February 18 Colorado Energy Cheat Sheet: Costly Clean Power Plan event video; EPA Animas River spill gets Congressional scrutiny; fracking ban off 2016 ballot
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, regulations
The Independence Institute and the Competitive Enterprise Institute joined forces on February 16 in Denver to provide an update on the Environmental Protection Agency’s costly Clean Power Plan, including where the rule stands with regard to the U.S. Supreme Court stay issued earlier in February, as well as the impact of the death of Associate Justice Antonin Scalia on the ongoing legal proceedings.
The Environmental Protection Agency’s Clean Power Plan rules will slow the Colorado economy, raise electricity rates and barely make a dent in carbon dioxide emissions, opponents and experts on the plan told an audience at the Independence Institute on Tuesday.
“Clean power alone will add billions if not tens of billions of costs to individual consumers and the American economy,” said Gregory Conko, executive director of the Competitive Enterprise Institute.
Myron Ebell, CEI’s director of the Center for Energy and Enviroment released a state-by-state comparison showing Colorado’s 9.49 cents per kilowatt hour is lower than the national average of 10.11 cents. But he said California, which has extensive power plant regulation and has consumers paying 15.11 cents, is a warning for the rest of the country if the Clean Power Plan is instituted.
“This is about keeping the lights on for America’s economy, for Colorado’s economy,” he said, adding any additional costs for energy will take away consumer purchasing power for other goods.
Keeping the lights on and the cost of electricity–the energy that drives our economy.
What happens when costs of electricity go up? It hurts the average Coloradan; the ratepayers and taxpayers already pressured by an economy that has never fully recovered from the recession that have seen their electricity bills skyrocket 63 percent between 2001 and 2014, and Colorado overall, across all sectors from residential to commercial, industrial, and transportation, of 67 percent:
Those cost increases are being felt, not the least by folks in southern Colorado.
Regulations impact economies, and officials at a hearing in New Mexico on proposed Bureau of Land Management rules got an earful:
“The implementation of these proposed rules will kill revenue to state and federal government,” said Farmington Mayor Tommy Roberts. “And it will kill jobs at the local level.”
To find the source of Farmington and San Juan County, New Mexico, residents’ frustration, one doesn’t need to look far. Last week, the Bureau of Labor Statistics released a report that showed the area ranked first in the nation in the rate of unemployment growth – from 5.2 percent in 2014 to 7.3 percent in 2015. Since 2009, the region has lost an estimated 6,000 jobs, mainly as a result of a declining oil and gas industry.
“I’ve seen the affects in my community,” said Bloomfield Mayor Scott Eckstein. “This will be a knock-out blow to an already-crippled community.”
In January, the BLM proposed an update to 30-year old regulations on methane and natural gas leaks on BLM and Native American lands. BLM officials estimate the tougher regulations would reduce emissions of the potent methane by about 169,00 tons per year, and decrease volatile organic compound releases by 410,000 tons per year. That reduction would be in keeping with an earlier Obama Administration goal of reducing methane emissions by 45 percent from 2012 levels by 2015.
In March of last year, I had the privilege of traveling to northwest Colorado to film AEA’s “Eye of the Storm” video which chronicled the threats radical environment activists were making against the communities of Craig and Meeker. Thankfully, with your help, we were able to convince the federal government that the Colowyo mine should stay open. Unfortunately, the mine and these communities are under threat yet again.
While in Craig and Meeker, Colorado, I was blown away by the people that I met. Every person knew just how important energy is to their community. From the mayor to the hotel concierge, every single person I spoke with had a personal story about how the energy their community produces and responsibly utilizes makes their lives better. And as many miners pointed out to me, their work provides affordable, reliable energy to the entire region.
Visiting the Colowyo mine was a surreal experience. At first, you drive up a winding dirt road through checkpoints, until you finally reach the mining area. Colowyo is a surface mine situated between the towns of Craig and Meeker. Cresting the ridge and looking down on the pit, you see these bright yellow trucks scurrying around with dirt and coal, but from that distance you can’t tell how massive they are. Realizing the immense scale of this project and the work these men and women do every day is profound—and in a way, beautiful.
