DOI Releases Proposed Rule On Fracking Chemical Disclosure

May 4: Department of Interior (DOI) Secretary Ken Salazar announced the release of a proposed rule to require companies to publicly disclose the chemicals used in hydraulic fracturing operations (fracking) on public and Indian lands, with appropriate protections for proprietary information. Currently, there is no specific requirement for operators to disclose these chemicals on Federal and Indian lands, where approximately 90 percent of the wells drilled use hydraulic fracturing to greatly increase the volume of oil and gas available for production. The proposed rule would require public disclosure of chemicals used during hydraulic fracturing after fracturing operations have been completed.

    DOI said this "common-sense measure," which builds on the preliminary input received from the public, industry, tribal representatives, and other stakeholders, supports the continued development of America's abundant oil and gas resources on Federal and Indian lands by taking steps to ensure public confidence in well stimulation techniques and technologies, including hydraulic fracturing. It is also in line with steps that some states have already taken, requiring operators to disclose the chemicals they use in activities on state lands.

    DOI said the draft rule also contains two additional, commonsense measures to ensure development continues safely and responsibly: (1) Improving assurances on well-bore integrity to verify that fluids used in wells during fracturing operations are not escaping; and, (2) Confirming that oil and gas operators have a water management plan in place for handling fracturing fluids that flow back to the surface.

    Secretary Salazar said, "As the President has made clear, this administration's energy strategy is an all-out effort to boost American production of every available source of energy. As we continue to offer millions of acres of America's public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place. The proposed rule will modernize our management of well stimulation activities -- including hydraulic fracturing -- to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices."

    DOI indicated that the measures contained in the draft rule are consistent with the goals first outlined by Secretary Salazar in November 2010 during a forum on hydraulic fracturing on public lands to examine best practices to ensure that natural gas on federal and Indian lands is developed in a safe and environmentally responsible manner. Once the proposed rule is published in the Federal Register, a 60-day public comment period will begin, during which the public, governments, industry and other stakeholders are encouraged to provide their input. The proposed rule would apply to BLM-managed mineral estate, including 700 million subsurface acres of federal estate and 56 million subsurface acres of Indian mineral estate.

    BLM Director Bob Abbey said, "The BLM recognizes the importance of all domestic energy sources to the welfare and security of this nation. The proposed rule will move our nation forward as we ensure responsible development while protecting public land resources." Current BLM regulations governing hydraulic fracturing operations on public lands are more than 30 years old and were not written to address modern hydraulic fracturing activities.

    DOI said the proposed rule seeks to maximize flexibility, minimize duplication and complement ongoing efforts in some states to regulate fracturing activities by providing a consistent standard across all federal and Indian lands and making reported information easily accessible to the public. For instance, the BLM is working closely with the Ground Water Protection Council and the Interstate Oil and Gas Commission in an effort to integrate the disclosure called for in the proposed rule with the existing program known as FracFocus.

    American Petroleum Institute (API) Upstream Director Erik Milito said any new Federal rules on hydraulic fracturing must reflect a history of successful state-led regulations on oil and natural gas production and avoid the creation of unnecessary bureaucratic red tape. He said, "The states have proven time and again that they are the best place for responsible regulation of drilling operations. While it appears constructive changes have been made, we are still reviewing the new proposal to see how the agency addressed the various concerns that we've raised. The administration should exercise deference to the robust and comprehensive state regulations that already exist. Energy production on federal lands has a history of driving job creation, and creating significant revenue for the government. But this potential could be stifled by a federal regulatory program that duplicates existing state regulations. This could have a chilling effect on investment and jobs."

    API said it supports and works closely with a number of public and private partnerships throughout the country that collaborate with state regulators, including FracFocus.org, State Review of Oil and Natural Gas Environmental Regulations (STRONGER) and the Groundwater Protection Council (GWPC). Milito said, "Led by API, the industry has adopted standards and practices for continuous improvement, hundreds of which are referenced in state regulations. The industry remains committed to informing and educating the public about all aspects of oil and natural gas production." Through the efforts of the industry to promote transparency, companies now voluntarily disclose the contents of fluids on FracFocus.org, run by the Groundwater Protection Council. The typical fracturing fluid is 90 percent water and 9.5 percent sand, with the rest being additives to aid well production [See WIMS 5/2/12].

    Amy Mall, senior policy analyst at the Natural Resources Defense Council (NRDC) issued a statement saying, "We need BLM to be a leader when it comes protecting our lands, water and ultimately our health from fracking pollution, yet several states already have stronger protections in place than what the agency proposed today. This is a critical first step, but so much more needs to be done. Oil and gas operations are expanding rapidly with new technologies and into new areas, including closer and closer to where families live and children go to school, but federal safeguards have not caught up. And industry does not inspire confidence when it balks at the notion of sharing chemical ingredients upfront. Communities shouldn't have to wait for that information until after the deed is done. We hope the agency will strengthen this proposal before it becomes final."

    Earthjustice Legislative Representative Jessica Ennis said in a statement, "Fracking for oil and gas is happening at a breakneck pace on our public lands -- and edging ever closer to the places where people live. In light of the near-constant reports of fracking-related air and water pollution, an update to federal rules is long overdue. Unfortunately, these proposed rules from the Department of the Interior fall far short of what's needed to protect public health. For one, the oil and gas industry needs to disclose the chemicals they'll be using in fracking before they are pumped into the ground. This information is essential so communities can test drinking water before fracking occurs and monitor the safety of water supplies in real time. If there's a problem with their water, families deserve to know immediately -- not after they've been drinking it for years.

    "The oil and gas industry has gotten used to operating in the shadows for too long – hiding chemical information, fighting against right-to-know laws, silencing families who speak out. It's unacceptable and needs to end now. The President promised in his State of the Union that this country's gas drilling boom would not come at the expense of public health. This proposed rule fails to meet that promise."

    Access a lengthy release from DOI/BLM with additional details and link to the proposed rule, economic analysis, appendix and related information (click here). Access the statement from API (click here). Access the statement from NRDC with links to more information (click here). Access the statement from Earthjustice (click here). [#Energy/Frack]

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Upcoming Hearing & EIA Report On Clean Energy Standard Act

May 2: The Senate Energy & Natural Resources (ENR) Committee, Chaired by Senator Jeff Bingaman (D-NM) with Ranking Member Lisa Murkowski (R-AK) has announced a hearing scheduled for May 17, to receive testimony on S. 2146, the Clean Energy Standard Act of 2012 [See WIMS 3/1/12]. Senator Bingaman introduced the legislation on March 1, 2012, which he indicated would modernize the nation's power sector and guide it toward a future in which more and more electricity is generated with cleaner and cleaner energy. At the time of introduction, Senator Bingaman said the Clean Energy Standard (CES), "employs a straightforward, market-based approach that encourages a wide variety of electricity-generating technologies. It sets a national goal for clean energy and establishes a transparent framework that lets resources compete based on how clean they are, then gets out of the way and lets the market and American ingenuity determine the best paths forward."

