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ACC PM 9/28

Industry and Association News

NGO Highlights Industries Weak on Conflict Minerals
Sep 28, 2015 | Chemical Watch
By Kelly Franklin

A report by the NGO Responsible Sourcing Network (RSN) has identified several industries that are falling behind in complying with best practices in conflict minerals reporting.

Chemical Management News

(ACC Mentioned) Studies Show Need to Restrict Endocrine Disruptors -- Scientists
Sep 28, 2015 | E&E Greenwire
By Sam Pearson

More evidence is emerging of the role played by hormone-disrupting chemicals in health threats, requiring more attention to the issue, a scientific organization said today.
US EPA Receives Test Data for Chemical Intermediate
Sep 28, 2015 | Chemical Watch

The US EPA has received test data for the substance 1,2-ethylene dichloride, in response to an enforceable consent order issued under the Toxic Substances Control Act.
Member States Discuss DEHP, HBCDD and Lead Chromate Authorisation
Sep 28, 2015 | Chemical Watch
By Geraint Roberts

Discussions at the EU REACH Committee meeting last week on authorisation applications for several substances centred on the length of their review periods and their scope.
Target Takes another Significant Step to Address Toxic Chemicals
Sep 28, 2015 | Safer Chemicals, Healthy Families
By Mike Schade

Recently, Target quietly posted a rather important update to its sustainable products standard addressing toxic chemicals. Bloomberg broke the news early this morning.

Chemical Security News

China, U.S. Lay Cyber 'Rules of the Road'
Sep 28, 2015 | E&E Greenwire
By Blake Sobczak

President Obama and Chinese President Xi Jinping have agreed to a limited set of rules in cyberspace, including an end to government spying for economic gain.
Are You 'Cybersensitive'? Study Explores Link Between Energy Habits and Smartphones
Sep 28, 2015 | E&E Energywire
By David Ferris

Susan Mazur-Stommen is a cultural anthropologist who studies how people use energy. In 2012, she and a colleague looked at a particular kind of energy-saving campaign -- ones that tried to change people's habits with the help of a digital device.

Energy and Environment News

Greens Brace Ahead of EPA's New Ozone Standard
Sep 28, 2015 | PoliticoPro
By Alex Guillen

The Obama administration will unveil its long-awaited ozone rule this week, and it could reopen an old wound for green groups who’ve been the biggest supporters of the president’s climate change agenda.
Week Ahead: EPA Set to Release Ozone Rule
Sep 28, 2015 | The Hill - E2 Wire
By Devin Henry

The Environmental Protection Agency is set to release a contentious new rule limiting surface-level ozone pollution.
Wall Street Banks Call GHG Emissions a 'Significant Risk,' Promise to Finance Solutions
Sep 28, 2015 | E&E Climatewire
By Benjamin Hulac

A banker's traditional role is to solve business problems by raising capital and helping firms access customers and markets. In an open letter sent this morning, six of the biggest Wall Street and commercial bankers pledged to do more to generate solutions to problems being created by greenhouse gas emissions.
States Cue Up Initial Talks on EPA Rule Options
Sep 28, 2015 | E&E Climatewire
By Emily Holden and Rod Kuckro

States around the country are buckling down to explore Clean Power Plan compliance options, even while some of them plan lawsuits against U.S. EPA.
Colo. Kicks off public dialogue on Clean Power Plan Compliance
Sep 28, 2015 | E&E Climatewire
By Emily Holden

Colorado's first official meeting about how the state might cut carbon emissions under U.S. EPA's Clean Power Plan offered a window Friday into a complex process almost all states will undergo in the coming months.
N.C. May go Nuclear to Meet EPA's Carbon Limits
Sep 28, 2015 | E&E Energywire
By Emily Holden and Kristi Swartz

If North Carolina's legal assaults on U.S. EPA's Clean Power Plan fail, the state may rely heavily on nuclear power to meet carbon reduction goals, according to a top state official.
If its Lawsuit Fails, N.C. May go Nuclear to Meet EPA's Carbon Limits
Sep 28, 2015 | E&E Climatewire
By Emily Holden and Kristi Swartz

If North Carolina's legal assaults on U.S. EPA's Clean Power Plan fail, the state may rely heavily on nuclear power to meet carbon reduction goals, according to a top state official.
Obama Vows Cooperation at U.N. to 'Decisively' Attack Warming
Sep 28, 2015 | E&E Greenwire
By Jean Chemnick

Climate change featured briefly in President Obama's address this morning to the United Nations General Assembly's final leadership summit ahead of this year's high-stakes round of climate negotiations in December.
At U.N., Obama Calls Sustainable Development an Investment 'in our own Future'
Sep 28, 2015 | E&E Climatewire
By Lisa Friedman

Climate change threatens to unravel global economic gains, President Obama warned world leaders yesterday as he committed the United States to a sweeping blueprint for ending poverty, hunger and inequality.
Shell to Abandon Arctic Drilling Efforts
Sep 28, 2015 | The Hill - E2 Wire
By Devin Henry

Royal Dutch Shell announced Monday that it will abandon its plan to drill for oil and natural gas in the Arctic Sea off the coast of Alaska.
Shell Drops Plans to Drill in Alaskan Arctic
Sep 28, 2015 | PoliticoPro
By Nick Juliano

Shell today announced it would be suspending its plan to drill in the Alaskan Arctic “for the foreseeable future,” after not finding enough oil and gas in a test well it drilled over the summer.
Shell Abruptly Exits Chukchi Drilling
Sep 28, 2015 | E&E Energywire
By Margaret Kriz Hobson

After investing seven years and $7 billion in hopes of finding a mother lode of oil in the American Arctic, Royal Dutch Shell PLC is scrapping its Chukchi Sea drilling program and ending exploration in offshore Alaska "for the foreseeable future."
Shell Retreat Clouds Obama Admin's Future Exploration Policy
Sep 28, 2015 | E&E Greenwire
By Phil Taylor

Royal Dutch Shell PLC's announcement today that it is putting an indefinite pause on its Arctic exploration activities could play a major role in the Obama administration's decision whether to hold additional oil and gas lease sales in the region.
Exxon Promotes Arctic Drilling
Sep 28, 2015 | E&E Energywire

About 700 people looked on Thursday as an Exxon Mobil official defended American oil exploration in the Arctic.
DOE's Greenwald Discusses Agency Road Map to Double Energy Productivity
Sep 28, 2015 | E&E TV

Last week, the Department of Energy, along with the Alliance to Save Energy and the Council on Competitiveness, unveiled a road map to double energy productivity by 2030.

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Industry and Association News

NGO Highlights Industries Weak on Conflict Minerals

Sep 28, 2015 | Chemical Watch

By Kelly Franklin

A report by the NGO Responsible Sourcing Network (RSN) has identified several industries that are falling behind in complying with best practices in conflict minerals reporting.
“Laggard” industries, in which the majority of studied companies scored “weak” or “minimal” against the NGO's best practice metrics, include: oil, gas, and combustible fuels;containers and packaging;pharmaceuticals; andtextiles and apparel.
Under the 2010 Dodd-Frank Act, publicly-traded companies who use tin, tantalum, tungsten and gold (3TG) must file annual reports on their use of the substances and the origin of those materials. The goal is to cut off funding to armed groups in the conflict regions of the Democratic Republic of Congo (DRC) (GBB July/August 2015).
RSN hypothesises that several industries with weaker ratings claimed to have limited 3TG use, and therefore “may not approach reporting as seriously as other industries”.
Other low-scoring industries, including pharmaceuticals, “may have escaped public scrutiny in past reporting, despite significant use of 3TG”, says the NGO. According to the report – Mining the disclosures– heightened public pressure has correlated with stronger conflict minerals reports.
The RSN evaluated 155 companies' conflict mineral reports filed for 2014, using key performance indicators of required and recommended reporting practices. The companies selected for evaluation in the report include the eight largest companies in each of 17 “high exposure” industries.
“Split” industries – which contain both high-performing and low-performing companies – include the automotive, aerospace and defence, and energy equipment sectors. Such industries could benefit from increased collaboration across the industry, says the RSN.
Electronics companies emerge as the highest-performing industry, consistent with other studies of 2014 reporting efforts (CW 25 August 2015).
Another of the report's findings is that the “vast majority” of companies in the sample group failed to explicitly encourage conflict-free sourcing from the DRC. According to the RSN, ambiguity on this could lead suppliers to “interpret the language used in a company’s policy to mean it is best to cut off all 3TG trade with the DRC region, the result [of which] is a devastating embargo on millions of miners.
“Policies that contribute to an embargo of conflict-free mines in the DRC region, whether intentionally or not, can never be considered to support responsible sourcing,” says the NGO. It adds that it “is therefore critical that companies specifically and clearly communicate their commitment to promote a conflict-free minerals trade in the DRC region.”
The report says that, by contrast, some “misguided companies” have placed a formal embargo on the DRC region.
Intel is credited as the only company of those reviewed that has a conflict-free product line. The semiconductor manufacturer scored highest based on the NGO's metrics, and is also one of only two companies that conducted an independent private sector audit (Ipsa).
The RSN has encouraged all companies to pursue an Ipsa, regardless of whether the company is using a third-party audit in order to designate a product as “DRC Conflict-Free”.

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Chemical Management News

(ACC Mentioned) Studies Show Need to Restrict Endocrine Disruptors -- Scientists

Sep 28, 2015 | E&E Greenwire

By Sam Pearson

More evidence is emerging of the role played by hormone-disrupting chemicals in health threats, requiring more attention to the issue, a scientific organization said today.
The Endocrine Society, in an update to a scientific statement on endocrine-disrupting chemicals (EDCs) it issued more than six years ago, said new research since then has found exposure to EDCs is associated with diabetes, obesity, infertility, hormone-related cancers, neurological issues and other ailments.
The chemicals promote these health problems by mimicking or blocking the body's natural hormones, changing how cells develop, the group said.
"The evidence is more definitive than ever before -- EDCs disrupt hormones in a manner that harms human health," said Andrea Gore, a professor and chairwoman of pharmacology at the University of Texas, Austin, who led a task force that developed the statement.
The group said "hundreds of studies" showed how developing fetuses are especially vulnerable to EDCs. A study published earlier this year estimated that the European Union faces more than €150 billion ($165 billion) per year in health costs associated with the substances (E&ENews PM, March 5).
The findings, which were published in the Endocrine Society's journal, Endocrine Reviews, note that many scientists believe EDCs behave differently from other substances, by showing health effects even at low doses and in non-monotonic exposure relationships.
The group said EDCs may contribute to obesity by altering the development of cells in a fetus. In addition, the chemicals may target cells in the pancreas, fat cells and liver cells, which could lead to excessive levels of insulin in the body and increase the risk of developing type 2 diabetes, the statement said.
Though researchers have gained new understanding of the effects of EDCs, the statement said, more work was needed to "take novel approaches to more directly infer cause and effect in humans."
The group's report in 2009 argued that policymakers and scientists must work to better understand EDCs and work to reduce the public's exposure to the chemicals. But that report faced criticism from the American Chemistry Council as "a scare tactic that will not promote public health" (Greenwire, June 11, 2009).
ACC also criticized the new report, with spokeswoman Kathryn St. John saying in a statement that it "disregards the state of the science associated with the effects of chemicals on the endocrine system and makes broad, unsupported claims about the relationship between certain chemicals and disease," including by failing to distinguish between chemicals that interact with the endocrine system but don't disrupt it.
In doing so, the scientists' group "discounts the extensive reviews by experts at the U.S. Environmental Protection Agency and the European Food Safety Authority that were unable to substantiate the health significance of the so called low-dose effects, and questioned the validity of the non-monotonic hypothesis," St. John said.
The International Council of Chemical Associations, an industry group of which ACC is a member, released its own set of principles for identifying EDCs today and argued some recent studies "have failed to incorporate critical information including exposure and weight of evidence analysis ... reducing their relevancy to sound decision-making."
ACC President Cal Dooley said in a statement that companies agree that more research is needed to better understand how chemicals affect the endocrine system.
"By improving screening and testing, we can support evidence-based decision making by regulatory agencies as they develop and implement programs intended to reduce risks associated with endocrine disrupting chemicals," Dooley said.
The principles the trade group said regulatory agencies should adhere to include labeling chemicals as endocrine disruptors only if a scientific consensus exists, using credible test methods and data, avoiding duplicative testing, considering real-world exposure levels, and using weight-of-the-evidence analysis to avoid letting outlier data skew results.
"The hypothesis that low levels of exposure can cause harmful effects that are not adequately captured by traditional toxicological studies is often discussed, but rigorous reviews by scientists at regulatory agencies have been unable to validate the hypothesis, so changes to current testing and safety assessment approaches are not warranted," the group said.