One real surprise to me is that soon after stepping out of the truck at the mine, I noticed wildlife. You do not expect to visit a mine and see elk, antelope, deer, and even an owl, but I saw all four within the first hour of our time there. The staff pointed with pride to the areas that had been previously been mined, but were now restored and how well the land and wildlife were thriving
The literal ban on fracking is out, but 10 more state constitutional amendments remain, including a “right to a healthy environment”:
“We’re going to pull the one that’s the ban, not the other ones,” Dyke told the Denver Business Journal on Friday. “We’re down to 10, but we still have plenty to work with.”
But while a proposal to ban fracking statewide may be off the table, the other initiatives backed by CREED are just as bad, said Karen Crummy, a spokeswoman for Protecting Colorado’s Environment, Economy and Energy Independence, an issues committee formed by the industry in 2014 to oppose anti-fracking initiatives.
“They withdrew it (the fracking ban proposal) because they know the vast majority of Coloradans support responsible oil and natural gas development and are against banning an entire industry,” Crummy said via email.
“However, their remaining proposals are just as irresponsible and extreme because they would still effectively ban development,” she said.
The other amendments, calling for 4,000 foot setbacks away from “special concern” areas along with the healthy environment proposal remain de facto fracking bans, and in most cases, include all oil and gas development not just the controversial hydraulic fracturing method.
For example, proposal #67:
Section 1. Purposes and findings. THE PEOPLE OF THE STATE OF COLORADO FIND AND DECLARE:
(a) THAT OIL AND GAS DEVELOPMENT, INCLUDING BUT NOT LIMITED TO THE USE OF HYDRAULIC FRACTURING, HAS DETRIMENTAL IMPACTS ON PUBLIC HEALTH, SAFETY, WELFARE, AND THE ENVIRONMENT;
(b) THAT SUCH IMPACTS ARE REDUCED BY LOCATING OIL AND GAS DEVELOPMENT FACILITIES AWAY FROM OCCUPIED STRUCTURES AND AREAS OF SPECIAL CONCERN; AND
(c) THAT TO PRESERVE PUBLIC HEALTH, SAFETY, WELFARE, AND THE ENVIRONMENT, THE PEOPLE DESIRE TO ESTABLISH A SETBACK REQUIRING ALL NEW OIL AND GAS DEVELOPMENT FACILITIES IN THE STATE OF COLORADO TO BE LOCATED AWAY FROM OCCUPIED STRUCTURES, INCLUDING HOMES, SCHOOLS AND HOSPITALS; AS WELL AS AREAS OF SPECIAL CONCERN.
Section 2. Definitions.
(a) FOR PURPOSES OF THIS ARTICLE, “OIL AND GAS DEVELOPMENT” MEANS EXPLORATION FOR AND DRILLING, PRODUCTION, AND PROCESSING OF OIL, GAS, OTHER GASEOUS AND LIQUID HYDROCARBONS, AND CARBON DIOXIDE, AS WELL AS THE TREATMENT AND DISPOSAL OF WASTE ASSOCIATED WITH SUCH EXPLORATION, DRILLING, PRODUCTION, AND PROCESSING. “OIL AND GAS DEVELOPMENT” INCLUDES, BUT IS NOT LIMITED TO, HYDRAULIC FRACTURING AND ASSOCIATED COMPONENTS.
Judge the activists by their words–they want bans or regulations so onerous as to yield the same results. This isn’t just about a fracking ban, although the most explicit amendment calling for a statewide ban has just been pulled. Make no mistake–this is about the wholesale removal of responsible natural resource extraction that gives Coloradans affordable and reliable energy.
Windsor High School junior Kamille Hocking worried a dozen oil wells on her family’s 132-acre Colorado homestead might sicken them. Then, Rebecca Johnson, an Anadarko Petroleum Corp. engineer, used a blender in her chemistry class to show the interaction of swirling frack sand, city water and friction reducer.
“We heard a lot of stories about how it could get into the water and pollute the land,” said Hocking, who is 16. “I’m going to tell my parents that fracking fluid only makes cracks in the rock the size of a hair that the sand gets into and holds open.”
