Energy prices have increased dramatically over the past five years, but royalty payments to the U.S. government has remained level, The New York Times reports today after a three-month investigation.

Energy companies are required to pay royalties to the government for the right to withdraw oil and natural gas publicly owned lands and coastal waters.

The article, written by Edmund L. Andrews, says that federal regulations allow the companies to write down the sale price of the natural gas they sell, thereby lowering the royalties they pay. Often, the price they report for calculating royalties is substantially lower than the price they report to shareholders, according to the article:

... [A]n often byzantine set of federal regulations, largely shaped and fiercely defended by the energy industry itself, allowed companies producing natural gas to provide the Interior Department with much lower sale prices - the crucial determinant for calculating government royalties - than they reported to their shareholders. As a result, the nation's taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy bonanza.

For fiscal 2005 alone, if the royalty payments for natural gas had kept up with market prices, they would have been $700 million higher, the Times reports.

Several weeks ago I went out to purchase some additional energy efficient bulbs and came home empty handed and a little concerned. I took some time to read the package data and found this note clearly printed on the label: "This product contains mercury." I know enough about environmental hazards to know that mercury, even in small quantities, is a dangerous heavy metal. This is the first time that I have been aware that a highly touted energy savings item contained mercury.

In fact, these bulbs do contain mercury, in vapor form. Mercury is a substance known affect the brain, spinal cord, kidneys and liver, according to the Environmental Protection Agency. It can cause symptoms such as trembling hands, memory loss and difficulty moving.

The amount of mercury in a CFL bulb is very small amount. According to a fact sheet distributed by the Environmental Protection Agency, CFL bulbs contain 4 mg of mercury. By comparison, a traditional glass thermometer contains 500 mg of mercury. So it would take 125 compact fluorescent bulbs to equal the same amount of mercury as what's contained in one thermometer.

Still, the EPA recommends that these bulbs be disposed of differently than regular light bulbs, and it suggests people take special care if a CFL breaks inside your home: "Open nearby windows to disperse any vapor that may escape, carefully sweep up the fragments (do not use your hands) and wipe the area with a disposable paper towel to remove all glass fragments. Do not use a vacuum. Place all fragments in a sealed plastic bag."

Broken or burned-out CFL bulbs should be recycled through residential recycling programs, the EPA says. They can be found at Earth911.org, or by calling 800-CLEAN-UP, an automated hotline.

In Rhode Island, the bulbs can be dropped off at the Rhode Island Resource Recovery Corporation's Eco-Depot in Johnston, said Joseph Rotella, Eco-Depot manager. The program allows people to drop off hazardous waste found in households. An appointment is necessary, Rotella said. The next collection date is December 10 in Johnston, For a list of all collection dates, see the company's Web site.

The company said it would provide "millions of gallons" of discounted heating oil for Massachusetts low-income residents and institutions that serve them. CITGO is a subsidiary of Venezuela's state oil company Petroleos de Venezuela (PDVSA).

...It is our duty to act as good corporate citizens and help those in need as circumstances allow. -- Felix Rodriguez, CITGO president and CEO

It did not say where else the program will be offered.

But a spokesman for Sen. Jack Reed said today the senator's office held a conference call with CITGO and the Rhode Island Oil Heat Institute on Friday to discuss the possibility of bringing discounted oil to Rhode Island. Nothing definite has been worked out, said the spokesman, Greg McCarthy. The Oil Heat Institute is a trade organization representing oil dealers in the state.

Reed wrote a letter last month to the heads of several oil companies, asking them to donate 10 percent of their profits to heating assistance programs. CITGO was the only one to respond, McCarthy said.

"CITGO Petroleum Corporation agrees with you, your colleagues and the national leadership of the country, that it is our duty to act as good corporate citizens and help those in need as circumstances allow,'' wrote Felix Rodriguez, CITGO's president and CEO.

He adds: "We are aiming to help low-income Americans not just this winter, but beyond that. We are studying potential plans for ongoing, sustained assistance programs in the United States with the goal of lifting our neighbors in need to an improved quality of life."

The letter didn't include any specifics, but Rodriguez closed by saying he desired to meeting with Reed and his colleagues "to further discuss the details of this initiative."

"It looks as though the U.S. consumer is returning to his old gas guzzling habits," said James L. Williams, an economist with WTRG Economics, based in London, Ark.

Demand is increasing as gasoline prices continue to drop. In Rhode Island, the average price for regular self-serve was $2.309 on Monday, down 89 cents from its all-time high of $3.199 on Sept. 6.

The Energy Department said that a big reason the price of gasoline has declined was a huge upswing in imported gasoline, which began arriving shortly after the Hurricane Rita hit the Gulf of Mexico.

Apparently, several oil company executives are having trouble remembering whether or not they, or representatives of their companies, attended meetings at the White House complex in 2001. They were held by Cheney's energy task force as the administration developed its national energy policy.

