Thursday, July 31, 2008
Since a low in 1986, domestic consumption of natural gas has generally increased and its uses have broadened. Natural gas has especially become popular as a cleaner alternative to coal in the electrical utility sector and gasoline and diesel in the transportation sector. As Congress considers energy policies that will increase our energy independence and help solve global warming, understanding the role of natural gas in our economy and how it might contribute to energy policies is critical. Witnesses testifying at the hearing included representatives from: Chesapeake Energy; Suez LNG North America; National Grid; The Dow Chemical Company; American Honda; and the Independent Petroleum Association of Mountain States.
Aubrey McClendon, Chairman and CEO of Chesapeake Energy Corporation and Chairman of the American Clean Skies Foundation (ACSF) testified on the natural gas industry and its future. He said, "the U.S. today consumes about 63 billion cubic feet of natural gas per day - in energy BTU equivalency terms, that’s 10.5 million barrels of oil per day, or about half of the amount of oil that the U.S. consumes each day. Of that 63 bcf per day of natural gas consumption, we import about 1 bcf in the form of liquefied natural gas, or LNG, and we import about 8 bcf per day from Canada. This means that we are about 98.5% self-reliant on natural gas supply from North America and about 86% self-reliant on natural gas supply from the U.S. Contrast that with oil, where we are only about 41% North American self-reliant and only about 27% self-reliant from U.S. sources."
In describing the industry he said, "a highly fragmented industry with more than 7,000 American-based companies producing natural gas from 33 different states. Most producers are very small private businesses that may drill a well or two per year. The heavy lifting in the industry is performed by the 20 largest U.S. natural gas producers, which account for about 60% of all U.S. natural gas production. Of these 20 companies, 6 are integrated oil companies with household names, such as Exxon or Chevron, while 14 are much smaller public companies such as Chesapeake."
On the future of oil, natural gas and the energy crisis he said, ". . .despite all the recent commotion over speculation in oil markets, the reality is oil prices have been rising for 10 years for a very good reason -- demand growth is outstripping supply growth -- and, in all likelihood, they will continue to rise in the future. We are on the road to national bankruptcy and must change our ways. The good news is it’s easy to change – we don’t need a new fuel, we don’t need new engine technology, we don’t need hundreds of billions of dollars. All you have to do is modify or replace today’s internal combustion engines that run on gasoline and diesel and replace them with an internal combustion engine that runs on natural gas. And that’s natural gas that costs less than half the price of gasoline, is more than two-thirds cleaner, and best of all, is produced right here at home in America, and we are proving to skeptics everyday that there is plenty of it."
He continued, "Imagine tomorrow if your hometown or national newspaper proclaimed that you had introduced a plan that would, in one stroke, cut gasoline’s cost in half, reduce our oil imports, improve our air quality, enhance national security, strengthen the dollar, reduce greenhouse gas emissions and create tens of thousands of new jobs in the U.S. in the automotive, truck, steel, natural gas and related industries. The papers might say you just have changed the course of American history.
"So is there enough natural gas to do this? The answer is absolutely yes. To convert just 10% of American cars to CNG would take less than 8 years to do and would only require an increase in U.S. natural gas consumption by slightly over 1% per year Yet, this year alone American natural gas producers will increase U.S. natural gas supplies by about 9%. Going forward, I believe U.S. natural gas producers can increase supplies by 5% per year for at least the next decade and that assumes there is no more access to public lands and waters than there is today." [Note: similar statement were made by T. Boone Pickens in his recent compelling testimony before the Senate Homeland Security Committee [See WIMS 7/23/08].
On the same day as the hearing, the American Clean Skies Foundation (ACSF) and Navigant Consulting, Inc. (NYSE:NCI) released a new comprehensive study -- North American Natural Gas Supply Assessment -- indicating the United States has 2,247 trillion cubic feet (Tcf) of natural gas reserves, which is enough to last more than 100 years. The report expands on and explains why existing forecasts from the U.S. Energy Information Administration (EIA) have historically underestimated and understated the contribution and potential of unconventional natural gas from three sources: tight sands, coalbed methane and gas from shale formations. McClendon said, "New technologies have allowed the rapid emergence of gas shales as a major energy source, representing a truly transformative event for U.S. energy supplies. American producers can clearly supply enough natural gas to meet today’s uses and become an economical source of transportation fuel in the form of CNG or greater supplies of electricity for plug-in hybrids for generations to come.”
Rick Smead, one of the study’s co-authors and overall project manager for NCI said, “The assessments and estimates on natural gas supply are very impressive and have, frankly, caught industry forecasters off guard. The study found that while all three unconventional gas sources have increased production over the past decade, natural gas production from shale formations is growing exponentially, increasing from less than a billion cubic feet a day in 1998, to about 5 billion cubic feet a day now. That’s a compound annual rate of growth of over 20 percent, which is over 600% for the time period. “The extent of this ramp-up has not been fully captured by many reserve estimators,” said Smead, “probably because their emergence has been too rapid for existing models to capture accurately.” There are approximately 22 shale basins located onshore in more than 20 states in the U.S. including Texas, Oklahoma, Arkansas, Louisiana, West Virginia, Wyoming, Colorado, New Mexico, West Virginia, Pennsylvania, New York and Michigan.
Denise Bode, president of ACSF said, “This is the age of natural gas. Frankly, no other energy source can do so much for America from fueling our vehicles to generating our electricity and do so as cleanly as American-produced natural gas. Without question, we know now that we have abundant supplies of domestically produced natural gas to take us to a clean, secure, scalable and affordable energy future. This study authoritatively refutes head-on the mistaken belief that we do not have sufficient supply. The fact is America has substantial natural gas to fuel its future beyond this century and at a price that is likely to remain less than half the price of oil and will provide significant environmental benefits as well.”
In his opening remarks at the hearing, Chairman Markey said, ". . .we must not forget that natural gas, like all fossil fuels, is both a finite resource and a contributor to greenhouse gases. Because of that reality, we must use it wisely, in a targeted manner, and we must use it efficiently and in ways that help transform our economy to one that is more energy secure and climate friendly. Today our witnesses will discuss a number of natural gas uses that are already helping to achieve these goals and what might be possible in the near future.
"Natural gas vehicles are already displacing gasoline and diesel and improving air quality. The replacement of diesel fleets such as buses and trucks with natural gas powered vehicles has especially helped reduce dangerous air pollution in some of our most polluted cities. Fuel cell vehicles hold the promise of using natural gas more efficiently in the transportation sector. As Congress considers energy policies that will increase our energy independence and help solve global warming, understanding the role of natural gas is critical."
Access the hearing website for links to all testimony and Chairman Markey's opening statement (click here). Access a ACSF blog post on the new study (click here)Access the complete 90-page ACSF report (click here). Access the ACSF website for extensive information (click here). [*Energy]
Wednesday, July 30, 2008
In a floor statement following the vote, Majority Leader Reid said the Senate may stay in session until there is a compromise reached on energy legislation. He said the oil companies had received $609 billion in profits during the "Bush years." He outlined a number of measures that Democrats have offered and said that Republicans have blocked all measures.
