February 11 Colorado Energy Cheat Sheet: SCOTUS stay on Clean Power Plan edition

February 11, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legal 

Join us Tuesday, February 16 at noon as the Competitive Enterprise Institute and Independence Institute discuss the latest on the EPA’s Clean Power Plan/111d rule, including the SCOTUS stay issued this week.

Competitive Enterprise Institute’s Center for Energy and Environment, and Raymond Gifford, a partner at the law firm Wilkinson, Barker, Knauer, LLP and a leading an expert in public utilities law, will provide in-depth analysis of what the Clean Power Plan means for Colorado and discuss the efforts being made across the country to stop this onerous regulation.

Free lunch, RSVP required.

***

What is the stay?:

WASHINGTON—A divided Supreme Court on Tuesday temporarily blocked the Obama administration’s initiative to limit carbon emissions from power plants, dealing an early and potentially significant blow to a rule that is the cornerstone of President Barack Obama’s efforts to slow climate change.

The court, in a brief written order, granted emergency requests by officials of mostly Republican-led states and business groups to delay the regulation while they challenge its legality.

Although the Supreme Court’s order is temporary and isn’t a ruling on the merits, it indicates the court’s conservative majority harbors misgivings about the Obama administration plan. It signals the rules could run into trouble in the courts, which could hamper the administration’s ability to follow through on U.S. commitments in the Paris climate deal.

The court’s action, which divided the justices along ideological lines, came as a surprise to many observers because the court has strict criteria for granting stays. And the Environmental Protection Agency rules, issued last summer, have yet to be evaluated by lower court judges.

The EPA rule is aimed at compelling utilities to shift away from coal-fired power plants, which have been the bedrock of U.S. electricity generation for decades, toward such renewable sources as wind and solar, and to a lesser extent toward natural gas and nuclear power.

Some have said that all that needs to be done is for the administration to change as a result of the 2016 election, but that may not be enough:

The Supreme Court issues stays sparingly, and only when specific criteria are met. Those include a “reasonable probability” that four justices will agree to review the case, and a “fair prospect” that five justices could vote to overturn a lower court ruling.

In addition, the court must find that irreparable harm will result to parties in the case unless the stay is granted, and that public interest is served by granting a stay.

White House officials said they were surprised by the court’s move. “Granting a stay in these circumstances is extraordinary,” one official said.

The ultimate outcome of the case likely won’t be decided until the next president is in office. Should the rule survive in the courts and a Republican be elected president, a GOP administration would face hurdles in abandoning the regulations.

Very few final regulations have ever been repealed by an administration—Republican or Democratic. To repeal a regulation, you have to write, and legally justify, a new regulation explaining why you are getting rid of the earlier one, a process that could take years and would be unlikely to withstand legal scrutiny, experts say.

As we wrote in a previous blog post, the Colorado Department of Public Health and Environment plans on proceeding with the rule’s implementation, calling its own decision to do so, “prudent”:

It is prudent for Colorado to move forward during the litigation to ensure that the state is not left at a disadvantage if the courts uphold all or part of the Clean Power Plan. Because the Supreme Court did not say whether the stay would change the rule’s compliance deadlines, Colorado could lose valuable time if it delays its work on the state plan and the rule is ultimately upheld.

The legal experts I’ve spoken with have said that the compliance deadlines were part of the stay, and dispute the agency’s interpretation that the state would lose time if it did not proceed with planning.

When the Independence Institute conducted our own poll last August on Colorado and the Clean Power Plan, “Nearly 6 in 10 said the state should wait to comply—not move forward as Governor John Hickenlooper has directed—on drawing up a state implementation plan for the Clean Power Plan.”

The new timetable for the Clean Power Plan and any legal proceedings should push well into 2017 and even early 2018.

The Attorney General’s office said Cynthia Coffman would not pursue intervention at the state level (DBJ article, paywall).

The EPA, like CDPHE, plans to push forward at the state level, offering guidance:

The EPA immediately issued a statement pledging to support states that wish to continue developing compliance plans.

“We’re disappointed the rule has been stayed, but you can’t stay climate change and you can’t stay climate action,” the EPA said. “Millions of people are demanding we confront the risks posed by climate change. And we will do just that. We believe strongly in this rule and we will continue working with our partners to address carbon pollution.”

Legal experts began weighing in on the SCOTUS stay, saying the EPA’s own attitudes and statements regarding previous rulemaking legal challenges may have pushed the Court to take this action:

This Court’s decision last Term in Michigan v. EPA, 135 S. Ct. 2699 (2015), starkly illustrates the need for a stay in this case. The day after this Court ruled in Michigan that EPA had violated the Clean Air Act (“CAA”) in enacting its rule regulating fossil fuel-fired power plants under Section 112 of the CAA, 42 U.S.C. § 7412, EPA boasted in an official blog post that the Court’s decision was effectively a nullity. Because the rule had not been stayed during the years of litigation, EPA assured its supporters that “the majority of power plants are already in compliance or well on their way to compliance.” Then, in reliance on EPA’s representation that most power plants had already fully complied, the D.C. Circuit responded to this Court’s remand by declining to vacate the rule that this Court had declared unlawful. […] In short, EPA extracted “nearly $10 billion a year” in compliance from power plants before this Court could even review the rule […] and then successfully used that unlawfully-mandated compliance to keep the rule in place even after this Court declared that the agency had violated the law.

Reaction from the Colorado Senate Republicans was swift:

Senate President Bill L. Cadman said he believes Gov. Hickenlooper should respect the Court’s ruling by instructing the Colorado Department of Public Health and Environment (CDPHE) to suspend all CPP implementation activities.

“In granting the stay on the EPA’s so-called Clean Power Plan, the US Supreme Court said there is a likelihood that the 27 states now suing the EPA will prevail in court and that allowing EPA to proceed without a stay would do irreparable harm to the states,” said Cadman. “That being the case, Colorado should follow the federal court ruling and suspend all CPP implementation.”

Senator John Cooke (R-Weld County) called the stay “a great victory for Colorado ratepayers and the rule of law. This US Supreme Court decision should send a strong message to the Governor not to force Colorado working families into an expensive, likely unconstitutional EPA plan that will cost Coloradans thousands of jobs.”

Senator Jerry Sonnenberg (R-Sterling) said he is very surprised by the White House and CDPHE statements defying the Supreme Court ruling. “Today the CDPHE said it is ignoring the stay and proceeding to implement the CPP. That is unacceptable, and Governor Hickenlooper needs to explain why his administration is not complying with the federal court order,” said Sonnenberg.

Republicans also offered praise for Attorney General Cynthia Coffman’s participation in the 27-state court challenge, which has drawn fire from Gov. Hickenlooper.

“We owe a big ‘thank you’ to Attorney General Cynthia Coffman for challenging the plan in federal court,” said Cooke. “This victory illustrates the value of having an attorney general who can act independently from the governor when the public interest demands it.”

As a reminder, the Heritage Foundation’s Nic Loris outlines just how much an impact the Clean Power Plan would have on its intended target–climate change:

The plan, which the EPA finalized in October 2015, requires most states to meet individual carbon dioxide emissions reduction goals for existing power plants by 2022 and again in 2030. States are to submit plans about how they would comply with the regulations by September but could ask for two-year extensions. As Politico reports, “[l]awsuits over the rule are expected to continue into 2017 at the earliest, with the Supreme Court widely expected to be the final arbiter of the regulation.”

To be clear, the Clean Power Plan has nothing to do with regulating pollutants that have adverse impacts on human health. Instead, it focuses strictly on attempting to combat global warming. Attempting is the operative word.

Even if you accept the administration’s premise that climate change is an urgent threat (which is questionable), the regulation would have almost no effect on global warming. If the states implemented the regulations flawlessly, a near impossibility, the Clean Power Plan would avert a mere 0.02 degrees Celsius by 2100.

As we say frequently on this blog, there will definitely be more to come!

Print Friendly

Colorado Department of Public Health and Environment plans to ignore SCOTUS stay, proceed with Clean Power Plan implementation

February 11, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legal 

From the CDPHE website, calling the decision to proceed on developing implementation despite the stay issued by the U.S. Supreme Court on the Clean Power Plan, while litigation is proceeding, as a “prudent” move:

Statement on U.S. Supreme Court Decision Regarding the Clean Power Plan

Yesterday, the United States Supreme Court stayed the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan, a rule designed to reduce nationwide emissions of carbon dioxide from power plants by about one-third. The stay is a temporary measure while the federal courts review the merits of the rule.

