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Texas Committee Looks For Common Ground On Local Control of Fracking
Mar 30, 2015 | E&E - Energywire
By Mike Lee
A Texas legislative committee could vote today on a compromise bill aimed at settling how far cities can go in regulating oil and gas development. A state Senate committee has already passed its version of a bill that would require local drilling ordinances to be "commercially reasonable." Representatives from Fort Worth, which has had... -
You Can’t Trust The Numbers On The New Fracking Regs
Mar 30, 2015 | The Washington Post
By Michelle Ye Hee Lee
“Interior’s $5,000 a well cost estimate is laughable,” Kathleen Sgamma, vice president for government and public affairs at the Western Energy Alliance, said today in a telephone interview. The final rule adds costs atop those estimated at $97,000 a well in the Alliance’s review of the proposed regulation, she said. -
Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes
Mar 30, 2015 | Bloomberg
By Benjamin Elgin & Matthew Philips
In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder... -
U.S. Should Tap Arctic Oil to Boost Energy Security -- National Petroleum Council
Mar 30, 2015 | E&E - Climatewire
By Benjamin Hulac
Tapping oil and gas deposits in the U.S. Arctic region would raise the nation's stature as a top energy producer for at least the next 35 years and could offset future slumps in energy production from the continental United States, the National Petroleum Council (NPC) said in a draft report released Friday. The report, requested in October 2013 by... -
Can Crude's Boom-Bust Cycle Be Stopped?
Mar 30, 2015 | E&E - Energywire
By Nathanial Gronewold
In 1986, traders moved global crude oil prices south over the course of several months, with price indexes eventually losing about 67 percent of their value during the cycle. The pattern was repeated in 1997, with oil prices falling by more than 60 percent over a period of months. In 2008, the global financial crisis sent markets crashing, and oil... -
Charleston, other S.C. Cities Attempt to Block Leases
Mar 30, 2015 | E&E - Greenwire
Even in conservative South Carolina, local governments are pushing back against attempts to open the state's offshore waters to oil drilling. -
Clean Power Plan Could Tank Wyo. Coal Industry -- Report
Mar 30, 2015 | E&E - Energywire
By Krysti Shallenberger
A new University of Wyoming economic study said the future of the Cowboy State's coal industry and coal-fired power plants could sink under the weight of U.S. EPA's proposed Clean Power Plan. The proposed rule has different targets for each state to cut its emissions. Its target goal to reduce carbon emissions for coal-reliant Wyoming is... -
Last U.S. FERC Conference to Explore Coordination, Infrastructure Needs in Sprawling Midwest
Mar 30, 2015 | E&E - Energywire
Regional grid organizations, state officials and utilities of all sizes will tell federal regulators this week that the diverse mix of power resources and stakeholders in the central U.S. region demands special attention to ensure states collaborate on the Clean Power Plan. The Federal Energy Regulatory Commission will convene in St. Louis... -
Clean Power Plan Expected to Propel Wind Development in Central States
Mar 30, 2015 | E&E - Energywire
By Jeffrey Tomich
There's little disagreement that U.S. EPA's Clean Power Plan will be a catalyst for continued development of the massive wind energy potential of the nation's central corridor. But how much and how fast it's developed ultimately depends on a laundry list of technical and policy questions involving EPA's final rule and how states choose to... -
Obama Admin to Unveil Climate Pact Contribution
Mar 30, 2015 | The Hill - E2 Wire
By Timothy Cama
The United States plans to formally submit this week its plans to cut greenhouse gases as part of a United Nations climate pact. A White House official told Reuters that the Obama administration will submit its contributions to the agreement Monday or Tuesday. That would make the United States only the fifth political division... -
U.S. Set to Send Emission Plan to U.N. by Tomorrow Night's Deadline
Mar 30, 2015 | E&E - Greenwire
By Jean Chemnick
The United States is expected to meet tomorrow night's deadline to submit its formal contribution to a new U.N. climate agreement to be reached in Paris this December. -
New Regs For Tuesday: Explosions, Gasoline Containers, Efficiency
Mar 30, 2015 | The Hill - Regulation
By Tim Devaney
Tuesday's edition of the Federal Register contains new explosion protection standards for offshore drilling units, child-resistant requirements for portable gasoline containers, and energy conservation standards for residential boilers. Here's what is happening: Offshore drilling: The Coast Guard is moving forward with new explosion ... -
EPA Critics Cite High Court 'Deference' Statements To Oppose Major Rules
Mar 30, 2015 | InsideEPA
By David LaRoss
Supreme Court justices' recent statements highlighting an increasing divide on the court about the level of deference to give EPA and other agencies in their statutory and regulatory powers are already being cited by plaintiffs and others to argue for stricter judicial oversight of EPA rules including a fuels testing policy and its utility climate rules. -
Revised EPA Haze Proposal Allows Ariz. Coal Plant's Emissions to Rise
Mar 30, 2015 | E&E - Greenwire
By Amanda Peterka
U.S. EPA is proposing changes to a regional haze plan for Arizona that would let a coal-fired power plant emit more nitrogen oxides. -
Stage Effects at Infamous Climate Hearing Didn't Happen
Mar 30, 2015 | E&E - Greenwire
Everybody implicated in a scheme to heat up the room during an infamous Senate climate change hearing in the 1980s acknowledged that rumors of windows left open and air conditioning manipulation were fiction. -
Industry Urges CEQ To Drop NEPA GHG Guide But Details Legal Challenge
Mar 30, 2015 | InsideEPA
By Dawn Reeves
Industry groups and some Senate Republicans are urging the administration to withdraw, or at least narrow, its draft guidance for assessing greenhouse gas (GHG) and climate impacts of major federal decisions but they are also detailing legal arguments they would make if, as expected, the administration finalizes the guide and draws litigation... -
Infrastructure Developer Anbaric Steps Into World of Microgrids, Pushes High-Voltage DC Lines in U.S.
Mar 30, 2015 | E&E - TV
How are microgrids helping to shape the future of the electric power sector? During today's OnPoint, Ed Krapels, founder and CEO of Anbaric, an energy infrastructure developer, discusses his company's recent partnership with Exelon on a series of microgrids in New York state. He also discusses the transmission and infrastructure... -
Rockefellers Discouraged By Exxon's Attitude Toward Climate Change
Mar 30, 2015 | E&E - Climatewire
Members of the Rockefeller family -- one of the oldest families of the oil empire -- have failed to convince Exxon Mobil Corp. to make efforts to address climate change and develop cleaner energy, according to Neva Rockefeller Goodwin, co-director of the Global Development and Environment Institute at Tufts University.
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Full Text of Stories Below
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Texas Committee Looks For Common Ground On Local Control of Fracking
Mar 30, 2015 | E&E - Energywire
By Mike Lee
A Texas legislative committee could vote today on a compromise bill aimed at settling how far cities can go in regulating oil and gas development.
A state Senate committee has already passed its version of a bill that would require local drilling ordinances to be "commercially reasonable." Representatives from Fort Worth, which has had drilling inside the city since 2001, and other cities said the language in the bill would limit their ability to protect residents from noise, traffic and other downsides of drilling.
Staff and legislators from the state House Energy and Natural Resources Committee were negotiating Friday with oil industry groups and the Texas Municipal League to come up with compromise language.
Texas Municipal League President Bennett Sandlin said the bill would still allow drilling and hydraulic fracturing inside cities.
"We're not trying to draw a line in the sand and say 'no' to any bill," he said. "Cities are big supporters of urban drilling."
The Legislature is being pressed to act after voters in Denton, a college town about 40 miles north of Dallas, approved a ban on hydraulic fracturing inside the city.
Most cities that lie above significant oil and gas deposits in Texas allow drilling inside the city limits, even in residential areas, since Texas law gives mineral owners superior legal rights to surface owners. The cities use a combination of rules -- including minimum distances between well sites and surrounding homes -- to cope with the impact on people who live nearby.
Fort Worth, which has about 2,100 gas wells in its territory, has a 600-foot setback, but a few others have pushed the limit to 1,200 feet or even 1,500 feet. The ordinances are constantly evolving, and a handful of communities are usually rewriting their ordinances at any given time (EnergyWire, Dec. 8, 2014).
The powerful Texas Oil and Gas Association said last week that those local setbacks amount to an attack on energy development, which is a mainstay of the state's economy.
That kicked off a contentious debate during hearings in front of the state's House and Senate committees on Monday and Tuesday. Mayors and city attorneys said they need flexibility to write their own rules and that they have a track record of balancing energy development and public safety (EnergyWire, March 24).
The House committee compromise would allow cities to keep their setbacks as long as they don't block oil and gas development, and would instruct courts to give legal weight to a city's existing ordinance if the city has a history of allowing energy production, said Jason Modglin, chief of staff for committee Chairman Drew Darby, a Republican from San Angelo.
The committee is scheduled to meet today at 3 p.m. EDT time in Austin.
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You Can’t Trust The Numbers On The New Fracking Regs
Mar 30, 2015 | The Washington Post
By Michelle Ye Hee Lee
“Interior’s $5,000 a well cost estimate is laughable,” Kathleen Sgamma, vice president for government and public affairs at the Western Energy Alliance, said today in a telephone interview. The final rule adds costs atop those estimated at $97,000 a well in the Alliance’s review of the proposed regulation, she said.
–Chicago Tribune article, March 20, 2015
The industry said the rule has the potential to create confusion and add hoops that could quash development. Sgamma’s group said a “conservative” estimate regarding the 2013 proposed rule would add $97,000 in expenses per well, which usually cost at least $1.5 million.
