March 3 Colorado Energy Cheat Sheet: EPA’s McCarthy ‘good news about Gold King’; a Tesla will improve your ‘quality of life’

Environmental Protection Administrator Gina McCarthy: “But, the good news about Gold King is that, you know, it really was a bright color, but the bright color was because the iron was oxidizing. It meant we had actually less problem than how it usually leaks, [laugh] which is pretty constantly, and so it was only a half a day’s release of what generally comes from those mines and goes into those rivers.”

The Daily Caller’s Michael Bastasch had more on the story:

The EPA-caused spill unleashed the equivalent of “9 football fields spread out at one foot deep” for a couple hours, according to a report by University of Arizona researchers.

Mine waste from Gold King was only coming out at a rate of 112 gallons per minute in August 2014. After the spill, wastewater was coming out at a rate of 500 to 700 gallons per minute.

While there have thankfully been no reported short-term health problems from the spill, experts are worried the toxic metals, like arsenic and lead, that leaked from the mine could pose long-term health problems.

“There is a potential for such sediments to be stirred up and metals released during high water events or recreational use,” University of Arizona researchers wrote. “The metals could become concentrated in fish that live in the river and feed on things that grow in the sediments. Metals in the sediments could seep into the groundwater, resulting in impacts to drinking and irrigation water.”

And the question of culpability for the EPA remains, as a House committee finds additional evidence implicating the agency directly:

House Natural Resources Committee Chairman Rob Bishop, R-Utah, cornered Interior Secretary Sally Jewell Tuesday over an email he says contradicts her statements that a toxic mine spill the Environmental Protection Agency caused last year in Colorado was an “accident.”

The mine blowout released 3 million gallons of heavy-metal-tainted water into the Colorado Animas River and the waterways of New Mexico and Utah. Bishop’s committee recently subpoenaed the Interior Department in February to provide it with email communications between Interior and the Army Corps of Engineers.

Much of what they received back was completely redacted, Bishop said. But one email that Interior sent to the panel, unrelated to the subpoena, was revealing.

The email shows “that less than 48 hours after the blowout, your employee in Colorado talks to the EPA official in charge, and then emails all senior leadership at [the Bureau of Land Management], and basically says that EPA was deliberately removing a small portion of the plug to relieve pressure in the mine when the blowout occurred.”

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ICYMI: Energy Policy Center associate analyst Simon Lomax’s latest column:

It was a rare moment of honesty from an environmental activist: “It is not easy to talk about the kind of massive changes that we need to make; about how we think, about what we eat, where it comes from, how we entertain ourselves, what kind of holidays we take,” said Kumi Naidoo, former executive director of Greenpeace International. “All of these things actually are very painful to talk about.”

Naidoo, who led Greenpeace for six years before departing late last year, made these remarks in mid-February at a climate-change forum in Germany. He was answering the question of an Icelandic official, who wanted to know why governments aren’t doing more to crack down on “meat consumption,” and other economic excesses that produce greenhouse gases. “We have to change the way we consume,” the official concluded at the end of her question.

On the same panel, three seats across from Naidoo, sat U.S. Sen. Sheldon Whitehouse (D-R.I.). As the former Greenpeace activist wrapped up his answer, the American lawmaker saw his climate and energy talking points going up in flames, and tried to get back on message.

“Let me just push back very gently on one point,” Whitehouse said, in comments first reported by The Harry Read Me File. “I don’t want to leave the impression that mankind must suffer in order to make these changes. The changes in consumption can actually be enjoyable and beneficial.”

Then he offered an example: “If you trade in your Mercedes for a Tesla, your quality of life just went up.”

Read it all here.

***

Have not had much on wind energy in a while, and the latest headline is somewhat revealing–wind sources acknowledge their lethal impact on birds, and propose to use technology to shut them down whenever a bird is nearby, making the energy source even more erratic and intermittent, not to mention the wear and tear of stop/start on the turbines themselves:

What if a wind turbine knew to shut down when a bird was too close? That vision is the goal of ongoing research in Golden, and birds themselves are helping to develop a solution.

The National Renewable Energy Laboratory has been conducting avian research alongside various industry partners to drastically reduce avian deaths by wind turbine collisions.

Colorado has 1,916 operating wind turbines statewide, placing it eighth in the nation for the number of turbines within a state.

Although those wind turbines accounted for only a small percentage of bird deaths annually, Jason Roadman, a technical engineer for NREL said that percentage should be zero.

“Renewable energy is something that I and a lot of people strongly believe in, so we want to make it as low impact as possible,” Roadman said. “The rates of wild bird collisions are fairly low on these solar-wind farms, but they’re not zero. So anything we can do to reduce the footprint of the negative effects of alternative energy, we’ll make every effort toward.”

Leaving the question of turbine resiliency and energy generation fluctuation aside, the admission that such measures are necessary to alleviate the threat to birds, including the heavily protected eagles and other raptors, is quite a step from a few years ago, when wind proponents minimized any such concern and sought takings extensions to prop up one of the industry’s most glaring shortcomings.

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To say it’s been a rough 18 months for oil and gas would be an understatement, and the effect of the drop in commodities prices is being reflected in new figures from local businesses and communities:

Anadarko Petroleum Corp., one of the biggest oil and gas companies working in Colorado, will have only one drilling rig operating in the state during 2016 — down from an average of seven in 2015.

The Texas company (NYSE: APC), based in The Woodlands, a suburb of Houston, on Tuesday followed its peers by releasing budget figures and plans for 2016 that are a far cry from last year.

Hammered by a bust in oil and gas prices brought on by an international glut in supplies, oil and gas companies have slashed budgets, laid off employees and sold assets in the struggle to survive.

Anadarko, which has operations in the U.S. and around the world, said Tuesday it expects to spend between $2.6 billion and $2.8 billion this year, down nearly 50 percent from its 2015 budget.

About half that money, $1.1 billion, will be spent in the United States, and about half that amount — approximately $500 million — spent in the Colorado’s Denver-Julesburg Basin during 2016, according to the company.

By comparison, Anadarko said a year ago it expected to spend about $1.8 billion on its Colorado operations in 2015.

Cuts like Anadarko’s have already manifested in places heavily involved in natural resource development, like northern Colorado’s Weld County:

Weld County’s economy appears to have entered a hard skid, now confirmed by larger-than-expected downward revisions to the number of people employed in oil and gas and mining statewide.

Preliminary employment counts last month estimated the county gained a net 3,800 payroll jobs between December 2014 and last December.

But revisions based on the Quarterly Census of Employment and Wages for the third quarter from the Colorado Department of Labor and Employment out Wednesday now project the county lost 500 jobs last year.

“It is playing out as we expected. It has just been more delayed than expected,” said Brian Lewandowski, associate director of the business research division at the University of Colorado at Boulder’s Leeds School of Business.

Weld County accounted for about 90 percent of the state’s oil production last year, and oil and gas producers account for about three-quarters of employment in the mining sector, Lewandowski said.

Mining has also been hit hard:

The QCEW revisions show what was initially measured as a modest 3.9 percent year-over-year decline in mining employment is running closer to a 20.7 percent drop.

Viewed another way, the loss of 1,400 mining sector jobs last year is now estimated at closer to 7,500, a nearly fivefold increase.

And while the number crunchers characterize the information as “delayed”–due to being lagging indicators following the commodity prices dropping–the impact was within a year, not a much longer or slowed trend that plays out over time.

A similar downturn has already been seen in severance taxes in the same area, as we noted a month ago in the Cheat Sheet:

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.

***

Xcel says the future of solar is bright:

Xcel Energy filed a new renewable energy plan with the Colorado Public Utilities Commission Monday that could more than double its portfolio of solar power in the state over the next three years.

“Our plan is all about our energy future in Colorado, and allowing our customers to choose and pay for the energy sources that they believe are best for them,” David Eves, president of Public Service Co. of Colorado, said in a statement.

The plan would add 421 megawatts of new power from renewable sources, enough for 126,300 homes, over the next three years. The bulk of that amount, 401 megawatts, would come from solar.

Xcel Energy, which currently obtains more than 22 percent of its power from renewable sources, said it is on track to meet or beat the state mandate of 30 percent from renewable sources by 2020.

The solar industry, however, is not impressed with Xcel, saying the utility should do more to encourage distributed generation:

But one leading solar advocate questioned the utility’s sincerity, given that Xcel, in a separate rate case, has asked for cuts to what it pays customers who put solar power onto the grid.

“Xcel’s view of the energy future is not the only one that Coloradans should consider. The public really needs to have a say here,” said Rebecca Cantwell, executive director of the Colorado Solar Energy Industries Association.

Xcel currently offers to take on 2 megawatts of additional solar power at the start of each month, but that capacity is reserved within 15 to 20 minutes.