The Colorado Department of Public Health and Environment has been working since last summer to develop a state plan to achieve the Clean Power Plan’s carbon reduction targets for Colorado. The department will continue to coordinate with stakeholders to develop this state plan during the litigation. The Court of Appeals for the District of Columbia Circuit will hear oral arguments on the rule in June.

It is prudent for Colorado to move forward during the litigation to ensure that the state is not left at a disadvantage if the courts uphold all or part of the Clean Power Plan. Because the Supreme Court did not say whether the stay would change the rule’s compliance deadlines, Colorado could lose valuable time if it delays its work on the state plan and the rule is ultimately upheld.

Colorado’s utilities, local governments, nongovernmental organizations, and other stakeholders have provided valuable input on the development of the state plan. The department will evaluate the decision and coordinate with stakeholders to assess how the stay might impact the timing and substance of the state plan.

Climate change remains both a critical environmental and public health and welfare issue. Colorado has and will continue to develop cost-effective strategies to diversify our energy mix, strengthen our economy and lower our greenhouse gas emissions. Through the Colorado Climate Plan, state agencies also will develop and implement innovative strategies to mitigate the impacts of climate change.

Governor John Hickenlooper attempted to challenge Attorney General Cynthia Coffman’s ability to join the multi-state lawsuit against the EPA and the Clean Power Plan, but failed when the Colorado Supreme Court decided not to review the petition.

Print Friendly

New Belgium back at it, pushing for coal-killing Clean Power Plan

February 5, 2016 by michael · Comments Off
Filed under: Environmental Protection Agency, renewable energy 

During the last decade, Colorado has become renowned, and rightly so, for its craft beer mastery.  With more than 230 microbreweries in the state, we have the highest concentration of breweries per capita.  Thank goodness for the vast selection of quality suds, otherwise I might have to purchase New Belgium beers, and become a de facto extreme, anti-free market environmental activist.

Fort Collins’ New Belgium Brewery lists “kindling cultural environmental change” and “honoring the environment at every turn” as two of their ten core values.  That’s fine, there’s nothing wrong with growth in our culture while respecting our natural surroundings.  But New Belgium’s cozy relationship with extreme environmental groups subjugates free market principles and the proper role of government in favor of promoting an economic and environmental agenda that negatively impacts Coloradans.

In 2015, there was a brouhaha brewing in Craig, the western slope town whose citizenry depends on the economics of coal mining.  New Belgium’s contributions to the anti-coal WildEarth Guardians incensed the townsfolk, prompting the brewery to sever their relationship with WildEarth Guardians.  The spokesperson for New Belgium claimed ignorance, reporting to have no knowledge of the fact that they were partners in the battle to kill local jobs.  Considering they employ a director of sustainability, it is hardly believable that nobody executed an Internet search of WildEarth Guardians before forking thousands of dollars over to them and their energy jobs killing agenda.

Having terminated that relationship and declaring the offense an oversight, one would think that New Belgium would no longer climb into bed with environmental extremists.  Or maybe, that’s just who they want as community partners, because a bottle of the season Accumulation brew boasts of a relationship with Protect our Winters, an effort co-sponsored by Ben & Jerry’s.

Via their website, Protect Our Winters purports that their relationship with New Belgium inspires people to call their governors and make policy demands including support for the EPA’s Clean Power Plan (CPP).  The CPP is designed to suffocate the coal industry and its workforce. According to a report from top economists at the National Economic Research Associates, the CPP’s squeezing of coal plants will increase delivered electricity costs by 17%, while only reducing global temperatures by a mere 0.003°, an amount that will not affect extreme weather or any other purported dangers of climate change.

As evidenced by their enduring relationships with anti-energy environmental activists, it is clear that New Belgium would like to see the coal industry out of business, increase utility costs for already stretched Coloradans, but have zero measurable effects on global temperatures.  They want people to demand more state and federally imposed restrictions on the citizenry. It would seem that New Belgium knew exactly what they were doing with WildEarth Guardians, and that they intend to continue these sorts of anti-energy partnerships into the future, maybe until we can no longer afford to purchase luxuries like craft beers.  Pour me a Coors.

Sarah Huisman is an Independence Institute Future Leader, and Master’s student at Liberty University’s Helms School of Government.

Print Friendly

February 4 Colorado Energy Cheat Sheet: Local governments face production-related revenue downturn; more red tape sought for resource development; Wyoming’s cautionary tale

February 4, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, New Energy Economy, PUC, regulations, solar energy, wind energy 

Pushing for bans on fracking or other measures to limit responsible natural resource development will only exacerbate problems at the local level, putting education, infrastructure, and other critical services at risk, on top of the drop noted here in the Denver Post due to commodity prices tanking:

Because 97 percent of Platte Valley’s budget comes from taxes paid on mineral production and equipment — a property tax known as ad valorem — McClain said his district could be looking at a budget reduction between $300,000 and nearly $1 million next school year.

How that plays out in terms of potential cuts or program impacts is yet to be seen, he said.

“You’re always concerned about your folks,” McClain said. “You worry about it taking the forward momentum and positivity out.”

It’s not just schools that are suffering. Municipal budgets, local businesses and even hospitals in mineral-rich pockets of Colorado are watching closely to see how long prices remain depressed.

Combine that with a 72.3 percent drop in severance tax revenue–down to $77.6 million this year compared with $280 million last fiscal year–and you’ll get, in the words of the Post, “the state’s direct distributions of those proceeds to cities, counties, towns and schools will be reduced from a little more than $40 million in 2015 to just $11.9 million this year.”

Nearly 75 percent drop, just from falling oil prices. Put on top of that more red tape, or eliminate the practice altogether, and eventually those figures will head toward zero (no production = no tax revenue).

This is what is at stake when it comes to pushing back against the repetitively dubbed “common sense” regulation that threatens a rather large portion of the state’s economy.

***

Speaking of restrictions:

BRIGHTON — Adams County leaders made it clear Wednesday morning that they won’t support a 10-month ban on new oil and gas activity in urban parts of the county after hearing nearly eight hours of testimony that began Tuesday night.

Commissioner Chaz Tedesco said he wasn’t comfortable imposing a moratorium on an industry that has proved critical to Adams County’s economy. He said he supported hiring an attorney that can make sure the county is making the best deals with industry as possible.

“I want to make the right decision with the right information,” Tedesco said.

His colleague, Erik Hansen, said oil and gas workers are not the villains their opponents make them out to be and that the county has a good site-by-site evaluation system already in place.

“You know what? The folks who work in the industry care about their kids too,” he said.

Those families–the workers and the kids–live in the communities. It may be stunning to anti-energy activists, but those developing and producing the energy that drives your car (gas OR electric), heats and cools your home, keeps your iPads and laptops running, and generally produces an incredible standard of living for you might live right next door. *shudder*

Good on Adams County for rejecting hyperbolic, paranoid nonsense.

***

And not to be outdone by the anti-fracking ballot measures proposed at the state level, Colorado legislators are looking to add more red tape, because enough is never enough, and the Colorado Oil and Gas Conservation Commission’s rulemaking last month did not address those concerns, say energy development opponents:

Democrats in the Colorado House, where that party has a majority, are expected to introduce two measures later this session, one making it easier for surface property owners to collect damages from mineral rights owners if their properties are damaged, and a second measure to give local governments more regulatory authority over drilling within their jurisdictions.

House Speaker Dickey Lee Hullinghorst, D-Boulder, said that second idea is something she highly supports.

“I think this bill would be a very reasonable approach,” she said. “I have always felt that’s where you have to get at, the conflict in property rights.”

Regardless of those measures, the backers of several proposed ballot measures dealing with fracking are still going ahead with their ideas.

Those proponents, who could not be reached for comment, have said they were not satisfied with new regulations approved by the Colorado Oil and Gas Conservation Commission last week. They said those new rules, the result of a special task force established by Gov. John Hickenlooper as a compromise to keep the proposals off the ballot in 2014, didn’t go far enough.