–Washington Examiner article, March 20, 2015
The day the Department of Interior released its regulations on oil and gas “fracking” operations on public lands, the $97,000-per-well figure circulated widely in news reports as the cost of the rule.
The tougher regulations have been four years in the making. And as new environmental regulations tend to be received, industry groups believed it would add costs to operators and environmental groups believed the rules didn’t go far enough. Readers asked us to check this $97,000 figure, as it was quoted in almost every news article that day and continues to be cited.
How much will the new regulation cost? Is it really $97,000 per well? Or as little as $11,400, as the government says?
The Facts
Hydraulic fracturing, or “fracking,” is the practice of injecting sand, water and chemicals into a well at high pressures to fracture shale layers in the Earth, which then releases natural oil and gas.
The Interior Department released its final rules on fracking on March 20, 2015, after four years of heated debate. The regulations imposed stronger standards for companies practicing fracking on federal and tribal lands. This was the first time since the 1980s that the agency moved to standardize fracking regulations on federal land. About 90 percent of wells currently drilled on federal land use fracking. Less than a quarter of the country’s fossil-fuel output comes from federal lands.
The Bureau of Land Management estimates the rule will affect between 2,800 to 3,800 wells per year, based on how active operations are on public lands in a given year. The agency estimates costs of complying with the new rule could be about $11,400 to $11,800 per operation, or $32 million to $45 million a year. This would make up about 0.13 to 0.21 percent of the cost of drilling a well, according to the final rule.
The much higher, $97,000-a-well figure comes from a July 2013 economic analysis commissioned by the Western Energy Alliance (WEA), which studied the cost impacts of the proposed rule. The analysis finds that if the BLM’s then-proposed regulations applied to the 3,566 wells that are under development in the western states, it would cost at least $345.6 million, or $96,913 per well.
At question is whether the rule sets cost-prohibitive standards for cement casings on wells, to protect usable water and minerals. The technical engineering aspects of this debate are very complex, so we’ll refrain from going too deep into the weeds.
The BLM estimates the new casing standards in the rule would cost approximately $4,000 to $5,500. WEA estimates the casing standards would cost about $86,950 per well. Why are the numbers so vastly different?
WEA’s analysts say the rule requires an additional 2,350 feet of casing per well, which they called a conservative estimate. Operators had been following the BLM’s Onshore Oil and Gas Order No. 2, which was written in 1988. The order is written broadly, and allows companies to work with states to comply with construction requirements that are safe and cost-effective, since each basin is geologically unique. Currently, state regulators set the minimum well depth, construction requirements, cement casing at which fracturing is safe and practical, according to a fact sheet on fracking by the Society of Professional Engineers. Cement casings are built to last at least 40 years, and operators and states already work closely to isolate usable water and not contaminate natural gas, according to the fact sheet.
The federal rule newly requires companies to “determine and document that there is adequate cement for all casing strings to isolate usable water.” Sgamma said this takes away flexibility and companies will need to add cement to meet federal requirements. Sgamma acknowledged that some wells may not need to add any extra casing, while other wells may need a lot more than 2,350 feet. She said the final cost for operators may be even bigger than $97,000 per well, because figure does not include new changes that were added in the final rule. WEA is studying the impact for the next few months.
“Regulators often don’t have an appreciation for how requirements translate practically on the ground, or how wording can be interpreted in various ways. Certainly the Washington BLM office doesn’t understand how the BLM field offices had worked with states to identify the usable water zones that they actually cared about … and had flexibility on how to protect them, whereas now, this rule is very prescriptive,” Sgamma said.
The BLM costs are so low because they believe the new rule incorporates industry practices, and formalizes what operators already are doing. Officials estimate wells largely are complying with these casing requirements, so they would not have to build large amounts of new casing. So BLM estimates that if there are, in fact, new costs associated with the casing standard, it would be for logging and reporting purposes.
Michael Scialla, an oil and gas analyst at Stifel Financial Corp., who follows oil and gas companies that are drilling and fracking wells and advises investors, said his clients have not expressed major cost concerns. Not all the companies he follows practice fracking on federal land, but those that do have said the impact would be minimal. The companies are concerned that formalized federal regulations would take away flexibility that companies have to work with state regulators, he said. But they are in compliance with “virtually everything” that is required in the new rules, Scialla said.
Indeed, much of the cement casing requirements mirror industry guidelines set by the American Petroleum Institute. A table on p. 16177 of the BLM rule in the Federal Register shows the rule’s requirements are modeled after industry casing requirements.
However, we wonder about the BLM’s estimates, which the government believes is an overestimate. Officials attributed their numbers to the agency’s economists, who wrote the proposed rule’s economic analysis. BLM assumes the industry already is complying with the majority of requirements, but acknowledges it “does not have specific data about the prevalence of voluntary compliance with these requirements irrespective of the rule.” So it could vastly decrease or increase costs for operators, depending on their current practices.
The Pinocchio Test
The exact impact of the rule remains to be seen, and there are pending legal challenges to the BLM rule. While it makes sense that industry groups are bracing for high cost impacts, it is difficult to believe that the BLM’s casing requirements, modeled after industry standards, would be so detrimental to companies. Long-lasting construction projects such as cement casings are built carefully with state regulators, keeping in mind the individual geological characteristics of the basins. One would presume that industry standards and state regulations have been more stringent than federal requirements set in 1988.
Yet the BLM estimates that cement casing requirements would be as little as $4,000 per well is fishy. It assumes that majority of wells already are complying with the new federal rules, yet those requirements have been determined by state regulators so far. We are hindered by the lack of a breakdown of wells that already meet federal requirement, but the BLM’s estimate may end up being too low. The BLM acknowledges it does not have accurate data on companies that are voluntarily complying with the new requirements.
These two figures are so extreme that it is difficult to conclude which one is a more realistic one. Each figure is used by proponents and opponents of the BLM rule as a definitive calculation of its impact. But in reality, it is so much more complicated than that. These numbers obscure the complexities of this debate, and the fact that neither the BLM nor the industry groups really know how many wells will be affected. We award Two Pinocchios to both figures.
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Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes
Mar 30, 2015 | Bloomberg
By Benjamin Elgin & Matthew Philips
In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Boren sits on the board of Continental, and Hamm is a big donor to the university, giving $20 million in 2011 for a new diabetes center. Says Holland: “It was just a little bit intimidating.”
Holland had been studying possible links between a rise in seismic activity in Oklahoma and the rapid increase in oil and gas production, the state’s largest industry. During the meeting, Hamm requested that Holland be careful when publicly discussing the possible connection between oil and gas operations and a big jump in the number of earthquakes, which geological researchers were increasingly tying to the underground disposal of oil and gas wastewater, a byproduct of the fracking boom that Continental has helped pioneer. “It was an expression of concern,” Holland recalls.
Details surrounding that meeting and others have emerged in recent weeks as e-mails from the Oklahoma Geological Survey have been released through public records requests filed by Bloomberg and other media outlets, including EnergyWire, which first reported the Hamm meeting.
Harold Hamm, the founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Photographer: Andrew Harrer
The e-mails suggest a steady stream of industry pressure on scientists at the state office. But oil companies say there’s nothing wrong with contact between executives and scientists. “The insinuation that there was something untoward that occurred in those meetings is both offensive and inaccurate,” says Continental Resources spokeswoman Kristin Thomas. “Upon its founding, the Oklahoma Geological Survey had a solid reputation of an agency that was accessible and of service to the community and industry in Oklahoma. We hope that the agency can continue the legacy to provide this service.”
Likewise, Boren says such conversations are harmless. “The meeting with Harold Hamm was purely informational,” the university president said in a statement on March 27. “Mr. Hamm is a very reputable producer and wanted to know if Mr. Holland had found any information which might be helpful to producers in adopting best practices that would help prevent any possible connection between drilling and seismic events. In addition, he wanted to make sure that the Survey (OGS) had the benefit of research by Continental geologists.” Boren is on the board of The Bloomberg Family Foundation, founded by Michael Bloomberg, the owner of Bloomberg LP.
Before Holland became the state seismologist in 2010, there wasn’t much for Big Oil and state researchers to argue about. Over the previous 3o years, Oklahoma had averaged fewer than two earthquakes a year of at least 3.0 in magnitude. In 2015 the state is on pace for 875, according to Holland. Oklahoma passed California last year as the most seismically active state in the continental U.S.
One significant change in drilling practices is contemporaneous with the increase in seismic activity: horizontal hydraulic fracturing. Fracking has been around for decades, but technological advances have allowed companies to drill sideways, injecting a high-pressure mix of water, mud, and sand into shale formations deep underground, creating access to previously unreachable pockets of oil and gas. Oil production in Oklahoma has more than doubled over the past decade, creating new wealth for the state as well as an unwanted surplus. Horizontal wells can produce as much as nine or 10 barrels of salty, toxin-laced water for every barrel of oil. Much of that fluid is injected back underground into wastewater disposal wells. It’s this water, injected near faults, that many seismologists—including those at the U.S. Geological Survey—say has caused the spike in earthquakes.
The rise of fracking has coincided with Oklahoma passing California as the most seismically active state in the continental U.S.
The Hamm and Boren meeting wasn’t the only such informational session. In an e-mail from October 2013, Holland updated his superiors on a meeting he had in the office of Patrice Douglas, then one of the three elected members of the Oklahoma Corporation Commission, which regulates that state’s oil and gas companies. Also at the meeting was Jack Stark, then-senior vice president for exploration at Continental and now its president. “The basic jist [sic] of the meeting is that Continental does not feel induced seismicity is an issue and they are nervous about any dialog about the subject,” wrote Holland. He also wrote that Continental and Douglas were concerned about his participation in a joint statement he’d recently signed with the U.S. Geological Survey suggesting a link between quakes and the oil industry.