The meetings, held between February and April that year, were controversial because environmentalists said they weren't invited, and their views were therefore not represented. The White House has declined several requests to release a list of who was there. Some organizations have sued to get a list of participants.

At a Senate hearing last week, several oil executives denied participating in the energy task force meetings.

But the Washington Post reports today that it has obtained a document that shows that many of the executives were indeed at the White House to meet with the task force. The newspaper reported:

The document, obtained this week by The Washington Post, shows that officials from Exxon Mobil Corp., Conoco (before its merger with Phillips), Shell Oil Co. and BP America Inc. met in the White House complex with the Cheney aides who were developing a national energy policy, parts of which became law and parts of which are still being debated.

The document was based on Secret Service records that show who was admitted to the White House, according to the article, written by Dana Milbank and Justin Blum.

To watch a video of the hearing, click here.
http://commerce.senate.gov/archive.energyprofits110905.ram

And this page has has links to the statements given by the executives.

Tomorrow night's episode of Thirteenth State, WSBE's public affairs show, will address winter energy costs and heating assistance programs. The two guests will be Janice McClanaghan of the Rhode Island State Energy Office and Major Robert Pfeiffer, of the Salvation Army. The show airs at 7:30 p.m. Wednesday. WSBE is Rhode Island's PBS television station, and it broadcasts on Channel 36, and on cable channel 8.

But until then, I have to share one tip from Ana Farias of Providence. She left this phone message:

My tip for saving money is to get a cat to sleep with you at night. I don't know why a cat works a lot better than a dog. I did not realize I was tempting my cat on the bed with a 100-percent wool blanket that I put on top of the comforter. When she gets up and gets on my leg, it is amazing how much heat she generates. I have a dog who wants to sleep with me too, but it is not nearly as effective. The cat really does the trick.

I called her back to see if she was just kidding, and she assured me she wasn't.

She said her brother visited recently and he complained that he was cold sleeping in her house. She asked him if he had left the cat on the bed and he said, no, he had kicked her off.

Ana told him about her discovery, and the next few nights, he left the cat on the bed. And he stopped complaining about being cold.

I wondered if she had figured out how much money she saved thanks to her cat, Leah.

She said she hadn't. "I'm sure it pays for her cat food."

The Corps today announced two hearing dates for the public to comment on the dredging plans: Dec. 14 at Durfee High School in Fall River; and Dec. 15 at Mt. Hope High School in Bristol. Registration begins at 4 p.m. and the hearings begin at 5 p.m. on both days. The hearings will run until public comments are complete, or until 10 p.m.

The notice about the hearings is here (7 page PDF).

Weaver's Cove has posted its dredging plan on its Web site.

Consumers will pay more this winter not just for home heating, but for manufactured products that contain chemical compounds -- which is nearly every good manufactured in the US, from tires, telecommunications and carpeting to pharmaceuticals and shampoo. That's because all chemical compounds are made with natural gas as a raw material. There are already product shortages because manufacturers cannot get natural gas at an affordable price: Simmons Bedding Company cannot obtain enough polyurethane foam needed to make bedding. Goodyear is cutting U.S. tire production by 30 percent due to rubber shortages. Newell Rubbermaid has seen resin costs jump 21 percent in a year, and is looking at switching to alternative materials. And a bottled water company that wanted to supply water to FEMA found that its suppliers could not provide the plastic needed. Production of carpet and fertilizer are also down.

The council, a trade association for the U.S. chemical industry, says the way to bring down gas prices is conservation, as well as legislation to increase gas supply:

...It is critical that legislation to increase domestic supplies is enacted into law. This legislation is currently working its way through Congress and could increase the nation's access to domestic reserves of natural gas. That could send a strong signal to the natural gas market that policymakers are serious about fixing the problem by increasing the supply (supply/demand has been grossly out of balance for years), and prices can come down. Public policies have a huge impact on natural gas prices and supply.

Sen. Lincoln Chafee isn't winning any new friends among his Republican colleagues on Capitol Hill. On Wednesday, he sided with the eight Democrats on the Senate Environment and Public Works Committee to kill a bill intended to spur the building of new oil refineries.

Congressional Quarterly reports that the bill, introduced by committee chairman James M. Inhofe, R-Okla., would have allowed states to opt into a new program streamlining the permitting process for new refinery projects. It also would have encouraged the siting of new refineries on former military bases and authorize federal funding for state and local organizations working to redevelop those sites.

Here's a summary of the bill, and here is the full text, both from the Library of Congress.

The bill got a 9-9 tie vote, which killed the bill.

Chafee voted against the bill because he had a number of concerns about it, his spokesman, Stephen Hourahan told me today.

"He was concerned it weakened environmental protections and eroded state and local perogatives," Hourahan said. It could have opened the door to a refineries being built on former military properties, such as those in Portsmouth, "without any of the local input or restrictions we would like to have." The bill also didn't address oil consumption, such as raising the federal CAFE standards that set the minimum miles-per-gallon ratings for cars and light trucks.

