EPA is wrapping up its series of listening sessions on future greenhouse gas emission regulations for existing power plants this week. None of the 11 hearings were scheduled in any of the top ten states that rely most on coal for electricity generation. Maybe they should have. EPA might learn something about affordable electricity. As this map from the Institute for 21st Century Energy shows, states like Wyoming, Kentucky, West Virginia, and Ohio pay on average electricity prices that are 15% below the national average.
EPA has been taking heat for locating the hearings in places far from where coal-powered electricity is most used, since it appears to be in violation the agency’s public engagement policy.
In a blog post, Janet McCabe, EPA’s Acting Assistant Administrator for the Office of Air and Radiation, defended her agency by lauding its “unprecedented and vigorous outreach and public engagement with key stakeholders and the general public.” She writes:
In preparing the guidelines for existing power plants, EPA leadership, including Administrator McCarthy, has been meeting with industry leaders and CEOs from the coal, oil, and natural gas sectors. We’ve been working with everyone from governors, mayors, Members of Congress, state and local government officials – from every region of the country — to environmental groups, health organizations, faith groups, and many others. We’re doing this because we know that carbon pollution guidelines for existing power plants require flexibility and sensitivity to state and regional differences. We want to be open to any and all information about what is important to each state and stakeholders.
Take a look at this map I posted last week, also produced by the Energy Institute, and you be the judge as to whether EPA is welcoming all perspectives on the future of America’s electricity generation capacity.
Avoiding hearings in states that depend the most on coal for their electricity isn’t my idea of “vigorous outreach.”
Speaking of West Virginia, Rep. Shelly Moore Capito (R-WV) sent a letter to EPA asking that a future hearing take place in her state:
It is difficult to imagine how the EPA could obtain the “best information available” from which to develop a “smart, cost-effective” regulation without listening to the people in the states most reliant on coal for electricity. Given West Virginia’s unique perspective as the state that generates the highest percentage of its electricity from coal and as the second-leading producer of coal, West Virginians have a special interest in sharing their views on regulatory efforts targeting existing power plants.
By ignoring valuable insights from states that depend the most on coal, EPA is avoiding a wide-ranging discussion on the future of electricity generation.
After meeting with State Department officials who continue to review the permit application for the Keystone XL pipeline, Russ Girling, CEO of TransCanada, gave interviews to Bloomberg and Politico on the state of the project.
While previous pipelines usually take two years to be reviewed and approved by the federal government, Keystone XL is in its sixth year. The debate surrounding the pipeline has devolved into a “circus,” he told Politico.
To Bloomberg, Girling said:
“There’s no question that the noise outside is having an influence on the process,” he said today, in an interview in Washington. “The project has been hijacked by activists that are opposed to the development of all fossil fuels.”
About the anti-energy opponents of the pipeline, he added:
“I categorize those activists that want to shut down our pipeline, they have potentially other agendas they’re pursuing and they’re using the regulatory process as a platform for whatever their objective might be. And I think that wastes taxpayer money, wastes people’s time and I don’t think it’s terribly productive,” he said.
Girling said Keystone opponents “will literally never be satisfied no matter what we do.”
Exactly. There will never be enough study to convince opponents.
As for the long review process, Girling told Politico he doesn’t expect the State Department’s final environmental review to be that different than its preliminary one which concluded that Keystone XL will have no significant environmental impacts:
“I haven’t seen any information that would suggest there’s any material conclusion that’s different,” Girling said, arguing that there’s no way the State Department could conclude that approval of the pipeline would lead to an increase in oil sands consumption and send more greenhouse gas emissions into the atmosphere.
“I have no idea how you’d get to a different conclusion,” he said.
Delays on the project’s approval are having negative consequences. For instance, he told Bloomberg there are added costs:
“We have a very expensive and complicated process of trying to manage a construction project that should have finished by now,” he said. “It’s the whole value chain that’s involved.”
