Archive for the ‘Energy Regulations’ Category

Obama’s State of Union will likely hit on a number of energy policy themes: climate change, promotion of offshore drilling, clean energy. The President’s statements on climate change were previewed in his January 21 inaugural address, when he declared “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.  Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition, we must lead it.”

The 2007 Supreme Court ruled the EPA must regulate greenhouse gasses under its existing Clean Air Act authority if it finds a scientific basis that such emissions pose a danger to public health. This summer, a Republican-led federal appeals court ruled that the EPAs compilation of the science of climate change was overwhelming and compelling, thereby requiring the Agency to act.

Obama has already used this authority to implement ground-breaking greenhouse gas emission rules for cars and trucks, and has proposed rules for new power plants that rule out the construction of conventional coal power plants. Tonight’s State of the Union will likely propose new rules over existing power plants.

And this is where Southern’s $100,000 contribution to Obama’s 2013 Inaguaration may become a factor. Southern Co was the only utility to make a contribution.  Obama’s climate change rules for cars were developed with auto industry support - previewing a framework for how rules over existing power plants may play out. In 2009 Obama was content to let the House take the lead in putting together climate rules to ensure there’d be shared responsibility among the legislative & executive branches on economy-wide legislation that was sure to be controversial in some circles. While Obama quickly abandoned succeeding Senate efforts to draft a companion bill after concluding that the cap ‘n trade approach was too politically risky, Obama pivoted in his 2011 SOTU around a clean energy standard that promoted nuclear and natural gas that had very similar emissions reduction targets as the Waxman Markey bill.

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The following is a repost of my National Journal Energy Experts blog

Electricity policy faces enormous challenges—three different federal agencies (EPA, DOE, FERC) and 10 Congressional committees wrestle with oversight over electricity markets, new generation sources, air and water emissions issues, and energy efficiency initiatives. Resolving the current political stalemate requires an acknowledgement that maximizing investment in a decentralized electricity structure has to be a significant part of policy going forward. And we must recognize that while constitutional rights within our Democratic Republic often clash with companies’ need for efficiency, preserving those rights must be our priority.

Not only are capital cost barriers of proposed new nuclear and coal-fired units significant, but so are the associated transmission infrastructure upgrades needed to move the power from new sources to population centers. Trying to build any new type of large infrastructure system designed to accommodate our centralized power system has traditionally run into NIMBY opposition, which lately has been characterized as Not on Planet Earth (NOPE). Population density in the US has increased 105% from 1950 to 2010—from 42.6 people per square mile in 1950 to 87.4 people per square mile in 2010. With more people living per square mile than ever before, Americans’ Fifth Amendment Constitutional right to due process guarantees that large projects will continue to be delayed. Congress’ unwillingness to grant the Federal Energy Regulatory Commission ultimate authority over transmission siting leaves permitting at the state level, where property owners will continue to hold sway over project developers. Meanwhile, the plummeting cost of solar photovoltaics, advances in micro-wind turbines, and continued permitting successes of geothermal are providing more opportunities for distributed renewable energy generation. It’s more efficient to site millions of rooftop solar systems than permit just a handful of new coal/nuclear stations with hundreds of miles of needed transmission.

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This is a repost of my blog at National Journal.

As I wrote in the Expert Blog at the beginning of this year, the primary attraction of natural gas today is its price advantage over competing fuels. Sure, the emissions benefits over coal and petroleum are nice and important, but pricing dynamics are driving the market. And it’s imprudent policy to assume that gas will remain cheap, or even affordable for that matter. While we most likely have a few more years of moderately-priced natural gas, we will see a return to the Bad Old Days of natural gas price volatility as soon as emerging and proposed infrastructure changes accelerate. Natural gas’ emissions benefits are no match for zero-emission competitors, but today’s cheap gas prices are luring crucial support away from the long-term renewables solution.

In the power sector, decisions are being made based on today’s low prices that commit significant parts of our electricity infrastructure to gas for the next generation. This will come at the expense of renewables, which, unlike natural gas, will only have a future cost curve that will continue to plummet. I can predict a future Energy Expert Blog after five years’ time bemoaning the natural gas price trap and “is it too late to ramp up renewables and efficiency?”.

