Last week, the 6th Circuit Court of Appeals ruled that AEP, which entered into a consent decree requiring it to install certain pollution controls at its Rockport 1 and 2 power plants, could not force the owner of those plants to pay to install the controls. The case involved the interpretation of specific contractual language under New York law, but it still has lessons for power plant owners and operators everywhere.… More
Category Archives: Energy
Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal. Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules. There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.… More
According to Bloomberg BNA (subscription required), last week, for the first time ever, more than 50% of the load in the Electric Reliability Council of Texas service area was supplied by wind power. This is the state that consumes more coal than any other. Installed wind capacity is now more than 18,000 megawatts and is projected to be as high as 28,000 MW by 2020.… More
According to the American Wind Energy Association blog, installed wind capacity in the United States has reached 82,000 MW. That puts it past the 80,000 MW of installed hydropower capacity and makes wind the largest installed renewable energy resource.
While the overall number represents a significant milestone, some of the details are interesting as well. Wind represents 5.5% of US generation. Moreover,… More
In an interesting study just published in the Proceedings of the National Academy of Sciences, the authors predict that climate change will have a more significant impact on peak energy demand than had previously been understood. They conclude that, in a business as usual case, peak demand will increase 18%, leading to a need to spend $180B (in current dollars) to meet that increased peak demand.
The authors acknowledge that their estimates are based on current infrastructure and that the development of energy storage could play a role in mitigating the need for new generation sources to meet peak demand.… More
Earlier this week, the Climate Leadership Council rolled out The Conservative Case for Carbon Dividends (note the absence of the “T” word in that title!). It’s a serious proposal and, if we lived in a world of facts, rather than alternative facts, it would be a useful starting point for a discussion.
Here are the highlights:
- A gradually increasing carbon tax,…
The NSR Regulations Still Make No Sense: The 6th Circuit Reverses the DTE Decision Based on a 1-Judge Minority Opinion
Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations. According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.… More
This week, the Department of Energy finalized regulations to increase energy efficiency for central air conditioners and heat pumps. The regulations apply to products manufactured or imported into the United States beginning in 2023. DOE estimates that, over the following 30 years, the regulations will reduce GHG emissions by 188.3 million metric tons, and will also result in similarly substantial reductions in emissions of conventional pollutants.… More
Does MassDEP Have Authority to Regulate Electric Generating Emissions Under Section 3(d) of the GWSA? I’m Not So Sure.
As I have previously noted, I sympathize with the difficulties faced by MassDEP in trying to implement the SJC decision in Kain. However, that does not mean that MassDEP can simply take the easy way out. After rereading Kain, I have come to the conclusion that DEP’s proposal to limit GHG emissions from electric generating facilities in Massachusetts would in fact violate Kain,… More
As I noted when the 5th Circuit Court of Appeals stayed EPA’s disapproval of Texas’s regional haze plan, EPA had pretty much no chance of winning. Although the parties then stayed the litigation to talk settlement, EPA announced yesterday that it was seeking a voluntary remand of the final rule. You don’t have to be privy to any confidential information to draw the conclusion that a certain election on November 8 rather drastically reduced EPA’s leverage in those negotiations.… More
Last week, DOE announced that transportation sector CO2 emissions in the US exceeded power sector CO2 emissions for the first time since 1978. Why? The combination of increasing vehicle miles traveled in the transportation sector and the decreasing use of coal in the power sector is certainly most of the answer.
The real question is whether this is good news or bad news.… More
Yesterday, the Energy Information Administration reported that “Energy-related CO2 emissions for first six months of 2016 are lowest since 1991.” The EIA gave three reasons for the drop in CO2 emissions.
- Mild weather. Of course, if global warming is our solution to reducing CO2 emissions, we better come up with something that works in the summer as well as the winter.…
On Monday, the TVA announced that Watts Bar Unit 2 had successfully completed what is known as its final power ascension test. It is now producing 1,150 MW of power in pre-commercial operation. Though EnergyWire did report it (subscription required), I would have thought this would have received more coverage. It’s been 20 years since the last nuclear facility came online in the United States.… More
On September 23, DOER presented a straw proposal for the next phase of Massachusetts solar incentives. DOER’s ambitious proposal for a tariff-based program reflects a thoughtful development process and a laudable goal of crafting a program that is more efficient at promoting sustained solar deployment. There is plenty to like. But, DOER has bitten off quite a mouthful by proposing a structure that departs so dramatically from the SREC approach. … More
When RGGI was first implemented, I heard Ian Bowles, then Secretary of Energy and Environmental Affairs in Massachusetts, say more than once that the purpose of RGGI wasn’t really to reduce greenhouse gas emissions or jump start the clean energy economy. Instead, the goal was much more modest; it was simply to demonstrate that a trading regime could work. The RGGI states were to serve as a model,… More
Last Friday, Governor Baker issued Executive Order 569, “Establishing an Integrated Climate Change Strategy for the Commonwealth.” EO 569 will advance climate policy in Massachusetts in a number of important ways. It also leaves much to be accomplished by MassDEP. Here are the highlights:
- EOEEA and MassDOT are instructed to work with other New England and Northeastern states to develop regional policies to reduce GHG emissions from the transportation sector.…
Last week, Judge Michael Fitzgerald granted summary judgment to the plaintiffs in a citizen suit alleging that BLM’s Environmental Impact Statement prepared to address whether to open certain lands in California to mineral development was inadequate. Judge Fitzgerald concluded that the EIS pretty much completely failed to address the potential risks of fracking and that, as a result, the EIS did not comply with NEPA.… More
DOE and DOI Release the New National Offshore Wind Strategy: Perhaps Prosperity Is Finally Just Around the Corner
Last Friday, DOE and DOI issued an update of their National Offshore Wind Strategy. It’s a moderately aggressive strategy, seeking to deploy at least 86 gigawatts of offshore wind by 2050. The report highlights both the significant opportunities and potential for growth and also some of the remaining potential roadblocks.
