Category: Regulation and Risks

Oregon & EPA Launch Aggressive Moves Against Coal

Oregon is now one of the first states to announce that it plans to officially wean itself off coal consumption. Governor Kate Brown signed a bill that prohibits the state’s utilities from purchasing coal-fired power after 2030. The bill is largely symbolic, since Oregon is not a coal producing state and consumes very little coal. In fact, Oregon produces and consumes far more hydroelectric energy than coal and natural gas.

  • The level of coal consumption has been steadily rising in Oregon.
  • Coal consumption is only 3 percent of all fossil fuel consumption.
  • Coal consumption is only 2 percent of all fuel and renewable energy consumption.
  • Hydroelectric power accounts for close to 35 to 40 percent of all of Oregon’s energy consumption.

In addition to Oregon’s anti-coal move, the Environmental Protection Agency (EPA) announced that 11 states have failed to submit plans to reduce sulfur dioxide air pollution. The EPA says the states have not reduced their emissions enough to meet federal limits or submitted plans to the EPA outlining how they will meet an October 2018 deadline for meeting standards.

Both of these efforts will more than likely have very little effect. Oregon is not much of a coal consuming state and the EPA’s deadline comes after the next federal administration is sworn into office.

Mar 14, 2016 | 5 comments | by

Utah Joins Oklahoma in Rejecting Clean Power Plan

The state of Utah has now joined Oklahoma in outright rejecting complying with the Clean Power Plan after the Supreme Court halted the regulations earlier in February. Utah was already a member of a coalition of 30 states challenging the EPA’s Clean Power Plan in the D.C. Circuit Court of Appeals. Under the plan, all states are required to come up with their own carbon emission reduction goals or have federal goals imposed on the state. It directs states to lower their greenhouse gas emissions by a third by 2030, specifically targeting the coal industry. An outright rejection may be viewed as the state is unwilling to come up with their own goals, thereby requiring the federal government to interfere in each state’s coal industry and electricity production.

Groups suing the agency say is an impossible goal that will raise energy prices and raise the potential for rolling blackouts. In addition, a study by NERA Economic Consulting concluded that:

The EPA has severely underestimated the cost of compliance with its regulation of carbon dioxide from power plants, and by doing so it is trying to make Americans believe that the government can force the electric generating sector to eliminate a massive amount of low-cost coal-fired generation for little or relatively no cost. U.S. consumers of electricity will pay for prematurely retiring coal-fired plants through substantially higher electricity prices. Because EPA has set emission reduction targets by state, the impact of the higher costs will not be borne equally, but 40 states (out of 47 affected) could see average electricity prices rise by 10 percent or more and 27 states could see average electricity prices increase 20 percent or more.

With the recent Supreme Court decision to stay the implementation of the Clean Power Plan, other states say they will continue to work on complying with the plan. EPA senior officials have said they will meet with any states that wish to voluntarily continue working on the regulations.

 

Mar 02, 2016 | 1 comment | by

Supreme Court Ruling Temporarily Helps Coal Industry

The Supreme Courts’ recent ruling temporarily holds off increased regulations on the coal industry. The administration’s stricter coal plant rules, which call for a phased-in 30-percent reduction in emissions by 2030 will be based on a state-by-state voluntary basis.

According to Environmental Protection Agency (EPA):

We will continue to provide tools and outreach. But we clearly understand that the courts will be winding through the process of looking at that rule. The [Supreme Court’s ruling] means that it’s going to take a little longer for that to happen. We will respect that, but in the meantime we’re going to continue to address greenhouse gases with the authorities under the Clean Air Act that are available to us today.

The Clean Power Plan requires very strict environmental controls to limit emissions from power plants. Twenty-seven states and a group of industry advocacy organizations challenged the new plan at the Supreme Court. The coalition of states and industry asked the Supreme Court to allow them to hold off on implementing the Clean Power Plan until after the Supreme Court has ruled on its legality. The Supreme Court granted a stay on the Clean Power Plan, giving hope, for now, to the coal industry and its allies.

