Geoscience Policy Monthly Review
june 2016
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energy
Hearing highlights implications of Supreme Court stay of the Clean Power Plan
June 9, 2016
The Senate Committee on Environment and Public Works held a hearing on the implications of the U.S. Supreme Court stay of the President’s Clean Power Plan (CPP). The CPP, announced in August 2015, sets state-by-state targets for reductions in carbon emissions from existing power plants.
In a 5-4 decision in February, the Supreme Court handed down a historic decision halting the implementation of the CPP pending further review. During the stay, states are not required to comply with the CPP; however, the stay does not prevent the EPA from issuing guidance and tools to states interested in working toward the CPP’s goals. Additionally, the stay does not guarantee the postponement of compliance deadlines if the regulations are upheld. Therefore, opponents argued that states would effectively be required to keep up with the new regulations for fear of potential penalties, thereby negating any relief provided by the stay.
In his opening statement, Chairman James Inhofe (R-OK) expressed concern over the CPP’s impact on energy costs and grid reliability. Missouri State Representative Jack Bondon echoed these concerns, arguing that Missourians who already pay 18 cents on the dollar for electricity cannot afford higher utility prices, and that the plan disregards steps Missouri has already taken to develop its own customized energy standards and provisions. Senator Deb Fischer (R-NE) similarly expressed concern for Nebraska, which would face the challenge of reducing its carbon emissions by 40 percent under the plan.
Chairman Inhofe additionally challenged the legality of the rule, calling the plan “unsound.” Senator Dan Sullivan (R-AK) and others also expressed concern that the EPA is overstepping its congressionally authorized bounds.
Conversely, Senator Sheldon Whitehouse (D-RI) spoke in support of the CPP, using former Senator John Chafee’s (R-RI) 1986 testimony on greenhouse gases to argue against a “wait and see” approach. Additionally, proponents of the CPP argued that the successful Regional Greenhouse Gas Initiative (RGGI) illustrates potential positive outcomes of the CPP.
The U.S. Court of Appeals announced in May that the CPP will go before the full Supreme Court in late September, skipping a customary three-judge panel review. This en banc review is extremely rare in the D.C. Circuit.
Sources: E&E News, Environmental Protection Agency
CHOW 2016 includes a panel on changing offshore energy portfolios
June 8, 2016
Inspired by recent milestones in domestic offshore wind energy and persistently low oil and gas prices, Capitol Hill Ocean Week (CHOW 2016) included a panel on potential changes to U.S. offshore energy portfolios.
The panel, moderated by E&ETV’s managing editor Monica Trauzzi, included Abigail Hopper of the Bureau of Ocean Energy Management, Nancy Sopko of the American Wind Energy Association, Erik Milito of the American Petroleum Institute, and John Weber of the Northeast Regional Ocean Council.
Hopper and Sopko both attributed recent offshore wind development to the Obama Administration’s commitment to addressing climate change, citing Deepwater Wind’s Block Island Wind Farm project, as well as 13 other projects in 10 states, including LEEDCo’s offshore freshwater wind project in Lake Erie and Fisherman’s Energy’s plans for a wind farm off of Atlantic City, NJ.
Despite cost challenges, Sopko believes land-based wind manufacturers can supply necessary materials for offshore wind projects and increase jobs. For offshore wind to continue expanding, however, Hopper noted three key needs: stable permitting processes, strong state policies that spur renewable energy demand, and successful technologies.
Referring to the future of offshore oil and gas, Hopper noted that the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program plan should be finished by year’s end, making available thirteen potential leasing sites, including three in the Arctic. However, many companies remain wary of investments in the Arctic due to uncertainty in both resource abundance and legislation, Milito said.
While emphasizing oil and gas as the foundation to the U.S. energy portfolio, both Milito and Hopper cautioned against the “false choice” between either oil and gas or renewable energy; instead of only one or the other, investment in renewables by the oil and gas industries and the slow evolution of their business models away from fossil fuels will lead to diversified offshore energy portfolios, they argued.
Sources: Bureau of Ocean Energy Management
U.S. and China embark on a R2ZE
June 3, 2016
U.S. Transportation Secretary Anthony Foxx and China’s Minister of Transport Yang Chuantang announced new efforts to reduce emissions from city bus fleets.
Referred to as a “Race to Zero Emissions” (R2ZE), this effort allows participating cities to compete against each other to achieve the highest percentage of zero-emission buses by 2025. A zero-emission bus runs on either electricity or hydrogen and has no tailpipe emissions. Cities in either country are eligible to compete if their fleet size is at least 200 buses. The announcement also included the goal of achieving 35 percent emission-free buses by the end of the competition period.
Though electric buses are expensive, often double the cost of traditional diesel buses, the market for emissions-free buses has grown in the U.S. with recent federal funding. The Fixing America’s Surface Transportation (FAST) Act, a 5-year transportation bill approved by Congress in 2015, doubled funding for low- and no-emissions buses to $55 million each year. While the leading electric bus maker is a Chinese company known as BYD Co. Ltd., American manufacturer Proterra Inc. will soon open new plants in California to support greater demand.
