Tag: "Regulation EPA Electricity Energy"

Strictest Frac Regulations Implemented in California

The first restrictions on hydraulic fracturing are about to be implemented in California. This follows the passage of Senate Bill 4, authored by Fran Pavley (D- Agoura Hills). Approved in 2013, the regulations will force oil companies to expand monitoring and reporting of water use and water quality, conduct rigorous analysis of potential seismic impacts of operations and disclose chemicals used in all operations. Abiding by these new laws will discourage future investments by oil and gas companies in the state.

Recently, the Division of Oil, Gas, and Geothermal Resources (DOGGR) ― California’s agency charged with enforcing such laws — has been coming under attack by lawmakers over its inadequate oversight over oil and gas operations. In the past, DOGGR has admitted to falling behind on monitoring oil field wastewater injections into federally protected aquifers, as well as missing deadlines imposed by legislators for providing data. Many doubt the agency’s ability to correctly implement and abide by these new regulations.

More importantly, the California Monterrey Shale formation could potentially hold the largest “tight oil” shale deposits in the United States. While oil and gas activity in the region could have boosted the California economy, new regulations will hurt potential economic growth in the state. Currently, it has been estimated that oil and gas contribute about $21.55 billion to the public coffers every year. Without such revenue, California will have to make some tough financial decisions and fire many state employees.

 

Study’s Conclusion Does Not Make New York Hydraulic Fracturing Ban Permanent

A conclusion of a seven year long review of hydraulic fracturing in the state of New York does not mean that a state wide hydraulic fracturing ban is permanent. The findings of the study might be the only thing that is official from Department of Environmental Conservation other than a speech made by the governor.

Joe Martens, head of the Department of Environmental Conservation:

After years of exhaustive research and examination of the science and facts, prohibiting high-volume hydraulic fracturing is the only reasonable alternative. High-volume hydraulic fracturing poses significant adverse impacts to land, air, water, natural resources and potential significant public health impacts that cannot be adequately mitigated.

New York governor Andrew M. Cuomo announced on December 17, 2014 that he would ban hydraulic fracturing in New York State by executive proclamation because of concerns over health risks, ending years of debate over a method of extracting natural gas. He was formally declaring a “ban” after his predecessor, Patterson, implemented a “moratorium” on hydraulic fracturing. The question of whether to allow hydraulic fracturing is occurring in many states and has been one of the most divisive public policy debates in New York in years. Environmental advocates, alarmed by the growth of the practice, pointed to New York’s decision as the first ban by a state with significant natural-gas resources.

There is no actual law in place that bans hydraulic fracturing in New York. Whereas there are laws in Texas and Oklahoma that ban local hydraulic fracturing bans in those two states. So, for now, hydraulic fracturing could be on hold in New York, but only temporarily.

 

EPA Regulations Overruled by Supreme Court

In a 5-4 ruling, the Supreme Court ruled that the Environmental Protection Agency (EPA) had not adequately considered the costs of its regulations before enacting them. Limits finalized in 2012 as part of the Clean Air Act on toxic air pollutants proved to be a prohibitive cost on coal utility plants. They were also a main feature in the Obama administration’s environmental policies.

The case, Michigan v. EPA, centered on the first ever limits on mercury, arsenic, and acid gases emitted by coal-fired power plants. While the EPA had estimated the new rules would cost $9.6 billion, placing it among the costliest regulations ever instated.

Prior to the ruling, the head of the EPA Gina McCarthy had said she felt confident the Supreme Court would rule in their favor. However, were that not to be the case, she said:

But even if we don’t [win], it was three years ago, most of them are already in compliance, investments have been made, and we’ll catch up. And we’re still going to get at the toxic pollution from their facilities.

With most coal plants already in compliance, the ruling does little to slow emission curbs in the coal industry. Regulations on interstate air pollution were already upheld last year by the Supreme Court, ensuring that most utilities will need to control future pollution regardless of the new ruling. Furthermore, in the majority opinion, written by Justice Scalia, the Court ruled that the EPA could reconsider the regulations with better cost assessments before reinstating such rules.