Rest assured, short of the outright ban, anti-energy folks will not back off even if all of the proposed measures are put into place. New development might be blocked, but continuing extraction would still be a target. They will never be satisfied, until all development is 100 percent eliminated.

Don’t take my word for it:

The Sierra Club Rocky Mountain Chapter would like the entire state of Colorado to be 100% renewable, beginning with Denver. Becky English, the executive committee chair for the Sierra Club, responded to an email about a sustainability summit scheduled for early December in Denver:

I would have liked to share that the Sierra Club national board has declared a goal of powering the electric sector by 100% renewable energy nationwide, and that the Rocky Mountain Chapter has adopted the goal for Colorado. I will approach you offline about how best to work toward this goal in Denver.

And that’s just the Sierra Club–see also here and here.

***

Stakeholder meetings or dog-and-pony shows supporting the Clean Power Plan and the state’s agencies dedicated to enforcing the rule (Colorado Department of Public Health and Environment)–the Gazette certainly has an opinion:

Reality struck when the Colorado Department of Public Health and Environment took the show to Brush, a rural eastern plains town where people work hard to earn a buck.

Four of five panel members were cheerleaders for the president’s plan, which has the full support of Gov. John Hickenlooper. Panelist Kent Singer, an attorney and executive director of the Colorado Rural Electric Association, offered the panel’s only balance. He said public utilities and electric cooperatives are supposed to provide reliable energy at a price households, farms, ranches and businesses can afford. The president’s plan, he worries, would impose hardships.

Audience participants crashed the party to explain how eastern Coloradans have invested in hundreds of wind turbines that won’t count toward the proposed standards, as the plan would disqualify assets built before 2013.

State Sen. Jerry Sonnenberg told state officials he represents 21,000 square miles that host more wind turbines than the rest of the state combined, and most would not qualify. He worries about constituents having to fund investments they already made in vain.

“We can look at the lower middle class, the working poor, the poor and the elderly and see how they would be impacted, and how it would make it even tougher for them,” Sonnenberg said. A farmer who spends $10,000 on energy to irrigate a field would take a big hit, the senator explained, at a time when some crop prices have plunged.

State health officials need to get serious about their presentation for the remaining “All Stakeholder” meetings in Pueblo and Craig. This plan poses serious consequences for those who cannot afford haphazard and experimental efforts to control the climate. We need a balance of experts presenting a variety of views, not another panel stacked with support for a political agenda.

Having attended one of the first CDPHE “stakeholder” events back in September 2015, I can assure the reader that comments in favor of the Clean Power Plan ran about 15 to 1, with plenty of others from industry to rural electric co-ops basically pleading for the agency to implement the rule as mercifully as possible.

It’s clear from the first few events that the stakeholder process is nothing more than a three ring circus for advocates like activists and renewable energy businesses to show up and applaud the agency, giving it a rather unnecessary shot in the arm of confidence. Meanwhile, the folks who actually bear the brunt of the rule itself, whether it’s the ratepayer who pays for the energy and the guaranteed profit for the utilities (all stranded assets like coal plants having to be replaced with more expensive energy alternatives), the taxpayer who is on the hook for subsidizing unaffordable and unreliable energy alternatives, the farmers and investors who were sold a bill of goods in years past of being part of a “New Energy Economy” by previous politicians only to be passed over and not counted as renewables anyway . . . the list goes on and on.

The CDPHE process is really illustrative of quite a few economic concepts, from crony capitalism to captive regulation, concentrated benefits vs. dispersed costs, and government intrusion in the free market to pick energy winners and losers. In this case, the winners repeatedly show up and applaud. The potential losers are taken out of the process, and must rely on lawsuits like the multi-state challenge joined by Attorney General Cynthia Coffman, or the much more distant hope of an administrative change in policy due to a shift in the political climate at the Federal level.

***

Turning to updates on the Gold King Mine spill:

DENVER – Southwest Colorado feels forgotten in the aftermath of the Gold King Mine spill, state lawmakers heard Wednesday.

Rep. Don Coram, R-Montrose, expressed the sentiment to a House committee just before the panel killed his legislation that would have allowed the state to file lawsuits against the federal government on behalf of individuals impacted by the spill.

Coram was especially irked by the fact that the measure was assigned to the House State, Veterans and Military Affairs Committee, a committee sometimes used by the majority party to kill legislation deemed unpopular by leadership. Democrats control the House.

The bill died on a 5-4 party-line vote.

“If this (Gold King spill) had happened in a metropolitan area, we would be doing something. But the fact is, in rural Southwest Colorado, we … have the opinion that the Front Range does not care who suffers in rural Colorado,” Coram told the committee.

And while state efforts to provide relief failed, Congressional inquiries into the EPA-caused spill continue apace, with calls for transparency and clarification over the role of the EPA in a report from the Department of the Interior that was supposed to be impartial and independent:

A key report on the Gold King Mine disaster, which poisoned drinking water for three states and the Navajo Nation, is now being questioned by congressional committee and subcommittee chairmen.

New evidence may “contradict” Environmental Protection Agency Administrator (EPA) Gina McCarthy’s “repeated assertions” to the Senate Committee on Environment and Public Works (EPW) “that EPA had reviewed only a [Department of the Interior] press release and had no role in DOI’s independent review” of the Gold King Mine blowout, according to a Wednesday letter to McCarthy.

“Please clarify … that DOI did not have a conflict of interest, that its review would be independent and that EPA officials had no involvement in DOI’s review,” committee Chairman Jim Inhofe and Superfund, Waste Management and Regulatory Oversight Subcommittee Chairman M. Michael Rounds wrote.

The DOI report detailed that the EPA-caused Gold King Mine spill, which sent three million gallons of wastewater into Colorado’s Animas River, was preventable. The report stated, however, events at the site before and after the incident were beyond the investigation’s scope – even though such details were sought by the EPW committee.

We’ll keep an eye on this development.

***

News from our Wyoming neighbors, a cautionary tale of how the current administration’s push to kill coal will likely kill local communities too:

President Barack Obama’s administration has ordered a three-year moratorium on sales of federal coal reserves, and it’s putting a rare mood on folks in Gillette, a ranching-turned-energy town of 32,000: pessimism.

“Most of the time it comes back. This time, I don’t know,” said Bobbie Garcia, watching her daughter summit a two-story climbing structure at the town’s $53 million recreation center largely built with coal money.

Until recently, the Powder River Basin of Wyoming and Montana remained a rare bright spot for the industry. Even as Appalachian mines shut down and cheap natural gas started crowding out coal as a power plant fuel, economies of scale kept the region rumbling.

Massive strip mines sprawled across tens of thousands of acres, much of it in the Thunder Basin National Grassland, produce roughly 40 percent of the nation’s supply of the fuel.

For Gillette and other communities, that means more than 7,000 mining industry jobs. And not just fly-by-night, roughneck gigs, but the sort that sustain families year after year, pointed out Michael Von Flatern, a state senator who has lived in Gillette since the early 1970s.

The sort of jobs that are likely irreplaceable. Also, it’s no easy task replacing 40 percent of the country’s coal, considering that 23 percent of U.S. energy production still comes from that resource. Compare that to 0.5 percent for solar and 2 percent for wind, according to the Energy Information Administration through 2014 (the last full year).

If you want to know what’s headed for Colorado, look north. Or ask the folks in Moffat County about the Colowyo Mine situation from last year.

Print Friendly

January 27 Colorado Energy Cheat Sheet: COGCC rulemaking pleases no one; anti-fracking measures disastrous for Colorado economy; pushing back against Clean Power Plan

January 27, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, regulations, renewable energy 

Even small changes to oil and gas regulations can have deep and damaging effects on Colorado’s economy, according to researchers at the University of Colorado:

A statewide, 2,000-foot buffer zone between drilling rigs and homes, schools and businesses would take a hammer to Colorado’s oil and gas industry, already reeling from low commodity prices, as well as the state’s wider economy, according to a new study from University of Colorado Boulder’s Leeds School of Business.

Such a setback requirement “could result in slower economic growth” for Colorado’s economy as well as state revenue, according to the study released Wednesday.