On the plus side:
- The combination of fossil retirements and demand growth provide significant incentive for offshore wind development.…
A Lumber Mill Biomass CoGen Need Not Consider Other Fuels In Its BACT Analysis. Other Sources Should Be So Lucky.
Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead. In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants from such redefinition of the source. … More
On June 15, 2016, Exxon sued Massachusetts AG Maura Healey in federal court in Texas, seeking to bar the enforcement of AG Healey’s April 19, 2016 civil investigative demand, issued pursuant to M.G.L. c. 93A, the Commonwealth’s unfair and deceptive practice statute. Under c. 93A, § 6, the AG may issue investigative demands “whenever [s]he believes a person has engaged in or is engaging in any method, act or practice” prohibited by c.… More
Last Friday, the Senate Committee on Ways and Means released its version of the energy bill that passed the House earlier this month. Whereas the House bill would require distribution companies to procure 1,200 MW of offshore wind power by 2027 and 9,450,000 MWH of hydroelectric power by 2022, the Senate’s version would require 2,000 MW of offshore wind by 2030 and 12,450,000 MWH of “clean energy generation” by 2018.… More
Yesterday, Judge Scott Skavdahl of the District of Wyoming held that the Bureau of Land Management did not have authority to regulate the environmental impacts of fracking. I think Judge Skavdahl probably got it right, but I also think it’s a much closer question than the Judge acknowledged and I could imagine either the 10th Circuit or the Supreme Court reaching a different conclusion.
Judge Skavdahl first reviewed the various statutes cited by BLM as providing authority for the rule. … More
Minnesota May Not Prohibit Power Sales That Would Increase Statewide CO2 Emissions. Why Not? Pick Your Reason.
If you needed any further proof that energy law is very complicated, Wednesday’s decision in North Dakota v. Heydinger should convince you. The judgment is simple – the 8th Circuit Court of Appeals struck down a Minnesota statute which provides in part that:
no person shall . . . (2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions;… More
If You Don’t Like Nukes, Petition Congress: The D.C. Circuit Affirms the NRC’s GEIR On Nuclear Waste Storage
On Friday, the D.C. Circuit Court of Appeals rejected challenges by several states and the NRDC to the Nuclear Regulatory Commission’s Generic Environmental Impact Statement analyzing the impacts of continued on-site storage of spent nuclear fuel. The decision is largely a plain vanilla application of Administrative Procedure Act deference to agency decisionmaking, but there were a few interesting nuggets.
- The Court agreed with the NRC that the GEIR itself was not a licensing action,…
This week a draft of the long-awaited Massachusetts energy bill was reported out of the Joint Committee on Telecommunications, Utilities and Energy. The bill would require the Commonwealth’s distribution companies to competitively solicit long-term, fifteen- to twenty-year contracts for large-scale offshore wind and hydroelectric power. Notably absent from the bill are provisions addressing resources such as solar, onshore wind, nuclear, energy storage, and energy efficiency.
The bill seeks to jumpstart the development of offshore wind in federal lease areas by directing distribution companies to enter into contracts for 1,200 MW of offshore wind power before July 1,… More
Last week, Judge John Agostini ruled that the Natural Gas Act preempts Article 97 of the Massachusetts Constitution, which otherwise would have required a 2/3 vote of the Legislature before Article 97 land could be conveyed to Tennessee Gas Pipeline Company for construction of a gas pipeline to be built in part through Otis State Forest.
Not only did Judge Agostini conclude that Article 97 is preempted,… More
Dylan Thomas said “Do not go gentle into that good night.” Obama’s EPA is taking that advice to heart, pushing forward aggressively on its climate change agenda, even as January 2017 approaches. On Thursday, EPA issued its final rule promulgating New Source Performance Standards for methane emissions from oil and gas facilities. The lengthy and complex rule is too long to summarize here, but you can find the Cliff Notes version in EPA’s fact sheet.… More
This week, the San Francisco Board of Supervisors enacted an ordinance that will require that the developers of all new buildings of 10 floors or less that apply for building permits after January 1, 2017 install solar PV or solar thermal systems. I’m not an expert in the California Code of Regulations, so I’m not familiar with all of the potential exemptions, but the only one stated in the new ordinance is for buildings (residential or non-residential) with a “solar zone” of less than 150 contiguous square feet.… More
Earlier this week, the 9th Circuit denied Arizona’s challenge to EPA’s decision to reject Arizona’s SIP addressing regional haze requirements and instead promulgate its own federal implementation plan. The decision has a number of interesting elements and is well worth a read, but it’s most notable for its treatment of the deference issue.
