April 7 Colorado Energy Cheat Sheet: Hickenlooper calls CDPHE refocusing away from CPP a ’shell game’, unloads on EPA ozone rule; ‘carbon tax’ defeated in Carbondale

Less than two weeks after Gov. John Hickenlooper told Colorado Public Radio “we don’t care what the Supreme Court says about the Clean Power Plan”, calling for continued planning for the Environmental Protection Agency’s embattled rule currently under a stay issued by the U.S. Supreme Court, the Democrat initially appeared to be walking back his initial disregard for the country’s highest judicial body:

Gov. John Hickenlooper said he’s willing to temporarily halt state work on the Obama administration’s Clean Power Plan if that would defuse an effort to strip funding from the agency developing the plan.

“I’m happy to have them stop working on it if that’s a problem, if that becomes a partisan issue,” Hickenlooper told a CPR reporter after a lunch hosted by the American Petroleum Institute.

But the easing on Hickenlooper’s view of the work being done by the Colorado Department of Public Health and Environment–dismissive of any SCOTUS intervention via a stay–was itself walked back, as he at first acknowledged that the state could work on its already existing regulatory mandates to achieve similar goals to the Clean Power Plan, but said that any such maneuver would be nothing more than a “shell game”:

“We’re doing the same work anyway,” said Hickenlooper. “I don’t think it would hurt our efforts if we were to reallocate some of that time in other directions. I mean, in the end, we’re going to get to the same place.”

Hickenlooper said state policy and laws, including the Clean Air, Clean Jobs Act passed in 2010, already require Colorado to reduce carbon emissions from coal fired power plants.

“Our goals were very aggressive goals, and they are not the same, but they are very similar to what the Clean Power Plan wants,” he said at the gathering.

The governor clarified his comments Wednesday, dismissing the idea that suspending work on the Clean Power Plan would have much real world impact on the state’s clean air efforts.

“I look at the whole thing as ridiculous, to be perfectly blunt,” Hickenlooper told reporters at a regular press gathering. “It’s like a shell game of who’s doing which work. We’re working toward clean air, that’s what the state’s doing, that’s what people want us to do. We can get into … semantical battles over this thing, but it’s pretty straightforward.”

When it comes to Hickenlooper’s pronouncements on any number of issues, including this one, it’s usually never “pretty straightforward.”

Hickenlooper, just days ago, attempted to cast a non-partisan tenor to the debate over the Clean Power Plan:

Gov. John Hickenlooper also defended the new air quality rules at an event hosted by the Colorado Petroleum Institute.

“Clean air is too important to Colorado to become a partisan issue,” he said. “I am convinced as much as I ever have been that this is in the self-interest of the state.”

Jack Gerard, the head of the American Petroleum Institute, disagreed with Hickenlooper’s assessment.

“We look at the Clean Power Plan as it’s unnecessary to regulate as trying to pick favorite energy forums,” Gerard said.

Hickenlooper’s soft spot for the Clean Power Plan did not hold him back from being critical of the EPA’s ozone rule, which he said risked the “possibility that there will be penalties eventually that will come from lack of compliance.” He also blasted a Democrat bill that would allow for more lawsuits over damage caused by earthquakes that allege a connection to oil and gas development, as well as a ballot measure that would create a 2500 foot setback, saying that it would deprive mineral rights owners of their property–a taking that could cost billions.

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Energy in Depth has more on Hickenlooper’s statement on the ballot initiative that would create 2500 foot setbacks:

Colorado’s Democratic governor, John Hickenlooper, is speaking out against an initiative backed by ‘ban-fracking’ activists to dramatically increase oil and gas setback distances in the state. The comments came at an event yesterday sponsored by the American Petroleum Institute (API) and Colorado Petroleum Council (CPC) featuring the governor and API President and CEO Jack Gerard.

When asked about the ballot initiative pushed by activists with strong ties to national ban fracking organizations, that would increase oil and gas setback distances to 2500 feet, Hickenlooper strongly denounced the effort. As reported by CBS Denver:

“That would be considered a taking, and I think the state would probably be judged responsible, and I think the cost could be in the many billions of dollars. I think that’s a risk that most Coloradans — if it was laid out for them in a sense they could clearly understand — would not support it.”

Hickenlooper’s assertion that the initiative could cost the state billions is backed up by a recent economic assessment from the Business Research Division at University of Colorado Leeds School of Business. Economists found that a 2,000 foot setback distance could cost the state up to $11 billion in lost GDP a year and 62,000 jobs. The 2,000 foot setback economists looked at is more modest than the 2,500 foot distance that activists are attempting to put before state voters this year.

