mile stretch of Interstate Highway within the state’s borders. And by 2025, that mandate is raised to one filling station every 50 miles.
As for the remaining 14 states that haven’t passed a similar bill yet, it’s hopefully only a matter of time before they realize that it means more jobs and higher tax revenue.
Natural gas is quietly creeping up into the limelight as a mainstream fuel. Before it turns into a groundswell, it’s worth considering adding a few natural gas-related stocks to your portfolio.