Facing 10 possible ballot initiatives restricting fracking, Anadarko has deployed 160 landmen, geologists and engineers such as Johnson to Rotary clubs, high schools and mothers groups. They demonstrate how drilling works and try to convince people that the technique and the accompanying chemicals and geological effects don’t harm the environment or public health.
The wide-ranging outreach in Colorado, the nation’s seventh-biggest oil producer and sixth-largest gas provider, represents a policy shift. The energy industry that has been known for insisting on confidentiality from employees about fracking practices now allows geologists, landmen and colleagues in 40 Anadarko job categories to divulge details of what they do to their churches, neighbors and golfing buddies.
Johnson, who’s personal motto is “faith, family and fracking,” told students in Windsor that she’s supervised 1,000 fracks in the course of her 24-year career without harm to the environment.
“I live right here,” Johnson said when she visited the school 60 miles (97 kilometers) north of Denver this month. “My family is here. My mother-in-law graduated from your high school. She turns 80 this year. We would know if something’s wrong.”
Real facts from the folks who live and work in the communities in question.
More rulemaking on the way, regardless of which amendments make the 2016 ballot:
Fresh off some recent rulemaking, Colorado’s oil and gas regulatory agency is turning its attention to one of the most persistent complaints from people living near extraction operations: noise.
The Colorado Oil and Gas Conservation Commission is in the process of gathering technical data from state health experts, industry officials and third party consultants regarding noise, its health impacts and mitigation measures, said Dave Kulmann, COGCC deputy director.
Since discussions are still in the early stages, no date is set for when formal rulemaking might start, although it will likely be some time late in 2016. Kulmann said the agency wants to gather the technical data before speculating on which specific aspects of the current regulations might be beefed up, but it is clear, he said, that noise is an issue.
In 2015, after implementing a new complaint process on Jan. 9 of that year, the COGCC received a total of 330 complaints on issues ranging from odors to traffic problems to property damage, according to a detailed complaint report compiled by COGCC. Of the total complaints, 123 were due to noise.
The Gold King Mine and Animas River spill–and the EPA–are still under scrutiny, even if the prominent news coverage has waned:
If a private company dumped three million gallons of toxic sludge into Colorado waterways, we’d be flooded with daily media updates for months. Yet the press has by now forgotten the disaster unleashed in August when EPA contractors punctured an abandoned mine. New evidence suggests the government isn’t coming clean about what happened.
EPA planned its disastrous investigation of the mine for years, not that you’d know: The agency assumed a layout of the area that contradicted public records, including the remarkable conclusion that a drain ran near the ceiling of the mine’s entrance. This led EPA to believe that water backed up only about half the tunnel. The agency didn’t test the water pressure, a precaution that would have prevented the gusher. EPA hasn’t explained this decision, and emails obtained by the committee show the on-site coordinator knew there was “some pressure.”
The crew made more bad decisions than characters in a horror movie. About a week before the blowout, the on-site coordinator went on vacation and left instructions that his replacement seems to have ditched. For example: Don’t dig toward the tunnel floor unless you have a pump handy. The crew pressed downward without a pump and intentionally unearthed the mine’s plug. “What exactly they expected to happen remains unclear,” the report concludes. The Interior Department now euphemistically calls this series of events an “excavation induced failure.”
EPA is so far suggesting that no one committed crimes, and maybe so. But consider: EPA cranked out a report three weeks after the disaster and said the Interior Department would conduct an independent review that the Army Corps of Engineers would sign off on. EPA testified to the committee that Interior would look for wrongdoing, though Interior said the department was only offering technical support.
July 16 Colorado Energy Roundup: Sec. Jewell adds Colowyo Mine visit; renewable energy mandate upheld
Filed under: CDPHE, Environmental Protection Agency, Legal, preferred energy, renewable energy
A week after the Department of the Interior declined to move forward with an appeal in the Colowyo Mine case, and facing mounting pressure to visit the northwest portion of Colorado during a scheduled trip to Aspen, Sec. Sally Jewell appears to have conceded to a meeting with county commissioners:
Moffat County Commissioner John Kinkaid said Wednesday that Jewell has added a meeting with northwest Colorado county commissioners to her itinerary Friday following her speech at the Aspen Institute.
