The energy industry held on tight through a volatile week as second quarter financial reports started rolling in and the federal government managed to compromise on a budget that would prevent a US default.

Environmental and energy funding have been front and center of the heated debate in Congress. In The Next Government Crisis, Margaret Ryan describes how Republicans are clashing with environmental regulators over a proposed bill that would slash nearly $2 billion from the EPA budget.

If passed, the bill would seriously affect the now-pending EPA MACT rule that would limit emissions of mercury, various other pollutants, and particulate matter from coal-burning power plants and industrial boilers.

Regulation In The Nation

On Wednesday, the APPA filed comments with the EPA claiming that the MACT rule did not give power utilities enough time to comply without seriously affecting reliability and cost of electricity (Three years as opposed to the 77 months APPA says is necessary). Read MACT Ruling Faces Utility Opposition for the full story.

The EPA responded to APPA claims in an official statement to Breaking Energy. The rule “would have minimal impact on reliability or affordability nationally,” of electricity, EPA Press Secretary Brendan Gilfillan said. Read the full statement: EPA Responds To Power Sector On MACT Rule.

A $100 million advanced coal gasification technology project was put “on hold” at the University of Wyoming late last week. Some say regulatory uncertainty has slowed investment in the project. See: No Surprises As Gasification Project Meets Delays.

But when it comes to natural gas, regulators have been tiptoeing on fragile ground. When the EPA released its new regulatory guidelines this week they struck a conciliatory tone. Recent government analyses that judges natural gas as critical in America’s future energy economy have sharpened regulator awareness of the industry’s role in a cleaner electricity generating sector. See: Regulators, Industry Treading Lightly For Now.

A Lucrative Opportunity?

Natural gas remains the fuel of the moment. Pennsylvania Governor Tom Corbett says he wants his state to become the “Texas of natural gas.” For more information, read: Gas Riches Creating New Energy Giants.

Scientists have been discovering plentiful domestic supplies of natural gas. In a video, Chevron‘s seismic specialist Julia Baggs explains how the company uses technology to locate underground stores of natural gas and oil and decides where to drill exploration wells. Watch: Seismic Searches For Natural Gas.

But many environmental regulators have been worries that hydraulic fracturing, “fracking,” for natural gas could contaminate underground water sources. Colorado Governor John Hickenlooper told oil and gas companies on Tuesday to expect heavier regulations on fracking fluid in the state by the end of the year. Read the full story: Colorado Governor Warns On Fracking Regulations.

Some claim that natural gas could help the country slowly transition to heavier reliance on renewables. A group of firms broke ground recently on its CPV Sentinel 800 MW natural gas plant in Riverside Country that uses turbines that can easily ramp up and down to accommodate intermittent renewables. Read: Breaking Ground On ‘A Great Enabler’.

A Strong First Half For 2011

Despite all the challenges in the sector, many energy companies are reporting strong first half financial results for 2011. Read: Duke Boosts Profit Ahead Of Merger and ITC Details Sunny Outlook As Profits Rise.

The solar industry has been seeing higher percentages of financing as compared with other forms of clean energy, (See: More Than Meets The Eye In Cleantech Funding) and has been receiving investment from newly engaged sources (See: A Boost For Solar Financing).

In Europe, the wind sector has been showing signs of growth as government feed-in-tariffs continue to encourage private sector investment. See: European Wind Sector Set For Growth.

With much possibility for success in the energy space, young entrepreneurs are flocking to create the best, most innovative new technologies. Read more: On The Cusp: Clean Tech And Investors.

One of the perhaps most innovative ideas in the sector is a project by Tres Amigas to connect the Eastern, Western and Texas interconnections as part of efforts to maximize efficiency of the American electricity grid and better integrate renewables. Watch this video to see Tres Amigas CEO Phillip Harris explain what he hopes his company can do: A Transmission Spider Web.

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