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

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

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

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

Free lunch, RSVP required.

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What is the stay?:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reaction from the Colorado Senate Republicans was swift:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Encouraging.

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

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

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

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

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

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

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

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

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

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

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Finally, your poop may be keeping the lights on:

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

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

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

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

The biogas–a delicate term–is renewable.

October 8 Colorado Energy Cheat Sheet: Ozone rule and Colorado; ‘ban fracking’ resurfaces in Denver; ‘Fossil Fuel Free Week’ proves a challenge

Be sure to check out and like our Energy Cheat Sheet page on Facebook for daily, up-to-the minute updates that compliment our weekly “best of” on the I2I Energy Blog.

Let’s open with a great piece from Lachlan Markay at the Free Beacon on the ways proponents of the Environmental Protection Agency’s raft of new policies, especially the Clean Power Plan, went on the offensive before the regulation was even finalized:

Supporters of a controversial Environmental Protection Agency regulation commissioned Democratic pollsters to plot ways to attack the motives and credibility of the regulation’s critics, documents obtained by the Washington Free Beacon reveal.

Aides to a dozen Democratic governors and the Democratic Party’s gubernatorial advocacy arm circulated talking points and political messaging memos on EPA’s new power plant regulations that laid out ways to “sow doubts about our opponents [sic] motives,” in the words of one of those memos.

The previously unreported documents, obtained by the Energy and Environment Legal Institute through an open records request and shared exclusively with the Free Beacon, provide a window into the Democratic messaging machine’s approach to an issue that its own pollsters acknowledge is a hard sell among its target voter demographics.

Read the whole thing.

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In what was certainly intended as a launching point for local national anti-energy, “ban fracking” advocates, last weekend’s confab in Denver–no doubt brought to us in no small part by fossil fuels–ramped up their efforts, as Energy In Depth’s Randy Hildreth writes:

National “ban fracking” groups descended on Denver this afternoon to protest oil and gas development as part of the “Stop the Frack Attack National Summit.”

For anyone still wondering if this was a Colorado effort, EID was on hand to note that when a speaker asked the crowd, “How many of you are from out of state?” attendees erupted into cheers. And while the group managed to draw roughly 100 participants, judging from the cheers of out of state folks, we’re guessing the showing was pretty sparse from Colorado (which, of course means they all got into planes and cars burning fossil fuels to get here).

Plenty of photos of the protestors at the link.

So what are they amping/ramping up?

Although Colorado-based environment groups such as Conservation Colorado didn’t participate; the demonstrations drew support from national groups, such as the Sierra Club, and impassioned “fractivist” residents. A group called Coloradans Resisting Extreme Energy Development has declared the COGCC illegitimate and is developing ballot initiatives including a statewide fracking ban.

“Local control” just means “ban fracking” and all other oil and gas development, using a few local fractivists for cover, a pattern of political posturing since at least the 2013 off-year election cycle, when national anti-fracking groups enlisted or created local branches to push ballot measures at the municipal level.

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Around Colorado:

“…groups do not believe grazing is compatible with the monument’s mission to protect ancient ruins…”

How big an economic driver is oil and gas development? Energy In Depth took a national look:

While these cities lie in different geological regions, they do have one thing in common: shale development. Oil and gas development in these cities was the biggest economic driver throughout 2014. For instance, take a look at the Greeley, Colorado metropolitan area, which encompasses Weld County, where a large percentage of shale development is taking place. It grew its GDP by 9.9 percent in 2014 and ranks fourth in the nation in terms of percent growth. According to a BizWest.com article:

“Greeley’s 2014 growth was dominated by the mining sector, which includes oil and gas extraction, growing by 24.6 percent from the previous year.”

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Some early analysis on the EPA’s recently announced ozone rule, set at 70 ppb. Colorado’s unique geographical and topographical situation mean that even at a higher level (original discussions for the ozone rule included possibly lowering the target to 60 ppb from 75), the state will face plenty of difficulties, including some entirely out of the state’s control:

“We don’t expect that the non-attainment areas will expand geographically,” said Will Allison, the director of the Colorado Department of Public Health and Environment’s air pollution control division.