“We don’t think there should be an allocation, a ‘Mother may I have some capacity’ system,’ ” Cantwell said. “The industry is ready to play a much bigger part in Colorado’s energy future.”

Solar remains captive to the need for government mandates, rebates, handouts, and incentives to spur growth beyond the natural market preference of customers desiring to install the preferred energy source. The cost of panels may be declining (again, due in no small part to taxpayer-funded R&D grants, state and federal mandates, and other subsidies), but the cost of a system remains daunting.

If you have any doubt about the extent of government programs to encourage solar and other renewables, take a look of this list compiled by the Department of Energy. It lists 129 programs for Colorado alone.

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As for the resources necessary for renewables and battery storage, here’s a new report from the Institute for Energy Research, as they show that renewables increase dependency on foreign sources:

One of the common reasons people claim to support wind and solar technologies is to reduce dependence on foreign sources of energy. For example, green energy supporter Jay Faison told the Wall Street Journal “If we expand our clean energy technologies, we’ll create more jobs, reduce our dependence on foreign sources of energy…”[i] The problem is that green energy actually increases reliance on imports instead of reducing imports.

Green energy technologies are dependent on rare earth minerals and lithium for batteries–both of which are primarily imported into the United States. Most of the world’s rare earth minerals are produced in China (85 percent); and that country supplies the United States with most of its rare earth imports (71 percent). The United States only produces 24 percent of the rare earth minerals that it needs.[ii] In 2013, the United States imported 54 percent of the lithium it used, with Chile and Argentina supplying 96 percent of those imports.[iii] Some believe that lithium may be the “new oil”, eclipsing oil as a source for geopolitical and economic power.[iv] Clearly, Tesla, who is building a gigafactory in Nevada to produce lithium-ion batteries for its cars and Powerwall storage device, needs access to low-cost lithium. In contrast to these figures, the United States now imports only 27 percent of the oil it uses domestically.[v]

***

And about that reliability argument:

Green energy is so unreliable and intermittent that it could wreck the power grid, according to industry and government experts.

The U.S. Federal Energy Regulatory Commission (FERC) is currently investigating how green energy undermines the reliability of the electrical grid. FERC believe there is a “significant risk” of electricity in the United States becoming unreliable because “wind and solar don’t offer the services the shuttered coal plants provided.” Environmental regulations could make operating coal or natural gas power plant unprofitable, which could compromise the reliability of the entire power grid.

“The intermittency of renewable sources of electricity is already threatening reliability in Britain,” Myron Ebell, director of the Center for Energy and Environment at the libertarian Competitive Enterprise Institute, told The Daily Caller News Foundation. ”This is because there are so many windmills that conventional power plants are being closed as uneconomic and so when the wind doesn’t blow there is not adequate backup power available. To avoid blackouts, the government is now paying large sums to have several hundred big diesel generators on standby. If this sounds crazy, it is.”

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

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.

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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.

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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.

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

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.

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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.

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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.

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November 5 Colorado Energy Cheat Sheet: Hickenlooper seeks CO Supreme guidance on Coffman EPA lawsuit; divestment movement is back at CU; WOTUS opposition in U.S. Senate

November 5, 2015 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legislation, PUC, regulations 

Governor John Hickenlooper finally filed his request with the Colorado Supreme Court to determine which office–governor or attorney general–has the final say in Colorado’s lawsuit against the Environmental Protection Agency’s Clean Power Plan. Attorney General Cynthia Coffman, joined the lawsuit with approximately two dozen other states in October.

Via the BARN blog:

Gov. John Hickenlooper today filed a petition asking the Colorado Supreme Court to issue a legal rule that the governor, not the attorney general, has the ultimate authority to decide on behalf of the state when to sue the federal government in federal court.

“The attorney general has filed an unprecedented number of lawsuits without support of or collaboration with her clients,” said Jacki Cooper Melmed, chief legal counsel to the governor. “This raises serious questions about the use of state dollars and the attorney-client relationship between the governor, state agencies and the attorney general.”

From the full petition:

Governor Hickenlooper petitions this Court under Colorado Constitution art. VI, § 3, and C.A.R. 21 for a rule requiring Attorney General Coffman to show cause regarding her legal authority to sue the United States without the Governor’s authorization. In this Petition, he requests a ruling on the Governor’s and Attorney General’s respective authority under the Constitution and laws of Colorado to determine whether the State of Colorado should sue the United States. The Governor asks this Court to issue a legal declaration that (1) the Governor, not the Attorney General, has ultimate authority to decide on behalf of the State of Colorado whether to sue the federal government, and (2) the Attorney General’s lawsuits against the federal government without the Governor’s authorization must be withdrawn.

No doubt this request will remain at the top of the news between the Democratic Governor and the Republican Attorney General as the hotly contested and controversial Clean Power Plan moves forward despite pending lawsuits. The EPA has already schedule a series of public hearings on the CPP implementation at four locations over the next two weeks in Pittsburgh, Atlanta, Washington, DC, and Denver.

How contested is the rule? At least twenty-six states have filed lawsuits–24 in a joint lawsuit, with two other states filing separately–while 18 states have filed a motion on behalf of the EPA and the Clean Power Plan.

The Clean Power Plan has split the country in half. More to come.

***

Earnest but misguided students at the University of Colorado have resurrected their divestment push and will harangue the CU Board of Regents with the usual mix of ideology and theater today, even after being voted down 7-2 back in April:

Also on Thursday, the student group Fossil Fuel CU is planning an “action” toward the end of the board’s meeting, complete with banners, signs, posters and singing. That’s likely to be a recurring theme again this year.

“The folks who don’t stand with us anticipated that that block in process would dishearten student leaders or stifle the campaign we’ve been building for two years, but it actually did quite the opposite,” said P.D. Gantert, who is taking time off from CU classes to organize divestment movements across the southwestern United States. “It emboldened us to take even more risky and loud actions to stand up for what we know is the change that needed to happen at our university.”

Here’s what I had to say back in April during a board meeting and hearing on the divestment question, as quoted by the Daily Camera:

“The anti-fossil fuel campaign is really a national campaign run by far-left environmental activists,” said Michael Sandoval of the Independence Institute, a free-market think tank in Denver, during a board meeting in April. “To be blunt, this is a national campaign using college students to shut down one of Colorado’s leading job creators.”

Schools from Swarthmore to Harvard, hardly conservative bastions, have rejected the arguments in favor of divestment. Our own spring intern, Lexi Osborn, took down the divestment arguments in an op-ed for the Greeley Tribune back in February:

Divestment activists appear willing to jeopardize university assets in the name of saving the planet. Yet they may not realize how ineffective their project would be.

A new report by the American Security Project found that university divestment from fossil fuels will have no mitigating effects on carbon emissions. Divestment does not decrease the demand for fossil fuels; it merely moves the money around. The campaign additionally ignores the complexities of transitioning to a “renewable and emission-neutral economy.”

Another study by University of Oxford found that, even if all capital were divested from university endowments and public pension funds, it would be such a small percentage of the market capitalization of traded fossil fuel companies that the divestment would barely impact the fossil fuel industry.

But the divestment of fossil fuel assets might not be the real goal of the campaign. In a video interview, Klein states that they are using the movement to create a space where it is easier to tax, nationalize and undermine oil companies. She claims that the people have a right to the oil industry’s “illegitimate” profits to make up for the crisis created by this sector.

***

The U.S. Senate moved beyond court injunctions on the EPA’s stalled Waters of the United States rule this week, with Republicans pushing forward on a repeal measure and another calling for revisions, with the former facing a veto from the Democratic administration, and the latter falling to Democratic opposition in the Senate itself:

“Coloradans know when they’re getting soaked,” Colorado Sen. Cory Gardner, a Republican, said following votes on Tuesday. “This rule is so poorly written and ill-conceived that multiple federal judges have put halts on its implementation.”

The resolution that passed in an effort to essentially repeal the rule fell under the Congressional Review Act, which allows for a simple majority to disapprove of any regulation. It passed Wednesday 53-44. The White House has already issued a veto threat.

The measure calling on the Environmental Protection Agency to rewrite the water rule required a procedural vote to advance. But it fell three short of the 60 votes needed, with Democrats leading the effort to stop the bill.

Gardner supported a rewrite in order to enact stronger state and agricultural protections with more input from local communities. He also supported the resolution eliminating the rule.

“The WOTUS rule is a classic example of federal overreach, giving the EPA authority to regulate ponds, ditches and tiny streams across Colorado and the West,” Gardner said.

Sen. Michael Bennet helped quash the rewrite measure.

***

The ongoing battle between the city of Boulder and Xcel Energy received clarification from the Public Utilities Commission this week.

***

Despite production records, Noble Energy sees losses in the third quarter due to lower commodity prices, and will likely trim staff numbers later this month.