Those mineral rights are worth billions of dollars to Coloradans and fill the coffers of counties and other entities annually to the tune of millions in property and severance taxes.

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A thinly disguised attempt to ban fracking under the ruse of “local control” failed in the Colorado House on Monday:

Activist groups have not been shy about the fact that they see “local control” as a de facto ban on fracking. On a recent call with supporters, Tricia Olson of Coloradans Resisting Extreme Energy Development (CREED), the group behind a series of ballot initiatives targeting energy development, even told the group that their “local control” measure is basically a “full-fledged” fracking ban:

“This version however has one significant difference, what we would call a floor, not a ceiling language. To lift its points, it authorizes local governments to pass regulations — prohibit, limit or impose moratoriums on oil and gas development. Of course the word prohibit means ban. This allows for a broad range of local government options within their jurisdictions from local actions to a full-fledged ban.” (23:14-23:44)

EID detailed the “local control” proponents’ misinformation campaign to push the measure. Two Democrats joined with Republicans to kill the bill on the floor of the Colorado House.

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Speaking of fracking–a non-partisan study “found no definitive evidence” that hydraulic fracturing and oil and gas development has negatively affected property values in Colorado.

And former Gov. Bill Ritter–you know–of the “New Energy Economy” and a paragon of all things green (dubbed the “Greenest Governor”), rejected a national ban on fracking:

“If you passed a national ban, this industry would go away and it would be harder for us to get to our place of transition on clean energy and climate.”

“I believe that with a good set of regulations, with good enforcement, with good compliance on the part of the industry, it [fracking for natural gas] can be a part of a clean energy future,” Ritter said.

Ritter and Hickenlooper, both Democrats, face opposition from their far-left counterparts when it comes to these types of calls for bans on responsible oil and gas development:

“We won’t transform the energy supplies of our nation overnight; there’s been rapid growth in solar and wind, but we’re a long way from saying we can walk away from hydrocarbons and not do significant damage to our economy,” Hickenlooper said.

“The number of people in Colorado who want to ban hydrocarbons is probably a small minority,” he said.

Gerard said the oil and gas sector will continue to play a significant role going forward, even through energy efficiency efforts focused on the automotive sector.

“When you look to make cars more energy efficient, you make them lighter with plastics brought to you by petroleum, you make the windows more efficient [with films] brought to you by petroleum, the gadgets you play with in your hand every day also come from petroleum,” he said.

As we can see, it’s not just about fracking, or burning oil and gas for electricity, as API’s president pointed out.

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Hickenlooper continues to express deep concern about the EPA’s ozone rule, reducing the target for acceptable ground level ozone from 75 ppb to 70 ppb, saying a suspension of the rule “would be a great idea”:

Transcript of Gov. John Hickenlooper’s comments on the Environmental Protection Agency’s ozone rule delivered to the Colorado Petroleum Council and the American Petroleum Institute on March 31, 2016 via the Center for Regulatory Solutions:

So I think it would be a great idea if they suspended the standard. I mean, just with the background [ozone], if you’re not going to be able to conform to a standard like this, you are leaving the risk or the possibility that there will be penalties of one sort or another that come from your lack of compliance. Obviously, no different than any business, states want to have as much predictability as possible, and I think if they suspend the standards, it’s not going to slow us down from continuing to try and make our air cleaner. …

You know, we’re a mile high. Air quality issues affect us more directly than they do at lower elevations. So we’re going to keep pushing it, we’re not going to back off, we’re going to continue to improve the air quality in the state every year if I have anything to say about it, but at the same time, those standards, you know, to be punitive when you’re working as hard as you can … to get cleaner air as rapidly as you can, it seems like it’s not the most constructive stance.

A bi-partisan chorus of opposition to the ozone rule has emerged, and Independence Institute energy policy analyst Simon Lomax notes that the rhetoric surrounding the ozone rule, and in particular, its potential impact on public health, is filled with fearmongering from the “bad-air chorus.”

Lomax testified before CDPHE last month on the ozone rule:

The nature of the problem is clear. The EPA’s new ozone standard goes too far. It will throw large areas of the state into long-term violation of federal law. Violation will impose new restrictions on economic growth and jeopardize badly needed investments in transportation infrastructure.

