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.”

***

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.

***

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

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

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

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

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

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

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

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

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

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

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

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

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

Mining has also been hit hard:

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

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

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

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

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

Because 97 percent of Platte Valley’s budget comes from taxes paid on mineral production and equipment — a property tax known as ad valorem — McClain said his district could be looking at a budget reduction between $300,000 and nearly $1 million next school year.
How that plays out in terms of potential cuts or program impacts is yet to be seen, he said.
“You’re always concerned about your folks,” McClain said. “You worry about it taking the forward momentum and positivity out.”
It’s not just schools that are suffering. Municipal budgets, local businesses and even hospitals in mineral-rich pockets of Colorado are watching closely to see how long prices remain depressed.

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

***

Xcel says the future of solar is bright:

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

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

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

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

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

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

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

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

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

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

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

***

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

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

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

***

And about that reliability argument:

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

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

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

February 18 Colorado Energy Cheat Sheet: Costly Clean Power Plan event video; EPA Animas River spill gets Congressional scrutiny; fracking ban off 2016 ballot

February 18, 2016 by michael · Comments Off
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.

Watchdog’s Art Kane:

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:

Energy_Increase_AllSectors_Percent_a

Energy_Increase_AllSectors_kwh

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.

***

Keeping Colorado coal alive:

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.

Too little, too late?

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.

November 20 Colorado Energy Cheat Sheet: Sierra Club to push for 100% renewables in Colorado; EPA Clean Power Plan hearing draws opposing sides; COGCC discusses new regs

11416162_10153626584141893_682657378597848906_n (1)
(Image Credit: Michael Sandoval)

The Independence Institute’s Energy Policy Analyst Michael Sandoval delivered this statement to the Environmental Protection Agency’s November 16 hearing in Denver, Colorado on the agency’s proposed federal plan and model trading rules for the Clean Power Plan:

In its December 2014 comments, the Colorado Department of Public Health and Environment, the Colorado Public Utilities Commission, and the Colorado Energy Office all maintained that ‘In Colorado, the PUC has exclusive statutory authority to regulate the IOUs and associated electric resource decisions’ and that ‘depending upon the plan elements proposed by Colorado, legislation may be needed to clarify or direct state agencies on their respective roles and authorities’.

In a proposed mass-based emissions allocation trading market to trade eligible resource credits (ERCs), who is the market maker? It would appear to require institutional apparatus of some sort–what enabling legislation in Colorado is required? In other states? If no legislation at this level is required, why not?

Markets are complex and difficulty in trading–what are the rules? how are the rules established? Who handles disputes and is the ultimate arbiter? How are the credits created in the trading mechanism?

The Independence Institute is a free market think tank interested in promoting the free market in energy resources, but as nice or well-intentioned a trading market for ERCs sounds at first glance, it becomes evident that government-created “markets” are simply picking energy winners and losers, often arbitrarily, often without actual considerations of cost or impact, but rather to self-serving goals contained within a given policy, such as the Clean Power Plan. When those transactional costs of trading ERCs rise, who will pay them? The inefficiencies won’t be borne at the administrative or even generating level, but by the ratepayers and taxpayers, not all of whom will be prepared for the rising costs of the Clean Power Plan itself, much less in terms of wealth transfers from state to state as the trading scheme expands.

So far, as with much else from the rollout of the Clean Power Plan, the timeline for market creation is heavily compacted. Information from CDPHE in September on question of trading was light and unhelpful. As it appear now it is a scribbling of generalities, and it is difficult to comment because it appears to be more like a make-up-as-you-go, details to be sketched in later program that will prove harder, more expensive, and more nuanced than any central planning or federal trading scheme could possibly account for ahead of time.

These comments, of course, fall into the requisite acknowledgement of the ongoing legal, technical, and other shortcomings of the overall Clean Power Plan. Proposing a FIP and trading scheme would appear to be adopting a one-size-fits-all scheme to hasty environmental and electric generation planning at federal and state levels, and an expansion of EPA control over generation, distribution, and energy choice at the state level.

Compressing the timeline in 2016 will leave states scrambling without guidance ahead of their initial state plan submissions in 2016. Complicated mechanisms like a credit trading scheme, besides being legally or technically burdensome, surely deserve a measured approach. Concerns about the CPP or a credit trading system will continue with retards to electric reliability and electricity prices, something the state of Colorado has indicated is a foremost consideration, should we be able to take the state’s agencies and political establishment at their word.

Finally, all portions of the CPP must and should address the regressive nature of raising electricity prices on the nations’ poor, minority, elderly, and other vulnerable communities.

Thank you.

***

The Denver Business Journal captured some other responses at Monday’s EPA Clean Power Plan hearing:

Kim Stevens, Environment Colorado:
“We’re already seeing the impacts of climate change here in Colorado, from drought to floods, and these extreme weather events will only get worse without bold action to slash carbon pollution.”

