Tuesday, August 29, 2006
Friday, August 25, 2006
The report concludes, "Biomass has some significant uses to provide economic waste disposal, but it has little potential as a primary energy source. For example, the European Commission admits that achieving its target of 5.75% of its transport fuels by use of biomass will require substantial imports of biomass despite turning more than 14% of EU agriculture over to biomass production. The limits to biomass for primary energy supply are set by physical laws and, therefore, cannot be overcome... conversion of 10% of US agricultural production to biomass production would provide less than 0.1% of US energy needs... However, the production of biomass has potential for environmental damage by reducing biodiversity and reliance on the use of biomass threatens energy security. These problems are causing concern to environmentalists in Europe..."
Richard S Courtney is a Member of the European Science and Environment Forum (ESEF) and acts as a technical advisor to several UK Members of Parliament. He is Chairman of the Southern Region of a Trade Union (BACM-TEAM) affiliated to the UK’s Trades Union Congress. Having been the contributing Technical Editor of CoalTrans International, he is now on the Editorial Board of Energy & Environment. His present work mostly consists of providing commissioned advice to national governments, although he has recently conducted research studies of energy interactions at sea surface. The Center for Science and Public Policy (CSPP) is a non-profit, non-partisan public policy organization. CSPP relies on scientific experts in many nations and the vast body of peer-reviewed literature to help lawmakers, policy makers, and the media distinguish between scientific findings that are agenda-driven and those that are based on accepted scientific methods and practices. CSPP operates as a policy center for the conservative organization Frontiers of Freedom.
Access the complete 18-page analysis (click here). Access the CSPP website (click here). [*Energy]
Thursday, August 24, 2006
The report comes on the heels of devastating back-to-back hurricane seasons in the U.S. that caused a record $75 billion in insured losses during 2004 and 2005, including $45 billion from Hurricane Katrina alone. While no individual weather event can be attributed to global warming, a growing body of new scientific data show that rising temperatures are likely increasing the intensity of hurricanes, floods, drought, wildfires and other extreme weather events in the U.S. and globally. The report, From Risk to Opportunity: How Insurers Can Proactively and Profitably Manage Climate Change, highlights the insurance industry's unique, powerful role historically in helping the country grapple and manage emerging risks. Just as the industry asserted its leadership to minimize risks from building fires and earthquakes, it is well positioned today to further society's understanding of global warming and advance forward-thinking solutions to minimize its impacts.
The report, written by two insurance industry experts, identifies 190 innovative products and services available or in the pipeline from dozens of insurance providers in 16 countries. Many provide win-win benefits, by reducing financial losses and greenhouse gas emissions. More than half of the activities come from U.S. companies, covering climate change solutions including energy efficiency, green building design, carbon emissions trading and sustainable driving practices.
Examples cited include the Firemen's Fund Insurance that is launching a first-of-its-kind "green" coverage, including rate credits and other incentives, for commercial building owners who re-build damaged properties using green and LEED-certified (Leadership in Energy and Environmental Design) building practices. California-based Firemen's Fund will begin seeking state regulatory approvals this month so that the products can be offered in states around the country this fall. Another example, Marsh, the world's largest insurance broker, and AIG, the world's largest insurer, have launched carbon emissions credit guarantees and other new renewable energy-related insurance products that are allowing more companies to participate in carbon offset projects and growing carbon emissions trading markets. The carbon trading market in the European Union alone is expected to hit $30 billion by the end of 2006.
The new report also outlines the nation's growing insurance availability crisis that has hundreds of thousands of coastal homeowners feeling the combined sting of premium shocks and coverage restrictions after last year's hurricanes. In Louisiana and Florida alone, more than 600,000 homeowners' property policies have been cancelled or not renewed in the past year. In Massachusetts and New York, private insurers have cancelled coverage for more than 80,000 coastal homeowners the past two years, even though it has been decades since the last major hurricane hit the region. Among the impacts of the pullouts is a stronger reliance on governments as insurers of last resort. As more private insurers refuse to take on new policies or renew existing ones, mandated state-run insurance "pools" are being forced to take on more customers and more financial exposure.
Ceres is a national coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as climate change. Ceres directs the Investor Network on Climate Risk (INCR), a network of 50-plus institutional investors who collectively manage more than $3 trillion in assets.
