House Hearing Indicates Chevy Volt Has No Defects

Jan 25: The House Ovesight & Government Reform Committee, Chaired by Representative Darrell Issa (R-CA), Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending, Chaired by Representative Jim Jordan (R-OH), held a hearing entitled, "Volt Vehicle Fire: What Did NHTSA Know and When Did They Know It?" Witnesses included: David L. Strickland, Administrator National Highway Traffic Safety Administration (NHTSA); Daniel Akerson, Chairman and CEO General Motors; and John German, Senior Fellow and Program Director for the International Council on Clean Transportation.

 

    A Republican committee staff report indicates, "The delayed public notification of serious safety concerns relating to the Chevy Volt raises significant concerns regarding the unnatural relationship between General Motors (GM), Chrysler and the Obama Administration. Rather than allowing GM and Chrysler to enter into a traditional bankruptcy process, the Obama Administration intervened and forced the companies to participate in a politically orchestrated process. The result was that GM and Chrysler emerged as quasi-private entities, partially owned by the United States government.

 

    "President Obama has used this unusual blurring of public and private sector boundaries to openly tout the results of this partnership as a top accomplishment of his Administration -- creating a dynamic where the President is politically reliant on the success of GM and Chrysler. Moreover, in the case of GM, the Administration has offered substantial taxpayer funded subsidies to encourage production of the Volt, such as $151.4 million in stimulus funds for a Michigan-based company that produces lithium-ion polymer battery cells for the Volt as well as $105 million directly to GM. It has also extended a significant subsidy to encourage consumers to purchase the vehicle, offering buyers of the Volt a federal tax credit of up to $7,500 per vehicle.

 

    "In the face of that political dependency, it is deeply troubling that public notification of the safety concerns related to the Volt was inexplicably delayed for six months – a period of time that also coincides with the negotiation over the 2017-2025 fuel economy standards. The necessity of a full explanation for NHTSA's silence concerning the Volt's safety risk has been compounded by its lack of cooperation with the Committee."

 

    NHTSA testified, ". . .we have concluded the agency's investigation and have found no discernible defect trend. The vehicle modifications recently developed by GM effectively address the issue of battery intrusion and they have included this modification as they manufacture new vehicles going forward. NHTSA continues to believe that electric vehicles show great promise as a safe and fuel-efficient option for American drivers."

 

    GM's Akerson testified, "We engineered the Volt to be among the safest vehicles on the road – earning an overall NHTSA 5 Stars for occupant safety and a Top Safety Pick from the Insurance Institute for Highway Safety. We engineered the Volt to be a technological wonder. . . In other words, we engineered the Volt to be the only current EV on the road that you can drive across town or across the country without fear of being stranded when the battery power is depleted. . .

 

    ". . .the Volt's entry into the market came soon after GM's emergence from its government rescue and restructuring -- and during this political season. As such, the Volt seems, perhaps unfairly, to have become a surrogate for some to offer broader

commentary on General Motors' business prospects and Administration policy." Following some concerns raised by NHTSA, Akerson said, "GM volunteered to conduct a Customer Satisfaction Program and implement structural and cooling system enhancements to further protect the Volt battery from the possibility of an electrical fire occurring days or weeks after a severe side crash. . .

 

    "It's also important that we reaffirm our commitment to the Volt's battery technology, and the actions we are taking have nothing to do with the battery pack itself. None of these changes will touch the battery cell or pack. As a result, we will not change any part of the manufacturing process at our Brownstown, Michigan, battery pack assembly plant. We have tested the Volt's battery system for more than 285,000 hours, or 25 years, of operation. It's important to note, the battery cell design used in the Volt was not the cause of the incidents that prompted the investigation. . .

 

    "Since news of the investigation broke, a couple of hundred out of our nearly eight thousand owners have requested either a loaner vehicle or a potential buy back. And that's no surprise as 93% of Volt owners in a recent Consumer Reports survey report

the highest customer satisfaction with their vehicles -- more than any other vehicle and the highest ever recorded by this respected third party. . . We have treated this process with NHTSA with the highest level of urgency and seriousness from day one. For its part, NHTSA has certainly been very thorough in this process and we have responded accordingly. In closing, the Volt is safe. It's a marvelous machine. It represents so much of what is right at GM and, frankly, American ingenuity and manufacturing."

 

    Representative Dennis Kucinich (D-OH), the Ranking Member on the Subcommittee said, "If I thought there was any kind of a cover-up in efforts by GM or NHTSA to protect consumer safety, I would not tolerate it. Today, I saw no such evidence. Based on what we know so far, NHTSA's New Car Assessment Program appeared to do just what it is supposed to do: catch potential safety concerns with new cars before they become a risk to consumers. And General Motors appeared to do exactly what we would hope it would do….So far, we have seen no evidence to support the implication that NHTSA has allowed politics to guide its decision-making."

 

    Rep. Kucinich said further, "A very detailed, one-hundred-and-thirty-five page final report by the National Highway Traffic Safety Administration on its investigation into the Volt Battery Fire Incident … provides detailed answers to the question this hearing seems to ask. Considering that in the last few months there have been efforts by the majority to defund programs that support the development of technologies for electric and alternative fuel vehicles, and other proposals to take away tax incentives for purchasing electric cars, I am concerned that an effect of this hearing could be to undermine technology that is critical to both protecting the environment and ensuring the success of the U.S. auto manufacturing industry, as well as U.S. economic competitiveness generally. The Chevy Volt has helped to propel the resurgence of GM, and the jobs that come with it. Technologies developed for the Volt have been adopted on other vehicles to increase their efficiency, desirability and marketability."

 

    Access the Republican hearing website for links to the testimony, staff report and video (click here). Access a release from Rep. Kucinich (click here). [#Transport/Electric, #MITransport/Electric]

 

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SOTU Calls For "All-Of-The-Above Strategy" For American Energy

Jan 25: President Obama delivered his State of the Union address and covered a wide-ranging agenda of topics including, of particular importance to the WIMS readers, Washington, DC gridlock, energy, infrastructure and regulatory reform.

 

    On the subject of Washington gridlock, the President emphasized the problems with the 60-vote filibuster and cloture rule in the Senate and destructive DC politics and rhetoric. He reminded that, "A simple majority is no longer enough to get anything -– even routine business –- passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a simple rule that all judicial and public service nominations receive a simple up or down vote within 90 days." He said,  I bet most Americans are thinking the same thing right about now:  Nothing will get done in Washington this year, or next year, or maybe even the year after that, because Washington is broken. Can you blame them for feeling a little cynical?" He called for lowering "the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common-sense ideas. 