But state officials do have concerns about the new standard’s impact on the state, and they will be talking to the EPA about issues unique to Colorado and other western states, such as the fact that the Rocky Mountains can act as a trap for air pollution flowing across the Pacific Ocean from Asia, Allison said.

The state’s high altitude and pattern of lightning storms also contribute to ozone levels — but there’s very little Colorado officials can do to interfere with Mother Nature.

Heritage Foundation–4 Reasons Congress Needs to Review the EPA’s Ozone Standard

Institute for Energy Research–EPA Finalizes Costly, Unnecessary Ozone Rule

In 2010, EPA reconsidered the 2008 standard and EPA’s delay means that implementation of the 2008 standard is now behind schedule. But instead of waiting until localities are complying with the 2008 regulation, EPA is imposing a newer, stricter standard that puts more counties out of attainment even though ozone levels are decreasing. Below is a map depicting the areas that are projected to be out of compliance under a 70 ppb standard.

ozone 70 ppb

National Association of Manufacturers–New Ozone Rule Will Inflict Pain on Manufacturers, Finalized Regulation Still Feels Like a Punch in the Gut

“Today, the Obama Administration finalized a rule that is overly burdensome, costly and misguided,” said Timmons. “For months, the Administration threatened to impose on manufacturers an even harsher rule, with even more devastating consequences. After an unprecedented level of outreach by manufacturers and other stakeholders, the worst-case scenario was avoided. However, make no mistake: The new ozone standard will inflict pain on companies that build things in America—and destroy job opportunities for American workers. Now it’s time for Congress to step up and take a stand for working families.”

According to the National Journal, the new ozone rule has pretty much ticked off everyone concerned, including those on the side of the current administration:

After a ban­ner second term that has seen the most ag­gress­ive ac­tion on cli­mate change from any ad­min­is­tra­tion, the Obama ad­min­is­tra­tion just opened up a new fault line with en­vir­on­ment­al­ists.

The En­vir­on­ment­al Pro­tec­tion Agency today re­leased its new air-qual­ity stand­ards for ground-level ozone, lower­ing the al­low­able level from 75 parts per bil­lion to 70 ppb. That’s well short of what en­vir­on­ment­al­ists and pub­lic-health groups had been push­ing and a level they say wouldn’t do enough to pro­tect pub­lic health.

In­dustry groups and Re­pub­lic­ans, mean­while, are not likely to be any hap­pi­er—they have been long op­posed to any stand­ard lower than the status quo be­cause of the po­ten­tial cost of com­pli­ance.

The enviros are fuming.

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The EPA’s shady procedural efforts appear to have killed natural resource development in Alaska, using hypotheticals and possibly in collusion with environmentalists, according to a new report, writes the Daily Caller’s Michael Bastasch:

The EPA may have rigged the permitting process in the Alaskan copper mining project, possibly hand-in-hand with environmentalists, to defeat the Pebble Mine before it even had a chance, a new report by an independent investigator suggests.

“The statements and actions of EPA personnel observed during this review raise serious concerns as to whether EPA orchestrated the process to reach a predetermined outcome; had inappropriately close relationships with anti-mine advocates,” reads a report by former defense secretary William Cohen, who now runs his own consulting firm.

The Pebble Partnership hired Cohen to review the EPA’s decision not to allow the Pebble Mine to seek a permit for mining copper near Alaska’s Bristol Bay. Cohen’s report only looked at the process the EPA used to pre-emptively veto the Pebble Mine. He did not make any conclusions on the EPA’s legal authority to do so or whether or not the mine should even be built.

Cohen found that the EPA’s “unprecedented, preemptive” use of the Clean Water Act to kill the Pebble Mine relied on a hypothetical mining project that “may or may not accurately or fairly represent an actual project.”

The Wall Street Journal added:

“It is by now beyond dispute that the Environmental Protection Agency went rogue when it halted Alaska’s proposed Pebble Mine project. And yet, there’s more.