We all know that courts defer to reasonable agency decision-making. … More
As we discussed last summer, the Judge Lucy Koh of the Northern District of California ruled that the Fish and Wildlife Service’s 30-year programmatic permit for incidental takes of bald and golden eagles from wind farms violates NEPA. This week, FWS bowed to reality and revised the permit to change the term to five years.
No word on any efforts by FWS to provide the necessary analysis under NEPA that might justify a 30-year term. … More
Yesterday, the Supreme Court stayed EPA’s Clean Power Plan rule. No matter how much EPA and DOJ proclaim that this says nothing about the ultimate results on the merits, the CPP is on very shaky ground at this point.
The Supreme Court today affirmed FERC’s Order No. 745, which required that demand response resources be treated the same as generation resources when participating in wholesale electricity markets. I’m feeling vindicated, because the post-oral argument prognosticators said that it looked bad for FERC, but I always thought that FERC had the stronger argument.
Earlier this week, Massachusetts released its updated Massachusetts Clean Energy and Climate Plan for 2020. The headline for the press release was “Massachusetts on Track to Meet 25% Greenhouse Gas Reduction Target for 2020”. The slightly more nuanced version is that we can do it, but only with a large dose of Canadian hydropower.
While that’s the main take-away, it really is a useful report,… More
Does the Paris Agreement Provide EPA With Authority Under the CAA To Impose Economy-Wide GHG Controls? Count Me Skeptical
In a very interesting article, Michael Burger of the Sabin Center and his co-authors suggest that, following the Paris climate agreement, § 115 of the Clean Air Act provides authority for EPA to develop economy-wide GHG emissions reduction regulations that would be more comprehensive and efficient than EPA’s current industry-specific approach. And what, you may ask, is § 115? Even the most dedicated “airhead” has probably never worked with it.… More
Yesterday’s Boston Globe had an op-ed by Joshua Goldstein and Steven Pinker concerning some “Inconvenient truths for the environmental movement.” I’m sorry to say that I agree with pretty much every word of it. Why am I sorry? Because Goldstein and Pinker make clear – even though they don’t mention his name – that the Pope was completely wrong in his prescription for addressing climate change. … More
So the Clean Power Plan has been published in the Federal Register. For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP.
Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue. … More
Governor Baker recently submitted Senate Bill No. 1965 to the Legislature. It calls for utilities to solicit long-term purchases of renewable energy. We are talking about as much as 1/3 of Massachusetts’ annual electricity use over a 15-25 year period. Two rationales are often provided to justify the large purchase of Canadian hydropower. First, cheap hydropower will ameliorate the high cost of electricity. Second, it will help Massachusetts attain its initial Global Warming Solutions Act goal of reducing GHG emissions by 25% below 1990 levels by 2020. … More
Yesterday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register. The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”
Really? Tell me something I did not know.
I’m sorry. The CPP is a far-ranging rule. … More
No Short Cuts Allowed: The FWS Must Comply with NEPA Before Extending Programmatic Take Permits to 30 Years
Earlier this month, the Judge Lucy Koh set aside the Fish & Wildlife Service’s decision to extend its programmatic permit for bald and golden eagle takes from five to 30 years. The extension was sought by the wind industry for the obvious reason that the uncertainty attached to a five-year permit makes financing a 20- or 30-year project very difficult. I agree with the concern and support the extension,… More
When the Regional Greenhouse Gas Initiative was first implemented, there were questions regarding how much of an impact it would actually have on GHG emissions. I recall Ian Bowles, then Secretary of Environmental Affairs in Massachusetts, saying that, while reductions would happen, the main purpose was to provide a template and to demonstrate that an emissions trading program could be implemented successfully.
Those doubts were only heightened when a combination of cheap gas and the Great Recession were understood to have caused low allowance prices in the RGGI auction. … More
One week after the Massachusetts legislature departed for its summer recess, Governor Charlie Baker released net metering legislation to rival the Massachusetts Senate’s recent bill on August 7, 2015.
Where the Senate bill would have simply raised the net metering cap to 1600 MWs and largely retained the current net metering credit calculations, the Governor’s bill would increase the metering cap but would substantially reduce the calculation of net metering credits.… More
So the Clean Power Plan is out. It’s difficult to be pithy about such a big, sprawling, mess, other than to say that it’s probably about as good as it could be, though that may not be enough. Here are a few items that have caught my eye so far:
- Although the initial deadlines have been eased, the goal of 32% reduction over 2005 emissions by 2030 is a slight increase over the 30% in the draft.…
The U.S. Department of Energy (DOE) recently released a Draft Environmental Impact Statement (DEIS) for Northern Pass Transmission, LLC’s proposed 187-mile transmission line across the United States-Canada border in New Hampshire.
If approved, the line would have the ability to deliver 1200 MW of hydroelectric power from Quebec into southern New England—a potentially tantalizing amount of power for policymakers seeking to diversify the region’s generation portfolio and lower its GHG emissions.… More
The Baker Administration announced on July 9 that it filed a bill for sourcing long-term hydroelectric power in the Commonwealth. Hydroelectric power currently provides a small portion of electricity consumed in Massachusetts. According to the Energy Information Administration, it ranks behind natural-gas, nuclear, coal and other renewable energy sources.