As Oklahoma has become the capital of American seismic activity, scientists, citizens, and some state lawmakers have been critical of state officials for their perceived slowness in drawing a connection between earthquakes and oil and gas activities, which account for 1 in 5 jobs in the state. Over the past couple years, as research began to get published and many seismologists became convinced that earthquakes were being induced by wastewater disposal, the OGS remained on the fence. In early 2013 the academic journal Geology accepted a paper attributing a 5.6 magnitude quake that hit Oklahoma in 2011 to underground changes resulting from wastewater disposal wells. In March 2013, OGS put out its own statement, attributing the quake to “natural causes.” And in February 2014, three months after Holland’s meeting with Hamm, the agency released a statement playing down the role of industry, saying the “majority, but not all, of the recent earthquakes appear to be the result of natural stresses.”
“This is a conflict of interest that we never before could’ve imagined,” says Jason Murphey, a Republican state representative from Logan County, which has been one of the most seismically active areas in the state over the past year. “When Boren facilitates that meeting, it sends a message to Austin Holland.”
Even when earthquakes appeared strongly correlated to wastewater injection, OGS has been reluctant to discuss a connection. In September 2013 a new disposal well was turned on in Love County in southern Oklahoma. Soon, quakes began to jolt the area, sometimes several a day.
The well reached its peak daily injection of more than 9,000 barrels of wastewater on Sept. 20, 2013. Three days later the area experienced a magnitude 3.4 quake, moving furniture inside homes and knocking down a chimney. Injection at the well was curtailed, then stopped altogether. The seismic activity dipped almost immediately.
Still, the OGS hesitated to link the two. “We cannot rule out that this observation could be simply a coincidence,” Holland wrote in a report a week later. In early October, Holland spoke at a town hall meeting in Love County, where he again said no conclusions could be drawn about the cause of the quakes.
Many residents were frustrated by the lack of answers. But ExxonMobil geologist Michael Sweatt wrote in an e-mail to Holland: “I would like to congratulate you on a job well done at the Town Hall meeting in Love County. I believe you delivered an unbiased report on the recent earthquake activity and answered the residents’ questions the best you could.”
Today, as the number of earthquakes continues to soar, Holland has evolved in his position. He recently told Bloomberg that the vast majority of the increase in earthquakes is due to the injection of oil and gas wastewater. Yet he bristles at any suggestion that industry pressure slowed him from reaching that conclusion. Oklahoma has naturally occurring earthquakes, he says, and there have been large spikes of natural earthquakes in the past where no oil and gas development was occurring. It was proper, Holland says, to start with the hypothesis that the quakes were not man-made. “Science doesn’t operate in beliefs,” he says. “It operates in demonstrable facts.”
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U.S. Should Tap Arctic Oil to Boost Energy Security -- National Petroleum Council
Mar 30, 2015 | E&E - Climatewire
By Benjamin Hulac
Tapping oil and gas deposits in the U.S. Arctic region would raise the nation's stature as a top energy producer for at least the next 35 years and could offset future slumps in energy production from the continental United States, the National Petroleum Council (NPC) said in a draft report released Friday.
The report, requested in October 2013 by Energy Secretary Ernest Moniz, found fossil energy resources under U.S. jurisdiction in the Arctic -- which are comparable to Russian deposits and larger than those under Canadian and Norwegian control -- can be developed in an environmentally friendly way due to improvements in the extraction industry's technologies.
Decades' worth of new production from the area will "play an increasingly important role in meeting future global energy needs," the NPC said in a statement. The study included input from industry groups, government agencies and environmental organizations.
"The Arctic environment poses some different challenges relative to other oil and natural gas production areas," NPC said, "but is generally well understood."
Other countries, specifically China and Russia, are moving forward with plans to extract Arctic energy resources, said the report, which used the phrase "climate change" once.
"In the Arctic we seek to meet natural security needs, develop economic opportunities, protect the environment, responsibly manage resources, support scientific research and strengthen international cooperation on a wide range of issues," Liz Sherwood-Randall, deputy energy secretary, said in a statement, calling the United States an Arctic nation.
Measured in terms of undiscovered conventional energy resources, the Arctic contains an estimated 13 percent of all oil resources and up to 30 percent of all natural gas resources on the planet, according to the U.S. Energy Information Administration. A third of Alaskan jobs are directly tied to or depend on oil and gas production, and oil and gas industries generate about 90 percent of the state's general revenue, according to the NPC.
"We concluded that technology exists today to safely and responsibly develop the U.S. Arctic and is supported by nearly a century of experience in the region," said Rex Tillerson, CEO of Exxon Mobil Corp. and chairman of the committee that drafted the study. 'It's a long time coming'
Other members of the report's steering committee included Paal Kibsgaard, CEO of Schlumberger Ltd.; Mark Myers, commissioner for the Alaska Department of Natural Resources; John Watson, chairman and CEO of Chevron Corp.; and Frank Verrastro, an energy and geopolitical expert at the Center for Strategic and International Studies.
Long technological and mechanical strides have been made since the explosion of the Deepwater Horizon oil rig off the Louisiana coast in April 2010, John Guy, executive director of the NPC, said Friday afternoon. Most of America's Arctic territory is in relatively shallow water -- less than 100 meters below the ocean's surface -- he said, noting that very deep water can be concerning to drilling operations.
"The focus should be on preventing spills in the first place," Guy said. "That's the No. 1 priority."
Caches of oil and natural gas, if offshore exploratory drilling begins in Alaska promptly and continues into the 2040s, "would help sustain domestic supplies as production of U.S. shale oil and tight oil may decline" in the contiguous United States, according to the report.
While it was first used in the 1940s, hydraulic fracturing, which has been boosted by the advent of horizontal drilling, has in the past few years lifted the United States to become the top oil producer worldwide, surpassing Saudi Arabia, Russia and Canada, as well as other Persian Gulf producers.
Developing oil and gas reserves in the Gulf of Mexico may be a decadelong project from start to finish, Guy said, while offshore Arctic exploration efforts may take several decades to generate supplies.
"It's a long time coming," he said of the development-to-extraction timeline for Arctic drilling operations. "The argument is that you need to get started now," he added. "The rest of the world is already developing the Arctic." Critics: Winter oil spill would be devastating
To Marilyn Heiman, director of the Pew Charitable Trusts' U.S. Arctic program, the study highlighted some positive recommendations, such as measures to advance spill technology, but raised serious concerns and presented an industry-slanted view.
"There are some recommendations in the report we would take exception to, including extending the drilling season," Heiman said in an emailed response.
"We have been clear that responding to a blowout after the fall storms and ice moves in is virtually impossible," she said. "We strongly advocate for limiting drilling to the open water season to minimize the chance of a blowout extending through the winter and delaying response until the following summer."
Her department, Heiman said, had pressed for specific equipment in the Arctic region -- such as ice-capable capping stacks and containment systems to cut down on the response time following a blowout -- because obtaining these items from the contiguous United States could take weeks or months.
"The damage from a major spill that lasts through the winter would be devastating to the Arctic," she said.
The report comes as tumultuous oil prices serve as a global backdrop. Crude oil futures on the New York Mercantile Exchange were trading at $48.43 as of 5:15 p.m. EDT Friday, down from $98.76 in July.
"The oil and natural gas industry has a long history of successful operations in Arctic conditions enabled by continuing technology and operational advances," the NPC said.
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Can Crude's Boom-Bust Cycle Be Stopped?
Mar 30, 2015 | E&E - Energywire
By Nathanial Gronewold
In 1986, traders moved global crude oil prices south over the course of several months, with price indexes eventually losing about 67 percent of their value during the cycle.
The pattern was repeated in 1997, with oil prices falling by more than 60 percent over a period of months. In 2008, the global financial crisis sent markets crashing, and oil prices crashed with them, falling by nearly 73 percent.
Then, beginning in late 2014, unrest in the Middle East failed to persuade traders to ignore the rising glut of crude facing softer demand for oil globally. Prices fell by around 60 percent again, though they have rallied somewhat recently.
The boom-bust cycle in crude oil markets is as old as oil drilling itself, and few believe the pattern will ever end. An assessment by energy analysts at Barclays Capital, an investment bank, estimates that supply-demand imbalances are responsible for 89 percent of historic price swings, including the one the oil and gas industry finds itself in today.
One prominent energy economist thinks there may be a way to end it, but the approach he is pitching isn't politically feasible. Others are skeptical, insisting that there is simply no way to stop the pattern of industry hiring tens of thousands of workers to fuel an oil boom on the upswing, only to fire them all a few short years later as the crude price plummets.
"Is there any way? No, I don't think there is," said John Kingston at Platts, a global commodities price tracking and information hub. "The commodities cycle is a part of the commodities landscape."
Last Thursday, the U.S. Energy Information Administration (EIA) released the first preliminary estimates of total domestic energy production and consumption for 2014. The agency estimates that total petroleum production, including oil and other liquids, rose by 16 percent last year. Total fossil fuel production, measured in British thermal units, expanded in the United States by about 7.35 percent in 2014, while domestic fossil fuel consumption grew by less than 1 percent, according to EIA statistics.
The contention that no one saw the current oil price drop coming beforehand is false.
Warnings of crude production outpacing consumption were heard at least four years ago. But it wasn't until the final quarter of 2014 that predictions of a price slump came true, made worse following the Organization of the Petroleum Exporting Countries' (OPEC) decision to keep the cartel's oil production at about 30 million barrels per day, nearly a third of the world's total.