Senate Minority Leader Mitch McConnell (R-KY) continuing the Republican position that energy legislation must include provisions for opening up more oil and gas drilling opportunities said, “Voting for cloture on this bill will take us off the single most important issue in America. The American people are clamoring for legislation that would bring down high gas prices. They expect their representatives in Washington to do something about this crisis now. . . I will vote that we stay on the energy bill -- until we offer the American people a solution. I urge my colleagues to do the same.”
On the House side, House Speaker Nancy Pelosi (D-CA) issued a release saying, "Republicans may talk a good game, but their actions speak louder than words. Republicans have voted against the critical solutions that must be part of a comprehensive New Direction for Energy Independence. They voted against renewable energy and conservation, responsible domestic oil production, short-term measures to bring down prices now and punish those who are manipulating the oil market, and new requirements that oil companies pay their fair share. Instead of working on behalf of American families and businesses, the House Republicans’ so-called 'all of the above' energy plan simply rehashes failed ideas on domestic drilling or proposes ideas that Republicans have repeatedly blocked in the past. Their all-out legislative battle in recent years to protect the record profits of Big Oil companies earning record profits has earned them the moniker 'Grand Oil Party.' Americans paying $4 a gallon thanks to an energy policy literally written by the oil industry cannot afford this the GOP’s 'none of the above' energy plan."
Speaking on energy and the economy in Cleveland, Ohio yesterday, President Bush reiterated the Republican position saying, "The feed stock for gasoline is oil. So when you hear 'my gasoline prices are going up,' you got to understand the main reason why is because oil prices are going up. And the reason why -- again I want to repeat to you -- is that the global demand for oil is growing faster than the global supply for oil. So it seems like we ought to be figuring out how to find more oil here in the United States. . . If we're worried about your gasoline price and recognize that it's high because of the price of crude oil, and it's possible to find more oil right here in the United States so we're not shipping our money overseas -- doesn't it make sense to try to find that oil? I think it does. And here are some places where we can. One place where there is a -- the experts say is a bountiful supply of oil, perhaps as much as 10 years' worth at current consumption rates, is in the Outer Continental Shelf."
Access a release from Senator Reid (click here). Access a release from Senator McConnell (click here). Access the President's Cleveland speech (click here). Access the Senate roll call vote (click here). Access legislative details for S. 3355 which includes links to floor statements (click here). Access a release from Speaker Pelosi listing House measures that Republicans have opposed (click here). [*Energy]
Tuesday, July 29, 2008
McLean said, "The Clean Air Interstate Rule contains three regulatory programs intended to support the efforts of 28 eastern states and the District of Columbia to meet their obligations to attain the fine particle (PM2.5) and ozone standards. It is the linchpin of EPA’s program to improve air quality and EPA’s most significant action to protect public health and the environment since the passage of the 1990 Clean Air Act Amendments (Act)."
He said EPA expected that by the end of 2008, 21 states would have SIP approval for the complete CAIR SO2 program; 23 states would have SIP approval for the complete CAIR NOx trading programs; four more states would have SIP approval covering NOx allowance allocations; and the remainder would be covered by the FIP trading programs. Since the court decision, however, he said the Agency has seen the growing concern in the markets and a collapse in SO2 and NOx allowance prices and the significant decline in trading activity. He said, "Clearly, the Court decision vacating CAIR in its entirety creates uncertainties that could cause setbacks in air quality and environmental benefits and negatively affect the health and well being of citizens in the CAIR region [28 eastern states and the District of Columbia]."
McLean indicated that EPA is continuing to evaluate further litigation options; however, he said assuming the decision stands it will have a ripple effect that "will delay and could impede significant clean air programs and activities throughout the eastern U.S." The first major category of affected programs involves requirements for state planning for clean air.
In conclusion, EPA testified that, "Although issues were raised by some stakeholders, the reductions and approach of CAIR were broadly accepted. While it is too early to fully assess the damage to our air quality programs and the health and environmental protection they were designed to achieve, the court decision to vacate CAIR poses significant concerns in implementing the CAA provisions. These include the significant burdens imposed on the states in meeting their CAA obligations (such as the near term deadlines for the PM2.5 and ozone NAAQS); a potential increase in emissions from power plants associated with precipitous declines in allowance values; and possible air quality degradation with implications for ecosystems, acid deposition, and human health. . .
". . .we are most concerned about the impacts to public health and welfare and the environmental damage that could result from companies which may now decide to shift to cheaper, higher-sulfur fuels; or choose not to install a scrubber for SO2 emissions on older boilers; or limit use of their control systems to save operating costs and increase plant efficiency. Another concern is the implications of the court decision on the future of cap-and-trade programs. . . In the wake of the Court’s decision, EPA and the states in the CAIR region will need to work together to develop strategies to protect public health and the environment. EPA will earnestly be considering all options over the next few weeks.
Senator James Inhofe (R-OK) and Ranking Member of the full committee said, "Three years ago I stated that 'CAIR is significantly more vulnerable to court challenges than Clear Skies would have been and will undoubtedly be held up, not unlike the Clinton administration's 1997 air quality standards. This latest round of litigation demonstrates the need for a strong national Clear Skies law more than ever.' Well, today, here we are, and unfortunately that statement has rung true. As I stated back then, “Trying to litigate the way to cleaner air only delays progress, often yields little or no result and wastes millions in taxpayer dollars.” Now we are faced with a full vacating of the entire Rule, which, ironically enough, is a litigation result that no party actually wanted. In addition, we face an uncertain regulatory future, and most importantly, we have thrown into jeopardy the health and environmental benefits that CAIR would have achieved–estimated to have benefits over 25 times greater than their costs by the EPA. I also note that this decision certainly doesn’t bode well for those people who say we can structure flexibility into regulating carbon under the Clean Air Act. . ."
Senator Tom Carper (D-DE), Chair of the Subcommittee on Clean Air and Nuclear Safety that held the hearing said, "Congress must pass clean air legislation now that a recent court ruling has brought many clean air remedies to a halt and created difficulties and confusion for the federal government, east and mid-western states, companies and environmental groups alike. As Albert Einstein once said, ‘in the middle of every difficulty lies opportunity.’” He said Congress has a new opportunity to craft comprehensive national clean air legislation that protects and improves public health.
Carper said, “As many of you know, Delaware struggles to meet its clean air goals because we’re located -- along with our neighbors -- at the end of America’s tailpipe. We simply can’t clean up our air along the eastern seaboard unless upwind states meet their obligations." He said, ". . .eight years have gone by without any meaningful, substantive action on the clean air debate. This inaction means tens [of] thousands of Americans will die prematurely from lung-related deaths who didn’t have to die. It means that Congress and this White House failed to do what’s right.”
He said in addition to the hearing, he will hold other hearings and roundtables on these clean air issues throughout the fall to highlight various perspectives on how to move forward on clean air legislation. He said, "Let me be clear. I’m not going to wait another eight years to do what we should have done eight years ago, and that is pass a strong, comprehensive clean air bill that makes deep and meaningful reductions in mercury, nitrogen oxide and sulfur dioxide.”
