Stateline Midwest ~ January 2013

By 2020, the United States is projected to become the largest oil producer in the world, and by 2035, the nation could be nearly energy self-sufficient.

These are two of the findings in the 2012 edition of the World Energy Outlook, published by the International Energy Agency (IEA) in November 2012. The Midwest will play a big role in the move toward self-sufficiency, through its production of renewable energy and fossil fuels and because of the energy efficiency requirements of many states in the region.

During our 2012 national conference last December in Austin, a policy resolution was passed promoting smart grid and grid modernization efforts at CSG. The resolution sets up a general framework of important components that should be considered by states when discussing grid modernization initiatives as well as encouraging additional educational outreach work to CSG's membership and interaction with other sister organizations on behalf of states. 

CSG Director of Energy and Environmental Policy Brydon Ross outlines the top five issues for 2013, including the future of coal, Clean Water Act legal actions, energy infrastructure hardening, managing the energy wave, and EPA air regulations. 

Numerous renewable energy tax incentives were extended as part of the 11th-hour legislation passed by Congress late last night to avoid the so-called "Fiscal Cliff." Among the bill's many provisions, perhaps the most high-profile in the energy arena was a one year extension of the 2.2 cents/kilowatt hour production tax credit (PTC) for wind energy that is estimated to be worth roughly $12 billion.

State leaders should expect energy and environmental issues to largely stay in the regulatory and legal arena in 2013 as fiscal issues will most dominate the attention of Congress. Market forces will also likely put upward pressure on the development of the country’s oil and natural gas resources, but could pose potentially complex oversight and budget issues for states. The substantial increase in natural gas supply and the current cheap price it enjoys could have long-lasting implications for the nation’s electricity mix as the use of coal-fired power declines and more stringent EPA air regulations are enforced. Lastly, as many states will continue to recover from the ravages caused by Hurricane Sandy opportunities will be presented to apply lessons learned to improve the resiliency of their energy infrastructure. 

On Tuesday, the Energy Information Administration (EIA) announced that crude oil production in the U.S. reached a 15-year high with nearly 6.5 million barrels per day in September. The boom was attributed to the use of hydraulic fracturing and horizontal drilling techniques which yielded a 16 percent increase, or an extra 900,000 barrels per day, from September 2011 levels.

The siting of interstate electricity transmission lines has long been a problem for both states and the federal government. With the expected growth in electricity demand—combined with the need to bring renewable energy to market and the necessity to enhance and secure the nation’s energy infrastructure—the need for added transmission capacity in the United States has never been more critical. Attendees learned more about a member-driven initiative aimed at improving the siting process through common applications, pre-determined timelines and coordinated publichearings during this session. This new compact will be ready for legislative introduction beginning in 2013. Subject matter experts discussed the need for the compact, the development process and specific areas covered by the new interstate agreement.

The emerging availability of oil and natural gas due to the process of hydraulic fracturing has been perhaps the biggest game changer for the energy sector and many states in recent years.