The bill, titled “An Act Relative to energy sector compliance with the Global Warming Solutions Act,” would require the State’s electric distribution companies to solicit proposals for hydroelectric contracts spanning 15 to 25 years. … More
When Colorado enacted a referendum petition strengthening its renewable portfolio standard, the Energy and Environment Legal Institute sued, arguing that the RPS violates the dormant commerce clause, because it harms out-of-state coal producers. The 10th Circuit Court of Appeals, in an opinion by Neil Gorsuch (son of the EPA former administrator), disagreed. Pretty much telegraphing the outcome in the first sentence, Judge Gorsuch framed the question as follows:
Can Colorado’s renewable energy mandate survive an encounter with the most dormant doctrine in dormant commerce clause jurisprudence?… More
The connection between energy use and emissions of air pollutants, including GHGs, is uncontroversial. It is also widely, if not universally, accepted that there is a lot of low-hanging fruit in energy efficiency. I agree completely with both propositions.
The short answer is, yes, though the majority is more wrong.
In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion. Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”. I agree. … More
The D.C. Circuit Court of Appeals today rejected Kansas’s challenge to EPA’s disapproval of Kansas’s SIP revisions intended to comply with the Interstate Transport Rule. The Court found that EPA was not arbitrary or capricious in rejecting Kansas’s SIP, noting that:
The discussion of interstate transport in Kansas’s SIP was only one page long and failed to provide any analysis at all of the downwind effect of its in-state emissions.… More
The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.
EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability. … More
As I noted last year, there has been significant criticism of the Integrated Assessment Models used to calculate the social cost of carbon. An article published this week in Nature Climate Change (not free), attempts to respond to some of those criticisms. The result is a social cost of carbon that might be as high as $220/ton of CO2. The authors thus conclude that,… More
Last week, the Massachusetts Department of Environmental Protection proposed to implement a “Clean Energy Standard,” which would require that, by 2020, at least 45% of electricity sales come from sources which have “clean energy attributes.” The required percentage would increase to 49% by 2024, and MassDEP would then have to define percentages going forward at least 10 years in advance, with the caveat that the required percentage can never decrease.… More
As most readers know, EPA has extended its schedule for issuing its rules addressing GHG emissions from both existing, and new and modified, power plants. EPA expects to issue the rules in the Summer of 2015. Only time will tell whether the agency makes the new date.
According to today’s Boston Globe, both NStar and National Grid have terminated their power purchase agreements with Cape Wind, citing the failure by Cape Wind to meet a December 31, 2014 deadline to obtain financing and begin construction. Cape Wind is asserting that the utilities may not validly terminate the PPAs, arguing that the protracted litigation against the project excuses Cape Wind’s obligation to meet the December 31 date.… More
Last Friday, FERC sought a further stay of the decision by the D.C. Circuit Court of Appeals striking down FERC Order 745. Whereas the United States had previously only indicated that it was considering filing a cert. petition, the latest filing clarifies that the United States has definitively decided to seek Supreme Court review. On Monday, Chief Justice Roberts granted the extension. The United States now has until January 15,… More
Last week, NRG Energy announced plans to reduce CO2 emissions 50% by 2030 and 90% by 2050. And this reduction is not from a 1990 or 2005 baseline; it is from 2014 emissions. NRG’s statement indicated that it had already reduced emissions by 40% since 2005. By my math, that means that the 2030 and 2050 reductions would be 70% and 94%, respectively, below 2005 emissions.
If NRG can do it,… More
Yesterday, I suggested that Massachusetts EOEEA may not have authority to issue its “MEPA Climate Change Adaptation and Resiliency Policy.” However, since I also conceded that Massachusetts courts are unlikely to agree with me, it’s probably worth taking a look at what the Adaptation Policy would require. As with any MEPA (or NEPA) analysis, it has two parts: identification of impacts and discussion of mitigation measures.… More
Environmental Impact Analysis — The Impact of a Project on the Environment or the Impact of the Environment on a Project?
Traditionally, environmental impact analysis, under NEPA and state analogs, has focused on the impacts that a proposed project may have on the environment. In Massachusetts, the Executive Office of Energy and Environmental Affairs has proposed a draft MEPA Climate Change Adaptation and Resiliency Policy. The policy seems sufficiently important to warrant more than one post. Today, I’ll look at EOEEA’s authority to promulgate an Adaptation Policy. Tomorrow,… More
On Tuesday, EPA issued a Notice of Data Availability, requesting further comment on some specific issues that have been raised since it published its draft Clean Power Plan in June. My immediate reaction? My head hurts.
I don’t mean to trivialize the implementation issues that would likely arise if Congress enacted either a cap-and-trade system or a carbon tax, but they’ve got to pale in comparison to the Rube Goldberg-like system that’s going to be in place once EPA promulgates a final rule. … More
The D.C. Circuit Court of Appeals has stayed its mandate vacating FERC Order no. 745, regarding demand response. The mandate is stayed at least until December 16, 2014, by which point FERC must petition the Supreme Court for review. If FERC does seek cert., the stay will continue until the Supreme Court denies the petition or rules against FERC on the merits.