Access a release and link to the audio of the press conference (click here). Access the complete 55-page report (click here). Access the Ceres website for additional information (click here). [*Climate]
Wednesday, August 23, 2006
On the supply side, U.S. crude oil production slid 1.3 percent July compared with a year earlier, the smallest year-on-year decline in 14 months. Domestic refinery operations continued at a strong pace as the national capacity utilization rate averaged 92.6 percent in July, down from 94 percent in July 2005. U.S. petroleum imports rose to 14 million barrels per day, a record for the month of July and the fifth highest level ever.
Access a release from API (click here). [*Energy]
Tuesday, August 22, 2006
The Comprehensive Assessment, carried out by 700 experts from around the world over the last five years, indicates that one third of the world’s population is currently living in places where water is either over-used - leading to falling groundwater levels and drying rivers - or can not be accessed due to the absence of the appropriate infrastructure. The Assessment, the first of its kind critically examining policies and practices of water use and development in the agricultural sector over the last 50 years, was co-sponsored by the Consultative Group on International Agricultural Research (CGIAR), FAO, the Ramsar Convention on Wetlands, and the Convention on Biological Diversity in a bid to find solutions to the challenge of balancing the water-food-environment needs. It was spearheaded by IWMI, one of 15 agricultural research centers supported by the CGIAR that are striving to increase food production, increase rural incomes, and safeguard the environment.
Despite the impending threat, the Assessment identifies numerous bright spots -- innovative approaches that hold potential for the future. These include very low cost technologies that facilitate access to, and use of water by, the rural poor. With health issues addressed, for example, people can effectively use urban wastewaters as a productive resource. Irrigation could also be reformed and transformed to reduce water wastage and increase productivity. The report finds that agriculture uses up to 70 times more water to produce food than is used in drinking and other domestic purposes, including cooking, washing and bathing. As a rule of thumb, each calorie consumed as food requires about one liter of water to produce.
David Molden who led the Comprehensive Assessment said, “The Assessment shows that while a third of the world population faces water scarcity, it is not because there is not enough water to go round, but because of choices people make. It is possible to reduce water scarcity, feed people and address poverty, but the key trade-off is with the environment. People and their governments will face some tough decisions on how to allocate and manage water. Not all situations are going to be a win-win for the parties involved, and in most cases there are winners and losers. If you don't consciously debate and make tough choices, more people, especially the poor, and the environment will continue to pay the price.”
The 2006 World Water Week in Stockholm is taking place August 20-26 at the Stockholm City Conference Centre in the Swedish capital. The World Water Week is hosted and organized by the Stockholm International Water Institute (SIWI). Over 100 different organizations and programs are on board as convenors or co-convenors of different activities and more than 1500 participants are expected from 100 countries.
Access a release (click here); and another (click here). Access the Assessment website for links to the research reports, discussion papers & briefs, conference papers and additional information (click here). Access the CGIAR website for more information (click here). Access the World Water Week website for complete details on the conference (click here). [*Water]
Monday, August 21, 2006
Michel Jarraud, Secretary-General of WMO said, “While these latest projections of ozone recovery are disappointing, the good news is that the level of ozone-depleting substances continues to decline from its 1992-94 peak in the troposphere and 1990s peak in the stratosphere. Global changes in climate suggest that atmospheric conditions are different today from those prior to periods marked by ozone depletion. This may have implications for ozone recovery. Maintaining and improving observational and assessment capabilities are critical in separating effects due to changes in climate from those in ozone -- depleting substances and will play a major role in verifying the effectiveness of actions taken under the 1985 Vienna Convention, the 1987 Montreal Protocol and its amendments.”
The next annual Meeting of the Parties to the Montreal Protocol, to be held in New Delhi from October 30 to November 3, will consider the policy implications of the Executive Summary of the current report. The full body of the report, which was written and reviewed by over 250 experts from around the world, will be available in early 2007.
Access a release and links to related information (click here). Access the Executive Summary (click here). [*Climate]
Friday, August 18, 2006
The Seventh Circuit said, "Cinergy’s suggested interpretation, besides not conforming well to the language of the regulation, would if adopted give a company that had a choice between making a physical modification that increased the hourly emissions rate and one that enabled an increase in the number of hours of operation an incentive to make the latter change even if that would produce a higher annual level of emissions, because it would elude the permit requirement. Cinergy’s interpretation would also distort the choice between rebuilding an old plant and replacing it with a new one."