 

Oklahoma Follows Texas to Prohibit Hydraulic Fracturing Bans

On Friday, May 30, 2015, Oklahoma became the second state to officially ban local bans on hydraulic fracturing. The bill prohibits bans on hydraulic fracturing, as well as other oil and gas drilling operations. The three-person Oklahoma Corporation Commission will now continue to act as the main regulator of oil and gas operations in the state.

Governor Mary Fallin said:

Corporate Commissioners are elected by the people of Oklahoma to regulate the oil and gas industry. They are best equipped to make decisions about drilling and its effect on seismic activity, the environment and other sensitive issues.

The bill was written in response to proposals to increase oil and gas drilling regulations in major cities and as an increasing number of Oklahomans become disgruntled with the mounting number of earthquakes. Sponsored by leaders in the Oklahoma House and Senate, the bill passed the House by a vote of 64-32 and the Senate by 33-13. Amendments to the original bill will still allow cities and municipalities to place “reasonable” restrictions on oil and gas operations, such as setbacks, noise, traffic and fencing regulations.

The bill comes at a time of great controversy within Oklahoma as the Oklahoma Geological Survey recently said increases in earthquakes were “very unlikely to represent a naturally occurring process.” In February, the U.S. Geological Survey published a paper written by Oklahoma Seismologic Austin Holland stating that the increase in seismic activity in Oklahoma was from human-induced activities.

Kim Hatfield, chairman of the regulatory committee at the Oklahoma Independent Petroleum Association (OIPA) responded:

This is something the Oklahoma Geological Survey, Oklahoma Corporation Commissions and OIPA have been working on for well over a year. We knew this was a possibility.

Oklahoma’s oil and natural gas producers have a proven history of developing the state’s oil and natural gas resources in a safe and effective manner.

 

The Real Cost of Clean Power Plan

The Environmental Protection Agency’s Clean Power Plan Proposed Rule to cut carbon emissions from power plants, specifically targets coal power plants. Not only would this hurt United States energy supplies, but also greatly increase energy costs that would hit consumers by raising their electricity bill.

The following shows the difference between the analysis of the costs of the National Economic Research Associates and the Environmental Protection Agency (EPA).

The EPA estimates:

Annual cost estimates for complying with the Clean Power Plan range from $5.4 billion to $7.4 billion in 2020, to $7.3 billion to $8.8 billion in 2030. These annual cost estimates factor in both the costs of investments in transitioning to lower-carbon electricity options and the savings that result from investments in energy efficiency.

NERA estimates:

EPA’s Clean Power Plan could cost consumers and businesses a staggering $41 billion or more per year, far outpacing the costs of compliance for all EPA rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion). The analysis also finds that additional coal retirements would total 45,000 megawatts or more of coal-based electricity, posing a major threat to electric reliability in many parts of the country.

States vs Local Hydraulic Fracturing Bans

In the past few years, hydraulic fracturing/frac bans have become increasingly common in communities opposed to the drilling practice that extracts oil and natural gas from shale rock by injecting sand, water and chemicals into the ground. Such bans focus on either the actual drilling methods or the transportation of waste from the hydraulic fracturing process.

State legislatures are now finding themselves in a fight against local authorities for control of hydraulic fracturing regulations in their own states. While Vermont and New York have already implemented state wide bans on hydraulic fracturing, Texas has banned local bans and Oklahoma is considering banning local bans on the practice as well.

Current hydraulic fracturing ban legislation:

  • Over 470 local measures have passed in towns, cities, and counties.
  • 24 states and Washington D.C. have seen at least one such local measure passed.
  • Oklahoma introduced legislation imposing a ban on local frac bans.