And because the stringent new standard approaches background ozone levels, which state regulators are powerless to control, there will be little, if any, environmental benefit in return. For months, stakeholders from across government, across the political spectrum and across the economy have stated and restated the problem. But admiring the complexity of the problem won’t solve it.

Notably, the ozone rule would attack the “bridge” fuel, namely natural gas, that the earlier versions of the Clean Power Plan envisaged would get the nation from a fossil fuel fleet to one primarily composed of renewables. Between the attempts to ban fracking, the leap made by the final Clean Power Plan that pushes almost exclusively for renewables, and the ozone rule’s affect on oil and gas development (emissions are a key component to create ground level ozone), the stage has been set for an onslaught of anti-oil and gas regulation that would devastate Colorado’s economy.

Colorado faces geographical and topographical challenges with any ground-level ozone measurements due to elevated background ozone levels, as Hickenlooper pointed out. Anthropogenic emissions in other states and Mexico and as far away as Asia (China), wildfires, atmospheric intrusions, and our elevation combine to bring levels of background ozone to the state that can’t simply be regulated away.

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From the “excellent news” category–carbon tax gets shot down in Carbondale, 61 to 39 percent:

For the so called “carbon tax,” 1,022 voters cast ballots against, while only 637 Carbondale residents voted in favor.

And with more than $3,000 in contributions, the committee supporting the carbon tax raised and spent more money than any single candidate for the board of trustees.

The climate action tax proposed to increase residents’ gas and electric bills in an attempt to promote clean energy projects and reduce energy usage in keeping with the town’s 2020 energy goals.

The climate tax would have been applied uniformly across town, with one set of rates for residents and another for business owners.

Supporters of the carbon tax had estimated that the average household’s utility bills would go up $5 to $7, and the average business would see a $10 to $30 increase.

This carbon/climate action tax would have just added more misery to Colorado’s already skyrocketing electricity rates.

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Hickenlooper: ‘we don’t care what the Supreme Court says’ on Clean Power Plan; supports growing state renewables standard for ‘no cost’

Transcript of Gov. John Hickenlooper’s comments on Colorado Public Radio’s “Colorado Matters” with Ryan Warner, Thursday, March 24, 2016:

Ryan Warner: A question about your commitment to fighting climate change.  Larry Milosovich of Lafayette asks about the state’s requirement that a certain percentage of energy come from renewables.  So in 2004, voters decided that it should be 10% by 2020; before you took office, that got bumped up to 30% for investor-owned utilities.  Milosovich says that made Colorado a leader nationally, but quoting here now, “we have since fallen behind several other states.  Isn’t it time we sent signals that we are still serious about moving forward on clean energy beyond 2020?” He asked would you be willing to pursue an updated Renewable Energy Standard equal to that approved by New York and California, namely 50% renewables by 2030?

Hickenlooper: So I certainly wouldn’t do it without sitting down and seeing what it would cost, you know what our citizens would have to pay for their electricity.  It goes to prove that you’re never going to satisfy everybody.  But we have been one of the more aggressive states saying “we don’t care what the Supreme Court says about the Clean Power Plan [emphasis added], we recognize we want to have the cleanest air possible.”  I think we need to look at, you know, what are our core values?  We want the cleanest energy we can have, reduce our carbon emissions in every way possible, but we want to do so in such a way that saves money.  Well it might well be certainly in the next couple of years if we’re looking at these large-scale industrial solar plants, they’re saying they might come in lower than natural gas plants.

RW: But it sounds like you think the market might drive it from here, as opposed to the state upping its Renewable Energy Standard.  Would that be a fair assessment?

Hickenlooper: No I think the market helps nudge the universe from time to time, but I don’t think we would…we’ve never left it to a completely market driven decision.

RW: Would you like to see a higher Renewable Energy Standard in Colorado? Do you think it should grow from where it is?

Hickenlooper:  Well again, as I’ve said I think it depends on exactly what the cost would be and what that looks like, but in an ideal world, if there was a way to do it for no cost, absolutely.

Hickenlooper continues to back his state agency–the Colorado Department of Public Health and Environment–moving forward on Clean Power Plan implementation despite a stay from the U.S. Supreme Court.

Senate Bill 157, an attempt by Senate Republicans to halt state planning on Clean Power Plan compliance while the stay is ongoing became a flashpoint, as the issue became a battle over budgeting for the state’s Air Quality Control Division.

Future Leaders intern Sarah Huisman contributed to this report.