 

    He said, "I'm a Democrat.  But I believe what Republican Abraham Lincoln believed:  That government should do for people only what they cannot do better by themselves, and no more. . . when we act together, there's nothing the United States of America can't achieve. That's the lesson we've learned from our actions abroad over the last few years." And, he concluded the speech reemphasizing the need for politicians to work together saying, "No one built this country on their own.  This nation is great because we built it together.  This nation is great because we worked as a team.  This nation is great because we get each other's backs.  And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard.  As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.

 

    The President spent a good deal of time talking about energy and one of the biggest applause lines of the night came when he called for an "all-of-the-above strategy" for American energy. The President said:

". . .nowhere is the promise of innovation greater than in American-made energy.  Over the last three years, we've opened millions of new acres for oil and gas exploration, and tonight, I'm directing my administration to open more than 75 percent of our potential offshore oil and gas resources.  (Applause.)  Right now -- right now -- American oil production is the highest that it's been in eight years.  That's right -- eight years.  Not only that -- last year, we relied less on foreign oil than in any of the past 16 years. 

 

"But with only 2 percent of the world's oil reserves, oil isn't enough.  This country needs an all-out, all-of-the-above strategy that develops every available source of American energy. A strategy that's cleaner, cheaper, and full of new jobs.

 

"We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy.  Experts believe this will support more than 600,000 jobs by the end of the decade.  And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. Because America will develop this resource without putting the health and safety of our citizens at risk.

 

"The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy.  (Applause.)  And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock –- reminding us that government support is critical in helping businesses get new energy ideas off the ground.    

 

"Now, what's true for natural gas is just as true for clean energy.  In three years, our partnership with the private sector has already positioned America to be the world's leading manufacturer of high-tech batteries.  Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.

 

"When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance.  But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts.  Today, it's hiring workers like Bryan, who said, "I'm proud to be working in the industry of the future."

 

"Our experience with shale gas, our experience with natural gas, shows us that the payoffs on these public investments don't always come right away.  Some technologies don't pan out; some companies fail.  But I will not walk away from the promise of clean energy.  I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. 

 

"We've subsidized oil companies for a century.  That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising.  Pass clean energy tax credits.  Create these jobs.

 

"We can also spur energy innovation with new incentives.  The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change.  But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation.  So far, you haven't acted.  Well, tonight, I will.  I'm directing my administration to allow the development of clean energy on enough public land to power 3 million homes.  And I'm proud to announce that the Department of Defense, working with us, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.

 

"Of course, the easiest way to save money is to waste less energy.  So here's a proposal:  Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings.  Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them.  Send me a bill that creates these jobs."

    The President also said that the focus on energy should be just one part of a broader agenda to repair America's infrastructure. He said:

"We've got crumbling roads and bridges; a power grid that wastes too much energy; an incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

"During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge.  After World War II, we connected our states with a system of highways.  Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

"In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects.  But you need to fund these projects.  Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."

    The President also reemphasized the need for regulatory reform, but cautioned about going too far and being selective in the reforms. He said:

"There's no question that some regulations are outdated, unnecessary, or too costly.  In fact, I've approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.  I've ordered every federal agency to eliminate rules that don't make sense.  We've already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.  We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill -- because milk was somehow classified as an oil.  With a rule like that, I guess it was worth crying over spilled milk. 

"Now, I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. Absolutely.  But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago.  I will not back down from protecting our kids from mercury poisoning, or making sure that our food is safe and our water is clean.  I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny your coverage, or charge women differently than men."

    Access the full text of the President's SOTU address (click here). Access the video of the SOTU (click here). Access links to more White House information on the SOTU including ways to participate and schedule of events (click here). Access the Blueprint for the Future (click here).[#All]

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Reactions To The President's State Of The Union Address - Jan 24: WIMS has assembled some representative excerpts of reactions to the President's State of the Union message. In addition the White House released a composite of a number of responses from many governors, mayors, business representatives, and labor organizations (See link below).

 

    Gov. Mitch Daniels of Indiana Republican Address to the Nation: "The President did not cause the economic and fiscal crises that continue in America tonight.  But he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse: the percentage of Americans with a job is at the lowest in decades.  One in five men of prime working age, and nearly half of all persons under 30, did not go to work today. . .So 2012 is a year of true opportunity, maybe our last, to restore an America of hope and upward mobility, and greater equality.  The challenges aren't matters of ideology, or party preference; the problems are simply mathematical, and the answers are purely practical. An opposition that would earn its way back to leadership must offer not just criticism of failures that anyone can see, but a positive and credible plan to make life better, particularly for those aspiring to make a better life for themselves. Republicans accept this duty, gratefully. . .

 

    "It's absolutely so that everyone should contribute to our national recovery, including of course the most affluent among us.  There are smart ways and dumb ways to do this: the dumb way is to raise rates in a broken, grossly complex tax system, choking off growth without bringing in the revenues we need to meet our debts.  The better course is to stop sending the wealthy benefits they do not need, and stop providing them so many tax preferences that distort our economy and do little or nothing to foster growth. . . As a loyal opposition, who put patriotism and national success ahead of party or ideology or any self-interest, we say that anyone who will join us in the cause of growth and solvency is our ally, and our friend.  We will speak the language of unity.  Let us rebuild our finances, and the safety net, and reopen the door to the stairway upward; any other disagreements we may have can wait. . ."

    Eileen Claussen, President, Center for Climate and Energy Solutions: "We share President Obama's enthusiasm for homegrown solutions to America's energy challenges. Without question, America has the resources and know-how to produce more energy at home, strengthening both our economy and our national security. But protecting the climate also has to be part of the equation. If we sensitively develop domestic reserves, get serious about ramping up new energy sources, and push efficiency across the board, we can both meet America's energy needs and dramatically shrink our carbon footprint. Even if comprehensive legislation remains off the table for now, we can make important progress tackling these challenges piece by piece. C2ES is working with policymakers and stakeholders on ways to expand enhanced oil recovery using captured carbon dioxide – an approach that can boost domestic oil production while reducing greenhouse gas emissions. Similarly, we're working with automakers, environmentalists and others on a plan for integrating plug-in electric vehicles into the U.S. electrical grid. We look forward to sharing the results of these and other C2ES initiatives aimed at practical solutions to our twin climate and energy challenges."

    Kierán Suckling, Executive Director of the Center for Biological Diversity: "Rather than calling for bold action to combat climate change, Obama intends to deepen America's dependence on fossil fuels which will increase dangerous greenhouse gas emissions. Expanding offshore oil drilling raises the risk of disastrous spills, puts wildlife in harm's way and solidifies U.S. dependence on the fossil fuels that are driving the global climate crisis."

    Sierra Club Executive Director Michael Brune: Tonight President Obama laid out a blueprint for a nation built to last, highlighting important priorities to give hardworking Americans a fair shake, create good jobs for American workers and restore America's role as a global leader in manufacturing and innovation. There is no better way to achieve those goals than with a clean energy economy. We are especially encouraged by the President's commitment to doubling down on clean energy sources like wind and solar and creating incentives for clean energy growth and job creation. . . But we can't wait much longer for the clean energy revolution.  Each day, corporate polluters put our children's health and our nation's future at risk, polluting the air we breathe and the water we drink with toxic chemicals."