Laura Comer, the Sierra Club’s Beyond Coal campaign:
“The Clean Power Plan shows that the United States has a real, enforceable plan to curb dangerous carbon pollution and that we are truly to committed to combating climate disruption. We cannot let attacks from big polluters and their allies lessen our chances of a strong international agreement and undermine the safety of our communities.”

***

More reaction in the Denver Post:

“The EPA regulations will cost Colorado jobs, will cause electricity prices to soar and threaten the reliability of the electrical grid by mandating a wholesale restructuring of our electricity system for no appreciable benefit to the climate,” Colorado Mining Association president Stuart Sanderson said.

Sanderson and National Mining Association officials pointed to industry-backed studies saying power costs for residents of Colorado and other states would increase by around 30 percent between 2022 and 2030.

The plan leaves it to states to implement changes subject to EPA approval. EPA officials have said they will take into account each state’s current energy mix. If a state fails to act, federal officials would impose “an implementation plan” on that state.

The feds held the hearings on implementing the plan in Pittsburgh last week and, after Denver, will hear from residents in Atlanta and Washington D.C. A second day of comments are scheduled to continue Tuesday morning in Denver.

Sanderson called the Clean Power Plan a “stealth energy tax” for Coloradans.***

Many folks who push for clean energy or regulations like the EPA’s Clean Power Plan say that these programs will create jobs–but they never seem to remember the jobs these anti-energy choice mandates end up killing, like the more than 200 jobs Union Pacific will likely slash due to decreases in coal transportation in Colorado:

Union Pacific this week notified workers it will shutter its Burnham Shop repair yard in central Denver, putting more than 200 jobs on the line and darkening a piece of Colorado history.

Operations at Burnham will halt Feb. 14, the Omaha-based railroad said.

“The well-documented decline in the coal carloadings in Colorado — a result of natural gas prices and regulatory pressure — has diminished the need for locomotive repairs and overhauls in the Denver area,” Calli B. Hite, a Union Pacific spokeswoman, said in an e-mail to The Denver Post.

Loaded coal trains originating in Colorado have decreased 80 percent since 2005, Hite wrote.

***

Earlier this week, the Colorado Oil and Gas Conservation Commission held hearings on new fracking rules, including limiting hours for fracking operations and setbacks for development:


***

The Bureau of Land Management has stirred up controversy over 65 existing oil and gas leases with a new environmental impact statement that puts nearly half at risk:

The Bureau of Land Management released a draft environmental impact statement (EIS) Wednesday that put 65 existing oil and gas leases on White River National Forest land under the microscope. The agency found that 25 leases in the controversial Thompson Divide area must be either wholly or partially cancelled.

This long-awaited decision was embraced by conservation groups, and panned by the oil and gas industry.

The rub was over the legality of these leases, which are owned by Houston-based energy companies SG Interests and Ursa Resources, and have been scrutinized for years. Many conservation groups have said that the leases were issued without undergoing the proper environmental evaluations.

The BLM draft EIS backs that position, and now a 49-day public comment period will begin on Nov. 20 and will run through Jan. 8, 2016.

“We appreciate the effort of the local community in this discussion,” said BLM Colorado State Director Ruth Welch in a prepared statement. “We will continue to work toward finding a path forward that balances energy development and conservation, while recognizing the White River National Forest’s planning efforts.”

***

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

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

The “Sustainable Denver Summit” on December 3rd will feature Denver Mayor Michael Hancock:

Sustainable Denver Summit Program
AGENDA:

8:00 – 9:00 a.m. – Registration, Continential Breakfast, and Exhibition Space

9:00 – 10:00 a.m. – Opening plenary session – Remarks from Keynote Speaker and Mayor Michael B. Hancock

10:00 a.m. – Breakout Sessions –

• Energy – Focusing on issues of energy efficiency, renewable energy, use of energy in mobility, and air quality and greenhouse gas reduction

• Water – Focusing on both water quantity and water quality, including climate change resilience

• Materials – Focusing on cradle-to-cradle materials management issues, including environmentally preferable purchasing, recycling, composting and by-product synergy

• Mobility – Focusing on providing multiple interconnected mobility modes that are cleaner, safer, cheaper and more efficient than the current system

12:30 – 1:30 p.m. – Luncheon and Sustainability Awards – Awards will be presented to the 2015 Sustainable Denver Award winners

1:45 – 3:45 p.m. – Breakout Sessions Reconvene

4:00 – 5:00 p.m. – Closing Plenary Session – Report out on commitments

They should probably also feature a breakout session on how these programs will make the city of Denver–not to mention the entire state of Colorado under the Sierra Club’s plan–less affordable for low income and minority populations.

July 16 Colorado Energy Roundup: Sec. Jewell adds Colowyo Mine visit; renewable energy mandate upheld

July 16, 2015 by michael · Comments Off
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.

***

Colorado’s preferred energy renewable mandate was upheld this week:

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.

***

In addition to the endangered Colowyo Mine, another Colorado mine with 150 employees faces environmental review and possible closure:

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.