Elliot Wave International (EWI), a Georgia-based investment group that is a firm believer in the power of cyclical crowd behavior, warned of a forthcoming oil and commodities bear market back in 2011. Later, a team of academics warned of a pending oil price collapse in the summer of 2013 at an event held at Rice University.
EWI chief market analyst Steven Hochberg told EnergyWire that unexpected developments merely delayed the start of the fall.
"Sometimes waves develop a degree of complexity, and the commodity bear market that started in 2011 took time before it accelerated lower," Hochberg said.
EWI believes the oil price crash is a result of a broader pessimistic mood that is beginning to take shape over the markets and the broader global economy. West Texas Intermediate (WTI) crude prices were in the low $40 per barrel range when Hochberg responded to questions. Last week, WTI rose to a bit above $50 a barrel on the basis of fresh geopolitical worries.
"Oil is down 63 percent from the start of the bear trend in 2011, and commodity indexes are down 50 percent over the same period," Hochberg added. "These trends have become extended, and optimism has now turned to pessimism. But bigger picture, our forecast remains on track." A pitch to limit imports
EWI expects a period of instability, with oil prices yo-yoing up and down for a while, before settling at the lower end and staying there for at least a decade. This prediction is almost identical to the one presented before industry representatives two years ago at Rice.
Oil industry boosters are now pressing for the federal government to lift all restrictions on crude oil exports from the United States, hoping that broader market access can help boost prices and possibly save thousands of oil field jobs. Many, including analysts at Wood Mackenzie, doubt that doing so would help lift prices much or have any greater positive impact on business conditions for the U.S. oil and gas industry.
Ed Hirs, an energy economist at the University of Houston, doesn't think loosening restrictions on oil exports will help improve business conditions, either.
Forget crude exports, he says. Rather, Hirs has been busy lately arguing that the government should instead introduce crude import quotas, keeping domestic drillers insulated from international price swings by giving them a captive market share and restricting foreign oil sales to the United States.
Hirs is lobbying for an Eisenhower era-style import quota on the basis of national security, arguing that oil has "always been a strategic asset." OPEC in the past used its control of a large part of global oil production to affect prices and as a political weapon, though that's not the case with the current price collapse.
Likewise, the shale oil boom now affords the United States an opportunity to counteract OPEC, only as a swing demand provider rather than swing oil producer, Hirs says. He admits that an adjustable annual import quota would send domestic oil prices soaring well above international levels, increasing prices at the pump for consumers, as well, but it would protect thousands of well-paid jobs and keep afloat rural communities that host oil and gas operations.
Import restrictions are common for a host of consumer goods, including pharmaceuticals, trucks, alcohol and even cheese in some instances.
"The United States, as a matter of national policy, protects industry," Hirs said. "Let's go back and think strategically, like Eisenhower did."
Kingston doesn't see any policy prescriptions putting the boom-bust cycle to rest once and for all. He said other schemes to bring greater stability and predictability to commodities markets have all failed.
As an example, he cited the International Tin Agreement, a past arrangement between tin producers and consumers to keep prices stable by artificially moving the market, buying up tin when prices fell too low and dumping the metal into the market if pricing got too hot.
"Eventually, the whole thing collapsed. It was a total disaster," Kingston said. "All these really smart people thought they would get together and they would do these wonderful things and they would keep the market in check ... and that's the tin market. That's nothing in size compared to the oil market." Pessimism abounds
Hirs accepts that his call for oil import quotas will remain theory for some time and may never see the light of day. He said some lawmakers in Washington, D.C., to whom he floated the idea were receptive, but told him that they could never vote to impose an import quota because it would raise fuel prices for millions of Americans.
There's even broadening agreement that OPEC's role in the market has become greatly diminished, both by the shale oil boom in the United States and by relations within OPEC itself.
Data show that nearly all OPEC members have been cheating on their production targets for the past decade, pumping a bit more crude than they initially promised. The only member nation that has kept to its OPEC-sanctioned production targets is Saudi Arabia.
Saudi Arabia is also busy undermining its own capacity to move the global crude markets, likely introducing even more instability in the future.
Jim Krane, a scholar at Rice University's Baker Institute, highlights the Saudis' dilemma in a paper he published last week. Krane points out that the kingdom is increasingly using more of its own crude production, with domestic Saudi crude demand expanding by an average 6 percent per year over the prior 10 years. If the trend continues, Krane estimates, that Saudi Arabia's internal oil consumption will have doubled by 2025, and by then the nation will have become "less willing or able to adjust supply to suit market demands."
The November OPEC vote in Vienna was contentious, with many members calling for a drop in output to help lift international oil prices. OPEC will have another chance to influence oil prices when it meets again on June 5 to vote on a production target.
EWI's Hochberg said he isn't surprised that the oil and gas industry failed to heed earlier warnings that they were pumping too much crude too fast and that it would eventually come back to haunt them. He said it is possible for investors to get ahead of trends and insulate themselves from price shocks, but it is very difficult for companies to buck the broader momentum within their industries, no matter how loudly the warnings are ringing.
"Assume, for example, the odds were high that global economies would enter recession sometime over the next four to eight quarters. Can you imagine Ford, which is in the business of building automobiles, somehow drastically altering its business?" Hochberg said. "They might shut down a plant here or there or make token cutbacks, but no matter what, they are going to build cars."
EWI argues that oil producers have fallen victim to a broader mood shift, not necessarily from their over-exuberance. Either way, Hochberg says, the industry is in for a much tougher road ahead, reminiscent of the bear market that started with the 1986 oil price fall.
"Mood trends are turning more pessimistic," he said. "Oil is down over 60 percent; commodities are at new multi-year lows; gold and silver topped over three years ago; U.S. annual GDP growth has not been above 3 percent for nine consecutive years, a record that dates back to the late 1800s. The economy is not stagnating; it's on the path to outright contraction."
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Charleston, other S.C. Cities Attempt to Block Leases
Mar 30, 2015 | E&E - Greenwire
Even in conservative South Carolina, local governments are pushing back against attempts to open the state's offshore waters to oil drilling.
Charleston's City Council voted last week to oppose offshore drilling, widening a rift between local officials and South Carolina's state and federal representatives, who are largely enthusiastic proponents of increased domestic energy production.
Charleston Mayor Joe Riley (D) said local officials are more aware of the environmental risks of oil drilling, including the dangers of an oil spill.
"It's not abstract to us," Riley said. "It's very real."
Charleston's City Council voted 7-5 to oppose seismic testing that can be used to locate possible oil deposits. Nine city councils this year have voted to oppose the testing.
The cities hope the statements will sway the Bureau of Ocean Energy Management as it considers a federal plan to allow offshore oil leases on parts of the East Coast, including South Carolina.
Today is the last day the agency is accepting public comments on its proposal (Sammy Fretwell, Columbia [S.C.] State, March 27). -- SP
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Clean Power Plan Could Tank Wyo. Coal Industry -- Report
Mar 30, 2015 | E&E - Energywire
By Krysti Shallenberger
A new University of Wyoming economic study said the future of the Cowboy State's coal industry and coal-fired power plants could sink under the weight of U.S. EPA's proposed Clean Power Plan.
The proposed rule has different targets for each state to cut its emissions. Its target goal to reduce carbon emissions for coal-reliant Wyoming is among the lowest -- 19 percent.
But in a state whose power generation and revenue relies heavily on coal, the effects from the Clean Power Plan will ripple across all sectors, the report said.
"Clearly coal is going to be affected the most," said Robert Godby, professor of economics at the University of Wyoming and lead author on the report. "Given that how much it could affect the state, the takeaway is that carbon regulations will reduce the demand for coal. The state then faces two problems. One is the economic affect of a significant sector of the state reduced in size and the state revenue that depends on that sector."
The report, sponsored by the Wyoming Infrastructure Authority, gathered data collected by the U.S. Energy Administration to track and forecast coal's future in Wyoming. The prognosis is grim.
Production already has slid 17 percent since 2008, the report said. Powder River Basin coal supplies 40 percent of the United States' coal usage.
Further, Wyoming's high dependence on mineral taxes to supplement the state's revenue coupled with low sales and property taxes would amplify the downward trend in coal production even more, Godby added.
"Our revenue stream is so dependent on direct mineral production," Godby said. "The point I'm making is anything that affects coal production directly really affects state revenue. When you only have a couple of horses in the stable, you only have those horses to get you there." Predictions for industry
WIA Director Loyd Drain said he approached Godby and a few others to construct an economic study regarding coal's future before the EPA introduced the CPP. But once the plan entered the scene, the stakes changed.
"If it were enacted as proposed, it would definitely affect the ecomony," Drain said. The study set up several environmental scenarios, all of which forecasts decline in varying degrees within all of Wyoming's coal-reliant sectors, including state revenue, jobs and production. But the study predicts the CPP is likeliest to hurt the state's coal industry.
State revenue from mineral taxes levied on coal will decline up to 36 to 46 percent by 2030; production will drop 20 to 45 percent, coupled with 1 in 10 jobs lost, the study said. Coal production directly and indirectly employs 5.9 Wyomingites.
Meanwhile, the state's coal-fired plants, mostly owned by the Berkshire Hathaway-owned public utility PacifiCorp, also supply power to neighboring states that could examine shutting down Wyoming plants as a way to meet their own CPP targets.
That, alongside the lengthy permitting process for power plants, could cripple Wyoming's ability to meet its target goals, Drain said.
"It's fine and dandy for the feds to say we're going to something by 2020," Drain said. "We have a lot of experience in how long it takes to permit infrastructure."
Godby said another twist appeared as they completed the study; while a drop in coal production could hurt jobs and power plants, state revenue from taxes might be able to weather the downturn as other coal-fired plants that might remain open demand the resource.