I don’t know if FERC will seek cert. … More
The Union of Concerned Scientists today announced release of a report which attempts to document that the renewable energy “building block” in EPA’s Clean Power Plan is not sufficiently aggressive. The report argues that, just relying on existing trends and compliance with renewable energy standards, renewable energy can supply 23% of electricity sales nationally by 2030, well above the 12% assumed by EPA.… More
Last week, Judge Walter Smith, Jr., ordered the Sierra Club to pay more than six million dollars – yes, you read that correctly – to Energy Future Holdings and Luminant Generation, after finding that the Sierra Club’s Clean Air Act citizen suit against them concerning the Big Brown (great name for a coal-fired facility!) plant was “frivolous, unreasonable, or groundless.”
The Sierra Club had avoided a motion to dismiss,… More
Last Friday, EPA published notice that it would not be revising its regulations on backup generators in response to three petitions for reconsideration it had received after it promulgated its final rule in January 2013. The rule had sparked controversy, because EPA allowed backup generators to operate for up to 100 hours a year, though EPA did require use of ultra-low sulfur diesel fuel beginning in January 2015.… More
Last week, the 9th Circuit Court of Appeals issued a decision that arguably explains everything from why the Tea Party exists to why otherwise calm and sane executives suddenly lose all their hair. Perhaps most astounding, the decision is clearly correct. Perhaps the law is an ass.
In 2008, Avenal Power submitted an application to EPA for a PSD permit to construct a new 600 MW natural gas-fired power plant in Avenal,… More
EPA Publishes Final 316(b) Rule: Flexibility for Generators Means Litigation By Environmental Groups
Last Friday, EPA finally published its § 316(b) rule in the Federal Register. As we noted in May, the rule is more significant for what it does not do – require closed cycle cooling – than for what it does.
Indeed, the rule provides a lot of flexibility for generators. It allows several different options for compliance with the impingement requirements.… More
In two related decisions last week, the Supreme Judicial Court issued three important rulings, and handed the Brockton Power Company one major problem in its long-running effort to build a combined-cycle gas plant in Brockton.
First, in City of Brockton v. EFSB, the SJC rejected all of the challenges by the City of Brockton and certain citizens to the Energy Facilities Siting Board approval of the Brockton Power project.… More
Still Using Economic (and Safety) Arguments to Reduce Greenhouse Gas Emissions: Massassachusetts Enacts Gas Leak Legislation
As I noted last year, there has been a concerted effort on the part of those fighting climate change to emphasize economic issues in connection with their policy proposals. That post concerned Senator Markey’s efforts to highlight the economic costs resulting from gas leaks. Of course, methane is a much more powerful greenhouse gas than CO2, with a global warming potential of 21.… More
Does Offshore Wind Finally Have The Wind At Its Back? DOI Announces Plan For Largest Auction To Date
Earlier this week, DOI Secretary Jewell joined with Governor Patrick to announce plans to auction more than 1,000 square miles on the Outer Continental Shelf offshore Massachusetts for wind energy development. The auction, which will be implemented as four separate leases, pretty much will follow the form of earlier lease auctions:
• Bidders will be prequalified to participate in the auction
• The auction will include multiple factors,… More
When Is An Agreement Not To Purchase Electricity a Retail Sale? The DC Circuit Strikes Down FERC Order 745
Last Friday, the D.C. Circuit Court of Appeals struck down FERC Order 745, which required that demand response resources be compensated in the same way as traditional generation resources, at the “locational marginal price”, or LMP. Why is this an environmental case? Because use of demand response at times of peak electricity demand substitutes for traditional generation and thus eliminates the emissions that would result from such generation.… More
Potomac Economics has released the Annual Report on the Market for RGGI CO2 Allowances for 2013. Based on the data in the report, it appears that a functioning market for CO2 allowances is finally developing. What’s the evidence?
• The share of allowances held by investors as opposed to compliance entities increased from 6% to 24% over the course of 2013.
• The volume of allowance futures trading rose from 2 million in 2012 to 76 million in 2013.… More
D.C. Circuit Affirms EPA’s Utility Air Toxics Rule: An “Appropriate” Rule Need Not Be Justified By Cost-Benefit Analysis
Yesterday, the D.C. Circuit Court of Appeals affirmed EPA’s rule setting limits for emissions of mercury and other air toxics from fossil-fuel-fired electric steam generating units. The focus of the decision – and the issue on which Judge Kavanaugh dissented – was whether EPA was required to consider the costs that would be imposed by the rule. EPA said no and the majority agreed.
Section 112(n) of the Clean Air Act required EPA to perform a study of the health hazards related to hazardous emissions from EGUs prior to regulating them. … More
What’s the Difference Between ExxonMobil and Shell When It Comes To Climate Change? What’s A Trillion Tons (or Tonnes) Among Friends?
