2011 Sept. 12: Climate, Energy, & Air Weekly Update – September 6-9, 2011
Print PDFKYLE DANISH, SHELLEY FIDLER, KEVIN GALLAGHER, TOMÁS CARBONELL, KAITLIN GREGG
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Will EPA delay release of its proposed utility GHG NSPS past September 30? . . . In his jobs speech, President did not refer to his suspension of efforts to revise the ozone NAAQS but made a robust no-rollbacks statement on environmental regulations . . . DOE wants to delegate to FERC its powers to create national transmission corridors . . . DOE’s Inspector General finds that a third of block grants for energy efficiency have not yet been spent and might go unspent by the 36 month deadline . . . New York and Texas issued rules on hydraulic fracturing . . . New Hampshire will stay in the RGGI at least for now . . . The Senate Appropriations Committee reported the Energy and Water Appropriations bill . . . Sign up for tomorrow’s free Van Ness Feldman webinar on the “Joint Select Committee on Deficit Reduction: Implications for the Energy Sector.” To register, click here.
- Obama Resists Broad Rollback of Regulations in Jobs Speech. President Obama’s September 8 address to a joint session of Congress did not include new energy policy proposals, but did include a strong defense of health and safety regulations such as those applicable to the energy sector. The President stated he would not “let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades,” and said he rejects “the argument that says for the economy to grow, we have to roll back . . . rules that keep our kids from being exposed to mercury.” The President did acknowledge that some regulations pose an “unnecessary burden” to business, and noted that federal agencies have identified approximately 500 regulatory reforms as a result of the review the President ordered earlier this year.
- DOE Considering Delegation of Transmission Siting Responsibilities to FERC. The Department of Energy (DOE) has announced that it is considering whether to delegate to the Federal Energy Regulatory Commission (FERC) certain transmission planning and siting authorities granted to DOE in the Energy Policy Act of 2005. Under DOE’s delegation plan, FERC would take responsibility for conducting triennial studies of transmission congestion, and would establish a process for designating “National Interest Electric Transmission Corridors” (NIETCs). FERC would also exercise DOE’s authority to issue construction permits for certain projects located in NIETCs over the objection of state public utility commissions. According to a proposal prepared by FERC staff and posted on DOE’s website, FERC would change the DOE’s procedure for designating NIETCs by allowing specific proposed transmission projects to be designated as NIETCs, and by establishing an expedited process for simultaneous federal and state review of environmental and engineering issues related to a proposed project. The FERC staff memorandum argues that the proposed delegation would “simplify and consolidate” the procedures required by the Energy Policy Act of 2005. FERC’s staff memorandum is available at http://www.congestion09.anl.gov/documents/docs/Transmission%20Siting%20Narrative%20Draft%20(Clean%208%2026%2011).pdf.
- DOE Awards Grants, Loan Guarantees to Solar and CCS Projects. As part of its “Sunshot Initiative” to reduce the cost of solar photovoltaic (PV) power systems by 75 percent, DOE has awarded $145 million in grant funding to 69 solar PV-related projects in 24 states. The funding will support projects focused on improving solar cell efficiency, advancing grid integration, promoting “next generation” solar cell technologies, reducing market barriers, and achieving reductions in hardware costs. Separate from these awards, DOE also announced that it has made a conditional commitment to guarantee 80 percent of a $344 million loan to support solar PV deployment on 160,000 homes and other commercial buildings located at 124 U.S. military bases. Sponsored by SolarCity Corp., the project will ultimately result in the installation of 371 MW of generating capacity. Lastly, DOE announced the award of six grants, totaling $14 million, that are intended to improve the economics of implementing carbon capture at coal-fired power plants using integrated gasification combined cycle (IGCC) technology. Grant recipients include Air Products and Chemicals, the Electric Power Research Institute, General Electric, Reaction Engineering International, and TDA Research. Information about the solar grants is available at http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=321; information about the solar loan guarantee is available at http://energy.gov/articles/energy-department-loan-guarantee-would-support-large-scale-rooftop-solar-power-us-military; and information about the CCS grants is available at http://www.fossil.energy.gov/news/techlines/2011/11051-DOE_Announces_IGCC_Projects.html.
- IG Finds One-Third of Recovery Act Block Grants for Energy Efficiency Remain Unspent. Following an investigation of the Energy Efficiency and Conservation Block Grant (EECBG) program, the DOE’s Inspector General (IG) has concluded that as much as 33 percent ($879 million) of the funds appropriated for the program in the American Recovery and Reinvestment Act remain unspent. The IG attributed the shortfall in disbursements to delays by state and local governments, which received EECBG funds from DOE shortly after the Recovery Act was passed. The IG report stated that the current rate of expenditure “calls into question” whether EECBG funds will be fully utilized within the 36-month deadline established by DOE; under the Recovery Act, EECBG recipients are required to use the funds no later than September 2015. Authorized by the Energy Independence and Security Act of 2007, the EECBG program is intended to provide flexible funding to state, local, and tribal governments to implement energy efficiency programs and projects. The IG’s report is available at http://energy.gov/sites/prod/files/OAS-RA-11-16_0.pdf.