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US EPA Receives Test Data for Chemical Intermediate

Sep 28, 2015 | Chemical Watch

The US EPA has received test data for the substance 1,2-ethylene dichloride, in response to an enforceable consent order issued under the Toxic Substances Control Act.
The substance is used primarily as a chemical intermediate in the production of vinyl chloride.
The test data pertains to reproductive toxicity and neurotoxicity.

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Member States Discuss DEHP, HBCDD and Lead Chromate Authorisation

Sep 28, 2015 | Chemical Watch

By Geraint Roberts

Discussions at the EU REACH Committee meeting last week on authorisation applications for several substances centred on the length of their review periods and their scope.
The first discussion addressed the applications from three recycling firms to permit the recycling of PVC containing the phthalate DEHP. Some member states said the proposed seven-year review period should be shortened, and that it would be more logical to discuss the applications at the same time as those from Arkema, ZAK and Deza, which applied for DEHP’s continued use in the formulation and use in production of PVC products.
But at least one member state argued that it would “send a bad signal” if the committee overruled the opinions of Echa’s Socio-economic Analysis Committee (Seac) and Risk Assessment Committee (Rac) on the recycling firms’ applications.
The REACH Committee also discussed applications for so-called “bridging” authorisations from a number of companies – including Ineos Styrenics – to use the brominated flame retardant HBCDD in expanded polystyrene (EPS) pellets and in EPS building insulation. Although Rac and Seac have adopted Opinions on these (CW 20 January 2015), some member states continue to argue that the applications should not be granted. The committee expects to vote on the applications at its next meeting on 21-22 October.
Discussions were also held on applications from DCC Maastricht for various uses of lead chromate pigments. These are opposed by Cepe, the trade body representing the European paints industry. It says that alternatives are already widely available (12 March 2015). No date was agreed for taking a vote.
Three environmental groups – WCEF, Wemos and PAN Europe – wrote to Dutch environment minister Stas Mansveld urging her to oppose the granting of authorisations for any of the DEHP, HBCDD and lead chromate applications.

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Target Takes another Significant Step to Address Toxic Chemicals

Sep 28, 2015 | Safer Chemicals, Healthy Families

By Mike Schade

Recently, Target quietly posted a rather important update to its sustainable products standard addressing toxic chemicals. Bloomberg broke the news early this morning.
Target’s Sustainable Product Index (formally known as the Sustainable Product Standard) is a program launched to encourage and incentivize suppliers to bring more sustainable products to market — especially those free of dangerous chemicals in beauty, personal care, baby care and cleaning products.
The updated standard now includes a number of substantial improvements to the original version, which will help drive suppliers away from toxic chemicals in products sold in their stores.
In the introduction to the new version, Target summarizes some of the key changes made to the program:
“In response to stakeholder comments on the initial criteria, we have expanded the set of regulatory lists used to identify chemicals of concern, refined the information used to evaluate packaging, incorporated third-party certifications and are piloting key issues that are specific to product categories.”
With an expanded universe of criteria suppliers’ products are evaluated on, products now receive a score from 0 to 115 (with up to 135 points available for household cleaning products with the new pilot criteria – more on that below), and information is collected and evaluated using the UL Transparency Platform.
You can view the original version of the standard here, which we blogged about and publicly congratulatedthe company on when it was first announced. Be sure to check out our blog for a summary of the key elements of the original program, which I won’t revisit here.How has the program been improved?
Let’s take a look at some of the most exciting elements of the expanded policy related to toxic chemicals:Taking on triclosan and a broader list of chemicals: Target added triclosan as well as Health Canada’s “Cosmetic Ingredient Hotlist – prohibited for use in cosmetics” to its list of “high level health concerns authoritative lists”, which already includes over 1,000 dangerous chemicals. We are particularly excited about these new criteria as triclosan is one of the chemicals on ourHazardous 100+ list we have been calling retailers to act on, and the Health Canada Cosmetic Ingredient Hotlist represents a large list of ingredients that are banned or limited in cosmetics by the Canadian government.Rewarding third-party DfE/Safer Choice and Cradle2Cradle certified products: The index has a whole new section on certifications, giving up to 15 points for third-party certified products. A product can receive 10 out of 15 points if it has been certified by either EPA Design for the Environment/Safer Choice program orCradle2Cradle (Bronze, Silver or Gold). The policy surprisingly doesn’t include GreenSeal, which would be another useful program to include.
A product can also receive 3 points if “one or more feedstock materials have been certified as USDA organic or biopreferred, non-GMO, fair trade or sustainable produced” though they don’t list which certifying bodies are relevant for each area.Piloting new criteria for cleaning products that incentivizes the use of safer chemicals:Target has also developed a new set of criteria specifically for household cleaning products such as laundry detergents and surface cleaners. Half of the additional credit for cleaners rewards those cleaning products containing ingredients on the Safer Chemical Ingredients List (SCIL) developed by EPA’s DfE/Safer Choice program. More specifically,“a product will receive 3 points if up to 25% of its ingredients are on the Safer Chemical Ingredients List (SCIL), 5 points if 25%-50% of its ingredients are on the SCIL, and 10 points if 100% of its ingredients are on the SCIL.”New product category: feminine care products, and more categories to come:Target is now for the first time adding feminine care products to the index, which our partners at Women’s Voices for the Earth have been calling attention to in recent years. Target states that“other product categories will have an index in the future” which is a promising sign that perhaps they will finally add cosmetics and other products to the program.
Clarifying transparency criteria: The language in the transparency section around generic ingredients (such as fragrances) has been slightly adjusted to now say, “A product will receive a maximum of 20 points if its ingredients are listed on packaging and website, ingredient purposes are listed on website and there are no generic ingredients on its publicly available ingredient list.” This provides an incentive for brands to publicly disclose chemicals in fragrances. Under water quality, the language has similarly been clarified to now say, “A product will receive 5 points if the ingredient list can be fully assessed and no ingredients are on the aquatic hazard lists.”
It’s important to note that these are not the only changes that have been made to the program, but those that are most relevant to driving toxic chemicals out of the value chain.Thinking about continuous improvement
While we recognize that taking action on toxic chemicals for retailers is a challenging task, we find a few areas for improvement.What about cosmetics? While the new policy includes a list of cosmetic ingredients of concern, the policy does not actually apply to cosmetics, which Target said it would add in 2014. The company notes that “other product categories will have an index in the future” — we hope Target will finally add cosmetics to the policy by the end of this year, including new criteria as they have done for the cleaning products pilot. Other product categories ripe for action include apparel, electronics, infant and children’s toys.No public timeframe for reduction of priority chemicals. In the policy, Target has flagged over 1,000 chemicals “with high level health concerns” that are “recognized as carcinogenic, developmental or reproductive toxicants, endocrine disruptors, or have other serious adverse health effects”. This is fantastic, but the policy unfortunately does not set any specific goals or timeframes for suppliers to transition away from harmful chemicals that they have flagged.Suppliers need guidance in assessing alternatives to chemicals of concern. Target should develop guidance for vendors to assess alternatives to chemicals of concern and reward suppliers that have policies or programs in place to assess alternatives to chemicals of high concern, that are aligned with the Common Principles for Alternatives Assessment. For example Walmart encourages suppliers to avoid “regrettable substitution” by evaluating the hazards of replacement chemicals and embracing best in class “informed substitution” and “alternatives assessment” principles. Walmart states:
“Informed substitution is the considered transition from a chemical of particular concern to safer chemicals or non-chemical alternatives [1]. Using informed substitution principles will mitigate hazard risks associated with product formulation and achieve compliance with Walmart’s Policy on Sustainable Chemistry in Consumables…In the aim of advancing safer formulated products and promoting informed substitution, Walmart recommends the major tenets of Alternatives Assessment, a process for identifying, comparing and selecting safer alternatives to priority chemicals (including those in materials, processes or technologies) on the basis of their hazards, performance, and economic viability…”
In their implementation guide, Walmart cites manygreat resources, such as the GreenScreen,BizNGO’s Chemical Alternatives Assessment Protocol, and the Lowell Center for Sustainable Production’s Alternatives Assessment Protocol.What is Target suppliers’ chemical footprint? A new tool, the Chemical Footprint Project, could be embedded into the Sustainable Product Index and utilized by Target to evaluate their suppliers’ chemical policies. Target should evaluate how this tool can be included in the Index and join Staples and other businesses in being a Signatory to the Chemical Footprint Project.
Congratulations to Target for continuing to move the needle on toxic chemicals in the retail sector!
All in all, the updates to the Target Sustainable Product Index are a significant milestone for Target as they continue to leverage their purchasing power to help drive the marketplace towards safer products.
We applaud Target for improving their standard and look forward to working with them to continue to expand the program over time.
We hope other big retailers will follow suit to Mind the Store.Join us in thanking Target for this step towards Minding the Store.
Tweet: Thank you @Target for taking another big step to address toxic chemicals! #MindtheStore #Target Learn more: http://bit.ly/1OLx6xF
Facebook: Target took another major step to move the market away from toxic chemicals – thank you! Learn more about their expanded Sustainable Products Index here: http://bit.ly/1OLx6xF #MindtheStore #Target
Or you can send Target a personal message.