The more comes via an independent report that criticizes the agency for its pre-emptive 2014 veto of Pebble, a proposal to create the country’s largest copper and gold mine in southwest Alaska. Under the Clean Water Act, the Army Corps of Engineers evaluates permit applications for new projects. The EPA has a secondary role of reviewing and potentially vetoing Corps approval. Here, the EPA issued a veto before [emphasis in original] either Pebble could file for permits or the Corps could take a look.”

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Mountain States Legal Foundation’s William Perry Pendley on the latest private property battle vs. federal land managers–”The U.S. Supreme Court on Friday is scheduled to consider whether to take up a case from Utah that could determine whether federal land managers can steal a citizen’s private property.”

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Native American energy production faces Democrat opposition:

House Democrats are expected to oppose legislation this week that would remove regulatory burdens for energy production on Native American land that tribes say have cost them tens of millions of dollars.

The Native American Energy Act would vest more regulatory authority over tribal energy production with the tribes themselves, rather federal regulators that have recently sought more stringent regulations on oil and gas production on federal land.

The bill passed out of the House Natural Resources Committee last month with just a single Democratic vote. Among its provisions is language that would exempt tribal land from new Interior Department regulations on hydraulic fracturing, an innovative oil and gas extraction technique commonly known as fracking.

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Last but not least, the Western Energy Alliance’s “Fossil Fuel Free Week” concluded last week, and it was a tough challenge (if you’re reading this right now, you’ve failed:

Fossil Fuel Free Week, organized by Western Energy Alliance, has concluded and succeeded in getting people to think about the role of oil and natural gas in their daily lives. The campaign was designed in response to numerous anti-fossil fuel protests in recent months, such as the Keep It In The Ground Coalition, various anti-fracking rallies, demonstrations against Keystone XL and other pipelines and rail transport, the divestiture movement, and kayaktivists against arctic drilling.

The key lesson from the campaign is environmental groups, when directly challenged, fail to provide workable alternatives that replace the full spectrum of products provided by fossil fuels. Instead they respond by being predictably dismissive and offer vague visions for the future, as President Tim Wigley of the Alliance explains:

“As we’ve seen with recent protests, environmental groups incite anger amongst their supporters while dangling fossil fuels in effigy. Yet not accustomed to being poked fun of themselves, environmentalists reacted reflexively to the Challenge, offering weak observations by calling it ridiculous, snarky and a ploy. Well…yes!

Victory for Transparency: Feeding at DOE’s public trough a little less appetizing

March 22, 2013 by Amy · Comments Off
Filed under: Abound Solar, Archive, New Energy Economy 

For the last two and half years, the Independence Institute along with other free market energy policy advocates have pounded the drum of transparency and exposed the federal government’s infamous Department of Energy (DOE) loan guarantee program that rewarded the politically well-connected while costing taxpayers billions of dollars with high profile bankruptcies such as Solyndra and Colorado’s own Abound Solar.

Without the work of the Independence Institute’s investigative reporter Todd Shepherd, the Energy Policy Center, and Michael Sandoval now with the Heritage Foundation, Abound Solar’s history is little more than a footnote in failure in the grand scheme of the DOE. We covered it. The mainstream media did not…until we shamed them into doing so.

Now the Government Accountability Office (GAO) has released a report on its audit of the DOE loan guarantee program that finds negative publicity surrounding the embattled program has left billions of taxpayer dollars untouched in the public trough.

Sandoval reported on the Foundry Blog:

More than $51 billion in unused loan guarantee authority and $4.4 billion in unused credit subsidies…remain available under the DOE’s Loan Guarantee Program (1703) and Advanced Technology Vehicles Manufacturing (ATVM) loan program.

According to the report,

Some applicants noted that the Solyndra default and other problems have created a negative public image and political environment for the program, which has made its future less certain and the DOE more cautious about closing on loan guarantees.

Good news for taxpayers, the DOE has not closed a loan since September 2011, the month that Solyndra shuttered its doors. The GAO conducted the performance audit beginning in June 2012 (the date Abound Solar went bankrupt) to February 2013.