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Colorado March 14 Energy Cheat sheet: Unencumbered from Clean Power Plan mandates, Hickenlooper opts to put Colorado in fiscal vulnerability; energy rate-payers are feeling the burn; environmental mandates make affordable housing as unaffordable as ever

March 14, 2016 by michael · Comments Off
Filed under: Environmental Protection Agency, renewable energy 

When the Supreme Court issued a stay of the Clean Power Plan, state leaders should’ve celebrated; our weighty budget crisis just got a little lighter with costly energy mandates no longer imminent.  Gov. Hickenlooper’s inexplicable decision to self-inflict these budget hits disappoints.

“One thing is clear: Any further effort to develop a state plan, full or partial, is a waste of taxpayer money. At a time when the state is facing a budget crisis, the agency’s position becomes even more untenable. Colorado’s unbridled zeal to charge on, absent the necessary certainty from the federal courts, coerces power providers to participate in an expensive process if only to ensure they don’t get run over.

Moreover, the benefits of developing new carbon regulations are nil, especially if Colorado proceeds on a piecemeal, stand-alone basis. Even if fully implemented, the federal Clean Power Plan would lower global temperatures a mere 0.02 of a degree — not enough to budge the needle. Rising sea levels? They’d be reduced by the thickness of two sheets of paper.”

And there’s no doubt that citizens are paying substantially higher rates for energy. Independence Institute energy analyst, Michael Sandoval, talks energy rates on-air with KOA’s Mandy Connell, confirming what we all have been suspecting: Colorado energy rates across all sectors (transportation, electricity, etc) have skyrocketed 67%, double the rate of inflation

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Is there any escape from the tentacles of regulators?  Not in the housing sector. After many billions of dollars were squandered on electric vehicle companies that flopped, Denver city leaders are mandating homebuilders install EV chargers in new home construction.  Homebuilders’ frustrations and concerns are given little to no weight:

“The Denver planning department’s proposed changes were spurred by the 2015 update to the International Code Council’s suggested rules, which serve as a sort of industry standard, along with Denver-specific amendments.

Those include the new requirement for electric vehicle-supporting conduits and panels in garages for new houses.

Initially, that change faced opposition, especially from homebuilders concerned about the added cost in construction.”

The homebuilder’s concerns were never mitigated, making Denver’s homebuilders the latest in Colorado to voice concerns about costly regulatory layers and fees in the housing sector.

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In the good news category, the Greeley city council will allow a 22-well oil and gas facility to go forward, overturning a decision made by its planning commission to deny the operation.  Initially, the planning commission unanimously sided with protesting neighbors, but the city council determined that the property owners legally are allowed this use of their land, and may access the underground assets.

“After six hours of testimony on Tuesday, the Greeley City Council overturned its planning commission, allowing a 22-well oil and gas facility in west Greeley — a move that aligned with the city’s own development code rather than public sentiment.

Hundreds of people turned out for the hearing, an appeal by Denver-based Extraction Oil and Gas, of the Greeley Planning Commission’s January decision to deny its project, 6-0. The hearing filled the hearing room at the Greeley-Evans School District 6 administration building, as well as its lobby, where almost 300 chairs were brought into accommodate the crowds, filled with neighbors against the project and hundreds of oil and gas workers wearing stickers that read, “Oil and gas feeds my family and yours!”

But hours of often emotional testimony couldn’t negate one fact: this was a property rights issue…”

***

Independence Institute Future Leader Sarah Huisman prepared this edition of Cheat Sheet.

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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.

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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]

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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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Huisman: CDPHE plows ahead; implementation model ignores cost of Clean Power Plan

On Monday February 22nd, the Colorado Department of Public Health and Environment’s (CDPHE) Air Pollution Control Division (APCD) held a public meeting to discuss the status of President Obama’s Clean Power Plan (CPP), which the U.S. Supreme Court officially stayed on February 9th.

The agenda for this previously scheduled meeting was modified in order to address the recent developments of both the CPP stay, and the CDHPE’s statement in response, which was posted the very next day.  In short, Colorado will essentially pursue CPP goals as if the stay never happened, while the states surrounding Colorado have put it on hold while the legal process plays out.

The 90-minute meeting consisted of a brief presentation by APCD deputy director, Chris Colclasure, followed by a Q & A and public testimony.  Mr. Colclasure began by discussing public comments already received by his office, which were overwhelmingly in support of the CPP, including over 500 form-emails from nationally organized campaigns.