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Chemical Security News

China, U.S. Lay Cyber 'Rules of the Road'

Sep 28, 2015 | E&E Greenwire

By Blake Sobczak

President Obama and Chinese President Xi Jinping have agreed to a limited set of rules in cyberspace, including an end to government spying for economic gain.
In a news conference Friday afternoon, Obama said the two countries "have reached a common understanding on the way forward" by agreeing not to "knowingly" support online theft of intellectual property from private companies.
"In addition, we'll work together, and with other nations, to promote international rules of the road for appropriate conduct in cyberspace," Obama said, adding, "so this is progress."
The U.S. government long has voiced concerns over cases of state-sponsored cyberespionage aimed at siphoning technology to Chinese state-owned companies. Beijing has denied stealing secrets from U.S. energy firms, computer chip manufacturers and other major companies for commercial gain. Last week's agreement follows repeated pledges by Xi to uphold international law in cyberspace during his first visit to the United States as China's head of state.
Security experts have already expressed doubts about whether China will stick to its side of the deal, but some business leaders and politicians say it's still a step in the right direction.
"The commitment to not engage in cyber theft of intellectual property and jointly fight cybercrime is a positive development that now needs to be followed with tangible progress," said John Frisbie, president of the U.S.-China Business Council, in a statement after the agreement was announced.
Sen. Tom Carper (D-Del.), ranking member of the Homeland Security and Government Affairs Committee, pointed out in a statement Friday that "some of my colleagues will say that this agreement doesn't do enough."
"But we must start somewhere and this is more than a good start," he said.
Carper added that the United States "can't just believe what China says" and would need to keep a close eye on Beijing's behavior in cyberspace.
Senior administration officials already have indicated they will keep monitoring Chinese hackers and are prepared to bring new economic sanctions against any miscreants.
Jason Healey, director of the Cyber Statecraft Initiative at the Atlantic Council, said on Twitter that such "naming & shaming has new importance" now that Xi has "personally committed" to stop cyberespionage for commercial gain.
In 2014, the U.S. Justice Department unsealed indictments against five Chinese military officers accused of stealing information from U.S. companies, in a move seen as aimed at shaming Beijing.
Healey's thinking is that Xi's latest promises to behave in cyberspace could come back to bite him if the United States brings new criminal charges or financial penalties against Chinese hackers suspected of stealing trade secrets.
"Both governments will not be engaged in or knowingly support online theft of intellectual properties," Xi said through an interpreter Friday, later adding that "during my current visit, I think it's fair to say that the two sides, concerning combating cyber-crimes, have reached a lot of consensus."
"Going forward, we need to, at an early date, reach further agreement on them and further put them on the ground," Xi said of the cyber rules.

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Are You 'Cybersensitive'? Study Explores Link Between Energy Habits and Smartphones

Sep 28, 2015 | E&E Energywire

By David Ferris

Susan Mazur-Stommen is a cultural anthropologist who studies how people use energy. In 2012, she and a colleague looked at a particular kind of energy-saving campaign -- ones that tried to change people's habits with the help of a digital device.
They discovered what may be a new sort of tribe.
Most people, when given real-time feedback from a screen about how much energy they used and its cost, dropped their energy usage by less than 4 percent. But a small, mysterious group experienced a plunge of up to 25 percent, according to a 2012 report on their research.
"What kept popping up is this group that seemed to have no particular cultural affiliation," she said, such as age, gender, neighborhood or other demographic label.
Now Mazur-Stommen has been awarded nearly $600,000 by the California Energy Commission to try to figure out who these people are. Her working assumption: There exists in the population a slice, perhaps 10 percent, who are particularly receptive to messages coming through the smartphone because they love the device itself.
She calls them "cybersensitives." A second group, called "cyberawares," change their behavior because of their relationship with the gadget, but the effect is not so strong.
"Our hypothesis is that these people have a very positive relationship with the technology in their lives. They are not necessarily early adopters, and they are not particularly tech-savvy. These are people who have an affinity for, perhaps even love, the technology in their lives," Mazur-Stommen said in an interview.Merging smartphones, energy and behavior
The study comes at a transitional moment in the worlds of smartphones, energy data and behavioral science.
As iPhones and tablets become ubiquitous, and more of our attention funnels through them, everyone with a message to share is keenly interested to know whether the information presented there will cause people to act.
This energy study is the first to propose that those who have an emotional attachment to their phones are a distinct ethnographic group, one that can be identified and its behavior predicted. The results could be of interest to everyone who seeks to use smartphones as a platform to alter people's behavior, from pizza parlors that want more customers to health advocates who want people to stop smoking.
But some behavioral scientists who study the impact of smartphones cautioned that just because people feel affection for their phones doesn't mean they are primed to listen.
"I think some 'cybersensitives' may not be as receptive to cellphone-based interventions as the authors propose," said Jacob Barkley, a researcher at Kent State University who did groundbreaking research on how heavy smartphone use affects college students.
"We find that the majority of cellphone use is for leisure purposes," Barkley said in an email. "Such individuals may view cellphone-based public service announcements as an intrusion into their leisure activity."
Meanwhile, a data explosion is underway in the energy industry. One source is the smart meter, which now comes standard in more than 46 million American homes. The meter captures detailed data on home electricity use but so far has barely been harnessed in pursuit of saving energy.
Moving faster than the smart meter is the smart home, and a wave of devices that are meant to manage energy use and reduce the power bill. The smart thermostat from Nest, the air conditioning manager from tado° and appliance data from Bidgely are just a few examples of services that gather energy-use data and encourage homeowners to manage it with a mobile device (EnergyWire, Aug. 11; EnergyWire, Jan. 30).
At the same time, the discipline of behavioral science is riding a wave of enthusiasm, emanating directly from the Oval Office.
President Obama, who relied on a team of behavioral scientists to help craft his 2012 campaign,according to The New York Times, on Sept. 15 issued an executive order asking all federal departments to use behavioral science to measure outcomes and make government services more effective.
To date, home dwellers have been stubbornly resistant to the energy efficiency campaigns waged by utilities across the country. Programs that encourage people to turn down the air conditioner or shut off the lights have yielded just a few percentage points of energy savings.
But many behavioral researchers believe the merging of smartphones, energy data and behavioral science holds great potential to get home dwellers to alter their behavior, and along the way significantly reduce energy use and help the United States reduce its carbon emissions -- the key goal of Obama's Clean Power Plan.
Exploring whether a tribe of cybersensitives lives among us is one such way.Finding the cybersensitives
The study, called "Cybernetic Fieldwork Across California," will seek out cybersensitives on the assumption that they are an as-yet-unidentified ethnic group, and explore to what extent they can be swayed by energy data coming through their phones.
To be conducted over four years, the study will consist of in-depth surveys of 60 to 120 households, culled from lists of utility customers who opted into a list, Mazur-Stommen said.
Most of the heavy lifting will be done by students of the 23-campus California state university system who are majoring in the social and behavioral sciences, she added. They will be hired to do in-depth interviews and observation of the subjects, as well as log data on their subjects' digital habits, like what kind of data plans they have and how often they trade in their devices. (Because cybersensitives love their gadgets, Mazur-Stommen said the answer is probably rarely.)
The participants will receive a device, perhaps furnished for free by a technology company, as reward for their participation.
Mazur-Stommen was one of five awardees who received a total of almost $2.2 million from the California Energy Commission for studies that look to attach quantifiable, academic rigor to the design of energy-efficiency programs, which are often guided by guesswork.
"This project was selected because the researcher proposed an innovative way to identify people who are tech-savvy and more likely to be enthusiastic about using energy more efficiently," Mike Gravely, an official with the energy commission's research division, said in an email. "Substantiating Mazur-Stommen's theory can help improve the precision of electricity demand forecasting and reduce the cost of meeting demand."
How does one know if one is a cybersensitive?
Mazur-Stommen has some ideas, because she thinks she might be one. In a blog post, Mazur-Stommen said she met her partner in an online game, and "am proud to use my phones until they are cracked and leaking radioactive sparkles."

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Energy and Environment News

Greens Brace Ahead of EPA's New Ozone Standard

Sep 28, 2015 | PoliticoPro

By Alex Guillen

The Obama administration will unveil its long-awaited ozone rule this week, and it could reopen an old wound for green groups who’ve been the biggest supporters of the president’s climate change agenda.
The update for the ozone standard, which will debut this week along with two separate regulations designed to curb toxic air and water emissions from power plants and refineries, has long been a source of tension between President Barack Obama and environmentalists, who felt burned in 2011 when the White House stopped EPA from reconsidering a 2008 ozone standard, citing concerns about economic harm.
Critics have blasted it as a politically oriented decision ahead of the 2012 election, andrumors swirled that then-EPA chief Lisa Jackson had nearly resigned in protest —assertions that were denied by Jackson.
EPA’s update is already two years overdue. The agency is required by the Clean Air Act to revisit the standard for ozone, a precursor to smog, every five years, and the Oct. 1 deadline that comes this week was set under a legal settlement with the environmental groups that sued the agency.
And the president, who has made fighting climate change a top agenda item, has made it clear that he’s taking action on ozone because the law requires it.
Obama told a gathering of business leaders this month that critics can “legitimately” attack his power plant carbon rules “because that was hatched by us.” But on ozone, he said, “this is an existing statute and an existing mechanism and we are charged with implementing it based on the science that's presented to us.”
Sources outside the administration say EPA has sent a proposal to the White House to lower the standard to 70 parts per billion from the current 75 ppb set under George W. Bush seven years ago, though neither EPA nor the Office of Management and Budget would comment.
House Science Chairman Lamar Smith has also latched on to unconfirmed reports that the White House is pushing EPA to set a 68 ppb standard. The Texas Republican last week demanded the administration turn over communications between several high-ranking officials to determine whether the White House is interfering for “purely political reasons.”
John Walke, the Natural Resources Defense Council’s clean air director, said he is taking seriously the possibility that EPA will set a 70 ppb standard, which is “generating a lot of anger and opposition” among green and public health advocates.
EPA’s proposed rule suggested setting the standard between 65-70 ppb, the upper end of the 60-70 ppb range recommended by an independent board of science advisers. Public health advocates and environmentalists have pushed for the 60 ppb standard.
“Having the weakest and worst standard proposed would obviously be a very severe disappointment and setback to the president’s legacy and a badly missed opportunity to protect public health,” Walke said in an interview.
The energy industry, manufacturers and labor unions are lobbying to keep the standard at its current 75 ppb, but also urged the administration to cut it no further than 70 ppb.
The industry groups warn that many cities and counties would be unable to meet a tightened ozone standard, a designation that would force them to curb pollution or risk losing federal transportation dollars.
Lowering the threshold from 75 to 70 ppb would increase the number areas that are out-of-attainment, said Howard Feldman, the director of regulatory and scientific affairs at the American Petroleum Institute. But at least most of those areas have dealt with air pollution regulations before, and going below that level would put a strain on smaller communities.
“When you start going from 70 down to 68, it doesn’t sound like much change, but … you start picking up smaller and smaller locations that are not experienced in developing implementation plans and coming up with control strategies,” Feldman said.
The National Association of Manufacturers has complained that a push to the low end of the range would make the ozone standard “the most expensive regulation in U.S. history,” a moniker swiftly adopted by Republican critics. The consulting firm commissioned by NAM calculated that a 65 ppb standard could reduce the national GDP by $1.7 trillion from 2017 through 2040, a figure that environmental groups have panned as hyperbolic.
EPA estimated that a 70 ppb standard would cost $3.9 billion to implement and yieldhealth benefits of $6.4 billion to $13 billion. NAM never modeled a 70 ppb standard, according to Ross Eisenberg, the group’s vice president of energy and resources policy.
API’s Feldman, who holds a degree in public health, also dismissed advocacy groups’ assertion that the 60 ppb standard is clearly the best choice for protecting human health.
“There’s no definitive study that [shows] that,” he said. “We don’t come away with anything that suggests a compelling need to change the standard right now, especially given [that] we haven’t reached the current standard.”
But Janice Nolen, the assistant vice president for national policy at the American Lung Association, dismissed industry warnings of economic doom.
“We’ve been able to successfully reduce emissions that cause these pollutants by over two-thirds and at the same time we have grown the economy by over 200 percent. So arguments that this hurts the economy have no basis that I’ve seen in history,” she said.
The final standard, whether 70 ppb or lower, is likely to be challenged in court, possibly by both industry and environmentalists, setting up a legal battle that could easily stretch into the next president’s term.
Advocates of a lower standard say there’s little chance a Republican president could roll it back after it’s been released. Once a lower standard has been justified it becomes difficult, both scientifically and legally, to return to a higher standard, according to Walke. The ozone standard was raised once before, in 1979, from 80 ppb to 120 ppb. It was lowered back to 80 ppb in 1997.
However, the next review is due in 2018, though it remains unclear whether EPA will stick to that tight schedule.
Two other court-ordered deadlines will make this week a hectic one for EPA, which is also required to finish rules on emissions from the nation’s oil refineries and effluent discharges from power plants by Wednesday.
The first proposal would require refiners to cut back on emissions from storage tanks, flares and coking units, and requires air quality monitoring at facility fence lines to help protect nearby communities.
EPA says that would reduce toxic air pollutants like benzene and xylene, as well as volatile organic compounds that react with nitrogen oxides and sunlight to form smog. And EPA says the rule would yield an additional benefit of cutting 700,000 metric tons of carbon dioxide equivalent emissions.
The effluent limitations guidelines due on Wednesday would require controls on fossil fuel and nuclear power plant emissions of wastewater toxics such as arsenic, lead, mercury and selenium.
In 2013, EPA proposed several different options for the final rule with varying levels of stringency, though greens were dismayed that the four “preferred” options were not among the toughest.
The rule is connected to EPA’s 2014 coal ash rule, which may require some power plants to switch to dry ash for their waste rather than pumping it into coal ash ponds that have drawn public attention after recent high-profile spills. Utilities are watching to see whether the final rule requires any pond closures or whether it imposes any new inspection requirements.
A previous version of this story misidentified Janice Nolen of the American Lung Association. It also misstated the history of the ozone standard; the standard was raised once before, in 1979.