“We look forward to meeting Secretary Jewell this Friday evening,” Kinkaid said. “I hope that she will be able to give us some assurances that our miners can keep working.”
He said he expected the meeting to include commissioners from Moffat and Rio Blanco counties, whose communities would bear the brunt of a mine closure. The meeting will take place in Glenwood Springs.
Jewell had come under pressure to visit the area after it was announced that she would deliver remarks Friday at the Aspen Institute, about a three-hour drive from Craig, where residents are alarmed about the future of the mine.
We’ll keep you posted on developments of the planned meeting.
The mandate, which voters passed in 2004 and expanded in 2010, was challenged by the free-market advocacy group Energy and Environment Legal Institute. The group argued that the renewable energy requirements violate the U.S. Constitution.
The lawsuit claimed that the requirement that large utilities such as Xcel Energy get 20 percent of their electricity from renewable sources violates constitutional protections for interstate commerce.
The plaintiffs argued that because electricity can go anywhere on the grid and come from anywhere on the grid, Colorado mandate illegally harms out-of-state companies.
The 10th Circuit Court of Appeals in Denver disagreed. The three-judge panel ruled that the mandate does not wrongly burden out-of-state coal producers. The judges also pointed out that Colorado voters approved the mandate.
The full text of the ruling can be found here.
For those who do not think increased energy costs–whether from increased cost of supply of fuel, onerous regulations, or government picking (more expensive) energy winners–affect lower and middle income families in Colorado, a new examination of the state’s Low-Income Energy Assistance Program (LEAP) reveals how devastating even modest price increases in energy can be:
About 430,000 households in Colorado — 22 percent of all households — are eligible for federal energy assistance.
These households have incomes below 150 percent of the federal poverty level, or about $36,372 for a family of four.
About 13 percent of Colorado households are below the federal poverty line of $24,250 for a family of four.
The federal Low-Income Energy Assistance Program, or LEAP, administered by local agencies, provided $47 million for heating bills during the 2014-15 season.
The article laments that program has a low reach at the present time, with only 19 percent of those eligible receiving outreach.
But the article’s lede is buried–even small, incremental increases have a large and outsized effect on low-income folks given the portion of income they spend on energy:
Xcel, the state’s largest electricity utility, calculates monthly payments based on 3 percent of a household’s income.
Average households pay 2 percent to 3 percent for energy, compared with low-income households, which often pay as much as 50 percent.
“That leaves very little for food, clothing, medicine,” said Pat Boland, Xcel’s manager of customer policy and assistance.
“Once we get them in the door, we want to keep them in the door,” Boland said in a presentation.
According to the article, Black Hills reaches only 10 percent of those eligible within its system. It pays for the assistance by charging other ratepayers, and is considering a rate hike to cover the program, which is currently losing money. That hike, along with three other rate increases since 2008, make Black Hills among the most expensive electricity providers in the state, the Post article said.
Despite a quiet 2015, fracking is still maintaining a low boil on the backburner of the state’s energy debate, and there is every indication that it won’t be simmering any time soon, and Democratic Rep. Jared Polis told the Associated Press that options remain:
Polis said fracking could be on the 2016 ballot if state officials don’t further regulate the industry. He stopped short of saying whether he would organize the effort, but he wants lawmakers and regulators to adopt three proposals that weren’t formally recommended by the task force.
One would let local governments impose stricter rules than the Colorado Oil and Gas Conservation Commission, charged with regulating drilling statewide. Another would change the commission’s role from facilitating oil and gas development to simply regulating it. The third would set up a panel to resolve disputes between energy companies and local governments or property owners before they land in court.
It remains to be seen whether or not activists, with or without Polis’s sponsorship, pursue a strategy like they did in 2013, targeting friendly and even tossup municipalities with fracking bans and moratoria, or wait for statewide opportunities in the 2016 Presidential election cycle.