    Frances Beinecke, president of the Natural Resources Defense Council: "Home-grown sources of energy certainly are preferable to imports, especially from unstable regions of the world. But as the president noted, feeding our addiction to fossil fuels is not the long-term solution; we need to embrace renewable sources of energy with even greater fervor as well as energy efficiency. That's the path to a healthier, cleaner and more prosperous world. We all want American energy independence. But let's do it right."

    T. Boone Pickens, Chair BP Capital Management: "I agree we should use every available American resource. I applaud President Obama for highlighting natural gas and for calling on Congress to better promote its use. The expanded use of natural gas in America — in power generation and transportation — has enormous bipartisan support in the Congress and in the states. It is time to move from vague generalities to specifics on how we make this transition happen. I am confident that President Obama, as well as all the candidates for President, will lay out detailed plans on how they intend to achieve it. . . America does not have a natural gas production problem — we are awash in natural gas. What we have is a demand problem and unless we bring both sides of the equation in balance, we will see this cleaner, cheaper, abundant, domestic resource exported in greater and greater quantities."

     Cal Dooley, President and CEO of the American Chemistry Council: "ACC welcomes the President's focus on energy and manufacturing—key to any blueprint for a stronger economy. Our member companies and their more than 780,000 employees are part of the answer, creating solutions that will enable a strong, secure and sustainable future. . . Natural gas from shale is a prime example of the 'homegrown energy' the President wants America to use. It's a game changer for the chemistry industry and other manufacturers, who can use more affordable and stable supplies to expand exports and create jobs. . . we need effective, fiscally responsible policies and balanced, rational regulations that will allow the nation to capitalize on our significant domestic energy sources while also protecting our environment."

    National Association of Manufacturers (NAM) President and CEO Jay Timmons: "Tonight the President focused on the need to create jobs, shore up our energy security through increased domestic production and revive manufacturing in America. Yet his decision last week to reject the Keystone XL killed the promise of nearly 20,000 manufacturing and construction jobs along with the 118,000 indirect jobs that would ripple across our economy. . . The Obama Administration must take action to put an end to the rampant overregulation and overreach by the National Labor Relations Board and the Environmental Protection Agency. . . As consumers of one-third of our nation's energy supply, manufacturers embrace a true 'all-of-the-above' energy policy – not one subject to the political winds."

    U.S. Chamber of Commerce President and CEO Thomas J. Donohue: "Tonight the president addressed a number of subjects important to the economy and our nation. Unfortunately, too many of the solutions he proposed rest on higher taxes, more spending, and an avalanche of new regulations. The way to create the jobs Americans need is to grow our free enterprise economy, not to further expand the federal government. "The Chamber stands ready to work with the administration and both parties in Congress to create American jobs without raising taxes or adding to the deficit. Stronger growth is fundamental to creating more opportunity, a more inclusive economy, and a better quality of life for all Americans. "All participants in this discussion should concentrate on uniting Americans around a common plan, not dividing them for political purposes."

    House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA): The President tonight outlined a laundry list of popular programs without regard to what they cost and his own record in office. He has failed to deliver on economic growth promises, has squandered $800 billion in stimulus funds, and vetoed jobs and affordable domestic energy bills passed by Congress. What is clear is that he is pursuing a partisan class-warfare agenda aimed at dividing the American people. . ."

    House Energy and Commerce Committee Chairman Fred Upton (R-MI):"President Obama talked of a future where we're in control of our own energy, but time and again, he has blocked our ability to develop our vast energy resources and partner with North American allies to lessen our dependence on hostile regions of the world. The President said we need an all-out, all-of-the-above strategy that develops every available source of American energy, but his government's policies are keeping supplies locked away and squeezing our power sector, making energy less reliable and less affordable for working families and businesses struggling to grow. He said a lot about energy at a time when the American people recognize the jobs and security that come with energy development, but he stayed silent on two of the most significant energy issues facing our nation today: the Keystone XL pipeline he rejected and the failed government gamble on Solyndra. The silence speaks volumes about contrasting policy visions. . ."

 

    U.S. Senate Republican Leader Mitch McConnell (R-KY): "Tonight, the President delivered a campaign speech designed to please his liberal base. The President told the American people that he has a blueprint for the economy, but what he failed to mention is that we've been working off the President's blueprint for three years. And what's it gotten us: millions still looking for work, trillions in debt, and the first credit downgrade in U.S. history. The President also proposed some ideas tonight that could have bipartisan support. If he's serious about those proposals -- if he really wants to enact them -- he'll encourage the Democrats who run the Senate to keep them free from poison pills like tax hikes on job creators that we know from past experience turn bipartisan support into bipartisan opposition. The President can decide he's not interested in working with Congress if his party only controls one half of it. That's his prerogative. He can give up on bipartisanship. But we won't. Our problems are too urgent. The economy is too weak. The future is too uncertain."

    Senator James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works: "President Obama has clearly received the message that his global warming agenda is gone, dead, done with the American people -- that's why he was touting oil and natural gas so much in his State of the Union address tonight. . . But while he talks the talk, he is clearly still determined to achieve his global warming agenda by shutting down oil, gas and coal development so that energy prices will, as he said himself, 'necessarily skyrocket'. . . He took credit for increased natural gas production, but this is the same President who said that we have to develop natural gas in a way that won't 'poison people' and has an administration that is waging a regulatory assault on hydraulic fracturing – the primary method of shale gas extraction – even though under state regulation, there has not been one confirmed case of water contamination from fracked formations. . ."

 

    Senator Barbara Boxer (D-CA), Chairman of the Environment and Public Works Committee: "The President's eloquent optimism stands in marked contrast to the angry tone Americans have been hearing on the campaign trail from his opponents. I welcome his call to action for us to work together to strengthen the middle class, create clean energy jobs, help responsible homeowners stay in their homes, protect the environment from toxins such as mercury and rebuild America's infrastructure. I will do everything I can to bridge the partisan divide and we can start right away by passing a bipartisan surface transportation bill that saves or creates millions of jobs."

 

    Senate Committee on Commerce, Science, and Transportation Chairman John D. (Jay) Rockefeller IV (D-WV) : "The President is absolutely correct to focus on reviving our nation's manufacturing sector. . . President Obama also addressed infrastructure development as one of the keys to creating jobs and spurring economic growth.  Our nation's transportation infrastructure is weakening by the day, roads and bridges are deteriorating, and the traveling public's lives are at stake.  It's critical we focus on making transportation safety a top priority, and with sound investments in our infrastructure we can do just that."