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Week Ahead: EPA Set to Release Ozone Rule

Sep 28, 2015 | The Hill - E2 Wire

By Devin Henry

The Environmental Protection Agency is set to release a contentious new rule limiting surface-level ozone pollution.
The agency has proposed tightening the current standard on ozone from 75 parts per billion to 65 or 70 parts per billion.
Regulators say they need to raise the standards to help the environment and improve public health. But the proposal has drawn scorn and bitter opposition from Republicans and business groups, who say the rule will be prohibitively expensive and lead to billions of dollars in compliance costs.
The EPA released its proposed rule last year, immediately kicking off a lobbying spree and public campaign by the National Association of Manufacturers and other business groups. The groups, and their Republican allies, have taken to calling the ozone proposal the “most expensive regulation ever.”
But regulators say they have the right to set federal limits on ozone, also called smog. They say strict standards are important to protecting the public and cutting down on public health problems like asthma.
The Obama administration has been reviewing the rule since August, and agreed in court to put out the new rules by Oct. 1.
On Capitol Hill, the Senate Environment and Public Works Committee is taking the administration to task.
On Tuesday, the committee will hold a hearing on the “economy-wide implications of President Obama’s air agenda,” and a subcommittee will meet to discuss the Endangered Species Act. Two governors and the director of the U.S. Fish and Wildlife Service are slated to testify.
A committee subpanel will hold a hearing Wednesday on the role of the Army Corps of Engineers in crafting new water regulations.
A Senate Transportation Committee panel will hold a hearing on pipeline safety on Tuesday. In the House, a Transportation subcommittee will discuss Great Lakes restoration projects on Wednesday.
Away from the Capitol, The Hill is hosting an event on the proposed methane regulations from the Obama administration on Tuesday. Click here for more information the event: http://bit.ly/1LxjDs6

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Wall Street Banks Call GHG Emissions a 'Significant Risk,' Promise to Finance Solutions

Sep 28, 2015 | E&E Climatewire

By Benjamin Hulac

A banker's traditional role is to solve business problems by raising capital and helping firms access customers and markets. In an open letter sent this morning, six of the biggest Wall Street and commercial bankers pledged to do more to generate solutions to problems being created by greenhouse gas emissions.
"While we may compete in the marketplace, we are aligned on the importance of policies to address the climate challenge," the banks wrote. Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. authored the letter.
"In partnership with our clients and customers, we will provide the financing required for value creation and vision necessary for a strong and prosperous economy for generations to come," the letter reads. "Our institutions are committing significant resources toward financing climate solutions."
The letter calls for "leadership and cooperation among governments" to create a robust climate agreement and policies that take into account that the "costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low-carbon energy and create." The proper legal framework can "unlock the incremental public and private capital" vital for a sustainable and strong economy, it continues.
Mindy Lubber, president of Ceres, the sustainable investment advocacy group, which organized the letter, said, "Financial institutions have a critical role to play" to trigger a low-carbon future. "As U.S. negotiators enter climate talks in Paris, they can say with confidence that the business and financial community in this country is ready for government leadership to address climate change."
The global environmental executive at Bank of America, Alex Liftman, said there's a silver lining to climate change, as challenging as the phenomenon remains. "Addressing it also offers tremendous opportunities," Liftman said in a statement.Pledge to build low-carbon economy
To this group of six of the biggest brands in corporate finance and Wall Street banking, climate change is far from a concern for academic inquiry and minimal investment. Rather, greenhouse gases pose "significant risk to prosperity and growth of the global economy."
"Scientific research finds that an increasing concentration of greenhouse gases in our atmosphere is warming the planet, posing significant risks to the prosperity and growth of the global economy," the letter begins. "As major financial institutions, working with clients and customers around the globe, we have the business opportunity to build a more sustainable, low-carbon economy and the ability to help manage and mitigate this climate-related risks."
The companies estimated that investors must allocate $90 trillion in the next 15 years toward energy and urban infrastructure spending to brace for and buttress against climate impacts.
"The capital markets can and must play a positive role scaling solutions to global challenges," said Audrey Choi, managing director and chief executive of the Morgan Stanley Institute for Sustainable Investing.
"The demand for financial tools that address climate change is strong and growing, and we are committed to continued leadership across a range of climate-focused capital markets activity," Choi said, "including financing for clean-tech and renewable energy businesses, underwriting green bonds and ensuring our wealth management clients have options to align their portfolios with their environmental goals."
One of the world's most respected financial institutions, the Bank of England, labeled climate change one of the "top risks" to the global economy earlier this year.
Mark Carney, the bank's governor, said last year that the "vast majority of reserves are unburnable" if humanity is to keep the rise in global temperatures below the internationally agreed-upon 2-degree-Celsius threshold. Carney is expected to speak about the financial risk of fossil fuels -- notably the idea of "stranded assets," pockets of coal, oil and gas that would be illegal in the future to burn due to government regulations -- before the Paris summit in Decemeber.
Nine major companies including Johnson & Johnson, Procter & Gamble Co., Starbucks Corp., Wal-Mart Stores Inc. and Voya Financial Inc., as well as Goldman Sachs, agreed to only using renewable energy last week. Each company set its own time frame to meet that goal, from this year to 2050 (Greenwire, Sept. 23).

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States Cue Up Initial Talks on EPA Rule Options

Sep 28, 2015 | E&E Climatewire

By Emily Holden and Rod Kuckro

States around the country are buckling down to explore Clean Power Plan compliance options, even while some of them plan lawsuits against U.S. EPA.
This week will feature public meetings in California, Georgia and Virginia. In the last several weeks, agencies and stakeholders also met in Colorado, Minnesota, Missouri, Montana and Pennsylvania. (Visit our Power Plan Hub state pages for those stories and stay tuned for more from those states in ClimateWire this week.)
Most states are starting to gather input from residents and special interests while exploring decisions they will have to make in writing plans (or requesting two-year extensions) by September 2016.
States must decide whether to pursue rate-based or mass-based standards -- to either reduce the level of power plant emissions or cap the total carbon output of the electricity sector. They are weighing various policies to cut emissions and considering whether to include compliance-credit trading options to work with other states to achieve carbon goals.
To gain an extension, states must at least describe options they are considering, justify their need for more time and describe their public outreach efforts.
Many states must also consider what roles state agencies and legislatures will play.Scoping out state events
In Georgia today, the Georgia Institute of Technology's School of Public Policy and Emory University's Climate@Emory will host a town hall on options for complying with the Clean Power Plan.
Speakers include Karen Hays, chief of Georgia's Environmental Protection Division Air Protection Branch, and Chuck Eaton, chairman of Georgia's Public Service Commission, as well as representatives from Georgia's Department of Economic Development, U.S. EPA, Emory and Georgia Tech.
E&E reporter Kristi E. Swartz will attend.
In Colorado on Wednesday, the Colorado State University Energy Institute, the Center for the New Energy Economy and the School of Global Environmental Sustainability will co-host aninformational overview of EPA's Clean Power Plan, featuring former Colorado Gov. Bill Ritter (D) and CNEE senior policy advisers. CNEE has been organizing Western states considering compliance paths for the rule.
In California on Friday, the Air Resources Board will hold an all-day public workshop on the state's cap-and-trade program and plan for complying with the Clean Power Plan. The portion from 3 to 5 p.m. PDT will focus on the U.S. EPA rule. E&E's Debra Kahn will report on the event.
Virginia has also been holding informal listening sessions around the state.Around Capitol Hill
At 1 p.m. tomorrow, the Environmental and Energy Study Institute will host a briefing about the best compliance strategies for the Clean Power Plan. EESI's lineup includes EPA Office of Air and Radiation senior counsel Joe Goffman and the executive directors of the organizations that represent state air administrators, electric regulators and energy officials.
Bill Becker will speak for the National Association of Clean Air Agencies, Charles Gray will represent the National Association of Regulatory Utility Commissioners, and David Terry will appear for the National Association of State Energy Officials.
Republicans in Congress will renew their attacks on the Obama's administration's air rules with a Senate Energy and Public Works Committee hearing, also at 10 a.m. tomorrow.
The EPW Committee hearing will explore the "economy-wide implications of President Obama's air agenda," and will focus on the ozone rule. EPA air chief Janet McCabe will testify.Related events
In West Virginia through tomorrow, the Southern States Energy Board meets to consider the transformation of the electricity industry and impacts to coal suppliers. A panel today will explore nuclear power's role in the Clean Power Plan. McCabe will speak about the federal role in fostering innovation and clean energy technologies.
In Austin on Wednesday and Thursday, E&E reporter Edward Klump will be following the Gulf Coast Power Association's fall conference, which includes a keynote address by Federal Energy Regulatory Commission member Colette Honorable and a session on the challenges and opportunities of regulations like the Clean Power Plan to the power business.The latest CPP news
In case you missed it:Top officials in North Carolina say nuclear power may be the best compliance option for the Clean Power Plan (see related story).The Colorado Department of Public Health and Environment sketched out questions for the public to consider as the agency works on a compliance plan with electric regulators and the state Energy Office (see related story).While opponents of the Clean Power Plan await its publication in the Federal Register before they can move forward with attacks, E&E reporter Rod Kuckro looked into why the process takes so long (EnergyWire, Sept. 25).North Dakota Gov. Jack Dalrymple will meet with EPA officials to protest his state's vastly tougher goals under the final rule. A number of Western governors are visiting Washington, D.C., this week to attend congressional hearings. E&ETV's Monica Trauzzi will sit down with several of them (EnergyWire, Sept. 25).Montana is grudgingly preparing options for Clean Power Plan compliance, while weighing whether to sue (ClimateWire, Sept. 24).The Southwest Power Pool says multi-state coordination to cut CO2 is the smartest option (ClimateWire, Sept. 24).ClimateWire explored an emerging political narrative about whether the Clean Power Plan creates "winners" and "losers" among the states (ClimateWire, Sept. 21).A white paper from a former Wisconsin electricity regulator and onetime adviser to Energy Secretary Steven Chu says complaints that the rule will harm electric reliability are all political (EnergyWire, Sept. 21).
Correction: The Environmental and Energy Study Institute briefing about compliance strategies will take place at 1 p.m. tomorrow. A previous version of this story contained an incorrect time.