Feb 17, 2016 | 2 comments | by

Supreme Court Votes Against Clean Air Act

Yesterday, the Supreme Court vote dealt a major blow to President Obama and his Environmental Protection Agency’s regulation of carbon dioxide emissions from power plants under the Clean Air Act. The Clean Air Act requires EPA to set national ambient air quality standards (NAAQS) for ozone and five other pollutants considered harmful to public health and the environment. However, the new regulation would have severe consequences, as emphasized here by the Supreme Court vote.

In addition, written testimony, related to this issue, by the NCPA to the Environmental Protection Agency last year included:

The EPA’s proposed regulation ― which would lower the threshold of ground-level ozone pollution ― has been characterized as “the most expensive regulation ever.”

President Obama nixed a similar version of this rule in 2011, claiming that he was acting to “underscore the importance of reducing regulatory burdens and regulatory uncertainty.” Yet many are wondering what happened to President Obama’s commitment to “reducing regulatory burdens” in the face of the EPA’s new proposal.

The proposal itself would lower the existing acceptable ozone standard from 75 parts per billion (ppb) to somewhere between 65 and 70 ppb ― though the EPA’s science advisers would rather see limits closer to 60 ppb. According to the EPA and environmentalist groups, lowering the amount of acceptable ozone would increase public health, reduce illness and premature deaths, and lead to $21.2-$42.1 billion in benefits, contrasted with $16.6 billion in costs.

However, a recent study by the National Association of Manufacturers found that the new ozone regulation could have a very high cost in jobs and to the economy. The study found that a stricter new ozone regulation could:

  • Reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040.
  • Result in 2.9 million fewer jobs per year on average through 2040.
  • Cost the average U.S. household $1,570 per year.
  • Increase natural gas and electricity costs for manufacturers and households across the country.

The EPA must make a final decision on the rule by October 1, 2015. While many argue that it’s too early to truly estimate the costs of the proposed regulation, the initial forecasts put millions of jobs, billions of dollars in investment, and trillions of dollars of economic output at risk.

Heavy regulations like this one cost too many jobs and wreck the economy. Businesses will choose to go to other countries with friendlier business environments, further negatively impacting our economy in the long run. We must look at the bigger picture and see the other side of the issue and understand that more harm than good is achieved through many existing regulations like this new one.

A domestic energy boom means nothing if the economy cannot rise with it — over a trillion dollars of estimated regulatory burden directly burdens job markets and wage growth. The American voters are clear: the economy and jobs remains their top concern; elected officials need to begin representing their constituents.

Feb 10, 2016 | 1 comment | by

Beneficiary of Billion Dollar Green Fuels Program Files for Creditor Protection

Today, the Environmental Protection Agency (EPA) released its final ruling on blend volumes of renewable fuels for the calendar years 2014, 2015 and 2016. The challenge for the EPA is the lack of advanced biofuels to meet obligated minimum levels. The Energy Independence and Security Act of 2007 (EISA), mandates an increasing blend of renewable products into our domestic fuel supply. The Renewable Fuel Standards (RFS) provisions require non-food based cellulosic biofuels to be increasingly introduced into commercial gasoline. Called “2nd generation”, cellulosic ethanol, unlike 1st generation corn-ethanol, is derived from wood chips, grasses, corn cobs and other biological material. The problem is the congressionally mandated product is simply nonexistent.

Industry discussions, analytical reviews, and organizational rationalizations toss out phrases such as immature technology, steep learning curve, and of course, more federal funding. The issue is complicated, yet, not complicated. Producing 1st generation ethanol is much simpler than taking a cellulosic material and transforming it into a viable fuel source suitable for commercial use. Of course, we all knew this going into the program. Unfortunately, after pouring billions of dollars into this boondoggle we have done nothing more than successfully proven cellulosic ethanol is not a practical endeavor.

Even more so, with one of only four cellulosic ethanol production plants possibly set to shut its doors, Abengoa, a Spain-based sustainable energy development company, has filed for creditor protection one day before Thanksgiving, and less than a week before the EPA is expected to release the blend levels of renewable fuels. After the U.S. taxpayers invested billions of dollars towards the building of a massive biofuel facility, not to mention the world’s largest solar farm and wind farms, the company is teetering like a giant, green energy Jenga tower.