- FBI Investigates Solyndra. The Federal Bureau of Investigation (FBI) searched the headquarters of the solar PV manufacturer Solyndra and also the homes of some of its senior executives. Solyndra recently filed for bankruptcy after spending nearly $535 million in loans guaranteed by DOE. The searches are part of an investigation being led by the Inspector General of DOE.
- Senate Appropriations Committee Approves Energy & Water Spending Bill. On September 7th, the Senate Appropriations Committee approved their version of the Energy and Water spending bill, which provides funding for fiscal year 2012 (FY 12) to the Department of Energy and certain offices within the Department of Interior (including the Bureau of Reclamation) and the Army Corps of Engineers. The Senate bill would provide $31.625 billion for these accounts, almost $1 billion more in funding than the version passed by the House on July 15, 2011 (H.R. 2354) and more than $4 billion less than the $36.5 billion that the Obama Administration had requested for these agencies in February.
As passed by the Senate Appropriations Committee, the bill provides $25.549 billion to fund the Department of Energy for FY 12. This amount is $57 million below FY 11. The funding for the Department of Energy includes $250 million in funding for the Advanced Research Projects Agency-Energy (ARPA-E), an increase of $70 million over FY 11 levels. The Office of Science was allocated $4.843 billion, the same as FY 11. The bill also appropriates $1.796 billion for Energy and Efficiency and Renewable Energy programs, the same as FY 11. Electricity and Energy Reliability would receive $141 million under the bill. The Office of Nuclear Energy would receive $584 million under the bill. The Office of Fossil Energy would receive $259 million, $186 million less than FY 11. The Committee declined to act on potential amendments to the bill regarding nuclear waste storage, thereby leaving debate on whether to eliminate funding for the Yucca Mountain Nuclear Waste Repository until a later date. Given the short time remaining in the fiscal year, is unclear whether a stand-alone Energy and Water Appropriations bill will eventually be enacted by Congress or whether that funding will be included in an omnibus spending bill, including funding for many Federal agencies. Funding for all federal agencies expires on September 30, 2011 requiring some sort of congressional action in the coming weeks.
- Chairman Hastings Circulates DOI Permitting Bill and Holds Hearing. Representative Doc Hastings (R-WA), Chairman of the House Natural Resources Committee, circulated draft legislation September 7th that would simplify the federal permitting process run by the Department of Interior (DOI) for both conventional fossil and renewable energy generation in an effort to increase domestic energy production. Representative Hastings also held a hearing on September 8 entitled “Creating American Jobs by Harnessing Our Resources: U.S. Offshore and Renewable Energy Production,” and underscored his hope in his opening statement that the permitting processes could be streamlined to encourage additional energy development, in particular renewable energy development including wind and geothermal energy.
- Murkowski Requests Further Analysis of Electric Reliability prior to Implementing MACT. Senator Lisa Murkowski (R-AK) sent a letter on September 8 asking the Environmental Protection Agency (EPA) to delay the implementation of its proposed “Utility MACT” rule, which requires control of emissions of mercury and other toxics from power plants, until the electric reliability impacts of the rule can be more fully analyzed by FERC on a regional basis. In her letter, Senator Murkowski refers to FERC estimates that almost 8 percent of electricity generation nationwide, predominantly older coal plants, is “likely” or “very likely” to be retired as a consequence of the rule, and requests that FERC and EPA do further analysis of the proposal on a region-by-region basis.
- House Transportation Committee Approves Bill Barring U.S. Involvement in EU Aviation Emissions Trading. On September 8th, the House Transportation and Infrastructure Committee approved H.R. 2594, the “EU Emissions Trading Scheme Prohibition Act of 2011,” which would bar U.S. involvement in the European Union’s (EU) greenhouse gas emission (GHG) trading scheme and remove emission reduction requirements for U.S. airlines that operate flights taking off or landing in the European Union starting in January 2012. The European Commission estimates that the program would increase the cost of a round-trip flight to Europe by $14 to $58. H.R. 2594, which was introduced by John Mica (R-FL) and Nick Rahall (D-WV), would require the Secretary of Transportation to prohibit U.S. involvement in the EU emission trading system (ETS) and would require that the Administrator of the Federal Aviation Administration (FAA) take steps to ensure that U.S. airlines are “held harmless” under any emissions trading program approved by the EU. Because of its international nature, the bill is also under the jurisdiction of the House Committee on Foreign Affairs. The Committee on Foreign Affairs must take action on the bill before it can move to the House floor.
- PA Withdraws from Environmental Lawsuits. In August, Pennsylvania withdrew from five air-related lawsuits in which it had participated under former Governor Ed Rendell. Four of the lawsuits relate to the on-going litigation over EPA’s regulation of greenhouse gas emissions (GHGs) in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit). Pennsylvania had joined 15 states in intervening in the cases on behalf of the EPA, but Hawaii and Arizona also dropped out of the cases earlier this year. Pennsylvania also dropped its involvement in a case brought by New York that challenges the EPA regulation of smog under the 2008 National Ambient Air Quality Standard for ozone as ineffective. Twelve states and the District of Columbia had joined New York in challenging the EPA.