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Colo. Kicks off public dialogue on Clean Power Plan Compliance

Sep 28, 2015 | E&E Climatewire

By Emily Holden

Colorado's first official meeting about how the state might cut carbon emissions under U.S. EPA's Clean Power Plan offered a window Friday into a complex process almost all states will undergo in the coming months.
The state's Department of Public Health and Environment -- which is tasked with writing a compliance plan -- sketched out a timeline for gathering public input and a list of questionsColorado must answer by an initial deadline next September.
While the state's GOP attorney general has announced she will join other states challenging the regulation in court, DPHE is charging ahead to hash out the details of a carbon-cutting blueprint, in coordination with the Public Utilities Commission and the Colorado Energy Office (ClimateWire, Sept. 8).
"We are going to help craft a made-in-Colorado plan," said DPHE's Air Pollution Control Division director, Will Allison. "We don't think it's best to wait around for the feds to impose a plan on us."
State officials said repeatedly Friday that they had not made any decisions yet and wanted to gather feedback from residents and businesses on "the path forward" and that they would continue to seek input in a series of public meetings in the spring and summer.
Chris Colclasure, policy and planning program manager for the Air Pollution Control Division, said Colorado has been a leader in reducing CO2 emissions and will continue down that path. But he acknowledged any compliance path with the CPP has the potential to drive electricity costs higher.
"We want our plan to minimize job loss or economic disruption that could come from changes in the way that we generate electricity," he said.
Speakers at the meeting Friday ranged from environmental advocates who commended the rule and said it would be achievable for Colorado to representatives of industry interests who criticized EPA for not giving the state more credit for prior investments in a cleaner energy fleet.
"Consideration must be given to those Colorado ratepayers who have funded investments to date in reducing CO2 emissions," said Michelle King, a lawyer with Holland & Hart who was representing the Colorado Energy Consumers. King noted that electricity rates in the state have risen sharply in recent years.A mass-based or rate-based standard?
Colorado must cut its power-sector CO2 emissions rate 38 percent below 2012 levels by 2030. It could also cap the annual tons of carbon that power plants emit, reducing mass emissions 31 percent overall, Colclasure said.
Last year, coal power represented 62 percent of electricity generation in the state, while natural gas made up less than a fourth of generation and renewables produced the rest. Colclasure said that mix is almost certain to change under the Clean Power Plan.
He said one of the most important decisions the state will make is whether to pursue a rate-based standard -- to lower the level at which plants emit carbon -- or a mass-based standard -- to cap annual emissions.
On one hand, a mass-based standard would reduce the red tape required of utilities to monitor and track emissions rates. And it would make trading with other states easier because a ton of carbon emitted would be common currency in any state.
But Colclasure said the state would have to figure out a way to divvy up carbon allowances among utilities, which could be complicated.
A rate-based standard would be more complicated to track but would help with expected power demand growth because the state could construct new power plants as long as it maintained a certain emissions level, he said. That could be important because Colorado is growing at nearly twice the rate of the rest of the United States, he noted.
Allowing trading would also require Colorado to set up some sort of tracking system, he said. The state will also have to consider whether to count new sources of power in its emissions cap if it pursues a mass-based standard, Colclasure said.
In any case, the agency is hearing "broad interest" from stakeholders in being able to trade compliance credits inside and outside the state, and Colorado's plan is likely to include a trading mechanism if that interest continues, he said.
Colclasure said EPA believes, and he generally agrees, that trading reduces costs, increases flexibility and makes it easier for states to comply.
The agency is also looking into how it might get extra credit under EPA's Clean Energy Incentive Program.
The Department of Public Health and Environment will have at least six more meetings on the rule, including two in Denver in February and May and others in Durango and communities with coal plants -- Commerce City, Craig and Pueblo.
The meetings will become more granular over time, Colclasure said.
In September, Colorado will likely submit an initial plan and request a two-year extension for sending EPA a final version. Public outreach meetings will continue while the state develops a final plan by 2018.

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N.C. May go Nuclear to Meet EPA's Carbon Limits

Sep 28, 2015 | E&E Energywire

By Emily Holden and Kristi Swartz

If North Carolina's legal assaults on U.S. EPA's Clean Power Plan fail, the state may rely heavily on nuclear power to meet carbon reduction goals, according to a top state official.
Donald van der Vaart, secretary of the North Carolina Department of Environment and Natural Resources, said last week that the state needs to "leapfrog" natural gas as a baseload fuel that supports intermittent renewable power.
"Every time you are putting in an intermittent power supply ... you are committing to retain some level of fossil-fuel combustion," van der Vaart said told attendees of a luncheon hosted by the conservative John Locke Foundation. "The real discussion that we need to be having, and that we are having in North Carolina, is the development of nuclear power because it is dispatchable, it is zero emissions, it is a far smaller footprint than some other energy sources, and ... if you recognize the length of service being close to 50 years, it is very competitive with natural gas-fired combined cycle."
Van der Vaart, whose agency is tasked with writing North Carolina's compliance plan, said Lt. Gov. Dan Forest has been discussing nuclear's role with the state's Energy Policy Council.
"It is really the dual plan, if you will," he said. "That's the plan that we're going to put in place, that we're going to initiate in case we lose the litigation."
The Energy Policy Council is exploring the option, a spokesman for the North Carolina lieutenant governor confirmed.
"In the event North Carolina has to comply with the Clean Power Plan rule, nuclear generation would allow us to reduce base-load use of coal energy with high-efficiency, clean energy that does not carry with it the problem of intermittency that other low-emissions sources have," Jamey Falkenbury said in an emailed statement to E&E Publishing. "The major hurdle that needs to be cleared before nuclear energy can expand in North Carolina is the financing of new facilities with as small an impact as possible on the ratepayer. The Energy Policy Council is exploring all available options to make nuclear expansion viable in North Carolina."
Van der Vaart added that renewables will also play a role in North Carolina's energy future. He said solar power costs have come down by two-thirds since the state implemented a renewable energy portfolio standard, and he said "wind may take a little longer, but there's every reason to believe that ultimately we'll see benefits there."
North Carolina's Democratic attorney general has yet to join any early challenges to the Clean Power Plan, which will not be formalized until next month with publication in the Federal Register. But van der Vaart signaled his intention to sue when EPA's final rule came out in August.
Van der Vaart argues EPA is misinterpreting a statute of the Clean Air Act that is supposed to be narrow.
"There are plenty of legal foibles, and we're going to pursue those in the various courts, and I think we'll prevail," he said.Lots of interest, little action for nuclear
North Carolina must reduce its power plant carbon emissions rate 32 percent below 2012 levels by 2030. A new nuclear power plant could go a long way toward meeting that goal, although analysts say it might be unrealistic from an economic standpoint.
"You often hear support for nuclear power, but there's a big difference between voicing support for it and actually taking action to actually create a framework where nuclear is being built," said Paul Patterson, a utility analyst with Glenrock Associates LLC. "We just aren't seeing that."
Duke Energy, the predominant electric utility in the state, operates 11 nuclear units at six sites in North and South Carolina and had planned to add reactors in both states, as well as in Florida. Duke shelved plans in 2013 to build an additional reactor at the Harris Nuclear Plant in Wake County. Other nuclear projects remain on the books but in name only.
In Florida, Duke decided to close its lone nuclear reactor after failing to repair it. The utility then shelved plans to build two more reactors, although it is still pursuing the federal license to build them.
Duke also continues to seek a license with the Nuclear Regulatory Commission to build reactors at what would be Lee Nuclear Station in Cherokee County, S.C. The NRC's website lists the schedule as being "revised," which means the noted 2017 proposed licensing date is likely outdated.
In response to van der Vaart's statements, a spokeswoman for Duke said in an email to E&E that "nuclear energy has been an important component of Duke Energy's energy portfolio for more than 40 years and will continue to serve our customers safely and reliably in the future."
"We strongly believe fuel diversity is in the long-term interest of our customers -- new nuclear, natural gas and renewable resources will all play an important role in serving our customers and reducing our carbon footprint," she added.
In a May interview with the Charlotte Business Journal, Duke Energy CEO Lynn Good said moving forward with the Lee nuclear project likely would depend upon several factors. Low natural gas prices are one of them. Future electricity demand and advances in renewable energy technologies also would play into the decision, she said.
Duke wants to build the Lee reactors with Westinghouse Electric Co.'s AP1000 reactor design, the same one being used in projects in Georgia, South Carolina and China. Following utilities that already have built reactors with the same design should give Duke an easier path and likely a shorter timeline from start to finish.
"It's a seven- or eight-year process to build one of these. So you want to do your homework before you start construction," Good told the Business Journal.Policy change needed
Nuclear reactors have significantly higher construction costs than traditional coal and natural gas plants, which means utilities need to have strong balance sheets and unwavering support from state regulators to build them. Good raised the issue of how much money the utility can recoup from its customers and when.
She made it clear that the North Carolina General Assembly would have to create a law that would let Duke collect the project's financing costs early before the company would move forward with such an expensive power plant.
North Carolina's session is set to wrap up shortly, so it's unlikely any policy change would happen this year.
Changes in state laws in Georgia and in South Carolina were a key reason those projects became more attractive to Wall Street. The policies gave investors certainty that the utilities would be collecting some of the costs of the multibillion-dollar reactors early.
That early cost recovery is helping now especially. Utilities in both states are in a dispute with their contractors over some costs that are associated with project delays. Even though both electric companies maintain they are not responsible for those costs, until the disputes are resolved, it remains unclear to investors who will be shouldering that burden.
How van der Vaart's agency responds to the rule may also depend on the North Carolina Legislature. The House directed DENR to prepare a plan, but the Senate amended that bill to restrict a state blueprint to carbon reductions that could be achieved through improvements at coal plants. The legislation is now in limbo in the House, with the Assembly set to adjourn soon.Fight comes first
While lawmakers debate the path forward and North Carolina weighs whether nuclear power could be its "Hail Mary" for the Clean Power Plan, Republican Gov. Pat McCrory's administration is poised to continue to fight the rule in court.
Van der Vaart argues EPA didn't give the state enough credit for earlier actions that curbed CO2.
He said North Carolina's coal-fired power plants are the most efficient in the country after a "culling of the herd" in recent years. And he said the state has added a significant amount of natural gas to its system to reduce pollutants other than CO2. He also noted North Carolina is the only state in the Southeast with a mandatory renewable energy portfolio standard. The state has cut 24 percent of CO2 emissions since 2005, he said.
"Yes, it costs money, but we're doing it and managing it in the least-cost manner," van der Vaart said. "The real question is -- do you want Washington, D.C., to take over the electricity generating system?"
Van der Vaart charged that power dispatch under the Clean Power Plan will be based on how much CO2 is emitted rather than how much a resource costs.
Without the Clean Power Plan, the state would still make progress on emissions, he said.
"If we prevail in court ... then there will still be very large reductions going forward because we're going to continue to see the replacement of these aging coal-fired power plants," van der Vaart said.
Van der Vaart also said the Clean Power Plan won't make a dent in global emissions and will only slightly slow the growth of greenhouse gases that cause climate change.
"From an environmental standpoint, it's a wash," he said. He said EPA has admitted that and argued the rule will give the United States the "moral basis" to ask India and China to reduce emissions.
"I frankly don't think the Chinese will be all that impressed, no matter what the number," he added.
For more information on North Carolina and the Clean Power Plan, visit E&E's Power Plan Hub.