May 14 Colorado Energy Roundup: fracking, ozone, and a national renewable energy standard

Energy In Depth’s Simon Lomax pokes holes in the American Lung Association’s report on ozone–and the Denver Post’s reporting on it–with input from the Colorado Department of Public Health and Environment:

Citing its own April 29 “report card” on the region’s air quality, the ALA told the Denver Post that levels of ground-level ozone – sometimes called smog – are deteriorating rather than improving. But the ALA went much further, claiming that while the air above the Denver metro area “looks cleaner than in the 1970s,” the region actually has “higher ozone” and the gains made since the 1970s “are going away.”

In the same news story – authored by the Post’s environmental writer Bruce Finley – the Colorado Department of Public Health and Environment (CDPHE) warned the ALA’s report card was “both inaccurate and misrepresents air quality in Colorado.” But Finley’s story didn’t detail what those inaccuracies and misrepresentations actually were.

In a follow-up interview with Energy In Depth, CDPHE’s Air Pollution Control Division (APCD) Director Will Allison revealed that the ALA report card ignored a full year of air quality data from 2014, which shows ozone levels getting better, not worse. To claim there’s higher ozone now than back in the 1970s also ignores decades of air quality data that show “it’s gotten a lot better,” Allison said.

To say the ALA took a liberal look at its own conclusions to bolster an argument for increased ozone regulation appears correct.

“If you look at 2011-2013 averages, we had 10 monitors in the Denver North Front Range that exceeded the ozone standard of 75 parts per billion. But if you look at the 2012-2014 averages, only four monitors exceeded the federal standards. So there was a significant drop from 10 noncompliant monitors to four,” Allison told EID.

***

Colorado’s 21-member oil and gas task force, which concluded its meetings in February, received modest support (about $2 million) in the Colorado legislature for a handful of its recommendations:

The budget includes:
$1,364,713 to pay for 12 new employees for the Colorado Oil and Gas Conservation Commission (COGCC), the state agency charged with overseeing the state’s multibillion-dollar oil and gas sector.
$360,910 for the Colorado Department of Public Health and Environment (CDPHE) to create a hot line and website with information about the industry, and a chance to raise concerns about its operations.
$402,859 for the CDPHE to create a mobile air monitoring unit to watch for air pollution from industry operations and a person to operate it.

These small changes stand in contrast to some of the more pointed and disruptive resolutions the committee considered, and to the ballot measures that tripped off the Governor’s “compromise” move last August.

Fracking opponents, of course, decried the legislative session’s activity on oil and gas issues, while the industry hailed the results, according to Valerie Richardson at The Colorado Statesman.

Kicking the can down the road to 2016 on fracking issues–with Democrats sidestepping a fractious debate, as Richardson put it–may still not prove advantageous to Democrats split over the issue. With eco-left activists vowing to work hard again next November and having felt betrayed by maneuvering in 2014, Sen. Michael Bennet’s re-election efforts might not get the smooth ride his party was hoping to craft. It certainly didn’t help former Sen. Mark Udall, who carved a more eco-friendly niche in his term, but ultimately suffered defeat last year.

***

Speaking of Sen. Bennet–an attempt to bolster his green credibility with new legislation aimed at a national renewable energy standard:

The bill unveiled Tuesday that would require utilities to generate 30 percent of their electricity from renewable energy sources by 2030, starting with an 8 percent requirement by 2016 followed by gradual increases.

Sen. Tom Udall has introduced this legislation in every session of Congress since 2008. The bill is based on his bipartisan initiative that passed the House in 2007. Co-sponsors this time around include Sens. Edward Markey (D-Mass.), Martin Heinrich (D-N.M.), Michael Bennet (D-Colo.), Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.) and Mazie K. Hirono (D-Hawaii).

“A national Renewable Electricity Standard (RES) will help slow utility rate increases and boost private investment in states like New Mexico — all while combating climate change,” Udall said in a news release. “Investing in homegrown clean energy jobs just makes sense, and that’s why I’m continuing my fight for a national RES.”

***

Colorado’s western slope counties may avoid economic devastation if the Fish and Wildlife Service decides not to tap the greater sage-grouse with a designation as threatened or endangered:

The Interior Department has said it wants to reach the point that the Fish and Wildlife Service can find that no listing is warranted. Much of that decision lies with the way the BLM manages its lands and both agencies report to Jewell.

“We are very, very close to avoiding a listing altogether,” Hickenlooper said, noting that he spoke to [Secretary of Interior Sally] Jewell 10 days ago.

Finding that the bird should not be listed is Jewell’s goal, Hickenlooper said.

“I believe her. I don’t think she’s posturing.”

A listing by the FWS would be a critical blow to Colorado’s western counties, along with 10 other states, as one county commissioner told Gov. Hickenlooper.

“All of Moffat County is out of business,” Moffat County Commissioner Chuck Grobe concluded, should the listing move forward contrary to Hickenlooper’s claims.