The Appeals Court indicates that Cinergy’s argument was rejected by the D.C. Circuit in New York v. EPA, which upheld the EPA’s interpretation of the regulation. But it was accepted by the Fourth Circuit in United States v. Duke Energy Corp., 411 F.3d 539, 546-51 (4th Cir. 2005), cert. granted, 126 S. Ct. 2019 (2006), creating a circuit conflict which the Appeals Court says is the reason "the Supreme Court presumably granted certiorari in the Duke Energy case to resolve."
In its brief 9-page opinion, the Seventh Circuit says in affirming the district courts agreement with EPA's interpretation, "In so ruling, the Fourth Circuit stepped out of bounds, as we have said in describing Cinergy’s argument. But in any event the argument’s premise is incorrect... The New Source Performance Standards and Prevention of Significant Deterioration provisions of the Clean Air Act are at one in defining a modification as a physical change in a plant that results in an increase in emissions, but are silent on whether the increase is in the hourly rate of emissions or in some other rate. The task of deciding was left to the EPA. There was nothing to require that it flesh out the vague statutory meaning in the identical way in different parts of the Clean Air Act adopted years apart and reflecting, to an extent anyway, different philosophies of pollution control. Cinergy’s other arguments are makeweights, and we will not extend this opinion to discuss them."
Environmental Defense issued a release hailing the decision and said, "The ruling in the government’s 'new source review' enforcement case against Cinergy firmly and explicitly rejects the flawed Fourth Circuit opinion now pending appeal in the U.S. Supreme Court’s review of the case, Environmental Defense, et al. v. Duke Energy Corporation (No. 05-848). The case is being briefed this summer and the High Court just established November 1st as the oral argument date in the Duke case. A corporate merger of Duke and Cinergy was approved in April. This pivotal decision by one of the most influential federal court of appeals in the nation sends a powerful signal that it is time to address the serious human health and environmental impacts of coal-fired power plants. The court's strong, clear decision also puts its considerable weight behind a protective interpretation of the Clean Air Act's clean up requirements for coal plants at the same time that the Supreme Court is considering a major case presenting these very questions.”
Access the complete opinion (click here). Access a release from Environmental Defense (click here). Access discussion on the SCOTUSblog (click here). Access links from the Indiana Law blog including background and the 8/29/05 district court decision (click here) the [*Air]
Thursday, August 17, 2006
EPA's final rule, issued pursuant to section 8(a) of TSCA, requires certain manufacturers (including importers) of certain HPV Challenge Program orphan (unsponsored) chemicals to submit a one-time report on general production/ importation volume, end use, and exposure-related information to EPA. The Interagency Testing Committee (ITC), established under section 4(e) of TSCA to recommend chemicals and chemical mixtures to EPA for priority testing consideration, amends the TSCA Section 4(e) Priority Testing List through periodic reports submitted to EPA. The ITC recently added certain HPV Challenge Program orphan (unsponsored) chemicals to the Priority Testing List in its 55\th\ and 56\th\ ITC Reports, as amended by deletions to this list made in its 56\th\ and 58\th\ ITC Reports. Two tungsten oxide compounds were added to the Priority Testing List by the ITC in its 55\th\ ITC Report but were removed from the Priority Testing List in the 58\th\ ITC Report. In addition, EPA is making technical corrections to update the EPA addresses to which submissions under the Preliminary Assessment Information Reporting (PAIR) rule must be mailed or delivered.
The final rule is effective September 15, 2006; however, Sec. 712.28 and 712.30(c), which contain technical corrections, are effective August 16, 2006. For purposes of judicial review, this rule shall be promulgated at 1 PM EDT on August 30, 2006. PAIR Forms must be submitted to EPA on or before November 14, 2006. A request to withdraw a chemical from the PAIR rule, pursuant to 40 CFR 712.30(c), must be received on or before August 30, 2006. ACC said that the final rule helps to “level the playing field” by ensuring that health and environmental information is also provided on chemicals for which the manufacturers or importers did not voluntarily commit to providing this information to EPA and to making this information public. The rules are also among EPA’s office pollution prevention and toxics largest rulemakings, in terms of the number of chemicals covered. As such, ACC said, "they demonstrate that TSCA is both strong and flexible."
