February 18 Colorado Energy Cheat Sheet: Costly Clean Power Plan event video; EPA Animas River spill gets Congressional scrutiny; fracking ban off 2016 ballot
Filed under: CDPHE, Environmental Protection Agency, Hydraulic Fracturing, Legal, Legislation, regulations
The Independence Institute and the Competitive Enterprise Institute joined forces on February 16 in Denver to provide an update on the Environmental Protection Agency’s costly Clean Power Plan, including where the rule stands with regard to the U.S. Supreme Court stay issued earlier in February, as well as the impact of the death of Associate Justice Antonin Scalia on the ongoing legal proceedings.
The Environmental Protection Agency’s Clean Power Plan rules will slow the Colorado economy, raise electricity rates and barely make a dent in carbon dioxide emissions, opponents and experts on the plan told an audience at the Independence Institute on Tuesday.
“Clean power alone will add billions if not tens of billions of costs to individual consumers and the American economy,” said Gregory Conko, executive director of the Competitive Enterprise Institute.
Myron Ebell, CEI’s director of the Center for Energy and Enviroment released a state-by-state comparison showing Colorado’s 9.49 cents per kilowatt hour is lower than the national average of 10.11 cents. But he said California, which has extensive power plant regulation and has consumers paying 15.11 cents, is a warning for the rest of the country if the Clean Power Plan is instituted.
“This is about keeping the lights on for America’s economy, for Colorado’s economy,” he said, adding any additional costs for energy will take away consumer purchasing power for other goods.
Keeping the lights on and the cost of electricity–the energy that drives our economy.
What happens when costs of electricity go up? It hurts the average Coloradan; the ratepayers and taxpayers already pressured by an economy that has never fully recovered from the recession that have seen their electricity bills skyrocket 63 percent between 2001 and 2014, and Colorado overall, across all sectors from residential to commercial, industrial, and transportation, of 67 percent:
Those cost increases are being felt, not the least by folks in southern Colorado.
Regulations impact economies, and officials at a hearing in New Mexico on proposed Bureau of Land Management rules got an earful:
“The implementation of these proposed rules will kill revenue to state and federal government,” said Farmington Mayor Tommy Roberts. “And it will kill jobs at the local level.”
To find the source of Farmington and San Juan County, New Mexico, residents’ frustration, one doesn’t need to look far. Last week, the Bureau of Labor Statistics released a report that showed the area ranked first in the nation in the rate of unemployment growth – from 5.2 percent in 2014 to 7.3 percent in 2015. Since 2009, the region has lost an estimated 6,000 jobs, mainly as a result of a declining oil and gas industry.
“I’ve seen the affects in my community,” said Bloomfield Mayor Scott Eckstein. “This will be a knock-out blow to an already-crippled community.”
In January, the BLM proposed an update to 30-year old regulations on methane and natural gas leaks on BLM and Native American lands. BLM officials estimate the tougher regulations would reduce emissions of the potent methane by about 169,00 tons per year, and decrease volatile organic compound releases by 410,000 tons per year. That reduction would be in keeping with an earlier Obama Administration goal of reducing methane emissions by 45 percent from 2012 levels by 2015.
In March of last year, I had the privilege of traveling to northwest Colorado to film AEA’s “Eye of the Storm” video which chronicled the threats radical environment activists were making against the communities of Craig and Meeker. Thankfully, with your help, we were able to convince the federal government that the Colowyo mine should stay open. Unfortunately, the mine and these communities are under threat yet again.
While in Craig and Meeker, Colorado, I was blown away by the people that I met. Every person knew just how important energy is to their community. From the mayor to the hotel concierge, every single person I spoke with had a personal story about how the energy their community produces and responsibly utilizes makes their lives better. And as many miners pointed out to me, their work provides affordable, reliable energy to the entire region.
