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Tuesday, October 11, 2011

Keeping America’s Pipelines Safe and Secure: Key Issues for Congress

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Nearly half a million miles of pipeline transporting natural gas, oil, and other hazardous liquids crisscross the United States. While an efficient and fundamentally safe means of transport, many pipelines carry materials with the potential to cause public injury and environmental damage. The nation’s pipeline networks are also widespread and vulnerable to accidents and terrorist attack. Recent pipeline accidents in Marshall, MI, San Bruno, CA, Allentown, PA, and Laurel, MT, have heightened congressional concern about pipeline risks and drawn criticism from the National Transportation Safety Board. Both government and industry have taken numerous steps to improve pipeline safety and security over the last 10 years. Nonetheless, while many stakeholders agree that federal pipeline safety programs have been on the right track, the spate of recent pipeline incidents suggest there continues to be significant room for improvement. Likewise, the threat of terrorist attack remains a concern.

The federal pipeline safety program was authorized through the fiscal year ending September 30, 2010, and is currently operating under a continuing resolution. The 112th Congress is considering new legislation to reauthorize the program for four years and to improve the safety and security of the U.S. pipeline network. Legislative proposals include the Strengthening Pipeline Safety and Enforcement Act of 2011 (S. 234), the Pipeline Transportation Safety Improvement Act of 2011 (S. 275), the Clean Rivers Act of 2011 (S. 1502), the Pipeline Safety and Community Empowerment Act of 2011 (H.R. 22), the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (H.R. 2845), the Pipeline Modernization for Safety Act of 2011 (H.R. 2871), and the Pipeline Infrastructure and Community Protection Act of 2011 (H.R. 2937). Pipeline-related provisions are also found in a draft of the Transportation Security Administration Authorization Act of 2011 approved by the House Committee on Homeland Security, Subcommittee on Transportation Security. The Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2012 (S. 1596) would appropriate federal pipeline safety funds for FY2012.

The legislative proposals above contain a broad range of provisions addressing pipeline safety and security. Among the most significant are provisions that would increase the number of federal pipeline safety inspectors, would require automatic shutoff valves for transmission pipelines, would mandate internal inspections of transmission pipelines, would increase civil penalties for pipeline safety violations, and would mandate reviews of diluted bitumen pipeline regulation. S. 1502 and H.R. 2937 would mandate a review of federal safety regulations for pipelines crossing inland bodies of water. The Transportation Security Administration Authorization Act of 2011 would mandate a study regarding the relative roles and responsibilities of the Department of Homeland Security and the Department of Transportation with respect to pipeline security.

As it debates reauthorization of the federal pipeline safety program and oversees the federal role in pipeline security, Congress may wish to assess how the various elements of U.S. pipeline safety and security fit together in the nation’s overall strategy to protect transportation infrastructure. Pipeline safety and security necessarily involve many groups: federal agencies, oil and gas pipeline associations, large and small pipeline operators, and local communities. Reviewing how these groups work together to achieve common goals could be an oversight challenge for Congress.

Date of Report: September 26, 2011
Number of Pages: 36
Order Number: R41536
Price: $29.95

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Monday, October 10, 2011

Oil and Natural Gas Markets: A Compendium

The five in-depth Congressional Research Service studies contained in this Compendium examines both the Obama Administration's focus on alternative energy sources and related policies regarding global climate change. It details a number of oil and gas issues and questions that remain to which the 112th Congress and ensuing Congresses may give attention. Included is attention to mitigating measures to offset price impacts on the U.S. transportation system and electricity generation, as well as environmental impacts of oil and gas development.

Date of Compendium:  September 28, 2011
Number of Pages: 158
Order Number:  IS503570
Price: $59.95 (Subscribers to the Congressional Research Report newsletter pay $29.97.

Thursday, October 6, 2011

Lighting Industry Trends

Suzanne M. Kirchhoff
Analyst in Industrial Organization and Business

More than 4 billion incandescent light bulbs (sometimes referred to as “lamps”) are in use in the United States. The basic technology in these bulbs has not changed substantially in the past 125 years, despite the fact that they convert less than 10% of their energy input into light. Improving light bulb performance can reduce overall U.S. energy use. About 20% of electricity consumed in the United States is used for lighting homes, offices, stores, factories, and outdoor spaces. Lighting represents about 14% of residential electricity use.

