U.S. Chamber Applauds DOI Endangered Species Act Proposal

[Subscribers & Readers Please Note: WIMS will be on break for the next two weeks. We'll be back on Tuesday, September 2, 2008. Have a safe and enjoyable end of summer and we'll be reporting to you again on September 2.]


Aug 14: The U.S. Chamber of Commerce commended Interior (DOI) Secretary Dick Kempthorne’s proposed rule changes to clarify the use of the consultation process surrounding the application of the Endangered Species Act (ESA) to the literally thousands of federal actions that may be subject to consultation under the Act [See WIMS 8/12/08]. William Kovacs, Chamber Vice President for Environment, Technology and Regulatory Affairs said, “1986 was the last time the relationship between ESA and the consultation process was discussed and the world was not then discussing the impact of greenhouse gases on the environment. Since then some have argued that any federal action anywhere has the potential to generate greenhouse gases and therefore, the consultation process should be applied to every federal action. That is just a ridiculous concept that would literally paralyze the ability of the federal government to move forward with projects."

“To address this huge bureaucratic nightmare and gross waste of federal resources, the Secretary is providing clear guidance to his agency as to when the Endangered Species Act consultation process must be used. By mandating that it must be used when the potential impacts are reasonable likely to occur but not requiring it when the potential impacts are unlikely, the Secretary has made a commonsense decision that greatly assists Department staff on the use of precious federal resources.

“Every year the federal government issues over 4000 new regulations that join the already existing 102,000 regulations. Within this massive regulatory maze of complex and costly mandates, it is reassuring to find someone in Washington willing to exercise commonsense. By making this clear distinction between the use of consultations for reasonably likely impacts but not mandating consultations in situations where impact is unlikely, the Secretary is bringing efficiency and rationality to the rulemaking process.”

Most major environmental and conservation organizations expressed outrage at Kempthorne's proposal. They said the Bush Administration plans to rollback protections for America’s imperiled wildlife by re-writing the ESA regulations which "would weaken the safety net of habitat protections that have helped protect and recover endangered fish, wildlife and plants for the past 35 years."

On August 11, Kempthorne announced the proposal which he called "common-sense modifications" to the existing ESA regulations. The proposed rule was published in the Federal Register today [73 FR 47868-47875, 8/15/08]. Comments on the proposal are due by September 15, 2008. [Note: An earlier draft of the proposal had included a 60-day comment period; however, it has been reduced to 30-days.]

Access a release from the U.S. Chamber (click here). Access the docket for the proposed rulemaking for the proposed rule and to submit and review comments (click here). [*Wildlife, *Climate]

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New Draft Global Sustainability Standard For Biofuels

Aug 13: A United Nations-backed group of international experts has endorsed a first draft of a new global sustainability standard for biofuels to assess their economic, social and environmental effects. The Steering Board of the Roundtable on Sustainable Biofuels (RSB), which includes an expert from the UN Environment Programme (UNEP), signed off on the draft criteria, called “Version Zero,” which is based on a comprehensive “land to tank” analysis spanning the entire chain of biofuel production. It is hoped that the new standard will be used by investors, governments, corporations and civil society to analyze the sustainability of different types of biofuels.

Version Zero contains input -- submitted during teleconferences, over an innovative Wiki online format and at various meetings held worldwide -- from over 300 experts from dozens of countries. It addressed such concerns as biofuels’ potential contribution to mitigating the effects of climate change, the protection of land and labor rights, soil pollution, water availability and food security. It is hoped that all feedback on the draft standard will be submitted by February 2009.

The RSB, housed at the Energy Center at the Swiss Federal Institute of Technology in Lausanne (EPFL), is comprised of over three hundred experts from organizations, corporations and civil society groups, including UNEP, WWF, and a number of fossil fuel producers such as BP and Shell.

Dr. Claude Martin, formerly Director-General of World Wildlife Fund, and current chair of the RSB issued a statement commenting on the Version Zero release and said, “With all of the mixed messages we hear about biofuels, there is a clear need for a standard that can differentiate the good from the bad. For an issue of such seminal importance, it was necessary to bring many different stakeholder groups together to agree on how to define and measure sustainable biofuels.” Jean-Philippe Denruyter, Global Bioenergy Coordinator at WWF and member of the RSB board said, “Ensuring sustainability is what all these discussions are hinged upon. Biofuels are one of a number of potential alternatives to fossil fuels, and today’s agreement allows us to initiate a stakeholder-driven process that will determine their value right across the production process, from field or forest to tank.”

The RSB indicated in its announcement, "As we wish this to be a globally-applicable and globally-accessible standard for sustainable biofuels, we are actively encouraging stakeholder feedback from any interested party. The Steering Board will take all of this feedback into account through February, 2009 and publish a revised 'Version One' in April, 2009. We encourage all stakeholders to post feedback on 'Version Zero' in English on the Bioenergy Wiki (See contacts below). We will also be co-hosting several in-person feedback sessions on Version Zero around the world." A sign up form is available.

The Version Zero standard is organized around 12 major principles with criteria and guidance for each: (1) Legality: Biofuel production shall follow all applicable laws of the country in which they occur, and shall endeavor to follow all international treaties relevant to biofuels' production to which the relevant country is a party. (2) Consultation, Planning and Monitoring: Biofuels projects shall be designed and operated under appropriate, comprehensive, transparent, consultative, and participatory processes that involve all relevant stakeholders. (3) Climate Change and Greenhouse Gas: Biofuels shall contribute to climate change mitigation by significantly reducing GHG emissions as compared to fossil fuels.(4) Human and Labor Rights: Biofuel production shall not violate human rights or labor rights, and shall ensure decent work and the well-being of workers. (5) Rural and Social Development: Biofuel production shall contribute to the social and economic development of local, rural and indigenous peoples and communities. (6) Food Security: Biofuel production shall not impair food security.

(7) Conservation and Biodiversity: Biofuel production shall avoid negative impacts on biodiversity, ecosystems, and areas of High Conservation Value. (8) Soil: Biofuel production shall promote practices that seek to improve soil health and minimize degradation. (9) Water: Biofuel production shall optimize surface and groundwater resource use, including minimizing contamination or depletion of these resources, and shall not violate existing formal and customary water rights. (10) Air: Air pollution from biofuel production and processing shall be minimized along the supply chain. (11) Economic efficiency, technology, and continuous improvement: Biofuels shall be produced in the most cost-effective way. The use of technology must improve production efficiency and social and environmental performance in all stages of the biofuel value chain. (12) Land Rights: Biofuel production shall not violate land rights.

Access a release from the UN (click here). Access the Version Zero of the RSB Principles and Criteria (click here). Access RSB website for extensive information and background (click here). Access the BionergyWiki (click here). Access a release from WWF (click here). [*Energy]

Republicans Continue Energy Protest On House Floor

Aug 12: House Republican Leader John Boehner (R-OH) and Republican Whip Roy Blunt (R-MO) announced they are continuing the historic gas prices revolt and urged House Speaker Nancy Pelosi (D-CA) to reconvene the House and schedule an up-or-down vote on the American Energy Act (H.R. 6566), the House Republicans’ comprehensive plan to increase production of American energy to lower gas prices. The bill, introduced by Representative Boehner on July 22, has 127 cosponsors.

House Republicans have transformed their “all-of-the-above” energy strategy into a single piece of legislation: the American Energy Act. The bill -- a product made possible by energy policies proposed by Members throughout the House Republican Conference -- they say will increase the supply of American-made energy, improve conservation and efficiency, and promote new and expanding energy technologies to help lower the price at the pump and reduce America’s increasingly costly and dangerous dependence on foreign sources of energy.

In a release, the Republicans said, "House Democrats are in chaos. Not only are they continuing to feel the heat in their congressional districts from Americans fed up with paying high gas prices, but they also are buckling under the weight of immense public support for more production of American energy to help bring down the price at the pump. The latest example: Speaker Pelosi herself, who yesterday on CNN’s Larry King Live said that the House 'can have a vote' on expanded drilling for oil and gas."