 

    Under Senator Bingaman's bill, all generators of "clean" energy are given credits based upon their carbon emissions; greater numbers of credits are given to generators with lower emissions per unit of electricity. Senator Bingaman indicated that this flexible framework: allows a wide variety of sources (solar, wind, nuclear, natural gas, coal with carbon capture and storage, etc.) to be used to meet the standard; allows market forces to determine what the optimal mix of technologies and fuels should be; and makes it easy for new technologies to be incorporated. To be considered "clean," a generator must either be a zero-carbon source of energy, like renewables and nuclear power, or have a lower carbon intensity than "a modern, efficient coal plant." Carbon intensity is defined as the amount of carbon dioxide emitted per megawatt-hour of electricity generated. Accounting for "clean" this way means that the cleanest resources have the greatest incentive, and also that every generator has a continuing incentive to become even more efficient.

 

    On the same day as the CES hearing was announced, the U.S. Department of Energy (DOE), Energy Information Administration (EIA) released its analysis of S.2146. Senator Bingaman indicated that the EIA's analysis shows that the bill would drive greater usage of the clean energy resources that already are in service, while also providing a long-term market signal to drive innovation and greater deployment of new clean energy for the future. It also shows that the CES would have little impact on national electricity rates for the first decade of the program. Senator Bingaman also indicated that the EIA analysis projects that the technology-neutral, inclusive design of the legislation will lead to substantial amounts of new clean energy from a wide range of sources, including wind, solar, natural gas and nuclear power. EIA also projects enhanced industrial efficiency would result from enactment of the legislation, with 21 percent more combined heat and power (CHP) deployed in 2035. EIA estimates that the legislation would reduce greenhouse gas emissions from the power sector by 20 percent in 2025 and by 44 percent in 2035.

 

    Specifically, the EIA analysis indicates, among other things, that "The BCES12 [the S.2146 model name] alters the projected generation mix, significantly reducing the role of coal-fired generation, while increasing the role of nuclear, natural gas, and non-hydropower renewable technologies. Coalfired generation decreases significantly under the BCES12, falling to 25 percent below the Reference case level in 2025 and 54 percent below the Reference case level in 2035. Conversely, natural gas-fired generation increases under the BCES12, with the greatest impact relatively early in the projection period, prior to significant new renewable or nuclear capacity coming online. In 2020, natural gas-fired generation is 13 percent above the Reference case. By 2025, this differential has fallen to 10 percent, and by 2035, natural gas-fired generation under the BCES12 is only 8 percent higher than in the Reference case. In absolute terms, most additional natural gas-fired generation occurs in the electric power sector; however, total combined heat and power (CHP) generation fired by natural gas does increase substantially due to the BCES12 provision that allows some CHP generators, to a limited extent, to sell BCES12 credits. . . BCES12 CHP generation fired by natural gas exceeds the Reference case by 8 percent in 2025, and by 21 percent in 2035."

 

    EIA also indicates that, "Nuclear generation increases substantially under the BCES12 policy. More than 80 gigawatts of capacity is added by 2035, compared to less than 10 gigawatts in the Reference case, resulting in 2025 nuclear generation exceeding the Reference case by 16 percent and 2035 nuclear generation exceeding the Reference case by 62 percent. Although pre-1991 nuclear capacity does not receive credits, its generation is removed from the baseline of required clean energy sales, so there is an incentive not to retire existing units beyond those already retired in the Reference case. Furthermore, due to the significant number of coal-fired plant retirements–97 gigawatts by 2035 versus 33 gigawatts in the Reference case–there is greater need for additional baseload capacity. The relatively high credit price combined with the need for additional baseload capacity and CES-compliant generation all contribute to the significant nuclear capacity additions in the latter part of the forecast. . ."

 

    EIA notes that, ". . .increased nuclear generation is a key compliance option in the BCES12 case. However, there is uncertainty about the ability of the nuclear industry to ramp up quickly even with the incentives that will be provided by the CES. While new nuclear capacity is once again under construction in the United States, it will be some time before a broad expansion could be expected. With these uncertainties in mind, EIA also looked at a case that assumed that no new nuclear capacity is built, aside from planned additions in the Reference case. Compared to the BCES12 case, natural gas generation in 2035 is about 7-percent higher and renewable generation is about 40 percent higher in an effort to meet the requirement with other qualifying sources. Most of the growth in renewable generation is projected to come from wind and solar generators. The price for clean energy credits and electricity prices are projected to be higher in this case, while the reduction in energy-related carbon dioxide emissions is smaller. With nuclear power builds limited to plants already in the pipeline, ACP [alternative compliance payment]payments are widely used, in contrast to the BCES12 case."

 

Access the hearing announcement (click here). Access legislative details for S.2146 (click here). Access the CES Two-Page Summary (click here). Access the CES Section-by-Section Summary (click here). Access a release from Senator Bingaman on the EIA report (click here). Access a summary and link to the complete 44-page EIA report (click here). [#Energy/CES]

 

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Appalachian Shale Industry Group Releases Fracking Standards

May 1: The Appalachian Shale Recommended Practices Group (ASRPG), a consortium of 11 of the Appalachian Basin's largest natural gas and oil producers, announced the creation of the "Recommended Standards and Practices for Exploration and Production of Natural Gas and Oil from Appalachian Shales" (Recommended Standards). According to a release, the ASRPG's Recommended Standards were developed to promote effective safety, environmental and health practices consistent with the key recommendations of both the U.S. Secretary of Energy Advisory Board's (SEAB) final report issued in November 2011 [See WIMS 8/11/11], and the National Petroleum Council's (NPC) Prudent Development report issued in September 2011 [See WIMS 9/16/11]. Both reports acknowledge regional differences in geology, land use, water resources and regulation.

 

    ASRPG indicates that consistent with these findings, the Recommended Standards reflect existing primacy of state regulation in the areas it addresses, which encompass each phase of the life cycle of a well. In conjunction with the Recommended Standards document, ASRPG issued the following statement:

"As producers in the Appalachian Basin, we strive to be responsible operators that conduct business in a transparent and sustainable manner, and openly communicate with stakeholders. ASRPG's members are committed to conducting operations in compliance with all applicable federal, state and local laws, regulations and ordinances, and implementing standards, practices and procedures that meet or exceed regulatory requirements. The continuous evolution of technology used by the oil and natural gas industry has improved economic opportunities in the Appalachian region, energy security and the ability to conduct operations in a safe and environmentally responsible manner. ASRPG's goal is to encourage operators to implement today's technologies that enhance safety and environmental performance. We also recognize it is

essential for all operators to continuously improve and adopt effective practices as technology evolves."

    The American Petroleum Institute (API) issued a release welcoming the announcement from ASRPG and highlighted the important role of local efforts in establishing industry standards for oil and natural gas production. API Standards Director David Miller said, "The oil and natural gas industry continues to lead in efforts that promote safe and environmentally responsible energy production, particularly in those operations that utilize hydraulic fracturing. We welcome these recommendations and are encouraged to see expert opinions that affirm API's hydraulic fracturing guidance documents.

    "API's standards and recommended practices form a very strong foundation for safe and responsible production of energy from shale, including hydraulic fracturing, which is an essential part of the process. Regional differences in state geology make a single set of operational regulations impractical and API's standards provide a structure amenable to various groups to help them develop practices specific to local geography."