Access the FR announcement (click here). Access an ACC release with links to related information (click here). Access EPA's HPV Challenge Program website for extensive information (click here). [*Toxics]
Wednesday, August 16, 2006
The states made substantial revisions to the draft model rule in response to public comments. Some of the changes made to the model rule required substantive changes to the MOU. As a result, an amendment to the MOU was also agreed to and signed by the agency heads of the energy regulatory and environmental agencies in each participating state. The participating states also released a Post-Model Rule Action Plan outlining the actions that will be taken to implement the program and work items that will be undertaken to support program implementation.
Under the Regional Greenhouse Gas Initiative (RGGI), seven Northeast states agreed to propose a cap-and-trade program to reduce carbon dioxide (CO2) emissions, which are a major contributor to global warming. This is the first mandatory cap-and-trade program for CO2 emissions in U.S. history. In addition to the states listed above, the State of Maryland recently adopted legislation requiring Maryland to join RGGI by June 2007. Under RGGI, the seven states will launch a regional cap-and-trade system that utilizes emissions credits or allowances to limit the total amount of CO2 emissions. Beginning in 2009, emissions of CO2 from power plants in the region would be capped at approximately current levels -- 121 million tons annually -- with this cap remaining in place until 2015. The states would then begin reducing emissions incrementally over a four-year period to achieve a 10 percent reduction by 2019. Compared to the emissions increases the region would see from the sector without the program, RGGI will result in an approximately 35 percent reduction by 2020.
Access links to a press release, the model rule, rule revisions, the rule action plan and the MOU (click here). Access the WIMS-EcoBizPort Climate Change website for links to additional resources [*Climate]
The report indicates that in the Tittabawassee River floodplain near Dow, one of the geographic areas studied, people had 28 percent higher median levels of total dioxin-like chemicals in their blood than people in a control group in Jackson and Calhoun counties. Dioxins are toxic chemicals. They had 32 parts of dioxins for every trillion parts of blood, compared to 25 in people living in Jackson and Calhoun counties.
The Jackson/Calhoun region was used as a comparison because it is similar to Midland/Saginaw but is more than 100 miles away from the Dow plant. Dioxin levels in Jackson/Calhoun residents are close to the national median level. According to a release, much of the increased amount of dioxins in Midland/Saginaw residents was related to age. Nationally, older people have higher dioxins levels. People in Midland/Saginaw tend to be older than people in Jackson/Calhoun. Some of the increase was associated with eating certain foods such as fish from local waters contaminated by Dow and other sources, engaging in recreational activities on or near contaminated waters, or having worked at the Dow plant from 1940 to 1959. A small portion of the increase was related to living on soil contaminated by Dow, the study found.
U-M scientists studied levels of dioxins in people’s property soil, household dust and blood samples, and interviewed residents about their age, body mass, dietary habits, land use, occupation, and other personal details. A total of 695 Midland/Saginaw residents and 251 Jackson/Calhoun residents gave blood samples. Participants in the study were at least 18 years old. The researchers found that the median level of dioxins in soil in Jackson/Calhoun, the control area, was 4 parts per trillion -- 4 parts of dioxins for every trillion parts of soil. The median levels in Midland/Saginaw ranged from 4 parts per trillion in the near-floodplain area to 13 in the floodplain and 59 in the area downwind of Dow. The researchers found that people who lived in Midland/Saginaw on property with contaminated soil had higher median levels of dioxins in their blood. If the dioxins in their soil increased by 1,000 parts per trillion, the dioxins in their blood increased by about 0.7 parts per trillion (a 2 percent increase over the average level of blood dioxin for most people).