In a second release, Representative Boehner said, "If Speaker Pelosi is truly sincere about having a vote on deep ocean oil and gas drilling to help bring down fuel costs, she should use her power as Speaker to call Congress back into session immediately and schedule a vote on the American Energy Act. Ever since Speaker Pelosi adjourned Congress for a five-week break while Americans are left to suffer at the pump, House Republicans have taken our message of more American-made energy and lower gas prices directly to the American people – on the floor of the House and in communities across the country. Based on the Speaker’s comments last night, it is clear our unprecedented nationwide effort is having an impact.

“Our message to Speaker Pelosi is very simple: we are ready to vote on more energy production and lower gas prices right now, and we should not wait one more day to begin giving the American people the relief they expect and deserve. If you meant what you said last night, we welcome you and your Democratic colleagues to join us in our historic call to action on American energy. End your five-week break early and call Congress back into session now so we can vote for more American-made energy and lower gas prices without any further delay.”

Although Speaker Pelosi did not respond directly to the Republicans, she has posted a series of responses on her website. On August 8 she posted the Top 10 for the House GOP on Energy and said, "As a small band of House Republicans remain on the House floor to call for 'drill only' legislation that would not bring immediate relief to consumers, their constituents deserve to know why their representatives in Congress have failed to support serious, responsible proposals put forward by the New Direction Congress. Americans have a right to know if House Republicans will reverse their opposition to these proposals; will Senate Republicans, including Senator McCain, stop blocking these bills; and will the President sign them?"

She said earlier that, "The New Direction Congress has repeatedly brought forth proposals to increase domestic supply, reduce the price at the pump, protect American consumers and businesses and promote renewable energy and conservation. To date, Democrats have brought forward 13 major initiatives to accomplish the above goals, yet each time a majority of House Republicans have voted against these proposals." She said, "A key proposal would codify Democrats’ call for releasing a small portion of oil from the Strategic Petroleum Reserve (SPR). Releasing a small amount from the government stockpile is a positive short-term step that would provide immediate impact on the price at the pump and ease the pain American families and businesses are feeling every day." She also said, "Republicans falsely claim that drilling in protected areas will provide immediate relief to America’s consumers. The Republican plan to drill on protected lands will result in only a 2 cents savings more than 10 years from now."

Access a release from House Republicans (click here). Access the 2nd Republican release (click here). Access a Republican website summarizing H.R. 6566 (click here). Access Speaker Pelosi's many responses to Republicans including a list of the 13 measures that large percentages of House Republicans voted against (click here). Access legislative details for H.R. 6566 (click here). [*Energy]

NWF Warns Of "Sneaky Attack" On Endangered Species Act

Aug 11: According to leaked documents obtained by the National Wildlife Federation (NWF), the Bush Administration plans to rollback protections for America’s imperiled wildlife by re-writing the regulations of the Endangered Species Act (ESA). The proposed changes would weaken the safety net of habitat protections that have helped protect and recover endangered fish, wildlife and plants for the past 35 years.

John Kostyack, Executive Director of Wildlife Conservation and Global Warming at the NWF said, “I have been working on the Endangered Species Act for 15 years and have never seen such a sneaky attack. To suggest that our nation's most important wildlife law could be gutted after a mere 60 day written comment period is the height of arrogance and disrespect for wildlife science. Elected officials have been saying no to proposals like this for 15 years. Do not be fooled when the Administration claims it is merely tweaking the law. The cumulative impact of these changes equals a full blown attack on America’s premier conservation law. We owe it to future generations to stop this attack and continue our legacy of protecting wildlife on the brink of extinction.”

NWF indicated in a release that since 1973, the ESA has served as "America's safety net for wildlife." NWF said it has saved hundreds of species from extinction, put hundreds more on the road to recovery and safeguarded the habitats upon which they depend. Without it, the bald eagle, condor, gray wolf, grizzly bear, Florida panther, manatee and hundreds of other species would be extinct today. The proposed changes target the ESA's "consultation process," which serves as the main safety net for species on the brink by allowing scientists with the U.S. Fish and Wildlife Service to determine if listed species will be harmed before moving forward with activities such as logging, mining or filling of wetlands.

Late Monday, August 11, Secretary of the Interior (DOI) Dirk Kempthorne announced that he was following through on his commitment to propose "common-sense modifications" to the existing ESA regulations. When Secretary Kempthorne on May 15, 2008, listed the polar bear as a “threatened species” under the ESA, he said the ESA was not the right tool to set U.S. climate policy or regulate green house gas emissions. DOI indicated in a release that the proposal is intended to update a portion of the ESA regulations dealing with section 7 of the Act. Section 7 governs the endangered species responsibilities of Federal agencies. The proposed changes to the regulations are designed to reflect current practices and recent courts cases. DOI said, "The changes will make it easier for agencies to understand when and how the regulations apply. While this rule will help avoid misuse of the ESA to regulate climate change, the rule will also generally improve the consultation process."

Each Federal agency is responsible under the regulations to consult with the U.S. Fish and Wildlife Service (FWS) or the National Oceanic and Atmospheric Administration (NOAA) before they undertake an action that may affect an endangered species. Such consultation may involve either a formal written request or it may be an informal conversation between the agencies. The purpose of these proposed changes is to clarify process, replace ambiguous definitions, explain when formal consultation is applicable, and improve the informal consultation process.

Kempthorne said, “ESA consultations in the 21st century address increasingly complex issues. We need a regulatory framework to guide those consultations that is consistent with the ESA and will address new challenges such as climate change,” said Kempthorne. “The existing regulations create unnecessary conflicts and delays. The proposed regulations will continue to protect species while focusing the consultation process on those federal actions where potential impacts can be linked to the action and the risks are reasonably certain to occur. The result should be a process that is less time-consuming and a more effective use of our resources.”

Dale Hall, Director of the Fish and Wildlife Service said, “The purpose of these changes is to reduce ambiguity, improve consistency, and narrow interpretive differences, even within the Services. They are a positive step forward. In 1986, our existing rules made sense. At that time very few Federal action agencies had any in-depth expertise with section 7 and listed species, but that is not the case today. We are not being good stewards of our resources when we pursue consultation in situations where the potential effects to a species are either unlikely, incapable of being meaningfully evaluated, wholly beneficial, or pose only a remote risk of causing jeopardy to the species or its habitat.” DOI said the announcement was being made in conjunction with the National Marine Fisheries Service (NMFS) under the Department of Commerce which shares responsibility for implementing the ESA.

DOI said, the proposed rule is consistent with the FWS current understanding that it is not possible to draw a direct causal link between greenhouse gas (GHG) emissions and distant observations of impacts affecting species. As a result, it is inappropriate to consult on a remote agency action involving the contribution of emissions to global warming because it is not possible to link the emissions to impacts on specific listed species such as polar bears. DOI said, "The Bush Administration has acknowledged climate change as a serious problem but has stressed that the proper forums to address it are through the Congress and the Bali Action Plan."

Finally, DOI said the proposal also adds timelines to help limit the duration of informal consultation and lend greater certainty to the process. It would allow action agencies to terminate consultation if the Fish and Wildlife Service has not acted on its request for concurrence within 60 days. However, the Service may request an additional 60 days. If, after that time, there is no written determination from the Service within the appropriate time frame, the action agency may terminate the consultation. The Department is seeking comment on this proposal for the next 30 days.

Noah Greenwald, science director at the Center for Biological Diversity (CBD), the lead organization that filed the formal petition to list the polar bear under the Act said, “The proposed regulations are an absolute disaster for the nation’s endangered species. Secretary Kempthorne seems determined to establish a legacy of environmental destruction and extinction and surpass even James Watt as the most anti-environmental interior secretary in U.S. history. These regulations are a recipe for the extinction of endangered species. It’s a classic example of letting the fox guard the henhouse. It would allow thousands of projects that harm endangered species to move forward without mitigation.”

