Posts filed under Policy and Legislation

Advocating for America’s Power: Week 3

I am back again, energy enthusiasts, and as promised have brought more information. I took a look last week at international reactions to EPA’s new carbon regulations, with a specific focus on Canada and Australia. This week my fellow intern, Joe Singh, and I analyze another area of the globe. Joe has a background in economic policy analysis and is helping ACCCE research the global coal market. As I mentioned last week, EPA’s costly new plan would have virtually no effect on climate change, with less than 1 percent in carbon reductions. The Obama Administration understands this, but believes that if they lead by example carbon-emitting nations like China and India will follow. In his research, Joe points out that assuming these nations will follow our lead is contrary to the growing coal consumption in both these nations.

China, the world’s largest coal consumer with one of the fastest growing economies, has said it will set emission limits. Make no mistake, however, China is not exactly following the administration’s approach. The EPA set state by state targets that would reduce carbon dioxide (CO2) emissions from the electric sector by 30 percent by 2030. China, on the other hand, has instead adopted an emissions intensity target. This emissions intensity target would limit the amount of COemitted for every dollar of economic activity in China, on average. The reason for using emissions intensity rather than absolute emissions is to allow economic growth, which China wishes to maintain. In Joe’s research, he cites an Australian National University report which found that if China maintains its economic growth, even with a significant emissions intensity target in place, COemissions will still grow. Put simply, even if China can meet the targets it sets, its continued economic growth will still result in increased COemissions – not less.

The results of future international negotiations on climate change are uncertain. One can look to the past, however, to provide clues for potential future actions.  In two recent international climate negotiations, agreements could not be reached because of defiance conflict between the developing and developed world. The United States did not ratify the Kyoto Protocol, because it exempted developing nations, like China, from reducing their emissions.  Chinese officials claimed that it was “unfair to expect impoverished people in…developing countries to cut back on energy consumption, which is not even sufficient to meet their basic living conditions.”  China’s resistance to a binding agreement arose again during the Copenhagen conference, which occurred during Obama’s first term in 2009.  In a study available on EPA’s website, Western officials blamed the failure of this conference on China’s opposition to binding global emissions reductions.  This opposition was traced once again to China’s view that emissions reductions are robbing developing nations of their right to industrialize. Considering this climate impasse happened only five years ago, it’s unclear if Chinese willingness to reach a binding agreement has changed.  All of this makes me wonder whether the administration’s plan to reduce COemissions will be enough to overcome a history of failed climate negotiations with China.


EPA Carbon Rule Based on Questionable Calculations of Energy Demand

Lately, we’ve been taking a hard look at some claims made in the roll-out of the Environmental Protection Agency’s carbon regulation for existing power plants. An Opinion Editorial I penned was featured in The Hill today, refuting six unsubstantiated claims and questionable facts. We’ve seen the misleading claims and want to make sure the reality of America’s energy situation doesn’t fall to the wayside. A recent Wall Street Journal article, “What’s the Real Cost of the EPA’s Emissions Cap?” demonstrates the faulty logic and fuzzy math employed by the Environmental Protection Agency (EPA) in setting standards for its greenhouse gas rule.

EPA based its calculations on one fundamentally erroneous assumption: that Americans will use less energy in the future. Conventional wisdom, not to mention the government’s own data, however, tells a very different story. As the piece says, the federal Energy Information Administration (EIA) recently forecast that electricity demand will, in fact, grow 0.9% every year until 2040.

But even if EIA’s data isn’t convincing on its own, conventional wisdom reaffirms that EPA’s postulation falls flat on its face. Simply put, the world in which we live demands more energy. Every day, Americans are using more mobile devices; more electric cars are driving on U.S. roads; and our population continues to rise. And it is low-cost, reliable baseload power from coal that supports economic and societal growth.

EPA is hedging its bets on largely unproven energy efficiency programs that pose enormous cost and implementation challenges. States that have experimented with such measures have yielded, on the whole, less-than-stellar results. The agency’s proposal sets pie-in-the-sky expectations for these programs that, in turn, inflate calculations across the board and set the stage for wholly unrealistic and unachievable standards.

While EPA’s rule clearly misses the mark on many counts, I fear that troubling revelations such as EPA’s calculating method will be unearthed as we more fully probe the measure. EPA needs to get back to reality, readjust its standards using more grounded data and stop misleading the American people about the true costs of its rule.

 


EPA’s Carbon Emissions Rule Missed the Mark for Americans

Yesterday, Environmental Protection Agency (EPA) Administrator Gina McCarthy personally announced the long-awaited proposed rule to reduce emissions from America’s existing power plants. This complex rule has a preamble alone of over 600 pages. We are working our way through the text of the regulation, but a few things became clear from the start.