Abengoa is an international, mega-corporation founded in 1941. Its near certain investment losses to taxpayers’ dwarfs those of the Solyndra fiasco. Aside from perks and discounts for federal land use, employment credits and special tax incentives a quick search discloses only some of the federal dollars pumped into Abengoa and yet we still have no 2nd stage biofuels to meet program goals.

  • $1.45 billion loan guarantee to Abengoa Solar, Inc. for construction and the start-up of solar energy plant in Solana, AZ — 2010
  • $1.2 billion loan guarantee to Mohave Solar, LLC. for the construction & start-up of Mohave Solar Project plant in San Bernardino County, CA. — 2011
  • $133.9 million loan guarantee for biofuel plant Hugoton, KS — Department of Energy – 2011
  • $97 million federal grant, Hugoton, KS — Department of Energy — 2011
  • $4.03 million in grants and federal contracts for 2015 alone

Beyond the amounts presented here, millions more U.S. dollars have rolled into Abengoa and its many subsidiaries. With its announcement in Spain yesterday and today being Thanksgiving, American stock values for the company have not yet reacted. The protection filing gives the company four months to find a solution before creditors can force a full bankruptcy. But, many employees of U.S.-based projects may still be unaware.

It is likely by the end of next week, Abengoa will be a household name. The failure of Abengoa, along with the failure of the Renewable Fuels Standard program, will hit jobs, stock values, the banks and the federal budget. All this, and we still have no cellulosic ethanol to meet the mandates of the Renewable Fuels Standard.

Nov 30, 2015 | 5 comments | by

New NERA Study Details Economic Impact of Clean Power Plan

A new study by NERA Economic Consulting explains the economic impact from increased regulations from the federal government’s Clean Power Plan (CCP) in great detail. The CCP’s goal is to reduce carbon emissions from new and existing fossil-fueled power plants in the United States. States have the responsibility to meet the CPP goals. If they fail to come up with a carbon reduction plan or submit a plan that does not comply with CPP, the federal government steps in with their plan to meet the CPP goals. CPP goals include:

  • All compliance scenarios lead to large reductions in average CO2 emissions.
  • Reductions range from 19% to 21%.
  • By 2031, annual emissions are expected to be 36% to 37% lower than in 2005.

NERA estimates that the impact of the CPP on the energy sector, electricity rates and to the economy include:

  • Total energy sector expenditure from 2022 through 2033 increases range from $220 to $292 billion.
  • Annual average expenditures increase between $29 and $39 billion each year.
  • Average annual U.S. retail electricity rate increases range from 11%/year to 14%/year over the same time period.
  • Losses to U.S. consumers range from $64 billion to $79 billion on a present value basis over the same time period.

State-level average electricity price increases demonstrate that many states could experience significant price increases:

  • 40 states could have average retail electricity price increases of 10% or more.
  • 17 states could have average retail electricity price increases of 20% or more.
  • 10 states could have average retail electricity price increases of 30% or more.

The highest annual increase in retail rates relative to the baseline also shows that many states could experience periods of significant price increases:

  • 41 states could have “peak” retail electricity price increases of 10% or more.
  • 28 states could have “peak” retail electricity price increases of 20% or more.
  • 7 states could have “peak” retail electricity price increases of 40% or more.
Nov 18, 2015 | 2 comments | by

USDA and States to Spend $210 Million on Fuel Pumps

On May 29th, the United States Department of Agriculture (USDA) announced $100 million in grants offered through their Biofuel Infrastructure Partnership (BIP) program. According to Secretary of Agriculture Tom Vilsack, the move is to make renewable fuel options more available to American consumers. The program is a 1:1 partnership with states to build fueling stations and purchase blender pumps for E15 and higher. The preliminary spending tally estimates $210 million for 5,000 pumps at 1,400 fueling stations in 21 states.

This latest money toss is yet another multi-million dollar outlay resulting from the Renewable Fuel Standard (RFS), as mandated by the 2007 Energy Independence and Security Act (EISA). The mandate requires gasoline to be blended with renewable fuel sources at incremental increasing levels.