Earthjustice Vice-President of Litigation Patti Goldman said, "It takes great hubris to resurrect an issue the court has already definitely struck down. This is like a zombie movie… their proposal to toss the Endangered Species Act over the cliff died, but now has somehow come back to life. The Bush/Cheney administration is looking back over the last eight years to see what real benefits they've brought to those who favor short term gain over our environment. They have little to show due to vigilance by conservation, fishing, and hunting groups who have worked to hold the line. Nonetheless, they're trying again to leave favors for powerful friends before leaving office." Environmental Defense and Sierra Club also issued releases (See below).

Access a release from NWF that summarizes the major proposals in the regulations and link to an analysis (click here). Access the draft regulations on the NWF website (click here). Access a release from DOI (click here). Access a release from CBD (click here). Access a release from Earthjustice (click here). Access a release from Environmental Defense (click here). Access a release from Sierra Club (click here). Access the FWS ESA website for additional information (click here). Access the NMFS ESA website for more information (click here). [*Wildlife, *Climate]

Next Round Of International Climate Change Talks Set For Ghana

Aug 11: The next round of United Nations international climate change negotiations is set to begin in Accra, Ghana, from August 21 to 27, 2008. The Accra Climate Change Talks will take forward work on a strengthened and effective international climate change deal under the UN Framework Convention on Climate Change (UNFCCC), as well as work on emission reduction rules and tools under the Kyoto Protocol. Over a thousand participants including government representatives, participants from business and industry, environmental organizations and research institutions are expected to attend the Accra gathering, which is part of the UN negotiating process that was launched that will be concluded in Copenhagen at the end of 2009. The process of global climate change negotiations will culminate in 2008 in the United Nations Climate Change Conference in Poznań, Poland, in December.

UNFCCC Executive Secretary Yvo de Boer said, "At the UN Climate Change Conference in Bali in 2007, the international community embarked on a two-year negotiating process which is both critically important and under severe time pressure. We are now 8 months into these negotiations, and while progress has been made, there is no doubt that we need to move forward quickly." The crucial Accra talks comprise the third session of the Ad hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA 3) and the first part of the sixth session of the Ad hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP 6, part I).

Within the context of negotiations under the Kyoto Protocol, work is scheduled to be concluded on analyzing the means available to developed countries to reach their emission reduction targets. In the context of the negotiation process on strengthened international action against climate change, workshops will be held on policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries. A second workshop will deal with on cooperative sectoral approaches and sector-specific actions.

Access a release on the upcoming meeting (click here). Access the Accra website for agendas, documents and further information as it becomes available (click here). [*Climate]

Reactions To EPA Denial Of Texas RFS Waiver Request

Aug 7: Various reactions are being expressed to U.S. EPA's decision to deny the request from Texas to reduce the nationwide Renewable Fuel Standard (RFS) by 50%. As a result of the denial, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009 [See WIMS 8/7/08]. Nearly all of the 162 U.S. ethanol biorefineries currently utilize corn as the feedstock and have a current capacity of 9,407 million gallons per year (mgy) with 4,208 mgy of expansions under construction [See contacts below].

Texas Governor Rick Perry who requested the waiver said, "I am greatly disappointed with the EPA’s inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households. For the EPA to assert that this federal mandate is not affecting food prices not only goes against common sense, but every American’s grocery bill. Denying Texas’ request is a mistake that will only increase the already-heavy financial burden on families while doing even more harm to the livestock industry. Good intentions and laudable goals are small compensation to the families, farmers and ranchers who are being hurt by the federal government’s efforts to trade food for fuel. Any government mandate that artificially props-up a single industry to the detriment of millions of Americans is bad public policy. Congress specifically created an emergency waiver provision for situations like these and EPA refuses to implement it."

Secretary of Energy Sam Bodman issued a release and said, “Clean, green, domestic, sustainable biofuels that reduce greenhouse gas emissions and increase our energy security are a crucial part of America’s energy policy. Advanced biofuels are just one part of a diverse portfolio of renewable energy and efficiency technologies that the Department of Energy is pursuing. . . In June, DOE announced an estimate that gasoline prices would be between 20 cents to 35 cents per gallon higher without ethanol, a first-generation biofuel. Also, without biofuels, DOE estimates that the U.S. would have to use 7.2 billion more gallons of gasoline in 2008 in order to maintain current levels of travel, a 5 percent increase. Since 2007 DOE has dedicated more than $1 billion in non-food based, sustainable, and cost competitive second-generation cellulosic biofuels research and demonstration. The Bush Administration is committed to continually monitoring the situation and is open to considering all policy options with respect to biofuels moving forward."

U.S. Senator James Inhofe (R-OK), Ranking Member of the Senate Environment and Public Works Committee, commented saying, "In the face of mounting questions and growing concern surrounding the corn-based ethanol mandates, today’s decision is a disappointment. In my home state of Oklahoma, the ethanol mandates are undoubtedly causing severe economic hardships for many cattlemen, pork producers, poultry producers and consumers."

The Alliance of Automobile Manufacturers (AAM) responded to the EPA decision saying, "The Alliance is pleased with EPA’s decision. Alliance members are working hard to do their part to help achieve the goals of renewable fuels standard. Alliance members have already produced more than 12.5 million alternative-fuel vehicles, including 5.5 million Flex-Fuel Vehicles (FFVs) capable of operating on a blend up of up to 85% ethanol, and 6 million diesel powered vehicles capable of operating on 5% biodiesel fuel. Yet only about 1 in 100 of the nation’s gas stations currently offer E85 fuel, with an even smaller percentage offering biodiesel blends. If the U.S. is to continue on the road to energy security, it is critical that the federal government continue to encourage growth in biofuels production and in the infrastructure needed to deliver these fuels to customers across the nation." AAM is a trade association of 10 car and light truck manufacturers including BMW Group, Chrysler LLC, Ford Motor Company, General Motors, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota and Volkswagen.

Pilgrim's Pride Corporation, the largest chicken company in the United States and Puerto Rico and the second-largest in Mexico said, "We are extremely disappointed . . . The RFS has caused feed ingredient prices to spiral out of control, inflicting extreme economic damage on food companies, and ultimately, on consumers, in the form of increased food costs. We expect our company's feed-ingredient costs for fiscal 2008 will increase $900 million from last fiscal year as a result of the U.S. government's failed ethanol policy. It's apparent that the government intends to blindly pursue this misguided and destructive policy despitereams of data demonstrating its negative impact on the environment, food prices, and world hunger. Not only are the 2008 mandates destructive, but the scheduled mandate next year will again increase another 16.7% from corn, consuming an additional 4.5% or more of the 2009-2010 corn crop than the anticipated 34% of the crop being consumed this year for ethanol production."

The American Meat Institute (AMI) issued a statement saying, “. . .using a third of our corn crop for ethanol production has driven corn and all feed prices up to levels that are severely impacting U.S. meat and poultry producers as well as consumers. . . the tripling of corn prices has done severe economic harm to the meat and poultry industry. The meat and poultry industry has already seen a contraction in production, resulting in smaller herd sizes and higher meat prices for consumers. Governor Perry recognized earlier this year that a near tripling of feed prices would harm Texas livestock and poultry farmers greatly, put meat industry employees out of jobs and strain Texas consumers. The same is true all across the country, and unfortunately EPA’s decision ensures that this will continue to be the case unless Congress acts quickly to restructure the ethanol mandates, taxes and tariffs.” A number of other food, restaurant and grocery associations expressed disappointment in the decision.

Access a release from Governor Perry (click here). Access 55-pages of supplemental arguments submitted by Texas on August 6 (click here). Access a release and link to additional information from DOE (click here). Access the statement from Senator Inhofe (click here). Access a release from AAM (click here). Access the statement from Pilgrim's Pride (click here). Access the AMI statement (click here). Access another release from AMI with other association comments (click here). Access a prepublication copy of the FR announcement (click here). Access the EPA docket for the action with all comments received and background information (click here). Access EPA's RFS Program website for further details and background (click here). Access a complete list of U.S. biorefineries and a locational map (click here). [*Energy, *Agriculture]

EPA Denies Texas RFS 50% Waiver Request

Aug 7: U.S. EPA Administrator Stephen Johnson announced his decision in the State of Texas’ request to reduce the nationwide Renewable Fuel Standard (RFS). Johnson said following extensive analysis, the Agency decided to deny the request from Texas. As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

Johnson said, “After reviewing the facts, it was clear this request did not meet the criteria in the law. The RFS remains an important tool in our ongoing efforts to reduce America’s greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways.” Current law authorizes EPA to waive the national RFS if the Agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment. EPA said it recognizes that high commodity prices are having economic impacts, but indicated that extensive analysis of the Texas request found no compelling evidence that the RFS mandate is causing severe economic harm during the time period specified by Texas.