If this rule is allowed to go into effect, the administration for all intents and purposes, is creating America’s next energy crisis. Coal is one of America’s most vital fuel sources, currently providing nearly 40 percent of our nation’s power. It is also far more stable in pricing and supply than other sources. If we turn away from this natural resource now, we will be ill-prepared for America’s energy needs in the coming years. This could lead to rolling brownouts and blackouts, not to mention volatile price spikes for ratepayers year-round.

The expansive, expensive regulatory agenda put forward by EPA has already become a burden for American consumers and our nation’s economy. Contrary to what EPA tells us, it will be costly to our big cities and our small towns, as all communities grapple with less base load power fueling our electricity grid. It will be costly to our low- and middle-income families for whom electricity bills make up a significant amount of their monthly budgets already. They will continue to see those rates rise. And it will be costly to the hundreds of thousands of Americans who will lose their jobs when these regulations go into effect.

Reliable, low-cost power drives America’s economy, creating hundreds of thousands of jobs both directly and indirectly tied to the power generation industry. The total cost of the cumulative lost jobs and unemployed American workers are a huge price to pay for negligible environmental improvements.  A recent paper released by ACCCE finds that the climate benefits of reducing carbon from America’s coal fleet are negligible. By 2050, eliminating our coal-based power plants would result in only 1% reduction in atmospheric CO2 concentration.

As I said yesterday, President Obama and EPA have chosen political expediency over practical reality as they unveiled energy standards devoid of commonsense. I look forward to weighing in on this proposed rule over the coming months and hope we can craft a final rule that makes far more sense for American than the one that has been proposed.

 


CO2-Enhanced Oil Recovery: What it is and why it’s important.

Carbon Capture and Storage, or CCS, is an important technology for reducing the greenhouse gas emissions from coal-fueled power plants and other industrial sources.  CCS is a three part process wherein, CO2, a greenhouse gas, is captured from a plant’s emissions stream, transported in a pipeline, and stored in the subsurface.  While the technology holds significant promise, it is many years from being commercially available.  As the U.S. Department of Energy (DOE) and its industrial partners undertake efforts to demonstrate the technology, most projects look to CO2 enhanced oil recovery (CO2-EOR) to store their captured CO2.

Basics of CO2-EOR:

Some oilfields that have gone through conventional oil production are amenable to processes that produce additional oil.  One such process is the injection of CO2 into the depleted oilfield.  Injected CO2 helps produce additional oil by raising the pressures of the formation which holds the oil and by reacting with the oil, making it easier to move.  When the oil and CO2 are produced at the surface, the CO2 is separated from the oil and re-injected into the formation.  Some CO2 remains in the subsurface permanently.  CO2-EOR operations tend to operate like closed-loop system, with CO2 either remaining in the subsurface, or being re-injected instead of being released into the atmosphere.  The EOR industry has several decades of experience conducting CO2-EOR operations with CO2 from naturally occurring sources.

Potential for CO2-EOR:

As part of the DOE’s effort to develop CCS technology, it published the fourth updated of their “United States Carbon Utilization and Storage Atlas” (Atlas).  The Atlas attempts to quantify the amount of CO2 storage resource in various geologies across the U.S. and Western Canada.  DOE estimates that nearly 250 billion tons of CO2 can be stored in depleted oil and gas formations.  This estimate does not account for economic or regulatory barriers that will limit the number of fields amenable to CO2-EOR.  It is worth noting that around two thirds of this potential is in the southwestern United States.

Regulatory Framework of CO2-EOR:

All injections in the US are regulated under the Safe Drinking Water Act.  Pursuant to that law, EPA has promulgated regulations for CO2-EOR operations through their Underground Injection Control (UIC) program.  Responsibility for implementing these regulations, commonly referred to as “Class II” regulations, has been delegated to state agencies in most instances.  These regulations cover construction and operation conditions, as well as other aspects of CO2-EOR operations.  Additional regulation of CO2-EOR operations is part of EPA’s broader effort to quantify CO2 emissions across the economy, the Mandatory Reporting Rule.  For each sector of the economy, EPA has developed a different subpart.  For CO2-EOR, EPA has promulgated the tiered approach of subparts RR and UU.  For conventional CO2-EOR operations, the less rigorous subpart UU applies.  Subpart RR requires more robust monitoring for those operators that are required to provide additional monitoring data because they seek to permanently store CO2.