"Because demand is very inelastic, when coal prices go up for reasons like higher coal costs, it will increase state revenue," Godby said. Waiting out a bust
Wyoming is a state long used to the boom-bust cycle of energy production. First was the oil boom in the 1970s. When that went bust in the 1980s, Godby remembers how coal stepped in to boost up the state's faltering economy.
"It really comes down to how much money we saved today," Godby said. "The outcome of a boom-and-bust economy is it forces people to think like squirrels; they store their nuts up for the winter and decide what to do. It becomes a kind of obsession when the next bust cycle comes."
Wyoming has readied for a potential bust with its Permanent Mineral Trust Fund that claims a portion of all severance taxes to prepare for a time when mineral production doesn't churn out a profit.
Though coal was a dark horse at first, the downturn in mining Appalachian coal proved a boon, Godby said, even when natural gas production overtook it starting in the late 2000s.
Now some state officials, including Drain, are eyeing natural gas as a possible savior for the state's mineral production. Possible solutions for meeting the Clean Power Plan's target emission goals include investing in more gas-fired plants or combined-cycle plants.
But Godby cautioned against such hopes.
"The gains and demands nationwide for gas only offset 40 percent," Godby said. "So the state is still worse off."
But another option might mean shipping Wyoming's most invisible resource: wind. Already, Drain is courting California as a possible market for what he calls "world-class Wyoming wind."
However, the state has yet to complete the nation's biggest wind farm and two major transmission line projects.
Even so, Godby does see Wyoming able to wait out the downturn again. The study calls for "region-wide" cooperation instead of just focusing on the state's interests.
"Instead of trying to stop regulations, we need to think about how we adapt to regulations when they come," Godby said. "And what kind of regulations and how impacts add up."
He suggested that the state partner up with neighboring states and investigate how to cut carbon emissions without hampering one state's ability to transmit reliable electrical generation and potentially damage its revenue stream.
"That's also made the study much more difficult, because these effects are nationwide," Godby said. "We will see responses occur in the economy."
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Last U.S. FERC Conference to Explore Coordination, Infrastructure Needs in Sprawling Midwest
Mar 30, 2015 | E&E - Energywire
Regional grid organizations, state officials and utilities of all sizes will tell federal regulators this week that the diverse mix of power resources and stakeholders in the central U.S. region demands special attention to ensure states collaborate on the Clean Power Plan.
The Federal Energy Regulatory Commission will convene in St. Louis tomorrow for the last of three regional FERC meetings on U.S. EPA's proposal to cut carbon emissions from power plants. According to pre-filed testimony, speakers on three panels will urge FERC and EPA to encourage states to coordinate and plan ahead for infrastructure needs.
FERC has asked how central U.S. states -- with different types of electric utilities, energy sources and public policy goals -- might develop regional compliance plans. Without multi-state coordination, stakeholders fear the region could end up with a complex web of individual compliance plans that don't work well in tandem.
Also next week, stakeholders from around the country will convene in Atlanta for a three-day Infocast conference on Clean Power Plan implementation. ClimateWire's Scott Detrow and EnergyWire's Kristi E. Swartz will be reporting from the meetings.
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Clean Power Plan Expected to Propel Wind Development in Central States
Mar 30, 2015 | E&E - Energywire
By Jeffrey Tomich
There's little disagreement that U.S. EPA's Clean Power Plan will be a catalyst for continued development of the massive wind energy potential of the nation's central corridor.
But how much and how fast it's developed ultimately depends on a laundry list of technical and policy questions involving EPA's final rule and how states choose to implement it.
Some of the issues are ones the Federal Energy Regulatory Commission is expected to explore tomorrow when it hosts the last of three regional meetings on Clean Power Plan implementation in St. Louis. FERC's focus will go way beyond the integration of renewable energy, of course. But the role of wind as a compliance tool for states looms large across the central region that's the focus of the meeting.
States including Iowa, South Dakota, Kansas, Minnesota and Oklahoma each get at least 15 percent of their electricity from wind and will undoubtedly be looking to do more as a way of reducing the carbon intensity of its generating fleet.
"We've only scratched the surface of the potential," said Steve Gaw of the Wind Coalition, a group that advocates for wind across Texas and the Great Plains region. "Certainly we can do a lot more."
Beside being a zero-carbon source of energy, wind provides long-term cost certainty that provides a hedge against the risk of natural gas price volatility and implementation of future environmental regulations.
"The one thing that wind can buy with a good price today is a good price for the life of the project," he said. "It just makes a tremendous amount of sense."
It's not just the industry blowing its own horn. In a study this month, the Department of Energy said wind energy, currently 4.5 percent of the nation's electricity supply, could provide 35 percent by 2050. Even under a more modest "business as usual" scenario, wind is seen providing 25 percent of the electricity sector by midcentury (Greenwire, March 12).
Beth Soholt, executive director of Wind on the Wires, a group advocating for wind across the Midwest, said the industry has work to do even though wind must play a role in state compliance plans.
"It's not a slam-dunk," she said. "Even if it looks like wind will be a large part of the compliance strategy, we have to get it through utilities and other stakeholders that are not thrilled with that result, such as incumbent fossil fuel generators." Transmission for growth
One key for further deployment of wind is transmission.
Across the Midcontinent Independent System Operator's footprint, there's enough new transmission being developed to accommodate thousands of megawatts of additional wind energy.
Clair Moeller, MISO's executive vice president of transmission and technology, said there's about 13,000 MW of wind connected and operating within MISO today. Transmission is being developed to accommodate 25,000 to 35,000 MW, depending on where projects are built. Those projects were approved in 2011 to help states meet renewable portfolio standard requirements.
"We can about double the wind that we have with the existing plans in place, providing the multi-value projects get constructed," Moeller said. "At this point, there does not appear to be any risk around that."
Moeller noted that wind's potential as a resource is limited by its reliability characteristics. Output varies by time of day and season, and MISO must have enough generating capacity on call to meet demand. For instance, wind accounted for 8.8 percent of the energy consumed in MISO's footprint in November but just 2.2 percent in August, when the grid operator sees demand peak.
"When we do the math around how much dispatchable generation you need, we try to take all of that statistically into account," he said. "Because the wind resource is pretty skinny in August when is typically when our highest demand is, it doesn't get a very big credit in terms of its ability to be counted on during that peak day."
The variability of wind has been offset somewhat by improved forecasting tools and geographic diversity. Wind farms scattered across a large region allow MISO to manage variability better than if they were clustered in a small area.
That makes wind a more valuable tool for states in terms of Clean Power Plan compliance if they band together instead of choosing to meet the EPA requirements on a stand-alone basis. Questions for a regional solution
But the draft EPA rule is unclear on how carbon-free power is credited when it's produced in one state and used in another.
Also, because carbon-reduction targets vary significantly by state, it complicates efforts to find regional solutions.
"Any kind of regional solution can't socialize the burden, and it can't socialize the cost of carrying that burden," Moeller said. "So that's the first and most important hurdle to work our way through."
Gaw, a former chairman of the Missouri Public Service Commission, likewise acknowledged obstacles to efficiently and affordably integrating renewables. For instance, some MISO states toward the south don't have much wind potential, but are located adjacent to windy states within the Southwest Power Pool.
"To the extent that FERC can help with that, it's going to be important," he said.
MidAmerican Energy, a unit of Warren Buffett's Berkshire Hathaway, suggested other ways FERC could help when it comes to the Clean Power Plan and enabling the integration of renewables.
"Implementation of the Clean Power Plan is likely to trigger a surge in new renewable projects," Jeffrey Gust, vice president of compliance and standards for the utility, said in a statement pre-filed with the commission ahead of Tuesday's meeting.
MidAmerican said the existence of regional transmission organizations has played a significant role in integrating wind energy, and that FERC should continue providing a strong signal, including incentives on return on equity, for entities to join organized markets.
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Obama Admin to Unveil Climate Pact Contribution
Mar 30, 2015 | The Hill - E2 Wire
By Timothy Cama
The United States plans to formally submit this week its plans to cut greenhouse gases as part of a United Nations climate pact.
A White House official told Reuters that the Obama administration will submit its contributions to the agreement Monday or Tuesday.
That would make the United States only the fifth political division to submit a plan to the UN, following contributions from the 28-nation European Union, Switzerland, Norway and Mexico.
Those countries emit about one third of the world’s greenhouse gases.
But other major sources of carbon like China, India, Russia, Brazil, Canada and Australia are planning to wait until closer to the December meeting in Paris where the agreement will be finalized, Reuters reported.
World leaders are under an informal Tuesday deadline to submit their plans, which would be put together to form the pact.
While later plans will be accepted, negotiators hoped that ample time before the December meeting would allow for better understand and conversations. Plans after the deadline will be more difficult to judge, Reuters said.
Last year, the United States said it would reduce its greenhouse gases 26 to 28 percent below 2005 levels by 2025. The country’s proposed contribution to the pact is meant to add to that.
Mexico said Friday that its emissions would peak by 2026 and fall 22 percent by 2030.
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U.S. Set to Send Emission Plan to U.N. by Tomorrow Night's Deadline
Mar 30, 2015 | E&E - Greenwire
By Jean Chemnick
The United States is expected to meet tomorrow night's deadline to submit its formal contribution to a new U.N. climate agreement to be reached in Paris this December.
The United States will pledge to cut emissions between 26 and 28 percent below 2005 levels by 2025 -- a commitment President Obama announced in Beijing in November as part of a bilateral agreement with China.