The Energy Policy Act of 2005 established the RFS program -- and included amendments to the Clean Air Act to set strict criteria for RFS-related waivers. RFS nationwide volume mandates were increased in the Energy Independence and Security Act, which was signed into law in December 2007. EPA said it conducted detailed analysis, consulted closely with the Departments of Energy and Agriculture, and carefully considered more than 15,000 public comments in response to the Texas request. This is the first RFS-related waiver request. In a Federal Register notice, EPA is publishing a detailed rationale that will also serve as a framework for any future waiver considerations.

In an April 25, 2008 letter to EPA, Governor Rick Perry asked EPA to grant a 50% waiver of the nationwide renewable fuels standard (RFS) mandate for the production of ethanol derived from grain, citing adverse economic impact due to higher corn prices in Texas. EPA's actions followed intensified debates over the RFS which have legislators divided on how to address the issue [See WIMS 5/12/08].

In May, EPA initiated a public comment during which it received over 15,000 comments and a number of the comments "raised substantive issues and included significant economic analysis," according to Johnson [See WIMS 7/22/08]. At that time, Johnson indicated EPA would need more time to respond to the Texas request and said, "I believe it is very important to take sufficient time to review and understand these comments in order to make an informed decision. EPA is also required to consult with the Departments of Agriculture and Energy in considering whether to grant or deny the waiver request and has begun these consultations. The process remains fair and open and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request."

Access the announcement from Administrator Johnson (click here). Access a fact sheet on the decision (click here). Access a prepublication copy of the FR announcement (click here). Access the EPA docket for the action with comments and background information (click here). Access EPA's RFS Program website for further details and background (click here). Access an April 25 release from Governor Perry (click here). [*Energy, *Agriculture]

Alaska Sues Federal Government On Polar Bear ESA Listing

Aug 4: Governor Sarah Palin announced that the State of Alaska has filed a lawsuit in U.S. District Court for the District of Columbia seeking to overturn U.S. Interior Secretary Dirk Kempthorne’s decision to list the polar bear as threatened under the Endangered Species Act (ESA) [See WIMS 5/15/08]. This action follows written notice given more than 60 days ago to Secretary Dirk Kempthorne of the Department of the Interior and Director Dale Hall of the U.S. Fish and Wildlife Service asking that the regulation listing the polar bear as threatened be withdrawn. Governor Palin said, “We believe that the Service’s decision to list the polar bear was not based on the best scientific and commercial data available.”

According to a release from the Governor's office, the Service’s analysis failed to adequately consider the polar bears’ survival through prior warming periods, and its findings that the polar bear is threatened by sea-ice habitat loss and inadequate regulatory mechanisms to address sea-ice recession are not warranted. The Service also failed to adequately consider the existing regulatory mechanisms, including conservation measures within Alaska and the international community, which have resulted in a sustainable worldwide polar bear population that has more than doubled in number over the last 40 years to 20,000-25,000 bears.

The release indicates, "The State takes seriously its obligation and interest in the management, conservation, and regulation of all wildlife and other natural resources within its jurisdiction. Alaska is also responsible for the welfare of its citizens, who are concerned that the unwarranted listing of the polar bear as a threatened species will have a significant adverse impact on Alaska by deterring activities such as commercial fisheries, oil and gas exploration and development, transportation, and tourism within and off-shore of Alaska."

Three environmental groups issued a statement on the lawsuit. Kassie Siegel, climate program director at the Center for Biological Diversity, and lead author of the 2005 petition to list the polar bear under the Endangered Species Act said, “The State of Alaska’s challenge to the protection of the polar bear is a lost cause based on discredited, industry-funded attacks on science. This case has no merit, and the Center for Biological Diversity, NRDC, and Greenpeace will be seeking to intervene in the lawsuit and have it dismissed.”

Access a release from the Governor's Office (click here). Access the statement from the environmental groups (click here). Access a copy of the complaint posted on the Climate Law Update blog (click here). [*Wildlife, *Climate]

Senator Bingaman To Lead September Energy Summit

Aug 4: Senate Energy Committee Chairman Jeff Bingaman (D-NM) has agreed to help lead an energy summit next month when the Senate returns to session. Senate Democrats and Republicans have been in deadlock stalemate in considering energy legislation for most of the summer. In an effort to find areas of agreement between both parties, Senate Majority Leader Harry Reid (D-NV) last week asked Senate Minority Leader Mitch McConnell (R-KY) to join him in sponsoring the summit. The summit was requested by the "Gang of 10," lead by Senators Kent Conrad (D-ND); Saxby Chambliss (R-GA); that proposed their "sweeping energy proposal" -- the comprehensive New Energy Reform Act of 2008 -- just prior to the Senate 5-week recess [See WIMS 8/1/08].

Bingaman commented about the lack of progress on energy issues saying, “The high price of gas and diesel at the pump is a major burden on American families and on the American economy. While all of us would like to find a single solution to the problem, the truth is that we must take action in three areas to achieve any lasting result. We must ensure the proper functioning of markets for oil and gas so that prices are not artificially high because of excessive speculation. We must find ways to increase the supply of oil and gas, but also other types of energy.

“And we must reduce the demand for fuel. I hope we can enact responsible legislation in each of these areas in the near future. Majority Leader Harry Reid has tried to schedule votes on proposed solutions to high energy prices during the past few weeks, but he has been blocked from doing so. I hope that all senators will participate in the energy summit next month so that we can find a way to move forward in a bipartisan manner.”

On August 1, Senator Pete Domenici (R-NM), Ranking Member of the Senate Energy Committee, and a key player in any Senate energy proposal, issued a statement saying,"After nine days of debate and seven different attempts to change the subject, the Democratic Majority in the Senate finally has come up with a way to deal with high gasoline prices: leave town. While this strategy may suit the presumptive Democratic nominee for President, who opposes offshore drilling and most likely doesn’t want his colleagues to vote on that subject, it does not suit the American people -- it fails them. When America is facing a problem, it is our job to address it. I’m sad to report today that the Senate has failed to do that because one Senator decided to prevent the other 99 from even considering reasonable proposals to deal with gas prices.

“As we head home for the August recess, I’m sure our constituents will want to know what their Congress has done to bring down prices at the pump. The record will show that Republicans offered broad, comprehensive solutions such as allowing offshore drilling and funding advanced battery research that call on us to find more domestic energy sources while using less energy. It will also show that Democrats blocked us from even voting on them. The Democrats hope that this problem will go away on its own. Republicans want to take action to fix it. I trust that when we return we will get serious about addressing the most important domestic issue in America.”

Access a release from Senator Bingaman (click here). Access a release from Senator Domenici (click here). [*Energy]

Groups Agree To Drop Opposition To Texas Utility Coal Expansion

Aug 4: NRG Texas LLC, a subsidiary of NRG Energy, Inc. (NYSE: NRG) has reached agreements with the Texas Clean Air Cities Coalition (TCACC) and Environmental Defense Fund in which Environmental Defense Fund (EDF) and TCACC have agreed to drop their opposition to the Limestone 3 permit application in response to a number of innovative commitments related to emissions of the greenhouse gas carbon dioxide (CO2), nitrogen oxides (NOx), sulfur dioxide (SO2), and mercury (Hg), and to other environmental issues including reductions in water usage. Both TCACC and EDF initially announced their intention to intervene in and oppose NRG’s permit application to add a third unit to Limestone Station. However, after several months of working together and discussing ways to meet Texas’ demand for electricity in a manner that would minimize adverse environmental impacts, these agreements were reached.