The study said its forecast on the effects of a 2,000-foot setback included:

Production of oil and gas statewide could drop between 25 percent and 50 percent;
A $6 billion to $11 billion drop in Colorado’s gross domestic product;
A loss of 33,000 and 62,000 jobs between 2015 and 2030;
Loss of $214 million to $428 million in per year in tax revenues from oil and gas companies.

Given that the Colorado Oil and Gas Conservation Commission just concluded a round of rulemaking based on the Governor’s Oil and Gas Task Force recommendations from 2015, new and more onerous regulations like the setback examined by CU researchers or the more dangerous proposed fracking bans and various setback ballot measures could have catastrophic consequences on top of the recent commodity downturns impacting the state.

Anti-energy activists have intimated that even more proposals could be in the offing for 2016:

Larimer County resident Katherine Hall, who testified in favor of local control, said she would not be surprised if a citizen-initiated measure ended up on November’s ballot.

“The final outcome of the rule making does not go far enough to ease the concerns of Colorado citizens,” Hall said.

Remember when this blog said the Oil and Gas Task Force was merely kicking the can down the road?

We’ve made our way down that road, and the can is about ready to explode.

In the near term, the COGCC rules could go into effect in as few as 6 to 8 weeks, subject to review by the legislature and the Attorney General:

Compton said the months of rulemakings were “the most difficult” that he’s been through — a string that included the 2008 wholesale overhaul of Colorado’s oil and gas regulations.

The commissioners voted 5-4 to define “large” oil and gas facilities, the threshold that triggers the communication process between energy companies and local governments, as eight new wells and storage tanks that can hold up to 4,000 barrels of oil and natural gas liquids. The commissioners restricted the rule to large facilities in “urban” areas, defined as 22 buildings within 1,000 feet of the wellsite, rejecting request from some quarters to take the rule statewide.

But the rules appear to exceed the recommendations, and create ambiguities that will only incur more procedural red tape:

The process approved by the COGCC will triple, from 90 days to 270 days, the amount of time needed to get a hearing on a large project before the oil and gas commissioners, said Tracee Bentley, the executive director of the Colorado Petroleum Council, an arm of the American Petroleum Institute.

The final rules also said facilities should be “as far as possible” from existing buildings, a phrase Bentley called “vague and confusing” that would cost energy companies time and money to comply with.

The commissioners also rejected a request that existing surface-use agreements between energy companies and landowners be grandfathered, and allowed to avoid the notification and consultation process.

“We feel the industry brought reasonable solutions to the table that were largely ignored, and the rules still go beyond the recommendations of the task force,” said Dan Haley, president and CEO of the Colorado Oil & Gas Association.

Bringing reasonable solutions and constructive dialogue should be expected of the industry, but the same can’t be said for the forces calling for the end of natural resource development altogether:

Activists addressing a state oil and gas rulemaking hearing this week levied a barrage of accusations and insults toward state officials and even renewed calls to eliminate Colorado’s state agency responsible for regulating oil and gas development.

Speaking at the Colorado Oil and Gas Conservation Commission (COGCC) hearing, Lauren Swain, representing national climate activist group 350.org, largely ignored the fact that the rulemaking was supposed to be the focus of the hearing and instead used her time to complain about the agency. From Swain’s testimony:

“With this new proposed rule, the COGCC has proven once again that it can no longer be considered a legitimate state agency because the COGCC continues to facilitate the pace of hazardous polluting oil and gas drilling and fracking operations near homes and schools subjecting communities to the risks of toxic emissions, spills and explosions.”

But Swain took her testimony even farther by lobbying for disbanding the agency in favor of creating a new agency that would “swiftly” transition the state to 100 percent renewables using the Solutions Project at Stanford as a guide. From Swain:

“The COGCC must be replaced with one or more agencies charged with one, facilitating to protect Coloradans from the harmful impact of oil and gas production and two, to aid and foster Colorado’s swift transition to one hundred percent renewable energy production and consumption using the Solutions Project developed at Stanford University as a guide.”

Up next was testimony from an activist who has previously accused the oil and gas industry of having a “personality disorder” and of being “socially deviant.” This time, Amanda Harper called oil and gas producers a “short sighted, selfish and sociopathic industry.”

Not a lot of balance or reasonable tone, it seems.

Colorado Governor John Hickenlooper offered his comments at an event that saw journalists kicked out and required an open records request to seek audio of the Democrat’s comments–and while he questioned the leverage of the anti-energy groups to get the proposed measures on the 2016 ballot, he surreptitiously argued that the COGCC rules discussed above had, in his opinion as well, gone further than his own Oil and Gas Task Force had recommended:

“I haven’t heard of any funding source for any of them,” Hickenlooper began. “Like the normal, large funders of those initiatives, you know, I haven’t heard of. So, maybe they’ll get on the ballot, but without a lot of money, I don’t think they’re going to do well. I can guarantee you there’ll be money spent showing that, the, the problems associated with any of those initiatives.” (Forum Q & A – 17:05)

Moments later, he added, “Again, we’re going further even than the commission recommended, and in certain cases, to try and give local, local municipal elected officials more, a greater role.”

Further.

We’ll see how that plays out.

***

The Environmental Protection Agency’s Clean Power Plan received a stay of its own last week when the DC circuit refused to grant a stay of the rule, forcing 26 states to appeal the case to the US Supreme Court.

Meanwhile at the Colorado legislature, Sen. John Cooke (R-Greeley) has championed measures designed to keep the implementation of the Clean Power Plan at arms’ length, allowing lawsuits to be completed before the state moves forward, something Coloradans clearly support:

Two weeks into the 2016 legislative session, Sen. John Cooke, a Republican from the heart of the Front Range oil and gas patch in Greeley, has introduced two bills that take aim at the plan, which requires power plants to cut carbon emissions by 32 percent from 2005 levels by 2030, largely by shutting down or converting coal-fired plants to alternative fuel sources.

One of Cooke’s bills couldn’t be more timely. After several state attorneys general, including Colorado’s Cynthia Coffman, failed to win a stay of the plan from a federal court Thursday, Cooke’s Senate Bill 46 jumps into the ring like a tag-team wrestler, working from another angle to stall implementation of the Obama administration plan.

“Well, it wasn’t really a surprise that the court in D.C. struck down the stay request,” Cooke told The Colorado Statesman. “Unfortunately, the bill is more relevant now.”

The “Preserve State Clean Power Plan Options Act” aims to “slow down the implementation process” in part by suspending it “until all [related] lawsuits are done,” Cooke told members of three rural Colorado advocacy groups, including some representing coal mining areas, who were visiting the Capitol Friday.

In effect, Colorado wouldn’t need a stay from a court because it would have passed a stay for itself, written by Cooke.

Cooke’s other bill, SB 61 or “Ratepayer Protection Act,” would require the Colorado Department of Public Health and Environment to pay for costs generated as a result of Clean Power Plan implementation.

***

NEWS ROUNDUP:
Silverton punts on Superfund designation

How the EPA handled Flint, MI water contamination, vs. Animas River spill

Plunging oil prices means lower severance tax revenue in Colorado

Lower gas prices? Let’s raise taxes!

Anti-energy activists oppose coal development on the Western Slope. News at 11.

Trading: Coal extraction for sage grouse habitat

Print Friendly

January 20 Colorado Energy Cheat Sheet: Billionaire Steyer plays CO politics; NM files intent to sue EPA over mine spill

January 20, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legislation, New Energy Economy, PUC, solar energy, wind energy 

Independence Institute associate energy policy analyst Simon Lomax has the latest on green billionaire Tom Steyer’s efforts to tilt the legislative balance in Colorado in 2016:

San Francisco billionaire activist Tom Steyer is getting more deeply involved in Colorado politics than ever before. After spending more than $350,000 on research and polling in the Centennial State last year, two groups aligned with Steyer are now funding political attacks on State Senator Laura Woods (R). Republicans control the Colorado State Senate by a single vote, so unseating Woods could return control of the state legislature to Democrats and reinstate one-party rule under Gov. John Hickenlooper (D) until early 2019 at least.

Read all of his latest piece here.