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October 29 Colorado Energy Cheat Sheet: Hickenlooper vs. Coffman over EPA lawsuit; EPA spill report short on info says New Mexico; Frack or Treat

October 29, 2015 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legal, Legislation, PUC, regulations, solar energy, wind energy 

Attorney General Cynthia Coffman’s decision to challenge the Environmental Protection Agency’s authority to implement the Clean Power Plan has initiated a constitutional battle in the eyes of Governor John Hickenlooper:

Gov. John Hickenlooper said Monday he will seek the state Supreme Court’s opinion on the legality of Attorney General Cynthia Coffman’s lawsuit to stop implementation of the Clean Power Plan.

“This notion of everyone suing all the time every time you disagree with a specific remedy, a specific statute, is part of what makes people so frustrated with government,” Hickenlooper, who supports the plan, said in a meeting with The Denver Post’s editorial board.

“Except in very rare circumstances, generally the governor is supposed to make that decision in concert with the attorney general,” Hickenlooper said of the lawsuit. “But the governor should have that final say.”

Hickenlooper’s office pushed the issue further, saying the AG’s actions “just gets in the way” of state plans to cooperate with the CPP:

“The statute that we’re looking at speaks of prosecuting and defending on the request of the governor,” said Jacki Cooper Melmed, Hickenlooper’s chief legal counsel, citing Colorado’s revised statutes, title 24, article 31, part 1.

Cooper Melmed said she is worried about conflicts as some Coffman deputies work with Hickenlooper’s administration to implement the plan while others in the attorney general’s office try to quash it.

“This just gets in the way,” Cooper Melmed said of the lawsuit. “There’s no wall really high enough to allow these two things to happen out of the same office.”

Coffman, for her part, said she was “disappointed” in the Governor’s decision.

Former Colorado Attorney General Gale Norton called Hickenlooper’s stance “unusual” when it comes to the relationship between AG and Governor, even when representing opposing parties:

“For the governor to try to challenge in this way is unusual,” Norton said.

In almost all cases where a governor challenges an attorney general, Norton said, rulings are in the attorney general’s favor.

“The attorney general represents the state and not the governor,” Norton said. “The attorney general is elected to provide independent representation of the state’s interest.”

The Pueblo Chieftain and the Colorado Springs Gazette support Coffman’s lawsuit, while the Denver Post welcomes the clarification that the Colorado Supreme Court’s advice might bring.

Steamboat Today has a great roundup of other reactions for and against the lawsuit.

***

It’s not just states suing the EPA over the Clean Power Plan–at least 26 states filed almost immediately after the ruling was published last Friday–but other lawsuits are on their way from the U.S. Chamber of Commerce, National Rural Electric Cooperative Association and National Association of Manufacturers.

The EPA, meanwhile, is touting its flexibility–a “wide range of choices”–in allowing states to file extensions:

Screen Shot 2015-10-29 at 2.35.42 PM

***

Taking another crack at busting the CPP progress, this time using pre-existing Congressional review legislation:

Lawmakers opposed to the Obama administration’s climate rule for power plants are moving to block the regulations from taking effect.

Several senators will offer Congressional Review Act (CRA) resolutions Monday that seek to stop the Clean Power Plan. Senate Majority Leader Mitch McConnell (R-Ky.), a longtime opponent of carbon regulations for the power sector, will schedule a vote on the resolutions soon after they come out.

“I have vowed to do all I can to fight back against this administration on behalf of the thousands of Kentucky coal miners and their families, and this CRA is another tool in that battle,” McConnell said in a statement.

The Congressional Review Act gives lawmakers the ability to end an executive branch regulation through an act of Congress.

***

Communities around Colorado continue to struggle with mine runoff, the August EPA spill in southwest Colorado not withstanding:

Toxic mines hang over this haven for wildflowers, contaminating water and driving residents — like counterparts statewide — to press for better protection.

A local group went to federal court this month seeking long-term assurances that a water-treatment plant will always remain open as the collapsed tunnels and heaps of tailings leak an acid mix of heavy metals: arsenic, cadmium, zinc and others.

State data show these contaminants reaching Coal Creek — the primary water source for Crested Butte and the Gunnison Valley’s green pastures — at levels exceeding health standards.

“A lot of people are nervous,” said Alli Melton of High Country Conservation Advocates. “We’d like to get it as clean as possible.”

But the EPA isn’t being all the helpful, as the Interior Department inspector general report on the Gold King Mine/Animas River spill concluded, as the U.S. Chamber points out:

These two quotes from the report illustrate just how careless EPA was:

EPA has “little appreciation for the engineering complexity.”

“[T]here appears to be a general absence of knowledge of the risks associated with these [abandoned mining] facilities.”

Even EPA’s internal investigators didn’t hold back on the agencies irresponsibility. Its initial review concluded the spill was “likely inevitable,” but the agency wasn’t prepared to contain a spill before digging into the mine.

That isn’t much consolation for the folks in Colorado, New Mexico, Utah, and the Navajo Nation affected by the spill, as New Mexico’s top environmental watchdog Ryan Flynn said, quoted again by the Chamber:

While the report reveals that an EPA decision was made to refrain from validating the flawed water level estimates with a previously used successful procedure (using a drill rig to bore into the mine from above to directly determine the water level of the mine pool prior to excavating the backfill at the portal); the report says absolutely nothing about who made the decision to fly by the seat of their pants, by digging out the closed Gold King Mine tunnel based on un-validated estimates of what volume and pressure of contaminated water would be violently released.

Here in New Mexico, we are already quite clear on the fact that EPA made a mistake, as the DOI’s report underwhelmingly reveals. What we were wondering, and hoped the report could tell us, is why EPA made the mistake, and who at EPA made the decisions that authorized dangerous work to proceed based on un-validated estimates. It is shocking to read the DOI’s “independent investigation” only to find that it overlooks the who, the how, and the why. [emphasis added]

***

How big are subsidies for electric cars? Without the $5,000 tax credit in Georgia, the state saw sales of electric vehicles plummet nearly 90% in just two months:

According to Georgia car registrations, sales shot up as electric car buyers rushed to take advantage of the tax credit before it expired. But the numbers declined sharply in July and took a swan dive in August — the most recent month tabulated:

electric-vehicle-sales-in-Georgia-in-2015-data-compiled-by-Don-Francis

The decline from 1,338 in June to 148 in August represents a drop of 88.9 percent.

Read the rest of this excellent Watchdog article here.

***

It’s almost Halloween, so we’ll end on a spooky anti-energy note from Energy in Depth:

Screen Shot 2015-10-29 at 3.10.38 PM

The Community Environmental Legal Defense Fund (CELDF) has been waging an extreme campaign to ban fracking through so called “Community Bill of Rights” ballot initiatives, especially targeting communities in Colorado, Ohio, and Pennsylvania. The group has already forced taxpayers to pay tens of thousands of dollars to defend their illegal ordinances and it is now planning to hit communities in California, Oregon, New Hampshire and Washington State. In fact, as Energy In Depth’s new video shows, this Halloween, CELDF’s extreme (and expensive) campaign could be coming to a ballot box near you.

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Independence Institute comments to CDPHE on Clean Power Plan implementation in Colorado

Thanks to the Colorado Department of Public Health and Environment for holding this event.

A few comments for the agency to consider.

First, in your December 2014 comments, the Colorado Department of Public Health and Environment, the Colorado Public Utilities Commission, and the Colorado Energy Office all maintained that ‘In Colorado, the PUC has exclusive statutory authority to regulate the IOUs and associated electric resource decisions’ and that ‘depending upon the plan elements proposed by Colorado, legislation may be needed to clarify or direct state agencies on their respective roles and authorities’–and since no legislation appears to have clarified this point, how do you expect to proceed?

Second, the state’s top law enforcement official Attorney General Cynthia Coffman believes the CPP to be overreach and has joined more than one dozen other states suing the EPA to stop the CPP. The EPA has even said in its brief in response to petitions for extraordinary writ in the D.C. Circuit:

“…if a state believes it appropriate to do so, it could defer much of the planning effort until judicial review is complete. The initial submittal requires substantially less than a state plan.”

We are pleased to hear today that this advisement has been acknowledged and that CDPHE will take the maximum time allowed.

Third, we hope that you include more input from citizens and ratepayers, the most important stakeholders in the state. A recent Magellan poll revealed 59% of Colorado voters want to WAIT for all legal challenges to be completed BEFORE Colorado complies and the EPA says that’s okay. So it seems prudent to wait for legal challenges to be completed. In the meantime we shouldn’t be planning compliance but rather studying what the CPP’s impact on the economy and Colorado’s working family, low income and minorities in a fair and open way. We need to know the full impact of the estimated $600 additional cost per year per Colorado family for no measurable impact on emissions.