Linda Koop, Dallas City Council Member and Chair of the TCACC said, “This agreement presents an excellent opportunity for emission reductions, beyond that which the Texas Commission on Environmental Quality (TCEQ) would have required. The greenhouse gas reductions -- 50% -- are particularly significant because the TCEQ does not consider carbon dioxide a pollutant and does not regulate or restrict carbon emissions.”

Jim Marston, EDF state climate director said, “We applaud NRG committing to offset a significant part of its CO2 emissions from the Limestone 3 plant. CO2 is the gas that scientists tell us is the principal cause of global warming. Offsets, such as the projects that NRG has committed to invest in, are a low-cost way to get the large reductions in greenhouse gases that are necessary to prevent catastrophic impacts of global warming, and NRG has established a precedent for other electricity companies to follow.” McElroy, Sullivan and Miller L.L.P., a widely respected Austin law firm specializing in energy and administrative matters, has donated time to represent EDF in this and other coal air permit cases.

The new unit is designed to be one of the cleanest pulverized coal-fueled electric generating units in North America and will use best available control technology to reduce air emissions and dry cooling to conserve our water resources. The proposed expansion project would add a third generating unit to the facility and bring approximately 744 megawatts (MW) of low-cost, stable electric generating capacity to the region -- enough to supply approximately 600,000 households. Currently, the Limestone Electric Generating Station is comprised of two lignite/coal-fueled steam units, which generate over 1,700 MW of baseload generating capacity. The facility, which went into operation between 1985 and 1986.

Access a lengthy joint release from NRG and the groups summarizing the agreement (click here). Access additional information from NRG on the Limestone 3 Expansion Project (click here). [*Energy]

Off-Shore Drilling Debate Spiraling Toward A Government Shutdown

Jul 31: Senator Bill Nelson (D-FL) moved to stop President Bush’s interior secretary from launching a plan for a new wave of oil drilling off the coast of Florida and other protected states. In a letter to Interior Secretary Dirk Kempthorne, Nelson vowed “to take whatever action is necessary” to prevent such a questionable step by an administration he views as hell-bent on risky offshore drilling. On July 30, Kempthorne announced his proposal to "jumpstart the development of a new oil and natural gas leasing program for the U.S. Outer Continental Shelf" [See WIMS 7/30/08]. The DOI initiative uses the process mandated by the Outer Continental Shelf Lands Act Amendments of 1978, which gives the Secretary of the Interior authority to develop “out-of-cycle” leasing programs and requires various procedural steps, including several rounds of public comment and multiple environmental reviews. The "Call for Information" will be published in the Federal Register on August 1, 2008. All comments must be received by September 15, 2008.

In a letter to Kempthorne, Senator Nelson said, “It is becoming increasingly clear that President Bush is set on putting oil rigs off the state of Florida before he leaves office in January, regardless of the fact it will have no effect on energy prices. You and he both know exploiting our coastlines won't bring down gasoline prices. The answer lies in the rapid development of alternative fuels and vehicles, like cars that run on hydrogen, not petroleum. And the oil companies need to drill in the 68 million acres already under lease where there still is no drilling.”

In a release Senator Nelson indicated that, "Kempthorne’s announcement comes hard on the heels of GOP presidential candidate Sen. John McCain having reversed his position to support new drilling, thus pushing the issue center-stage in the presidential contest. It also comes in the wake of President Bush saying he was lifting an executive ban on coastal drilling that was put in place by his own father when he was president.

"And, the announcement comes as Republicans in Congress are beginning to threaten not to approve a temporary spending measure for operating the government that’s could be up for a vote in September, unless Congress removes from that measure its annual moratorium language against drilling in protected areas. Failure to approve the spending plan could result in a shut-down of the government, like one that occurred in the mid-1990s during a bitter, partisan fight between President Clinton and the Newt Gingrich-led Congress.

In addition to Senator Nelson's opposition, the West Coast Governors of California, Oregon and Washington launched their historic West Coast Governors' Ocean Action Plan, on July 29, which states explicitly, "The three states have determined that new offshore oil and gas development in ocean waters along the West Coast is unacceptable because of the harmful impacts to the marine and coastal environment. Therefore, the states are committed to exploring options for developing renewable energy sources in an environmentally sustainable manner. Recent advances in wind, wave, current, and tidal energy conversion technologies have improved the economic viability of these alternatives."

On the Senate Floor, the debate over Republican drilling proposals, as opposed to various alternatives proposed by Democrats has escalated out of control [See WIMS 7/30/08]. On July 31, Senate Majority Leader Harry Reid (D-NV) and other Senate Democratic Leaders asked unanimous consent to pass six bills designed to address the nation’s energy crisis; however, Reid said, "Just as they have throughout the year, Bush-McCain Republicans said no, preferring to slow, stop and stall progress rather than help American families paying record-high energy prices. Below are Reid’s remarks as prepared for delivery. . . Their one idea -- more coastline drilling -- won’t have any significant impact on prices ever. . ."

The Senators now leave for a 5-week break in the middle of this bitter debate which may serve as a cooling off period. The hope for a breakthrough seems to rest in the proposal put forth today by the so-called "Gang of 10."

In a July 30, letter to Senator Mitch McConnell (R-KY), the Senate Minority Leader, Senator Reid responded to a proposal from 10 Republican and Democratic Senators ('Gang Of 10' Energy Plan) and indicated, "Given we have been unable to make progress on these measures, I think it is important that we both look at other ways to break the current legislative impasse on energy.

"Therefore, I am proposing that we jointly embrace the proposal made by the bipartisan group of Senators to convene a summit to address all facets of the energy challenges confronting this nation today including economic security, national security, global warming and ending our addiction to oil. As you may know, I have already taken the initiative to plan a National Clean Energy Summit next month in Las Vegas to bring together Republicans, Democrats, business leaders, labor and academics to address these challenges. . .

"Please let me know as soon as possible if you agree with this proposal for a summit here. If so, we can get to work immediately with the bipartisan group and other interested Senators in our respective caucuses to work out the details of this summit. If not, I want to inform you that I think the energy issues facing this country are so important a bipartisan summit still makes sense and I intend to proceed accordingly."

Although Senator McConnell agreed to the bipartisan summit, he delivered a lengthy and highly critical speech on the Floor today saying, "This was an opportunity for the Democrats who control Congress to demonstrate courage and resolve. They squandered it. In their hunt for more seats in Congress and control of the White House, they took the path of least resistance. They decided that they could increase their hold on Congress by avoiding tough votes, and then blaming the mess that followed on a party that wasn’t even in charge. . . When Americans demanded action, the Democrats played games."

Majority Leader Reid said regarding the "Gang of 10" proposals, “This proposal includes some very good ideas to address our country’s many energy-related challenges, and while I do not agree with every part of it, I very much appreciate the bipartisan spirit in which it was constructed. Along with the National Clean Energy Summit I will host this month in Nevada and September’s bipartisan energy summit, this group’s ideas should be helpful as we craft comprehensive energy legislation. I am hopeful this plan can begin to break the current legislative stalemate on the Senate floor. The American people deserve a real debate with productive Senate action on bipartisan proposals to help make energy more abundant, secure and affordable for America’s families and businesses.”

The "Gang of 10" Senate lawmakers include: Senators Kent Conrad (D-ND); Saxby Chambliss (R-GA); and other members include: Senators Ben Nelson (D-NE), John Thune (R-SD), Lindsey Graham (R-SC); Blanche Lincoln (D-AR); Mark Pryor (D-AR); Mary Landrieu (D-LA), Johnny Isakson (R-GA), Bob Corker (R-TN).

The bipartisan coalition of senators led Senators Conrad and Chambliss unveiled their sweeping energy proposal at about noon August 1, to reduce gas prices, lessen our nation’s dependence on foreign oil, and strengthen America’s economy. They said the comprehensive New Energy Reform Act of 2008, -- known as “New ERA” -- lays the groundwork to transition the nation’s motor vehicle fleets to fuels other than gasoline and diesel. To ease gas prices in the interim, the proposal includes significant conservation provisions, consumer tax credits, and responsible measures to increase domestic production. The New Era bill contains three main components: An intensive effort to transition vehicles to non-petroleum based fuels; A robust federal commitment to conservation and energy efficiency; and Targeted, responsible domestic production of energy resources. They said they hoped the discussion draft bill could be a starting point for discussions when the Senate returns in September.

