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Comment 10 for Cap-and-Trade Meeting to Discuss Emissions Leakage (july-30-leakage-ws) - 1st Workshop.
First Name: Ed
Last Name: Pike
Email Address: pikeenergy@gmail.com
Affiliation:
Subject: reconsideration of oil production leakage classification
Comment:
Dear Mr. Cliff: Thank you for the opportunity to submit comments on CARB’s process for re-assessing industrial leakage potential under the cap and trade program. We recommend that you revise the oil production leakage designation from high to low due to several factors. First, CARB has noted that oil extraction falls into the category of activities that “have to be located where the reserve is” (CARB Appendix K p26, Leakage Analysis). In addition, oil producers have invested many billions of dollars in fixed well, pump, field treatment, pipeline, and tankage facilities. Thus, oil production is a domestic captive supplier. Furthermore, CARB greenhouse gas (GHG) allowances are unlikely to have any significant effect on production for two reasons. First, profit margins would not be significantly affected even if GHG allowance prices were to add a dollar or two per barrel to production costs. For instance, Midway-Sunset crude oil prices have tripled over the last decade. Second, production levels have been driven by reservoir depletion rather than margins even at historic high prices. Thus, we recommend designating oil production as subject to low risk of leakage. Please see our attached detailed June 6, 2011 comments and feel free to contact me at ed@theicct.org or Chris Malins, ICCT fuels program lead, at chris@theicct.org with any questions. Sincerely, Ed Pike, PE
Attachment: www.arb.ca.gov/lists/july-30-leakage-ws/12-icct_comments_on_oil_production_leakage_re-assessment.pdf
Original File Name: ICCT Comments on oil production leakage re-assessment.pdf
Date and Time Comment Was Submitted: 2012-08-30 16:13:09
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