In that light, we wonder how Colorado will remain committed to ensuring reliable and affordable electricity if it pushes forward with a plan without allowing legal challenges to be resolved?

Thank you for this opportunity to speak on behalf of Colorado citizens and ratepayers. We appreciate CDPHE’s process and support an open, transparent stakeholder process subject to relevant legislation.

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August 27 Colorado Energy Cheat Sheet: Bennet says ozone rule “not going to work”; net metering gets a boost from PUC

bennet

Sen. Michael Bennet, joined a bipartisan group of officials in Colorado questioning the proposed Environmental Protection Agency’s new ozone rule proposal at the recent Colorado Oil and Gas Association Energy Summit in Denver:

Senator Bennet and Gardner participated on a panel hosted by the Colorado Oil and Gas Association on August 26. Below is the question posed to Senator Bennet, and his response:

Manu Raju, Politico: Senator Bennet, a big issue here in the room is the ozone standards. Environmental groups, EPA officials are concerned about excessive levels of ozone; that they could lead to premature death and respiratory problems. The business community warns that the standards EPA is proposing would be very bad here in Colorado; it would cost a lot of jobs. The current ground-level ozone standard set in 2008 is 75 parts per billion. EPA’s proposal is lowering it to 65 to 70 parts per billion, and it could go even lower. Question to you: Do you think the EPA proposal is fair? Should they go to 65 parts per billion?

Senator Bennet: I’m deeply concerned about it. I think we should understand how they arrived at that conclusion, because the way some statutes are written, they don’t sometimes have the flexibility we think they should have. And this is the perfect example of applying the law and doing it in a way that doesn’t make sense on the ground. Because of the pollution that’s come in from other Western states, from across the globe, from wildfires in the West, we have significant parts of our state that would be in non-attainment [unintelligible] from the very beginning of the law. That doesn’t make any sense. That’s not going to work.[emphasis added] Having said that, we need to care a lot about our kids and the elderly and the quality of the air that they breathe, and we need to care about children in our state that have asthma. So my hope is that we can work together to get to a rational outcome, but I’m not—The one that’s been proposed is not yet there.

Earlier this month, The Center for Regulatory Solutions issued a report that included opinions from Democrats, Republicans, and other elected officials from across the state opposing or pushing back against the EPA ozone rule. A sampling of those statement can be found in our August 13 edition.

***

Net metering, a handout from folks who don’t own solar panels to those who do, in the form of retail price reimbursement for the electricity they generate–gets a boost from a unanimous Public Utilities Commission decision to keep the current rates in place:

Colorado’s Public Utility Commission ruled Wednesday afternoon that no changes were needed to the state’s net metering process, meaning that homeowners with solar arrays will continue to receive retail rates for energy they produce.

“The PUC voted (3-0) today to maintain the status quo for the net metering program and close the docket,” PUC spokesman Terry Bote confirmed via email.

Net metering provides a credit for every kilowatt-hour an array puts on the grid at the same price residential customers are charged for electricity – about 10.5 cents.

Xcel Energy, the state’s largest electric utility, has been pushing a plan to cut the incentives for each kilowatt-hour produced to a fraction of a penny, but solar users and industry groups have lobbied hard against changes that would remove a key financial incentive.

“This appears to be the outcome we have been working towards in more than a year of work on this docket,” said Rebecca Cantwell, executive director of the Colorado Solar Energy Industries Association. “We have worked in full collaboration with other members of the solar industry, and this represents a tremendous amount of hard work from many people. Xcel officials could not immediately be reached for comment.

“Key financial incentive” = subsidy.

From my op-ed late in 2014, as the PUC was steering through a slate of meetings to determine the “value of solar”:

At issue is the method of calculating the “value of rooftop solar,” as the Public Utilities Commission chairperson put it this year. Solar proponents believe the credits for excess electricity generated by solar panels and pushed back onto the grid should continue to get 10.5 cents per kilowatt-hour — the average of annual residential retail rates.

Xcel is arguing for a reduction to 4.6 cents, saying the costs associated with maintaining the grid made the reimbursement unfair.

Xcel representatives called maintaining the 10.5-cent credit a “hidden cost” for its 1.2 million Colorado ratepayers. “Everybody needs to pay for the cost of the grid,” said spokesperson Hollie Velazquez Horvath.

Rooftop solar uses the grid in multiple ways. For customers pulling energy when the sun isn’t out (or near maximum generation) or pushing electricity onto the grid at the peak of summer, the grid balances supply and demand, regulating and stabilizing electrical output. It also acts as the exchange mechanism when a customer goes from generating and reselling excess electricity, to periods when the customer needs more electricity than the solar panel provides.

Customers who generate enough “revenue” from their net metering credits end up paying little or nothing for the grid costs. The costs get shifted to the utilities’ non-solar customers.

In other words, solar proponents advocate that non-solar ratepayers continue to subsidize grid maintenance for solar customers and then purchase electricity from those same solar customers at a price higher than they would pay for Xcel to generate the power.

The PUC has closed the docket on this proposal, but the legislature may look to take up the issue of net metering in future sessions.

***

Speaking of Sen. Michael Bennet (D-CO), the Democrat up for reelection in 2016 has some words of advice for embattled Democratic Party presidential frontrunner Hillary Clinton on #KeystoneXL:

DENVER — Sen. Michael Bennet (D-Colo.) on Wednesday dinged Hillary Clinton for punting on the issue of Keystone XL oil pipeline.

“I think she should take a position,” Bennet said of his party’s presidential frontrunner at a Colorado Oil and Gas Association conference here. “She should take a position for it — or she should take a position against it.”

Speaking at a forum moderated by POLITICO, Bennet said he supports building the pipeline. He is up for reelection next year in this perennial swing state and could face a tough battle if the GOP fields a formidable opponent.

***

A Colorado Association of Commerce and Industry panel of five of the state’s Congressional delegation was split on whether federal or state and local authorities were the best in dealing with oil and gas regulations–an issue Colorado registered voters in a recent Independence Institute poll said should go the state’s way, 37 to 5 percent, over DC-based rulemaking:

On energy legislation, the three Democrats and two Republicans who represent portions of metro Denver took not two but three different stances on which government should be most responsible for oversight of the oil and gas industry:

Democratic U.S. Rep. Diana DeGette of Denver said that while she respects the laws the state has drafted, the federal government must play a role in regulating the effects of drilling on waterways that flow between states.

Coffman said that regulations should fall to the state government, where bodies like the Colorado Oil and Gas Conservation Commission are much more in touch with the needs of local residents.

And Democratic U.S. Rep. Jared Polis of Boulder — who last year backed two state constitutional amendments to increase the role of cities and counties in regulation of drilling before pulling the measures— said it is actually local governments like those in Weld County that should decide where and how oil rigs should be allowed to operate in their communities. “I don’t trust the D.C. politicians. I don’t trust the Denver politicians,” said Polis, a fourth-term congressman. “This is a decision that should be made at the local level.”

Don’t be too impressed with Polis’s “local level” mantra as anti-fracking activists look to resurrect ballot issues designed to ban oil and gas development under the guise of “local community control.” Polis backed similar measures in 2014 before they were pulled in favor of Governor John Hickenlooper’s oil and gas commission.

***

The Clean Power Plan may have been finalized on August 3, but serious questions about the EPA’s assumptions for the rule remain, as an analysis by Raymond L. Gifford, Gregory E. Sopkin, and Matthew S. Larson show (all emphases added):

• EPA scaled back on carbon dioxide reductions from coal plant improvements and energy
efficiency in its Final Rule under the Clean Power Plan, but nevertheless increased its
carbon reduction mandate from 30 percent to 32 percent by 2030. EPA did so through its
use of “potential renewables” as the variable driving eventual state carbon budgets. EPA now
forecasts that incremental renewable energy electric generation (Building Block 3) will more
than double, from 335,370 gigawatt hours in the Proposed Rule to 706,030 GWh in the Final
Rule.

• EPA uses a complicated and unprecedented methodology to achieve its new renewable
energy forecast for the years 2024 through 2030. Looking to historic renewable capacity
additions during 2010-2014, EPA selects the maximum change in capacity for each renewable
resource type that occurred in any year over the five-year period, and adds this maximum
capacity change year-over-year from 2024 through 2030. The maximum capacity addition
year selected by EPA for each resource is more than twice as much as the average over 2010
- 2014.

EPA’s methodology fails to account for the fact that expiration of the production tax
credit, or PTC, drove the development of renewable energy resources during 2012.

Renewable energy capacity additions fluctuated substantially between 2010 and 2014,
especially the largest component of Building Block 3, onshore wind power. EPA uses the
anomalous year, 2012, to predict future growth of wind power. In 2012, the wind production
tax credit was expected to expire at the end of the year, causing producers to rush to install as
much wind capacity as possible. Other renewable resource types also showed non-linear and
unpredictable trends during 2010 – 2014.