Importance of EOR in Demonstrating CCS:

CO2-EOR is playing an important role in the demonstration of CCS technology at coal-fueled power plants.  DOE is supporting five CCS demonstration projects at coal-fueled power plants.  Of those five projects, four plan to integrate CO2-EOR as the storage component of the project, including the only project that is under construction.  The reason is simple, project developers can be paid by EOR operators for the CO2 that they generate.  This economic benefit is important to the technology development because it can begin to reduce the overall cost of implementing a CCS project.  The revenue from CO2-EOR, however, is not enough to account for the approximately $1 billion cost of installing CCS on a single 600 MW coal-fueled power plant.  In combination with grants and tax incentives, CO2-EOR plays an significant role in demonstrating this important technology.

 

Visit www.AmericasPower.org to learn more about clean coal technology and how coal is fueling the future of American energy.


Tomorrow: Let Your Voice Be Heard on the Future of Coal

Tomorrow, Friday May 9th, is the last and final day that the Environmental Protection Agency (EPA) is accepting comments on its proposed New Source Performance Standards (NSPS) for coal- and gas-fueled power plants. Once the comment period ends, the debate will certainly continue on this stringent and unprecedented regulation; but the end of the comment period also means that EPA will begin writing its final rule, making your input during the home stretch all the more critical.

In September 2013, the proposed rule for new coal-based power plants was released to cheers from environmentalists and extreme concern on the part of the coal industry, advocates of clean coal technology and consumers. NSPS, as proposed, will place a de facto ban on any new coal-fueled power plant in the United States, effectively halting development of cleaner coal technologies in their tracks. It will also hamper America’s leadership on building advanced new power plants that use our nation’s most abundant energy resource, coal, to generate low-cost electricity.

Since the rule’s initial release, we have seen an outpouring of support from a broad array of stakeholders across the nation. Consumers and businesses know that advanced coal-based power plants are critical to our nation’s energy supply now and will continue to hold the key to a secure energy future.

Advocates for cleaner, more advanced technologies to limit emissions from coal-based power plants have also lamented the rule’s stringent guidelines that require the use of a technology that is far from ready. The regulation would require new power plants to use carbon capture and storage, a process that is in the early stages of development and has not been put to use on a commercial scale. We are continuing to learn about and develop this technology, but experts and industry leaders agree it is not yet ready for “primetime.”

And to make matters worse, we are bracing for the next round of EPA regulations for existing coal-based power plants, set to be released on or before June 1st. Just yesterday, the National Mining Association released an eye-opening poll, which found that 76 percent of Americans are at least somewhat concerned that new EPA regulations will lead directly to higher energy costs.

Coal is our nation’s most affordable, reliable source of electricity, and we must ensure that overreaching EPA regulations do not rob us of this valuable resource, costing us all higher electricity bills, lost jobs and unreliable power in the process. That is why it is so important that we make our voices heard over the next 36 hours before EPA closes the door on discussion of this important issue.

Visit www.EPARegsCostJobs.com today to join us and tell the EPA to protect our economic and energy future.


New Study Reveals Billions in Costs, Lost Jobs Under NRDC’s Carbon Regulation Proposal

This week, we released a detailed economic analysis of the Natural Resource Defense Council’s (NRDC) carbon regulation proposal, first put forth by NRDC in December 2012 and updated last week.

The newest version of NRDC’s proposal ludicrously asserts that its plan to reduce CO2 emissions from existing power plants would carry no costs at all and would actually spur numerous benefits. Worse yet, the NRDC proposal recommends a system-based approach (also known as “outside-the-fence”) that is essentially a cap-and-trade program. Our analysis, performed by leading research firm the National Economic Research Associates (NERA), clearly demonstrates that NRDC left out some critical facts including the $13 to $17 billion-per-year price tag for consumers and the millions of jobs America stands to lose under its proposed policy.

Our economic analysis further projects the NRDC proposal would cost consumers a total of $116 to $151 billion during the period of 2018-2033. And, retail electricity prices would increase by double digit percentages in as many as 29 states.

Over this same time period, net job losses could total as many as 2.85 million. NRDC projects net job gains in the thousands, but only in the years 2016 and 2020.

NRDC also asserts that gas-fired generation would increase by 2 percent. Our economic analysis found that natural gas-fired generation would increase by 8-16 percent to keep up with demand, while rates would simultaneously increase by as much as 16 percent.

The results of our economic analysis reveal that the NRDC proposal is, in fact, all pain with very little gain. And the proposal’s failure to mention the many potential consequences, like cost increases and job losses, suggests that the group is ignoring reality in order to drum up support for its impractical plan. A more reasonable approach to greenhouse gas regulations would offer more flexibility and would focus on measures that can be taken at power plants to reduce their impact, while maintaining dependable, low-cost, coal-based electricity.