Visiting the Colowyo mine was a surreal experience. At first, you drive up a winding dirt road through checkpoints, until you finally reach the mining area. Colowyo is a surface mine situated between the towns of Craig and Meeker. Cresting the ridge and looking down on the pit, you see these bright yellow trucks scurrying around with dirt and coal, but from that distance you can’t tell how massive they are. Realizing the immense scale of this project and the work these men and women do every day is profound—and in a way, beautiful.
One real surprise to me is that soon after stepping out of the truck at the mine, I noticed wildlife. You do not expect to visit a mine and see elk, antelope, deer, and even an owl, but I saw all four within the first hour of our time there. The staff pointed with pride to the areas that had been previously been mined, but were now restored and how well the land and wildlife were thriving
The literal ban on fracking is out, but 10 more state constitutional amendments remain, including a “right to a healthy environment”:
“We’re going to pull the one that’s the ban, not the other ones,” Dyke told the Denver Business Journal on Friday. “We’re down to 10, but we still have plenty to work with.”
But while a proposal to ban fracking statewide may be off the table, the other initiatives backed by CREED are just as bad, said Karen Crummy, a spokeswoman for Protecting Colorado’s Environment, Economy and Energy Independence, an issues committee formed by the industry in 2014 to oppose anti-fracking initiatives.
“They withdrew it (the fracking ban proposal) because they know the vast majority of Coloradans support responsible oil and natural gas development and are against banning an entire industry,” Crummy said via email.
“However, their remaining proposals are just as irresponsible and extreme because they would still effectively ban development,” she said.
The other amendments, calling for 4,000 foot setbacks away from “special concern” areas along with the healthy environment proposal remain de facto fracking bans, and in most cases, include all oil and gas development not just the controversial hydraulic fracturing method.
For example, proposal #67:
Section 1. Purposes and findings. THE PEOPLE OF THE STATE OF COLORADO FIND AND DECLARE:
(a) THAT OIL AND GAS DEVELOPMENT, INCLUDING BUT NOT LIMITED TO THE USE OF HYDRAULIC FRACTURING, HAS DETRIMENTAL IMPACTS ON PUBLIC HEALTH, SAFETY, WELFARE, AND THE ENVIRONMENT;
(b) THAT SUCH IMPACTS ARE REDUCED BY LOCATING OIL AND GAS DEVELOPMENT FACILITIES AWAY FROM OCCUPIED STRUCTURES AND AREAS OF SPECIAL CONCERN; AND
(c) THAT TO PRESERVE PUBLIC HEALTH, SAFETY, WELFARE, AND THE ENVIRONMENT, THE PEOPLE DESIRE TO ESTABLISH A SETBACK REQUIRING ALL NEW OIL AND GAS DEVELOPMENT FACILITIES IN THE STATE OF COLORADO TO BE LOCATED AWAY FROM OCCUPIED STRUCTURES, INCLUDING HOMES, SCHOOLS AND HOSPITALS; AS WELL AS AREAS OF SPECIAL CONCERN.
Section 2. Definitions.
(a) FOR PURPOSES OF THIS ARTICLE, “OIL AND GAS DEVELOPMENT” MEANS EXPLORATION FOR AND DRILLING, PRODUCTION, AND PROCESSING OF OIL, GAS, OTHER GASEOUS AND LIQUID HYDROCARBONS, AND CARBON DIOXIDE, AS WELL AS THE TREATMENT AND DISPOSAL OF WASTE ASSOCIATED WITH SUCH EXPLORATION, DRILLING, PRODUCTION, AND PROCESSING. “OIL AND GAS DEVELOPMENT” INCLUDES, BUT IS NOT LIMITED TO, HYDRAULIC FRACTURING AND ASSOCIATED COMPONENTS.
Judge the activists by their words–they want bans or regulations so onerous as to yield the same results. This isn’t just about a fracking ban, although the most explicit amendment calling for a statewide ban has just been pulled. Make no mistake–this is about the wholesale removal of responsible natural resource extraction that gives Coloradans affordable and reliable energy.