***

Our neighbors to the south, New Mexico, has filed an intent to sue notice over the Animas River/Gold King Mine spill last year triggered by the Environmental Protection Agency:

ALBUQUERQUE, N.M. (AP) – New Mexico plans to sue the federal government and the owners of two Colorado mines that were the source of a massive spill last year that contaminated rivers in three Western states, officials said Thursday.

The New Mexico Environment Department said it filed a notice of its intention to sue the U.S. Environmental Protection Agency over the spill, becoming the first to do so. The lawsuit also would target the state of Colorado and the owners of the Gold King and Sunnyside Mines.

The New Mexico regulators said they will sue if the EPA does not begin to take meaningful measures to clean up the affected areas and agree to a long-term plan that will research and monitor the effects of the spill.

“From the very beginning, the EPA failed to hold itself accountable in the same way that it would a private business,” said Ryan Flynn, state Environment Department cabinet secretary.

While the Navajo Nation is considering its options for legal action, the state of Colorado’s Attorney General had no comment at this time.

***

Drilling on the Western Slope dropped in 2015:

Garfield County last year held onto the No. 2 spot statewide in terms of oil and gas drilling activity, despite the lowest level of activity since the 1990s.

Mesa County bucked the statewide trend in 2015, however, seeing a sharp increase in drilling and ranking third among Colorado counties.

Falling oil and gas prices resulted in drilling beginning on just 1,437 wells statewide last year, down from 2,239 the prior year, according to Colorado Oil and Gas Conservation Commission data. Much of the decrease occurred in Weld County as companies slowed oil drilling there thanks to falling prices. But the county still continued to see the bulk of activity last year, with drilling begun on 1,084 wells.

Garfield County had just 173 well starts last year, down from 362 in 2014. The last time the county saw less drilling, with 94 well starts, it wasn’t Jeb Bush but his brother, George, who was harboring presidential aspirations, in the year 1999.

***

Lower commodity prices have given Coloradans a bit of temporary relief, offsetting the region’s cost of living increases:

Two conflicting consumer price trends are pushing around the Denver area’s cost of living like a rag doll.

A new federal report Wednesday says that the cost of shelter in the Denver, Boulder and Greeley area jumped 5.8 percent in the second half of 2015 from a year earlier.

And yet, over the same period, energy costs fell 19 percent.

The result: a 1.4 percent year-over-year rise in the area’s overall consumer prices, the cost of a basket of typical goods and services, according to the report from the Bureau of Labor Statistics’ Kansas City office.

Shelter costs outweigh energy costs for most consumers, so shelter plays a bigger role in driving overall consumer prices.

The problem is that commodity prices fluctuate (due to market forces but also to environmental factors like government policies), and this small, offsetting bump for Colorado electricity ratepayers will provide only temporary relief. According to the Denver Business Journal, gasoline is down nearly 26 percent in 2015, with natural gas down nearly 19 percent. Household electricity was off 2.9 percent

On the other hand, gasoline cost 25.9 percent less in late 2015 than it did a year earlier, BLS said, while household natural gas cost 18.9 percent less and household electricity was down 2.9 percent. That’s hardly a dent in the 63 percent increase in residential electricity costs measured through 2014.

***

Job counters will see in a few years if the solar industry’s employment numbers are real (this time, and not an ephemeral mirage like so many other “green jobs”) and not temporary construction jobs and inferred “indirect jobs,” but for now they admit what is giving the solar folks a bump:

A few key developments are driving the job surge in solar.

Businesses and homeowners are eligible for a 30% tax credit if they install solar panels on their property. That’s been in place since 2006 but in December Congress renewed the tax credit for another six years. That lowers installation costs considerably.

The climate change agreement in Paris and the global action plan to limit global warming is also a positive for the clean energy industry.

And the Environmental Protection Agency released plans last year to force states to lower their carbon output.

Not much in the way of actual demand from consumers without government force (EPA’s Clean Power Plan) or government incentive (tax credit), or public pressure (Paris).

The article notes that lower commodity prices for oil and gasoline, and natural gas, are giving solar a “headwind.” Free market effects will do that.

Despite all the supply-side incentives (tax credits, subsidies, and mandates) and the demand-side disincentives (killing coal through the Clean Power Plan) the Energy Information Administration reports that solar was at 4.4 percent of all renewables in 2014 (last full year of data available), and a mere 0.4 percent of total U.S. energy consumption that year.

Print Friendly

War on Coal: Sec. Jewell’s comments on fed coal halt

January 15, 2016 by michael · Comments Off
Filed under: Environmental Protection Agency, Legal, preferred energy, regulations, renewable energy 

Costly fees and additional regulations, along with a three year programmatic environmental impact statement:

Secretary Jewell Launches Comprehensive Review of Federal Coal Program

Implements Pause on New Coal Leasing while Review is Underway; Announces Additional Transparency, Good Government Initiatives to Modernize Program

WASHINGTON – Secretary Sally Jewell announced today that the Interior Department will launch a comprehensive review to identify and evaluate potential reforms to the federal coal program in order to ensure that it is properly structured to provide a fair return to taxpayers and reflect its impacts on the environment, while continuing to help meet our energy needs. This is another step along the path that President Obama announced in Tuesday’s State of the Union address to improve the way we manage our fossil fuel resources and move the country towards a clean energy economy.

The programmatic review will examine concerns about the federal coal program that have been raised by the Government Accountability Office, the Interior Department’s Inspector General, Members of Congress and the public. The review, in the form of a Programmatic Environmental Impact Statement (PEIS), will take a careful look at issues such as how, when, and where to lease; how to account for the environmental and public health impacts of federal coal production; and how to ensure American taxpayers are earning a fair return for the use of their public resources.

“Even as our nation transitions to cleaner energy sources, building on smart policies and progress already underway, we know that coal will continue to be an important domestic energy source in the years ahead,” said Secretary Jewell. “We haven’t undertaken a comprehensive review of the program in more than 30 years, and we have an obligation to current and future generations to ensure the federal coal program delivers a fair return to American taxpayers and takes into account its impacts on climate change.”

Consistent with the practice during two programmatic reviews of the federal coal program that occurred during the 1970s and 1980s, the Interior Department will also institute a pause on issuing new coal leases while the review is underway. The pause does not apply to existing coal production activities. There will be limited, commonsense exceptions to the pause, including for metallurgical coal (typically used in steel production), small lease modifications and emergency leasing, including where there is a demonstrated safety need or insufficient reserves. In addition, pending leases that have already completed an environmental analysis under the National Environmental Policy Act and received a final Record of Decision or Decision Order by a federal agency under the existing regulations will be allowed to complete the final procedural steps to secure a lease or lease modification. During and after the pause, companies can continue to mine the large amount of coal reserves already under lease, estimated to be enough to sustain current levels of production from federal land for approximately 20 years.

“Given serious concerns raised about the federal coal program, we’re taking the prudent step to hit pause on approving significant new leases so that decisions about those leases can benefit from the recommendations that come out of the review,” said Secretary Jewell. “During this time, companies can continue production activities on the large reserves of recoverable coal they have under lease, and we’ll make accommodations in the event of emergency circumstances to ensure this pause will have no material impact on the nation’s ability to meet its power generation needs. We are undertaking this effort with full consideration of the importance of maintaining reliable and affordable energy for American families and businesses, as well other federal programs and policies.”

Today’s action builds on Secretary Jewell’s call last March for an open and honest conversation about modernizing the federal coal program, which led to a series of public listening sessions across the country in 2015. The listening sessions and public comment period solicited a broad range of responses to complex questions, including: Are taxpayers and local communities getting a fair return from these resources? How can we make coal leasing more transparent and more competitive? How do we manage the program in a way that is consistent with our climate change objectives?

Secretary Jewell also announced today that the Interior Department will undertake a series of good government reforms to improve transparency and administration of the federal coal program. These reforms include establishing a publicly available database to account for the carbon emitted from fossil fuels developed on public lands, requiring Bureau of Land Management offices to publicly post online pending requests to lease coal or reduce royalties, and facilitating the capture of waste mine methane.

These actions build on existing efforts to modernize the federal coal program, including the Office of Natural Resources Revenue’s work to finalize a proposed rule to ensure that the valuation process for federal and American Indian coal resources better reflects the changing energy industry while protecting taxpayers and American Indian assets.