And while U.S. EPA regulations including the Clean Power Plan and forthcoming Clean Air Act restrictions for oil and gas methane emissions will figure in the document submitted to the U.N. Framework Convention on Climate Change (UNFCCC), experts who track the negotiations say the submission is unlikely to make news.
"I think they'll spell out for international audiences the detailed set of measures that they're already implementing to reduce U.S. emissions," said Jake Schmidt, director of international programs at the Natural Resources Defense Council. The submission won't say how many tons of carbon dioxide emissions each policy will help avoid, he said.
But the U.S. submission may include some justification for why the U.S. emissions offer is "fair and ambitious" enough for the world's wealthiest nation and largest historic emitter, environmentalists say.
David Waskow of the World Resources Institute said there are a "basket of factors" that countries should consider when vetting the adequacy of their submissions.
"For the U.S., one of the things that I wouldn't be surprised if they highlighted is the rate of emissions reductions," he said.
The president's pledge in Beijing would obligate the United States to cut its emissions an average of 2.5 percent each year between 2020 and 2025 -- twice as fast as the U.S. economy decarbonized in the previous decade.
And the United States and other countries should touch on per-capita emissions, the relationship between their commitments and their gross domestic product, and the progress their offers show in improving emissions intensity, Waskow said. Many of these elements have figured already in submissions by the European Union, Switzerland and -- last week -- Mexico (ClimateWire, March 30).
The post-2020 target depends heavily on actions and policies that would take effect after Obama leaves office. And a flurry of amendments Senate Republicans offered last week to the fiscal 2016 budget resolution show that the administration's carbon policies and its participation in international negotiations are controversial.
But amendments to target EPA's Clean Power Plant rule and U.S. involvement in the UNFCCC process did not come to the floor for a vote -- a fact that Waskow said showed an unwillingness by Republican leaders to prioritize them.
And Schmidt said that while Capitol Hill votes and rhetoric are "part of the noise" other countries will be aware of when considering U.S. commitments, the commitments themselves are solidly based on existing legal authorities and market trends.
"It's one thing to bluster about changing regulations on the ground, but it's another thing to actually impact and change them," he said. "These are policies that are embedded in existing law, they've stood the test of time, and we and future administrations are going to fight to ensure that they are implemented because that's the law of the land."
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New Regs For Tuesday: Explosions, Gasoline Containers, Efficiency
Mar 30, 2015 | The Hill - Regulation
By Tim Devaney
Tuesday's edition of the Federal Register contains new explosion protection standards for offshore drilling units, child-resistant requirements for portable gasoline containers, and energy conservation standards for residential boilers.
Here's what is happening:
Offshore drilling: The Coast Guard is moving forward with new explosion protection standards for certain mobile offshore drilling units.
The regulations establish testing and certification methods for electrical equipment that will be used in hazardous locations on these offshore drilling units in the outer continental shelf, the agency said.
The rules go into effect in 30 days.
Gas containers: The Consumer Product Safety Commission (CPSC) is moving forward with new requirements for making portable gasoline containers child-resistant under the Children’s Gasoline Burn Prevention Act.
The CPSC announced Monday it is updating the child resistance requirements for these containers, which people often fill up at gas stations and then bring back to use in their lawnmowers, boats, and other devices.
The new rules go into effect on April 12.
Efficiency: The Department of Energy is proposing new energy conservation standards for residential boilers.
The Energy Department's Office of Energy Efficiency and Renewable Energy proposed Monday new efficiency rules for residential boilers that it estimates will cost manufacturers more than $380 million to comply with, but save consumers as much as $1.3 billion.
The Energy Department will hold a public meeting on April 30 to discuss the proposed rule.
The public has 60 days to comment.
Hydropower licenses: The Obama administration is moving forward with new rules for conducting hydropower license hearings.
The U.S. Department of Agriculture (USDA), Department of the Interior, and Department of Commerce announced Monday they are issuing a joint rule that revises the procedures for holding expedited hearings to resolve disputes over hydropower licenses.
The changes go into effect in 30 days.
Workplace discrimination: The Department of Labor will study how federal contractors and subcontractors comply with a new rule prohibiting discrimination against gay people.
The Labor Department issued the rule to protect LGBT workers last December, but the agency's Office of Federal Contract Compliance Programs was approved for an information collection requirement to assess how companies are complying with the rule.
The changes go into effect on April 8.
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EPA Critics Cite High Court 'Deference' Statements To Oppose Major Rules
Mar 30, 2015 | InsideEPA
By David LaRoss
Supreme Court justices' recent statements highlighting an increasing divide on the court about the level of deference to give EPA and other agencies in their statutory and regulatory powers are already being cited by plaintiffs and others to argue for stricter judicial oversight of EPA rules including a fuels testing policy and its utility climate rules.
For example, in a March 12 letter to the U.S. Court of Appeals for the District of Columbia Circuit, ethanol groups challenging the fuels testing policy say that the majority opinion in a recent high court ruling on agency deference for a Department of Labor rule provides "new authority in support of Petitioners' argument that the Government's new 'interpretation' of the alternative test fuel rule is not entitled" to agency deference.
And Harvard law professor Laurence Tribe told a March 17 House energy panel hearing that justices during oral arguments in another recent Supreme Court case over the Affordable Care Act (ACA) appeared to suggest limits on deference to federal agencies that could undermine EPA's basis for its climate rule for existing power plants.
The responses to the two high court suits shows an early attempt by legal observers and others to look for signals from the justices on potential future rulings that could change the level of deference given to agencies. Any decision placing new limits on the doctrine of "Auer deference" -- in which courts defer to agencies' reasonable interpretations of their own rules -- could potentially create new hurdles for EPA in developing rulemakings.
EPA in some major rules has claimed deference for interpreting environmental statutes such as the Clean Air Act when they are ambiguous or silent on an issue. For example, opponents of the agency's proposed greenhouse gas (GHG) rules for existing power plants says that a "drafting error" in the 1990 air law amendments bars the rule for new utilities, but the agency says courts should defer to its interpretation of the statute that allows the rule.
Despite concerns from some legal observers about the extent to which EPA receives deference to interpret laws and rules, appellate courts continue to side with the agency, including a 9th Circuit ruling earlier this month that backed the agency's decision to approve a state's air fee program that advocates said was unlawful.
Any change in judicial deference doctrine would therefore likely have to come from the Supreme Court, and conservative justices are signaling a willingness to pare back agencies' deference.
Agencies' Leeway
EPA's critics are pointing to the high court's March 9 decision in Perez, et al., v. Mortgage Bankers Association (MBA), et al. on the Labor Department rule, and comments raised at March 4 oral arguments in the ACA suit, King, et al., v. Burwell -- both cases where conservative justices voiced concerns over agencies' leeway to interpret their statutory and regulatory authority -- as reasons to block controversial EPA policies.
While neither the Perez ruling nor King arguments set new precedent on agency authority, conservatives' concurrences to the Perez ruling called for an end to the doctrine of Auer deference to agencies.
Meanwhile, the conservative justices also said during oral arguments in the ACA suit that they were concerned over agencies' expansive readings of their statutory authority, and worried over potential federalism implications if courts defer too heavily to those interpretations on agencies' readings of laws.
"I don't think the majority opinion in Perez changed how Auer deference is applied. . . . [but] with the conservatives on the Supreme Court attacking Auer, the lower courts may now feel the need to be more rigorous in their consideration of the exceptions" to the standard, says one attorney tracking the deference issue.
Speaking before a March 17 hearing of the House Energy & Commerce Committee's energy and power panel, Tribe touted the King arguments as backing industry and states' criticisms of the agency's proposed GHG rule for existing utilities, which opponents say usurps state authority through a broad reading of the Clean Air Act.
"[T]he federalism principles at issue here are strikingly similar to those that arose in the Affordable Care Act case of King v. Burwell. There, Justice Kennedy, among others, noted the 'serious constitutional problem' that would result if a federal statute were interpreted as threatening the citizens of a State with significant injury unless the State agreed to follow federal policies. This case involves the same pressures on States to knuckle under to the Federal Government, and the same lack of clear notice," Tribe said in his written testimony to the panel.
The ACA challenge centers on the Obama administration's reading of statutory language on who qualifies for tax credits on insurance purchased on an "exchange" market.
During arguments, Justice Anthony Kennedy -- widely seen as a crucial swing vote in the case -- said "it seems to me a drastic step for us to say that the Department of Internal Revenue and its director can make this call."
On the federalism question, he said "there's a serious constitutional problem if we adopt" the argument that states that opt out of creating an exchange market sacrifice tax credits for their citizens.
Tribe and other opponents of the climate rule have already argued that it would give it power to regulate energy markets that have until now been reserved to states, and that the potential for states that choose not to comply with air rules to lose federal highway funds could be unconstitutionally coercive.
Even before the King arguments, Texas and Mississippi claimed in separate litigation over Clean Air Act implementation plans that the very threat of withholding highway funds for failing to craft plans that would bring the states into attainment is a coercive process that fails the test established in the 2012 health care ruling, National Federation of Independent Business (NFIB) v. Sebelius.
And Jonathan Adler, a constitutional and environmental law expert with Case Western Reserve University, said during a Jan. 21 Environmental Law Institute webinar on issues in cooperative federalism that NFIB "certainly suggests that the highway funds sanction under the Clean Air Act at least needs to be rethought. . . . And I would not be at all surprised to see one or more states seek resolution of that question."
Regulatory Interpretations
In the Perez decision, the court ruled 9-0 to back the Labor Department and other agencies' power to amend interpretations of their rules without formal notice and comment.
But while the result gives agencies expanded regulatory authority, Justices Antonin Scalia, Clarence Thomas and Samuel Alito in concurring opinions argued that judges should no longer defer to those interpretations, saying such deference allows sweeping substantive rule changes without accountability.