For example, there's $200 million in pipe to be used for the pipeline sitting in a field in North Dakota.
In addition, Girling warned that America’s future ability to build things was at stake, telling Politico:
“You can’t turn every one of these regulatory reviews into a circus. Or else we’ll get nothing done in this country,” Girling said in a lengthy interview with POLITICO. “If you turn every one into a circus, then the economy comes to a grinding halt, and I don’t think that’s in anyone’s interest.”
Despite the long approval process, Girling is confident Keystone XL will be built, telling Politico:
“It has to be. Ultimately at the end of the day, you need a pipeline from here to here,” he said, pointing to a map of the pipeline. “And it’s taken five years. It may take longer, but the marketplace will get the crude from A to B.”
In a letter to the EPA, the Institute for 21st Century Energy and 13 state and local business organizations call out the agency for not living up to its own policies on the location of listening sessions on greenhouse gas emissions rules for existing power plants:
EPA has chosen to locate most of these hearings in states and regions that use very little coal, while neglecting states most dependent on coal for affordable and reliable electricity generation. For example, EPA is not planning listening sessions in any of the 10 states most reliant on coal for electricity generation, instead choosing states such as California (1% of electricity from coal), New York (4%), and Washington (4%).
There are no scheduled hearings in any of the ten states that generate the highest percentage of electricity from coal—states such as West Virginia (95% of electricity from coal), for Indiana (84%), North Dakota (78%), or Ohio (71%).
This ignores EPA's policy on public hearings:
When the subject of a public hearing, meeting or other information exchange process relates to conditions or facilities in a specific geographic area, EPA should hold the public hearing or meeting in that general geographic area.
So far, EPA isn’t living up to this standard.
The business organizations ask EPA to reach out to--not ignore--states that are most dependent on coal.
Greenhouse gas emission rules, expected to be released by EPA next year, will greatly affect coal producers and electricity users. It’s critical that all affected parties be able to give their input to the agency.
Carbon capture and sequestration (CCS) technology could be a way to use America’s vast supply of coal while limiting carbon emissions. It’s also EPA’s technological answer to meet new greenhouse gas emissions rules for new power plants.
However, CCS is no where close to being ready, according to the Obama Administration’s former top official responsible for overseeing the technology.
The Daily Caller reports that Charles McConnell, former assistant secretary of energy and now Executive Director of the Energy & Environment Initiative at Rice University, told the House Science Committee:
“Studies have verified that implementation of [CSS] technology is necessary to comply with EPA’s proposed [EPA carbon-emissions limits] regulation and meet the [greenhouse gas] targets necessary for limiting CO2 emissions to our atmosphere,” McConnell said in his prepared congressional testimony. “However, commercial [CSS] technology currently is not available to meet EPA’s proposed rule. The cost of current CO2 capture technology is much too high to be commercially viable.”
McConnell told committee members that “affordable solutions may be decades away with the current level of funding” and and that “it is disingenuous to state that the technology is ‘ready’.”
Also testifying at the hearing was former EPA general counsel Roger Martella, who agreed and referred to the CCS mandate as “the fundamental and fatal flaw in EPA’s proposal.”
Why carbon capture technology hasn't taken off. http://t.co/OAiVMLU0e7
— The Week (@TheWeek) October 23, 2013
CCS isn’t viable yet. These experts and former administration officials know this and anyone who is studying the development of the first large-scale commercial application of CCS, the Kemper project in Mississippi, knows this.
CCS might become commercially available in the future, but right now it is EPA’s regulatory unicorn. The agency wishes it would work now so it could be the legal key to its overbearing greenhouse gas rule on new power plants. However, wishing won’t keep the lights on. Hoping won’t ensure that businesses and families have reliable electricity. Until CCS is ready for primetime, we need to continue improving current coal-fired technology to use our abundant coal supply.
The shale energy boom in the United States is creating jobs and economic growth, boosting incomes, and enhancing the nation’s energy security, according to a pair of recent studies.