Carper concluded that Congressional legislation is necessary to get air pollution control out of the courts and ensure actions are taken on schedule; new law must cover the whole country not just the eastern United States; and new legislation will address not only SO2 and NOx, but also toxic mercury emissions (The D.C. Circuit also vacated EPA’s mercury rulings, State of New Jersey v. EPA) [See WIMS 2/8/08] and global warming caused by carbon dioxide. Last year, Senator Carper introduced his Clean Air Planning Act of 2007 (CAPA), which he said would significantly reduce unhealthy emissions of mercury, as well as the harmful pollutants (nitrogen oxide and sulfur dioxide) that produce smog and acid rain. In addition, this four-pollutant bill would set up a mandatory cap-and-trade program for utilities to reduce their emissions of carbon dioxide, which causes global warming.
Others testifying at the hearing included representatives from: New York Department of Environmental Conservation; PSEG; PPL Corp.; Ohio EPA; and Natural Resources Defense Council.
Access the Subcommittee hearing website for links to a webcast of the hearing and testimony, including Senator Inhofe's opening statement (click here). Access a release from Senator Carper (click here). [*Air]
Monday, July 28, 2008
In opening remarks, full Committee Chairman John Dingell (D-MI) said, "Water is critical to growth and economic development in many areas of the country, and will become even more so in future years. In pursuing the goal of carbon capture and storage, a system must be in place that protects the quality of drinking water sources and assures the public that this is a safe way to proceed. Approximately one week ago EPA released proposed regulations under the Safe Drinking Water Act designed to achieve these goals [See WIMS 7/15/08]. I look forward to EPA’s testimony and the views of our other witnesses on the adequacy of the proposed regulations and any gaps that remain to be addressed.
EPA testified that geologic sequestration associated with Carbon Capture and Storage (CCS) is a promising technology that provides an innovative solution for reducing emissions of (CO2) to the atmosphere, while safeguarding our country’s underground sources of drinking water. EPA said the UIC program is focused on protecting public health by preventing injection wells from contaminating underground sources of drinking water. EPA’s proposed regulations build on more than 35 years of experience in the UIC program of safely injecting fluids, either liquid, gas or slurry, including CO2, into the subsurface. Annually, billions of gallons of fluids are injected underground through wells authorized under State and Federal UIC Programs. This includes approximately 35 million tons of carbon dioxide that are injected for the purposes of enhancing oil and gas recovery.
The buoyancy of CO2, its potential corrosivity when in water, the potential presence of impurities in captured CO2, its mobility within subsurface formations, and the large injection volumes anticipated at full scale deployment, have all been considered in requirements tailored to the new practice of injecting CO2 for long-term storage. EPA’s proposal would create a new well type -- a Class VI UIC well. EPA said, "We believe we have developed a framework that will ensure safe injection in the present and safe storage in the future."
USGS testified that Section 711 of the Energy Independence and Security Act (P.L. 110-140), enacted into law in December 2007, authorized the Secretary of the Interior, acting through the Director of the USGS, to develop an assessment methodology and conduct a national assessment of geological storage capacity in collaboration with the Secretary of Energy, the Administrator of EPA, and the State geological surveys. USGS will collaborate with DOE to incorporate the results of the assessment into future revisions of the DOE “Carbon Sequestration Atlas of the United States and Canada”. The cumulative advances from these earlier USGS studies and DOE-funded activities provide a basis for developing a methodology to assess the national capacity to store CO2 and understand the potential impacts of large-scale deployment of geologic sequestration.
DOE testified that the 2006 Carbon Sequestration Atlas contains information on major CO2 emission point sources, geologic formations with sequestration potential, and some terrestrial ecosystems that offer the potential for enhanced carbon uptake – all referenced to their geographic location to enable analysis of CO2 sources and storage sites. An interactive version of the Atlas is publicly available through the National Carbon Explorer (NATCARB) website [See below]. DOE is funding a network of seven Regional Carbon Sequestration Partnerships to help develop technology, infrastructure, and best practices/protocols for implementing CO2 sequestration in different geologies of the Nation. This approach includes engaging local organizations and citizens to contribute expertise, experience, and perspectives that represent their concerns and goals.
AWWA testified, "Our overarching concern regarding geologic carbon sequestration is the potential contamination of underground sources of drinking water (USDW) from such activities and the potential for other unintended, and possibly harmful, consequences. AWWA is particularly concerned about the potential for contamination of sole source aquifers and suggests that these aquifers be provided with special protective measures. An aquifer receives the designation of “sole source aquifer” if it is located in an area where there are few or no alternative sources to the ground water resource, and where if contamination occurred, using an alternative source would be extremely expensive. AWWA urges caution on the implementation of large-scale, commercial geologic carbon sequestration, as little data are available regarding the potential effects of this technology on drinking water resources. . . AWWA recommends that commercial-scale carbon sequestration not be deployed until the results of the large-scale Department of Energy pilot projects have been received and reviewed. . . "
AWWA also draws attention to the significant issue of long-term liability resolved. EPA’s proposed geologic carbon sequestration rule cannot address financial responsibility of the sequestration site after the formal period of post-injection site care has ended (default of 50 year length). AWWA says Congress must develop legislation that will address the issue of who has to assume financial responsibility of the sequestration site after the site closure requirements have been fulfilled and anticipates a means by which drinking water utilities could recover any costs incurred as a result contamination.
Access the hearing website with links to all testimony and a webcast (click here). Access Representative Dingell's statement (click here). Access the Carbon Sequestration Atlas of the United States and Canada (click here). Access the USGS CO2 Sequestration website (click here). Access the NATCARB website (click here). Access a release from EDF (click here). [*Climate, *Water]
Friday, July 25, 2008
According to the Committee, the document says, "The Administrator is proposing that elevated concentrations of the greenhouse gases are reasonably anticipated to endanger public welfare, given the stated vulnerabilities, risks, and impacts from climate change on air quality (and related effects on the environment from changes in air quality), agriculture, forestry, water resources, ecosystems, coastal areas, the energy sector, infrastructure and settlements, and the direct effects of such elevated concentrations on the environment."
Senator Boxer reported that, ". . .the endangerment finding was not brought over by the White House Counsel's office until about 4:30 yesterday, despite our longstanding request. The White House conditioned our review of the document, not allowing us to copy it or to do more than take 'reasonable notes.'
"My staff has read the document in detail and briefed me. I read it, and have more work to do. This proposed endangerment finding, by the Administrator of EPA, concludes that the welfare of the American people is endangered if steps are not taken to avoid the ravages of unchecked global warming. In this document, in EPA's own words, we see that the law is clear, that the scientific evidence is sufficient, and that we must act. I have been informed that the Administrator and his senior staff participated directly in the preparation of this endangerment finding, and at the highest levels, and approved its transmission to the White House. There is no excuse, there is no argument that could possibly support withholding this endangerment finding from the American people, and I will continue to do everything I can to provide the public with as much information as possible. . ."