The programmatic review will include extensive opportunities for public participation. The PEIS will kick off with public sessions in early 2016 to help determine the precise scope of the review. The Interior Department will release an interim report by the end of 2016 with conclusions from the scoping process about alternatives that will be evaluated and, as appropriate, any initial analytical results. The full review is expected to take approximately three years.

Additional information on today’s announcements can be found here. The Secretarial Order can be found here. Additional information on the federal coal program can be found here.

Print Friendly

January 13 Colorado Energy Cheat Sheet: Oil and gas drive Colorado’s economy, but outlook uncertain; Western Slope feels effects of regulation; WOTUS repeal?

January 13, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, preferred energy, renewable energy, solar energy 

Oil and gas development contributes a rather large percentage to Colorado’s economic condition, and new numbers confirm its continued importance to the state:

A new economic report shows that oil and gas development contributed billions to Colorado’s economy in 2014 generating benefits that researchers conclude “impact every citizen in the state.”

Prepared by the Business Research Division of the Leeds School of Business, University of Colorado Boulder, for the Colorado Oil and Gas Association (COGA), the report details how oil and gas development contributed $31.7 billion in total economic impact to Colorado’s economy in 2014, along with “supporting 102,700 jobs and $7.6 billion in compensation.” From the report:

“The oil and gas industry, along with nearly all extraction industries, inherently provides substantial economic benefits due to its integrated supply chain, high wage jobs, and propensity to sell nationally and globally. Much of Colorado’s oil and gas is sold outside of the state, contributing wealth to owners, employees, governments, and schools, all of which are beneficiaries of oil and gas revenues.” emphasis added

Energy in Depth has a complete review of the report’s findings.

The state’s oil and gas development would be crippled if newly proposed ballot measures calling for a ban on hydraulic fracturing and other regulatory limits are passed in 2016.

***

Lower oil commodity prices–a drop from $90 per barrel in 2014 to roughly $30 per barrel in January 2016 means great prices at the pump, but not good news for Colorado’s oil and gas workers:

KUSA – Oil is in an all-out freefall, dropping from roughly $90 dollars a barrel at the end of 2014 to just more than $30 per barrel Tuesday.

It’s enough to make you wonder if the industry is starting to panic.

Colorado Oil and Gas Association president and CEO Dan Haley said when commodities drop, challenges emerge.

“You’ll see some restructuring, you’ll see some tightening of jobs,” Haley said, adding that in 2015, about 2,000 people lost their jobs due to falling oil prices.

The full fallout is not likely to be known when or if the price has hit bottom, or begins to rebound, in the short or long term. Rig numbers are down and students at Colorado School of Mines are worried about the future of the industry, according to the article.

***

A report on job creation tied to a “100% renewables” future is looking a little damaged, according to the folks at Energy in Depth:

A Stanford professor who claims a transition to 100 percent renewables would be a major job creator has scrubbed his website of data showing significant long-term job losses from such a plan, according to a new review by Energy In Depth. Online records show that the professor, Dr. Mark Jacobson, edited his documents just hours after an Energy In Depth report revealed how the transition to 100 percent renewables would cause a net loss of more than 1.2 million long-term jobs, based on data pulled directly from Dr. Jacobson’s website.

The decision to alter his own data could raise additional questions about Dr. Jacobson’s plan for a 100 percent renewables energy system, a plan that has already faced significant criticism from the scientific and environmental communities.

Even if the jobs were there, as Dr. Jacobson contended, not everyone on the left is on board the “100% renewables” bandwagon:

Earlier this week, Dr. Jacobson granted a separate interview to the left-wing blog Daily Kos, which gave him a forum to respond to Energy In Depth’s report. But Dr. Jacobson likely did not anticipate another Daily Kos blogger criticizing his 100 percent renewables plan as impractical. In a comment posted to the article including Dr. Jacobson’s interview, an environmental blogger said that “no electric utility is ever going to adopt Jacobson’s plan” because, among other things, the “wind power component of Jacobson’s plan cannot be relied upon for reliable electric power generation and supply.”

***

Two Colorado Republicans reacted to President Barack Obama’s final State of the Union address and in particular the plight of Colorado’s Western Slope communities hit hard by the administration’s regulations:

U.S. Rep. Scott Tipton, R-Colo., whose 3rd Congressional District trails the rest of the state in the economic recovery, said the president would do well to visit his district.

“I would invite him to visit Craig or Delta,” Tipton said in an interview. “They have lost good-paying jobs and are struggling right now.”

Both communities in Colorado’s 3rd Congressional District have been hard-hit by coal-mine closures. Arch Coal, a major coal supplier and employer on the Western Slope, declared bankruptcy on Tuesday, before the speech.

“The president talked about significant government interference in the marketplace that will most likely imperil jobs on the West Slope of Colorado,” said U.S. Sen. Cory Gardner, R-Colo.

***

Speaking of Arch Coal’s bankruptcy:

Arch Coal Inc.’s bankruptcy filing Monday signals that the coal industry’s shakeout is entering a crucial phase, which will result in more small, unlisted mining companies, record numbers of mines for sale and lower wages for workers.

Over a quarter of U.S. coal production is now in bankruptcy, trying to reorganize to cope with prices that have fallen 50% since 2011, battered by competition from natural gas and new environmental rules. Arch, the biggest domino to fall so far, is trying to trim $4.5 billion in debt from its balance sheet.

Competitors Walter Energy Inc., Alpha Natural Resources Inc., and Patriot Coal Corp. all filed for court protection last year.

But bankruptcies only spell death for current corporate structures, not necessarily the mines they operate. And the U.S. still gets 34% of its electricity from coal, according to the Energy Information Administration, and that number is still expected to be around 30% by 2030. “The question is, what is that 30% going to look like?” says Steve Nelson, chief operating officer at Longview Power LLC, a 700-megawatt coal-fired plant in northern West Virginia.

Market-driven changes are good–the transition from coal-heavy electricity to natural gas is not a problem, and beneficial to the environment–when done without government mandates. Onerous regulations designed to put coal out of commission, from fuel switching initiatives in Colorado to the Environmental Protection Agency’s Clean Power Plan, are not beneficial to the country’s economy and to the individuals and communities impacted by layoffs and dislocation, as well as skyrocketing residential electricity rates.

***

Should be an interesting event and will definitely address some of the impact to Colorado of recent commodity downturns in oil:

By: Vital for Colorado
Event Description
Join us in discussing lifting the U.S. Oil Export Ban and what it means to Colorado. Our esteemed panel includes U.S. Representative Ed Perlmutter (D) CO and U.S. Representative Ken Buck (R) CO, Christopher Guith, U.S. Chamber of Commerce’s Institute for 21st Century Energy, Geoff Houlton, Dir. of Commodity Fundamentals Anadarko Petroleum Corp., John R. Grizz Deal, CEO IX Power Clean Water, and Craig W. Van Kirk, Professor Emeritus Petroleum Engineering Colorado School of Mines. This is a free event but registration is encouraged.

WHEN
Thursday, January 21, 2016 from 5:30 PM to 7:30 PM (MST) – Add to Calendar
WHERE
Colorado School of Mines Green Center – Bunker Auditorium – 924 16th Street Golden, CO 80401 – View Map

The Independence Institute is not affiliated with the event.

***

The EPA’s Waters of the United States rule is facing legislative repeal, subject to President Obama’s veto:

House lawmakers are poised to pass legislation repealing what is probably the Environmental Protection Agency’s (EPA) most hotly contested regulation: an attempt to expand its authority over bodies of water across the country.

The House will vote Wednesday on a bill that would repeal the EPA’s so-called Clean Water Rule under the Congressional Review Act — a law that allows Congress to vote down executive branch regulations. EPA’s water rule has been heavily criticized by lawmakers who see it as a huge expansion of government power and could mean more regulations for private landowners.

“We want them to go back and do a new rule,” Ohio Republican Rep. Bob Gibbs told The Daily Caller New Foundation in an interview. Gibbs sent a letter to House leadership last year asking them to defund EPA’s water rule in the 2016 budget bill.

The Senate passed a bill repealing EPA’s water rule in November, sparking huge outcry from environmentalists who support more federal control over bodies of water. The House is likely to pass the repeal with bipartisan support, sending it to President Barack Obama.