Shale energy supports 377,000 jobs in the manufacturing, chemical, and energy transportation industries, according to a study by IHS, a provider of energy market and economic information. These jobs are in addition to the 1.7 million jobs directly supported by shale energy extraction.
The IHS report, the third and final in a series about shale, finds that shale energy production will increase manufacturing output by $258 billion by 2020 and $328 billion by 2025. In addition, $216 billion will be invested in manufacturing and energy transportation (e.g., trucking, rail, pipelines) between 2012 and 2025.
Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, highlights the positive pocketbook impact of the shale revolution. “The study shows that shale energy development increased the real disposable income of the average American household by more than $1,200 in 2012, providing further evidence that energy is America’s true stimulus, creating more jobs than any other industry today.”
This income boost is due to less expensive input costs for manufacturers—oil and natural gas are used in plastics, pharmaceuticals, and fertilizers—and lower energy prices for both households and industry.
In an interview with Fortune magazine, Daniel Yergin, vice chairman of IHS and Putlitzer Prize-winning author of The Prize, explains the importance of the shale boom to American manufacturing.
“It is important on an even larger scale for businesses that rely heavily on natural gas or electricity generated with natural gas—ranging from petrochemicals and fertilizer, to food producers and glass manufacturers,” he says. “For these companies, low-cost natural gas is a game changer and will stimulate an estimated $350 billion of new investment in the United States over the next dozen years. Such growth would have seemed inconceivable half a decade ago, when the expectation was that American manufacturers—and the entire U.S. economy—would have to depend increasingly on high-cost imports of liquefied natural gas as well as high-cost domestic gas.”
The study warns that job creation and economic growth would be hurt if the federal government were to impose regulations on hydraulic fracturing that duplicates state efforts. With new federal regulations, the report estimates a 52% decrease in shale energy production by 2025, which would result in 1.4 million fewer jobs created in 2015 and $127 billion less in GDP in 2015.
“The federal government is risking the only reliable sector of job growth in the entire economy,” says Harbert.
Energy Risks Subside
A separate study, The 2013 Energy Security Index published by the U.S. Chamber’s Institute for 21st Century Energy, shows that unconventional shale energy development is a major contributor to improved American energy security.
America’s energy risk score in 2012 fell to 95.3 from 102.0. The Index measures energy risks in 36 metrics in four categories: geopolitical, economic, reliability, and environmental.
According to the report, increased unconventional shale energy production “lowered U.S. energy security risks in 2012 by increasing supply security, reducing net imports, and putting downward pressure on energy costs and expenditures.”
The report points out that “the boom in U.S. energy production has come about largely in spite of national policy rather than because of it.” According to the Congressional Research Service, oil and natural gas production has been increasing on private and state lands while falling on federal lands.
Speaking to local chamber of commerce executives in South Louisiana in September, U.S. Chamber of Commerce President and CEO Tom Donohue pointed out federal exploration restrictions off the coast of Louisiana and other Gulf states. “Some 87% of our offshore oil and gas resources remain off limits,” Donohue said. “We have more technically recoverable oil off our coasts than the proven oil reserves of Asia and Europe—combined. Clearly, we’re leaving a lot on the table, and the administration and Congress need to open up those areas for surveying and safe exploration and development.”
While the Index fell, it did so off its 2011 record high, and the report notes that energy security risk continues to be “uncomfortably high and is projected to remain so.”
“We still have a long way to go,” says Harbert. “But the improvements we’ve seen recently should give us hope that continued development of America’s vast energy resources will lead us toward greater energy self-reliance and security.”
The Index urges policymakers to see the present as “an era of sustained energy abundance” and not as an era of scarcity, warning that “overreaching by regulatory agencies targeting coal, limitations on access to resources on public lands, a broken siting and permitting process, and a flawed nuclear waste disposal policy, to name a few, create roadblocks that could squander the tremendous prospect of a secure energy future.”