    API said it supports and works closely with a number of public and private partnerships throughout the country, including FracFocus, State Review of Oil and Natural Gas Environmental Regulations (STRONGER) and the Groundwater Protection Council (GWPC). Miller said, "It is only with the use of hydraulic fracturing that our nation will be able to develop our vast oil and natural gas resources. And, this technology is a game changer that could lead to significant job growth, billions in revenue for our government, and a boost to our energy security." 

 

    Access a release from ASRPG with details on the consortium members (click here). Access the complete 8-page Recommended Standards document which includes links to referenced information (click here). Access a release from API and link to API's five standards related to hydraulic fracturing (click here). [#Energy/Frack]

 

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President Signs EO Promoting International Regulatory Cooperation

May 1: According to a blog posting from Cass Sunstein, the Administrator of the OMB Office of Information and Regulatory Affairs (OIRA), over the past year, the Federal Government has been working to implement President Obama's directions for a 21st-century regulatory system, which he described in Executive Order 13563, "Improving Regulation and Regulatory Review."  Executive Order 13563 requires U.S. regulators, to the extent permitted by law, to select approaches that maximize net benefits; choose the least burdensome alternative; increase public participation in the rulemaking process; design rules that are simpler and more flexible, and that provide freedom of choice; and base regulations on sound science. Executive Order 13563 also calls for an ambitious, government-wide "lookback" at existing rules, with the central goal of eliminating outdated requirements and unjustified costs.

    Today, President Obama has built on Executive Order 13563 by signing a historic Executive Order on Promoting International Regulatory Cooperation. The new Executive Order (EO) is designed to promote American exports, economic growth, and job creation by helping to eliminate unnecessary regulatory differences between the United States and other countries and by making sure that we do not create new ones.

Sunstein also wrote an op-ed in Wall Street Journal, indicating that the EO makes clear that in eliminating such differences, the U.S. will respect domestic law and will not compromise its priorities and prerogatives. Sunstein said, "Even while insisting on those priorities and prerogatives, we can eliminate pointless red tape. Today's global economy relies on supply chains that cross national borders (sometimes more than once), and different regulatory requirements in different countries can significantly increase costs for companies doing business abroad. As the President's Jobs Council recently noted, international regulatory cooperation can reduce these costs and help American businesses access foreign markets. Such cooperation can also help U.S. regulators more effectively protect the environment and the health and safety of the American people."

    The new Executive Order calls for, among other things, an interagency working group, chaired by OMB's OIRA, to provide a forum to foster greater cooperation and coordination of U.S. Government strategies, including those for promoting regulatory transparency, sound regulatory practices, and U.S. regulatory approaches abroad. The EO also requires Federal agencies, as part of the President's retrospective review initiative under Executive Order 13563, to consider regulatory reforms that eliminate unnecessary differences between the United States and its major trading partners.

    Sean Heather, vice president of the U.S. Chamber's Center for Global Regulatory Cooperation, issued a statement welcoming the new executive order saying, "Today's executive order marks a paradigm shift for U.S. regulators by directing them to take the international implications of their work into account in a consistent and comprehensive way. Fulfilling primary regulatory objectives such as health and safety is more complicated than ever due to the interconnected nature of the global economy. The result is that international cooperation is clearly in the interest of regulators and is now assuming a central role in framing good domestic regulatory policy.

    "This landmark executive order recognizes that good regulatory policy supports good trade policy. Dialogue between U.S. regulators and their foreign counterparts can avert unnecessary divergences in regulation that become 'behind the border' barriers to commerce and hinder the ability of U.S. companies to reach the 95% of the world's consumers that live beyond our borders. . . This executive order is the international riposte. We look forward to working with the Office of Information and Regulatory Affairs on further guidance in support of today's executive order."

    Access the blog posting with links to the EO, the WSJ op-ed and extensive additional related information (click here). Access the statement from the U.S. Chamber (click here). [#All]

Administration Releases 10-Year Global Change Research Plan

Apr 27: The Obama Administration released a 10-year strategic plan for research related to global change, identifying priorities that will help state and local governments, businesses, and communities prepare for anticipated changes in the global environment, including climate change, in the decades ahead. The Plan -- released by the U.S. Global Change Research Program (USGCRP), which for more than 20 years has coordinated Federal global change research -- was developed collaboratively by more than 100 Federal scientists. It reflects extensive inputs from stakeholders and the general public, as well as a detailed review by the National Research Council, chartered by Congress to provide independent expert advice to the Nation. The Plan will be implemented through the USGCRP and the 13 Federal departments and agencies it represents. 

    Tom Armstrong, Executive Director of the USGCRP said, "Human actions are altering the atmosphere, the land, and our oceans, placing new pressures on the Earth's ecosystems and threatening the health and economic welfare of our Nation and the world. High-quality and well-coordinated research is essential if we are to better understand and predict future changes, develop strategies to minimize our vulnerabilities, and adapt to changes that can't be avoided."

    Federal research under the USGCRP has for two decades focused largely on detailed documentation of specific environmental changes by satellite and other Earth-observing technologies and the development of sophisticated computer models of the Earth's climate system to predict how such changes will manifest in the near-term. In the ten years going forward that emphasis will expand to incorporate the complex dynamics of ecosystems and human social-economic activities and how those factors influence global change. By including these added dimensions, USGCRP-sponsored research will generate information of unprecedented practical use to decision-makers in a wide range of sectors including agriculture, municipal planning, and public works.  

    Armstrong said, "It is no longer enough to study the isolated physical, chemical, and biological factors affecting global change. Advanced computing technologies and methods now allow us to integrate insights from those disciplines and add important information from the ecological, social, and economic sciences. This new capacity will deepen our understanding of global change processes and help planners in realms as diverse as storm water management, agriculture, and natural resources management."

    The Strategic Plan describes four key goals for the USGCRP during 2012 – 2021:

• Advance Science: Advance scientific knowledge of the integrated natural and human components of the Earth system, drawing upon physical, chemical, biological, ecological, and behavioral sciences.
• Inform Decisions: Provide the scientific basis to inform and enable timely decisions on adaptation to and mitigation of global change.
• Conduct Sustained Assessments: Build a sustained assessment capacity that improves the Nation's ability to understand, anticipate, and respond to global change impacts and vulnerabilities.
• Communicate and Educate: Broaden public understanding of global change and support the development of a scientific workforce skilled in Earth-system sciences.

    Work towards these goals will help the fulfill its Congressional mandate to "assist the Nation and the world to understand, assess, predict, and respond to human-induced and natural processes of global change," as called for in the Global Change Research Act of 1990. To achieve these goals, USGCRP is developing an implementation strategy that will draw in part upon its expertise in conducting National Climate Assessments -- broad assessments of global change impacts across U.S. economic sectors, the latest of which is currently under development. In combination with USGCRP's expanding communication and education activities, the new scientific findings and decision-support tools expected to emerge from the Strategic Plan will empower a broad range of stakeholders to make more informed and effective decisions as they prepare for and respond to the many dimensions of global change.