- EPA Brief filed in GHG Mobile Source Case. On September 1st, the EPA filed its opening brief in the mobile source portion of the challenges to its greenhouse gas (GHG) regulations in Coalition for Responsible Regulation v. EPA. The brief, filed in the D.C. Circuit, argues that EPA was “unequivocally” required to put a rule in place for mobile sources once it issued an “endangerment finding” for GHGs. The endangerment finding, which held that GHGs endanger human health and welfare as defined under the Clean Air Act, is also being challenged in a separate lawsuit pending in the D.C. Circuit. The petitioners in the case consist mainly of owners of stationary sources. Their primary concern is that EPA has concluded that the mobile source regulations also trigger regulation of certain stationary sources under the Prevention of Significant Deterioration provisions of the Clean Air Act.
- New Hampshire Stays in RGGI for Now as State Senate Fails to Override Governor’s Veto. The New Hampshire State Senate fell one vote short of overriding Governor John Lynch’s veto of legislation that would withdraw the state from the Regional Greenhouse Gas Initiative (RGGI). The Senate originally passed the legislation earlier this year. As a result of the 15-9 vote, New Hampshire will continue to participate in the regional cap-and-trade program. New Jersey remains the only one of the ten original member states to withdraw from the program.
- New York Agency Issues Proposed Rules on Hydraulic Fracturing. The New York Department of Environmental Conservation (DEC) has issued proposed rules to regulate hydraulic fracturing in the state. The proposed rules contain requirements that drillers file detailed transportation plans; report on the condition of the roads that will be used; place limitations on the placement of wells and well pads; and require that drilling equipment be camouflaged or set back from roads.The rules will be subject to a 90-day public comment period during which the DEC is scheduled to hold four public hearings on the proposal.In conjunction with the release of the proposed regulations, the DEC released a socioeconomic study that found that hydraulic fracturing in the state could generate between 6,200-24,800 jobs and $419 million-$1.7 billion in revenues.
- Texas Railroad Commission Proposes Hydraulic Fracturing Disclosure Rule. The Texas Railroad Commission proposed the Hydraulic Fracturing Chemical Disclosure Requirements rule, which would require the disclosure of the chemical ingredients and volumes of water used in hydraulic fracturing. The rules, which would apply to oil and gas well operators, include exemptions from disclosure for trade secrets. Required disclosures must be submitted to “FracFocus”, a hydraulic fracturing chemical registry website run by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. The draft rule will be open for public comment until October 11.
Industry and NGOs
- BlueGreen Alliance Urges Obama to Support Expansion of Clean Energy Economy. The BlueGreen Alliance, a coalition of 14 national labor and environmental organizations, sent a letter to President Obama urging him to adopt a variety of policies to promote a clean energy economy as part of his job-creation agenda. Focusing primarily on short-term efforts to increase clean energy manufacturing, the letter called for the implementation of an array of policies including: the expansion and improvement of the Advanced Energy Manufacturing Credit; a block grant program targeted toward small- and medium-sized manufacturers; a clean energy deployment administration or green bank; the expansion of aid for retooling to the domestic automobile industry; consistent, long-term tax incentives for clean energy; a robust renewable electricity standard; programs to support retrofits for residential, commercial, industrial, and public buildings; an infrastructure bank; and livable communities initiatives. The policies described in the letter are largely based on those put forward in the group’s report entitled “Jobs21! Blueprint to Solve the Jobs Crisis”. The letter is available online here; the “Jobs21!” report is available online here.
Studies and Reports
- Study Finds Climate Change Benefits of Switch to Natural Gas Could Be Less Than Commonly Thought. A new study by Dr. Tom Wigley, a researcher at the National Center for Atmospheric Research, (NCAR) projects how a large-scale switch from coal-derived electricity to natural gas would impact predicted global climate change using varying assumptions about methane leakage from pipelines and hydraulically fractured gas wells. NCAR is a federally funded research and development center for atmospheric research; it is primarily supported by the National Science Foundation. The study reached the surprising conclusion that fuel-switching would lead to a slight short-term acceleration in global temperature increases through 2050, even assuming no leakage of methane. This is because the retirement of coal-fired power plants would also reduce sulfur dioxide emissions and particulate matter pollution, both of which reflect incoming solar radiation and tend to cool the planet. Over a longer time period, according to the study, the use of natural gas would result in small reductions in currently expected higher global temperatures. For example, according to the study, a 50% reduction in coal use relative to baseline levels would mitigate the expected increase in global temperatures by approximately 0.1 to 0.2 degrees Celsius by 2100 (assuming no leakage of methane). The study will be published in the next edition of the journal Climatic Change Letters. A summary is available at http://www2.ucar.edu/news/5292/switching-coal-natural-gas-would-do-little-global-climate-study-indicates.