 

    Senate Energy & Natural Resources Committee Chairman Senator Jeff Bingaman (D-NM): "I thought President Obama laid out a very good blueprint for how we can accelerate economic growth in our country – to create jobs now and to lay the foundation for a strong economy for the next several decades.  I think it's important for us to focus on rebuilding manufacturing jobs in our country, and to develop a labor force that can do the work that needs to be done.  I also agree with the president that we need to focus on our own energy sources to meet our economic needs.  All of that, I think, is very positive and would be good for the country.  I hope the Congress will rise to the challenge and work with President Obama over the next several months."

 

    Access the White House listing of comments (click here). Access the complete statements by clicking on the underlines above. [#All]

 

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EIA 2012 Annual Energy Outlook Early Release Reference Case

Jan 23: The U.S. Energy Information Administration (EIA) issued the 2012 Annual Energy Outlook (AEO2012) Early Release Reference case, which provides updated projections for U.S. energy markets through 2035. In addition to a press release and tables that summarize the new projection, an Overview report is provided that addresses key findings and major changes in assumptions and results from the previous year's projection. The Early Release Overview specifically highlights the Reference case, which assumes no changes in current laws and regulations, thus serving as a starting point for analysis of potential policy changes or technology breakthroughs. The complete AEO2012, to be released this spring, will include many alternative cases in recognition of the uncertainty inherent in making projections about energy markets, which in part arises from assumptions about policies and other market drivers such as trends in prices and economic growth. Some key findings of the early report include:

Domestic crude oil production is expected to grow by more than 20 percent over the coming decade: Domestic crude oil production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

With modest economic growth, increased efficiency, growing domestic production, and continued adoption of nonpetroleum liquids, net petroleum imports make up a smaller share of total liquids consumption: U.S. dependence on imported petroleum liquids declines in the AEO2012 Reference case, primarily as a result of growth in domestic oil production of over 1 million barrels per day by 2020, an increase in biofuel use of over 1 million barrels per day crude oil equivalent by 2024, and modest growth in transportation sector demand through 2035. Net petroleum imports as a share of total U.S. liquid fuels consumed drop from 49 percent in 2010 to 38 percent in 2020 and 36 percent in 2035 in AEO2012.

U.S. production of natural gas is expected to exceed consumption early in the next decade: The United States is projected to become a net exporter of liquefied natural gas (LNG) in 2016, a net pipeline exporter in 2025, and an overall net exporter of natural gas in 2021. The outlook reflects increased use of LNG in markets outside of North America, strong domestic natural gas production, reduced pipeline imports and increased pipeline exports, and relatively low natural gas prices in the United States compared to other global markets.

Use of renewable fuels and natural gas for electric power generation rises: The natural gas share of electric power generation increases from 24 percent in 2010 to 27 percent in 2035, and the renewables share grows from 10 percent to 16 percent over the same period. In recent years, the U.S. electric power sector's historical reliance on coal-fired power plants has begun to decline. Over the next 25 years, the projected coal share of overall electricity generation falls to 39 percent, well below the 49-percent share seen as recently as 2007, because of slow growth in electricity demand, continued competition from natural gas and renewable plants, and the need to comply with new environmental regulations.

Total U.S. energy-related carbon dioxide (CO2) emissions remain below their 2005 level through 2035: Energy-related CO2 emissions grow by 3 percent from 2010 to 2035, reaching 5,806 million metric tons in 2035. They are more than 7 percent below their 2005 level in 2020 and do not return to the 2005 level of 5,996 million metric tons by the end of the projection period. Emissions per capita fall by an average of 1 percent per year from 2005 to 2035, as growth in demand for transportation fuels is moderated by higher energy prices and Federal fuel economy standards. Proposed fuel economy standards covering model years 2017 through 2025 that are not included in the Reference case would further reduce projected energy use and emissions. Electricity-related emissions are tempered by appliance and lighting efficiency standards, State renewable portfolio standard requirements, competitive natural gas prices that dampen coal use by electric generators, and implementation of the Cross-State Air Pollution Rule.

    Other highlights of the AEO2012 Reference case projections:

• World oil prices rise in the Reference case, as pressure from growth in global demand continues. In 2035, the average real price of crude oil in the Reference case is $146 per barrel in 2010 dollars. World liquids consumption grows from 87.1 million barrels per day in 2010 to 109.7 million barrels per day in 2035, driven by growing demand in China, India, the Middle East and other developing economies.
• Total U.S. primary energy consumption, which was 101.4 quadrillion Btu in 2007, grows from 98.2 quadrillion Btu in 2010 to 108.0 quadrillion Btu in 2035. The fossil fuel share of energy consumption falls from 83 percent of total U.S. energy demand in 2010 to 77 percent in 2035.
• Net imports of energy meet a declining share of total U.S. energy demand as domestic energy production increases. The projected net import share of total U.S. energy consumption in 2035 is 13 percent, compared with 22 percent in 2010 and 29 percent in 2007.

    EIA notes that the Reference case results shown in the AEO2012 Early Release will vary somewhat from those included in the complete Annual Energy Outlook (AEO) that will be released in spring 2012, because some data and model updates were not available for inclusion in the Early Release. In particular, the complete AEO2012 will include the Mercury and Air Toxics Standards issued by the U.S. Environmental Protection Agency (EPA) in December 2011; updated historical data and equations in the transportation sector, based on revised data from the National Highway Traffic Safety Administration (NHTSA) and the Federal Highway Administration; a new model for cement production in the industrial sector; a revised long-term macroeconomic projection based on an updated long-term projection from IHS Global Insight, Inc.; and an updated representation of biomass supply.

    One of the more interesting factors in the AEO2012 report is a substantial reduction in the estimate of recoverable shale gas in the U.S. The report indicates that, "Cumulative natural gas production from 2010 through 2035 in the AEO2012 Reference case is 7 percent higher than in AEO2011, even though the estimated natural gas resource base is lower. This primarily reflects increased shale gas production resulting from the application of recent technological advances, as well as continued drilling in shale plays with high concentrations of natural gas liquids and crude oil, which have a higher value in energy equivalent terms than dry natural gas. Production levels for tight gas and coalbed methane exceed those in the AEO2011 Reference case through 2035, making significant contributions to the overall increase in production. Offshore natural gas production in the Gulf of Mexico fluctuates between 2.0 and 2.8 trillion cubic feet per year as new large projects directed toward liquids development are started over time.