Senator James Inhofe (R-OK), Ranking Member on the Committee issued a statement saying, "I am very disappointed with the actions of this Committee today. It is my view that the calling of this Business Meeting to consider a Committee Resolution to issue a subpoena to EPA Administrator Johnson is unwarranted and not focused on true oversight. Rather, this is a political exercise that is intended to score more political points to help keep this issue of alleged Administration interference alive in the press as long as possible. The document in question today has been offered to the Committee for review, and was in fact reviewed by staff yesterday evening. This same offer was accepted by Congressman Markey and the Select Committee on Energy Independence and Global Warming, but had been rejected by my Democratic colleagues. . .
"It is my view that regardless of Administration, the President acting through the entire executive branch is fully entitled to express his policy judgments to the EPA Administrator, and to expect this subordinate to carry out the judgment of what the law requires and permits. It can be argued that the “unitary Executive concept” promotes more effective rulemaking by bringing a broader perspective to bear on important regulatory decisions. It also enhances democratic accountability for regulatory decision-making by pinning responsibility on the President to answer to the public for the regulatory actions taken by his Administration.
Therefore, I consider this debate over censorship within the Administration to be a non-issue. . . "
Immediately following the conclusion of the business meeting, Senator Boxer held a press conference to brief reporters on the details of EPA's Proposed Endangerment Finding for greenhouse gases. A vote from the Committee was not possible due to lack of Republican members.
Access the statement from Senator Boxer which includes a summary of the endangerment finding excerpts (click here). Access the statement from Senator Inhofe (click here). Access the meeting website which includes a webcast of the meeting with extensive additional details and statements from Members in attendance (click here). Access the video of the press conference (click here). Access a press statement from Senator Boxer (click here). Access numerous WIMS-eNewsUSA postings on the endangerment issues (click here). [*Climate]
Thursday, July 24, 2008
Senate Majority Leader Reid says, “Our Republican colleagues think they’ve found a winner. They think that with Americans from coast to coast facing $4.00, $4.15, $4.25, even $4.50 gas prices, they can score some easy political points off our energy crisis. They say that all we need to do is open up our coasts for the oil companies to drill and gas prices will go down. They say that the energy crisis is so important that the Senate should stay on the issue and do nothing else until it is solved. But we all know that actions speak louder than words. And the Republican rhetoric has no basis in reality. Senate Republicans have had numerous opportunities to work with us to lower gas prices. In fact, Democrats have proposed plans to lower gas prices six times in just the past few weeks. Six times, Republicans have blocked us. What has happened over those weeks? Gas prices have broken one record after another."
Reid said, Democrats proposed legislation to extend tax credits for innovators who are researching and producing clean, renewable energy to decrease our consumption of oil; proposed legislation to roll back tax breaks on the oil companies who are making record profits; proposed a cap-and-trade system that would address global warming and provide billions of dollars for alternative energy; proposed legislation to protect consumers from price gouging; proposed a renewable electricity standard; proposed legislation to go after OPEC for collusion and price-fixing; proposed legislation that would curb the excessive speculation of Wall Street oil traders; and proposed improvements to the LIHEAP program. He said Republicans said "no" to all of the proposals.
He said, “Democrats even offered Republicans the one thing they’ve been talking about: a vote on drilling. Did Republicans take our offer of exactly what they claim to want? No. Once again, Republicans said no. The game they seem to be playing is this: make the American people think that they are willing to grind the Senate to a halt to deal with gas prices. But the American people can see the record: Democrats have offered a comprehensive set of solutions for the short- and long-term. Republicans have offered nothing but talk. They have talked about more drilling. What they don’t say is that their drilling bill wouldn’t put a drop of oil into the marketplace for at least 13 years. Even the Republican nominee for President, Senator McCain, has called the Republican drilling plan purely psychological."
Republican Minority Leader McConnell responds, "When historians look back at the 110th Congress, they’ll say that the most vexing domestic issue we faced was a rapid and dramatic rise in gas prices at the pump. And, as is stands today, they’ll have to conclude that the Democratic Leaders ignored the problem by refusing to unlock the domestic energy resources that they put off limits back when gas and oil were cheap. And if these historians do their homework, they’ll note the irony in all this. They’ll note that these same Democrats were the ones who took the Majority less than two years ago promising to do something about gas prices that were a lot lower than they are today. . .
“Clearly, this is a serious problem for people. And we have an obligation to address it. But I’m afraid the Democrats who run the Senate just want it all to go away. They’ve been going to great lengths to make sure it goes away. They’re cancelling hearings where they’re afraid the issue might come up. And they’re muzzling their own members -- more than a dozen of whom favor a balanced solution that includes more domestic production and increased conservation. They’re telling them the same thing they’re telling the American people: ‘No, we can’t.’
“The problem we face, as everyone knows, is that the demand for oil is increasing faster than the supply. And the solution, as everyone knows, is to increase supply and lower demand. Yet this week, the Democrat Leadership in Congress is saying ‘No we can’t.’ They’re saying ‘No we can’t’ produce a single additional barrel of oil at home. Instead of increasing supply, they’re trying to distract us with the same blame game they roll out whenever the demands of some special interest group conflict with the will of the people.
"This time they’ve turned their attention on speculators. They say the reason gas prices have nearly doubled since the Democrats took over a year and a half ago is the speculators. Republicans have no problem strengthening regulation of the futures markets. But if Congress doesn’t allow any new exploration, it’s perfectly clear what the speculation about future prices will be — not good. The speculators are betting on scarcity. And the Majority is helping to prove them right. So here we are. . . "
And, it goes on and on.
Access the full statement from Senator Reid (click here). Access the full statement from Senator McConnell (click here). Access the Senate Republicans website for links to many releases, statements and videos on the debate (click here). Access the Senate Democrats website for links to information on the debate (click here). Access legislative details for S. 3268 which includes links to all Congressional actions and the floor statements (click here). [*Energy]
Wednesday, July 23, 2008
The down home, straight-forward Texas style and Pickens' fascinating mastery of global energy statistics and markets captivated the Republican and Democratic Committee members, and should be "must see viewing" for all energy advocates and managers. The other witnesses testifying at the hearing included representatives from: Institute for the Analysis of Global Security; Smart Growth America; and the Advanced Structures and Composites Laboratory, University of Maine.
According to Pickens, "America is in a hole and it's getting deeper every day. We import 70% of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war. I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil. On January 20, 2009, a new President gets sworn in. If we're organized, we can convince Congress to make major changes towards cleaner, cheaper and domestic energy resources."
The crux of the Pickens Plan is to ease energy pressures now, by constructing massive wind facilities, particularly in the Midwest plains states (Texas to North Dakota) and switching to Natural Gas Vehicles (NGV). He says it can be done in less than 10 years, will reduce imports by 38% and $300 billion per year, and will allow time -- 20-30 years -- for further developments of other energy sources. Pickens readily admits, that in addition to his plan, he's in favor of developing all "American" energy resources including the outer continental shelf, ANWR and "anything American." He said, "I only have one enemy -- that's foreign oil. By 2050 we have to be off of hydrocarbons. . . as our primary transportation fuel."
Pickens told the Committee, "And the price of oil will go up further. Over the next 10 years, you’re looking at exporting $10 trillion out of this country. It will be the greatest transfer of wealth from one country to other parts of the world in the history of mankind. It is a clear and growing threat to our national security, and our national economy. It has to be stopped. We are on the verge of losing our Super Power status. It’s time to quit the blame game, and look for solutions and leadership to solve the problem."