    Access a release from USGCRP and link to more about the Strategic Plan and USGCRP (click here). Access the complete 152-page Research Plan (click here, 31MB file). [#Climate]

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Senate Ag Committee Approves Bipartisan 2012 Farm Bill

Apr 26: The U.S. Senate Committee on Agriculture, Nutrition and Forestry, Chaired by Senator Debbie Stabenow (D-MI) with Ranking Member Senator Pat Roberts (R-KS) approved the Agriculture Reform, Food and Jobs Act of 2012, a bipartisan Farm Bill by a vote of 16-5. The bill reforms food and agricultural policy by eliminating direct payments and emphasizing the need to strengthen risk management tools for farmers, saving billions of dollars. Overall, the 2012 Senate Farm Bill will reduce the deficit by $23 billion dollars by eliminating unnecessary subsidies, consolidating programs to end duplication, and cracking down on food assistance abuse. The reforms allow for the strengthening of key initiatives that help farmers and small businesses reach new markets and create American jobs. The measure will now go to the full Senate for consideration.

    Chairman Stabenow said, "The Agriculture Reform, Food and Jobs Act of 2012 will save taxpayers billions of dollars while promising a safe and healthy national food supply. By eliminating duplication, and streamlining and consolidating programs, we were able to continue investing in initiatives that help farmers and small businesses create jobs. This bill proves that by working across party lines, we can save taxpayer money and create smart, cost-effective policies that lay the foundation for a stronger, more prosperous economy.  I am proud that once again the Agriculture Committee was able to work together in a bipartisan way to complete major reforms that save money and grow our economy. We now look forward to continuing to work with our colleagues in a bipartisan way to ensure we enact a Farm Bill this year before the current one expires. Agriculture supports 16 million jobs in our country, and it is absolutely critical to provide farmers the certainty they need to plan and grow by passing a Farm Bill this year."

    Senator Roberts said, "We've worked hard to put together the best bill possible. We've performed our duty to taxpayers by cutting deficit spending while at the same time strengthening and preserving the programs so important to agriculture and rural America. And, we've done it in a bipartisan fashion. I look forward to the bill's consideration on the Senate floor to further the debate on our efforts to save taxpayer dollars, continue to eliminate waste, fraud and abuse, and end redundant programs."

     Representative Frank Lucas (R-OK) Chairman of the House Agriculture Committee issued a statement on the Senate bill saying, "I commend Chairwoman Stabenow, Ranking Member Roberts and the other members of the Senate Ag Committee for advancing their farm bill today. This is an important first step in the development of the next Farm Bill. I look forward to concluding the House Agriculture Committee's hearing process and working with Ranking Member Peterson and members of the Committee to write the House bill in the coming weeks.

    "I am disappointed by the Senate bill's commodity title because it does not work for all of agriculture. It fails to provide producers a viable safety net and instead locks in profit for a couple of commodities. I have made it clear that my chief priority is making certain that the commodity title is equitable and provides a safety net for all covered commodities and all regions of the country. A shallow loss program is not a safety net. It does not provide protection against price declines over multiple years and it does not work for all commodities."

    The Biotechnology Industry Organization (BIO) issued a release thanking members of the Senate Agriculture Committee, for reauthorizing farm programs that are valuable to the biotechnology industry and ensuring they have the funding to work. BIO President & CEO Jim Greenwood said, "The important energy title programs authorized and funded in this bill are just beginning to have a positive impact in revitalizing rural America, fueling economic growth and creating well-paying opportunities where we need it most -- in manufacturing, energy, agriculture and forestry. These programs can also help meet our responsibilities to revitalize rural areas, reduce dependence on foreign oil, and renew economic growth. The Farm Bill's energy title and proposals to support biomanufacturing will help the United States maintain its competitive leadership in biotechnology, manufacturing and agriculture – ensuring that what we grow here in the United States can be used to make new products here and create jobs here.

    "These programs would provide the highest return on taxpayer dollars and ensure the future of emerging energy and renewable chemical markets, if the bill is passed by the full Congress. These programs already have helped renewable energy companies unlock private capital for construction of advanced biorefineries, something that has been extraordinarily difficult during the recent economic downturn. They also have helped farmers in over 150 counties across 10 states begin to put more than 150,000 acres of underutilized farmland into production of next generation energy crops. The programs have further ignited an explosion of innovation and early commercialization of renewable chemicals here in the United States."

    The Union of Concerned Scientists (UCS) issued a statement saying it believes the Farm Bill approved by the Senate Agriculture Committee offers a unique opportunity to influence what the nation's farmers grow -- and how they grow it --for years to come.  Justin Tatham, Senior Washington Representative for the Food & Environment Program at UCS said, "The Union of Concerned Scientists lauds Senators Stabenow and Roberts for kicking off the Farm Bill deliberations with a bipartisan committee bill. In some regards, progress has been made, but more needs to be done to expand the production of local and healthy food, ensure basic levels of on-farm conservation, promote the adoption of sustainable agriculture practices, and foster a more robust research agenda.

    "The direction in the committee bill to develop a whole-farm revenue program that offers effective insurance coverage nationwide is a huge step in helping small, local farmers. Funding included in the bill for programs to support organic food production and expand local food systems is critical. . . additional funding and policy changes are needed to help these growing sectors of the agriculture economy reach their full potential. Organic farmers in particular still have a tough row to hoe with the bill's failure to eliminate an unnecessary insurance premium surcharge placed on organic producers. . . we believe the absence of conservation compliance requirements for crop and revenue insurance is a critical flaw." 

    The National Wildlife Federation (NWF) commended the Committee's approval and Julie Sibbing, director of agriculture and forestry programs at NWF said, "The final bill must ensure that farmers receiving taxpayer-subsidized crop insurance do not drain wetlands and cultivate erosion-prone soil without conservation measures. Unfortunately, the bill as it stands now would allow farmers to continue to receive taxpayer-supported crop insurance without complying with such measures. It is unfair to ask taxpayers to help fund insurance for farmers while these same farmers are increasing the risk to downstream communities." NWF said, "The lack of wetlands protection requirements for crop insurance recipients means the estimated $90 billion to be spent on taxpayer subsidies for crop insurance over the next ten years could be subsidizing the destruction of tens of thousands of acres of valuable wetlands, resulting in increased downstream flooding and loss of wildlife habitat."

    NWF praised the inclusion of a number of modifications to the farm bill, including an amendment by Senator Thune to discourage the destruction of native prairies, an amendment by Senator Conrad to provide mandatory funding for Energy title programs (including the Biomass Crop Assistance Program and the Rural Energy for America Program) and an amendment by Senator Brown to add nutrient management as a goal of the Regional Conservation Partnerships program, a new initiative hat will strategically direct resources to improve the health of some of the nation's Great Waters such as the Chesapeake Bay and the Great Lakes.

    Access a release from Senator Stabenow that summarizes key provisions (click here). Access a release from Sen. Roberts (click here). Access a copy of the Senate bill, including the amendments that were accepted by the Committee, a section-by-section summary and webcast of the markup procedures (click here). Access the statement from Representative Lucas (click here). Access the BIO release (click here). Access the UCS release (click here). Access the NWF release (click here). [#Agriculture]

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House Motion To Accept Sen. Transportation Bill Fails

Apr 24: The House and Senate have now appointed the members to the Conference Committee to resolve the differences, which are substantial, between the two versions of the reauthorization of the Highway Surface Transportation program [See WIMS 4/24/12]. The House version, H.R.4348, the Surface Transportation Extension Act of 2012, provides a short-term extension and includes highly controversial provisions requiring approval of the Keystone XL pipeline and the management and reuse of coal ash. The Senate version, S.1813, the Moving Ahead for Progress in the 21st Century (MAP-21), provides a two-year $109 billion surface transportation reauthorization.

    Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) named the following 14 Senate conferees: Senators Barbara Boxer (D-CA), James Inhofe (R-OK), Max Baucus (D-MT), Jay Rockefeller (D-WV), Dick Durbin (D-IL), Tim Johnson (D-SD), Chuck Schumer (D-NY), Bill Nelson (D-FL), Robert Menendez (D-NJ), David Vitter (R-LA), Richard Shelby (R-AL), Orrin Hatch (R-UT), Kay Bailey Hutchison (R-TX), and John Hoeven (R-ND).

    On the House side, 20 Republicans and 13 Democrats were named including: Representatives John Mica (R-FL), Don Young (R-AK), John Duncan (R-TN), Bill Shuster (R-PA), Shelley Moore Capito (R-WV), Rick Crawford (R-AR), Jaime Herrera Beutler (R--WA), Larry Buschon (R-IN), Richard Hanna (R-NY), Steve Southerland (R-FL), James Lankford (R-OK), Reid Ribble (R-WI), Fred Upton (R-MI), Ed Whitfield (R-KY), Doc Hastings (R-WA), Rob Bishop (R-UT), Ralph Hall (R-TX), Chip Cravaack (R-MN), Dave Camp (R-MI), Patrick Tiberi (R-OH), Nick Rahall (D-WV), Peter DeFazio (D-OR), Jerry Costello (D-IL), Jerrold Nadler (D-NY), Corrine Brown (D-FL), Elijah Cummings (D-MD), Leonard Boswell (D-IA), Tim Bishop (D-NY), Henry Waxman (D-CA), Ed Markey (D-MA), Eddie Bernice Johnson (D-TX), Earl Blumenauer (D-OR) and Del. Eleanor Holmes Norton (D-DC).

    In the House, Representative Rahall (D-WV), Ranking Member of the House Transportation and Infrastructure Committee offered a motion to instruct the House Conferees "to recede from disagreement to the amendment of the Senate." Rep. Rahall explained, "Running these programs through short-term extensions creates tremendous uncertainty among State departments of transportation, public transit agencies, and highway and transit contractors that delay critical highway and transit projects, costing good-paying jobs each step of the way. With more than 2.5 million construction and manufacturing workers still out of work, it is far past time for Congress to enact surface transportation legislation that will remove this uncertainty, create and sustain family-wage jobs, and restore our Nation's economic growth.

   That's why I offer this motion today. We have an opportunity before us to move quickly to pass legislation that can remove this uncertainty and get America back to work. Over a month ago, the Senate passed S. 1813, known as MAP 21, by an overwhelmingly bipartisan vote of 74 22. Now, each of us in this body knows how difficult it is for the other body to agree on just about anything. But, unlike the House, the Senate was able to come together to pass bipartisan legislation that will provide States with the certainty that they need to move forward with highway and transit projects and get Americans back to work. It is time for the House, believe it or not, to follow the other body's lead and pass S. 1813. . ."

    Representative Mica (R-FL), Chairman of the House Transportation and Infrastructure Committee, rebutted the Rahall motion and said in part, "Today they propose closing down that free and open process. Let's just adopt what the Senate tossed over to us. I say 'no,' and I say 'no' for a whole host of reasons. The Senate proposal is a proposal that will bankrupt the trust fund. The Senate proposal is a path to just building paths, to resurfacing, to short-term jobs, not answering the call of the people who sent us here to make certain that their transportation money, when they go fill up their gas tank, pay for 1 gallon of gas, 18.4 cents comes to Washington in the trust fund, and we spend it. That's what this sets the policy for, what's eligible for receiving those Federal dollars.

    The Rahall motion to instruct failed by a vote of 181-242. The vote include 180 Democrats and 1 Republican voting for the motion; and 238 Republicans and 4 Democrats voting against it.

    Access legislative details for H.R.4348 (click here). Access legislative details for S.1813 (click here). Access the complete, lengthy House Floor debate on the motion to recede and instruct (click here). Access a release from House Republicans on the Keystone XL and coal ash provisions (click here). [#Transport]

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IEA Report Calls For Faster Deployment Of Clean Energy Technologies

Apr 25: The International Energy Agency (IEA) reported to the ministers and representatives of nations that account for four-fifths of global energy demand that, "while progress is being made on renewable energy, most clean energy technologies are not being deployed quickly enough." The report -- Tracking Clean Energy Progress -- the Agency's annual progress report highlights the rapid progress made in some renewable technologies, notably the solar panels easily installed by households and businesses (solar PV) and in onshore wind technologies.

 

    IEA indicated that in fact, onshore wind has seen 27% average annual growth over the past decade, and solar PV has grown at 42%, albeit from a small base. IEA said, even more impressive is the 75% reduction in system costs for solar PV in as little as three years in some countries. This serves as evidence that rapid technology change is possible. Unfortunately, however, the report concludes that most clean energy technologies are not on track to make their required contribution to reducing carbon dioxide (CO2) emissions and thereby provide a more secure energy system.

    IEA Deputy Executive Director Ambassador Richard Jones said, "We have a responsibility and a golden opportunity to act. Energy-related CO2 emissions are at historic highs; under current policies, we estimate that energy use and CO2 emissions would increase by a third by 2020, and almost double by 2050. This would likely send global temperatures at least 6°C higher. Such an outcome would confront future generations with significant economic, environmental and energy security hardships -- a legacy that I know none of us wishes to leave behind."

    The report was released at the third Clean Energy Ministerial (CEM) in London and urges aggressive policy action to take full advantage of the benefits offered by clean energy technologies. In sounding the alarm over the report's findings, Ambassador Jones stressed the positive role the CEM can play in improving the situation. He said, "The ministers meeting this week in London have an incredible opportunity before them. It is my hope that they heed our warning of insufficient progress, and act to seize the security, economic and environmental benefits that a clean-energy transition can bring."

    The report notes that many technologies with great potential for energy and emissions savings are making "halting progress at best." IEA notes that, "Carbon capture and storage (CCS) is not seeing the necessary rates of investment to develop full-scale demonstration projects, and nearly half of new coal-fired power plants are still being built with inefficient technology. Vehicle fuel-efficiency improvement is slow, and significant untapped energy-efficiency potential remains in the building and industry sectors."

    In addition, while government targets for electric vehicles (20 million by 2020) are ambitious, as are continued nuclear expansion plans in many countries, translating plans into reality is easier said than done. Manufacturers' production targets for electric vehicles after 2014 are highly uncertain; and increasing public opposition to nuclear power is proving challenging to address. The report offers three over-arching policy recommendations for changing this status quo and moving clean-energy technologies to the mainstream market:

• First, level the playing field for clean energy technologies. This means ensuring that energy prices reflect the "true cost" of energy -- accounting for the positive and negative impacts of energy production and consumption;
• Second, unlock the potential of energy efficiency, the "hidden fuel" of the future. Making sure that energy is not wasted and that it is used in the best possible way is the most cost-effective action and must be the first step of any policy aimed at building a sustainable energy mix;
• Finally, accelerate energy innovation and public support for research, development and demonstration. This will help lay the groundwork for private sector innovation, and speed technologies to market.