Remember that natural gas, for all of its emissions benefits to its fossil fuel cousins, remains a messy extractive product. The folks that argue that all natural gas drilling pollutes drinking water are as correct as the industry folks who claim, always with a straight face, that fracking has never contaminated a single drinking water source (let’s start opening up those hundreds of nondisclosure agreements households have been forced to sign with drillers in exchange for getting their hands on trucked clean water to their rural homes). There is no such thing as benign fossil fuel extraction. There are risks and environmental costs associated with fracking, and there can be no doubt that the vast fracking revolution, complemented with weak federal (and, for the most part, state) oversight is a recipe for disaster. Water wars will define the next generation’s resource fight (it’s actually already beginning). Let’s not hasten that with natural gas’ inherent risks.

The recent revival of multilateral international trade talks with visions of using the 1992 Energy Policy Act requirement forcing approval of natural gas import/export facilities to countries with which we have a FTA requiring national treatment for trade in natural gas is fallacious. Sure the extreme price gap between North American and European/Asian markets is tempting, but the minute we become a significant exporter the fuel will no longer be affordable to fill our power plants and T. Boone Pickens’ patented trucks.

Natural gas will continue to be a part of our energy mix for the foreseeable future. But it must not―and cannot―serve as our foundation. That must be reserved for renewables and efficiency. The technology revolution is not fracking, but in solar PV and other renewables.

Tyson Slocum Directs Public Citizen’s Energy Program. Follow him on twitter @tysonslocum

This week National Journal reports that former Senators Byron Dorgan, D-N.D. and Trent Lott, R-Miss “are working together on a blueprint for energy legislation” through their role as co-chairs of the Bipartisan Policy Center’s Strategic Energy Initiative, and plan to release it in January. NJ notes that “their effort could gain traction: Both are held in high regard by their former colleagues, and the BPC is a serious player in the energy debate.

What NJ fails to mention is that both Dorgan and Lott are also lobbyists getting rich taking special interest money from a who’s who of major energy corporations, which raises the question: will their energy blueprint serve as yet another veiled, sophisticated sell for their high priced energy corporate clients? When does their respected “high regard” begin and their shilling for their corporate clients end?

Lott’s Breaux Lott Leadership Group represents ExxonMobilEntergy, GE, energy trader Goldman Sachs, National Propane Gas Association, Plains Exploration and Shell Oil. In addition, the Breaux Lott group is a subsidiary of lobbying giant Patton Boggs, so you should also include PBs list of energy clients: ATP Oil & Gas, the Mining Awareness Resource Group, Oil States International and the oil giant TOTAL.

Dorgan co-chairs Government Relations for Arent Fox, where his corporate energy clients include oil companies Denbury Resources & Noble Energy.

I’m sure there will be some good recommendations in the Lott-Dorgan energy report. And I’m sure there’ll be policies that will be controversial. At the end of the day, we just don’t know what made it into the blueprint because of policy merits or the special interest paycheck.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @tysonslocum

After a concerted effort by Republican lawmakers to stall progress on a policy that would lead to cleaner and more fuel-efficient cars, it looks today as if the long-awaited new standard is close to becoming a reality. It is designed to reduce oil Tyson Slocum "fuel efficiency standard"consumption by 2.2 million barrels a day and cut greenhouse-gas emissions by 6 billion metric tons by 2025, according to the White House, which hammered out the deal with automakers in July 2011. That will be accomplished by requiring the industry to double the 2011 fuel-efficiency standard of 27.3 mpg to 54.5 mpg by 2025. Automakers have until 2017 to begin turning out vehicles that meet this requirement.

The new environmentally friendly policy resulted from the administration’s ability to extract “cooperation” from an industry at its most vulnerable. After the government bailed out General Motors with taxpayer dollars, the automakers had little choice but to go along with the administration’s proposed fuel-efficiency program – a regulatory policy it has resisted for decades.

President Barack Obama may have called the deal “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” but it is clear that the industry had to be cornered first before it would agree to the landmark effort to benefit both our economy and the environment.

While Public Citizen applauds the new standard, we won’t kid ourselves about the automakers’ plans for compliance. They managed to build in some wiggle room with a loophole that allows for a 2018 review of the standard, opening the door to possibly adjusting the standard in its favor just one year after it takes effect. We can be sure the industry will attempt to make a case that it is too expensive to meet the federal goal of 54.5 mpg. And you can be just as sure that we will be there, working to hold them to it.

Tyson Slocum is Public Citizen’s energy program director. You can follow him on Twitter @TysonSlocum

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