Interestingly, the story is being played differently, depending on the source. Human Events Online, a national conservative weekly, headlines its story today about the vote: Chafee Votes to Keep Gas Prices High / R.I. Liberal Joins Democrats to Oppose Refinery Bill.

Here's how Human Events covered the story:

The eight committee Democrats won over liberal Sen. Lincoln Chafee (R.-R.I.), whose vote against Chairman Jim Inhofe's Gas PRICE Act (S 1772) means Republicans will have to take other steps if they want to push a refinery bill through the Senate this year.

Inhofe (R.-Okla.) told HUMAN EVENTS he pleaded with Chafee to vote with the committee's nine other Republicans on the measure because Democrats were opposing the bill for purely partisan reasons. In the end, however, Chafee sided with Democrats.

"I went to Lincoln Chafee," Inhofe told HUMAN EVENTS in an exclusive interview, "and I said, 'Lincoln, I know you're from Rhode Island, and I know from time to time you have to cave in to these people because you're in a tight election, but their motivation is to blame Republicans for something the Republicans didn't do, and you're a Republican.'"

Meanwhile, the environmentally conscious Sierra Club issued a press release on its reaction to the demise of the refinery bill:

WASHINGTON -- In a victory for clean air and the health of American communities, the Senate Environment and Public Works Committee refused to vote out a bill by Committee Chair Sen.Inhofe (R, OK) that would have weakened environmental protections and given subsidies and handouts to the polluting oil industry. The bill was defeated by a 9-9 vote with all the Committee Democrats and Sen. Lincoln Chafee (R. RI) opposing this harmful legislation that attempted to exploit the tragedies of Hurricanes Katrina and Rita by decreasing public involvement and oversight in oil refinery permitting, and limiting the ability of individual states to promote cleaner fuels.

With both energy prices and energy profits at record highs, Sen. Jack Reed wants energy companies to help low-income households pay their heating bills.

Reed sent a letter today to the chief executive officers of nine large oil companies, asking them to donate 10 percent of their record profits to programs that provide low-income heating assistance.

The letter was sent to Lee R. Raymond, ExxonMobil Corp.; David J. O'Reilly, Chevron Corp; James J. Mulva, ConocoPhillips; John G. Drosdick, Sunoco Inc.; William Greehey, Valero Energy Corp.; Clarence P. Cazalot Jr., Marathon Oil Corp.; John B. Hess, Amerada Hess Corp.; Bruce A. Smith, Tesoro Corp.; and Felix Rodriguez, CITGO Petroleum Corp.

According to a copy of the letter provided by Reed's office, the senator wrote:

Energy companies are earning record profits this quarter, therefore, we urge you to act as good corporate citizens and invest earning profits into programs, such as fuel funds, that will provide energy assistance to low-income Americans.

Rising energy prices threaten to financially overwhelm low-income families and seniors this winter. These households will face impossible choices this winter: to heat or to eat. A study by the RAND Corporation found that low-income households reduced food expenditures by roughly the same amount as their increase in fuel expenditures. The Mortgage Bankers Association expects steep energy costs could increase the number of missed payments and lost homes beginning later this year.

]]> 2005-12-13T17:41:15Z 2005-10-26T14:22:36Z tag:www.beloblog.com,2005:/ProJo_Blogs/EnergyBlog/65.4949 2005-10-26T14:22:36Z

I believe that we need to assess the oil companies an alternative energy development fee to be put into the new Strategic Energy Fund. We should design the fee so it is taken solely out of unanticipated profits from the sky high oil prices and ensure that it is not passed on to consumers. It could generate as much as $20 billion a year to help retool our economy and deploy new energy strategies. ...

We need to devise a bipartisan mechanism to make sure that energy companies are contributing their share to America's energy future. I suggest the following fundamental principles:

Reform our energy taxes so that large oil companies who reap huge benefits over the next two years will pay a portion of their profits to fund new tax incentives for those consumers and companies who do want to invest in America's energy future. Companies that choose to invest these profits in refining capacity, efficiency and alternative energy would not be required to pay into the fund.

...Now is the perfect time for oil companies, flush with cash, to transform themselves into energy companies, investing in technologies that will produce profits and increase America's energy independence. British Petroleum and Shell are already taking encouraging steps in this direction. But our country, and our country’s companies, as the world's largest energy consumer and emitter of greenhouse gases, should lead the way.

The full text of her speech is on her Web site. The video is here too..

The top five big oil companies -- Exxon Mobil, BP, Royal Dutch Shell, Chevron and ConocoPhillips -- will earn $9 billion more this quarter. That's because oil and natural gas prices rose in the wake of the storm. And with some refineries shut down, others were able to capture higher margins. Houston investment banker Matt Simmons said he would not be surprised to see a public outcry, with demands that energy companies start giving money back.

She said that the earnings reports may lead to new federal legislation aimed at grabbing more of those windfall profits, with at least five bills being considered in House and Senate Committees.