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If its Lawsuit Fails, N.C. May go Nuclear to Meet EPA's Carbon Limits

Sep 28, 2015 | E&E Climatewire

By Emily Holden and Kristi Swartz

If North Carolina's legal assaults on U.S. EPA's Clean Power Plan fail, the state may rely heavily on nuclear power to meet carbon reduction goals, according to a top state official.
Donald van der Vaart, secretary of the North Carolina Department of Environment and Natural Resources, said last week that the state needs to "leapfrog" natural gas as a baseload fuel that supports intermittent renewable power.
"Every time you are putting in an intermittent power supply ... you are committing to retain some level of fossil-fuel combustion," van der Vaart told attendees of a luncheonhosted by the conservative John Locke Foundation. "The real discussion that we need to be having, and that we are having in North Carolina, is the development of nuclear power because it is dispatchable, it is zero emissions, it is a far smaller footprint than some other energy sources, and ... if you recognize the length of service being close to 50 years, it is very competitive with natural-gas-fired combined cycle."
Van der Vaart, whose agency is tasked with writing North Carolina's compliance plan, said Lt. Gov. Dan Forest has been discussing nuclear's role with the state's Energy Policy Council.
"It is really the dual plan, if you will," he said. "That's the plan that we're going to put in place, that we're going to initiate in case we lose the litigation."
The Energy Policy Council is exploring the option, a spokesman for the N.C. lieutenant governor confirmed.
"In the event North Carolina has to comply with the Clean Power Plan rule, nuclear generation would allow us to reduce base-load use of coal energy with high-efficiency, clean energy that does not carry with it the problem of intermittency that other low-emissions sources have," Jamey Falkenbury said in an emailed statement to E&E Publishing. "The major hurdle that needs to be cleared before nuclear energy can expand in North Carolina is the financing of new facilities with as small an impact as possible on the ratepayer. The Energy Policy Council is exploring all available options to make nuclear expansion viable in North Carolina."
Van der Vaart added that renewables will also play a role in North Carolina's energy future. He said solar power costs have come down by two-thirds since the state implemented a renewable energy portfolio standard, and he said "wind may take a little longer, but there's every reason to believe that ultimately we'll see benefits there."
North Carolina's Democratic attorney general has yet to join any early challenges to the Clean Power Plan, which will not be formalized until next month with publication in the Federal Register. But van der Vaart signaled his intention to sue when EPA's final rule came out in August.
Van der Vaart argues EPA is misinterpreting a statute of the Clean Air Act that is supposed to be narrow.
"There are plenty of legal foibles, and we're going to pursue those in the various courts, and I think we'll prevail," he said.Lots of interest, little action for nuclear
North Carolina must reduce its power plant carbon emissions rate 32 percent below 2012 levels by 2030. A new nuclear power plant could go a long way toward meeting that goal, although analysts say it might be unrealistic from an economic standpoint.
"You often hear support for nuclear power, but there's a big difference between voicing support for it and actually taking action to actually create a framework where nuclear is being built," said Paul Patterson, a utility analyst with Glenrock Associates LLC. "We just aren't seeing that."
Duke Energy Corp., the predominant electric utility in the state, operates 11 nuclear units at six sites in North and South Carolina and had planned to add reactors in both states, as well as in Florida. Duke shelved plans in 2013 to build an additional reactor at the Harris Nuclear Plant in Wake County. Other nuclear projects remain on the books but in name only.
In Florida, Duke decided to close its lone nuclear reactor after failing to repair it. The utility then shelved plans to build two more reactors, although it is still pursuing the federal license to build them.
Duke also continues to seek a license with the Nuclear Regulatory Commission to build reactors at what would be Lee Nuclear Station in Cherokee County, S.C. The NRC's website lists the schedule as being "revised," which means the noted 2017 proposed licensing date is likely outdated.
In response to van der Vaart's statements, a spokeswoman for Duke said in an email to E&E that "nuclear energy has been an important component of Duke Energy's energy portfolio for more than 40 years and will continue to serve our customers safely and reliably in the future."
"We strongly believe fuel diversity is in the long-term interest of our customers -- new nuclear, natural gas and renewable resources will all play an important role in serving our customers and reducing our carbon footprint," she added.
In a May interview with the Charlotte Business Journal, Duke Energy CEO Lynn Good said moving forward with the Lee nuclear project likely would depend on several factors. Low natural gas prices are one of them. Future electricity demand and advances in renewable energy technologies also would play into the decision, she said.
Duke wants to build the Lee reactors with Westinghouse Electric Co.'s AP1000 reactor design, the same one being used in projects in Georgia, South Carolina and China. Following utilities that already have built reactors with the same design should give Duke an easier path and likely a shorter timeline from start to finish.
"It's a seven- or eight-year process to build one of these. So you want to do your homework before you before you start construction," Good told the Business Journal.Policy changes needed next year
Nuclear reactors have significantly higher construction costs than traditional coal and natural gas plants, which means utilities need to have strong balance sheets and unwavering support from state regulators to build them. Good raised the issue of how much money the utility can recoup from its customers and when.
She made it clear that the North Carolina General Assembly would have to create a law that would let Duke collect the project's financing costs early before the company would move forward with such an expensive power plant.
North Carolina's session is set to wrap up shortly, so it's unlikely any policy change would happen this year.
Changes in state laws in Georgia and in South Carolina were a key reason those projects became more attractive to Wall Street. The policies gave investors certainty that the utilities would be collecting some of the costs of the multibillion-dollar reactors early.
That early cost recovery is helping now especially. Utilities in both states are in a dispute with their contractors over some costs that are associated with project delays. Even though both electric companies maintain they are not responsible for those costs, until the disputes are resolved, it remains unclear to investors who will be shouldering that burden.
How van der Vaart's agency responds to the rule may also depend on the North Carolina Legislature. The House directed DENR to prepare a plan, but the Senate amended that bill to restrict a state blueprint to carbon reductions that could be achieved through improvements at coal plants. The legislation is now in limbo in the House, with the Assembly set to adjourn soon.Court fight comes first
While lawmakers debate the path forward and North Carolina weighs whether nuclear power could be its "Hail Mary" for the Clean Power Plan, Republican Gov. Pat McCrory's administration is poised to continue to fight the rule in court.
Van der Vaart argues EPA didn't give the state enough credit for earlier actions that curbed CO2.
He said North Carolina's coal-fired power plants are the most efficient in the country after a "culling of the herd" in recent years. And he said the state has added a significant amount of natural gas to its system to reduce pollutants other than CO2. He also noted North Carolina is the only state in the Southeast with a mandatory renewable energy portfolio standard. The state has cut 24 percent of CO2 emissions since 2005, he said.
"Yes, it costs money, but we're doing it and managing it in the least-cost manner," van der Vaart said. "The real question is -- do you want Washington, D.C., to take over the electricity generating system?"
Van der Vaart charged that power dispatch under the Clean Power Plan will be based on how much CO2 is emitted rather than how much a resource costs. Without the Clean Power Plan, the state would still make progress on emissions, he argued.
"If we prevail in court ... then there will still be very large reductions going forward because we're going to continue to see the replacement of these aging coal-fired power plants," van der Vaart said.
Van der Vaart also argued that the Clean Power Plan won't make a dent in global emissions and will only slightly slow the growth of greenhouse gases that cause climate change. "From an environmental standpoint, it's a wash," he said. He said EPA has admitted that and argued the rule will give the United States the "moral basis" to ask India and China to reduce emissions.
"I frankly don't think the Chinese will be all that impressed, no matter what the number," he added.

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Obama Vows Cooperation at U.N. to 'Decisively' Attack Warming

Sep 28, 2015 | E&E Greenwire

By Jean Chemnick

Climate change featured briefly in President Obama's address this morning to the United Nations General Assembly's final leadership summit ahead of this year's high-stakes round of climate negotiations in December.
The president reserved one paragraph late in his speech for a call to action on warming, telling heads of state from around the world that the United States would cooperate with any nation "that is willing to do its part so that we can come together in Paris to decisively confront this challenge."
He told the gathering of leaders from 193 countries that addressing warming would also help eradicate global poverty and create new industries.
"We can roll back the pollution that we put in our skies, and help economies lift people out of poverty without condemning our children to the ravages of an ever-warming climate," the president said. "The same ingenuity that produced the industrial age and the computer age allows us to harness the potential of clean energy."
Obama has made it a personal priority to help broker a deal on emissions and finance this December, raising climate issues in meetings with leaders from a variety of key countries. That produced a major agreement last week with China in which the world's highest-emitting nation agreed to introduce a cap-and-trade system to contain emissions beginning in 2017. And Obama meets today with Indian Prime Minister Narendra Modi on the sidelines of the General Assembly meeting to discuss India's emissions commitments ahead of Paris.
But Obama devoted relatively little time in today's address to warming, spending the bulk of his hourlong speech on issues including Islamic extremism and the normalization of relations with Cuba.
Pope Francis in his own address to the U.N. gathering Friday argued that environmental destruction would lead to human suffering (Greenwire, Sept. 25).
"Any harm done to the environment, therefore, is harm done to humanity," the pontiff said, sounding a theme he also raised in speeches at the White House and on Capitol Hill.