Access a release (click here). Access the U-M Dioxin website for the complete report, handouts, presentations, information on meetings and background information (click here). Access the WIMS-EcoBizPort Special Report on Midland Area Dioxin Issues for further background information and links to additional resources (click here). [*MIToxics]
Tuesday, August 15, 2006
The Kyoto Protocol requires 35 industrialized countries to reduce greenhouse gas emissions below levels specified for each of them in the Protocol. Overall, this should amount to reductions of at least 5% below 1990 levels between 2008 and 2012. The ITL will be connected to the emissions trading registries of all the industrialized countries that sign up to the Kyoto Protocol. Kinley said, “Awarding this contract is a significant milestone in finalizing the systems to make carbon trading under the Kyoto Protocol a reality. We remain on track for Kyoto countries' systems to link to the ITL and become fully operational by April 2007.” Companies investing in climate friendly projects can obtain additional carbon credits in exchange for every tonne of emissions saved through the Kyoto Protocol’s project-based mechanisms (Clean Development Mechanism and Joint Implementation, i.e. CDM & JI). These can then be freely traded on the carbon market.
Access a UNFCCC release (click here). Access the UNFCCC website with links to extensive information including details of the CDM and JI programs (click here). [*Climate]
Monday, August 14, 2006
Atlantic sought to recover a portion of these costs from the United States by invoking CERCLA §§ 107(a) and 113(f).3 Atlantic and the government began to negotiate in an effort to resolve these financial matters. The negotiations ended with the United States Supreme Court decision in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S. Ct. 577, 160 L.
Ed. 2d 548 (2004) (Aviall). In Aviall, the court found a party could only attempt to obtain § 113(f) contribution 'during or following' a §§ 106 or 107(a) CERCLA civil action. Id. at 161, 125 S. Ct. at 580. As no action had been commenced against Atlantic under either §§ 106 or 107(a), the Aviall decision barred its § 113(f) contribution claim. With its § 113(f) claim Aviall-foreclosed, Atlantic amended its complaint. The amended complaint relied solely on § 107(a) and federal common law. In lieu of answer, the government moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing this Court’s pre-Aviall decision in Dico, Inc. v. Amoco Oil Co., 340 F.3d 525 (8th Cir. 2003) (Dico) foreclosed Atlantic’s § 107 claim. The district court agreed and Atlantic appealed the decision.
The Appeals Court provides considerable discussion of pre-Aviall claims and the effect of the Aviall Supreme Court decision. The Second Circuit is the only Court which has considered this question since the Aviall decision. That Court also revisited its pre-Aviall precedent and concluded that § 107 allowed one liable party to recover voluntarily incurred response costs from another. Consolidated Edison Co. v. UGI Utilities, Inc., 423 F.3d 90, 100 (2d Cir. 2005).
The Eighth Circuit said, "We agree with our sister Circuit, and hold that it no longer makes sense to view § 113 as a liable party’s exclusive remedy. This distinction may have made sense for parties such as Dico, which was allowed to seek contribution under § 113. But here, Atlantic is foreclosed from using § 113. This path is barred because Atlantic – like Aviall – commenced suit before, rather than 'during or following,' a CERCLA enforcement action. Atlantic has opted to rely upon § 107 to try to recover its cleanup costs exceeding its own equitable share. We conclude it may do so."
Editor's Update Note: On January 19, 2007, the U.S. Supreme Court agreed to hear the case of U.S. v. Atlantic Research Corp. (Docket: 06-0562). The case was appealed from the Eighth Circuit Court of Appeals decision of August 11, 2006 [See WIMS 8/14/06]. The primary questions presented in the case is: "Whether a party that is potentially responsible for the cost of cleaning up property contaminated by hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), but that does not satisfy the requirements for bringing an action for contribution under Section 113(f) of CERCLA, 42 U.S.C. 9613(f), may bring an action against another potentially responsible party under Section 107(a), 42 U.S.C. 9607(a)?"
Access the complete Eighth Circuit opinion (click here). Access a Medill News Service summary of the action (click here). Access the U.S. Supreme Court Docket for the case (click here). [*Remed]
Friday, August 11, 2006
The City of Healdsburg appeals the district court’s judgment in favor of Northern California River Watch, an environmental group, in this litigation under the Clean Water Act (CWA). Plaintiff alleges that Healdsburg, without first obtaining a National Pollutant Discharge Elimination System (NPDES) permit, violated the CWA by discharging sewage from its waste treatment plant into waters covered by the Act. Healdsburg discharged the sewage into a body of water known as “Basalt Pond,” a rock quarry pit that had filled with water from the surrounding aquifer, located next to the Russian River.