Pickens said the world produces 85 million barrels of oil a day, or more than 30 billion barrels of oil a year. He said he believes production has peaked, and the world’s current oil fields are declining at the rate of 8 percent a year. "The simple truth is we’re never going above 85 million barrels per day of oil production." The U.S. consumes 25 percent of the world’s oil, with only 4 percent of the world’s population. Pickens asks: "And what’s going to happen when you’re dealing with a supply plateau at 85 million barrels and increasing demand as the Chinese, Indians, and rest of the underdeveloped countries around the world continue to use more and more oil?"
The part of the Pickens Plan that Members found most interesting, even surprising, was his analysis of the natural gas markets. Pickens said, "We have approximately 80 years supply of natural gas available to us from sources in North America. Domestic natural gas reserves are twice that of petroleum. And new discoveries of natural gas and ongoing development of renewable biogas are continually adding to existing reserves., In fact, 98% of the natural gas consumed in the United States is produced in the US and Canada. On the economic side of natural gas, Pickens said, "One million cubic feet (MCF) of natural gas equals 8 gallons of gasoline. At $4 dollars a gallon for gasoline, that means an MCF of natural gas is worth $32 dollars. And natural gas is selling today around $12 dollars an MCF." He said, "I almost hate to tell you this but natural gas is cheap compared to other fuels."
He says, "If we take the natural gas we would be using for electrical generation to meet new demand and replacement of existing plants and move it to transportation, we can replace 38 percent of our foreign oil imports. And that, sports fans, is a real number." He indicates that using natural gas for transportation is not a new idea. While there are only 150,000 vehicles running on natural gas in the U.S., there are nearly 8 million automobiles worldwide and that number is growing rapidly. There are numerous manufacturers of natural gas vehicles for the world market, including Ford, Honda and General Motors. He said the technology is sound, proven and off-the-shelf. He said, "I know they [American auto companies] know how to make them. . . they're already doing it."
He says getting from here to there takes political will. "I know that we can do this because we’ve done it before. President Eisenhower led us to build an extraordinary interstate highway system. President Kennedy took us to the moon. And President Reagan led us to win the cold war." He said Congress needs to mandate that government transportation fleets be powered by natural gas vehicles. He said with that as a start, the automobile companies will respond and the private sector and local governments will follow with similar fleet conversions. He said individual consumers will simply have a choice among many options, i.e. gas, natural gas, bi-fuel, electric, hybrid, plug-in, etc. Pickens said the other major government action needed is to commit to a 10 year extension for the Production Tax Credit (PTC), which will cost of approximately $15 billion per year. But, he said compared to exporting $700 billion to foreign government for the price of oil, it a relatively modest investment.
The other benefit of his Plan is the rural economic development spin-off. Pickens says the investment in wind energy will stay in American and help poor rural economies by creating jobs.He said, "My company, Mesa Power, just put under contract with GE the largest single turbine order that has ever been given. The first phase of the Mesa Pampa Wind Project will be capable of generating 1,000 megawatts of electricity, enough for 300,000 average U.S. homes. When we complete the entire project, it will have the capacity to generate some 4000 megawatts and will have cost close to $10 billion. The project will provide 1,500 jobs and over $385 million in economic benefits to the community.
Access the hearing website for links to all testimony, opening statements and a webcast (click here). Access the NGVAmerica website for extensive information on natural gas vehicles (click here). Access the Pickens Plan website for complete information including videos and information on "pushing the plan" (click here). [*Energy]
Tuesday, July 22, 2008
Dorgan said, “The price of gas and oil continues to shoot up like a Roman candle. It has become abundantly clear that speculators, not the laws of supply and demand, are driving up prices. This legislation will cut out the rampant speculation that is happening in the oil futures market.” Klobuchar, noting that the price of gas has gone up $1 in just the past six months said, “The experts tell us that a good amount of the money we now pay at the pump is going into the bank accounts of financial speculators, when I was a prosecutor we had a saying: ‘Follow the money and you’ll find the bad guy.’ If we’re going to protect American consumers and businesses, we need to follow the money and stop the speculators.’’
On July 17, Senator Pete Domenici's (R-NM), Ranking Member of the Senate Energy and Natural Resources Committee, office issued a release saying that energy market experts disagree with Democrats about the market speculation issue. A number of experts cited in the Republican release indicated that generally high energy prices are not the result of speculation, but rather a factor of supply and demand. On July 21, Senate Minority Leader Mitch McConnell (R-KY) issued a release saying, "The Majority Leader has moved to a bill that only addresses the issue of speculation. But no serious person thinks passing this legislation alone will fix the problem. I don’t know of any reputable economists who think that simply addressing the futures market will significantly affect the price of gas. . . Strengthening regulation of the futures market is a worthwhile piece of any legislative effort, but let’s be clear from the outset: it’s just a piece -- and a small piece at that."
Sherri Cabrera, Director of Legislative Affairs for the Petroleum Marketers Association of America said, “Petroleum marketers want to be able to respond to the needs of their customers to provide affordable gas and diesel, and heating oil dealers desperately need to be able to provide affordable heating oil to their customers. Reducing speculation is something that can be done immediately. Other solutions are important, but long term. Petroleum marketers are focused on reducing prices now. If S. 3268 is not enacted, not only will the economy continue to suffer, but this extreme energy crisis could well cost human lives this winter. Gas station owners and heating fuel retailers are fighting to lower fuel prices by urging Senators to pass S. 3268. Consumers who want lower gas prices should also tell their Senators to pass S. 3268.”
McConnell said, ". . . gas prices will not go down unless supply goes up. . . They [Democrats generally] need to unlock the Outer Continental Shelf and lift their ban on the development of the vast oil shale deposits in western states. . . So far, a dozen Democrats have expressed some level of openness to new domestic exploration. We are approaching a bipartisan consensus on the need to increase domestic supply. But their leadership isn’t there. Their presidential nominee opposes every effort to increase supply. The Speaker of the House is walking in lock-step with Al Gore." On July 21, Senator Domenici said he would introduce an amendment to S. 3268 that would seek to lift the moratorium on deep sea exploration.
As the Senate began its debate on S. 3268, Senate Majority Leader Harry Reid (D-NV) turned the tables and said, "Democrats have made it clear that we support more domestic production. That is certainly part of the answer. But it’s only one part. . . He outlined the Democratic strategy in four parts saying, "First – we end the billions of dollars in tax breaks for big oil companies whose executives have been hauling record profits while we pay record prices. Second – we force the oil companies to do their part by investing some of their profits in clean and affordable alternative energy. Third – we protect the American people from price gougers and greedy oil traders who manipulate the market. And fourth – we stand up to OPEC and countries who are colluding together to keep oil prices sky-high."
Senator Reid said, "We have offered Republicans a chance to vote on not just speculation, but the issue they’ve talked about for weeks: allowing state governors to decide on offshore drilling. We have made it clear that we are willing to compromise and work together on energy legislation that both sides can live with. They can offer their drilling amendment, and we would offer our own alternative. Both measures would receive a vote. That is how the legislative process is supposed to work. This latest Republican obstruction tactic has left us with no choice but to file cloture to proceed to our speculation bill. . . By forcing us to file cloture, Republicans are wasting precious time when prompt action is desperately needed. Perhaps during these 30 hours we must now spend on cloture, Republicans will decide to vote on speculation and vote on drilling. The American people will certainly be waiting to see whether Republicans are willing to take yes for an answer – and legislate on the energy crisis."