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At U.N., Obama Calls Sustainable Development an Investment 'in our own Future'

Sep 28, 2015 | E&E Climatewire

By Lisa Friedman

Climate change threatens to unravel global economic gains, President Obama warned world leaders yesterday as he committed the United States to a sweeping blueprint for ending poverty, hunger and inequality.
In his first of two addresses to the U.N. General Assembly, Obama on Sunday said the United Nations' sustainable development agenda is "not charity, but instead is one of the smartest investments we can make in our own future." And tackling climate change, he said, is part of that.
"In just two months, the world has an opportunity to unite around a strong global agreement," Obama said. "We need to establish the tools and financing to help developing nations embrace clean energy, adapt to climate change and ensure that there's not a false choice between economic development and the best practices that can save our planet."
Obama's speech capped a momentous week on climate change that started when Pope Francis arrived in Washington, D.C., and called for action on global warming. Next came Chinese President Xi Jinping, who announced with Obama that China would launch a carbon market and deliver billions of dollars in climate aid to poor countries. Now, as world leaders converge on New York for the 70th session of the U.N. General Assembly, more than a dozen countries -- including Indonesia, Brazil and South Africa -- have submitted carbon-cutting plans toward a global deal.
Before Obama took the stage yesterday, Secretary of State John Kerry participated in a leaders' climate luncheon sponsored by U.N. Secretary-General Ban Ki-moon. The group of about 30 heads of state and ministers agreed that the accord expected to be signed in Paris "must be a turning point" in a decarbonizing world, according to a summary released by French officials.
The drumroll continues this week. U.S. Special Envoy for Climate Change Todd Stern will speak along with Indian Environment Minister Prakash Javadekar and former New York Mayor Michael Bloomberg at a Climate Week NYC signature event.
According to Marshall Islands foreign minister Tony de Brum, Stern later that day will meet with a number of small island state leaders to specifically discuss the issue of losses and damages from climate change that cannot be adapted to. The issue is one close to the hearts of vulnerable island countries that already are seeing entire countries devastated by storms -- as Vanuatu's capital island was during Cyclone Pam earlier this year. Stern's office declined to give details about the upcoming meeting.
And back at the United Nations, French President François Hollande is expected to make a major new climate financing announcement, according to several sources. That announcement will follow on a pledge by the United Kingdom to double its climate contribution to poor countries to nearly 6 billion pounds. The money will flow to an independent Green Climate Fund created by the United Nations to help countries cope with climate impacts and develop clean energy.
"There is a condition for an agreement to take place, and that is finance," Hollande said after the luncheon. He noted that many countries, "including France," have said they will increase their pledge and added that when the General Assembly convenes today, "we hope we will receive new announcements of contributions."
Increased pledges by European nations, especially if followed by other countries like Japan, could cause some political discomfort for the Obama administration. The United States has pledged $3 billion over four years to the Green Climate Fund, but Republicans in Congress have vowed to block it.

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Shell to Abandon Arctic Drilling Efforts

Sep 28, 2015 | The Hill - E2 Wire

By Devin Henry

Royal Dutch Shell announced Monday that it will abandon its plan to drill for oil and natural gas in the Arctic Sea off the coast of Alaska.
The company had been exploring the Burger Region of the Chukchi Sea for oil and natural gas. Its deadline for ending that effort for the season was Monday, and though the company said it found some reserves of oil, there isn’t enough there to undertake further expeditions.
"Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” Shell Upstream Americas Direct Marvin Odum said in a statement. “However, this is a clearly disappointing exploration outcome for this part of the basin.”
Shell said its Alaska drilling campaign is worth about $3 billion on its balance sheet. The company still holds leases for other drilling sites in the Chukchi Sea, but it said it will “cease further exploration activity in offshore Alaska for the foreseeable future,” blaming the limited amount of oil found in its exploration well, the high cost associated with drilling there and an unclear future for federal regulations.
Shell’s decision to drill in the Arctic — and the Obama administration’s approval of the project — was highly controversial, with green groups warning about the risks of an oil spill in the Arctic Ocean while calling for less fossil fuel development.
The groups cheered Shell’s decision to pull out of the region on Monday.
“While this is a victory for everyone who hoped to avoid a catastrophic spill — or catastrophic climate change — from Shell’s plans, it’s also proof positive that drilling in the Arctic is too costly to be effective and a bad bet for other energy companies,” said Annie Leonard, the executive director of Greenpeace USA, which had led protests against Shell this summer.
“Shell’s abandonment of drilling and cancellation of all exploratory activity in the Arctic is joyous news for our climate, communities along the Arctic Ocean, and the hundreds of thousands of people who have joined in public protests saying ‘Shell No’ to Arctic drilling,” Sierra Club Executive Director Michael Brune said.
Many environmentalists had warned that the decision to open up the region for drilling — both Shell’s excursion there this year and in the government’s formal long-term plan for the region — would hurt President Obama’s environmental legacy. On Monday, they repeated their call for Obama to block future lease sales in the Arctic.
“Today, President Obama can also make history by canceling any future drilling and declaring the U.S. Arctic Ocean off limits to oil companies,” Leonard said. “There is no better time to keep fossil fuels like Arctic oil in the ground, bringing us one step closer to an energy revolution and sustainable future.”

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Shell Drops Plans to Drill in Alaskan Arctic

Sep 28, 2015 | PoliticoPro

By Nick Juliano

Shell today announced it would be suspending its plan to drill in the Alaskan Arctic “for the foreseeable future,” after not finding enough oil and gas in a test well it drilled over the summer.
The company pointed to the high drilling costs in the Chukchi Sea as well as the “challenging and unpredictable federal regulatory environment in offshore Alaska.” Shell has spent at least $7 billion so far on the search.
"Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US,” Marvin Odum, director of Shell Upstream Americas, said in a statement. “However, this is a clearly disappointing exploration outcome for this part of the basin.”
The news is likely to be cheered by environmental groups that sharply criticized the Obama administration’s decision to approve Shell’s exploratory drilling plan this summer. Democratic frontrunner Hillary Clinton has said she opposes drilling in the Arctic.

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Shell Abruptly Exits Chukchi Drilling

Sep 28, 2015 | E&E Energywire

By Margaret Kriz Hobson

After investing seven years and $7 billion in hopes of finding a mother lode of oil in the American Arctic, Royal Dutch Shell PLC is scrapping its Chukchi Sea drilling program and ending exploration in offshore Alaska "for the foreseeable future."
In a short but blunt press statement, the company said the amount of oil and gas discovered at its Burger J lease is "not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with U.S. regulations."
Marvin Odum, director of Shell Upstream Americas, noted that "Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US."
"However, this is a clearly disappointing exploration outcome for this part of the basin," he said.
While the low oil potential was the main reason for walking away from the American Arctic, Shell also blamed "the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska."
With the Chukchi operation ending, Shell said it expects to take a significant financial loss. However, the full impact of the decision was not immediately clear.
The company said only that its "balance sheet carrying value of Shell's Alaska position is approximately $3.0 billion, with approximately a further $1.1 billion of future contractual commitments. An update will be provided with the third quarter 2015 results."
Shell's stunning decision marks the end of the company's controversial plan to develop oil and gas resources in the American offshore Arctic waters.
Environmental activists who have continually challenged Shell's Arctic drilling operation applauded the company's decision to give up its Chukchi exploration program.
Lois Epstein, Arctic program director for the Wilderness Society, described Shell's decision as "very good news for the marine environment, sensitive coastal lands and the Arctic communities that would be devastated by a major oil spill."
"Hopefully, this means that we are done with oil companies gambling with the Arctic Ocean, and we can celebrate the news that the Arctic Ocean will be safe for the foreseeable future," she said.

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Shell Retreat Clouds Obama Admin's Future Exploration Policy

Sep 28, 2015 | E&E Greenwire

By Phil Taylor

Royal Dutch Shell PLC's announcement today that it is putting an indefinite pause on its Arctic exploration activities could play a major role in the Obama administration's decision whether to hold additional oil and gas lease sales in the region.
Shell today announced it was shelving its Arctic exploration campaign "for the foreseeable future" after its first fully drilled well in the Chukchi Sea in decades turned up "disappointing" results (EnergyWire, Sept. 28).
The company's decision offered a political boost to Democrats and conservation groups that are lobbying the administration to cancel the Arctic lease sales it scheduled for 2016 and 2017 in the Chukchi and Beaufort seas, respectively, and to yank additional sales the administration included in its draft 2017-2022 leasing plan.
The decision also comes months after White House hopeful Hillary Clinton first publicized her "doubts" about Arctic oil and gas exploration, a position that is shared by her competitors for the Democratic nomination (Greenwire, July 29).
Those two developments, combined with the low price of oil and tepid interest from other major companies to explore the U.S. Arctic, may provide political cover if the administration decides to pull back on its Arctic energy ambitions.
"Today's news may be the nail in the coffin for scheduled [Arctic] lease sales," said Michael LeVine, senior counsel for the environmental group Oceana. "We hope that one outcome from today's announcement is a focus on the future. ... [T]he right thing to do is wipe the slate clean and allow existing leases to expire."
But Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said she was "extremely disappointed" by Shell's decision, which she blamed on onerous government regulations.
"It is clear that the federal regulatory environment -- uncertain, ever-changing and continuing to deteriorate -- was a significant factor in Shell's decision," she said. "What we need -- but still do not have -- is a predictable and sensible regulatory system both onshore and offshore that encourages companies to make major investments in our future."
Murkowski urged the administration to move forward with future Arctic leases, extend expiring leases held by Shell and others, and support her proposal to share outer continental shelf revenues with local governments.
Shell's Chukchi leases are due to expire in five years unless regulators stretch the lease deadline or the company begins producing hydrocarbons at the site. The company's Beaufort Sea prospects are scheduled to lapse in 2017 (EnergyWire, Sept. 15). Shell formally petitioned the Obama administration last year to extend its Chukchi and Beaufort leases by an additional five years. ConocoPhillips Co. and Statoil USA, which also hold leases in the Arctic, filed similar requests.
Shell's CEO this summer said five years is far too short a window for it to build the pricey infrastructure needed to get Arctic oil to market.
Interior continues to lay the regulatory groundwork for future exploration in the Arctic, which holds what scientists believe to be the nation's largest untapped source of oil. The agency is expected to soon finalize a suite of safety regulations it unveiled last February.
But the administration's next major decision is whether to proceed with the two Arctic lease sales it included in its 2012-2017 plan. As of last week, the Bureau of Ocean Energy Management had not yet initiated a National Environmental Policy Act review for its Chukchi sale, a sign that, at a minimum, those sales could be at risk of being pushed back.
"The sales are still on the schedule," said Connie Gillette, a spokeswoman for BOEM. "And yes, NEPA reviews would occur."
Environmentalists do not believe the administration has enough time to complete those reviews before leaving office. Erik Grafe, an attorney for Earthjustice in Alaska who has litigated against the administration's Arctic policies, said BOEM's most recent reviews for a Chukchi lease sale would need significant updates.
"There's a lot of process left for a new environmental impact statement," he said. "And I don't know what industry demand is there."
Industry demand will likely be a big factor in Interior's decision. One conservationist who asked not to be named said Interior officials are considering how the low price of crude and the high cost of development in the Arctic might influence how aggressively companies would bid on future Arctic leases and how that would affect revenues to the U.S. Treasury.
In 2013, major oil and gas groups balked at Interior's request that they rank which areas of Alaska's Chukchi Sea should be opened to exploration in next year's lease. The groups were protesting the administration's decision to only offer portions of the Chukchi and Beaufort planning areas, a break from its policy of offering entire planning areas for sale in the Gulf of Mexico (Greenwire, Dec. 4, 2013).
In 2008, the most recent year leases were sold in the Chukchi, the government netted a record $2.6 billion for 460 leases.
Democrats who oppose Arctic drilling seized on Shell's decision.
"At a time when the oil industry is warehousing tens of millions of acres of leases on public land that it already holds and is arguing that we need to allow American oil to be exported overseas, there is no justification for continuing to push to drill offshore in Alaska or off the East Coast for oil that will then be shipped away to foreign nations where they can get a higher price," said Sen. Ed Markey (D-Mass.).
If the administration decides against holding its 2016 and 2017 Arctic lease sales, it may choose to roll them into the next five-year plan. BOEM's draft proposed leasing program for 2017-2022 already calls for a sale in the Beaufort in 2020 and in the Chukchi in 2022. The administration is expected to finalize the new leasing plan before leaving office in January 2017.
Randall Luthi, president of the National Ocean Industries Association, said he's hopeful other companies will continue efforts to explore the Arctic, which he argued will continue to be a strategic resource for the United States.
"Hopefully other companies will continue their efforts offshore Alaska, so that Americans can gain a better understanding of the location and size of the valuable oil and natural gas resources in the region," he said.
He commended Shell for its investments in the Arctic and its ability to explore this season without major incidents. The company's decision to leave is a blow to energy diversification as well as to Alaska Natives who stood to benefit from the additional jobs and tax revenues that development could have brought, he said.
The role that federal regulations played in Shell's decision "merits examination," he added.
"Due to federal regulatory constraints, Shell was forced to put all their exploratory eggs in one basket -- one well, rather than a suite of exploratory wells that would have given a more complete picture of potential resources," he said. "Unfortunately, the results serve as an example of the harsh reality of the exploration business; dry or noncommercial wells are not uncommon."

