Environment Update

An Information Service of the NCSL Standing Committee on Environment and Natural Resources

OFF-SHORE DRILLING IS CENTERPIECE FOR ‘ENERGY WEEK’ – Expect the House to consider HR 4761, which passed the House Resources Committee on June 21, as early as this Thursday, June 29.  HR 4761, which was introduced by Louisiana Representative Bobby Jindal, will alter the present crude oil and natural gas production moratorium as outlined below:

• Up to 50 miles from shore – Remains under moratorium, however states may choose to open such waters
• 50-100 miles from shore – Open to drilling, however states may choose to ban such action
• 100 miles from shore – Open to drilling
• Increased revenue sharing; percentage dependent on distance from shore.

Appearance on the House Calendar indicates that Republican Leadership believes it has enough votes to pass the measure out of the House.  Votes on the other side of the Capitol are believed to be severely lacking.

FEDERAL POLICY MAKERS STILL SCRATCHING HEADS – In its Report to the President:  Task Force on Boutique Fuels released June 23, the EPA concluded that boutique fuels are not an effective arena for Congress to aid consumers in fuel prices.  According to the report, boutique fuels are beneficial to air improvement while being cost-effective, and are useful to the eleven states that currently use specially blended motor fuels to lower volatile organic compound (VOC) emissions which cause high levels of ozone and particulate matter.  EPA will use this report as a base for an additional analysis of boutique fuels which is due to Congress in August per the Energy Policy Act of 2005 (EPAct).  Also per EPAct, EPA is scheduled to deliver a comprehensive assessment of the nation’s fuel system, including state and local fuel variations, and the effects of different national, state, and local requirements on supply, quality, and cost, to Congress in mid-2008.  To view the Task Force report, please visit http://www.epa.gov/otaq/boutique-task-force.htm.

ULTRA-LOW SULFUR DIESEL MAKES FOR STRANGE BEDFELLOWS – The Petroleum Marketers Association (PMA) has reported that by the Environmental Protection Agency (EPA) deadline of October 15, 2006, only 10% of the diesel fuel available at retail outlets will be 15 parts per million ultra-low sulfur diesel (ULSD).  They assess, however, that the 10% will be sufficient to fuel the new clean diesel vehicles that will be on the road at that time.  The 2001 EPA-issued rule requires that between June 1 and December 31 refiners produce at least 80% of their inventory at the reduced sulfur level of 15 ppm, and that by model year 2007 heavy-duty trucks fueled by diesel reduce their nitrogen oxides, particulate matter, and sulfur dioxide emission by 95%.  The lack of full compliance with the rule required the PMA to request an extension of the October 15 deadline, which was denied by the EPA and opposed by the trucking and truck manufacturing industry as well as environmental groups.  The new technology in the cleaner trucks will be permanently damaged if fueled by anything other than ULSD, therefore the trucking and associated industries join the environment groups in the fight against any extension.  The EPA agreed that such action was not possible. 

PMA assures, however, that by January or March of next year, most pumps will be selling ULSD, and refiners’ production of 15 ppm diesel should be close to 100%.