The Energy Independence and Security Act of 2007 (EISA 2007, P.L. 110-140), imposed higher efficiency standards for manufacturers and importers of general use, screw-base light bulbs commonly used in residential fixtures, that begin January 1, 2012. EISA 2007 did not ban incandescent light bulbs. Instead, the law mandated that bulbs manufactured or imported after phase-in dates specified in the bill meet higher efficiency standards—about 25%-30% more efficient on average. The law left it up to the industry to determine which products best meet those requirements. Congress is now debating proposals to repeal or delay implementation of the lighting efficiency provisions. The Better Use of Light Bulbs (BULB) Act of 2011 (H.R. 2417) would repeal standards for general service incandescent bulbs. The House by voice vote on July 15, 2011, passed an amendment to the FY2012 Energy and Water Development Appropriations Bill (H.R. 2354) to prohibit funding for Department of Energy (DOE) implementation and enforcement of the standards.

Lawmakers cite several reasons for the repeal efforts, including consumer concerns about lack of access to affordable incandescent light bulbs, and reports that companies have shut down incandescent bulb factories because they could not afford to retool to make more efficient products. While DOE predicts that energy-efficient alternatives such as compact fluorescent bulbs (CFLs) and light-emitting diodes (LEDs) will gain a larger U.S. market share after the Energy Independence Act is implemented, it also forecasts that incandescent bulbs will be widely available, and widely used, for years to come. U.S. and foreign manufacturers have developed higher-efficiency halogen incandescent bulbs, available at retailers, that meet the law’s minimum standards for 25%-30% electricity savings (compared to 75%-80% savings from CFLs and LEDs) and are competitive in price.

The Obama Administration and major lighting companies oppose efforts to repeal the 2007 law, noting that the industry has invested billions of dollars to prepare for the new standards and develop next-generation lighting. The new light bulb standards are taking effect at a time when the lighting industry, due to advances in LED products that often exceed EISA 2007 standards, is undergoing the most sweeping technological changes in decades. The LED industry is producing not just more efficient bulbs, but integrated fixtures that can be specially programmed to emit differing colors and types of light and have other potential applications.

DOE has been funding special research projects to bolster the LED industry, which is already the fastest-growing part of the global lighting market. Some analysts project that LEDs will make up at least half the global lighting market by 2020, driven by technical breakthroughs and enhanced demand from energy-efficiency laws in the United States and other nations. Some lighting executives argue that repealing EISA 2007 could undercut LED manufacturing efforts, where U.S. companies have a technological edge. The vast majority of the incandescent and CFL light bulbs Americans now use are imported from China and Mexico. China and other countries are investing heavily in LED production.

Date of Report: September
27, 2011
Number of Pages:
Order Number: R
Price: $29.95

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The Low Income Home Energy Assistance Program (LIHEAP): Program and Funding

Libby Perl
Specialist in Housing Policy

The Low Income Home Energy Assistance program (LIHEAP), established in 1981 as part of the Omnibus Budget Reconciliation Act (P.L. 97-35), is a block grant program under which the federal government makes annual grants to states, tribes, and territories to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: regular funds (sometimes referred to as formula funds), which are allocated to all states using a statutory formula, and emergency contingency funds, which are allocated to one or more states at the discretion of the Administration in cases of emergency as defined by the LIHEAP statute.

States may use LIHEAP funds to help households pay for heating and cooling costs, for crisis assistance, weatherization assistance, and services (such as counseling) to reduce the need for energy assistance. According to the most recent data available from the Department of Health and Human Services (HHS), in FY2007, 52.8% of funds went to pay for heating assistance, 3.4% was used for cooling aid, 17.9% of funds went to crisis assistance, and 10.1% was used for weatherization. The LIHEAP statute establishes federal eligibility for households with incomes at or below 150% of poverty or 60% of state median income, whichever is higher, although states may set lower limits. However, in both the FY2009 and FY2010 appropriations acts, Congress gave states the authority to raise their LIHEAP eligibility standards to 75% of state median income. In FY2008, the most recent year for which HHS data are available, an estimated 33.5 million households were eligible for LIHEAP under the federal statutory guidelines. According to HHS, 5.4 million households received heating or winter crisis assistance and approximately 600,000 households received cooling assistance that same year.

For FY2011, after being funded under a series of continuing resolutions, Congress appropriated a total of $4.71 billion for LIHEAP regular and emergency contingency funds as part of the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112-10). Of this amount, $4.51 billion was appropriated for regular funds and $200 million for emergency contingency funds. This compares to a total appropriation of $5.1 billion in FY2010, with the same level of regular funds, but $590 million in emergency contingency funds. The FY2011 appropriation was also subject to an across-the-board rescission of 0.2%, bringing the LIHEAP total to approximately $4.7 billion. On January 24, 2011, HHS announced the distribution of $200 million in emergency contingency funds to all states, tribes, and territories.