Colclasure defended CDPHE’s position to move forward on CPP emission goals, stating that his department will “take actions that have benefits regardless of the litigation,” because despite the legal process, “climate change remains a critical issue.”  However, these purported benefits remain subjective, and are disputed by many stakeholders.

What analytical use is it to know a presumed benefit without knowing about its life-partner, cost?  The CDPHE is conducting, a benefit analysis (and acting on it), rather than conducting a cost-benefit analysis.  Colclasure stated in his presentation that they “hope” to model potential costs.  The private sector metaphor here is a borrower going to a lender and saying, “lend me money for a house, because I hope to be able to afford my mortgage.”  But in this case, the taxpayers are the ones being recklessly put at risk.

That isn’t a stretch.  Energy Strategies and the Center for the New Energy Economy produced a model used by APCD to evaluate the CPP, but this model was never built to consider costs.  During Monday’s public meeting, Mr. Colclasure admitted that the above companies have the ability to build a cost-inclusive model, but they were specifically contracted to not include costs in their modeling.

About 15 people spoke during the public testimony period, the majority of which supported the CPP, proving that the extreme environmental movement is well funded and well organized.  Local, state, and national groups were represented, some even claiming the CPP doesn’t go far enough, and that environmental racism and injustice is not adequately addressed.

The testimony that did not support the CPP was moderate by comparison.  Representatives from the Colorado Energy Consumers and the Colorado Mining Association requested that given the gift of time resulting from the stay, cost modeling, including probable job losses and ratepayer increases, be a priority in the coming months.

The CDPHE has demonstrated that it is unlikely to model the almost certainly heavy costs of the CPP, let alone reconsider implementing it.  Colclasure spoke with certainty about the inevitability of carbon dioxide regulations, be they from the CPP or some other avenue.  By all appearances, extreme and economically unsound environmental regulations are a runaway train in Colorado.

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

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February 23 Colorado Energy Cheat Sheet: Conflicting views over Colorado CPP prep; Gold King Mine persists for Navajo Nation

February 23, 2016 by michael · Comments Off
Filed under: CDPHE, Environmental Protection Agency, Legal, renewable energy, solar energy, wind energy 

An E&E story ‘Colo. steps back from crafting formal plan for EPA rule’ might give readers pause, thinking that the Colorado Department of Public Health and Environment was backing off its previous statement to proceed with “prudent” Clean Power Plan development even as a stay from the U.S. Supreme Court was in effect (paywall):

Colorado officials said yesterday they believe it is “prudent” for the state to keep working toward power plant carbon emissions reductions despite a recent Supreme Court ruling to freeze a key federal climate change regulation.

But the state’s original path toward meeting U.S. EPA’s Clean Power Plan goals will be recharted, officials declared at Colorado’s first public meeting about the regulation since the court stay.

“We don’t think it is appropriate at this point to continue drafting a full state plan,” said Chris Colclasure of the Colorado Department of Public Health and Environment’s Air Pollution Control Division. “There’s just too much uncertainty for that.”

Colclasure said the decision to stop work on developing a full compliance plan is part of an effort in smart time management.

“We want to take any steps that we can to put Colorado in the best position given the uncertainty so that when the Supreme Court gives us a ruling, we have used that time effectively,” he said.

The state is “trying to identify actions that we can take that will have benefits regardless of the outcome of the litigation,” Colclasure said, adding that “we don’t want to waste time, either, by having people work on activities that wind up being irrelevant.”

This would include whether to cancel, reschedule, or rework meetings already on the CDPHE agenda for this spring.

A generous reading would see CDPHE’s declarations as a revision or walk-back of its post stay bravado to carry on with CPP preparation at the state level. But there might be no walk-back, but some verbal gymnastics designed to throw off possible legislative action this session or to see other reasons (not just “we should do something anyway because it’s a good thing”) like the state’s own impending 2020 renewable energy standards or Governor John Hickenlooper’s 2015 Colorado Climate Plan.

Meanwhile, at least 17 other states’ governors have signed a bipartisan pledge to promote a “new energy future” as CPP litigation continues.

An amicus brief filed by 34 Senators and 171 Representatives supporting the CPP lawsuit:

WASHINGTON – Led by U.S. Senate Majority Leader Mitch McConnell (R-Ky.), Senate Environment and Public Works Committee Chairman Jim Inhofe (R-Okla.), House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.), 34 Senators and 171 House Members filed an amicus brief today in the case of State of West Virginia, et al. v. Environmental Protection Agency, et al.