Earlier this week, I posted about ExxonMobil’s shareholder disclosure. The bookend to ExxonMobil’s disclosure is the release of the Trillion Tonne Communique by the Prince of Wale’s Corporate Leaders Group. The Communique calls for total carbon emissions to be capped at one trillion tons, a level at which the signers have confidence that global temperature increases can be kept at or below two degrees Celsius.… More
ExxonMobil Admits Climate Change Is Real. It also Imposes an Internal Cost on Carbon. Still Not Enough to Get Any Love From the Greens (Interesting Reading, Though)
Last week, in response to shareholder requests that it disclose information regarding how climate change might affect it in the future, ExxonMobil released two reports, one titled Energy and Climate, and one titled Energy and Carbon – Managing the Risks. They actually make fascinating reading and seem to represent a new tack by ExxonMobil in its battle with those seeking aggressive action on climate change.… More
As the lawyers among our readers know, the denial of a certiorari petition does not establish precedent. However, that doesn’t make it unimportant. Yesterday, the Supreme Court denied cert. in Mingo Logan Coal Co. v. EPA. The cert. denial leaves in place the decision by the D.C. Circuit Court of Appeals holding that EPA has authority retroactively to withdraw a site specification for a Clean Water Act § 404 permit issued by the Army Corps of Engineers. … More
Late last week, in Public Employees for Environmental Responsibility v. Beaudreu, Judge Reggie Walton gave Cape Wind and its federal co-defendants an almost across the board victory in a series of challenges by Cape Wind opponents to a variety of environmental decisions made by federal agencies. We’ll see how many more of these victories Cape Wind can take. Their opponents certainly aren’t going away. In fact,… More
Last week’s auction of CO2 allowances by the Regional Greenhouse Gas Initiative (RGGI) was the 23rd in the program’s history, but the first auction under the new RGGI rules and reduced cap. The new rules undoubtedly explain why the auction yielded the highest sales price in RGGI history — $4 per allowance. Even more notable, it was the first auction where the clearing price was high enough to trigger the cost containment reserve (CCR). … More
NSR Emissions Projections — Finally, An Area Where It is the Regulated Entity Which Is Entitled to Deference
Last spring, the 6th Circuit Court of Appeals ruled that when power plant owners compare actual emissions to projected future actual emissions for the purpose of determining whether a project is subject to the Clean Air Act’s NSR provisions, EPA may bring an enforcement action if the operator does not “make projections according to the requirements for such projections contained in the regulations.” At the same time, however,… More
Through the end of 2012, the nine states remaining in the Regional Greenhouse Gas Initiative invested just over $707 million of the proceeds from the RGGI Auctions. But the impact this money will have in the future is even more impressive. According to a report released this week, these investments are projected to return more than $2 billion in lifetime energy bill savings to more than 3 million participating households and 12,000 businesses in the region. … More
EPA May Rely — In Part — on Projects Funded Under the Energy Policy Act to Justify the Greenhouse Gas NSPS. That’s Its Story and It’s Sticking To It
As those following EPA’s efforts to promulgate NSPS for greenhouse gas emissions from new fossil fuel-fired electric generating plants know, EPA has come under fire for basing its proposal on demonstrations of feasibility at projects that have received federal funding or tax credits under the Energy Policy Act of 2005. Apparently, EPA is sufficiently concerned that they have prepared a Notice of Data Availability to be published in the Federal Register. … More
Last week, the Ninth Circuit Court of Appeals agreed with the plaintiffs that the Environmental Impact Statement issued by the Bureau of Ocean Energy Management to support oil and gas leasing in the Chukchi Sea was flawed. Although the decision was split and the Ninth Circuit’s track record on appeal is less than perfect, I think that they probably got it right. Moreover, the flaws identified by the court provide a useful lesson to agencies in performing environmental analysis of probabilistic outcomes.… More
Cape Wind Survives a Legal Challenge to FAA Approval: Is the Opposition Strategy to Play Whac-A-Mole?
On Wednesday, the Court of Appeals rejected a challenge by the Town of Barnstable to the FAA’s “no hazard” determination for Cape Wind. As background, the same court had determined in 2010 that a prior no hazard determination by the FAA had not been adequately supported. This time, the FAA did better, in part because the facts on the ground were better. One significant concern in 2010 had been the potential impact of the turbines on the radar system at Otis Airfield. … More
On Tuesday, Governor Patrick announced a series of climate change preparedness initiatives, including about $50 million in funds for a variety of programs. Before summarizing the plan, I’ll note that Massachusetts appears to have jettisoned “adaptation” as the descriptor for programs designed to mitigate the effects of climate change. We are no longer “adapting”. Now, like the Boy Scouts, we will be “prepared.” Shrewd call.
The biggest piece of the pie with be $40 million for a municipal “resilience” grant program,… More
Last year, Governor Patrick announced a goal of 1.6GW of solar electricity in Massachusetts by 2020; a goal that requires more than 1.2GW of new solar in the next six years. The Massachusetts Department of Energy Resources has now issued draft regulations for its SREC II program. The regulations are too complicated to summarize in a blog post, but you can read the details in our client alert.… More
One More Update on the GHG NSPS Rule: EPA Has Improved Its Odds of Surviving Judicial Review, But I’m Still, Still, Skeptical
When EPA’s NSPS Rule for GHGs was published in the Federal Register last week, I noted that the rule might be on shaky ground, because an EPA Science Advisory Board work group had questioned the basis for EPA’s decision that carbon capture and storage is feasible technology. Now it turns out that EPA has provided the work group with some additional information and the work group issued a memorandum last week stating that further review by the SAB is not required. … More
According to ClimateWire on Tuesday, a Minnesota state administrative law Judge’s recommendation to the state Public Utility Commission may be the first time that a solar project has been declared cost-competitive against natural gas in an open bidding situation. That might be a little bit hyperbolic, given that Xcel Energy, which would be purchasing the power, has an obligation to significantly increase its solar portfolio and the decision recognized the economic value of the solar renewable energy credits that the recommended winner,… More
Those of us with an interest in renewable energy have long wondered if offshore wind would ever reach its promise. The knots into which Cape Wind has been tied provide an object lesson – and an abject lesson – in how not to incentivize new technologies. As of now, offshore wind in the United States remains all promise, and no delivery.