The original RFS mandated level was 10% ethanol or E-10. The next mandated level, 15% ethanol or E-15, is a blend level the EPA labels to be used only in Flex-fuel passenger vehicles, model years 2001 and newer. The label goes on to state, “Do not use in other vehicles, boats, or gasoline-powered equipment. It may cause damage and is prohibited by Federal law”. Still, the EPA wants to make even higher blend levels available, even if that means taxpayers are to fund the necessary infrastructure.

Unlike the traditional pumps where a consumer makes the fuel choice of diesel, unleaded, or octane levels, the government has decided to fund blender pumps offering a choice between ethanol or even more ethanol. Even though the overwhelming preference of consumers, environmentalist, economists, most ag sectors and automakers is E-0, an option not found on the new pumps.

Though extensive studies with science-based evidence prove the damage ethanol contributes to the environment and engines, along with the real damage to a market-based economy, federal agencies continue to dig deeper into the ethanol quagmire. Even the Government Accountability Office (GAO) found the RFS costs outweighed its benefits and criticized the EPA’s economic analysis of the RFS as intentionally misleading. In a 2014 report to Congress, the GAO exposed the agency’s false reporting of the program’s costs stating, “EPA estimated net benefits of the mandated volumes ranging from $13 to $26 billion.” However, the EPA did not include the infrastructure costs (such as this latest $100 million) in their calculations. An expense the EPA estimates to total an astounding $90.5 billion.

 

Nov 04, 2015 | 4 comments | by

Clean Power Plan Opposition Grows

A coalition of 24 states and a power company are suing to stop the Obama administration’s Clean Power Plan (CPP), calling it an unlawful federal bid to control state power grids.

As part of the lawsuit, the states seek to place a hold on the Clean Power Plan’s deadlines for meeting its carbon emission goals, which supporters have described as necessary to improve air quality but foes have criticized as arbitrary and unrealistically strict.

In addition to the lawsuit by the states, pro-business groups have also joined the fight against the Clean power Plan that mandates a massive reduction in carbon emissions in the next 15 years, arguing that it will jack up energy costs and slash jobs without making a dent in greenhouse gases.

U.S. Chamber of Commerce and 14 other business groups filed a lawsuit against the Environmental Protection Agency. Their lawsuit:

  • Claims the EPA has overstepped its authority by attempting a takeover of state power plants.
  • Seeks a hold on the rule’s implementation pending the legal challenge.
  • Parallels the lawsuit filed same day by 24 states.

The Rule requires a fundamental restructuring of the power sector, compelling States, utilities and suppliers to adopt EPA’s preferred sources of power and fuel and to redesign their electricity infrastructure in the process.

A preliminary analysis of the Clean Power Plan issued in October, 2014 by the NERA economic consulting calculated that the CPP could boost retail electricity prices 12 percent to 17 percent.

The Clean Power Plan would effectively shut down coal-fired power plants, which provide inexpensive and reliable electricity but cannot reduce their emissions to the required levels using current technology.

Thousands of businesses will stop providing support services to coal-fired plants and coal mines. Many coal mines will have to reduce operations or close entirely, laying off numerous employees in the process.

Oct 28, 2015 | 1 comment | by

OIG announces probe of EPA’s Reporting Practices on Biofuels Impact

The Office of Inspector General (OIG) has announced a probe into the Environmental Protection Agency’s (EPA) adherence to reporting requirements regarding biofuel’s impact on air quality. Under the Renewable Fuel Standards (RFS), the EPA is to submit to Congress a science-based triennial report on the effect of the controversial program.

As a result of the Energy Independence and Security Act of 2007 (EISA), changes were made to the Renewable Fuel Standard program (RFS), the program that mandates the blending of ethanol with petroleum-based fuels for domestic use. The law directs the Environmental Protection Agency (EPA) to analyze lifecycle greenhouse gas (GHG) emissions from the increased use of renewable fuels in comparison with petroleum-based fuels.

The Clean Air Act (CAA), defines the term “lifecycle greenhouse gas emissions” as the GHG impact from all emissions including land use changes and other activities. The law requires EPA’s report to include,

“…all stages of production of fuel and feedstock and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.”