Windsor High School junior Kamille Hocking worried a dozen oil wells on her family’s 132-acre Colorado homestead might sicken them. Then, Rebecca Johnson, an Anadarko Petroleum Corp. engineer, used a blender in her chemistry class to show the interaction of swirling frack sand, city water and friction reducer.
“We heard a lot of stories about how it could get into the water and pollute the land,” said Hocking, who is 16. “I’m going to tell my parents that fracking fluid only makes cracks in the rock the size of a hair that the sand gets into and holds open.”
Facing 10 possible ballot initiatives restricting fracking, Anadarko has deployed 160 landmen, geologists and engineers such as Johnson to Rotary clubs, high schools and mothers groups. They demonstrate how drilling works and try to convince people that the technique and the accompanying chemicals and geological effects don’t harm the environment or public health.
The wide-ranging outreach in Colorado, the nation’s seventh-biggest oil producer and sixth-largest gas provider, represents a policy shift. The energy industry that has been known for insisting on confidentiality from employees about fracking practices now allows geologists, landmen and colleagues in 40 Anadarko job categories to divulge details of what they do to their churches, neighbors and golfing buddies.
Johnson, who’s personal motto is “faith, family and fracking,” told students in Windsor that she’s supervised 1,000 fracks in the course of her 24-year career without harm to the environment.
“I live right here,” Johnson said when she visited the school 60 miles (97 kilometers) north of Denver this month. “My family is here. My mother-in-law graduated from your high school. She turns 80 this year. We would know if something’s wrong.”
Real facts from the folks who live and work in the communities in question.
More rulemaking on the way, regardless of which amendments make the 2016 ballot:
Fresh off some recent rulemaking, Colorado’s oil and gas regulatory agency is turning its attention to one of the most persistent complaints from people living near extraction operations: noise.
The Colorado Oil and Gas Conservation Commission is in the process of gathering technical data from state health experts, industry officials and third party consultants regarding noise, its health impacts and mitigation measures, said Dave Kulmann, COGCC deputy director.
Since discussions are still in the early stages, no date is set for when formal rulemaking might start, although it will likely be some time late in 2016. Kulmann said the agency wants to gather the technical data before speculating on which specific aspects of the current regulations might be beefed up, but it is clear, he said, that noise is an issue.
In 2015, after implementing a new complaint process on Jan. 9 of that year, the COGCC received a total of 330 complaints on issues ranging from odors to traffic problems to property damage, according to a detailed complaint report compiled by COGCC. Of the total complaints, 123 were due to noise.
The Gold King Mine and Animas River spill–and the EPA–are still under scrutiny, even if the prominent news coverage has waned:
If a private company dumped three million gallons of toxic sludge into Colorado waterways, we’d be flooded with daily media updates for months. Yet the press has by now forgotten the disaster unleashed in August when EPA contractors punctured an abandoned mine. New evidence suggests the government isn’t coming clean about what happened.
EPA planned its disastrous investigation of the mine for years, not that you’d know: The agency assumed a layout of the area that contradicted public records, including the remarkable conclusion that a drain ran near the ceiling of the mine’s entrance. This led EPA to believe that water backed up only about half the tunnel. The agency didn’t test the water pressure, a precaution that would have prevented the gusher. EPA hasn’t explained this decision, and emails obtained by the committee show the on-site coordinator knew there was “some pressure.”
The crew made more bad decisions than characters in a horror movie. About a week before the blowout, the on-site coordinator went on vacation and left instructions that his replacement seems to have ditched. For example: Don’t dig toward the tunnel floor unless you have a pump handy. The crew pressed downward without a pump and intentionally unearthed the mine’s plug. “What exactly they expected to happen remains unclear,” the report concludes. The Interior Department now euphemistically calls this series of events an “excavation induced failure.”