The debate has sparked questions over who has the right to regulate oil and gas activity in the state, state agencies or individual communities. For New York, the state-wide ban followed a court decision that town zoning laws allowed the banning of hydraulic fracturing. In an attempt to achieve a compromise between state and local control, state legislation banning cities and counties from outlawing hydraulic fracturing opens the door for local oil and gas regulations, specifically where it concerns health and safety. Texas House Bill 40, signed into law this week by Governor Greg Abbott, includes a four-part test for determining city drilling regulations while prohibiting hydraulic fracturing bans throughout the state.

Lauren Aragon is a research associate at the National Center for Policy Analysis.

Energy Security Must Include Reliable Power

A similar version of this blog post appeared in Newsmax:

Unlike populations in most other parts of the world we Americans take vital benefits of dependable electricity for granted. We simply plug into an outlet or flip on a switch and fully expect that our lights will go on, our computers will charge, our coffee will heat up, our air conditioners will function, and yes, our generous taxpayer subsidized plug-in vehicles will run again until tomorrow.

This wonderful, finely balanced round-the-clock empowerment required planning and development which didn’t occur overnight. The same will be true of future efforts to restore adequate capabilities after the Obama EPA’s Clean Power Plan takes an estimated one-third of all U.S. coal-fired plants off the grid over the next five years. This amounts to a loss of generating capacity sufficient to supply residential electricity for about 57 million people.

The North American Electric Reliability Corp, a nonprofit oversight group, emphasizes that the plan constitutes “a significant reliability challenge, given the time required for implementation.” The timeline to convert or replace a coal-fired power plant with natural gas requires years, whereby siting, permitting and development to meet EPA’s interim target would need to be completed by 2017.

Even if a state were able to submit a compliance plan by 2017 or 2018, EPA has admitted that it may take up to another year to approve it. New and upgraded natural gas plants will require additional pipeline infrastructure which may take five years or longer. More expansive transmission lines will also be required to connect that capacity to the grid, with full implementation potentially taking up to 15 years.

EPA’s latest climate alarm-premised war on coal assault calls for states to cut CO2 emissions by 30 percent from 2005 levels by 2030 despite satellite-recorded flat mean global temperatures over the past 18 years and counting. This federal usurpation of state responsibility dating back to the invention of the modern steam engine in the 1880s is unprecedented.

A “finishing rule” expected to be issued in June or July will require states to meet agency carbon-reduction targets by reorganizing their “production, distribution, and use of electricity.” In complying, 39 states must achieve more than 50 percent of EPA’s reduction targets by 2020.

Not only are EPA’s mandates unfeasible, they also demand that states operate “outside the fence line” to force shut-downs of coal (and eventually natural gas), establish minimum quotas for renewables (wind and solar), and impose energy conservation mandates. Never mind here that last year the D.C. Court of Appeals ruled against the Federal Energy Regulatory Commission’s claim of authority over “demand response” of the national energy grid.

Even liberal Harvard constitutional authority Larry Tribe has observed being stunned at this effort to nationalize U.S. electricity generation by coercing states to pass new laws or rush through new compliance rules that exceed EPA’s legal jurisdiction. President Obama is clearly eager for such policy changes to be quickly put into effect which a future Republican president can’t reverse. This will also provide bragging rights for a climate initiative he can announce at the Paris climate conference later this year.

Fortunately, while states are invited to draw up implementation plans for EPA approval, they really have no legal obligation to do so. And while EPA can attempt to commandeer a federal plan if states resist, there are good incentives for them to band together in calling EPA’s bluff — reasons which can otherwise bear dangerous and costly consequences.

An April 7 Washington, D.C., power outage caused by a mechanical failure and fire at a transfer station temporarily disrupted electricity to the White house, Capitol, government agencies (yes, including the Energy Department), businesses/residents, and street lights. While relatively minor, it most likely could have been avoided if a 60-year-old coal-fired plant called the Potomac River Generating Station in Alexandria, Va., which provided backup capacity to balance the grid, hadn’t been shuttered.

It was one of 188 plant closures credited to former New York City Mayor Bloomberg’s activist “Beyond Coal” campaign which he has supported with $80 million in donations to the anti-fossil Sierra Club.