The Bureau of Land Management has closed off nearly 100,000 acres of federal land from future leasing:
The Bureau of Land Management rejected all 19 protests from conservation groups, the oil and gas industry and other interests in approving a new resource management plan for the Colorado River Valley Field Office.
The Colorado River Valley Field Office, in Silt, manages more than 500,000 acres of land and more than 700,000 acres of subsurface federal minerals in Garfield, Mesa, Rio Blanco, Pitkin, Eagle and Routt counties. The agency says the majority of the 147,500 acres with high potential for oil and gas production under the office’s jurisdiction are already leased and will continue producing under the plan.
The plan closes 98,100 acres for future leasing, including in the Garfield Creek State Wildlife Area near New Castle, areas managed for wilderness characteristics, areas of critical environmental concern, municipalities and designated recreation areas.
A second Craig-area coal mine apparently also will have to undergo a remedial federal environmental review process if it hopes to avoid a shutdown based on a recent court order.
The Trapper Mine near Craig is now looking at going through the same kind of review currently underway in the case of the Colowyo Mine between Craig and Meeker following a federal judge’s ruling in May.
U.S. District Court Judge R. Brooke Jackson, in a suit brought by WildEarth Guardians, found that the federal Office of Surface Mining Reclamation and Enforcement illegally approved expansions of the two mines because it failed to provide public notice of the decisions and account for the environmental impacts.
The Trapper Mine faces discrepancies over permitted areas and coverage under filings with Judge Jackson, who did not impose a similar ruling as that issued for the Colowyo Mine.
In a notice filed last week to alert the court about the new information, the Trapper attorneys said they support doing remedial environmental analysis involving the Trapper Mine after the Colowyo review is done.
Bob Postle, manager of the program support division for the OSMRE’s western region, said the notice has “just been filed, and we’re now working through how we’re going to address it.”
Given the discrepancies, it isn’t clear at this moment whether a new or remedial environmental review is necessary, according to Trapper’s legal counsel.
In a meeting with Republican Senator Cory Gardner, western slope businesses and entrepreneurs described facing onerous regulatory burdens imposed by DC bureaucrats:
A Moffat County sheepherder, Delta hardware shop owner and Grand Junction manufacturer all walked into a meeting Friday with U.S. Sen. Cory Gardner, R-Colo., each with much the same punchline in mind.
The common theme: The federal government is reaching too far into their businesses, discouraging them from seeking out new ways of doing business and growing.
Constraining regulations have “taken the creativity out of business,” Jim Kendrick, owner of Delta Hardware, told Gardner. “The move is to make us all do business the same way. That’s stifling growth.”
Gardner met with two dozen western Colorado business and economic leaders at Colorado Mesa University in hopes of finding ways to improve the state’s sputtering rural economy.
“I spend all my time on regulatory compliance and none of it on product development,” one Department of Defense contractor said. That would result in pushing more business to bigger vendors able to hurdle all of the regulatory red tape due to a larger staff.
Colorado already has the most expensive electric rates of all neighboring states and the second highest in the Rocky Mountain West, with projections to go even higher in the near future. Now, a bill just introduced into the state senate threatens to make Colorado’s energy rates even more expensive. The following is a column from the Colorado Consumer Coalition about the dangers of SB 178. Senator Kevin Lundberg offered an amendment that would have achieved the bill’s supposed primary purpose and saved consumers money, but it was voted down as the column details.
Colorado consumers—from Denver down to Pueblo and all across the state—could wind up paying even more for their electricity following a troubling development at the legislature this week. An obscure bill just introduced on Tuesday with almost no warning, only days before the end of the 2012 session, would pull the rug out from under the state’s public utilities and turn their long-term energy planning inside-out. And ratepayers would be left holding the bag.
Senate Bill 178 would scrap a key feature of Colorado’s renewable-energy mandate, on which utilities have based their plans and projections for years to come; the change would force them to get even more of their electricity from pricey renewables like wind and solar power than the law now requires. Specifically, the bill would take away a break that utilities have been able to pass on to consumers as they strive to meet costly state mandates to derive 30 percent of their electricity from renewables by 2030.