• EPA’s renewable energy expectations diverge by an order of magnitude from the EIA’s
base case renewable energy capacity and generation forecasts over the 2022 – 2030 period.
Notwithstanding these incongruences with EIA’s forecasts, EPA suggests that its forecasted
renewable energy additions would occur in the normal course even without the CPP.

EPA assumes that fossil fuel generation could be displaced based on the average capacity
factors of renewable energy resource types (e.g., 41.8 percent for onshore wind power).
However, utilities and restructured market system operators assign a much lower capacity value
for wind power, in the 10-15 percent range, because wind production is often not available during
peak load conditions.
To the extent that the EPA’s assumed renewable energy displacement of
fossil fuel resources does not occur because wind, solar, or other intermittent generation is not
available, system capacity will in real terms be lost absent planners assigning a much lower
capacity value to the given renewable resource (and in turn adding additional capacity, be it
fossil-based or renewable).

The authors conclude:

Setting aside enforceability, the President gave EPA a goal in his Climate Action Plan: achieve a 30% carbon emission reduction by 2030. EPA proceeded to solve for that goal with a capacious construction of the BSER [Best System of Emission Reduction] under the Clean Air Act. While gas “won” in the near-term under the Proposed Rule, in the end renewable energy resources assume a Brobdingnagian role in determining the level of carbon emission reductions that are purportedly possible under the BSER. EPA’s Final Rule constructs a method that solves for a conclusion, instead of having a method that yields a conclusion. Of even greater concern, EPA’s use of renewable average capacity factors instead of capacity credit exacerbates reliability risks to the electric system during peak load conditions. The end result may be unknown, but the method of getting there is highly questionable at best.

***

LINKS

Despite tanking oil prices, a new outfit, Evolution Midstream, announced a planned $300 million launch, saying of the current situation that “this too shall pass.”

Paving the way for the EPA’s Clean Power Plan, the billionaire Tom Steyer funded and pushed a “state-level advocacy network” to prop up the controversial plan and give endangered politicians cover.

Colorado’s oil and gas production projected to fall, according to a University of Colorado study.

***

Animas River updates

EPA officials knew of a “blowout” potential as much as a year before the Animas River spill, but even the release of this info took place late on a Friday, in what AP reporter Nick Riccardi called a “very late-night document dump on Gold King mine”:

U.S. officials knew of the potential for a catastrophic “blowout” of poisonous wastewater from an inactive gold mine, yet appeared to have only a cursory plan to deal with such an event when a government cleanup team triggered a 3-million-gallon spill, according to internal documents released by the Environmental Protection Agency.

The EPA released the documents late Friday following weeks of prodding from The Associated Press and other media organizations. While shedding some light on the circumstances surrounding the accident, the newly disclosed information also raises more questions about whether enough was done to prevent it.

The Aug. 5 spill came as workers excavated the entrance to the idled Gold King Mine near Silverton, Colorado, unleashing a torrent of toxic water that fouled rivers in three states.

A June 2014 work order for a planned cleanup noted the mine had not been accessible since 1995, when the entrance partially collapsed.

“This condition has likely caused impounding of water behind the collapse,” the report said. “Conditions may exist that could result in a blowout of the blockages and cause a release of large volumes of contaminated mine waters and sediment from inside the mine.”

An EPA internal review post-spill revealed that they never checked the water levels or the pressure contained within the mine despite their June 2014 work order:

Dangerously high water pressure levels behind the collapsed opening of the Gold King Mine were never checked by the Environmental Protection Agency, in part because of costs and time oversights.

The revelations came Wednesday as the EPA released an internal review of a massive Aug. 5 blowout at the mine above Silverton. The report called an underestimation of the pressure the most significant factor leading to the spill.

According to the report, had crews drilled into the mine’s collapsed opening, as they had done at a nearby site, they “may have been able to discover the pressurized conditions that turned out to cause the blowout.”

EPA officials claim they were caught unaware:

EPA supervisor Hays Griswold, who was at the scene of the blowout Aug. 5, told The Denver Post in an interview this month conditions in the mine were worse than anticipated.

“Nobody expected (the acid water backed up in the mine) to be that high,” he said.

The report says, however, that decreased wastewater flows from the mine, which had been leaching for years, could have offered a clue to the pressurization. Also, a June 2014 task order about work at the mine said “conditions may exist that could result in a blowout of the blockages.”

The inability to obtain an actual measurement of the mine water pressure behind the mine’s blocked opening “seems to be a primary issue,” according to the review. It went on to say if the pressure information was obtained, other steps could have been considered.

It did not elaborate on what those steps could have been.

“Despite the available information suggesting low water pressure behind the debris at the adit entrance, there was, in fact, sufficiently high pressure to cause the blowout,” the review says. “Because the pressure of the water in the adit was higher than anticipated, the precautions that were part of the work plan turned out to be insufficient.”

Stan Meiburg, EPA’s deputy administrator, said during the call that “provisions for a worst-case scenario were not included in the work plan.”

The 3 million gallon orange spill was, apparently, the worst-case scenario.

The internal investigation called the agency’s preparedness when it came to analysis of the water issue as “insufficient.”

It may take a while–many years–to know how the toxic minerals and metals released by the EPA will settle in the sediment of the Animas River and further downstream:

As communities along the Animas River continue to wonder about the long-term consequences of the Gold King Mine spill, one of the biggest questions remaining is the orange sediment lying along riverbeds and riverbanks.

What’s in it? How long will it be there? How might it affect our drinking water and our health? These are all concerns for community members, and many experts say we may not know until time goes by and a few spring runoffs continue to wash it downstream.

The EPA isn’t getting off the hook with the release of internal reports admitting lack of preparation or failure to measure water levels, or even late-night docu-dumps:

Republicans say the administration has been too wrapped up in guarding the world against climate change to address environmental dangers closer to home and should be held accountable, according to Texas Republican Lamar Smith, who is leading a probe into the spill in the House.

“Even in the face of self-imposed environmental disaster, this administration continues to prioritize its extreme agenda over the interests and well-being of Americans,” said Smith, chairman of the House Science, Space and Technology Committee.

The committee has scheduled a Sept. 9 hearing on the spill and has requested the head of EPA and the contractor involved in the mine incident to testify. It appears from the internal reports that the contractor involved in the spill was the same one that drafted the blowout report.

The report that was released “in the dead of night” Friday raises new questions about the depth of EPA’s culpability, according to Smith. “The actions that caused this spill are either the result of EPA negligence or incompetence,” he said. “We must hear from all those involved to determine the cause of what happened and how to prevent future disasters like this.”

The agency’s lack of timely dissemination of documents and details has been a theme since the spill erupted earlier this month.

But partisan flaps at the federal level between Republicans in Congress and one of the administration’s favorite agencies is not the only scene of squabbles, as local officials allege Republican Attorney General Cynthia Coffman had a partisan agenda in mind when scheduling meetings in Durango in the aftermath of the spill.

And finally, Silverton decided to seek federal funds for clean up operations after years of reservations over possible “Superfund” designation:

After two decades resisting Environmental Protection Agency funds for cleanup of the festering mines that dot its surroundings, Silverton on Tuesday announced it is seeking federal help.

A joint resolution passed by the town’s board and the San Juan County Commission says officials will work with neighboring communities to petition Congress for federal disaster dollars they hope will address leaching sites quickly.

“Silverton and San Juan County understand that this problem is in our district, and we feel we bear a greater responsibility to our downstream neighbors to help find a solution,” the resolution said.

The decision is a paradigm shift for the small town of about 650 year-round residents in the wake of a 3 million-gallon wastewater spill Aug. 5 at the Gold King Mine in the mountains to the north.

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August 13 Colorado Energy Roundup: EPA dumps on Colorado with Clean Power Plan, Ozone rule–then releases a toxic mess!

August 13, 2015 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legal, Legislation, PUC 

To say the Environmental Protection Agency has been in the news lately would be an understatement. Just this time last week, less than 24 hours after triggering a spill of toxic sludge including heavy metals into the Animas River in SW Colorado, most folks were unaware of the situation due to a lack of EPA communication–but more on that in a minute.

They were too busy focused on the new carbon-cutting Clean Power Plan rules being dumped on the state by the regulatory side of the agency.

Here’s a recap of the CPP, as Independence Institute’s Mike Krause can explain:

Or more in depth from former Colorado Public Utilities Commission chair, Ray Gifford:

Last week the EPA finalized the rule, as we told you in last week’s edition of the Energy Roundup, with the Colorado Attorney General Cynthia Coffman considering joining a multi-state lawsuit challenging the CPP’s legality, and legislators possibly returning to some form of transparency or oversight for the CPP state implementation plan, now with pushed back deadlines (and therefore more sessions to seek legislation).