    "In the AEO2012 Reference case, the estimated unproved technically recoverable resource (TRR) of shale gas for the United States is 482 trillion cubic feet, substantially below the estimate of 827 trillion cubic feet in AEO2011. The decline largely reflects a decrease in the estimate for the Marcellus shale, from 410 trillion cubic feet to 141 trillion cubic feet. Both EIA and USGS have recently made significant revisions to their TRR estimates for the Marcellus shale. Drilling in the Marcellus accelerated rapidly in 2010 and 2011, so that there is far more information available today than a year ago. Indeed, the daily rate of Marcellus production doubled during 2011 alone. Using data though 2010, USGS updated its TRR estimate for the Marcellus to 84 trillion cubic feet, with a 90-percent confidence range from 43 to 144 trillion cubic feet -- a substantial increase over the previous USGS estimate of 2 trillion cubic feet dating from 2002. For AEO2012, EIA uses more recent drilling and production data available through 2011 and excludes production experience from the pre-shale era (before 2008). EIA's TRR estimate for the entire Northeast also includes TRR of 16 trillion cubic feet for the Utica shale, which underlies the Marcellus and is still relatively little explored. The complete AEO2012 publication will include a more in-depth examination of the factors that affect resource estimates."

 

    Sierra Club issued a release commenting on the AEO2012 reports assessment of coal-fired electricity which is projected to continue in a steady decline in 2012, which they say will opening market space for clean energy. Bruce Nilles, Senior Director of the Sierra Club's Beyond Coal Campaign said, "For many years the Energy Information Agency has exaggerated coal's prospects for the future, and every year has had to downgrade its projections. Today EIA again downgraded coal's future, though we know coal's future is even darker than EIA is predicting."

 

    Sierra Club noted that EIA projects that at least 33,000 megawatts worth of existing coal-fired power plants are expected to retire in the coming decades, not including any retirements due to the recently-finalized mercury and air toxics standard from U.S. EPA. Sierra Club cited for reference that an average-sized coal-burning power plant is approximately 500 megawatts. Coal's market share of U.S. electricity production is expected to continue to drop, from 44 to 39 percent. Last year's EIA report thought coal would fall from 48 to 44 percent between 2010 and 2035. No new coal plants are predicted to be constructed in the time period, beyond those few that are already under construction.

 

    In their release, Sierra Club indicated that while the EIA estimates that over the next 25 years approximately 33,000 megawatts of existing coal power will retire, they have identified over 38,000 megawatts of existing coal power that has retired or announced an upcoming retirement since January 2010 -- and more are expected soon. There are about 340,000 megawatts of coal in the United States as of January 2010. Nilles said, "Even today's EIA projections remain far too rosy for coal; we expect the vast majority of coal plants to be retired no later than 2030. We agree, however, with EIA's prediction that no new coal plants will break ground in the future because clean energy is more cost effective, and we expect even more coal plant retirements."

    Access an announcement (click here). Access complete information and the AEO2012 report (click here). Access a release from Sierra Club (click here). [#Energy]

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President Denies Keystone XL Pipeline; TransCanada Will Re-Apply

Jan 18: The Department of State (DOS) recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline [See WIMS 1/6/12] be denied and, that at this time, "the TransCanada Keystone XL Pipeline be determined not to serve the national interest." The President concurred with the Department's recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest. The Department emphasized that its denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

    In an announcement DOS indicated that since 2008, it has been conducting a "transparent, thorough, and rigorous review of TransCanada's permit application for the proposed Keystone XL Pipeline project." As a result of this process, particularly given the concentration of concerns regarding the proposed route through the Sand Hills area of Nebraska, on November 10, 2011, the Department announced that it could not make a national interest determination regarding the permit application without additional information. Specifically, the Department called for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska. The Department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter of 2013. DOS said, "In consultations with the State of Nebraska and TransCanada, they agreed with the estimated timeline."

    On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (the Act). The Act included a rider that provided 60 days for the President to determine whether the Keystone XL pipeline is in the national interest. DOS said the allotted time was "insufficient for such a determination."

    The President issued a brief statement on the DOS decision and said, "I received the Secretary of State's recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department's report, I agree. 
 
    This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security -- including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico -- even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment."

    The President issued a "Presidential Memorandum -- Implementing Provisions of the Temporary Payroll Tax Cut Continuation Act of 2011 Relating to the Keystone XL Pipeline Permit." In the Memorandum, the President indicates, "I have determined, based upon your recommendation, including the State Department's view that 60 days is an insufficient period to obtain and assess the necessary information, that the Keystone XL pipeline project, as presented and analyzed at this time, would not serve the national interest. . . I direct you to submit the report to the Congress as specified in section 501(b)(2) of the Temporary Payroll Tax Cut Continuation Act of 2011 and to issue a denial of the Keystone XL pipeline permit application."

 

    TransCanada Corporation the developer of the project issued a statement saying it had received the DOS decision that the Presidential Permit for Keystone XL had been denied. Russ Girling, TransCanada's president and chief executive officer said, "This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. We will re-apply for a Presidential Permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014." The company said it expects that consideration of a renewed application would make use of the exhaustive record compiled over the past three plus years.

    Girling continued saying, "Until this pipeline is constructed, the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela and other foreign countries who do not share democratic values Canadians and Americans are privileged to have.  Thousands of jobs continue to hang in the balance if this project does not go forward. This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed." TransCanada said it will continue to work collaboratively with Nebraska's Department of Environmental Quality on determining the safest route for Keystone XL that avoids the Sandhills. This process is expected to be complete in September or October of this year.

    TransCanada has committed to a project labor agreement with the Laborers International Union of North America, the International Brotherhood of Teamsters, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, the International Union of Operating Engineers and the Pipeline Contractors Association. The company said, "Any delay in approval of construction prevents this work from going to thousands of hard-working trades people. Girling added that TransCanada continues to believe in Keystone XL due to the overwhelming support the project has received from American and Canadian producers and U.S. refiners who signed 17 to 18 year contracts to ship over 600,000 barrels of oil per day to meet the needs of American consumers.

    Republican members of the House Energy and Commerce Committee issued a release on January 20, reaffirming their "commitment to getting the Keystone XL pipeline built despite President Obama's decision this week to reject the project. Members expressed their deep disappointment in the president's choice to say no to a project that would create tens of thousands of jobs and bring nearly a million barrels of secure oil to this country each day." Committee Chairman Fred Upton (R-MI) said, "We are absolutely committed -- as a Republican team -- to keep the Keystone XL pipeline on the front burner. The State Department has taken, as you know, over three years on this issue and we are ready for a green light and not a red light."

    The Committee will be holding a hearing this week with the State Department testifying. Members will discuss a bill introduced by Representative Lee Terry (R-NE) to take the pipeline decision out of the president's hands. H.R.3548, the North American Energy Access Act, would give the Federal Energy Regulatory Commission oversight of the pipeline's permit and instruct the agency to review and approve the pipeline application within 30 days, and to work in coordination with the State of Nebraska to review and approve the route and environmental review developed by the state. Rep. Terry said, "The American people want us to put aside politics and do what is right. It seems to me that it makes more sense that we let the experts on pipelines make decisions on whether this is a safe and sound pipeline, as opposed to a political entity worried about November elections."