The break to ratepayers was enacted in 2004 along with the mandates because those who had been advocating for the shift to a greater reliance on alternative fuels also realized such a seismic change doesn’t come cheaply. And it’s neither fair nor even possible to make hard-pressed home- and business owners bear the whole burden. So, the policy’s authors not only placed a 2-percent cap on year-to-year rate increases due to the increased cost of renewables, but they also wrote the law to give extra credit to utilities for switching to alternative energy sources. That gave the utilities greater flexibility in meeting the statutory standards for renewables so consumers wouldn’t have to dig so deeply into their pockets.
Now, SB 178 aims to monkey-wrench that delicate balance. By revoking the extra credit for switching to renewable energy after 2015, the bill effectively would require the public to rely on an even higher percentage of renewable energy sources than most of the state’s utilities had anticipated. The result would be to wreak havoc with the balance sheets and strategic plans of the utilities, for-profit and nonprofit alike. They’d have to scramble to acquire more renewable sources for power and, inevitably, pass the cost on to the public through higher power bills.
Not surprisingly, when the bill was unveiled Wednesday at a meeting of the Senate Judiciary Committee, lawmakers got an earful from representatives of some of those utilities as well as other stakeholders—many of whom had only heard of the legislation a few days earlier and, in some cases, only hours prior to the hearing. And they told lawmakers point-blank what would happen if the bill were enacted.
“This bill will result in increased costs to… members and their customers,” said Thomas Dougherty, representing Tri-State Generation and Transmission Association, a wholesale electric power supplier owned by 44 electric cooperatives and serving 900,000 Coloradans.
Ratepayers of Black Hills Energy, which serves the Pueblo region, would be dealt a major blow by the legislation, the company’s Wenday Moser told lawmakers Wednesday.
“We are very concerned about Senate Bill 178 because we are concerned about our ability to meet the renewable energy standard,” Moser said. “As of now, Black Hills is marginally meeting the standard…We are struggling to meet that standard.”
Dougherty had noted in his testimony that even though the law caps renewable-energy cost increases at 2 percent a year on power bills, that increase in an of itself still can pack a punch for consumers. And Moser made clear that the cap really won’t spare consumers at all over the long run.
She pointed out that companies such as hers simply will be forced to assess that extra 2 percent “for many more years” until recovering the added costs of the additional renewables. After all, the utilities are legally bound to attain the renewable-energy standard; it’ll just take them longer to recover those costs from consumers.
Why this bill at this time—out of the blue like this? What possibly could have motivated some lawmakers to propose such a reckless policy for so little gain—at a time when Colorado already is well on its way toward greater reliance on renewable energy?
A representative of Attorney General John Suthers told the committee at Wednesday’s hearing that his office wasn’t behind the bill but had endorsed it because of concerns about a provision in the current law allowing the extra renewable-energy credits for purchases of Colorado energy but not for renewables originating outside the state. That, the AG’s rep said, set up Colorado for a constitutional challenge in court.
Fine, responded a skeptical Sen. Kevin Lundberg, of Berthoud—then why not simply extend the same extra credit to any acquisition of renewable energy from outside Colorado as well? Lundberg was told the attorney general would in fact be fine with that alternative, so Lundberg proposed it as an amendment to the bill. Unfortunately, it was voted down.
Lundberg and fellow Judiciary Committee Sens. Steve King, of Grand Junction, and Ellen Roberts, of Durango, deserve credit for asking tough and probing questions about the bill during the hearing. All three laudably voted against the measure, but they were outgunned by the majority, and the measure now moves to the Senate floor for further action.
Pending what happens next, let’s give credit to Black Hills Energy, too, for telling lawmakers what they really needed to hear—whether they wanted to or not—about a costly, destructive bill with no discernible value to Colorado Consumers.
My take: this bill isn’t about leveling the playing field for in-state versus out-of-state renewable energy producers but rather about forcing Colorado energy consumers to rely more heavily upon unreliable, expensive wind and solar energy. To make matters worse, this will be a windfall for Xcel Energy because the more expensive electricity is, the more Xcel makes. If this bill gets fast-tracked through the legislature like HB 1365, the infamous fuel-switching bill, consumers will have more proof that Xcel “owns” the state legislature.