A far more damaging 2003 Northeast blackout resulted in costs of about $13 billion. Referring to the Clean Power Plan, the New York Independent Systems Operator (NYISO) now reports that EPA’s “inherently unreasonable” reductions “cannot be sustained while maintaining reliable electric service to New York City.” NYISO further projects unacceptable plan consequences which “no amount of flexibility can fix.”

States should collectively heed this reality. Rather than accept EPA’s dirty work, it’s imperative that federal hijacking of state sovereignty be resoundingly rejected.

American Energy Renaissance Act — Why Oil and Gas Matter

The American Energy Renaissance Act of 2014 — a bill proposed by Senator and now presidential candidate, Ted Cruz — proposes many drastic changes to the status quo surrounding energy and environmental regulations, some of which include:

  • Giving only states the right to regulate hydraulic fracturing
  • Preventing the Environmental Protection Agency (EPA) from regulating carbon dioxide (CO2), methane, water vapor and nitrous oxide emissions
  • Repealing regulations on crude oil exports

Passage of the bill would be lauded by energy proponents, and while as a whole it would be no victory for traditional environmentalists, one of its provisions stands out, as it seeks to phase out engine-damaging ethanol fuel and create a higher standard for fuel economy. One can only truly understand the magnitude of improving fuel economy across the board by first looking at CO2 emissions by source:

Greenhouse Gas Emission

Transportation, which is second only to the electric power sector in terms of carbon dioxide emissions, could see significant long-term reduction in emissions while creating a surplus in disposable income for Americans and business owners. Notably, passage of the bill does not imply that American oil companies would be at a significant disadvantage due to the simple fact that it would open a whole new niche for American crude in the international economy.

Energy CO2 Emissions

Also striking is coal’s share of carbon dioxide emissions in the electric power industry — for coal’s actual share in energy generation as seen below, it seems almost unwarranted:

Electric Power Generation

Natural gas, while still not yet as widespread as coal, is very cost competitive, with liquid natural gas (LNG) at less than $10 per British thermal unit (Btu) while normal gas flirts with numbers around and below $5. Furthermore, if natural gas cannibalized market share from the coal sector — as is likely given the amount of continuing regulations on coal — it would help both the economy and the environment. Indeed, the Energy Information Administration asserts that for every million Btu generated, coal can release between 214 and 228 pounds of CO2 while natural gas creates almost half at 117 pounds per million Btu. While opponents of natural gas could cite its past price volatility, the past 5 years have been quite stable and the fracking boom is no reason to believe that the energy will be subject to much variance, at least not besides cyclical winter-heating and summer-cooling fluctuations, which coal can also be subject to. On the contrary, the market for coal is either becoming too expensive due to relentless regulation or disappearing altogether, especially abroad in developed countries.

The consumer free market response to any good or service in production is to demand quality proportional to whatever price level that consumer is willing and able to pay. With time, more countries are joining the ranks of developed nations who — like the U.S. — are characterizing themselves as more than willing to pay premiums on energy for better environmental quality. Additionally, natural gas has a history of matching or even beating domestic coal prices in the private sector, while mounting pressure on the public sector is slowly opening the international markets for both gas and oil.

NCPA Hydaulic Fracturing Current and Proposed Restriction/Ban Map

FrackingMapForWeb

The National Center for Policy Analysis created a national hydraulic fracturing ban and restriction map that shows all of the recent local and state bans, proposed bans and restrictions.

By enacting this these bans, states are forgoing much needed revenue from the production of critical energy resources. The following are some of the states that are forgoing revenue due to current hydraulic fracturing bans:

  • California
$1,034,471,000
  • Colorado
$11,836,700
  • Connecticut
$131,200
  • Delaware
$96,178,800

National Ambient Air Quality Standards for Ozone response

Submitted comments to the Environmental Protection Agency on National Ambient Air Quality Standards for Ozone.