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Exxon Promotes Arctic Drilling

Sep 28, 2015 | E&E Energywire

About 700 people looked on Thursday as an Exxon Mobil official defended American oil exploration in the Arctic.
"The world has a tremendous thirst for energy," said Jed Hamilton, senior Arctic consultant at Exxon Mobil Upstream Research Co. "If the U.S. stands in the background, Russia will move forward, and things won't be as good as they could be if the U.S. had a seat at the table in the Arctic."
His statement was part of a panel debate at the University of Houston that largely centered on the ecological and physical dangers posed by offshore Arctic drilling.
"You're going to hear that technology is the answer -- better rigs, better blowout technology," said Kevin Harun, Arctic program director at Pacific Environment. "But there is an inherent unsafe situation by mixing oil and water. This is not the Gulf Coast."
Environmental experts like Harun opposed Arctic drilling on many fronts, including oil spills.
Peter Van Tuyn, an Alaska attorney at Bessenyey & Van Tuyn LLC, said oil companies lose control of their wells at the same rate they did before BP's Macondo spill in 2010. Van Tuyn said offshore oil equipment "just hasn't developed to the point where it's meaningful yet."
Hamilton, the Exxon official, argued that new technology to prevent and mitigate oil spills has increased significantly, including blowout preventers that are quicker to block the flow of runaway oil wells.
Environmental experts also noted inherent dangers of Arctic storms, the cold and a vulnerable ecosystem. On the Gulf Coast, there are hydrocarbon-eating bacteria that don't exist in the Arctic. There is also a greater interspecies dependence in the Arctic.
Hamilton said the United States will need this oil when shale oil fields dry up. The Exxon official added that even if a large oil discovery is made, it won't be until around 2030 that the industry can produce there.
Harun said they should still wait until better technology to stop oil spills is available.
"There is no harm in moving slowly here," he said (Collin Eaton, Fuel Fix, Sept. 24).

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DOE's Greenwald Discusses Agency Road Map to Double Energy Productivity

Sep 28, 2015 | E&E TV

Last week, the Department of Energy, along with the Alliance to Save Energy and the Council on Competitiveness, unveiled a road map to double energy productivity by 2030. How does this road map fit into the series of actions the Obama administration has already taken on climate and energy? During today's OnPoint, Judi Greenwald, deputy director for climate, environment and energy efficiency at DOE, discusses the strategies stakeholders can employ to increase their energy productivity. She also talks about the policies that will be needed to reach the agency's goal.
Transcript
Monica Trauzzi: Hello and welcome to OnPoint, I'm Monica Trauzzi. With me today is Judi Greenwald, deputy director for climate, environment and energy efficiency at the Department of Energy. Judi, thank you for joining me.
Judi Greenwald: Thanks so much for having me.
Monica Trauzzi: Judi, the Department of Energy, along with the Alliance to Save Energy and the Council on Competitiveness, have unveiled a road map to double energy productivity by 2030, energy productivity being the ratio of GDP to primary energy use. How does the road map sort of fit into the series of actions we've seen this administration already take on climate and energy?
Judi Greenwald: So as you probably know, in 2013 in his State of the Union address the president announced this goal of doubling energy productivity by 2030, and it's one of many things that the administration is doing. Certainly in terms of my bailiwick, what I focus on in the department, we have a lot of commonality between what we've been learning through the Quadrennial Energy Review process, a number of the recommendations from the Quadrennial Energy Review, the first installment that we released in the spring are coming into play as part of the productivity initiative, and also we expect that what we have been learning in the productivity initiative will feed into the next installment of the Quadrennial Energy Review, which is going to be on the power sector from generation through transmission, storage and distribution and the end-use sector.
Monica Trauzzi: So let's dig into the road map a little bit. What are some of the strategies that stakeholders can employ to increase their energy productivity?
Judi Greenwald: So as you probably know, but I'll help your viewers out, we had three things that we did as part of this Accelerate Energy Productivity initiative in partnership with our partners, the Alliance to Save Energy and the Council on Competitiveness. The first one is that we wanted to do education. So we've educated people about what this goal is, what it means, as you explained, that it's energy on the bottom and our economic well-being in the numerator. So we wanted to make sure people understood what the goal was and how our economic well-being is tied to our energy efficiency. And there are interactions between energy savings and what we can do for our economy.
So the second thing that we tried to do in addition to education was to motivate people around the country to participate. So we did three dialogues around the country and we talked to people about what they're doing, what they're learning, and help them figure out how they could feed in to this goal.
And then the third thing we did was we created this road map, and the road map built on what we were learning about what things people were doing around the country, and then we built that up into what we called six wedges of actions that people could take. It's not prescriptive, it's not every single thing that you have to do in the road map in order to achieve our goals, but it's illustrative of the type of things that you can do.
And what we learned was that you could meet the president's goal by doubling energy productivity by 2030 and you could increase our GDP by close to 4 percent compared to our EIA's base case, and you could decrease energy use by almost 4 percent. And so you get both that increase in economic growth as well as the decrease in our energy use.
Monica Trauzzi: So when you talk about reducing energy consumption, are there specific sectors of the economy that should be tackled first, or sort of where would DOE like to see the greatest reductions?
Judi Greenwald: So we looked at the entire economy -- and of course it's where the energy use is, which is in many different places. A key wedge was transportation. Things like improving vehicle efficiency. Also making it easier for people to get around without driving alone in vehicles, and there's quite a bit that you can get there. That was a big fraction of our outcome in terms of what we could do and how we would get to the goal. A lot in the power sector. A lot about smart power, how we can combine information technology with some more traditional approaches to energy use, and that combination can really lead to enormous reductions in energy use. The smart grid can really enable a lot more reductions in energy use and help us produce our power and move it around and get it to end users much more efficiently.
We also talked a lot about smart manufacturing. Again, that relationship between information technology and manufacturing, so that we can make things more precisely, and that's been helpful in our whole approach to manufacturing where we can do more onshoring but also do it efficiently.
Monica Trauzzi: So on the utility front, a suggested strategy is for utilities and regulators to design policies that align efficiency with the utility business model that is rapidly evolving and changing. How does that interact with the Clean Power Plan where we're also seeing a huge focus on utilities?
Judi Greenwald: So the Clean Power Plan will definitely also drive energy efficiency, and that's one of the things that we have to take into account. We did not focus much on the Clean Power Plan because it came out fairly recently towards the end of our process and we focused more on these other sets of initiatives and things that people were doing, and it was a bit more bottom-up. We talked a lot, for example, about specific case studies of different actors around the country who told us their stories about what they were up to. The city of Atlanta, for example, is close to meeting its targets to reduce its water use by 20 percent and its energy use by 10 percent. So it's a very bottom-up type approach of looking across the country, at the same time rolling that up and showing that we can actually do this. We don't have to do anything terribly ground shaking, we really just have to scale up strategies that people are doing around the country.
Monica Trauzzi: Are there specific policies, state and federal, that will be needed in order to reach that goal by 2030?
Judi Greenwald: So we definitely are leaning in at the federal level and the states as well. I think it's part about policy and it's also part about other actors. We talk a lot about what the government can do as well as what businesses can do, what utilities can do, what the private sector can do. I'd say some of the key things that the federal government is doing are energy efficiency standards, which is something that DOE does, and that of course matters. Building codes at the local level. Certainly these energy efficiency resource standards that a lot of states are doing, that matters a lot to drive all of this energy efficiency.
I would also say the financing is important, and that was an important piece of what we looked at. A lot of times when you're doing energy efficiency, it actually pencils out, if you look at the economics, but people can't get the financing. And so if we can lean in on that, that can make a big difference, and a number of states are doing that, for example, through Green Banks. There's a lot of public-private partnerships on that front, and that's a big way that we can get access to energy efficiency that's sort of a policy-related outcome, but it's really more of a public and private partnership working together on that.
Monica Trauzzi: How would you like stakeholders to use this road map?
Judi Greenwald: If stakeholders are interested they can go to Accelerate Energy Productivity 2030, our website, and they can look at all of the endorsers, people around the country who have endorsed our goal. We have up to 125 or more at the moment, so people can endorse the goal. They can look at the website and see how much they could do and how they could be part of the solution. So we really welcome everyone joining in and helping us. Also, if you go to our website you can find the presentations and the video from our summit yesterday where we had lots of people participating from around the country, talking about what they're doing, and the secretary, Secretary Moniz, talking about how this is an important initiative for us and how we're leaning in at the federal level.
Monica Trauzzi: All right, very interesting. Thank you for coming on the show.
Judi Greenwald: Thanks.
Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.

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