In brief summary, the plan calls for transitioning 85% of America’s new motor vehicles to non-petroleum-based fuels within 20 years; significant $84 billion federal commitment to promoting conservation and efficiency including; extending renewable energy, carbon mitigation and energy conservation and efficiency tax incentives and the production tax credit, through 2012; increased domestic energy production in environmentally responsible ways, including new Gulf of Mexico areas and allowing Virginia, North and South Carolina and Georgia to opt in to leasing off their shores. The plan is silent for now on the subject of speculation and the groups said the would await the mid-September report of the CFTC to consider this subject [A general summary of the bill is available from the contact below].

Access a release from Senator Nelson and link to the letter to Kempthorne (click here). Access a release from DOI (click here). Access a prepublication copy of the Call for Information (click here). Access a FAQ document on the Call (click here). Access the MMS website for additional information (click here). Access the West Coast Governors Ocean Agreement website for complete background and extensive information (click here). Access a release from Majority Leader Reid (click here). Access a letter from Reid to McConnell and his statement on the "Gang of 10" (click here). Access the Floor statement from Senator McConnell (click here). Access the Gang of 10 release on their plan (click here). Access a Senatus Blog posts on the possible September shutdown (click here). Access the "Gang of 10" press conference video (click here). [*Energy, *Water]

So, Is This The Age Of Natural Gas? The Silver Bullet?

Jul 30: The House Select Committee on Energy Independence & Global Warming, Chaired by Representative Ed Markey (D-MA) held a hearing entitled, What’s Cooking with Natural Gas?: Hearing to Examine Fuel’s Role in Global Warming Solutions. According to an announcement, natural gas plays a critical role in numerous sectors of our economy from home heating to chemical production to electricity generation to transportation fuel. With 3.4 percent of global natural gas reserves, the United States has the fifth largest reserves in the world.

Since a low in 1986, domestic consumption of natural gas has generally increased and its uses have broadened. Natural gas has especially become popular as a cleaner alternative to coal in the electrical utility sector and gasoline and diesel in the transportation sector. As Congress considers energy policies that will increase our energy independence and help solve global warming, understanding the role of natural gas in our economy and how it might contribute to energy policies is critical. Witnesses testifying at the hearing included representatives from: Chesapeake Energy; Suez LNG North America; National Grid; The Dow Chemical Company; American Honda; and the Independent Petroleum Association of Mountain States.

Aubrey McClendon, Chairman and CEO of Chesapeake Energy Corporation and Chairman of the American Clean Skies Foundation (ACSF) testified on the natural gas industry and its future. He said, "the U.S. today consumes about 63 billion cubic feet of natural gas per day - in energy BTU equivalency terms, that’s 10.5 million barrels of oil per day, or about half of the amount of oil that the U.S. consumes each day. Of that 63 bcf per day of natural gas consumption, we import about 1 bcf in the form of liquefied natural gas, or LNG, and we import about 8 bcf per day from Canada. This means that we are about 98.5% self-reliant on natural gas supply from North America and about 86% self-reliant on natural gas supply from the U.S. Contrast that with oil, where we are only about 41% North American self-reliant and only about 27% self-reliant from U.S. sources."

In describing the industry he said, "a highly fragmented industry with more than 7,000 American-based companies producing natural gas from 33 different states. Most producers are very small private businesses that may drill a well or two per year. The heavy lifting in the industry is performed by the 20 largest U.S. natural gas producers, which account for about 60% of all U.S. natural gas production. Of these 20 companies, 6 are integrated oil companies with household names, such as Exxon or Chevron, while 14 are much smaller public companies such as Chesapeake."

On the future of oil, natural gas and the energy crisis he said, ". . .despite all the recent commotion over speculation in oil markets, the reality is oil prices have been rising for 10 years for a very good reason -- demand growth is outstripping supply growth -- and, in all likelihood, they will continue to rise in the future. We are on the road to national bankruptcy and must change our ways. The good news is it’s easy to change – we don’t need a new fuel, we don’t need new engine technology, we don’t need hundreds of billions of dollars. All you have to do is modify or replace today’s internal combustion engines that run on gasoline and diesel and replace them with an internal combustion engine that runs on natural gas. And that’s natural gas that costs less than half the price of gasoline, is more than two-thirds cleaner, and best of all, is produced right here at home in America, and we are proving to skeptics everyday that there is plenty of it."

He continued, "Imagine tomorrow if your hometown or national newspaper proclaimed that you had introduced a plan that would, in one stroke, cut gasoline’s cost in half, reduce our oil imports, improve our air quality, enhance national security, strengthen the dollar, reduce greenhouse gas emissions and create tens of thousands of new jobs in the U.S. in the automotive, truck, steel, natural gas and related industries. The papers might say you just have changed the course of American history.

"So is there enough natural gas to do this? The answer is absolutely yes. To convert just 10% of American cars to CNG would take less than 8 years to do and would only require an increase in U.S. natural gas consumption by slightly over 1% per year Yet, this year alone American natural gas producers will increase U.S. natural gas supplies by about 9%. Going forward, I believe U.S. natural gas producers can increase supplies by 5% per year for at least the next decade and that assumes there is no more access to public lands and waters than there is today." [Note: similar statement were made by T. Boone Pickens in his recent compelling testimony before the Senate Homeland Security Committee [See WIMS 7/23/08].

On the same day as the hearing, the American Clean Skies Foundation (ACSF) and Navigant Consulting, Inc. (NYSE:NCI) released a new comprehensive study -- North American Natural Gas Supply Assessment -- indicating the United States has 2,247 trillion cubic feet (Tcf) of natural gas reserves, which is enough to last more than 100 years. The report expands on and explains why existing forecasts from the U.S. Energy Information Administration (EIA) have historically underestimated and understated the contribution and potential of unconventional natural gas from three sources: tight sands, coalbed methane and gas from shale formations. McClendon said, "New technologies have allowed the rapid emergence of gas shales as a major energy source, representing a truly transformative event for U.S. energy supplies. American producers can clearly supply enough natural gas to meet today’s uses and become an economical source of transportation fuel in the form of CNG or greater supplies of electricity for plug-in hybrids for generations to come.”

Rick Smead, one of the study’s co-authors and overall project manager for NCI said, “The assessments and estimates on natural gas supply are very impressive and have, frankly, caught industry forecasters off guard. The study found that while all three unconventional gas sources have increased production over the past decade, natural gas production from shale formations is growing exponentially, increasing from less than a billion cubic feet a day in 1998, to about 5 billion cubic feet a day now. That’s a compound annual rate of growth of over 20 percent, which is over 600% for the time period. “The extent of this ramp-up has not been fully captured by many reserve estimators,” said Smead, “probably because their emergence has been too rapid for existing models to capture accurately.” There are approximately 22 shale basins located onshore in more than 20 states in the U.S. including Texas, Oklahoma, Arkansas, Louisiana, West Virginia, Wyoming, Colorado, New Mexico, West Virginia, Pennsylvania, New York and Michigan.

Denise Bode, president of ACSF said, “This is the age of natural gas. Frankly, no other energy source can do so much for America from fueling our vehicles to generating our electricity and do so as cleanly as American-produced natural gas. Without question, we know now that we have abundant supplies of domestically produced natural gas to take us to a clean, secure, scalable and affordable energy future. This study authoritatively refutes head-on the mistaken belief that we do not have sufficient supply. The fact is America has substantial natural gas to fuel its future beyond this century and at a price that is likely to remain less than half the price of oil and will provide significant environmental benefits as well.”

In his opening remarks at the hearing, Chairman Markey said, ". . .we must not forget that natural gas, like all fossil fuels, is both a finite resource and a contributor to greenhouse gases. Because of that reality, we must use it wisely, in a targeted manner, and we must use it efficiently and in ways that help transform our economy to one that is more energy secure and climate friendly. Today our witnesses will discuss a number of natural gas uses that are already helping to achieve these goals and what might be possible in the near future.