According to the OIG’s announcement, the goal of the review is to determine the following;

  1. Whether the EPA has complied with the law on reporting requirements of the Clean Air Act.
  2. If the EPA followed a mandate to amend its previous biofuel’s environmental impact reports to reflect the findings of a 2011 study by the National Academy of Sciences.
  3. If the EPA used the National Academy of Sciences data in subsequent reports.

In preparation for the review the OIG has asked EPA to provide:

  • Triennial Reports to Congress issued after the EPA’s first report in 2011, and any other reports to Congress on the environmental and resource conservation impacts of the RFS program.
  • RFS Antibacksliding Analysis required under Section 211(v) of the Clean Air Act.
  • Documentation of the EPA’s response to the 2011 National Academy of Sciences study and its recommendations.
  • Documented changes or planned future modifications to the RFS regulatory impact analysis or lifecycle analysis based on findings/recommendations from the 2011 National Academy of Sciences study, Triennial Reports to Congress and/or Antibacksliding Analysis (or documentation explaining why no changes were necessary).

The OIG’s investigation comes at a time when the call to cut corn-based ethanol is growing louder. Interestingly, the announcement came one day after the University of Tennessee released results of a comprehensive 10-year review which calls for a restructuring of the RFS program. The Tennessee study concludes, “We have had 10 years under the RFS and a commercially viable, next-generation biofuels technology has not emerged.”

Oct 26, 2015 | Leave a Comment | by

Congressional Request leads to Scathing Review of the EPA

Businesses, landowners and farmers know the feeling of dread that comes with hearing the words “not in compliance” from the U.S. Environmental Protection Agency (EPA). The EPA has earned the reputation of delivering heavy-handed enforcement actions and exorbitant punitive penalties. The agency’s authoritarian over-reach is near legendary, earning them the moniker “rogue agency”. Even the U.S. Supreme Court gave the EPA a dressing-down stating they commonly strong-arm regulated parties into “voluntary compliance” without the opportunity for judicial review. The EPA has taken a firm stance that the rules are published, and therefore, noncompliance is not excusable.

Yet, a congressionally requested federal review of the EPA found the agency regularly ignores rules that pertain to its own operating procedures as dictated by law. In fact, a Government Accountability Office (GAO) report says the EPA disregards the law in its reporting to congressional inquiries. According to the GAO, the EPA’s Science Advisory Board (SAB) is not in compliance with the long-standing Environmental Research, Development and Demonstration Authorization Act of 1978 (ERDDAA). As well, the agency’s Clean Air Scientific Advisory Committee (CASAC) fails to follow legal requirements of the Clean Air Act.

The GAO investigation revealed agency staffers routinely judge whether a congressional request is a policy driven question or requires a science-based response. As a result, answers to lawmaker’s queries often have no scientific basis in fact. Also, the agency failed to perform regular five-year impact reviews of national ambient air quality standards (NAAQS). Under the Clean Air Act, CASAC is to review and report “any adverse public health, welfare, social, economic, or energy effects” resulting from regulations and strategies of NAAQS. According to the GAO, the EPA “has never” instructed CASAC to comply with the federal requirement to review and report.

Members of Congress and the GAO have voiced similar concerns regarding EPA conduct and manner of operational performance.

  • Regularly ignores epidemiological evidence that dispels, counters, or invalidates their decisions.
  • Ignores their own scientific panels to format or propel false alarms.
  • Uses federal law, such as the Clean Water Act, to regulate private lands through regulatory “takings” of rights.
  • Consistently exceeds its legislative authority forcing businesses, municipalities, and citizens to challenge regulations through the court system.
  • Abuses authority in “policing” of private property activity through notoriously heavy fines.
  • Habitually practices “moving the goal” tactics to hamper businesses and industries efforts to remain operationally compliant.

The agency’s standard operating procedures often are in defiance of the law. Also, the arbitrary use of selected and contrived science to establish environmental regulation is a serious threat to our national wellbeing and jeopardizes public health, general welfare, socio-economic conditions and our environment.

Oct 21, 2015 | 1 comment | by
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