Print Friendly

January 6 Colorado Energy Cheat Sheet: fracking foes awaken; legislative session promises energy battles; EPA and Gold King Mine saga

January 6, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legislation, preferred energy, regulations, renewable energy 

Let’s start with the obvious–the anti-fracking forces have reignited their campaign to ban hydraulic fracturing, and want to do away with property rights too, according to this Gazette editorial:

CREED, an umbrella of sorts for anti-energy activists, wants an outright ban on fracking with a proposal known as Initiative 62. In addition to banning all fracking, the measure would prevent compensation of mineral owners for financial losses incurred by the elimination of fracking.

The measure states, in part: “The prohibition of hydraulic fracturing is not a taking of private property and does not require the payment of compensation pursuant to sections 14 and 15 of Article II of the Colorado Constitution.”

In other words, they want eminent- domain-by-mob without due process or just compensation. The U.S. Constitution, thankfully, prohibits voters from taking private property or negating its value. Voters have no more authority to eliminate mineral rights than to end same-sex marriage. Federal law will prevail.

Initiative 63 would establish an “Environmental Bill of Rights,” suggesting local governments have all sorts of newfound authority to ban energy production on private property. Initiative 65 would impose 4,000-foot fracking setbacks from buildings and homes.

As the editorial correctly point out, these anti-energy measures will drive a wedge between leftwing activists and mainstream Democrats, just as they threatened to do in 2014, before Gov. John Hickenlooper threw his policy Hail Mary to halt any chance of a Dem split.

The Denver Business Journal has a quick rundown of the 11 proposed initiatives.

Which brings us to billionaire activist Tom Steyer. From our new energy policy analyst, Simon Lomax:

Steyer’s track record further suggests he won’t be limited to the presidential contest in Colorado or the effort to reelect Bennet, who served as chairman of the Democratic Senatorial Campaign Committee two years ago. Before holding talks with Colorado’s anti-fracking groups about statewide ballot measures in 2014, Steyer called for a fracking ban in his home state of California, which could only be lifted on a county-by-county basis with a two-thirds popular vote. Steyer’s views are very close to those of anti-fracking groups in Colorado, who have proposed a mix of statewide and local bans for the 2016 ballot. Steyer and Rep. Polis – who championed the 2014 anti-fracking measures before they were pulled – are “kindred spirits,” according to a top adviser to the California billionaire. Steyer has a long history with ballot initiatives in California, and is already backing a 2016 measure in Washington state to impose a carbon tax.

Along with ballot measures, Steyer also has a history of throwing his money into state legislative races. In 2014, for example, he poured money into Washington and Oregon trying to win seats for Democrats. In some cases, NextGen Climate did not spend the money directly – it was given to environmental groups like Washington Conservation Voters and the Oregon League of Conservation Voters. NextGen Climate also gave generously to the national League of Conservation Voters for campaigning in Oregon, Washington and several other states, with the group’s president telling The Washington Post, “There’s not a day that goes by that someone on our team doesn’t talk to someone on the Steyer team.”

Which brings us back to Conservation Colorado. If swaying state legislative races is part of Steyer’s plan, he could not find a better partner than Conservation Colorado. The group spent more than $950,000 on Colorado elections in 2014, and appears to have hit the ground running in 2016. In a little-noticed move, Conservation Colorado gave $10,000 to Fairness for Colorado, a 527 political organization, in September 2015. According to state records, Fairness for Colorado – which focuses on economic issues and social welfare, not the environment – has already spent almost $11,000 with a Denver direct-mail firm.

Simon’s article has tons of links for all the relevant information, plus plenty more on Steyer and Democratic efforts in Colorado in 2015 and 2016.

The fracking battle will also continue in the legislature with liability for earthquakes laid at the feet of resource developers:

Democratic state Rep. Joe Salazar wants to hold drillers responsible for any earthquakes they trigger that cause property damage or physical injury.

Salazar says residents in his Adams County district are worried about a fracking group’s plans to place 20 oil and gas wells in neighborhoods there.

“These were people who were concerned for their children,” Salazar said. “They were concerned for their community. They were concerned about the environment. They’re concerned about their clean water and clean air.”

But state Sen. Ray Scott, R-Grand Junction, says liability would be difficult to prove. He also says that Colorado already has strict environmental guidelines – and he cautions against targeting an industry that provides a great deal of revenue to the state.

“How much longer do you want to stand on the throat of the oil and gas industry to limit that amount of money that’s being generated by the state of Colorado?” Scott said.

But even Rep. Salazar doesn’t think an outright ban on fracking–as some on his side have demanded, will work, and responses to any proposed ban are also in the works:

State Rep. Joseph Salazar, D-Thornton says he doesn’t think increased oil and gas regulation should be handled with constitutional amendments. Nor does he think an outright ban on fracking will fly. But he believes that the Legislature can do more to protect residents from the impacts of drilling.

“An outright ban, that’s just not going to work,” Salazar told The Statesman. “I understand that mineral rights owners have property rights, and that’s a taking. But that doesn’t mean that we can’t be safe about it by studying the effects and implementing good safety measures to ensure that when people want to exercise their mineral rights that they’re not adversely affecting their neighbors.”

State Sen. Jerry Sonnenberg, R-Sterling, said he’s ready to sponsor his own initiative similar to one he backed in 2014 that would prevent any local government that bans oil and gas production from receiving state tax revenues generated by the industry.

“I pushed pretty hard for us not to cave on that for fear that we’d be going down this same path in 2016 that we were in 2014,” Sonnenberg said, referring to the decision to pull two industry-backed ballot questions as part of the 2014 Hickenlooper-Polis compromise. “Rest assured, I will not be silent on this issue. Whatever I need to do, I will be out front.”

***

Other legislative efforts will be focused on the fallout of the Environmental Protection Agency’s Gold King Mine spill:

She [Sen. Ellen Roberts, R-Durango] is also working on bills in the wake of the inactive Gold King Mine spill, in which an error by the Environmental Protection Agency caused an estimated 3 million gallons of mining sludge to pour into the Animas River on Aug. 5.

One proposal comes out of an interim water resources committee that has suggested a resolution that would encourage Congress to pass “good samaritan” legislation, which would reduce the liability associated with private entities conducting mine reclamation work.

Roberts would also like to address jurisdictional issues between states in the wake of Gold King. The incident impacted several states, including neighboring New Mexico. State agencies found it difficult to work with one another because of legal roadblocks. Roberts has proposed legislation that would eliminate some of those barriers through intergovernmental agreements.

“When minutes matter, you need a clearer pathway,” she said.

But deciding anything with regards to the EPA Gold King Mine spill might be difficult, as The Daily Caller explains:

A definitive explanation for what caused the Gold King Mine disaster may never be known if the Environmental Protection Agency is not investigated just as a private company responsible for the calamitous spill would be, according to a former enforcement agent.

The EPA accepted blame for the Aug. 5, 2015, leak that poisoned drinking water in three western states and the Navajo Nation with three million gallons of toxic mining waste, but no officials have been named as responsible or punished. Similar previous environmental disasters, however, were subjects of criminal investigations that led to severe public penalties for those responsible.

“You may not learn about it unless you engage in a criminal investigation,” Heritage Foundation senior legal research fellow and former EPA criminal enforcement special agent Paul Larkin told The Daily Caller News Foundation.

Encouraging.

***

And the EPA isn’t done with mining either, with backing from the usual anti-energy suspects:

The Environmental Protection Agency is proposing toughening its requirements for measuring methane emissions from underground coal mines, a move that would result in some added expenses for testing and could bolster calls for regulating the emissions.

The agency recently unveiled a proposal it says will streamline — and improve the data quality of — its greenhouse gas reporting rule, which applies to a number of industries.

In the case of underground coal mines, it would no longer let them use data from quarterly Mine Safety and Health Administration reports for reporting the volumes of methane vented from mines.

Ted Zukoski, an attorney with the Earthjustice conservation group, praised the proposal as one that will provide better information on Colorado coal mines and address a major source of climate pollution.