While there is no explicit prize for winning, this effort aims to hasten the development of new technologies, generate economic growth, improve air quality in urban areas, and mitigate climate change.
Sources: ClimateWire, Proterra.com, Transportation & Infrastructure Committee, United States Department of Transportation
Updated 7/11/2016
Hearing highlights the status of research on new energy technologies
June 15, 2016
The House Committee on Science, Space and Technology’s Subcommittee on Energy held a hearing to discuss emerging energy technologies in the United States. Subcommittee Chairman Randy Weber (R-TX) and full Committee Chairman Lamar Smith (R-TX) led the meeting alongside Subcommittee Ranking Member Alan Grayson (D-FL). Testimony was provided by a panel of four witnesses who spoke about the role solar fuels, energy storage and quantum materials may play in the country’s energy future.
All introductory remarks by those who led the meeting underscored the importance of government funding for basic research. Chairman Weber emphasized that the Department of Energy needs to prioritize basic research over grants for technology already suitable for industry, and Ranking Member Grayson asked why there was a lack of effort in the private sector to create artificial fuels.
Representatives from both parties, including Reps. Marc Veasey (D-TX) and Stephen Knight (R-CA) were concerned about the large areas of land used for renewable technologies, such as wind farms, relative to the small amounts of energy capable of being stored for later use. Witnesses explained current and emerging technologies, such as redox flow batteries and multivalent ion batteries, to address storage.
One of Rep. Mo Brooks’ (R-AL) primary interests was the status of the U.S. relative to international competitors in the research of artificial photosynthesis, synchrotron light sources and high temperature superconductors. Likewise, Rep. Daniel Lipinski (D-IL), a proponent of laboratory facility upgrades, inquired how these upgrades would give the U.S. an advantage.
All panelists agreed that increased government research support is necessary for the U.S. to maintain international leadership, and to facilitate the transition of these technologies from basic research to industry.
Sources: California Institute of Technology, Office of Science, Oak Ridge National Laboratory, Berkeley Lab, Energy Storage Association
Council of Economic Advisers releases report on coal leasing on federal lands
June 22, 2016
The White House Council of Economic Advisers (CEA) released a report entitled, “The Economics of Coal Leasing on Federal Lands: Ensuring a Fair Return to Taxpayers”. This report is part of a larger ongoing review of the federal coal leasing program – the first such review since the 1980s. The Bureau of Land Management, in the Department of the Interior, administers the program.
The report asserted that the program’s structure has distorted the coal market, keeping the price of most federal coal – and resulting government revenues – artificially and unnecessarily low.
Three model scenarios were considered for increasing royalty rates to ensure a fair return to the taxpayer. These scenarios based royalty terms for federal coal leases on (1) nearby regional coal prices; (2) nationwide coal prices; or (3) natural gas prices. In all scenarios, models showed that annual state and federal revenues would increase; federal coal production would decrease slightly; and non-federal coal production would increase slightly as it became more competitive.
Overall, the report found that increasing royalty payments would be an economically viable way to ensure a fair return to the taxpayer for this use of public lands. The report also noted that the unpriced social costs of coal mining (emissions of carbon dioxide, methane, sulfur, and mercury, and local environmental effects) are very high, and that an increase in royalties would somewhat alleviate these by decreasing overall U.S. coal production by 1 to 3 percent.
On the same day, Resources for the Future (RFF) hosted a seminar featuring details and discussion of this report. A recorded video of the seminar is available on the RFF website.
Sources: Council of Economic Advisers, Resources for the Future
U.S. District Court rejects BLM authority to regulate fracking on public and tribal lands
June 24, 2016
The U.S. District Court for Wyoming ruled that the Department of the Interior (DOI) and Bureau of Land Management (BLM) have no authority to regulate hydraulic fracturing, commonly known as “fracking,” on public and tribal lands.
In 2015, Colorado, North Dakota, Utah, and Wyoming, as well as two industry groups and the Ute Indian Tribe sued DOI and BLM for attempting to pass a rule setting new requirements for wellbore construction, chemical disclosures, and wastewater management for fracking on public and tribal lands. The rule would have also required operators to get BLM approval before fracking. The rule had received over 1.4 million public comments since its first draft in 2012, and had been stalled in litigation since its release in March 2015.
The court issued its final ruling this June, in a move the appellants celebrated as a victory against federal agencies proposing regulations with “self-proclaimed prior regulatory authority.” The decision is expected to be fiercely challenged by environmental groups, the DOI, and the BLM in the 10th U.S. Circuit Court of Appeals as early as this fall. The groups claim the ruling was legally flawed and will be detrimental to public and tribal lands.
Sources: E&E Daily, Federal Register, U.S. District Court of Wyoming