Here at America’s Power, we support an “inside-the-fence,” source-based approach that bases emissions reductions on measures taken at existing power plants. This would include many improvements power plants can make to their facilities that improve efficiency, remove emissions and more. Being able to implement measures at individual generating units is a common sense approach to working with utilities and achieving significant emissions reductions and environmental improvements. Let’s work together to craft a solution that works for our consumers and for America’s energy future.

Join us in asking the EPA to set common sense policies and to protect American jobs today.


Confirming What We Already Know

If you read the Wall Street Journal yesterday, you probably noticed a full-page ad featuring EPA Administrator Gina McCarthy telling Americans to “suck it up” over skyrocketing electricity bills. While we agree, skyrocketing bills are coming your way, that ad didn’t come from us. It came from a group called Environmental Policy Alliance who launched a new site epafacts.com yesterday to call attention to little issues at EPA like transparency and secret science, as well as what the true cost Americans will bear as a result of its overreaching regulations.

The Environmental Policy Alliance is not alone in wanting to know more about what goes on behind the closed doors at EPA. In fact, the House Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations has weighed-in on the matter and is opening a full investigation on the EPA decision-making process relating to the agency’s consideration of carbon capture and storage (CCS) technologies as it relates to creating greenhouse gas emission standards for new power plants. The letter to Administrator McCarthy specifically mentions how section 111 of the Clean Air Act authorizes the EPA to impose emission standards using carbon capture technologies that have been “adequately demonstrated” which does not legally include those that are federally funded. A plant that we are quite familiar with, the Kemper County facility in Mississippi, is federally funded, has the CCS technology and is a great starting point but is not ready to be duplicated for many reasons.

The House Energy investigation as well as the site epafacts.com confirms what we already know: EPA’s regulations are far too stringent and will be destructive to our way of life. By continuing on their rampage of taking coal out of the mix, energy costs for families will continue to rise, forcing some to make the unbearable choice to keep the lights on or put food on the table. In addition, coal-fired plants around the country are facing retirements that will result in jobs lost and an unreliable grid that can’t deliver power when it’s needed most.   Thankfully, our legislators are starting to listen, and hopefully will put a stop to EPA’s overzealous regulations which ultimately will inflict much pain without any real gain. If you haven’t already, visit eparegscostjobs.com and send a comment to McCarthy’s EPA and stand up for affordable, reliable power and American jobs.


ACCCE Talks Energy Policy with Senator Heidi Heitkamp

Following the Coal Technology Symposium on Capitol Hill last week, we sat down with Senator Heidi Heitkamp (D-ND) to talk about North Dakota’s and America’s energy future.

Senator Heitkamp knows better than most the need for a diverse fuel portfolio in America’s energy sector. After years of experience working within the energy industry, she now reaches across party lines on Capitol Hill to pursue common sense energy policies. Senator Heitkamp understands that coal-fueled electricity provides reliable, affordable power and can support America’s energy demands while reducing our carbon footprint.

“We know we can deploy clean coal,” Senator Heitkamp told us. “People ask me all the time, is there such a thing? And I say, absolutely.”

The United States is currently the global leader in clean coal technology innovation.  The Environmental Protection Agency’s (EPA) proposed New Source Performance Standards (NSPS) for coal-fueled power plants, however, put America’s innovation leadership at serious risk. As currently devised, NSPS will all but ensure no new coal plant is ever built in America resulting in a halt in innovation in clean coal technologies. Other countries like China and India will be all too eager to step in and continue to advance these technologies which will bring economic benefits in the trillions of dollars to the leader of the innovation race.

Senator Heitkamp believes that EPA and energy policy makers should work with America’s coal industry to develop less stringent regulations that allow room for extensive research and development of clean coal technologies right here at home.

“When you shut down the opportunity for coal long-term, or you send the wrong signals, you’re going to shut down the investment,” Senator Heitkamp added.

In 2012, North Dakota depended on coal-fueled power to generate 78 percent of the state’s electricity. Local businesses and families alike rely on the affordable power from coal to power their communities reliably, even during North Dakota’s harsh winters. And, this winter in particular, coal-fueled power plants were critical in meeting electricity demands across the country during the coldest days.

If EPA continues to pursue regulations that will shut down coal-fueled plants or place a de facto ban on future construction, local communities will be hit the hardest. Thankfully, Senator Heitkamp is standing up for North Dakota communities that depend on coal-fired power for electricity, job growth, and the numerous benefits coal offers local economies.

 

Take action today and join the fight to protect low-cost energy from coal and support the development of clean coal technology.