Most impressive is that taxpayers are making their voices heard and companies themselves are feeling the negative public pressure of socializing risk while privatizing profit:

“Most applicants and manufacturers noted that public problems with the Solyndra default and other DOE programs have also tarnished” other programs such as ATVM. They believed the negative publicity makes the DOE more risk-averse or makes companies wary of being associated with government support.”

Good.

We would be remiss if we didn’t mention by name the excellent work of Paul Chesser of the National Legal and Policy Center exposing the DOE’s corporate welfare program for Big Green projects such as electric vehicle manufacturers to the stars Fisker and Tesla and battery maker A123 Systems.

No such thing as a free lunch or free energy

October 30, 2012 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

The Independence Institute’s Todd Shepherd, along with this blog, have spent two years covering, and ultimately exposing, what is now the Abound Solar scandal. Understandably, much of the focus is now on Weld County District Attorney Ken Buck’s criminal investigation as well as a Congressional Oversight Committee inquiry into the bankrupt solar panel manufacturer.

Recently released emails on Complete Colorado indicate that, despite statements to the contrary, the White House politicized the Department of Energy (DOE) loan guarantee process for politically well-connected Abound.

But something else within those emails caught my attention reminding me of free market economist and Nobel Prize winner Milton Friedman’s famous quote, “there is no such thing as a free lunch.” In other words, even things that appear to be free have an associated cost.

This basic economic concept is lost on Colorado State Representative Max Tyler’s (D-Lakewood) who in a March 23, 2010, press release bragged about a government-dictated increase in Colorado’s renewable energy mandate:

With HB 1001 we will manufacture and install panels and turbines all over Colorado to capture free energy….The sun will always shine for free, the winds will always blow for free, and our energy production will be cleaner.  Renewable energy, green jobs, and a cleaner future — what’s not to like?

At roughly the same time that Tyler publicly fantasized about “free energy,” a credit advisor for the Department of Energy (DOE) loan guarantee program James McCrea was concerned about “major issues” with Abound Solar’s marketability. In an email dated April 1, 2010, just seven days after Tyler’s press release, McCrea explained:

Another issue is the very limited supply of telluride, its potential price trajectory and other demands for it. Related to this is a question of the viability of the Abound panels as compared to other panels and whether there is sufficient benefit to allow the panels to be profitable if Te [telluride] prices really increase. If the price really rises will there be alternative uses that can afford it basically turning it into a non available input for Abound?

I don’t believe we have ever worked with an input material that is so limited. We need to think that through carefully.

Before going bankrupt this summer, Abound produced cadmium telluride (CdTe) thin-filmed photovoltaic solar panels. Cadmium and tellurium, used in the manufacturing of Abound’s panels, are two of the world’s 17 “rare earth elements” that are needed for everything from smart phones to solar panels to high tech weapons systems. My former colleague Michael Sandoval, now an investigative reporter with the Heritage Foundation, and I have written several columns on general issues with rare earth elements.

This email highlights the problem specific to Abound, and McCrea was right to be concerned. According to the December 2011 DOE Critical Materials Strategy the price of tellurium has been going up since 2007:

The price dropped in 2006, but in 2007 resumed its upward trend owing to increased production of cadmium telluride (CdTe) solar cells.

Furthermore, China controls the vast majority of rare earth elements. In August 2012, the Chinese announced an ambitious plan to increase its stranglehold on the world’s available supply of rare earths. According to China Daily the country:

launched a physical trading platform for rare earth metals as part of its efforts to regulate the sector and strengthen its pricing power for the resources.

As the world’s largest producer of rare earth metals, China now supplies more than 90 percent of the global demand for rare earth metals, although its reserves account for just 23 percent of the world’s total.

The article reiterated what Michael and I have said on numerous occasions, mining rare earths comes with a significant environmental cost that green zealots like Tyler completely ignore when claiming solar energy is free and clean:

Mining the metals greatly damages the environment. In recent years, China has come down heavily on illegal mining and smuggling, cut export quotas and imposed production caps, stricter emissions standards and higher resource taxes to control environmental damage and stave off resource depletion.