    Ranking Member of the Committee Henry Waxman (D-CA) issued a brief statement saying, "Today, the Obama Administration rejected a dirty and dangerous tar sands oil pipeline, refusing to be bullied by the oil industry into approving the project in 60 days without even knowing where it would be built. Despite intense and misleading oil industry lobbying, Americans understand that what's good for the oil industry is not necessarily good for the American people. Keystone XL would boost tar sands development, which produces the dirtiest oil available, open up Asian markets to tar sands, and, if anything, increase gas prices. Keystone XL is a lose-lose proposition for energy security, gas prices, a safe climate, and a healthy environment."

    U.S. Chamber of Commerce President and CEO Thomas Donohue issued a statement indicating, "The President's decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business. By placing politics over policy, the Obama administration is sacrificing tens of thousands of good-paying American jobs in the short term, and many more than that in the long term. Donohue said, "It is dumbfounding that President Obama's decision to deny the Keystone XL pipeline permit ignores his own Council on Jobs and Competitiveness "Road Map to Renewal" report. Issued yesterday, it recommends that the United States step up its game on energy and construct pipelines to deliver fuel as a key component of our economic recovery. Just as troubling, the President's decision will make us more dependent on oil from foreign nations that don't share our interests. He's also saying no to improving our relationship with our reliable and friendly ally to the north, Canada. American workers and consumers should be outraged. They deserve better than this politically-motivated decision."

    Frances Beinecke, president of the Natural Resources Defense Council (NRDC) issued a statement saying, "The pipeline was rejected for all the right reasons. President Obama put the health and safety of the American people and our air, lands and water -- our national interest -- above the interests of the oil industry. His decision represents a triumph of truth over Big Oil's bullying tactics and its disinformation campaign with wildly exaggerated jobs claims. Rather than bringing America energy security, the pipeline would have transported dirty Canadian tar sands oil through America's heartlands -- for export to other countries.

    "A decision on the pipeline proposal requires nothing less than a thorough and fair-minded analysis of its full effects on our environment and climate. But the schedule forced upon the Obama administration -- a 60-day rush to judgment -- left insufficient time to conduct that assessment. Pipeline proponents preordained this outcome. If TransCanada reapplies, Keystone XL will still face the same valid public concerns and fierce opposition as the first time. No matter how many times it is proposed, Keystone XL is not in the national interest.''

    On January 18, NRDC issued a new report along with Oil Change International, a Washington, DC-based group dedicated to exposing the true cost of fossil fuels. The groups and report indicate that, "Existing Canadian pipelines in the United States are operating only at half-capacity now, making any new pipeline unnecessary, much less a 1,700-mile XL pipeline through America's heartlands that would threaten U.S. lands and waters." The report, Keystone XL Pipeline: Undermining U.S. Energy Security and Sending Tar Sands Overseas, and authors indicate that, "This pipeline would divert up to 800,000 barrels of oil a day from the Midwest to Latin America, Europe and other countries -- at a huge profit for the oil companies." They said, "Keystone XL will ship tar sands to refineries on the Gulf Coast, where currently a quarter of the refinery output is exported. Keystone XL does nothing for U.S. energy security but plenty to boost exports and tax-free profits for Big Oil."

    Access the DOS announcement (click here). Access the statement from the President (click here). Access the Presidential Memorandum (click here). Access the full text of the DOS press conference on the decision (click here). Access the release from TransCanada (click here). Access the TransCanada Keystone XL project website for additional information (click here). Access the release from the House GOP Energy and Commerce Committee and press conference video (click here). Access the statement from Rep. Waxman (click here). Access the statement from the U.S. Chamber (click here). Access the 72-page Council on Jobs and Competitiveness Report (click here). Access the statement from NRDC (click here). Access a release and link to the report from NRDC, et al (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here). [#Energy/Pipeline, #Energy/KXL, #Energy/OilSands, #Energy/TarSands]

 

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Huge Differences In Cost & Benefit Estimates Of Tier 3 Low Sulfur Rules

Jan 12: A bipartisan group of Senators, including Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works, Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Committee on Energy and Natural Resources, Senator David Vitter (R-LA), Senator John Barrasso (R-WY), Senator Mary Landrieu (D-LA), and Senator Mark Begich (D-AK) joined in a letter to U.S. EPA Administrator Lisa Jackson expressing concern that EPA's Tier 3 standards will greatly increase the cost of gasoline and put jobs at risk at a time when Americans are struggling to make ends meet in a weak economy.

 

    On October 31, 2011, the National Association of Clean Air Agencies (NACAA), representing air pollution control agencies in 53 states and territories and over 165 major metropolitan areas across the United States(formerly STAPPA and ALAPCO), released a report on the benefits and costs of implementing the their recommendations for Tier 3 motor vehicle and gasoline standards. NACAA indicated that the amount of air pollution that would be immediately reduced from lowering the sulfur content of gasoline to an average of 10-ppm is equivalent to removing approximately one in eight cars and light trucks from the roads. They said that result would come at a price of $0.008 -- eight-tenths of a cent per gallon. Such cleaner gasoline would also enable improved technologies on cars and light trucks that could yield substantial vehicle emissions reductions at a cost of about $150 per car [See WIMS 10/31/11].

 

    Specifically, the concerned Senators said EPA is preparing a notice of proposed rulemaking (NPR) that will lower the sulfur content in gasoline from 30ppm to 10ppm -- and they said, "this comes at a high cost." Despite the estimates of NACAA, the Senators cite a study by Baker & O'Brien that estimates the capital and annual operating cost of a 10ppm standard at $17 billion and $13 billion, respectively. They said, "Depending on the stringency of the proposed rule, that could add 12 to 25 cents to each gallon of gasoline." Additionally, they indicated that "several fuel manufacturers will not likely be able to comply, which will force plant closures -- resulting in both direct and indirect job losses." 

 

    The Senators concluded their 3-page letter saying, ". . ."we urge EPA to reconsider the timing of Tier 3 standards for gasoline. We also ask you to provide Congress and the public with as much notice as possible in advance of any formal proposal. We support clean air, but EPA should provide adequate scientific justification for all aspect of the proposed rule, thoughtfully reflect on the results of the yet-to-be completed anti-backsliding study, and understand the cumulative effects of all existing and pending air regulations on families and workers."  

 

    Senator Murkowski said, "A high level of bipartisan concern has emerged over EPA's looming Tier 3 regulations. Gas prices are already high, especially in Alaska, and our nation's economy continues to struggle. Despite this, EPA has chosen to proceed with a rulemaking that could lead to added financial burden on families and businesses. I hope that Administrator Jackson will pay close and careful attention to the unintended negative impacts this rule could have, especially in combination with the rest of EPA's regulatory agenda." Senator Landrieu said, "I am deeply concerned that the EPA is crafting these new Tier 3 regulations without regard to the real-world consequences for American consumers and businesses. With Americans already feeling the pinch from high gas prices, these regulations stand to burden our country even further. I urge the EPA to consider the negative consequences that this rule could have on American families and our economy as a whole." 