"Natural gas vehicles are already displacing gasoline and diesel and improving air quality. The replacement of diesel fleets such as buses and trucks with natural gas powered vehicles has especially helped reduce dangerous air pollution in some of our most polluted cities. Fuel cell vehicles hold the promise of using natural gas more efficiently in the transportation sector. As Congress considers energy policies that will increase our energy independence and help solve global warming, understanding the role of natural gas is critical."

Access the hearing website for links to all testimony and Chairman Markey's opening statement (click here). Access a ACSF blog post on the new study (click here)Access the complete 90-page ACSF report (click here). Access the ACSF website for extensive information (click here). [*Energy]

Senate Again Fails To Pass Energy Legislation; May Stay In Session

Jul 30: By another close vote (51-43, 6 not voting) Senate Republicans have stopped a vote on a Democratic bill known as the Jobs, Energy, Families, and Disaster Relief Act of 2008 (S. 3335). The bill was introduced by Senator Max Baucus (D-MT). In a release, Senate Majority Leader Harry Reid (D-NV) said, “We have heard Republicans expend a tremendous amount of words and energy talking about our national energy crisis. Today, Democrats offer them yet another chance to stop the talking and actually do something to solve the problem. We have already offered Senate Republicans four opportunities to pass tax-extenders legislation. Today we offer a fifth chance. This tax-extender legislation provides tax incentives to private sector innovators who are discovering new ways to harness the power of the wind, the sun, geothermal, and other sources of clean, renewable energy."

In a floor statement following the vote, Majority Leader Reid said the Senate may stay in session until there is a compromise reached on energy legislation. He said the oil companies had received $609 billion in profits during the "Bush years." He outlined a number of measures that Democrats have offered and said that Republicans have blocked all measures.

Senate Minority Leader Mitch McConnell (R-KY) continuing the Republican position that energy legislation must include provisions for opening up more oil and gas drilling opportunities said, “Voting for cloture on this bill will take us off the single most important issue in America. The American people are clamoring for legislation that would bring down high gas prices. They expect their representatives in Washington to do something about this crisis now. . . I will vote that we stay on the energy bill -- until we offer the American people a solution. I urge my colleagues to do the same.”

On the House side, House Speaker Nancy Pelosi (D-CA) issued a release saying, "Republicans may talk a good game, but their actions speak louder than words. Republicans have voted against the critical solutions that must be part of a comprehensive New Direction for Energy Independence. They voted against renewable energy and conservation, responsible domestic oil production, short-term measures to bring down prices now and punish those who are manipulating the oil market, and new requirements that oil companies pay their fair share. Instead of working on behalf of American families and businesses, the House Republicans’ so-called 'all of the above' energy plan simply rehashes failed ideas on domestic drilling or proposes ideas that Republicans have repeatedly blocked in the past. Their all-out legislative battle in recent years to protect the record profits of Big Oil companies earning record profits has earned them the moniker 'Grand Oil Party.' Americans paying $4 a gallon thanks to an energy policy literally written by the oil industry cannot afford this the GOP’s 'none of the above' energy plan."

Speaking on energy and the economy in Cleveland, Ohio yesterday, President Bush reiterated the Republican position saying, "The feed stock for gasoline is oil. So when you hear 'my gasoline prices are going up,' you got to understand the main reason why is because oil prices are going up. And the reason why -- again I want to repeat to you -- is that the global demand for oil is growing faster than the global supply for oil. So it seems like we ought to be figuring out how to find more oil here in the United States. . . If we're worried about your gasoline price and recognize that it's high because of the price of crude oil, and it's possible to find more oil right here in the United States so we're not shipping our money overseas -- doesn't it make sense to try to find that oil? I think it does. And here are some places where we can. One place where there is a -- the experts say is a bountiful supply of oil, perhaps as much as 10 years' worth at current consumption rates, is in the Outer Continental Shelf."

Access a release from Senator Reid (click here). Access a release from Senator McConnell (click here). Access the President's Cleveland speech (click here). Access the Senate roll call vote (click here). Access legislative details for S. 3355 which includes links to floor statements (click here). Access a release from Speaker Pelosi listing House measures that Republicans have opposed (click here). [*Energy]

Strong, New Clean Air Bill May Follow Vacated CAIR

Jul 29: Brian McLean Director of the Office of Atmospheric Programs within EPA’s Office of Air and Radiation testified at today's Senate Environment and Public Works Subcommittee hearing on the Clean Air Interstate Rule (CAIR) [See WIMS 7/29/08] and our Agency's preliminary assessment of how the recent D.C. Circuit Court decision vacating that rule [See WIMS 7/14/08] may affect EPA’s air quality programs, including its cap-and-trade programs. CAIR is a program designed to help states address interstate transport of emissions, similar in design to an approach EPA successfully employed in the 1990s to address significant ozone problems in the eastern United States. When the D.C. Circuit vacated the CAIR in the case of State of North Carolina v. U.S. EPA on July 11, it said it contained, "several fatal flaws" and vacated the rule in its entirety and remanded it to EPA.

McLean said, "The Clean Air Interstate Rule contains three regulatory programs intended to support the efforts of 28 eastern states and the District of Columbia to meet their obligations to attain the fine particle (PM2.5) and ozone standards. It is the linchpin of EPA’s program to improve air quality and EPA’s most significant action to protect public health and the environment since the passage of the 1990 Clean Air Act Amendments (Act)."

He said EPA expected that by the end of 2008, 21 states would have SIP approval for the complete CAIR SO2 program; 23 states would have SIP approval for the complete CAIR NOx trading programs; four more states would have SIP approval covering NOx allowance allocations; and the remainder would be covered by the FIP trading programs. Since the court decision, however, he said the Agency has seen the growing concern in the markets and a collapse in SO2 and NOx allowance prices and the significant decline in trading activity. He said, "Clearly, the Court decision vacating CAIR in its entirety creates uncertainties that could cause setbacks in air quality and environmental benefits and negatively affect the health and well being of citizens in the CAIR region [28 eastern states and the District of Columbia]."

McLean indicated that EPA is continuing to evaluate further litigation options; however, he said assuming the decision stands it will have a ripple effect that "will delay and could impede significant clean air programs and activities throughout the eastern U.S." The first major category of affected programs involves requirements for state planning for clean air.

In conclusion, EPA testified that, "Although issues were raised by some stakeholders, the reductions and approach of CAIR were broadly accepted. While it is too early to fully assess the damage to our air quality programs and the health and environmental protection they were designed to achieve, the court decision to vacate CAIR poses significant concerns in implementing the CAA provisions. These include the significant burdens imposed on the states in meeting their CAA obligations (such as the near term deadlines for the PM2.5 and ozone NAAQS); a potential increase in emissions from power plants associated with precipitous declines in allowance values; and possible air quality degradation with implications for ecosystems, acid deposition, and human health. . .

". . .we are most concerned about the impacts to public health and welfare and the environmental damage that could result from companies which may now decide to shift to cheaper, higher-sulfur fuels; or choose not to install a scrubber for SO2 emissions on older boilers; or limit use of their control systems to save operating costs and increase plant efficiency. Another concern is the implications of the court decision on the future of cap-and-trade programs. . . In the wake of the Court’s decision, EPA and the states in the CAIR region will need to work together to develop strategies to protect public health and the environment. EPA will earnestly be considering all options over the next few weeks.

Senator James Inhofe (R-OK) and Ranking Member of the full committee said, "Three years ago I stated that 'CAIR is significantly more vulnerable to court challenges than Clear Skies would have been and will undoubtedly be held up, not unlike the Clinton administration's 1997 air quality standards. This latest round of litigation demonstrates the need for a strong national Clear Skies law more than ever.' Well, today, here we are, and unfortunately that statement has rung true. As I stated back then, “Trying to litigate the way to cleaner air only delays progress, often yields little or no result and wastes millions in taxpayer dollars.” Now we are faced with a full vacating of the entire Rule, which, ironically enough, is a litigation result that no party actually wanted. In addition, we face an uncertain regulatory future, and most importantly, we have thrown into jeopardy the health and environmental benefits that CAIR would have achieved–estimated to have benefits over 25 times greater than their costs by the EPA. I also note that this decision certainly doesn’t bode well for those people who say we can structure flexibility into regulating carbon under the Clean Air Act. . ."

