Drilling foes winners in Energy Policy Act

8/7/2005

President Bush tomorrow is expected to sign the Energy Policy Act of 2005 at a ceremony in Albuquerque, N.M., an event that has the potential of ushering in big changes hundreds of miles away in the Great Lakes region.

The complex, 1,724-page document - the first major overhaul of energy policies in 13 years - is laden with tax credits and incentives to jump-start anything from nuclear power to wind power to clean-coal research.

The automotive industry will be encouraged to develop more hybrid vehicles and alternatives to gas guzzlers, without facing greater mandates for fuel efficiency.

A number of items have been largely overlooked on the national level, including a permanent ban on drilling additional oil and natural gas wells beneath the Great Lakes.

Additional is the key word here.

Many Americans might be surprised to learn that Canadians have drilled more than 2,500 directional, or "slant," wells from their shoreline since the early 1900s. One in five produced oil or natural gas. Michigan has allowed 13 such wells to be drilled under Lake Michigan or Lake Huron since 1979. Seven remain in operation.

Ontario also has allowed offshore drilling for natural gas from its side of Lake Erie for decades. The drilling occurs from portable rigs, devices forbidden on the U.S. side of the lakes.

Calls for a ban began in earnest a few years ago, when former Michigan Gov. John Engler entertained the possibility of issuing more leases for slant drilling from land.

About the same time, the Ohio Department of Natural Resources quietly entertained the notion of starting a pro-drilling public relations campaign for the Ohio side of Lake Erie. But the Ohio DNR took no applications for drilling leases and quickly dismissed plans for even gauging public interest after witnessing the backlash against Mr. Engler in Michigan.

Congress enacted a two-year moratorium against additional drilling in 2001, even though Mr. Bush said he had no plans to expand drilling beneath the lakes.

But skepticism reigned, especially given Mr. Bush's continued desire to drill in another ecologically sensitive area, Alaska's Arctic National Wildlife Refuge. At a GOP event in suburban Detroit, Vice President Dick Cheney fueled the controversy by saying the Great Lakes were not off limits.

Thus, the ban. U.S. Sen. Debbie Stabenow (D., Mich.), who co-authored the first of three two-year moratoriums, said that making the ban permanent "will benefit not only Michigan residents, but all who live around the lakes."

Tom Stewart, executive vice president of the Ohio Oil & Gas Association, said the ban is a result of "fear and ignorance." Drilling advocates eventually gave up trying to win people over to their side. "We realized the politics of the situation," he said.

Drilling in arctic national refuge wasn't part of the bill. But it's not off the table. It's expected to come up during debates over appropriations bills this fall.

The energy act also aims to revive the lackluster nuclear industry.

No new applications for reactors have been submitted to the Nuclear Regulatory Commission since the Three Mile Island accident in 1979.

But the TMI accident likely only put another nail in the industry's coffin. Applications stopped, NRC officials have said, because Wall Street got fed up with nuclear plants becoming bad investments. They typically came in millions of dollars over budget.

As one U.S. Department of Energy official said at last fall's national Society of Environmental Journalists conference in Pittsburgh, nukes make Wall Street so nervous that utility boards are reluctant to discuss them out of fear of devaluing their stock.

The energy act attempts to make nukes more attractive through incentives, including some $2.5 billion in risk insurance to cover investment losses for construction delays caused by permit or regulatory issues.

Jim Riccio, Greenpeace nuclear policy analyst, said Mr. Bush either "missed what happened in Ohio with Davis-Besse or he didn't care," a reference to the near-rupture of Davis-Besse's reactor head in 2002. The NRC has described that as the nuclear industry's biggest safety lapse since Three Mile Island.

Safety, costs, and security. Those three issues are ones that activists use to argue against expansion of the nation's current 103-reactor fleet.

But Greenpeace founder Patrick Moore recently told a congressional subcommittee he believes those in charge of his former group have become "blinded by their extremist policies." Mr. Moore said he now believes nuclear power is "an environmentally sound and safe choice."

The energy act's incentives for more wind power could help Ohio's economy. Ohio is viewed as one of the nation's hot spots for job growth in the development of renewable energy products, given its manufacturing legacy and proximity to America's heartland.

The success of the four Bowling Green wind turbines encouraged the nonprofit GreenEnergy Ohio to pursue a statewide inventory of wind resources, beginning this summer in Bryan.

On Thursday, the group plans to finish construction of a 6,000-pound steel tower north of Cleveland that is to rise 165 feet out of Lake Erie. The tower, built on top of a water intake crib, is to help gauge the potential for harnessing wind power from the lake, another potential step forward.

GreenEnergy's Bill Spratley, en route to an international solar power conference in Orlando, said he soon expects to learn more about how the energy act will benefit Ohio's job potential via renewables.

Contact Tom Henry at: thenry@theblade.com or 419-724-6079.