"Because the agency (not Congress) drafts the substantive rules that are the object of those interpretations, giving them deference allows the agency to control the extent of its notice-and-comment-free domain. To expand this domain, the agency need only write substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment. The [Administrative Procedure Act] does not remotely contemplate this regime," Scalia says in his Perez concurrence.
Although the majority opinion, authored by Justice Sonia Sotomayor, confirms that the Auer doctrine still stands, it also reiterates that agencies do not receive deference for interpretations that are "plainly erroneous" or represent a tactical or political decision rather than "the agency's fair and considered judgment."
Ethanol groups seized on the Perez ruling in their recent letter to the D.C. Circuit in the Tier 3 litigation, in which they are criticizing EPA's approach for a vehicle fuels compliance testing policy that they say was amended by the Tier 3 rule and hinders new ethanol blends from entering the marketplace. The groups in Energy Future Coalition, et al. v. EPA, et al. say the agency's latest interpretion of the policy should not be given judicial deference.
In the Perez ruling, "the Court cautioned that the ultimate arbiter of the meaning of a regulation is the court, even when the agency is entitled to deference: 'Even in cases where an agency's interpretation receives Auer deference, however, it is the court that ultimately decides whether a given regulation means what the agency says,'" the ethanol group's letter says.
The attorney following deference issues says the letter "properly reminds the [appellate] court that Auer deference isn't an automatic pass for the agency," especially given the high court conservatives' hostility toward the doctrine.
Statutory Deference
Meanwhile, a March 16 blog post by the law firm Bergeson & Campbell says even the majority opinion in Perez could weaken both Auer and an earlier case giving agencies deference on rule interpretations, Bowles v. Seminole Rock & Sand Co.
"[I]t is possible that the Perez decision could ultimately undermine Seminole Rock, a case that has encouraged reviewing courts to give administrative agencies a high degree of discretion when interpreting ambiguous provisions in their own rules. After all, when the agency is free to resolve clearly such ambiguities through amendments adopted through notice and comment rulemaking, there may be less justification for resolving the same ambiguities through non-binding interpretations," the post says.
Despite those concerns, however, lower courts are continuing to give EPA substantial leeway in interpreting its authority. For example, the 9th Circuit's unanimous March 11 ruling in Natural Resources Defense Council (NRDC) and Communities For a Better Environment v. EPA, et al., upheld the agency's reading of section 185 of the air law to allow it to collect fees levied by local authorities on facilities that emit ozone-forming pollutants, rather than penalizing emitters directly as environmentalists said the air law required.
The 9th Circuit concludes that EPA reasonably interpreted both the air law and prior court rulings finding that "anti-backsliding" measures apply even when national ambient air quality standards (NAAQS) are tightened, in order to allow the South Coast air district's alternative fees on the basis that they are "not less stringent" than the otherwise applicable fees on industry. NRDC had argued that the air law requires that section 185 fees must apply when NAAQS are tightened, with no alternatives allowed, but the court said EPA's interpretation was reasonably grounded in the law.
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Revised EPA Haze Proposal Allows Ariz. Coal Plant's Emissions to Rise
Mar 30, 2015 | E&E - Greenwire
By Amanda Peterka
U.S. EPA is proposing changes to a regional haze plan for Arizona that would let a coal-fired power plant emit more nitrogen oxides.
The proposal calls for replacing a plantwide NOx limit with curbs on individual electricity generating units at the Coronado Generating Station. The change comes in response to a petition for reconsideration from the plant operator, the Salt River Project Agricultural Improvement and Power District.
The 773-megawatt Coronado plant near St. Johns, Ariz., dates back to the late 1970s.
EPA will make the proposal in a Federal Register notice that is scheduled for publication tomorrow. The agency says the increase in NOx emissions allowed under the proposal would not affect pollution levels at 16 national parks and wilderness areas within 300 kilometers of the plant, including Grand Canyon National Park.
"This change will allow for a slight increase in NOx emissions, but is not expected to impact the projected visibility improvement," EPA says in a fact sheet.
Under EPA's regional haze program, states are responsible for developing plans to control pollutants that cause visibility-limiting haze at national parks and wilderness areas. EPA is responsible for approving state plans and for crafting general guidance for states to follow.
After finding that Arizona's regional haze plan for reducing NOx at Coronado didn't meet all the requirements of the Clean Air Act, EPA in 2012 issued a federal plan for reducing the visibility-causing pollutants at the plant. EPA's plan also targeted NOx emissions at the Cholla and Apache generating stations in Arizona.
Under EPA's plan, Coronado had to comply with a plantwide limit of 0.065 pound per million British thermal units (MMBtu) for the whole plant based on a rolling 30-day average.
But Salt River Project petitioned EPA in February 2013 to reconsider the limits, arguing that the NOx limit was not achievable. SRP also asked EPA to delay the compliance deadlines until its legal challenge to the plan was resolved in the 9th U.S. Circuit Court of Appeals.
In a follow-up request, SRP also asked EPA to halt the requirements based on the grounds that it would probably be forced to shutter Coronado by 2020 anyway to comply with the agency's proposed greenhouse gas requirements for existing power plants.
"Implementation of any program to achieve these CO2 emission rate goals for Arizona almost certainly would result in the forced shutdown of Coronado Units 1 and 2 by 2020," Salt River Project said.
"For EPA to require such significant expenditures at this time -- when there is a serious risk, created by the 111(d) Proposal, that Coronado will have to be shut down by 2020 -- is unreasonable."
EPA agreed to take another look at the NOx limits. In the notice tomorrow, the agency will propose to set a 0.065-pound-per-MMBtu limit for Unit 1 and a separate 0.080-pound-per-MMBtu for Unit 2. EPA 'relaxing' curbs, greens say
The proposed rule also would remove provisions providing liability protection for both Coronado and the Cholla power plant in Joseph City, Ariz., during periods of malfunction. It would also revise the work practice standard to require that selective catalytic reduction technology be employed at all times that Unit 2 is in operation.
Stephanie Kodish, who directs the clean air program at the National Parks Conservation Association, said the group was still reviewing the proposal but characterized EPA's action as a "relaxing" of emissions controls. NPCA has been closely involved in the development of EPA's federal plan for the Coronado, Apache and Cholla stations.
"A relaxing of those limits will mean more pollution to the places that the Clean Air Act is intended to protect, so we'll be taking a very close look and evaluating options carefully," she said. "All three of these coal plants have astronomical impacts on the national parks and wildernesses and people in the region."
EPA is also expected to issue a final rule soon in the Federal Register changing the pollution technology requirements for the Apache Generating Station in Wilcox, Ariz., also as a result of a petition for reconsideration from operator Arizona Electric Power Co-ops.
Conservation groups say that reconsideration would also result in greater emissions of NOx. EPA, however, says that the new plan complies with the Clean Air Act.
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Stage Effects at Infamous Climate Hearing Didn't Happen
Mar 30, 2015 | E&E - Greenwire
Everybody implicated in a scheme to heat up the room during an infamous Senate climate change hearing in the 1980s acknowledged that rumors of windows left open and air conditioning manipulation were fiction.
Last week, The Washington Post's Fact Checker took Secretary of State John Kerry to task for repeatedly claiming he had organized the historic hearing in which former NASA Goddard Institute for Space Studies head James Hansen testified he was 99 percent certain that humans were causing global warming (Greenwire, March 18).
Now, Hansen, former senators and congressional staffers have confirmed that although the room was hot, it was likely due to a swarm of television cameras and record heat outside, not strategic planning for effect.
In 2007, then-Sen. Timothy Wirth (D-Colo.) told PBS's "Frontline" that his office called the Weather Bureau to find out the hottest day of the summer and then opened all the windows the night before, causing Hansen to have to mop his brow during his remarkable testimony.
"In fact, I'll have to check but I'm not even sure those windows can be opened," said Daryl Owen, Senate Energy and Natural Resources Committee staff director at the time.
In a statement, Wirth said he had wrongly repeated the various myths he had heard over the years.
"I've since learned it didn't happen. So let's put those stories to rest and instead focus on the substance of the hearing -- the brave and prescient testimony of Dr. Jim Hansen," he wrote.
The Fact Checker gave everyone involved, including itself, the maximum four Pinocchios for repeating the claims (Glenn Kessler, Washington Post, March 30). -- DTB
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Industry Urges CEQ To Drop NEPA GHG Guide But Details Legal Challenge
Mar 30, 2015 | InsideEPA
By Dawn Reeves
Industry groups and some Senate Republicans are urging the administration to withdraw, or at least narrow, its draft guidance for assessing greenhouse gas (GHG) and climate impacts of major federal decisions but they are also detailing legal arguments they would make if, as expected, the administration finalizes the guide and draws litigation on the issue.
A major industry coalition -- along with GOP Sens. Jim Inhofe (OK), John Boozman (AR), John Barrasso (WY), Deb Fischer (NE), Jeff Sessions (AL), and Dan Sullivan (AK) -- in comments filed March 25 are asking the White House Council on Environmental Quality (CEQ) to withdraw the guide, which would outline how agencies assess GHGs in National Environmental Policy Act (NEPA) reviews for the first time.
In its 95-page comment document, the industry coalition warns that “overly broad NEPA reviews can add significant and unreasonable costs and delays to projects,” including development of energy projects intended to reduce GHGs.
The National Rural Electric Cooperative Association, which signed onto the industry coalition comments, filed a separate March 24 letter airing concerns about how the guide will delay energy infrastructure projects needed to aid compliance with EPA's GHG rule for existing power plants.