EPA is so far suggesting that no one committed crimes, and maybe so. But consider: EPA cranked out a report three weeks after the disaster and said the Interior Department would conduct an independent review that the Army Corps of Engineers would sign off on. EPA testified to the committee that Interior would look for wrongdoing, though Interior said the department was only offering technical support.
Filed under: Legislation, New Energy Economy, preferred energy, regulations, solar energy, wind energy
The cost of electricity for Colorado residents skyrocketed 63 percent between 2001 and 2014, far outpacing median income in the state at just 24 percent over the same time period, according to Independence Institute analysis of electricity rates provided by the Energy Information Administration and census data from the U.S. Census Bureau.
Retail residential electricity rates increased from 7.47 cents per kilowatthour in 2001 to 12.18 cents per kilowatthour by 2014, a 63.1 percent hike. Coloradans’ median income, however, went up just 24.1 percent, from $49,397 to $61,303. Median income in Colorado actually declined between 2008 and 2012.
In comparison, the U.S. Bureau of Labor and Statistics’ CPI inflation calculator returned an inflation measurement of 34 percent between 2001 and 2014.
It’s clear from the data that Coloradans’ income is not keeping pace with almost continuous electricity price increases over the past 15 years, consistently outpacing the rate of inflation. Colorado’s ratepayers have had to endure two economic recessions over that period, while feeling no relief from escalating energy prices driven by onerous regulations driving energy costs ever higher.
From fuel-switching and renewable mandates to other costly regulations imposed by state and federal agencies, Colorado’s ratepayers and taxpayers alike have been subject to policies that do not consider energy affordability or reliability as a primary concern. The most vulnerable communities–elderly, minorities, and the poor–are the most sensitive to even the smallest increases in energy costs.
Not to mention the state’s many business owners, including small business owners, who face the same hikes in energy costs that could force decisions like layoffs or relocation to nearby states, where energy costs are lower. This reduces job growth and harms the state’s economy twice, with increased business costs passed on to consumers–the same ratepayers who already are paying more at the meter.
“Colorado is an outlier in front of an unfortunate nationwide trend. According to federal data, average U.S. electricity prices in 2016 are projected to be about 4.5 percent greater than 2013 levels, despite decreasing overall demand, historically low natural gas prices, and plummeting oil,” said William Yeatman, senior fellow of environmental policy and energy markets at the Competitive Enterprise Institute and author of the Independence Institute’s 2012 Cost Analysis of the New Energy Economy.
“The best explanation for this confounding upward trend in utility bills nationwide is the Obama’s administration’s war on coal. Colorado, alas, was well ahead of the curve on the war on coal, which explains much of why the state’s rate increases are presently so much greater than the nationwide average,” he continued. “Governor Ritter and PUC Chairman Ron Binz were the primary players responsible for the creation of the so-called New Energy Economy, which is perhaps better labeled the Expensive Energy Economy. Theirs was a two-part policy. First, they shuttered a number of coal-fired power plants that were already paid for and that enjoyed among the lowest fuel costs on the state’s grid. To be clear: they shut down the cheapest sources of power. Second, they replaced this cheap power with expensive power. Instead of having power plants that were paid for, they required the construction of brand new gas power plants. And they required wind, much of which was “locked in” for long periods at exorbitant rates set on the price of natural gas 8 years ago. And they required solar, a program on which all ratepayers have paid hundreds of millions of dollars to subsidize the installation of solar panels for the relatively few. Ritter and Binz are well out of office, but Coloradans now shoulder the burden of their misguided policies,” Yeatman concluded.
Yeatman’s analysis of 57 legislative items guided by Governor Ritter’s New Energy Economy push yielded $484 million in additional costs by 2012 to the state’s Xcel customers alone, or an additional $345 for every ratepayer.
But even these costs might not be all that’s in store for Colorado’s pressured electricity consumer.
“The saddest part of all is that it’s as yet uncertain whether any of Colorado’s rateshock would help stave off the worst of the Obama administration’s climate initiative, were that regulation to survive judicial review. That means that it could get much worse,” Yeatman said.