The amicus brief is in support of petitions filed by 27 states seeking to overturn the EPA final rule identified as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, EPA-HQ-OAR-2013-0602, 80 Fed. Reg. 64,662 (Oct. 23, 2015), also known as the “Clean Power Plan.” A copy of the brief can be found here.

As Senators and Representatives duly elected to serve in the Congress of the United States in which “all legislative Powers” granted by the Constitution are vested, the members state that:

The Final Rule goes well beyond the clear statutory directive by, among other things, requiring States to submit, for approval, state or regional energy plans to meet EPA’s predetermined CO2 mandates for their electricity sector. In reality, if Congress desired to give EPA sweeping authority to transform the nation’s electricity sector, Congress would have provided for that unprecedented power in detailed legislation. Indeed, when an agency seeks to make “decisions of vast ‘economic and political significance’” under a “long-extant statute,” it must point to a “clear” statement from Congress. Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2444 (2014) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160, 529 U. S. Ct. 1291, 1315 (2000)). EPA can point to no statement of congressional authorization for the Final Rule’s central features, precisely because there is none.

Gov. Hickenlooper defended his views about the CPP on CPR: ignoring SCOTUS stay to do a Colorado approach–more wind, more solar–”I think we do have a responsibility to go to those communities and see what we can do to try and find new businesses or be able to retrain some of the miners so that that community doesn’t suffer so much economically.”

“We really can have inexpensive electrical generation and clean air at the same time,” said Hickenlooper.

That “responsibility” Hickenlooper outlined will be tested, as coal communities see economic upheaval already:

The downward slide continued for Colorado’s coal industry in 2015, highlighted by production at Routt County’s Twentymile Mine, which was down 38 percent.

Statewide, production in Colorado was down 18.5 percent, with 18.7 million tons, the lowest amount of coal mined in 23 years.

In Moffat County, production at the Trapper Mine was actually up nine percent, with 2.1 million tons. At Colowyo Mine, production was down six percent at 2.3 million tons.

Colorado Mining Association President Stuart Sanderson said the drop in production is a result of lower demand, but it was not caused by natural market forces.

“What we are seeing is the direct result of government regulations that are designed to drive coal out of the energy mix,” Sanderson said.

Sanderson pointed to the 2010 Clean Air Clean Jobs fuel-switching bill from coal to natural gas.

“Moving forward, there is no question that the companies are suffering from this absurd action by the government to put hardworking men and women out of work,” Sanderson said.

In other words, mining communities aren’t just suffering economically, they’re suffering governmentally.

***

At the “Lifting the Oil Export Ban” event, Democratic Rep. Ed Perlmutter indicated support for a 5-10 cent gas tax hike as an “investment”–as he “comes from a construction family” (51:00 mark):

***

The Gold King Mine spill prompted by the Environmental Protection Agency still has lingering effects in Navajo Nation areas south of Colorado:

Millions of gallons of contamination from heavy metals flowed from the Animas River in Colorado into the San Juan River in New Mexico, threatening their economy and their spiritual way of life.

Joe Ben Jr. is a farmer and representative to the Navajo Nation board. He walked with CBS4 Investigator Rick Sallinger through corn stalks in a field.

“This corn should normally be higher than 6 feet, it’s about 4 feet,” Ben said.

With sadness he told of how they shut off the irrigation water when they heard the toxic plume was coming and still haven’t turned it back on. Some 550 indigenous Navajo farmers in the region have felt the impact. Ben says farming is an art in their culture for those who live off the land.

Among them is Earl Yazzie and his family. He can only bundle up what remains of what might have been a bountiful harvest. The mine spill took a toll on his farm. He estimates the loss at $10,000.

The U.S. Chamber of Commerce asked–“What if a business did this?”:

If this were a private business, EPA would never have accepted this answer. It would have decried such behavior as “cutting corners” and rushing ahead with little regard to safety and the environment. Fines would’ve been issued.

Just like when EPA fined an oil exploration company $30,500 only a few days before the Gold King Mine spill for leaking 500 gallons of well testing fluids on Alaska’s North Slope. EPA allowed 6,000 times that amount of material to pour into a river. Will EPA (i.e. taxpayers) fork over $183 million in fines?

Last year, Administrator Gina McCarthy said EPA will be held accountable for the spill:

“We are going to be fully accountable for this in a transparent way,” she said at a press conference. “The EPA takes full responsibility for this incident. No agency could be more upset.”

When asked if the EPA will investigate itself as vigorously as it would a private company, McCarthy said, “We will hold ourselves to a higher standard than anybody else.”