However, these measures have irked rare earth importers, who complained about rising prices and strained supplies.

But China did exactly what it said it would do in 2009. It drove up prices with reduced output as global demand increased.

China’s rare earth output fell 36 percent year on year to 40,000 tonnes in the first half of the year. Prices of major rare earth products in July remained twice as high as prices at the beginning of 2011, although down from the beginning of the year.

In July 2009, about a year before President Barack Obama announced a $400 million loan guarantee for Abound, Jack Lifton, an expert on sources and uses of rare minerals, wrote a lengthy article for Resource Investor about the availability of tellurium for First Solar, a global leader in cadmium telluride solar panel manufacturering. Lifton’s conclusion should have served as a prophetic warning for Abound and any hope of profitability:

A company such as First Solar, which is critically dependent on a secure supply of tellurium to exist and on an unsustainable growth in the supply to it of tellurium for it to grow and achieve competitive pricing is a big risk for short-term investors. The maximum supply and production levels attainable of tellurium are quantifiable even if the actual production figures are murky, and they do not bode well for the future of First Solar if it must make profits to survive.

The next time you hear a politician like Max Tyler tout the benefits of “free” and “clean” energy, remember Abound Solar because there is no such thing as a free lunch.

The EPA press release we didn’t read

December 9, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

No one read a press release from the Environmental Protection Agency stating that drinking water in Dimock, Pennsylvania is safe to drink and not contaminated by hydraulic fracturing because the EPA didn’t issue one. Instead it sent an email to Dimock residents.

-Original Message—– From: Taylor.Trish <Taylor.Trish@epamail.epa.gov>

To: Cc: Polish.David <Polish.David@epamail.epa.gov>

Sent: Fri, Dec 2, 2011 6:34 am

Subject: Follow-up status re: Nov 10, 2011 visit with Dimock PA residents

Dear Dimock Residents,

This email is a follow-up to the visits to Dimock area homes by EPA on November 10, 2011 and the subsequent review of well sampling data for wells impacted by the Cabot Oil and Gas Company drilling activities.                  EPA has conducted a preliminary review and screening of the data provided by the Pennsylvania Department of Environmental Protection and residents. While we are continuing our review, to date, the data does not indicate that the well water presents an immediate health threat to users.                  EPA will continue to review available information related to the concerns of Dimock area residents. We are continuing to work with the Commonwealth of Pennsylvania going forward on this issue.

Please feel free to call me or David Polish, Community Involvement Coordinator, at (215) 814-3327, if you have further questions.

Sincerely,

Trish Taylor, Community Involvement Coordinator

Hazardous Site Cleanup Division (Mailcode 3HS52)

U.S. Environmental Protection Agency,

Region 3 1650 Arch Street, Philadelphia, PA., 19103

phone: (215) 814 – 5539 fax: (215) 814 – 3015

Thanks to Heritage Foundation blog The Foundry for making it public:

Federal authorities have ruled that the drinking water in Dimock, Pennsylvania, which some claimed had been contaminated by nearby natural gas drilling efforts, is safe to drink. The statement lends some factual weight to a political debate wrought with emotion and more than the occasional doom-and-gloom proclamation.

Dimock has become a lightning rod in the fight against the natural gas extraction technique hydraulic fracturing. Anti-natural gas activists have used the town in a years-long campaign to prevent the practice, which they insist contaminates drinking water supplies.

But the Environmental Protection Agency says otherwise….

EPA’s findings comport with administrator Lisa Jackson’s previous statements regarding the effects – or lack thereof – of hydraulic fracturing on drinking water. Earlier this year, Jackson told a House committee that she was “not aware of any proven case where the fracking process itself has affected water.”

Scott Perry, director of the Pennsylvania Department of Environmental Protection’s Bureau of Oil and Gas Management, echoed that position. “There has never been any evidence of fracking ever causing direct contamination of fresh groundwater in Pennsylvania or anywhere else,” Perry said in April.

This is a stark contrast to how the EPA and the media responded to a “draft finding” regarding ground water in Pavillion, Wyoming.