Is the future finally around the corner? … More
In last week’s auction held by the Regional Greenhouse Gas Initiative (RGGI), not only did the allowances sell at $3 — the highest clearing price in four years, other than the June auction’s $3.21 — but a majority of the allowances sold to investors, rather than the large generators of electricity whose carbon dioxide emissions are regulated under RGGI. Fifty-seven percent of the allowances were bought by commodities firms,… More
Just a Hiccup or a Major Obstacle? EPA Science Advisory Board Work Group Recommends that the SAB Review the Science Behind EPA’s Proposed NSPS For Greenhouse Gases
I have posted numerous times in recent years on the importance of the views of EPA’s own science advisors in judicial determinations whether EPA regulatory actions are arbitrary and capricious. With few exceptions, courts have affirmed EPA when the regulations were supported by EPA’s science advisors, and struck down the regulations when not supported by those advisors.
Now comes word that a work group of EPA’s Science Advisory Board has recommended that the SAB review the science supporting EPA’s proposed New Source Performance Standards for GHG emissions from electric generating units. … More
On November 25, the world was stunned as DOE proposed new energy efficiency standards for electric motors, and no one complained. The standards will apply to motors from 1 to 500 horsepower and will cost roughly $500 million annually over the expected 30-year life of the rule. However, they are also expected to save approximately one trillion kilowatt-hours of electricity over that period. That’s $23 billion in energy costs and 400 million tons of CO2.… More
The Old Razzle Dazzle Is Not Sufficient: DOE May Not Collect a Nuclear Waste Disposal Fee If It Has No Way to Dispose of the Waste
In an opinion last week surprising only for the shortness of the shrift that the Court gave to DOE’s arguments, the DC Circuit Court of Appeals ruled that DOE may not continue to collect nuclear waste handling/disposal fees from nuclear plant operators when DOE does not have a plausible estimate of the cost to construct and operate a nuclear waste disposal site.
The Court had previously ruled that DOE had violated a statutory obligation to determine annually what the waste disposal fee should be. … More
If you are still wondering whether municipalities are serious about planning for climate change, the Boston Redevelopment Authority’s announcement this week of its new draft Guidelines for the inclusion of planning for climate change in its Article 80 review (basically the Boston local version of NEPA) might convince you. While the Guidelines are fairly broad, the accompanying Climate Change Resiliency and Preparedness Checklist gets way down into the weeds.… More
EPA Issues Revised Draft NSPS for Carbon Emissions From New Power Plants: It’s All About Technology Forcing
Last Friday, EPA reissued its draft NSPS addressing carbon emissions from new power plants. It’s not actually that different from the prior proposal, which would have required all new fossil-fuel plants to meet a 1,000 lbs CO2/MWh standard. The new proposal would require new large gas plants to meet the 1,000 lbs/MWh standard, but would relax the standard to 1,100 lbs/MWh for small gas plants and for coal plants. … More
On Tuesday, the American Council for an Energy Efficient Economy released its 2013 City Energy Efficiency Scorecard. This may not be big news, but I had to take the opportunity to lord it over my friends Rick Glick, who must be crushed that Portland finished in second, and Pam Giblin, who must be thrilled that Austin won the prize for the city farthest out ahead of its state government – what a shock there.… More
The Atomic Energy Act Preempts Vermont’s Efforts To Close Vermont Yankee: Sometimes, Legislative Intent Is Just Too Clear To Ignore
Last week, in Entergy v. Shumlin, the 2nd Circuit Court of Appeals largely struck down Vermont’s efforts to close Vermont Yankee. Although three separate Vermont statutes were at issue, and Entergy made both preemption and dormant Commerce Clause arguments, the essence of the case was simply that Vermont sought to require explicit legislative approval for Vermont Yankee’s continued operation. Dismissing various proffered rationales for Vermont’s scheme,… More
Making Economic Arguments to Reduce GHG Releases: Senator Markey Releases a Report on Methane Leaks From Gas Distribution Lines
Two years ago, when I participated in a D.C. fly-in with a renewable energy group, we were instructed not to use the words “climate change.” Instead, we were told to focus on “growing the clean energy economy.” The push to frame the climate debate in economic terms continues. This week, Senator Markey released a report asserting that, in Massachusetts alone in 2011, 69 billion cubic feet of natural gas was released from gas distribution lines. … More
One Step At A Time Is Just Too Late: The DC Circuit Strikes Down EPA’s Deferral of GHG Regulation of Biomass Emissions
On Friday, in Center For Biological Diversity v. EPA, the D.C. Circuit Court of Appeals struck down EPA’s rule deferring regulation of GHG emissions from “biogenic” sources. EPA had promulgated the rule, delaying regulation of emissions from biogenic sources from July 20, 2011, to July 21, 2014, on the ground that the carbon cycle is sufficiently complex that EPA is not yet in a position to judge what the actual carbon impact of different biogenic sources might be. … More
On Friday, MassDEP released for public review and comment draft amendments to the CO2 Budget Trading Program regulations. These amendments are designed to implement the changes to the Regional Greenhouse Gas Initiative (RGGI) agreed to by the RGGI states earlier this year as part of the 2012 Program Review.