 

    S. William Becker, NACAA's Executive Director had a very different view and said in October last year, "As NACAA's report reveals, reducing sulfur in gasoline would not only enable the use of improved emissions control technology on new cars and light trucks, it would also result in an overnight reduction in emissions from the existing fleet -- on the order of approximately 260,000 tons of nitrogen oxides (NOx) -- equivalent to taking 33 million cars off our nation's roads in 2017 when the program begins. I don't know of any other air pollution control strategy out there that can provide emissions reductions as significant and immediate as this."

 

    NACAA indicated in its report that, to independently determine the cost implications of lower sulfur gasoline, the International Council on Clean Transportation (ICCT) contracted with an expert refinery consulting company, MathPro, to update and slightly modify an earlier study MathPro carried out in 2009. In this new study, MathPro estimates the cost of reducing sulfur in gasoline to 10 ppm under differing sets of assumptions.

   

    NACAA indicated, "Based on the MathPro study, it appears the most reasonable, but still conservative, assumptions would be: All existing FCC post-treaters would require revamping to meet the 10-ppm sulfur standard; The average capital expenditure for revamping the fleet of FCC post-treaters is 30 percent of the expenditure for grassroots post-treaters (even though some of the existing units may require no revamping); and The target rate of return on refinery investments is 7 percent before tax. Using these conservative assumptions, MathPro concluded that the per-gallon price of 10-ppm sulfur fuel would be just $0.008 -- eight-tenths of a penny."

 

    When the Baker & O'Brien study was release last summer, Bob Greco of American Petroleum Institute (API) said, "The new EPA requirements could be devastating to consumers and communities across the nation. Consumers would be hurt by the increased cost of fuel projected by the study, and the closing of refineries could put local economies at risk, meaning there would be fewer jobs. In addition, we would be forced to rely even more on foreign fuel supplies, and that can only weaken our nation's economy and national security."

 

    National Petrochemical & Refiners Association President Charles Drevna said, "These regulations don't make sense environmentally or economically. The proposal would increase greenhouse gas emissions, hurt American consumers by adding billions of dollars to the cost of manufacturing gasoline, hurt communities and workers by threatening to put some fuel manufacturing plants out of business, and weaken America's economic and national security."

 

    Access the release and letter from the concerned Senators (click here). Access the 96-page Baker & O'Brien study (click here). Access a release from NACAA (click here). Access the complete 32-page NACAA report (click here). Access a Jul 29 release from API (click here). [#Air, #Transport]

 

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America Is Thinking Too Small On Energy Efficiency

Jan 12: The American Council for an Energy-Efficient Economy (ACEEE) indicates in a major new report that, "America is thinking too small when it comes to energy efficiency, while also making the mistake of 'crowding out' economically beneficial investments in energy efficiency by focusing on riskier and more expensive bids to develop new energy sources. The report, The Long-Term Energy Efficiency Potential: What the Evidence Suggests, outlines three scenarios under which the U.S. could either continue on its current path or cut energy consumption by the year 2050 almost 60 percent, add nearly two million net jobs in 2050, and save energy consumers as much as $400 billion per year (the equivalent of $2600 per household annually).

    According to ACEEE, the secret to major economic gains from energy efficiency is a more productive investment pattern of increased investments in energy efficiency, which would allow lower investments in power plants and other supply infrastructure, thereby substantially lowering overall energy expenditures on an economy-wide basis in the residential, commercial, industrial, transportation, and electric power sectors.

    ACEEE Director of Economic and Social Analysis John A. "Skip" Laitner said, "The U.S. would prosper more if investments in new energy were not crowding out needed investments in energy efficiency. The evidence suggests that without a greater emphasis on the more efficient use of energy resources, there may be as many as three jokers in the deck that will threaten the robustness of our nation's future economy. These include the many uncertainties surrounding the availability of conventional and relatively inexpensive energy supplies, a slowing rate of energy productivity gains and therefore economic productivity, and a variety of potential climate constraints that may create further economic impacts of their own. Given all of this, large-scale energy efficiency advances are by far the smartest investment for America."

    ACEEE Executive Director Steven Nadel said, "Large-scale energy efficiency advances will require major investments. But the good news is that the investments will generate a significant return in the form of large energy bill savings. After paying for the program costs and making the necessary investments as we pay for them over time, the economy will benefit from a net energy bill savings that ranges from 12 to 16 trillion dollars cumulatively from 2012 through 2050. In other words, the energy efficiency scenarios outlined in our report will spur an annual net energy bill savings that might range up to about $2600 per household annually in constant 2009 dollars."

    Examples of potential large-scale energy efficiency savings identified by ACEEE include the following:

• Electric Power -- "Our current system of generating and delivering electricity to U.S. homes and businesses is an anemic 31 percent energy efficient. That is, for every three units of coal or other fuel we use to generate the power, we manage to deliver less than one unit of electricity to our homes and businesses. What the U.S. wastes in the generation of electricity is more than Japan needs to power its entire economy. What is even more astonishing is that our current level of (in)efficiency is essentially unchanged in the half century since 1960, when President Dwight D. Eisenhower spent his last year in the White House."
• Transportation -- "The fuel economy of conventional petroleum-fueled vehicles continues to grow while hybrid, electric, and fuel cell vehicles gain large shares, totaling nearly three-quarters of all new light-duty vehicles in 2050 in the report's middle scenario. Aviation, rail, and shipping energy use declines substantially in this scenario through a combination of technological and operational improvements. In the most aggressive scenario, there is a shift toward more compact development patterns, and greater investment in alternative modes of travel and other measures that reduce both passenger and freight vehicle miles traveled. This scenario also phases out conventional light-duty gasoline vehicles entirely, increases hybrid and fuel cell penetration for heavy-duty vehicles, and reduces aviation energy use by 70 percent."  
• Buildings -- "In residential and commercial buildings the evidence suggests potential reductions of space heating and cooling needs as the result of building shell improvements of up to 60 percent in existing buildings, and 70-90 percent in new buildings. The ACEEE scenarios also incorporate advanced heating and cooling systems (e.g., gas and ground-source air conditioners and heat pumps, and condensing furnaces and boilers), decreased energy distribution losses, advanced solid-state lighting, and significantly more efficient appliances."
• Industry -- "In the industrial sector, energy efficiency opportunities reduce 2050 energy use by up to half, coming less from equipment efficiency and more from optimization of complex systems. The ACEEE analysis focuses on process optimization in the middle scenario, but also anticipates even greater optimization of entire supply chains in the most aggressive scenario, allowing for more efficient use of feedstocks and elimination of wasted production."