The President’s budget for LIHEAP in FY2012 proposed to reduce regular funds to $1.98 billion, the amount that was appropriated for the program in FY2007 and FY2008, and to fund emergency contingency funds at the FY2010 level of $590 million. The Senate Appropriations Committee-passed bill for FY2012 (S. 1599) would increase LIHEAP funding over the President’s request by approximately $1 billion, but it would reduce funding from the FY2011 level by $1.1 billion. The bill would provide $3.40 billion for regular funds, all distributed according to the proportions of the “old” LIHEAP formula, and retain the same level of emergency contingency funding from FY2011—$200 million. The Departments of Labor, Health and Human Services, and Education Appropriations bill introduced in the House (H.R. 3070) would appropriate $3.93 billion for regular funds, with state distributions made according to the statutory LIHEAP formula, and would provide no emergency contingency funds.

This report describes LIHEAP funding, program rules, and eligibility.

Date of Report: September
30, 2011
Number of Pages:
Order Number: RL
Price: $29.95

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Wednesday, October 5, 2011

The Bakken Formation: An Emerging Unconventional Oil Resource

Michael Ratner
Analyst in Energy Policy

Anthony Andrews
Specialist in Energy and Defense Policy

Nicole T. Carter
Specialist in Natural Resources Policy

Mary Tiemann
Specialist in Environmental Policy

The Bakken Formation is a large unconventional petroleum and natural gas resource underlying parts of North Dakota, Montana, and the Canadian provinces of Saskatchewan and Manitoba. The Bakken began attracting interest in the mid-1970s, but well drilling and completion techniques at the time made it uneconomic to develop. The key to its development lies now in technologically advanced horizontal drilling and hydraulic fracturing methods. This combination of drilling and completion technology substantially boosts a well’s production, improving its economic viability.

High oil prices and low natural gas prices have prompted shale gas producers to turn to shale oil. The Bakken Formation has emerged as a major shale oil resource “play.” The U.S. Geological Survey (USGS) estimated that the Bakken may contain 3.65 billion barrels (bbls) of undiscovered oil (or less than 3% of total U.S. estimates), 1.85 trillion cubic feet (tcf) associated/dissolved undiscovered natural gas (less than 1% of total U.S. estimates), and 148 million bbls of undiscovered natural gas liquids (NGLs) recoverable under current technology. USGS announced in July 2011 that it will reassess the Bakken resources.

The pace of oil production now places the north central region of the United States, particularly North Dakota, among the most significant new domestic energy resources. North Dakota’s current production rate of roughly 425,000 barrels per day (bpd) places it fourth nationally, or about 7.5% of total U.S. production. The prospect of increasing production, which is up over 30% year-on-year for the latest production data, to between 600,000 bpd to 700,000 bpd in the next several years would place it second to only Texas at current levels.

Full development of this resource faces a number of hurdles. A major constraint to more vigorous development of the Bakken is the lack of pipeline capacity to move more product to refineries. A proposed pipeline, the Keystone XL pipeline, would extend from Canada to the Gulf of Mexico, and could transport oil from the Bakken. The pipeline is awaiting a Presidential Permit from the Department of State. As part of the approval process, the State Department completed an Environmental Impact Statement, finding that the proposed pipeline would have “no significant impact” and recommending that it proceed. A final determination as to whether the pipeline is in the national interest is expected by the end of 2011.

A longer-term constraint concerns availability of and access to water, with much water needed to hydraulically fracture the oil wells. Extracting groundwater for fracking creates competition with agriculture and others for a limited resource. Access to a key water source, North Dakota’s Lake Sakakawea, is controlled by the Army Corps of Engineers, which is evaluating requests for water from the lake. The Corps has proposed to make surplus water in the reservoir available for a fee to the energy industry. This has renewed debate over federal control of Lake Sakakawea.

Another issue potentially affecting development of the Bakken is the need to make use of hydraulic fracturing. This technology is the subject of increasing regulatory scrutiny, along with public concern over its possible impact on water quality. The Environmental Protection Agency (EPA) is conducting a congressionally mandated study on the impact the technique may have on drinking water, and the Department of Energy (DOE) has undertaken a broader assessment of the potential environmental effects of this practice. Legislation pending in the House and the Senate would authorize EPA to regulate hydraulic fracturing used in oil and natural gas production. Currently, states broadly regulate oil and gas exploration and production on non-federal lands, and proposals to give EPA new authority in this area have been highly controversial.

Date of Report:
September 28, 2011
Number of Pages:
Order Number: R
Price: $29.95

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