President Obama yesterday released his Climate Action Plan, together with a Memorandum concerning EPA’s issuance of rules governing carbon emissions from new and existing power plants under the Clean Air Act. At a certain level, there is not much new here. The mere existence of the Plan and the commitment to address climate issues is presumably the point.
The Plan does not provide many specifics. … More
The Supreme Court Agrees to Review the CSAPR Decision: Might EPA Avoid Version 3 of the Transport Rule?
The Supreme Court today granted certiorari in EPA v. EME Homer City, the challenge to EPA’s Cross-State Air Pollution Rule, or CSAPR. The Court of Appeals for the District of Columbia had struck down the rule, over a fairly blistering dissent from Judge Judith Rogers.
Speculation over the reasons why the Supreme Court takes a case is often pointless, but I will say this: Consideration of the history of EPA’s rulemaking leads to the conclusion that the rule should be upheld.… More
On Tuesday, the Bureau of Ocean Energy Management announced that the first auction of leases of offshore wind areas will be held on July 31. Even though it now looks as though Cape Wind will eventually get to the finish line, this competitive lease auction, for areas off the coast of Rhode Island and Massachusetts, can really be seen to mark the true beginning of an offshore wind market.… More
On May 8, the Boston City Council approved an ordinance requiring building owners to report annual energy and water use. The final ordinance is slightly different from the one about which we posted in February. Highlights include the following:
- Building owners subject to the ordinance will have to report on May 15 of each year:
The previous calendar year’s energy and water use of each building and other building characteristics necessary to evaluate absolute and relative energy use intensity.… More
Massachusetts Releases Its Revised Solid Waste Master Plan: Are We Really on a Pathway to Zero Waste?
On Tuesday, MassDEP announced release of its updated Solid Waste Master Plan, subtitled “Pathway to Zero Waste.” The Plan’s most significant discussion relates to the state of the solid waste market and the Plan’s goal for disposal reduction. The Plan announces a goal of reducing solid waste disposal by 30% from 2008 to 2020, from 6,550,000 tons to 4,550,000 tons. However, the Plan acknowledges that,… More
Coming to a Steam Electric Generating Plant Near You in May 2014 — New Effluent Limitation Guidelines
Last Friday, EPA announced release of its draft proposal to revise the effluent guidelines and standards for the steam electric power generating industry, last revised in 1982. The proposal was in conformance with a litigation settlement with environmental groups, which also calls for a final rule by May 22, 2014.
The California Air Resources Board just released the results of its second auction of GHG allowances. While the auction for vintage 2013 allowances was still healthy, with all allowances sold at $13.62/allowance, the future auction, for vintage 2016 allowances, did not fare so well. Fewer than half the allowances sold, and the clearing price was CARB’s reserve price of $10.71/allowance.
Why the disparity? It’s significantly above any reasonable discount rate. … More
Today, Mayor Menino forwarded to the Boston City Council proposed amendments to the City of Boston Code that would require owners of many city buildings to report their energy and water use annually. That information would then be made available to the public – presumably so that the market can work its magic and informed consumers can put pressure on building owners to increase the efficiency of their buildings.… More
Combine New Gas Plants, Lower Gas Prices, and More Stringent Emission Controls and What Do You Get? Lower Emissions
- Total emissions of NOx, SO2, and CO2 have decreased by 12.1%, 29.5%, and 10.2% from 2010 to 2011
- Emission rates for NOx, SO2, and CO2 have decreased by 8.7%, 25.8%, and 5.9% over the same time period
As our observant readers will have inferred,… More
It was a busy week on the climate change front in Boston. First, RGGI announced a new Model Rule. Under the new Model Rule, summarized here, the 2014 cap would be reduced by 45%, from 165 million tons to 91 million tons. Because such a sharp decrease in allowances will be expected to cause an increase in allowance prices, RGGI has now provided a safety valve,… More
EPA Splits the Baby on Backup Generators: Still Allows 100 Hours Use, But Now Requires Ultra Low Sulfur Diesel
Yesterday, EPA finalized revisions to the National Emissions Standards for Hazardous Air Pollutants for stationary reciprocating internal combustion engines, or – one of my new favorite acronyms – RICE. The biggest dispute over the rule was the extent to which it would allow backup diesel generators to run for demand response purposes.
Can Wind Energy Serve As Baseload Power? The First Circuit Agrees with the NRC That, For Now, The Answer Is “Not Yet.”
In an interesting decision issued last Friday, the Court of Appeals for the First Circuit, in Beyond Nuclear v. NextEra Energy Seabrook, affirmed the decision by the NRC rejecting a challenge to Seabrook’s relicensing posed by a coalition of environmental groups. The decision seems clearly correct, but raises an important policy issue that is likely to recur as renewable energy technologies advance,… More