Access a release from Senate Democrats (click here). Access a release from Senator McConnell (click here). Access the floor speech from Majority Leader Reid (click here). Access the Senate Republicans website for links to many releases, statements and videos on the debate (click here). Access the Senate Democrats website for links to information on the debate (click here). Access legislative details for S. 3268 which includes links to all Congressional actions and the floor statements (click here). [*Energy]
Monday, July 21, 2008
"For nearly eight years, the Bush-Cheney Administration has turned a blind eye to this increasingly excessive speculation, which has driven oil future prices to record levels and directly contributed to soaring prices of gasoline at the pump. In fact, the former head of the CFTC’s [Commodity Futures Trading Commission's] trade division said speculation has increased the price of oil by as much as 50 percent. That is why Democrats have introduced legislation to curb excessive speculation and increase transparency and accountability in the oil and gas markets. This bill will address the rising cost of gasoline in the short-term, prevent Wall Street traders from gaming the oil markets and ensure that American consumers are paying a fair price at the pump.”
On July 17, Senator Pete Domenici's (R-NM) office issued a rebuttal release saying that energy market experts disagree with Democrats about the market speculation issue. The Republican release quotes experts and agencies including: Warren Buffet, Chairman & CEO, Berkshire Hathaway; International Energy Agency; Ben Bernanke, Chairman of the Federal Reserve; Daniel Yergin, Chairman, Cambridge Energy Research Associates; John Chapman, Researcher at the American Enterprise Institute; Michael Haigh, senior commodity analyst at Societe Generale Corporate and Investment Banking; and Craig Pirrong, professor of finance at the University of Houston. The "experts" all indicate that generally high energy prices are not the result of speculation, but rather a factor of supply and demand.
Senator Domenici, ranking member of the Senate Energy and Natural Resources Committee, said he plans to offer an offshore production amendment to S.3268. Domenici said, “Although I’m perfectly willing to work with Democrats on speculation, it is clear to me -- and most economists -- that the real reason for the high price of oil is a global supply and demand imbalance. For that reason, I believe that any legislation considered by the Senate should seek to address supply and demand.
“While it is unclear at this point whether the Majority Leader will allow amendments to his bill, it is my intention to introduce an amendment that would seek to lift the moratorium on deep sea exploration. My amendment would allow states to opt into exploration if they choose, providing states with a substantial source of revenue and providing America with much needed domestic oil. Since the President has already lifted the Executive Moratorium on offshore exploration, Congress is the last remaining obstacle. I believe the American people want to see the Senate debate and vote on this issue, and as the floor manager for Republicans on this bill, I intend to do everything in my power to make it happen.”
Access a release from Senator Reid with a summary of the legislation (click here). Access the 7/17 release from Senator Domenici (click here). Access the 7/21 release from Domenici (click here). Access legislative details for S. 3268 (click here). [*Energy]
Friday, July 18, 2008
Markey said, "This is the dysfunctions and motivations of the Bush administration laid bare. The fact that they can, with near unanimity, completely switch positions on global warming to please the oil industry is shocking, and yet disappointingly predictable." The investigation by the Select Committee is based on an on-the-record interview with a former high-ranking EPA official, Jason Burnett, confidential discussions with other EPA staff, and review of EPA documents obtained in response to a Select Committee subpoena.
On July 11, when EPA released its Advance Notice of Proposed Rulemaking (ANPR) soliciting public input on the effects of climate change and the potential ramifications of the Clean Air Act in relation to greenhouse gas (GHG) emissions. Administrator Stephen Johnson said, "While EPA’s staff has done an outstanding job making a square peg fit into a round hole, I believe the ANPR demonstrates the Clean Air Act is ill-suited for the task of regulating global greenhouse gases. Based on the analyses to date, pursuing this course of action would take decades and inevitably result in a very complicated and likely, convoluted set of regulations. If our nation is truly serious about regulating greenhouse gases, the Clean Air Act is the wrong tool for the job" [See WIMS 7/11/08].
According to a summary of the investigation included in Markey's release, highlighting some key points:
- President Bush’s Deputy Chief of Staff Joel Kaplan and numerous heads of cabinet agencies -- including Energy Secretary Samuel Bodman, Office of Management and Budget’s Susan E. Dudley, and White House Council on Environmental Quality Chairman James L. Connaughton, among others -- and White House offices endorsed EPA’s finding that greenhouse gas emissions endanger public welfare, and EPA’s proposals that greenhouse gas emissions from both vehicles and stationary sources including power plants and refineries should be regulated under the Clean Air Act.
- White House Deputy Chief of Staff Kaplan personally approved EPA’s plan to go forward with a positive endangerment finding, which would necessitate the regulation of greenhouse gas regulations for motor vehicles and fuels, as well as trigger regulation of stationary source emissions under the Clean Air Act.
- While electric utility representatives, including the Edison Electric Institute (which represents the nation’s major investor-owned utilities), agreed that it would be best for EPA to proceed with regulation of both vehicles and stationary sources using Clean Air Act authority, oil industry representatives from ExxonMobil, the American Petroleum Institute, and the National Petrochemicals and Refiners Association, adopted a "not on my watch" approach – arguing that such regulations would tarnish President Bush’s conservative anti-regulatory legacy, and should be delayed until the next President took office.
- Doing the oil industry’s bidding, the Bush administration reversed course on regulating heat-trapping emissions – opting to do nothing and leave it to the next president to respond to the serious environmental threat of global warming. This decision was made at the very highest level within the White House. The winning argument against regulatory action had the support of the Office of Vice President Cheney, including Vice President Cheney’s energy adviser, F. Chase Hutto III.
- Most of the cabinet secretaries and heads of White House offices who recently wrote letters opposing use of the Clean Air Act to regulate global warming emissions – which were appended to the release of EPA’s July 11, 2008 "Advance Notice of Proposed Regulation" – had previously supported regulation of both vehicles and stationary sources under the act.
Additionally, Representative Henry Waxman (D-CA), Chairman of the House Committee on Oversight and Government Reform is still deciding how to proceed on his investigation of White House interference, since the President asserted executive privilege over thousands of pages of documents that Waxman says would show whether the President and his staff complied with the Clean Air Act (CAA) in overruling EPA Administrator Stephen Johnson on important environmental decisions [See WIMS 6/20/08].
Access a release from Representative Markey (click here). Access the full 35-page investigative report (click here). Access the 64-page transcript of the interview with Jason Burnett (click here). [*Climate]
Thursday, July 17, 2008
Gore says, "Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. The quickest, cheapest and best way to start using all this renewable energy is in the production of electricity. In fact, we can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses."
By way of background, Gore points out, "We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that's got to change." Gore says, "A few years ago, it would not have been possible to issue such a challenge. But here's what's changed: the sharp cost reductions now beginning to take place in solar, wind, and geothermal power - coupled with the recent dramatic price increases for oil and coal -- have radically changed the economics of energy."