The Independence Institute has a CPP backgrounder that provides further details.

EPA Administrator Gina McCarthy discussed the launch of the CPP in a video on Tuesday.

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Hot on the heels of the CPP, the EPA expects to finalize rules for ground-level ozone some time in October. But large and small businesses alike, from the National Association of Manufacturers to Colorado Association of Commerce and Industry, joined the Center for Regulatory Solutions (CRS), a project of the Small Business Entrepreneurship Council (SBE Council), in a press call yesterday to announce a new study that looked at the effects of the ozone rule on Colorado. The sheer volume of bipartisan commentary opposing the proposed ozone reduction is particularly eye-opening in these normally contentious times, and shows a break with the EPA on new regulations–the ozone rule might be a step too far following so closely behind the CPP:

“This ozone proposal gives the federal government far too much control over state and local planning decisions that shape the Colorado economy,” said Karen Kerrigan, President of the Small Business and Entrepreneurship Council. “Colorado is one of the biggest success stories of the federal Clean Air Act, but now the EPA is moving the goalposts. The standard is so strict – approaching background levels in some areas – that the vast majority of the state economy will be found in violation immediately. Violation of the ozone standard gives EPA the authority to effectively rewrite state and local environmental laws the way Washington wants.”

“No wonder this EPA proposal has been met with such strong and diverse opposition from across Colorado’s political spectrum. Washington officials, all the way up to President Obama himself, should listen to the voices coming from Colorado and across the country and once again give the current standard a chance to work.”

A sample of the key findings:

By lowering the National Ambient Air Quality Standard from 75 parts per billion (ppb) into the 65 to 70 ppb range, EPA would force, with a single action, at least 15 counties in Colorado to be in violation of federal law. These happen to be some of Colorado’s most populated counties, concentrated in the Denver metropolitan area, but a number of counties on the Western Slope may be dragged into non-attainment as well. Together, these 15 counties are responsible for 89 percent of Colorado’s economy and 85 percent of state employment. (Page 3)

Under the Clean Air Act, cities and counties that do not meet the NAAQS for ozone are placed into “non-attainment,” or violation of federal environmental standards. Once in non-attainment, local and state officials must answer to the federal government for permitting and planning decisions that could impact ozone levels. State officials are required to develop an “implementation plan” that imposes new restrictions across the economy, especially the transportation, construction and energy industries. The EPA has veto power over these implementation plans. States that refuse to comply, or have their implementation plans rejected, face regulatory and financial sanctions imposed on them directly from the federal government. (Page 19)

The report, entitled “Slamming the Brakes: How Washington’s Ozone Plan Will Hurt the Colorado Economy and Make Traffic Worse” has revealed that opposition to the ozone rule with a river of comments from Colorado state and local officials.

Here’s a sample of the bipartisan criticism:

State Senator Cheri Jahn (D):

“Coloradans care deeply about the environment. After the great progress we have made on air quality, our state should be praised, not punished. This ozone proposal out of Washington, D.C. scares my constituents, because it could hamstring our regional economy and cost jobs.

We have worked so hard to bring manufacturing jobs to Colorado, and by moving the goal posts on ozone, the EPA is going to chase manufacturing jobs away from our state. This plan could also gum up the approval process for badly needed road and transportation investments, which will make our traffic worse, and make it much harder to attract new industries, grow existing businesses, and strengthen Colorado’s middle class.”

State Senator Ellen Roberts (R):

“If the EPA carries out this ozone plan, Western Colorado will be placed at a terrible economic disadvantage. We have worked hard to responsibly care for our environment even as we grow and diversify our economy.

Tightening the ozone standard any further just does not make sense when the existing standard, which is less than 10 years old, is working. I urge the EPA to reconsider this plan and leave the 2008 standard in place.”

State Senator Jerry Sonnenberg (R):

“The EPA’s proposed new standards would drive small family farms such as mine out of business. We have never been able to afford new equipment and if the only way to comply with this new standard is with new equipment, my family would have to leave agriculture. Even if we could meet the standards with expensive upgrades to our machinery, the increased costs to finance those upgrades, as well as the fuel and the fertilizer, takes a marginally profitable farm and turns it into one that can’t make its payments.

Unless you want to see the family farm only as a memory, one must make the EPA understand that their new standards will have a devastating effect on rural America and the agriculture economy.”

Routt County Commissioners Douglas Monger (D), Cari Hermacinski (R), Timothy Corrigan (D):

“We set and meet high standards because we know it is good for our people and our state. So you might expect us to support the Environmental Protection Agency’s proposed standards for ground-level ozone. Those standards, however, are too overbearing and are meeting with a lot of resistance even in places where air quality regulations are welcome…

These standards must not be implemented. If they go forward as proposed, they will do more than put good people out of work and cause hardships for communities that have done so much to protect the land, air and water around them. They will turn away a lot of people who have been receptive to the idea that government can be trusted to do environmental regulation the right way.”

NAM also released a video ad buy, to be seen across Colorado over the next few days:


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Only the sheer quantity of toxic material–some 3 million or so gallons of Sunny-D colored water laden with heavy metals–comes close to the media coverage of one of the biggest environmental stories in recent Colorado history.

Most of the stories have been widely publicized and shared, so here is a quick look at this EPA-related (not strictly energy-related) blockbuster news blitz from just the past two days alone, in reverse chronological order (most recent first):

EPA Contractor Behind CO Mine Spill Got $381 Million From Taxpayers:

The EPA is not letting the public know the names of the government contractors responsible for spilling three million gallons of toxic wastewater from a southern Colorado mine. The agency is holding the information close — so close, the Colorado attorney general’s office doesn’t have it.

A spokesman with the Colorado attorney general’s office told The Daily Caller News Foundation the EPA had not disclosed the names of the federal contractor that caused millions of gallons of wastewater into the Animas River — leaked contaminants include zinc, copper, cadmium, iron, lead and aluminum.

EPA Withholding Mine Spill Info From State AGs:

The EPA is not letting the public know the names of the government contractors responsible for spilling three million gallons of toxic wastewater from a southern Colorado mine. The agency is holding the information close — so close, the Colorado attorney general’s office doesn’t have it.

A spokesman with the Colorado attorney general’s office told The Daily Caller News Foundation the EPA had not disclosed the names of the federal contractor that caused millions of gallons of wastewater into the Animas River — leaked contaminants include zinc, copper, cadmium, iron, lead and aluminum.

Animas River outfitters shut as plume passes, but say they’ll endure:

“Very difficult,” said Alex Mickel, who has turned hundreds of customers away from his Mild to Wild Rafting each day since the Environmental Protection Agency accidentally unleashed a 3 million gallon torrent of toxic mine water into the headwaters of the Animas last week.

“We are anticipating around $150,000 to $200,000 in lost revenue,” Mickel said. “But from an emotional standpoint, it’s difficult to see a beautiful river damaged in this way.”

Animas River spill leaves Colorado, neighbors weighing EPA lawsuit:

The attorneys general of Colorado, New Mexico and Utah said Wednesday that a lawsuit against the Environmental Protection Agency is an option in the wake of a massive mine wastewater spill caused by the agency.

All three, however, agreed that it’s too early to say if they will sue.

“I would hope that it would not be necessary,” Colorado’s Cynthia Coffman, a Republican, said of a suit in an interview with The Denver Post. “The statements by the (EPA’s administrator) indicate the EPA is accepting responsibility for the accident. The question is: What does that mean? What does accepting responsibility mean?”

Hickenlooper drinks Animas River water to make a point:

Gov. John Hickenlooper on Tuesday drank a hearty gulp of the Animas River in an effort to highlight that the river has returned to pre-contamination conditions.

The governor and his health department director, however, cautioned that citizens should not be freely drinking from the river, because the water was unsafe for consumption even before the Environmental Protection Agency released an estimated 3 million gallons of mining wastewater into it.

But the drinking exercise indicated that state officials are more than confident that the river does not pose a toxic risk to humans, as they publicly stated on Tuesday.

“Am I willing to go out there and demonstrate that we’re back to normal?” Hickenlooper asked out loud after The Durango Herald raised the idea with the governor. “Certainly. I’m happy to do that. I’m dead serious.”

Navajos Distrustful OF EPA Promises On Toxic Mine Spill:

Navajo Nation is furious with the EPA, not just because the agency accidentally spilled three million gallons of toxic mine waste in the region, but because the agency is allegedly trying to get tribal members to waive rights to future compensation for damages incurred by the toxic spill.

“The federal government is asking our people to waive their future rights because they know without the waiver they will be paying millions to our people,” Navajo President Russell Begaye told Indianz.com. “This is simple; the feds are protecting themselves at the expense of the Navajo people and it is outrageous.”