“Methane is a greenhouse gas on steroids — it’s up to 80 times more potent than (carbon dioxide) as a heat-trapping gas over the short term. And coal mine methane is a big issue in Colorado because coal mines in the North Fork Valley are some of the gassiest in the U.S. It’s important for EPA — and the public — to have an accurate picture of this pollution, particularly after the climate accord in Paris, which put a major emphasis on transparency around climate pollution,” he said.

***

Another piece from Simon, this time on the Paris climate deal and our own Sen. Michael Bennet:

Of the 26 Senate Democrats who voted with Republicans in 2009 to put the brakes on cap-and-trade, nine are still serving.

Avoiding a debate over the Paris climate agreement and its impact on energy prices, jobs and the economy is a great deal for them—especially U.S. Sens. Patty Murray, D-Wash., and Michael Bennet, D-Colo., who are running for re-election in November 2016. As things stand, they can just hunker down and let the EPA do its thing.

But it’s a lousy deal for the blue-collar and rural constituents who voted for these senators. Their concerns about the economy, energy prices, and jobs were front and center during the cap-and-trade debate, and they should be front and center again after the Paris climate agreement. Instead, these voters have been left in the cold while environmental groups toast themselves and whatever they think was achieved in Paris.

***

Finally, your poop may be keeping the lights on:

The wastewater treatment plant in Grand Junction, Colo., takes in 8 million gallons of raw sewage — what’s flushed down the toilet and sinks.

Processing this sewage produces a lot of methane, which the plant used to just burn off into the air.

The process was “not good for the environment and a waste of a wonderful resource,” says Dan Tonello, manager of the Persigo Wastewater Treatment Plant.

Now, using more infrastructure, the facility refines the methane further to produce natural gas chemically identical to what’s drilled from underground.

The biogas–a delicate term–is renewable.

Print Friendly

December 30 Colorado Energy Cheat Sheet: the anti-fracking force awakens; EPA receives a lump of coal in its budgetary stocking; pot is not green

December 30, 2015 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legislation, regulations, renewable energy, solar energy, wind energy 

Theeeeeeey’re baaaaaack!

As promised, the anti-energy, anti-fracking folks have delivered nearly a dozen ballot initiatives that focus on either banning hydraulic fracturing altogether or a host of other setback measures.

The group has cleverly dubbed themselves Coloradans Resisting Extreme Energy Development, or CREED, likely to inspire confusion among voters who might be only familiar with Coloradans for Responsible Energy Development, or CRED:

Each of the constitutional amendments would need signatures from 98,492 registered Colorado voters to get on November’s ballot.

A review-and-comment hearing on the language of the ballot questions is set for at 1:30 p.m. Jan. 5 in Room 109 at the Capitol.

“If the state will not adequately protect Coloradans and communities, then we, the people of Colorado, must do it, and that requires a change to Colorado law,” Tricia Olson, CREED’s executive director, said in a statement.

“Our beautiful state should not be overwhelmed by wells, pads and other industrial oil and gas operations plunked down next to neighborhoods and schools.”

As the Post points out, these measures would toss the efforts of Governor John Hickenlooper’s grand pragmatic strategy to develop and cultivate the blue ribbon commission that existed in 2014-15, narrowly averting a previous slate of anti-fracking measures brought forward in 2014 that Democrats feared would threaten the midterm election that cycle.

But the supporters of the 2014 measures felt that Hickenlooper’s attempts to find “balance”–his words–on fracking in Colorado did not go far enough, and felt betrayed when the measures were pulled. Continued efforts on this issue could once again upset a delicate situation for Democrats in the state split between development and anti-energy, more left-leaning Democrats.

The Independence Institute will be tracking these measures throughout the year in 2016, and will provide regular updates on ballot specifics, tracking ballot measure progress, and weighing in when and where appropriate.

Stay tuned.

***

The Environmental Protection Agency’s Christmas stockings weren’t as full this year as they would have liked, instead getting a lump or two of coal, so to speak:

The EPA received $8.1 billion or $451 million less than Mr. Obama had demanded, and no increase from the year before. Congress has cut the EPA’s allowance by $2.1 billion, or 21%, since fiscal 2010. This has forced the EPA to cut more than 2,000 full-time employees over the same period, and its manpower is now at the lowest level since 1989 (see nearby chart).

Mr. Obama sought an additional $72.1 million to turbocharge his extralegal climate rule on power plants. That request included $8.3 million for the EPA’s science and technology groups, which do the phony modeling to justify regulations. It also included $68.3 million for the agency’s environmental programs and management department, which is where the minions draft and implement the President’s climate initiatives. Congress denied every penny.

Two thousand fewer EPA officials to harass the American public with onerous regulations? Sounds like a good start (from the WSJ):
Screen Shot 2015-12-29 at 11.34.03 PM

***

There will be plenty of energy battles in 2016, from the Clean Power Plan’s effect on rising electricity costs to anti-fracking ballot measures and beyond. The Independence Institute has already revealed that residential electricity rates in Colorado have skyrocketed 63% between 2001 and 2014, before the CPP or other measures even kick in at the state level.

But this nugget, from July 2015, illustrates just how much the impact of rising electricity costs disproportionately targets those least able to afford it:

Average households pay 2 percent to 3 percent for energy, compared with low-income households, which often pay as much as 50 percent.

“That leaves very little for food, clothing, medicine,” said Pat Boland, Xcel’s manager of customer policy and assistance.

Percent_Increase_NRG_Income(Independence Institute)

The next time someone advocates for higher energy costs through regulation or burdensome energy mandates, remind them who really takes a hit in the pocketbook.

***

Speaking of folks who like higher energy costs:

A coalition of environmental groups announced earlier this week its intent to take legal action against several federal agencies for extending operations at the Four Corners Power Plant and Navajo Mine just outside Farmington.

On Dec. 21, San Juan Citizen Alliance, among other regional and national conservation groups, filed a 60-day notice of intent to sue the Office of Surface Mining, U.S. Fish and Wildlife Service and others over a July decision to allow the plant to operate until 2041.

“While the rest of the world is transitioning to alternative forms of energy, the Four Corners Power Plant continues to burn coal and will do so for the next 25 years,” Colleen Cooley with Diné Citizens Against Ruining Our Environment said in a news release. “Prolonging coal not only condemns our health and the water, air, and land around us, it undermines our community’s economic future because we are not investing and transitioning to clean energy.”

***

On the other hand, lawsuits to protect Coloradans from rogue agency actions, like the EPA spill in August, could be on tap in 2016:

DENVER – State legislation has been drafted in an effort to pressure the federal government into quickly settling damage claims stemming from the Gold King Mine spill.

Rep. Don Coram, R-Montrose, said he will carry the bill at the start of the legislative session, which begins next month.

The bill would allow the state to file lawsuits against the federal government on behalf of individuals financially impacted by the Gold King Mine spill.

“It’s authorizing the state of Colorado to sue the EPA in case they renege on their obligation,” Coram said.

He added, “The idea behind the bill is that it encourages them to settle this in a gentlemanly manner.”

***

It’s not every day that pot and energy end up jointly in the same article, but this revelation may be a real eye opener for a lot of folks, some who steadfastly approve of pot legalization but prefer more renewable forms of energy:

DENVER – Pot’s not green.

The $3.5 billion U.S. cannabis market is emerging as one of the nation’s most power-hungry industries, with the 24-hour demands of thousands of indoor growing sites taxing aging electricity grids and unraveling hard-earned gains in energy conservation.

Without design standards or efficient equipment, the facilities in the 23 states where marijuana is legal are responsible for greenhouse-gas emissions almost equal to those of every car, home and business in New Hampshire. While reams of regulations cover everything from tracking individual plants to package labeling to advertising, they lack requirements to reduce energy waste.

Some operations have blown out transformers, resulting in fires. Others rely on pollution-belching diesel generators to avoid hooking into the grid. And demand could intensify in 2017 if advocates succeed in legalizing the drug for recreational use in several states, including California and Nevada. State regulators are grappling with how to address the growth, said Pennsylvania Public Utility Commissioner Pam Witmer.

“We are at the edge of this,” Witmer said. “We are looking all across the country for examples and best practices.”

Light ‘em if you got ‘em. It’s legal here, ya know.

***

Looking into the future of Colorado’s oil boom, thanks to the end of the U.S. oil export ban–but only time will tell.

Print Friendly

Next Page »