"To those who say the costs are still too high: I ask them to consider whether the costs of oil and coal will ever stop increasing if we keep relying on quickly depleting energy sources to feed a rapidly growing demand all around the world. When demand for oil and coal increases, their price goes up. When demand for solar cells increases, the price often comes down. When we send money to foreign countries to buy nearly 70 percent of the oil we use every day, they build new skyscrapers and we lose jobs. When we spend that money building solar arrays and windmills, we build competitive industries and gain jobs here at home."
Gore indicated that, ". . .a political promise to do something 40 years from now is universally ignored because everyone knows that it's meaningless. Ten years is about the maximum time that we as a nation can hold a steady aim and hit our target." He said, ". . .the greatest obstacle to meeting the challenge of 100 percent renewable electricity in 10 years may be the deep dysfunction of our politics and our self-governing system as it exists today. In recent years, our politics has tended toward incremental proposals made up of small policies designed to avoid offending special interests, alternating with occasional baby steps in the right direction. Our democracy has become sclerotic at a time when these crises require boldness. It is only a truly dysfunctional system that would buy into the perverse logic that the short-term answer to high gasoline prices is drilling for more oil ten years from now."
Gore concluded saying, "I watched along with hundreds of millions of others around the world as Neil Armstrong took one small step to the surface of the moon and changed the history of the human race. We must now lift our nation to reach another goal that will change history. Our entire civilization depends upon us now embarking on a new journey of exploration and discovery. Our success depends on our willingness as a people to undertake this journey and to complete it within 10 years. Once again, we have an opportunity to take a giant leap for humankind."
Access the complete Gore speech (click here). Access an annotated analysis on the New York Times website (click here). Access links to various media reports (click here). Access Al Gore's We Can Solve It website for more information (click here). [*Energy, *Climate]
Wednesday, July 16, 2008
According to the document, which has already been circulated to millions via its posting on the Internet, "This document provides technical support for the endangerment analysis concerning greenhouse gas (GHG) emissions that may be addressed under the Clean Air Act. The primary GHGs of concern directly emitted by human activities include carbon dioxide CO2, methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6)."
According to the report, "The current (year 2005) CO2 concentration is 379 parts per million (ppm) and has recently been increasing by about 1.9 ppm per year. Current ambient concentrations of CO2 and other GHGs remain well below published thresholds for any direct adverse health effects, such as respiratory or toxic effects. . .
"Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level. Global mean surface temperatures have risen by 0.74°C (1.3ºF) over the last 100 years. The rate of warming over the last 50 years is almost double that over the last 100 years. . .
"Most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic GHG concentrations. Climate model simulations suggest natural forcings alone (e.g., changes in solar irradiance) cannot explain the observed warming. Likewise, North America’s observed temperatures over the last century can only be reproduced using model simulations containing both natural and anthropogenic forcings. . .
"Observational evidence from all continents and most oceans shows that many natural systems are being affected by regional climate changes, particularly temperature increases. Observations show that climate change is currently impacting the nation’s ecosystems and services in significant ways. . .
"The range of projected ambient concentrations of CO2 and other GHGs will remain well below published thresholds for any direct adverse health effects, such as respiratory or toxic effects. . . "All of the U.S. is very likely to warm during this century, and most areas of the U.S. are expected to warm by more than the global average. The average warming in the U.S. is projected to exceed 2°C (3.6°F) by the end of the century, with 5 out of 21 models from IPCC projecting average warming in excess of 4°C (7.2°F). . . By the end of the century, sea level is projected to rise between 0.18 and 0.59 meters relative to around 1990. . . "
The report indicates that the Global and U.S. Impacts Associated with Future Climate Change include:
- Risk increases with increases in both the rate and magnitude of climate change. Climate warming may increase the possibility of large, abrupt, and unwelcome regional or global climatic events (e.g., disintegration of the Greenland Ice Sheet or collapse of the West Antarctic Ice Sheet). . .
- Severe heat waves are projected to intensify in magnitude and duration over the portions of the U.S. where these events already occur. . .
- The IPCC projects with virtual certainty declining air quality in U.S. and other world cities due to warmer and fewer cold days and nights and/or warmer/more frequent hot days and nights over most land areas. . .
- Moderate climate change in the early decades of the century is projected to increase aggregate yields of rainfed agriculture by 5-20% in the U.S., but with important variability among regions. . .
- Disturbances like wildfire and insect outbreaks are increasing and are likely to intensify in a warmer future with drier soils and longer growing seasons. . .
- Coastal communities and habitats will be increasingly stressed by climate change impacts interacting with development and pollution. . .
- Climate change will constrain over-allocated water resources in the U.S., increasing competition among agricultural, municipal, industrial, and ecological uses. . .
- Climate change is likely to affect both U.S. energy use and energy production; physical infrastructures; institutional infrastructures. . .
- Disturbances such as wildfire and insect outbreaks are increasing in the U.S. and are likely to intensify in a warmer future with drier soils and longer growing seasons.
- Climate change impacts in certain regions of the world may exacerbate problems that raise humanitarian and national security issues for the U.S.
Section 8 of the report describes how climate change may increase exposure to concentrations of ozone and, in some cases, PM with associated impacts on public health and welfare in the U.S. The report indicates, "Assuming constant population and dose-response characteristics, ozone related deaths from climate change in the U.S. are projected to increase by approximately 4.5% from the 1990s to the 2050s (under the IPCC A2 scenario) (Field et al., 2007; Bell et al., 2007; Knowlton et al., 2004). According to the IPCC (Field et al., 2007), the 'large potential population exposed to outdoor air pollution, translates this small relative risk into a substantial attributable health risk.' In New York City, health impacts could be further exacerbated by climate change interacting with urban heat island effects (Field et al., 2007). . ."
Access the Endangerment document (click here). Access the EPA Docket with links to the many other background materials (click here). Access EPA's website on the ANPR with additional information (click here). [*Climate]
Tuesday, July 15, 2008
EPA's proposed regulation creates a consistent, national framework for the injection of carbon dioxide underground and protection of underground drinking water resources. The rule would create a new class of injection wells under the authority of the Safe Drinking Water Act's Underground Injection Control (UIC) program. The proposed rule builds on the existing UIC program, including extensive requirements to ensure wells are appropriately located, constructed, tested, monitored, and ultimately, closed with proper funding. It would apply to owners and operators of wells that will be used to inject carbon dioxide into the subsurface for the purpose of long-term storage.
Carbon capture and storage (CCS) is part of a portfolio of technologies available to reduce greenhouse gas emissions. EPA is coordinating with the Department of Energy on carbon sequestration research and development. EPA is requesting public comments on the proposed rule for 120 days following publication in the Federal Register.
EPA indicates that while the elements of the proposal are based on the existing regulatory framework of EPA’s Underground Injection Control (UIC) Program, modifications address the unique nature of CO2 injection for GS. The relative buoyancy of CO2, its corrosivity in the presence of water, the potential presence of impurities in captured CO2, its mobility within subsurface formations, and large injection volumes anticipated at full scale deployment warrant specific requirements tailored to this new practice.