The issue is whether Basalt Pond is subject to the CWA because the Pond contains wetlands adjacent to a navigable river of the United States. The district court held that discharges into the Pond are discharges into the Russian River, a navigable water of the United States protected by the CWA. The court followed the United States Supreme Court decision in United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).
The Ninth Circuit, in what is believed to be the first Appeals Court interpretation of the Supreme Court's Rapanos decision [See WIMS 8/2/06] said, "The Supreme Court, however, has now narrowed the scope of that decision. See Rapanos v. United States, 126 S.Ct. 2208 (2006). In a 4-4-1 decision, the controlling opinion is that of Justice Kennedy who said that to qualify as a navigable water under the CWA the body of water itself need not be continuously flowing, but that there must be a “significant nexus” to a waterway that is in fact navigable. Adjacency of wetlands to navigable waters alone is not sufficient. Id. at 2236-52. In light of Rapanos, we conclude that Basalt Pond and its wetlands possess such a “significant nexus” to waters that are navigable in fact, because the Pond waters seep directly into the navigable Russian River. We affirm the district court’s holding that Basalt Pond is subject to the CWA. We also affirm the district court’s ruling that neither the waste treatment system nor the excavation operation exceptions in the Act apply to Healdsburg’s discharges."
In it discussion of the Supreme Court ruling in Rapanos, the Ninth Circuit said, "In the last term, however, the Supreme Court discussed the intersection between Riverside Bayview Homes and SWANCC. United States v. Rapanos, 126 S.Ct. 2208 (2006). The Rapanos decision involved two consolidated cases, United States v. Rapanos, 376 F.3d 629 (6th Cir. 2004) (Rapanos I) and Carabell v. U.S. Army Corps of Engineers, 391 F.3d 704 (6th Cir. 2004)...
"In Rapanos, a 4-4-1 plurality opinion, the Supreme Court addressed how the term 'navigable waters' should be construed under the Act. The plurality, written by Justice Scalia for four Justices, would have reversed on the grounds that only those wetlands with a continuous surface connection to bodies that are 'waters of the United States' are protected under the CWA. Justice Stevens, writing the dissent for four Justices, would have affirmed on the grounds that wetlands not directly adjacent to navigable waters, but adjacent to tributaries of navigable waters, are protected under the CWA. Justice Stevens argued that Riverside Bayview Homes is still the controlling precedent and does not require a 'significant nexus' test.
"Justice Kennedy, constituting the fifth vote for reversal, concurred only in the judgment and, therefore, provides the controlling rule of law. See Marks v. United States, 430 U.S. 188, 193 (1977) (explaining that '[w]hen a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds')..."
Access the complete opinion (click here). On August 1: The Senate Committee on Environment and Public Works, Subcommittee on Fisheries, Wildlife, and Water, Chaired by Lincoln Chafee (R-RI) held a hearing on interpreting the effect of the U.S. Supreme Court's recent decision in the joint cases of Rapanos v. United States and Carabell v. U.S. Army Corps of Engineers on "The Waters of the United States". Access the hearing website and links to all testimony (click here). Access a "simple" explanation of the Rapanos v. U.S. decision from QuizLaw (click here). [*Water]
Thursday, August 10, 2006
The proposal addresses the residual risk and the eight-year technology review provisions in the Clean Air Act. These provisions direct EPA to review existing control technology standards. EPA is to tighten those standards if needed to protect health or because of improvements in emissions reduction methods. EPA will accept public comment on its proposal for 45 days following publication of the proposed action in the Federal Register.
Access a release (click here). Access a fact sheet on the proposed rule (click here). Access a prepublication copy of the proposed rule (click here). [*Air]
Wednesday, August 09, 2006
With the release of the study, DOE will now be seeking comments until October 10, from interested parties on the possible designation of National Interest Electric Transmission corridors in relation to all three groups of congestion areas. If appropriate, the DOE Secretary will designate certain areas as National Corridors in accordance with the law. The study, and comments on it from stakeholders, will be used in future decisions by the Department concerning the designation of National Corridors. Section 1221(a) of the Energy Policy Act of 2005 updates Section 216 of the Federal Power Act and requires DOE to issue a national transmission congestion study for comment by August 2006 and every three years thereafter. Based on the study and public comments, DOE may designate selected geographic areas as "National Interest Electric Transmission Corridors." Applicants for projects proposed within designated corridors that are not acted upon by state siting authorities within one year may request FERC to exercise federal "backstop" siting authority.