    The IEA is an autonomous organization which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA's initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.

 

    Access a release from IEA and link to additional information (click here). Access the complete 82-page report (click here). [#Energy/Renewable]

 

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House Passes Controversial Version Of Surface Transportation Bill

Apr 18: The U.S. House of Representatives passed its own version of an extension of surface transportation law by a vote of 293 to 127. Republicans said the bill, H.R.4348, the Surface Transportation Extension Act of 2012, "includes important provisions to significantly cut the red tape that delays highway and bridge projects across the country. The measure also includes a provision that will lower energy costs for Americans and decrease reliance on unstable foreign sources of energy." The House-passed bill included two highly controversial provisions from the Energy and Commerce Committee including requiring approval of the Keystone XL pipeline and the management and reuse of coal ash.

 

    On March 14, the full Senate approved S.1813, the Moving Ahead for Progress in the 21st Century (MAP-21), a two-year $109 billion surface transportation bill by a vote of 74-22. Funding for the Surface Transportation program which was set to expire on March 31, was extended 90-days to June 30 [See WIMS 3/30/12].

 

    The day before the House approval, the White House issued a Statement of Administration Policy indicating, "The Administration strongly opposes H.R. 4348." The Administration which supported the Senate bill said the House bill, which would simply extend current authority through the end of the fiscal year, "would miss a critical opportunity to provide more certainty to States and localities as they undertake the long-term planning and execution of projects and programs that are essential to creating and keeping American workers in good paying jobs, improving the Nation's surface transportation infrastructure, and ensuring roadway safety."

 

    The White House said further, ". . .the Administration is strongly opposed to this bill because it seeks to circumvent a longstanding and proven process for determining whether cross-border pipelines are in the national interest and for assessing the environmental impacts by mandating the permitting of the Keystone XL pipeline project, despite the fact that the pipeline route has yet to be identified and there is no complete assessment of its potential impacts, including impacts on health and safety, the economy, foreign policy, energy security, and the environment. . ."

 

    Representative John Mica (R-FL), Chairman of the Transportation and Infrastructure Committee and primary sponsor of the bill said, "This bill contains no tax increases, earmarks, or new federal government programs, which may disappoint Democrats, but this legislation will help move the process forward in working to resolve differences with the Senate. When the President first sold the stimulus as an infrastructure bill, he failed to address the red tape that delays the approval of transportation projects. 'Shovel-ready' became a national joke because it takes so long to get the bureaucratic approvals for a project. This bill includes important provisions to significantly reduce the red tape that leaves projects and jobs behind."

    Rep. Mica continued, "This bill also includes provisions to help ensure funds collected for the maintenance and improvement of our nation's harbors are invested for that purpose. In addition, this bill moves forward with the Keystone pipeline project. While the Administration meanders on developing any kind of real energy policy, this measure will help lower energy costs and create jobs for Americans, particularly important as gasoline prices continue to skyrocket because of the squeeze that the Obama Administration has put on production of our energy assets here at home."

    Representative John Duncan, Jr. (R-TN), Chairman of the Highways and Transit Subcommittee said, "This legislation will allow programs to continue through the fiscal year and provide predictability during the summer construction season. The environmental streamlining provisions would also eliminate duplication by providing a single system to review decisions. It reduces bureaucratic delay by requiring concurrent, instead of consecutive, project reviews and setting deadlines for the completion of environmental reviews. These changes will cut the delivery process in half and save taxpayers a great deal of money."

    House Speaker John Boehner (R-OH) praised the House passed legislation and said, "The House is on record again in support of the Keystone XL energy pipeline -- a project President Obama blocked, personally lobbied against, then tried to take credit for, and now says he'll veto. There's no telling where the president stands from one day to the next on Keystone, but he knows the pipeline has broad and bipartisan support in Congress and among the American people. He knows it will create tens of thousands of new American jobs. And he knows that if he continues to stand in the way, the Canadian government will bypass the United States and ship their energy – and the jobs that come with it -- to countries like China.

    "Keystone is a critical part of our 'all of the above' energy strategy. The higher energy prices go, the more we all pay for everything from gasoline to groceries, and it's taking a real toll on families and small businesses. That's why I hope President Obama and Senate Democrats will get moving, and join the American people and Republicans in supporting this common-sense bill."

    Senator Barbara Boxer (D-CA), Chairman of the Environment and Public Works (EPW) Committee, and sponsor of the Senate-passed bill issued a statement saying, "The fact that the House voted to take a step forward on a surface transportation bill is encouraging -- as long as they follow through and immediately appoint conferees so that Congress can complete its work and get a bill to the President's desk. I have spoken to Senate Majority Leader Harry Reid, and he has committed to appoint Senate conferees as soon as Senate Rules allow. The final bill must be truly bipartisan so it can pass both Houses of Congress. The economic recovery really depends on our bipartisan action, because the transportation and construction sectors have such a huge impact on the nation's economy."

 

    Senator James Inhofe (R-OK), Ranking Member of the EPW Committee and a cosponsor of the Senate bill said, "I am pleased that the House has passed its short-term highway bill extension, as it means that the Senate and the House can proceed to conference on a long-term highway bill. Now we can get to the important work of providing much-needed funding to states to build and repair our nation's highways and bridges, and we can make crucial reforms to the federal highway program to ensure the taxpayer's money is best spent. I look forward to joining my colleagues in this bicameral, bipartisan effort as we work together to get the highway bill to the President's desk." 

 

    House Energy and Commerce Committee Chairman Fred Upton (R-MI) issued a statement saying, "Today, the House took a stand for jobs and affordable energy. For too long, President Obama's policies have put American jobs, our economy, and our energy security at risk. Today, we tell the president enough is enough. If he won't lead, Congress will. The legislation we passed today will protect thousands of jobs from the administration's dangerous overreach, prevent higher energy costs, and put our nation on a path toward greater energy security.  Families and business across the country are desperate for relief from high gas prices, and still the president refuses to act on the Keystone XL pipeline. . ." Regarding the coal ash amendment, Rep. Upton said, ". . .coal ash is safely and responsibly managed without sacrificing jobs. The amendment adopted today is necessary to escape the costly repercussions of EPA's heavy-handed approach to regulation, which could put as many as 300,000 jobs at risk and drive up electricity rates.

 

    Access a release from House Republicans on the Transportation Committee (click here). Access the White House statement of policy (click here). Access a release from Speaker Boehner (click here). Access a release from Sen. Boxer (click here). Access a release from Sen. Inhofe (click here).  Access a release from Rep. Upton (click here). Access legislative details for H.R.4348 (click here). Access legislative details for S.1813 (click here). [#Transport]

 

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EPA Issues Final Oil & Gas Production Air Standards

Apr 18: U.S. EPA announced that, in response to a court deadline, it has finalized standards to reduce harmful air pollution associated with oil and natural gas production. EPA said the updated standards, required by the Clean Air Act, were informed by the important feedback from a range of stakeholders including the public, public health groups, states and industry. As a result, the final standards reduce implementation costs while also ensuring they are achievable and can be met by relying on proven, cost-effective technologies as well as processes already in use at approximately half of the fractured natural gas wells in the United States.