Congressmen: EPA Must Answer For Spilling Toxic Waste:

Republican congressmen are calling for the EPA to be held accountable for spilling 3 million gallons of toxic mine wastewater into the Animas River last week, especially since the agency is a government entity and won’t be punished to the same degree a private company would for spilling waste.

“The EPA must be held accountable for its actions,” Rep. Lamar Smith told The Daily Caller News Foundation in an emailed statement. “If a private company caused such a disaster, it would be hit with substantial penalties and would be required to pay for cleanup.”

“In this case, it will be the taxpayers who foot the bill,” the Texas Republican said. “The EPA has an obligation to the families and businesses that have been devastated by this spill.”

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From the Denver Post house editorial:

The U.S. Environmental Protection Agency’s clumsy, tone-deaf response to the toxic disaster on the Animas River was an embarrassment even to the EPA. One agency official managed to admit the reaction was “cavalier,” but that’s putting a mild face on it.

Top EPA official takes responsibility for Colorado mine spill:

EPA Administrator Gina McCarthy said Tuesday in Washington, D.C., that she takes full responsibility for the spill, which she said “pains me to no end.” She said the agency is working around the clock to assess the environmental impact.

Hickenlooper sees a silver lining:

“Colorado’s governor thinks a mine spill accidentally triggered by an EPA crew will move the state and federal government to more aggressively tackle the “legacy of pollution” left by mining in the West.

Gov. John Hickenlooper said Tuesday that much of the wastewater has been plugged up, but the state and the Environmental Protection Agency need to speed up work to identify the most dangerous areas and clean them up.

The former geologist says that if there’s a “silver lining” to the disaster, it will be a new relationship between the state and the EPA to solve the problem.”

Navajo Nation Mourning, Pleading for Help After Toxic Mine Spill Contaminates Rivers

John Hickenlooper calls Animas River disaster “unacceptable”:

Gov. John Hickenlooper on Tuesday stood on the banks of the Animas River and said last week’s spill of 3 million gallons of contaminated mining waste water into its flow was “in every sense, unacceptable.”

He said the long-term effects of the spill, which happened as the Environmental Protection Agency was investigating the contaminated mine, are unknown.

The governor said he has spoken with the head of the EPA, Gina McCarthy, and described her as “committed” and “firm” in her resolve to respond to the spill. McCarthy will be in Durango and New Mexico on Wednesday, she said Tuesday on Twitter.

“I think we share the anger that something like this could happen,” Hickenlooper said. “But I think that said, our primary role is now: that’s behind us and how are we going to move forward.”

EPA Shrugs after Spilling Millions of Gallons of Toxic Water into a River in the Mountain States

EPA Chief Apologizes as Anger Mounts:

Environmental Protection Agency Administrator Gina McCarthy apologized Tuesday for a mine spill in Colorado that her agency caused last week and planned to travel to the area Wednesday, amid increasing criticism from lawmakers about the EPA’s response.

Ms. McCarthy said at a news conference in Washington that she was still learning about what happened, responding to a question about whether the EPA was reviewing changes in how it cleans up old mines. “I don’t have a complete understanding of anything that went on in there,” she said. “If there is something that went wrong, we want to make sure it never goes wrong again.”

EPA won’t face fines for polluting rivers with orange muck:

Unlike BP, which was fined $5.5 billion for the 2010 Deepwater Horizon disaster, the EPA will pay nothing in fines for unleashing the Animas River spill.

“Sovereign immunity. The government doesn’t fine itself,” said Thomas L. Sansonetti, former assistant attorney general for the Justice Department’s division of environment and natural resources.

And of course, some folks don’t think the EPA should be blamed . . .

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August 6 Colorado Energy Roundup: Clean Power Plan Edition

Colorado’s expected targets on carbon reduction from the finalized Clean Power Plan unveiled Monday:

Colorado’s 2030 goal of a 28 percent reduction in overall carbon dioxide emissions — or a 40 percent reduction in the pounds of CO2 emitted per megawatt hour of electricity generated — was set using a 2012 benchmark.

“Having them stick to that baseline year of 2012, we don’t necessarily get credit for being early thinkers and early movers,” said Dr. Larry Wolk, executive director and chief medical officer of the Colorado Department of Public Health and Environment.

Colorado’s Attorney General Cynthia Coffman has vowed to review the new rules and could consider joining a multi-state lawsuit against the Clean Power Plan:

Attorney General Cynthia Coffman said the plan “raises significant concerns for Colorado” and that she’s considering joining other states in a legal challenge.

Citing concerns about potential job losses and an unrealistic set of goals and timelines, Coffman said in an e-mail she will ” carefully review the EPA’s plan and evaluate its long term consequences for our state.”

“But as I put the best interests of Colorado first, it may become necessary to join other states in challenging President Obama’s authority under the Clean Air Act.”

It is not clear at this time how long Coffman will take to render a decision on whether or not to join that lawsuit, but the Colorado Department of Public Health and Environment’s Dr. Wolk said that the agency is pushing forward:

“It is the right thing to do,” Wolk said.

If there’s a legal challenge to be had related to EPA authority, that’s a matter specific to the attorney general, he said.

“But it is not something we would use to deter our efforts, which have been underway for several years,” Wolk said.

Governor John Hickenlooper’s office told the Denver Post, “We respect the due diligence of the attorney general in reviewing the plan and will watch the next steps closely.”

Hickenlooper has already made it clear his administration welcomed the Clean Power Plan, and would not join an effort to thwart that plan at the state level.

The final rule moves the deadline for state implementation plans back, and the CDPHE has given an initial nod to allowing the legislature to vote on the agency’s plan:

The final state plan will go to the legislature for approval before submission to the EPA. An initial state plan will be due September 2016 with an option for states to request a two-year extension to September 2018 for submission of the final plan.

How much input the Colorado legislature will have remains to be seen due to the possibility of legislation in 2016 and even 2017. Colorado may file for an extension, giving the legislators additional opportunities to consider enabling legislation, procedural requirements such as a stronger or even mandatory role for the Public Utilities Commission, or other variations on how Colorado submits its CPP SIP. The 2015 session saw SB 258, the Electric Consumers’ Protection Act, pass out of the Senate in bipartisan fashion but ultimately die in Democratically-controlled House. The bill would have sought transparency for the CPP state plan by requiring PUC hearings and deliberation, as well as an up or down vote by the Colorado legislature as a whole.

The Independence Institute published a backgrounder in April, during the rule finalization process, that took a look at possible economic and legal implications of the CPP:

– Will require a new regulatory regime, and holistically seeks to remake the nation’s energy policy;
– Will incur massive costs;
– Will greatly affect energy reliability across the country;
– Is likely illegal; and
–Won’t have any measurable impact on global CO2 emissions.

A quick look at Colorado’s CO2 emission levels from the 2012 baseline show a 40.5 percent reduction in carbon by 2030, from 1973 pounds per megawatt hour down to 1174. Interim goals would reach approximately 31 percent reduction between 2022 and 2029, with states receiving some flexibility on reaching the step reductions. The EPA estimates that by 2020, Colorado would see a 14 percent reduction–without any Clean Power Plan guidelines.

States’ goals fall in a narrower band, reflecting a more consistent approach among sources and states.

At final, all state goals fall in a range between 771 pounds per megawatt-hour (states that have only natural gas plants) to 1,305 pounds per megawatt-hour (states that only have coal/oil plants). A state’s goal is based on how many of each of the two types of plants are in the state.

The goals are much closer together than at proposal. Compared to proposal, the highest (least stringent) goals got tighter, and the lowest (most stringent) goals got looser.

o Colorado’s 2030 goal is 1,174 pounds per megawatt-hour. That’s in the middle of this range, meaning Colorado has one of the moderate state goals, compared to other state goals in the final Clean Power Plan.

o Colorado’s step 1 interim goal of 1,476 pounds per megawatt-hour reflects changes EPA made to provide a smoother glide path and less of a “cliff” at the beginning of the program.

The 2012 baseline for Colorado was adjusted to be more representative, based on information that came in during the comment period.

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The full text of the EPA’s outline for Colorado is here:

Colorado Clean Power Plan Goals

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So why can the EPA project an additional 14 percent reduction of carbon emissions by 2020 without the Clean Power Plan?

Energy In Depth has the details, via the Energy Information Administration:

According to a report released today by the Energy Information Administration (EIA), monthly power sector carbon emissions reached a 27-year low in April of 2015. In that same month, natural gas was, for the first time, the leading source of American electricity. As the EIA puts it:

“The electric power sector emitted 128 million metric tons of carbon dioxide (MMmt CO2) in April 2015, the lowest for any month since April 1988…Comparing April 1988 to April 2015 (27 years), natural gas consumption in the sector more than tripled.” (emphasis added)

EIA-chart

EID concludes, “As the EIA’s report clearly shows, these environmental benefits are due in large part to an American abundance of safely produced, clean-burning natural gas.” EPA’s administrator Gina McCarthy has repeatedly pointed to natural gas as a “bridge” or key component in reducing carbon.