The new draft guide, released last last year, is a significant expansion from a 2010 draft that CEQ never finalized but which says agencies should consider the upstream and downstream GHG impacts as well as the impact of climate change on a project.
Despite the critics' call to withdraw the document, the Obama administration is expected to finalize the new guidance document, even though it was not specifically mentioned as part of President Obama's climate action plan. Should CEQ finalize the guide as expected -- and it has backing from environmental groups to do so -- then the opponents may need to pursue litigation over the document.
But any litigation over a final version of the document would also likely face a high bar as courts generally will not hear challenges to guidance documents.
Still, the industry coalition -- which includes major trade associations such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Petroleum Institute, the American Farm Bureau Federation, the American Chemistry Council, the National Mining Association and the American Forest & Paper Association -- lays out a host of legal arguments against the guide including that it goes “beyond the scope” of NEPA.
“To the extent CEQ elects to proceed with final guidance, it is imperative that the guidance stay firmly within the scope of the NEPA statute and CEQ's implementing regulations,” the comments say.
They warn that CEQ must restrict agencies from evaluating GHG and climate change effects “that are so unrelated, speculative, or remote that they are unable to inform the agency's ultimate decision regarding a specific proposed action. Without such necessary limits in place, addressing GHG emissions has the risk of increasing uncertainty regarding critical government approvals and decisions.”
The comments also note that guidance documents “serve a limited purpose of explaining and interpreting laws and regulations” and “should have no binding legal effect. . . . Where guidance goes too far . . . it is unlawful and should not be issued or followed.”
'Serious Concerns'
Among the “serious concerns” listed by the group is that the guide's recommendation to assess upstream and downstream emissions is inconsistent with NEPA regulations; that it “inappropriately expands” NEPA to include “transnational environmental effects” and “land and resource management actions” without addressing the “paralyzing effect this one-size-fits-all guidance will have” on the decisionmaking process “both procedurally and from legal challenges.”
The comments also ask CEQ to exclude land and resource management agency actions from any final guidance and proceed “if at all, with sector-specific guidance tailored to the unique challenges” posed by those decisions.
Further, they say it inappropriately directs agencies to include the administration's social cost of carbon (SCC) estimate; that its inclusion of mitigation expands the scope of NEPA and CEQ's regulations beyond what is authorized; and that it sets an arbitrary 25,000-tons-per-year GHG emissions threshold for a NEPA review.
“In light of these serious deficiencies, the Associations urge CEQ to withdraw” the guide, the comments say.
Similarly, the GOP senators outline 12 reasons for why CEQ should withdraw the guide in their comments, including that “climate change falls outside the scope of NEPA” because it is “not a direct or indirect effect of a federal action” and that the guide “fails to provide any geographic limit on the so-called connected actions.”
Meanwhile, a coalition of environmental groups -- including the Natural Resources Defense Council, Sierra Club, Friends of the Earth, League of Conservation Voters and many others -- filed March 25 comments supporting the revised guide and seeking strengthened provisions.
“The inclusion of public land management agencies in the guidance is of particular importance, and we strongly urge CEQ to specify that the final guidance applies to all federal departments and agencies in the executive branch.” The groups add that the 25,000-ton threshold for assessing GHGs is “unnecessary and unwise;” that the language on analyzing synergistic effects of a proposed action “needs a more robust direction;” and that the discussion of the SCC is “too cursory.”
Also the Sabin Center for Climate Change Law in March 24 comments asks CEQ to include indirect GHG emissions in the 25,000-ton applicability threshold and to provide additional guidance encouraging GHG programmatic reviews. And Friends of the Earth urged supporters in a March 23 email blast to press the White House to strengthen the NEPA GHG guide by expanding it to consider black carbon and the release of carbon stored in sinks such as forests and soils.
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Mar 30, 2015 | E&E - TV
How are microgrids helping to shape the future of the electric power sector? During today's OnPoint, Ed Krapels, founder and CEO of Anbaric, an energy infrastructure developer, discusses his company's recent partnership with Exelon on a series of microgrids in New York state. He also discusses the transmission and infrastructure challenges that exist with U.S. EPA's Clean Power Plan. Transcript
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Ed Krapels, founder and CEO of Anbaric, an energy infrastructure developer. Ed, it's nice to see you. Thanks for coming in.
Ed Krapels: Nice to see you, Monica.
Monica Trauzzi: Ed, you recently announced that you would be partnering with Exelon to create a series of microgrids in New York state. Why was your company uniquely qualified to partner with Exelon on this?
Ed Krapels: Well, we've been watching the microgrid space for a number of years now. We also developed transmission lines, and in a lot of jurisdictions people are asking why do I need to build this transmission line? Why can't we do distributed generation? So I thought it'd be good for us to understand both sides of the business, both the macro big transmission line issues and the microgrid issues. Technology is leading to some great enhancements in microgrids, and so we feel that we understand both the big and the small pieces of this, and we'd like to put them together.
Monica Trauzzi: So why is this microgrid project a good fit for New York?
Ed Krapels: New York's always been on the leading edge of innovation and the regulatory space. And New York's chairman of the Public Service Commission, Audrey Zibelman, has issued a new document called the REV, which is a renewed energy vision for the state of New York where she's trying to revolutionize and change how the distribution segment of the electric business operates. So, 20 years ago, we started to restructure the generation space and then the transmission space. Now New York is leading reform in the distribution arena.
Monica Trauzzi: How do you think microgrids are sort of shaking up the industry and the evolution of the electric power sector?
Ed Krapels: They take the bundle of values that is at the customer segment, right? All the transmission lines that go into each area, the distribution lines that go into each area, the assets that are behind that, both the generation and the distribution, and they kind of shake that up and say, "Is the way we've been doing it really the most efficient way." And I think in a lot of cases the answer is no, because technology is taking us into new areas and new directions where customers are more empowered, if you will, to interact with the grid than they have been in the past. And I think in New York they're going to get an opportunity to do that.
Monica Trauzzi: So you talked about transmission and infrastructure before. These are thought to be key pieces of the puzzle in terms of how to make EPA's Clean Power Plan work. But there seems to be less of a focus in the discussion on that element, and we don't hear that piece coming up as much. As we potentially start to see coal plants coming offline, how critical is that transmission infrastructure piece going to be, and what kinds of improvements do we need to see?
Ed Krapels: Very, very critical because as much as I like microgrids, I don't want folks to forget about the fact that what we really have to do as well as develop the distribution sector is we have to reshape the old grid for clean energy. And so from the standpoint of the end of depending on coal for so much of our electric supply, we're now gonna be relying more on wind and on hydro and on alternatives to coal. And when we do that, all of the transmission assumptions that we used in the past to connect coal to the market, we now have to basically rethink how do we connect clean energy to the markets, and that is going to require a lot of new transmission.
Monica Trauzzi: So talk a bit about high-voltage DC lines and the role that you think that they should play in U.S. infrastructure. We don't really see them a whole lot in the U.S.
Ed Krapels: We don't, and it's a shame because high-voltage DC is one way that you can move energy a long way with minimal losses. It has a lot of advantages from the standpoint of bringing clean energy to the market. So in my company, we have a couple of critical high-voltage DC projects that would bring wind, for example, from northern Maine hundreds of miles into southern New England. In the Midwest, there is a lot of wind that could be brought into the populated areas, and there are projects now beginning to be developed that will do that. HVDC is uniquely capable of doing that in an environmentally acceptable and sustainable way.
Monica Trauzzi: So how innovative do you think the industry can and should be in terms of new infrastructure?
Ed Krapels: The industry knows what's up, so people understand HVDC. Companies know what needs to be done. It's difficult to get state governments and utility commissions to understand that we can't stop investing in transmission; we have to continue to invest in transmission. So it's really more funding the next $20, $30 billion of transmission projects. That's what we need to do to bring clean energy into the market.
Monica Trauzzi: All right. We're going to end it right there. Thank you for coming on the show; nice to see you.
Ed Krapels: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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Rockefellers Discouraged By Exxon's Attitude Toward Climate Change
Mar 30, 2015 | E&E - Climatewire
Members of the Rockefeller family -- one of the oldest families of the oil empire -- have failed to convince Exxon Mobil Corp. to make efforts to address climate change and develop cleaner energy, according to Neva Rockefeller Goodwin, co-director of the Global Development and Environment Institute at Tufts University.
Efforts to reform the oil giant began more than 10 years ago, when John D. Rockefeller Sr.'s great-grandchildren arranged a meeting with Exxon's head of investor relations at the time. Though Rockefeller shares in the company were fairly small, the family hoped its historic ties with the company would persuade the company to change, Goodwin told the London Guardian.
"We wanted to start talking with the company about their view of the future and how they could be a constructive player as well as part of the problem," said Goodwin. "This was the family trying to get into a friendly conversation with Exxon Mobil, feeling we have a strong historical connection with that company."
More than a dozen Rockefellers launched resolutions to pressure Exxon to accept climate change and the associated dangers. Almost 100 family members signed numerous letters urging the company to stop funding research that was skeptical of climate change, Goodwin said.
But repeated efforts did not change Exxon's behavior, according to documents environmental group Greenpeace obtained via freedom of information filings. In 2008, Exxon agreed to stop funding skeptical research, yet it continued to fund a known climate skeptic from 2008 to 2010.
"I was pretty discouraged. Exxon has an extremely strong culture of believing that they are right and know what they are doing and really don't need to listen to anybody else," said Goodwin. "It was clear that we didn't have an ability to make more of a dent in that." Exxon declined to respond to requests for comment from The Guardian on the grounds that the media organization's coverage of climate change lacks objectivity (Suzanne Goldenberg, London Guardian, March 27)
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