On the transparency front, EPA is lacking. As noted above, Griswold’s email about water pressure concerns wasn’t included in EPA’s December 2015 report. Also, committee members are subpoenaing the Interior Department and the Army Corps of Engineers for more documents about the spill, because they don’t think the agencies have been forthcoming.

As for holding itself to a higher standard, that’s yet to be seen six months after the spill.

A House committee is seeking Interior Department documents in the Gold King Mine incident and the subsequent post-spill investigation:

Sally Jewell was ordered Wednesday by the U.S. House Committee on Natural Resources to produce a long list of records and correspondences by the end of next week.

Specifically, the committee wants information about how investigators under Jewell worked with the Army Corps of Engineers to peer review the report.

The committee’s chair, Rep. Rob Bishop, R-Utah, said the Department of Interior has interfered with his requests for information on how the Gold King Mine report was compiled.

Bishop says the DOI has tried to block records showing the Army Corps of Engineers had “serious reservations about the scope and veracity” of the interior department’s review.

Army Corps records were also subpoenaed Wednesday.

Meanwhile, CDPHE sees the Gold King Mine spill as the impetus for action on other mines around the state:

SILVERTON —Of the 230 inactive mines the state recognized six months ago as causing the worst damage to Colorado waterways, state officials say 148 have not been fully evaluated.

The Colorado Department of Public Health and Environment has cobbled together $300,000 for an “inventory initiative” to round up records and set priorities. The agency is enlisting help from the Colorado Geological Survey at the Colorado School of Mines.

Colorado officials hope attention on the Animas River after the EPA-triggered spill at the Gold King Mine in August will spur action at scores of other inactive mines contaminating waterways. After the disaster, the state identified the worst 230 leaking mines draining into creeks and rivers.

There are an estimated 23,000 inactive mines in Colorado and 500,000 around the West. State officials estimate mining wastewater causes 89 percent of the harm to thousands of miles of waterways statewide.

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Energy Policy Center Report: Electricity rates skyrocket across all Colorado sectors

Across all sectors of Colorado the cost of electricity has skyrocketed more than 67 percent between 2001 and 2014, easily exceeding median income growth and the expected rate of inflation for the same period, an extended analysis of government energy records by the Independence Institute has revealed.

Energy_Increase_AllSectors_Percent_a

Energy_Increase_AllSectors_kwh

For all sectors between 2001 and 2014, the cost per kilowatthour jumped from just over 6 cents to more than 10 cents, or 67.11 percent.

Data obtained by the Independence Institute from the Energy Information Administration and the U.S. Census Bureau showed an increase in electricity rates for residential, commercial, industrial, and transportation sectors throughout the state contributing to the across-the-board growth in prices. In November, the Energy Policy Center reported a staggering increase of 63 percent for residential customers in Colorado.

“Retail residential electricity rates increased from 7.47 cents per kilowatthour in 2001 to 12.18 cents per kilowatthour by 2014, a 63.1 percent hike. Coloradans’ median income, however, went up just 24.1 percent, from $49,397 to $61,303. Median income in Colorado actually declined between 2008 and 2012,” the report concluded. It also noted that the U.S. Bureau of Labor and Statistics projected just a 34 percent increase in inflation for the 14 year period, using the agency’s CPI inflation calculator.

And while the data for late 2015 from the BLS indicated a modest decline of 2.9 percent in electricity prices for the Denver-Boulder-Greeley census area, this drop in rates did not offset the 3.8 percent increase seen one year earlier. While global commodity prices have given Colorado energy consumers a brief respite (and wild fluctuations in prices), electricity generation and costs have proven less volatile.

“The energy index, which includes motor fuel and household fuels, decreased 19.0 percent from the second half of 2014 to the second half of 2015, following an increase of 0.3 percent in the same period one year ago. Falling prices for motor fuel (-26.0 percent), all of which occurred in the first half of the period, were largely responsible for the decline in the energy component. Lower prices for utility (piped) gas service (-18.9 percent) and electricity (-2.9 percent) also contributed to the decrease. During the same period one year ago, motor fuel costs declined 3.1 percent, while the indexes for utility (piped) gas service and electricity rose 5.8 and 3.8 percent, respectively,” the BLS report concluded.

Energy_Increase_Residential_Percent

Energy_Increase_Residential_kwh

Analysis from the earlier November report on residential electricity rates stands confirmed and, indeed, underscored:

It’s clear from the data that Coloradans’ income is not keeping pace with almost continuous electricity price increases over the past 15 years, consistently outpacing the rate of inflation. Colorado’s ratepayers have had to endure two economic recessions over that period, while feeling no relief from escalating energy prices driven by onerous regulations driving energy costs ever higher.