CO2 is captured from flue gas produced by fossil-fueled power plants or industrial facilities, typically compressed to convert it from a gaseous state to a supercritical fluid, and transported to the sequestration site, usually by pipeline. The CO2 is then injected into deep subsurface rock formations through one or more wells, using technologies that have been developed and refined over the past several decades. To store the CO2 as a supercritical fluid, it would likely be injected at depths greater than approximately 800 meters (2,625 feet), where the pressure and temperature below the earth’s surface are sufficient to keep the CO2 in a supercritical state.
When injected in an appropriate receiving formation, CO2 is sequestered by a combination of physical and geochemical trapping processes. Physical trapping occurs when the relatively buoyant CO2 rises in the formation until it reaches a low-permeability layer that inhibits further upward migration, or when residual CO2 is immobilized in formation pore spaces. Geochemical trapping occurs when chemical reactions between the dissolved CO2 and minerals in the formation lead to the precipitation of solid carbonate minerals. Similarly, naturally-occurring CO2 deposits have been physically and geochemically trapped in geologic formations for millions of years.
The United States has abundant CO2 storage potential in onshore and offshore deep saline formations, depleted oil and gas fields, and deep, unmineable coal seams. These formations are present across the country and 95 percent of the largest stationary sources in the nation that emit CO2 are within 50 miles of a candidate CO2 storage reservoir.
On July 10, the House Energy & Commerce Committee, Energy and Air Quality Subcommittee, held a hearing on H.R. 6258, the Carbon Capture and Storage Early Deployment Act, that was introduced by Subcommittee Chairman Rick Boucher (D-VA) on June 12 [See WIMS 6/12/08]. The bipartisan legislation would advance the development and deployment of carbon capture and storage (CCS) technologies [See WIMS 7/10/08]. The bill, which has strong, bipartisan support, is designed to accelerate the time CCS becomes generally available by creating a Carbon Storage Research Corporation and a $1 billion annual fund to be distributed by the Corporation in the form of grants and contracts to governmental, academic and private entities for projects with the purpose of accelerating the commercial availability of CCS technologies.
Access a release from EPA with links to an audio file of the announcement (click here). Access a prepublication copy of the proposed rule (click here). Access a fact sheet on the proposal (click here). Access EPA website on Geologic Sequestration of Carbon Dioxide for extensive information (click here). Access the H.R. 6258 hearing website for a webcast and links to all testimony (click here). Access legislative details for H.R. 6258 (click here). [*Energy, *Climate]
Monday, July 14, 2008
By way of background the Court explains that like the NOx SIP Call, the Clean Air Interstate Rule -- Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOx SIP Call, 70 Fed. Reg.25,162 (May 12, 2005) (CIR”) -- is the rule at issue in these consolidated petitions for review. At issue in much of this litigation is the definition of the term “contribute significantly.” In other words, in order to promulgate CAIR, EPA had to determine what amount of emissions constitutes a “significant contribution” to another state’s nonattainment problem.
Recognizing that its actions will result in significant disruption of EPA Clean Air Act activities, the D.C. Circuit said, ". . . the threat of disruptive consequences cannot save a rule when its fundamental flaws 'foreclose EPA from promulgating the same standards on remand,' [citing Natural Res. Def. Council v. EPA, 489 F.3d 1250, 1261–62 (D.C. Cir. 2007).]
" We must vacate CAIR because very little will “survive[ ] remand in anything approaching recognizable form.” Id. at 1261. EPA’s approach -- regionwide caps with no state-specific quantitative contribution determinations or emissions requirements -- is fundamentally flawed. Moreover, EPA must redo its analysis from the ground up. It must consider anew which states are included in CAIR, after giving some significance to the phrase 'interfere with maintenance' in section 110(a)(2)(D), 42 U.S.C. § 7410(a)(2)(D). It must decide what date, whether 2015 or earlier, is as expeditious as practicable for states to eliminate their significant contributions to downwind nonattainment. The trading program is unlawful, because it does not connect states’ emissions reductions to any measure of their own significant contributions. To the contrary, it relates their SO2 reductions simply to their Title IV allowances, tampering unlawfully with the Title IV trading program. The SO2 regionwide caps are entirely arbitrary, since EPA based them on irrelevant factors like the existence of the Title IV program. The allocation of state budgets from the NOx caps is similarly arbitrary because EPA distributed allowances simply in the interest of fairness. It is possible that after rebuilding, a somewhat similar CAIR may emerge; after all, EPA already promulgated the apparently similar NOx SIP Call eight years ago. But as we have explained, the similarities with the NOx SIP Call are only superficial, and CAIR’s flaws are deep. No amount of tinkering with the rule or revising of the explanations will transform CAIR, as written, into an acceptable rule. Of course the Federal Implementation Plan EPA imposed is intimately connected to CAIR, and we vacate the FIP as well."
The Appeals Court notes that, ". . .in the absence of CAIR, the NOx SIP Call trading program will continue, because EPA terminated the program only as part of the CAIR rulemaking. CAIR, 70 Fed. Reg. at 25,317 (codified at 40 C.F.R. § 51.121(r)). The continuation of the NOx SIP Call should mitigate any disruption that might result from our vacating CAIR at least with regard to NOx. In addition, downwind states retain their statutory right to petition for immediate relief from unlawful interstate pollution under section 126, 42 U.S.C. § 7426."
In its summary of the decision, the Appeals Court indicates, "To summarize, we grant the petitions of Entergy, SO2 Petitioners, and Minnesota Power. We grant North Carolina’s petition with respect to the 'interfere with maintenance' language, CAIR’s 2015 compliance date, and the unrestricted trading of allowances; we deny it with respect to EPA’s definition of 'will' in 'will contribute significantly,' and the PM2.5 contribution threshold. We deny the petitions of the Florida and Texas petitioners, and the Florida Association of Electric Utilities. Accordingly, we vacate CAIR and its associated FIP and remand both to the EPA."
In a release from Environmental Defense Fund (EDF) summarizing the ruling they said, “The government should take immediate corrective action to protect the millions of Americans hard hit by power plant pollution. Power plants must do their part to cut the smog that blankets our cities, the mercury that threatens our children’s development and the greenhouse gases that are recklessly warming the planet. Cost-effective solutions are at hand to protect human health and the environment from power plant pollution while ensuring the steady flow of affordable electricity. . .
"The court agreed with North Carolina that EPA must consider faster reductions that better reflect states’ obligations to restore healthy air and making pollution cuts that help prevent states from backsliding into non-compliance with health-based standards. The court also agreed with North Carolina that EPA must tailor pollution cuts in upwind states with the level of impacts wrought on downwind jurisdictions. The court also agreed with industry litigants that EPA erred in relying on or otherwise interfering with the allowance trading system established to address acid rain while affirming EPA’s broad remedial powers to require interstate air pollution abatement to protect human health. The court agreed with gas-based utilities that EPA unfairly credited coal-based utilities in designing the program. Finally, the court rejected utility claims seeking to exclude Florida and West Texas from the program."
Access the complete 60-page opinion (click here). Access a release from EDF (click here). [*Air]