Bodman also released a report prepared by the Department that details other programs that have been undertaken since the passage of EPAct. The report, On the Road to Energy Security: Implementing a Comprehensive Energy Strategy, is designed to be an easy-to-read document that explains many of the highlights of EPAct, and provides a progress summary on achieving the Act’s goals of greater energy security. Additionally, Bodman provide an overview briefing on issues surrounding the Prudhoe Bay, Alaska oil field shutdown.
Access a lengthy release (click here). Access links to the complete Congestion study, an executive summary, comment procedures, and extensive background information (click here). Access the EPAct accomplishments summary (click here). [*Energy]
Tuesday, August 08, 2006
To examine how society uses its water resources, the CBO analysis addresses several major questions: What are this country’s water sources, and how is the water used?; What determines the underlying allocation, and does that allocation maximize water’s potential benefits to society as a whole?; and What policies might the federal government consider toward that end? The report indicates that the state laws governing property rights and the pricing mechanisms that conceal opportunity costs make the current allocation of water relatively inflexible. That inflexibility might become increasingly costly in the future, as it exacerbates pressures on federal spending and reduces the potential gains to the economy from the use of water resources. Four developments in particular augment demand pressures: the settlement of Indian tribes’ claims on water rights currently held by others; environmental laws that require greater amounts of water be retained in natural courses; growing populations in arid states; and the recurring impacts of droughts, which may increase in frequency and intensity as a result of shifts in precipitation patterns.
Under policy options, the report says that broader use of markets in deciding how scarce water resources are allocated could improve on the current system of administrative allocation that has emerged under state law. Because markets offer flexibility in balancing supply and demand -- by providing incentives to reallocate water among users, to use less water, and to provide more water -- they could mitigate society’s costs of adjusting to changing conditions. The report notes that, "The federal government could facilitate market transfers of water by clarifying the potential for broader water marketing using its jurisdiction under the commerce clause of the Constitution and federally reserved water rights. The commerce clause gives the Congress the authority to allocate interstate waters to serve the national interest -- even if doing so means overriding state law."
Access the complete 32-page report (click here). [*Water]
Monday, August 07, 2006
BP America Chairman and President Bob Malone said, “We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause. However, the discovery of this leak and the unexpected results of this most recent smart pig run have called into question the condition of the oil transit lines at Prudhoe Bay. We will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment.” BP indicated it is identifying and mobilizing additional resources from across Alaska and North America in order to speed inspection of remaining Prudhoe Bay oil transit lines. BP operates 22 miles of oil transit pipeline at Prudhoe Bay. Smart pigging inspection has been completed over about 40 percent of that length. BP previously announced plans to replace a three-mile segment of pipeline following inspections conducted after a large spill discovered on March 2, 2006.
Meanwhile, various media reports indicate that Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian, in India for two days of talks on a proposed $7 billion gas pipeline, said that global crude oil prices could reach $100 a barrel on geopolitical tension and soaring winter demand. Other Iranian statements have warned of oil prices of $200 if international sanctions were imposed on the country in its nuclear dispute with the U.S.
An August 7, 2006, Standard & Poor's article entitled, The Effect Of A Major Oil-Supply Disruption On U.S. And Global Economies, analyzes a range of options that indicate oil prices could reach $250 oil barrel, under a worse case scenario where Iran would close the Strait of Hormuz, a shipping route for oil tankers from Kuwait, Saudi Arabia and the United Arab Emirates. The most likely scenario according to S&P is based on a limited Middle East conflict with oil prices around $75 a barrel and falling even lower by year's end.
Access a release from BP (click here). Access the BP Alaska corrosion Response website for continued updates and information (click here). Access an extensive Reuters financial analysis (click here). Access links to various media coverage on the Iranian oil issue (click here). Access the S&P for links to the article and an audio playback of a telephone conference call held on July 27, 2006 to discuss S&P's view on the economic impact of increased oil prices (click here, registration required). [*Energy]