 

    EPA said the technologies will not only reduce 95 percent of the harmful emissions from the wells that contribute to smog and lead to health impacts, they will also enable companies to collect additional natural gas that can be sold. Natural gas is a key component of the nation's clean energy future and the standards make sure that production can continue to expand while reducing impacts to public health, and most importantly builds on steps already being taken by industry leaders.

    EPA Administrator Lisa Jackson said, "The president has been clear that he wants to continue to expand production of important domestic resources like natural gas, and today's standard supports that goal while making sure these fuels are produced without threatening the health of the American people. By ensuring the capture of gases that were previously released to pollute our air and threaten our climate, these updated standards will not only protect our health, but also lead to more product for fuel suppliers to bring to market. They're an important step toward tapping future energy supplies without exposing American families and children to dangerous health threats in the air they breathe."

    In a release EPA indicates that when natural gas is produced, some of the gas escapes the well and may not be captured by the producing company. These gases can pollute the air and as a result threaten public health. Consistent with states that have already put in place similar requirements, the updated EPA standards include the first Federal air rules for natural gas wells that are hydraulically fractured, specifically requiring operators of new fractured natural gas wells to use cost-effective technologies and practices to capture natural gas that might otherwise escape the well, which can subsequently be sold. EPA's analysis of the final rules shows that they are highly cost-effective, relying on widely available technologies and practices already deployed at approximately half of all fractured wells, and consistent with steps industry is already taking in many cases to capture additional natural gas for sale, offsetting the cost of compliance. Together, EPA said the rules will result in $11 to $19 million in savings for industry each year. In addition to cutting pollution at the wellhead, the final standards also address emissions from storage tanks and other equipment.

    EPA also indicated that, in line with the executive order released by the President last week on natural gas development [See WIMS 4/13/12], the final rule received important interagency feedback and provides industry flexibilities. Based on new data provided during the public comment period, the rule establishes a phase-in period that will ensure emissions reduction technology is broadly available. During the first phase, until January 2015, owners and operators must either flare their emissions or use emissions reduction technology called "green completions," technologies that are already widely deployed at wells. In 2015, all new fractured wells will be required to use green completions. The final rule does not require new Federal permits. Instead, it sets clear standards and uses enhanced reporting to strengthen transparency and accountability, and ensure compliance, while establishing a consistent set of national standards to safeguard public health and the environment.

    EPA said that an estimated 13,000 new and existing natural gas wells are fractured or re-fractured each year. As those wells are being prepared for production, they emit volatile organic compounds (VOCs), which contribute to smog formation, and air toxics, including benzene and hexane, which can cause cancer and other serious health effects. In addition, the rule is expected to yield a significant environmental co-benefit by reducing methane, the primary constituent of natural gas. Methane, when released directly to the atmosphere, is a potent greenhouse gas -- more than 20 times more potent than carbon dioxide.

    EPA indicated that during the nearly 100-day public comment period, the Agency received more than 150,000 comments on the proposed rules from the public, industry, environmental groups and states. The Agency also held three public hearings. EPA said, "The updated standards were informed by the important feedback received through the public comment period, reducing implementation cost and ensuring the achievable standard can be met by relying on proven, cost-effective technologies and processes already in use."

 

    Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works (EPW), said that contrary to President Obama's reelection rhetoric, the new regulations are "the latest in his administration's war on natural gas production." Senator Inhofe said, "The Obama EPA has been working aggressively to assert control over natural gas production so that they can regulate it out of existence -- and this rule is just the latest in that grand scheme. It's no secret that EPA has been trying hard to manufacture a correlation between groundwater contamination and hydraulic fracturing, but in each case, they were unable to find sound scientific evidence to make this link. So now, they're attempting to usurp control through air regulations. EPA has given us few details about the rule, and while I look forward to seeing it in full, I have serious concerns about its potential impacts, particularly on smaller producers. . ."

 

    Representative Ed Markey (D-MA) praised the rule saying, "These new EPA safety and environmental standards will ensure that less pollution escapes into our air and our atmosphere, and that the natural gas industry won't be able to escape proper oversight of their practices. American natural gas will be a vital part of our economic and environmental progress, but only if the industry accepts the fact that the public wants assurances that drilling practices are done safely and don't result in needless releases of pollution into the environment. These new standards will encourage safer, cleaner natural gas that can then be used to fuel a manufacturing renaissance in America, and cut our use of dirtier fuels like old-style coal power plants. The natural gas industry should embrace these standards as a responsible way to continue the expansion of domestic natural gas, and should reject the proposed trend towards sending our natural gas abroad, which will raise costs to consumers and industry."

 

    Energy and Commerce Committee Chairman Fred Upton (R-MI) and other Republican Committee member expressed concern about the rule. Chairman Upton said, "This rule is another example of EPA expanding its role in national energy policy. The president says he wants to promote American energy production, yet he continues to allow EPA to issue regulations that increase environmental regulatory requirements and impose more red tape for domestic producers of affordable energy. American energy production on state and private lands remains a bright spot in our economy but EPA's layers of red tape threaten to stifle job creation and industry growth, especially for small businesses. We should be focusing on solutions to remove government barriers to affordable energy. Instead, the administration continues to layer regulation after regulation that will drive electricity and fuel prices even higher."

 

    The American Petroleum Institute (API) said it "recognized improvements" in the rule and Director of Regulatory and Scientific Affairs Howard Feldman commented saying, "The industry has led efforts to reduce emissions by developing new technologies that were adopted in the rule. EPA has made some improvements in the rules that allow our companies to continue reducing emissions while producing the oil and natural gas our country needs. This is a large and complicated rulemaking for an industry so critical to the economy, and we need to thoroughly review the final rule to fully understand its impacts."

 

    In a joint release, environmental groups praised EPA rule saying it is the "first federal safeguard aimed at curbing air pollution from hydraulic fracturing or 'fracking.'" They said the New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAPS) "will benefit the health of Americans and our environment in many ways. The updated standards will result in major reductions in emissions of volatile organic compounds (VOCs), toxic benzene and methane, a highly potent contributor to climate disruption. These pollutants are known to cause asthma attacks, hospital admissions, emergency room visits, cancer and even premature death." Groups commenting on the rule included: Sierra Club, Environment America, Earthjustice, Earthworks, Clean Air Task Force and Clean Water Action.

 

    Michael Brune, Executive Director of the Sierra Club said, "EPA Administrator Lisa Jackson is taking an important first step in closing loopholes for the natural gas industry and addressing dangerous air quality levels in and near frack-fields across the country. The natural gas industry dumps massive amounts of air pollutants into our air every day, sickening families and children.  An industry that touts its ability to efficiently drill thousands of wells thousands of feet into the earth is crying wolf when it claims it can't build enough tanks to capture wellhead pollution.  It's time we clean up the natural gas industry's dirty and reckless practices."

 

    Earthjustice President Trip Van Noppen said, "Left to its own devices, the oil and gas industry has turned the clear skies over Wyoming as smoggy as the car-choked highways of Los Angeles. For decades, industry had a free pollution pass. Thanks to a court victory, that changes today. There is more work to be done to protect Americans living near oil and gas fields from cancer and other unacceptable health threats, but this rule from EPA is an important first step."