But natural gas as a “building block” for CPP compliance is threatened by the next EPA rule to come down the regulatory turnpike, the ground-level ozone rule to be finalized in October, according to the Institute for Energy Research.

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Studies have considered the cost to the economy and the toll in human terms due to job loss:

President Barack Obama’s plan targeting coal-burning power plants will cost a quarter of a million jobs and shrink the coal industry by nearly half, according to a new report by the American Action Forum (AAF).

The president released final regulations from the Environmental Protection Agency (EPA) on Monday, which require every state to meet strict emission standards for coal-burning power plants in the next 15 years.

The so-called “Clean Power Plan” will cost the industry $8.4 billion, nearly 10 times more expensive than the most burdensome regulation released this year, according to AAF, a center-right think tank led by Douglas Holtz-Eakin, former director of the Congressional Budget Office.

“This week, the Environmental Protection Agency (EPA) released its final greenhouse gas (GHG) standards for existing power plants,” according to the report, authored by AAF’s director of regulatory policy Sam Batkins. “The final plan will shutter 66 power plants and eliminate 125,800 jobs in the coal industry.”

Job loss will be substantial due to the shuttering of coal-fired power plants, including those in Colorado.

It will also likely be heavily localized, as the tenuous situation in northwest Colorado facing the Colowyo Mine and Craig’s coal-fired plant illustrate–and this comes before the state considers how to implement the Clean Power Plan.

Moffat County, where both the mine and power plant reside, would see just a few hundred jobs on the chopping block, but this would devastate the area, as a recent video from Institute for Energy Research showed:

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Reaction to the rule varied across the spectrum, and the Denver Business Journal gathered a handful of the more pointed statements from both sides:

Joel Serface, managing director of Brightman Energy, a renewable energy development company.

“The Clean Power Plan is a huge opportunity for Colorado’s economy. By tackling the rising economic costs of climate change, we can modernize our energy infrastructure, stimulate innovation and help create thousands of good, new Colorado jobs in high-growth sectors like wind and solar.”

State Sen. John B. Cooke (R-Weld County):

“The Governor needs to commit himself to a true public process, including a rigorous review by the people’s representatives in the Colorado General Assembly, before giving a green light to Colorado’s implementation of this new federal mandate. These rules are being challenged in federal court by sixteen states, and I hope that Colorado’s Attorney General will join that lawsuit now that the EPA rules are final. The fact is, the Clean Air Act passed by Congress does not authorize these costly dictates, and there is a good chance the US Supreme Court will block these rules for that reason.”

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July 30 Colorado Energy Roundup: Clean Power Plan extension expected; a new Sagebrush Rebellion?

The Clean Power Plan’s timeline for compliance may see an extension, and the final rule itself may be revealed next Monday:

The final version of President Obama’s signature climate change policy is expected to extend an earlier timeline for states to significantly cut planet-warming pollution from power plants, according to people familiar with the plan.

If enacted, the climate change plan, the final version of which is expected to be unveiled as early as Monday, could stand as the most significant action ever taken by an American president to curb global warming. But some environmental groups have cautioned that a later deadline for states to comply could make it tougher for the United States to meet Mr. Obama’s climate change pledges on the world stage.

The plan consists of three major environmental regulations, which combined are intended to drastically cut emissions of greenhouse gases. The rules take aim at coal-fired power plants, the largest source of greenhouse emissions, and are intended to spur a transformation of the nation’s power sector from fossil fuels to renewable sources such as wind and solar. Under the rules, the Environmental Protection Agency would require states to draft plans to lower emissions from power plants. The agency is also expected to issue its own model of a state-level plan, to be imposed on states that refuse to draft their own plans.

The final rules would extend the timeline for states and electric utilities to comply, compared with a draft proposal put forth by the E.P.A. in June last year, according to people who are familiar with the plan but who spoke on the condition of anonymity because they were not authorized to speak publicly about it.

The Independence Institute’s backgrounder on the Clean Power Plan and its devastating effects on our energy choice and enormous costs to taxpayers and the economy in general can be found here.

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Much of the public land in the Rocky Mountain west is administered not by the states but by the federal government all the way from DC–and the debate over who should ultimately preside over these vast swathes of federal land has seen a resurgence:

Not since the Sagebrush Rebellion in 1979 has the debate over whether it’s time for federal lands to fall to states’ control gained such attention, and the anti-federal-government sentiment and talking points aren’t likely to dissipate as the West heads toward the next presidential election.

The fight stirred in 2012 when the Utah legislature passed the Transfer of Public Lands Act to demand authority over millions of acres of federal land by last New Year’s Eve. It didn’t happen.

Eight states cumulatively considered 30 bills around the issue this year. In March, Republicans in the U.S. Senate passed, without a single Democratic vote, a symbolic resolution in support of transferring or trading land to states. The resolution, though, doesn’t give Congress or any federal agency additional power to make deals.

And in the last Colorado legislative session there were three bills around the subject. Only one passed. House Bill 1225, a bipartisan bill supported by environmental groups, strengthens communities’ position in saying how local federal lands are managed.

Opponents of devolving control of public lands to the states cite the enormous costs of maintaining them, arguing states are not prepared to shoulder the added burden of hundreds of millions of dollars in annual upkeep.

For example, a single wildfire could cripple Colorado, said Governor John Hickenlooper’s advisor:

The federal government also picks up the costs for wildfires on federal lands. But just one massive wildfire in Colorado — a state that can have several in one year — could obliterate the state budget, said John Swartout, a Republican who is Hickenlooper’s top policy adviser on land, wildlife and conservation issues.

“The solution is constructive engagement,” Swartout said. “Are we always going to be happy with all the decisions? No. But we’re going to get a lot farther helping create the final solution.”

More than 1/3 of Colorado is subject to federal jurisdiction. Whether or not the debate develops into a political conflagration or peters out in favor of other issues remains to be seen, but expect energy producers and environmental activists to keep a close eye on how the narrative proceeds.

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WildEarth Guardians won’t hesitate to launch a legal battle, as a recent look at the group’s lawsuit filings shows:

Though a relatively small organization with only 26 people on staff, WildEarth Guardians’ litigious nature has established the environmental advocacy group as a dominant voice in the national debate about environmental policy.

From 2010 to present, Guardians have initiated a total of 152 cases in federal district courts and 55 in the Circuit Court of Appeals for a total of 207 cases. In 2010 alone they filed 61 claims — an average of about one per week.

However, Guardians’ pervasiveness in the courts has not gone without criticism.

In a 2012 analysis of WildEarth Guardians’ legal activity, the conservative group Americans for Prosperity claimed that Guardians has been “misusing the judicial system, exploiting poorly-written laws and taking advantage of taxpayers to pursue a narrow, litigation-driven, special interest agenda.”

For Coloradans, especially those in Craig and surrounding areas, lawsuits from the group have drawn the ire of residents and businesses for favoring costly litigation as a first-stop solution:

Lee Boughey, senior manager of corporate communications and public affairs for Tri-State, said in a statement that the courts should not be a first resort.

“Environmental policy, regulations and law should be set by state legislatures and Congress, and based on sound science, a thorough cost-benefit analysis and appropriate timeframes for implementation. These are difficult issues, and it is a far better for all stakeholders to commit to work together to develop sound regulatory policy that take these consideration into account, as opposed to running straight to the courts,” he said.

The group remains adamant, saying, the “legal system is oftentimes the last recourse of justice for interests and peoples that have been marginalized or whose issues haven’t been heard.”

In the case of Colowyo Mine, the marginalized appear to be the local residents, workers, and communities.

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A pair of energy-related ballot measures will appear in November in Boulder, including a Climate Action tax:

Boulder officials also want to ask voters to extend the portion of the utility occupation tax on energy bills that replaces Xcel Energy’s franchise fee and provides roughly $4.1 million to the city’s general fund each year. It is not the portion of the tax that funds analysis and legal efforts toward municipalization, which is not on the ballot. The municipal energy utility would also have to pay a similar amount into the general fund, but that utility may not be up and running by 2017, when the tax expires. The proposed ballot measure would extend the tax through 2022.

The Climate Action Plan tax, which funds energy-efficiency programs and solar rebates, will also appear on the ballot. That tax expires in March 2018, and city leaders believe the programs ultimately will be paid for out of utility rates. However, that won’t be possible until the utility is up and running. The proposed ballot measure would extend the tax through March 2023 so that those programs could continue regardless of progress on the municipal utility.

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