    In response to the question: "Are such advances in energy efficiency realistic?" the ACEEE report points out, the U.S. already has achieved considerable advances in the energy efficiency context and is poised to do more:  "The U.S. economy has tripled in size since 1970 and three-quarters of the energy needed to fuel that growth came from an amazing variety of efficiency advances -- not new energy supplies. Indeed, the overwhelming emphasis in current policy debates on finding new energy supplies is such that emphasis on new supplies may be crowding out investments and innovations that can help to achieve greater levels of energy productivity. Going forward, the current economic recovery, and our future economic prosperity, will depend more on new energy efficiency behaviors and investments than we've seen in the last 40 years."

    Access a release from ACEEE (click here). Access the complete 96-page report (click here, free registration required). [#Energy/Efficiency]

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DC Judge Vacates EPA's Boiler MACT & CISWI Delay Notice

Jan 9: U.S. Washington, DC, District Court Judge Paul Friedman has issued a critical 42-page ruling regarding U.S. EPA's recently proposed Clean Air Act standards for boilers and certain incinerators (i.e. "Boiler MACT" rules, Proposed rules) [See WIMS 12/2/11]. EPA had proposed to delay finalization of the rules until the spring 2012, including the rule for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters (i.e.Boiler MACT) and for Commercial and Industrial Solid Waste Incineration Units (CISWI).

 

    However, in the case of Sierra Club v. Jackson (U.S. EPA), Case No. 11-1278, the Court vacated EPA's decision to delay. The Court indicated it would "grant in part and deny in part the parties' cross-motions for summary judgment. It will enter judgment for EPA on Claim 1 and Claim 2 and for Sierra Club on Claim 3. As a result, the Court will declare unlawful EPA's Delay Notice will vacate the Delay Notice, and will remand the Delay Notice to EPA for further proceedings consistent with this Opinion." Petitions for review of the decision have already been filed with the U.S. Court of Appeals, D.C. Circuit and the matter may be addressed quickly by the Appeals Court.

 

    The Court explains that after EPA initially issued its Boiler and CISWI rules which were being challenged in the Court of Appeals, ". . .on May 18, 2011, two days before the Boiler Rule and the CISWI Rule were to go into effect, EPA issued a notice, referred to by the agency as the 'Delay Notice,' staying the effective date of both rules 'until the proceedings for judicial review of these rules [in the court of appeals] are completed or the EPA completes its reconsideration of the rules, whichever is earlier[.]' 76 FED.REG. at 28,664. In the Delay Notice, EPA made explicit that it was staying the effective date of these two rules 'pursuant to the APA[, that is, the Administrative Procedure Act], rather than . . . the Clean Air Act.' Id. at 28,663. Specifically, EPA stated that it was acting pursuant to its authority under 5 U.S.C. § 705 of the APA, rather than under 42 U.S.C. § 7607(d)(7)(B) of the Clean Air Act." Sierra Club then filed this lawsuit on July 14, 2011 to challenge the validity of EPA's Delay Notice.

 

    Sierra Club argues that it is entitled to summary judgment on all three of its claims and requests that the Court declare the Delay Notice unlawful and vacate it. First, Sierra Club contends that the Delay Notice is unlawful because EPA promulgated it without providing the public with notice and an opportunity for comment; Second, Sierra Club contends that EPA lacked the authority to issue the Delay Notice; And third, Sierra Club contends that the Delay Notice is arbitrary and capricious for "at least four reasons, each of which independently requires vacatur." EPA opposes Sierra Club's motion for summary judgment and has filed its own cross-motion for summary judgment. As EPA describes it, the agency had the authority to promulgate the Delay Notice; the agency provided adequate justification for the Delay Notice; and the Delay Notice is not a rule and therefore is not subject to notice and comment requirements.

 

    The Court ruled on Claim 1: ". . .the Court concludes that the Delay Notice does not constitute substantive rulemaking, see 5 U.S.C. § 551(4), and therefore is not subject to notice and comment requirements. See id. §§ 553(b), (c). The Court will grant EPA's motion for summary judgment on Claim 1 and will deny Sierra Club's motion for summary judgment on that claim." On Claim 2: "The Court therefore concludes that EPA had the authority to issue the Delay Notice under Section 705 of the APA. The Court will grant EPA's motion for summary judgment on Claim 2 and will deny Sierra Club's motion for summary judgment on that claim."

 

    And, on Claim 3: "The Court concludes that the Delay Notice is arbitrary and capricious for three separate reasons: (1) the standard for a stay at the agency level is the same as the standard for a stay of agency action by a court, and EPA has not even attempted to justify its decision under that standard; (2) EPA is bound by its own precedents to apply the four-part test for stays and injunctions unless it provides a reasoned decision for its change of position, which it has not done; and (3) because EPA relies on Section 705 authorizing it to stay agency action 'pending judicial review,' the reasons it articulates to justify the stay must be based on the underlying litigation in the court of appeals, which they are not."

 

    The National Association of Manufacturers (NAM) Vice President for Energy and Resources Policy Chip Yost issued a statement on the decision saying, "The court's ruling to revoke the stay of the Boiler MACT and Incinerator rules will severely harm manufacturers' competitiveness, add to their uncertainty and cost vital jobs. It is already 20 percent more expensive to manufacture in the U.S. compared to our trade partners, and regulations such as Boiler MACT continue to set us back. The ruling by the court underscores the critical need for Congress to pass legislation to address the damaging Boiler MACT and Incinerator regulations. The EPA Regulatory Relief Act [H.R.2250, See WIMS 10/14/11] received bipartisan support when it passed the House last October, and manufacturers urge the Senate to act now to save jobs. Manufacturers are looking to Washington for policies that will eliminate the uncertainty of harmful regulations such as Boiler MACT and enable them to invest, grow and create jobs."

 

    House Republicans on the Energy and Commerce Committee issued a release stating, "By vacating EPA's stay, yesterday's ruling speeds the rules' compliance schedules, which were already unworkable. As a result of the ruling, facilities will be forced to determine how to implement the rules even though they are still being reconsidered." Committee Chairman Fred Upton (R-MI) said, "The ruling increases the already significant regulatory and legal uncertainty surrounding these complex rules, which by EPA's own estimates impose new costs in excess of $5 billion. It is increasingly clear that Congress must intervene to provide regulatory relief. The House-passed EPA Regulatory Relief Act provides EPA the framework to fix these rules and offers American businesses the flexibility and certainty they need to invest and create jobs. I urge the Senate to pass this legislation so we can put an end to the uncertainty and finally get the EPA to move forward in a way that protects jobs."

 

    Access the complete ruling (click here). Access the statement from NAM (click here). Access the release from House Republicans (click here). [#Air]

 

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