 

    Access a release from EPA (click here). Access the complete 588-page final rule and extensive background, summary information, regulatory impact analysis and more (click here). Access the complete statement from Senator Inhofe (click here). Access a release from Rep. Markey (click here). Access a release from the House E&C Committee Republicans (click here).

Access a release from API (click here). Access a release from the environmental groups (click here). Access a separate release from EPA with favorable comments on the rule (click here). [#Air, #Energy/Frack, #Energy/OilGas]

 

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Clean Energy Markets Suffer From Political Bickering & Uncertainty

Apr 12: Bloomberg New Energy Finance (BNEF) reports that after clocking up a record in 2011, new financial investment in clean energy in first quarter of 2012 was the weakest since the depths of the financial crisis in Q1 2009. In a release BNEF indicates that clean energy investment fell sharply in the first quarter of 2012, and new financial investment was down 28% from Q4 2011 to just $27 billion; it was 22% lower than the equivalent figure in the first quarter of last year. New financial investment includes venture capital, private equity, public markets and asset finance, but excludes small-scale projects and corporate and government RD&D, on which Bloomberg New Energy Finance reports only annually. 

    The first quarter 2012 new financial investment total included $24.2 billion in asset finance of utility-scale renewable energy projects, such as wind farms and solar parks, plus $1.9 billion of venture capital and private equity investment in specialist clean energy companies. Just $601 million was raised on the public markets by quoted companies during the period.

    Michael Liebreich, chief executive of Bloomberg New Energy Finance, said, "A $27 billion quarterly figure is not a disaster, but it is the weakest since the dismal $20 billion seen in the first quarter of 2009, when the financial crisis was at its worst. The weak Q1 2012 number reflects the destabilizing uncertainty over future clean energy support in both the European Union -- driven by the financial crisis -- and the US -- driven by the expiry of stimulus programmes and the electoral cycle. There is no sign of a rapid turnaround in either of these regions in the next 12 months. Clean energy technologies, particularly solar photovoltaics and onshore wind, continue to fall in price and approach competitiveness with fossil-fuel power -- but politicians in many countries appear to be ducking the decisions that would ensure that the sector maintains its growth trajectory. We are seeing growth in some of the non-core markets around the world, but they will have a tough job replacing weakening demand in the developed world."

    In the U.S., the key support mechanism for wind -- the Production Tax Credit -- is due to expire at the end of this year unless Congress agrees to extend it [See WIMS 4/9/12]; while in Europe, governments in key countries such as Spain, Italy, Germany, Poland and the UK have announced cuts in incentives for renewable power projects, in some cases leaving investors guessing about their likely future returns.

    Looking at the different categories of investment in Q1, asset finance of $24.2 billion was 30% down from the fourth quarter and 13% below that in the first quarter of 2011. There continued to be some large renewable energy projects financed -- including the 396MW Marena Wind Portfolio in Mexico for $961 million, the 100MW KVK Chinnu solar thermal plant in India for approximately $400 million, and the 201MW Post Rock Wind farm in Kansas, US, for an estimated $376 million.

    The largest projects financed in Europe in Q1 -- in the face of a difficult market for bank lending following last autumn's euro area crisis – were the 150MW Monsson Pantelina wind farm in Romania at $317 million, and the 60.4MW SunEdison Karadzhalovo solar PV plant in Bulgaria at $248 million.

Venture capital and private equity investment held up well at $1.9 billion, just 2% below that in the fourth quarter of last year and 6% higher than the first quarter of 2011. The biggest deals were $130 million in equity raised by US electric vehicle company Fisker Automotive, a $102.6 million injection into UK-based biomass-to-power firm Tamar Energy, and an $81 million fund-raise by US PV installer SolarCity.

    Public market investment in clean energy of $601 million was down 12% from the fourth quarter, and 87% from the first quarter of 2011 -- a plunge that was not surprising, given the poor performance of sector shares in the last year. The WilderHill New Energy Global Innovation Index, or NEX, which tracks the movements of 97 clean energy shares worldwide, fell 40% in 2011 and clawed back just 7% in the first quarter of 2012 as world stock markets rebounded. The largest two public market deals in clean energy in Q1 were both initial public offerings by US companies in the biofuel sector -- Ceres, a developer of genetically-modified energy crops, raised $74.8m, and Renewable Energy Group, a maker of biodiesel, raised $68.6 million.

    Liebreich said, "The outlook for investment in the remainder of the year remains difficult. The rapidly improving cost-competitiveness of renewable energy technologies is stimulating activity, particularly in developing countries. However it is becoming harder to see the sector worldwide beating last year's record, unless the storm-clouds lift in Europe and U.S. Congress stops bickering sends some clear signals about the importance of new energy technologies. Meanwhile, continuing improvements in the sector's economics mean that companies which survive these next few years, whether on the industry's supply or demand side, will be extremely well positioned for the next growth phase."

    BNEF reports that in 2011, overall clean energy investment, including the "financial new investment" measure calculated quarterly but also annually-calculated totals for government and corporate research and development and small-scale projects such as rooftop solar, was a record $263 billion. This compares to 2010's total of $247 billion and just $54 billion back in 2004. A final figure for 2011 will be published by mid-year as part of the UN Global Trends in Renewable Investment report, which will include information on late-reporting transactions from 2011.

    Meanwhile, the Pew Environmental Group released a separate report entitled, Who's Winning the Clean Energy Race? 2011 Edition. Pew reports that Among Group of Twenty (G-20) nations, the United States reclaimed the top spot from China, which led the global clean energy race since 2009. Germany, Italy, the United Kingdom, and India were also among the nations that most successfully attracted private investments last year. 

    Phyllis Cuttino, director of Pew's Clean Energy Program said, "Clean energy investment, excluding research and development, has grown by 600 percent since 2004, on the basis of effective national policies that create market certainty. This increase was due in part to the number of countries that have implemented effective national policies to support the clean energy market. In the United States, which attracted $48 billion last year, investors took advantage of the country's stimulus programs before they expired at the end of 2011, as well as the production tax credit for electricity from renewable energy, which is to end this December." Pew reports additional key findings from the report as follows:

• Led by 42 percent growth in the United States and 15 percent in Brazil, investment in the Americas region grew by more than 21 percent to $63.1 billion, faster than any other region. 
• The clean energy sector in the Asia/Oceania region increased more than 10 percent to $75 billion. Relatively flat investment in China was mitigated by sharp gains in India, Japan, and Indonesia, which were among the fastest-growing clean energy markets in the world. 
• The clean energy sector in the European region grew by a modest 4 percent but remains the leading destination for such investment, at $99.3 billion. Significant investment growth in Italy, the United Kingdom, and Spain helped to offset declines in other European Union member states. Germany and Italy continue to lead the world in deployment of small, distributed solar photovoltaic power installations, accounting for more than 50 percent of worldwide solar capacity additions, and 38 percent of G-20 solar technology investments.
• The United States remains the leader in venture capital financing, an important measure of energy innovation, attracting $6 billion, or 70 percent of the G-20 total. Germany and China were distant followers, with $635 million and $458 million, respectively, in venture capital investments.

    Access the summary from BNEF (click here). Access a release from Pew (click here). Access the links to the complete 56-page Pew report and executive summary (click here). [#Energy/Clean, #Energy/Renewables]

 

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