Senator Tom Carper (D-DE), Chair of the Subcommittee on Clean Air and Nuclear Safety that held the hearing said, "Congress must pass clean air legislation now that a recent court ruling has brought many clean air remedies to a halt and created difficulties and confusion for the federal government, east and mid-western states, companies and environmental groups alike. As Albert Einstein once said, ‘in the middle of every difficulty lies opportunity.’” He said Congress has a new opportunity to craft comprehensive national clean air legislation that protects and improves public health.

Carper said, “As many of you know, Delaware struggles to meet its clean air goals because we’re located -- along with our neighbors -- at the end of America’s tailpipe. We simply can’t clean up our air along the eastern seaboard unless upwind states meet their obligations." He said, ". . .eight years have gone by without any meaningful, substantive action on the clean air debate. This inaction means tens [of] thousands of Americans will die prematurely from lung-related deaths who didn’t have to die. It means that Congress and this White House failed to do what’s right.”

He said in addition to the hearing, he will hold other hearings and roundtables on these clean air issues throughout the fall to highlight various perspectives on how to move forward on clean air legislation. He said, "Let me be clear. I’m not going to wait another eight years to do what we should have done eight years ago, and that is pass a strong, comprehensive clean air bill that makes deep and meaningful reductions in mercury, nitrogen oxide and sulfur dioxide.”

Carper concluded that Congressional legislation is necessary to get air pollution control out of the courts and ensure actions are taken on schedule; new law must cover the whole country not just the eastern United States; and new legislation will address not only SO2 and NOx, but also toxic mercury emissions (The D.C. Circuit also vacated EPA’s mercury rulings, State of New Jersey v. EPA) [See WIMS 2/8/08] and global warming caused by carbon dioxide. Last year, Senator Carper introduced his Clean Air Planning Act of 2007 (CAPA), which he said would significantly reduce unhealthy emissions of mercury, as well as the harmful pollutants (nitrogen oxide and sulfur dioxide) that produce smog and acid rain. In addition, this four-pollutant bill would set up a mandatory cap-and-trade program for utilities to reduce their emissions of carbon dioxide, which causes global warming.

Others testifying at the hearing included representatives from: New York Department of Environmental Conservation; PSEG; PPL Corp.; Ohio EPA; and Natural Resources Defense Council.

Access the Subcommittee hearing website for links to a webcast of the hearing and testimony, including Senator Inhofe's opening statement (click here). Access a release from Senator Carper (click here). [*Air]

House Hearing On Carbon Sequestration & Drinking Water Protection

Jul 24: The House Energy & Commerce Committee, Subcommittee on Environment and Hazardous Materials, Chaired by Representative Gene Green (D-TX), held a hearing entitled, Carbon Sequestration: Risks, Opportunities, and Protection of Drinking Water. Witnesses testifying at the hearing included Benjamin Grumbles, Assistant Administrator Office of Water for U.S. EPA, and representatives from: Energy Resources Team U.S. Geological Survey National Center; Strategic Center for Coal of U.S. Department of Energy (DOE); Oil and Gas Commission; American Water Works Association (AWWA); Bureau of Economic Geology, University of Texas at Austin; Environmental Defense Fund (EDF); and the Coal Utilization Research Council.

In opening remarks, full Committee Chairman John Dingell (D-MI) said, "Water is critical to growth and economic development in many areas of the country, and will become even more so in future years. In pursuing the goal of carbon capture and storage, a system must be in place that protects the quality of drinking water sources and assures the public that this is a safe way to proceed. Approximately one week ago EPA released proposed regulations under the Safe Drinking Water Act designed to achieve these goals [See WIMS 7/15/08]. I look forward to EPA’s testimony and the views of our other witnesses on the adequacy of the proposed regulations and any gaps that remain to be addressed.

EPA testified that geologic sequestration associated with Carbon Capture and Storage (CCS) is a promising technology that provides an innovative solution for reducing emissions of (CO2) to the atmosphere, while safeguarding our country’s underground sources of drinking water. EPA said the UIC program is focused on protecting public health by preventing injection wells from contaminating underground sources of drinking water. EPA’s proposed regulations build on more than 35 years of experience in the UIC program of safely injecting fluids, either liquid, gas or slurry, including CO2, into the subsurface. Annually, billions of gallons of fluids are injected underground through wells authorized under State and Federal UIC Programs. This includes approximately 35 million tons of carbon dioxide that are injected for the purposes of enhancing oil and gas recovery.

The buoyancy of CO2, its potential corrosivity when in water, the potential presence of impurities in captured CO2, its mobility within subsurface formations, and the large injection volumes anticipated at full scale deployment, have all been considered in requirements tailored to the new practice of injecting CO2 for long-term storage. EPA’s proposal would create a new well type -- a Class VI UIC well. EPA said, "We believe we have developed a framework that will ensure safe injection in the present and safe storage in the future."

USGS testified that Section 711 of the Energy Independence and Security Act (P.L. 110-140), enacted into law in December 2007, authorized the Secretary of the Interior, acting through the Director of the USGS, to develop an assessment methodology and conduct a national assessment of geological storage capacity in collaboration with the Secretary of Energy, the Administrator of EPA, and the State geological surveys. USGS will collaborate with DOE to incorporate the results of the assessment into future revisions of the DOE “Carbon Sequestration Atlas of the United States and Canada”. The cumulative advances from these earlier USGS studies and DOE-funded activities provide a basis for developing a methodology to assess the national capacity to store CO2 and understand the potential impacts of large-scale deployment of geologic sequestration.

DOE testified that the 2006 Carbon Sequestration Atlas contains information on major CO2 emission point sources, geologic formations with sequestration potential, and some terrestrial ecosystems that offer the potential for enhanced carbon uptake – all referenced to their geographic location to enable analysis of CO2 sources and storage sites. An interactive version of the Atlas is publicly available through the National Carbon Explorer (NATCARB) website [See below]. DOE is funding a network of seven Regional Carbon Sequestration Partnerships to help develop technology, infrastructure, and best practices/protocols for implementing CO2 sequestration in different geologies of the Nation. This approach includes engaging local organizations and citizens to contribute expertise, experience, and perspectives that represent their concerns and goals.

AWWA testified, "Our overarching concern regarding geologic carbon sequestration is the potential contamination of underground sources of drinking water (USDW) from such activities and the potential for other unintended, and possibly harmful, consequences. AWWA is particularly concerned about the potential for contamination of sole source aquifers and suggests that these aquifers be provided with special protective measures. An aquifer receives the designation of “sole source aquifer” if it is located in an area where there are few or no alternative sources to the ground water resource, and where if contamination occurred, using an alternative source would be extremely expensive. AWWA urges caution on the implementation of large-scale, commercial geologic carbon sequestration, as little data are available regarding the potential effects of this technology on drinking water resources. . . AWWA recommends that commercial-scale carbon sequestration not be deployed until the results of the large-scale Department of Energy pilot projects have been received and reviewed. . . "

AWWA also draws attention to the significant issue of long-term liability resolved. EPA’s proposed geologic carbon sequestration rule cannot address financial responsibility of the sequestration site after the formal period of post-injection site care has ended (default of 50 year length). AWWA says Congress must develop legislation that will address the issue of who has to assume financial responsibility of the sequestration site after the site closure requirements have been fulfilled and anticipates a means by which drinking water utilities could recover any costs incurred as a result contamination.

Access the hearing website with links to all testimony and a webcast (click here). Access Representative Dingell's statement (click here). Access the Carbon Sequestration Atlas of the United States and Canada (click here). Access the USGS CO2 Sequestration website (click here). Access the NATCARB website (click here). Access a release from EDF (click here). [*Climate, *Water]