From fuel-switching and renewable mandates to other costly regulations imposed by state and federal agencies, Colorado’s ratepayers and taxpayers alike have been subject to policies that do not consider energy affordability or reliability as a primary concern. The most vulnerable communities–elderly, minorities, and the poor–are the most sensitive to even the smallest increases in energy costs.

Not to mention the state’s many business owners, including small business owners, who face the same hikes in energy costs that could force decisions like layoffs or relocation to nearby states, where energy costs are lower. This reduces job growth and harms the state’s economy twice, with increased business costs passed on to consumers–the same ratepayers who already are paying more at the meter.

Upshot: the data for the remaining sectors emphasizes the double impact that increased energy costs have in the form of rapidly escalating electricity rates on Colorado ratepayers, who see not only their own personal energy costs rise, but are hit a second time by commercial, industrial, and transportation charges that are “baked into” the cost of providing goods and services that are passed on to consumers.

William Yeatman, senior fellow of environmental policy and energy markets at the Competitive Enterprise Institute and author of the Independence Institute’s 2012 Cost Analysis of the New Energy Economy, said in the November report that given the current regulatory climate, things “could get much worse.”

Some of the costs already baked in to electricity prices came directly from policy initiatives undertaken in the last decade.

Yeatman analyzed 57 legislative items included in the push for a “New Energy Economy,” determining that as much as $484 million in additional costs were incurred by the state’s Xcel customers–an additional $345 per ratepayer.

“The best explanation for this confounding upward trend in utility bills nationwide is the Obama’s administration’s war on coal. Colorado, alas, was well ahead of the curve on the war on coal, which explains much of why the state’s rate increases are presently so much greater than the nationwide average,” Yeatman said.

Part of the war on coal, the Environmental Protection Agency finalized the Clean Power Plan in August 2015.

The policy battle over the EPA’s Clean Power Plan, and the future of Colorado’s electricity rates, rests upon multi-state legal challenges to the agency’s authority that just last week resulted in a stay from the U.S. Supreme Court. That decision was overshadowed, however, by the subsequent death of Justice Antonin Scalia days later, leaving the legal challenge in turmoil given the SCOTUS’ delicate and likely 4-4 ideological split and the contentious election year battle over nominations to replace Scalia.

Meanwhile, Governor John Hickenlooper remains committed to pushing for a “prudent” continuation of planning for Clean Power Plan implementation, with the Colorado Department of Public Health and Environment proceeding with its pre-stay timeline. Colorado Senate Republicans, however, called ignoring the court’s stay “unacceptable.” Legislation addressing CDPHE’s ability to proceed with CPP planning will likely be introduced before the end of the 2o16 Colorado legislative session.

The Independence Institute’s analysis of electricity costs, broken down by the other sectors, shows commercial electricity rates for Colorado have seen a 77.78 percent increase from 2001 to 2014, jumping from 5.67 cents per kilowatthour to 10.08 cents.

Energy_Increase_Commercial_Percent

Energy_Increase_Commercial_kwh

Industrial rates have tracked with the overall rate increase of approximately 67 percent, from 4.48 cents to 7.47 cents per kilowatthour.

Energy_Increase_Industrial_Percent_a

Energy_Increase_Industrial_kwh

Transportation figures from EIA data do not extend back to 2001. Instead, the trackable data begins in 2003, with a sharp decline by 2005, before prices more than doubled, from 5.01 cents to 10.79 cents per kilowatthour, or a 115 percent increase in the last full 10 years of EIA measurement.

Energy_Increase_Transportation_Percent_a

Energy_Increase_Transportation_kwh_a

Overall increases for comparison (with the adjustment for transportation noted):

Energy_Increase_Combined_Percent_a

For a complete description of EIA definitions of electricity consumers and data collection, click here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Further.

We’ll see how that plays out.

***

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

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

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

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

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

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

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

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

***

NEWS ROUNDUP:
Silverton punts on Superfund designation

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

Plunging oil prices means lower severance tax revenue in Colorado

Lower gas prices? Let’s raise taxes!

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

Trading: Coal extraction for sage grouse habitat

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

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

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

Secretary Jewell Launches Comprehensive Review of Federal Coal Program

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

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

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

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

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

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

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

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

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

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

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

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