By Emily Holden (@emilyhholden)
Today’s Washington Brief:
- What's still unclear about the EPA's carbon emissions rule is how hard it will be for any individual state to meet the agency's demands. The disparate treatment of states has fueled political fallout as congressional candidates complain that goals for their states are stricter than for others'. Politico Pro's Erica Martinson reports.
- The GOP has coalesced behind a message of regulatory overreach by the EPA, but there's a less-acknowledged split in the Republican ranks over whether carbon emissions should be regulated at all, E&E's Elana Schor and Nick Juliano report.
- Investigators looking into the BP oil spill said in a report that a faulty blowout preventer contributed to the disaster. The Chemical Safety Board warns that other companies operating in the Gulf need to make a lot of changes based on the findings, Washington Post's Steven Mufson reports.
Today’s Business Brief:
- The carbon emissions rule gives states that host nuclear power a 6 percent credit toward meeting emissions reductions targets, boosting a struggling industry, Washington Examiner's Zack Colman reports. Standard & Poor's Rating Services say the rule could mean new nuclear plant construction in the long term, according to Platts.
- Water utilities are taking note of high-profile oil pipeline spills around the country and pushing back against pipeline expansions near their watersheds. Wall Street Journal reports.
- As demand for imported oil has eased in the U.S., Canada is looking for new markets but doesn't have enough access to ocean ports, Wall Street Journal reports.
Today's Chart Review:
Best of Both Worlds? Northeast Cut Emissions and Enjoyed Growth
from New York Times by David Leonhardt
Mark Your Calendars (All Times Eastern):
Friday: Energy Storage Association conference @ 8 am
Friday: American Association for the Advancement of Science conference on climate resilience @ 8:45 am
Friday: Inter-American Dialogue talk on Mexico's energy reform @ 9 am
15-17: Utilities and Infrastructure
OPINIONS, EDITORIALS, PERSPECTIVES
23: Brookings Institution
24: National Journal
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
25: U.S. Chemical Safety Board
26: Government Accountability Office
1) States, Utilities Still Grappling with Climate Rule’s Fine Print
from Politico Pro by Erica Martinson
The paradoxes in the EPA’s new climate regulation for power plants are still puzzling many of the states and utilities that will have to comply with it. The White House sold the rule as a recipe for cutting power plants’ greenhouse gas pollution 30 percent below 2005 levels by 2030. But the complex regulation doesn’t explicitly require that — instead, it sets separate targets for each state to make emissions cleaner by that date, using the EPA’s estimates of how much mileage the states can get from strategies like promoting energy efficiency or shifting toward natural gas instead of coal. What’s still unclear, even to people overseeing the compliance efforts, is how hard it will be for any individual state to meet the EPA’s demands.
2) Best of Both Worlds? Northeast Cut Emissions and Enjoyed Growth
from New York Times by David Leonhardt
Some critics of the Environmental Protection Agency’s new requirements for power plants argue that forcing emissions reduction will curtail economic growth. But the recent experience of states that already cap carbon emissions reveals that emissions and economic growth are no longer tightly tied together.
One of the ways that states will be able to meet the new E.P.A. standards is by joining a Northeastern cap-and-trade program known as the Regional Greenhouse Gas Initiative, which first put in a carbon cap in 2009. In a cap-and-trade system, the government places a ceiling on total carbon emissions and issues permits for those emissions, which companies can buy and sell from one another.
3) The Surprising Winner of the EPA's Power Plant Rules
from Washington Examiner by Zack Colman
If any energy sector scored a clear victory in the Environmental Protection Agency's proposed rule on power plant carbon emissions, it was the nuclear industry. A number of nuclear reactors are facing tough economic futures. Given the cheap price of natural gas and competition from wind power, some nuclear operators were considering prematurely retiring about 5.7 gigawatts of nuclear reactors because of gloomy economic forecasts. So the EPA did something that caught many energy industry experts off guard — it awarded states that host nuclear power generation a 6 percent credit toward meeting emissions reduction goals by 2030 as an incentive to keep their reactors afloat.
4) GOP Split Over Carbon Lingers, but with Less Attention than Democratic Division
from E&E by Elana Schor and Nick Juliano
Republicans are crowing this week about Democratic divisions over U.S. EPA's proposed power plant carbon limits, but within their own ranks is a less-acknowledged split over whether emissions should be dealt with at all. That some in the GOP see greenhouse gases as a real environmental threat is no surprise to close congressional observers. As their party coalesces behind a message of regulatory overreach by EPA and uses the proposed rule as a political cudgel against Democrats, however, Republicans who acknowledge the threat of unchecked emissions are far from any coordinated effort to offer an alternative to the regulation.
5) It's Watershed vs. Pipeline in Latest Fracking Battle
from Wall Street Journal by Alexandra Berzon and Alison Sider
...The Mobile legal battle reflects growing conflict between some water systems and pipeline companies. Environmental activists have long cited drinking-water concerns as a basis for opposing pipelines.
But in the past few years, utilities have begun voicing similar worries too—in lawsuits and regulatory comments, with the media and on the Web. Officials say they have been motivated by recent high-profile spills in Arkansas, Michigan and elsewhere, as well as by the race to build and upgrade pipelines to accommodate the U.S. oil-and-gas boom brought on by hydraulic fracturing.
6) Germany Leans Toward Lifting Ban on Fracking
from New York Times by Melissa Eddy and Stanley Reed
In a potential shift in German energy policy, the government of Chancellor Angela Merkel is preparing a framework that would let energy companies extract oil and natural gas by the controversial practice of hydraulic fracturing, or fracking. The guidelines emerging from government discussions are strict, but they are a step, as energy companies have been barred from using the technology in recent years, even for conventional gas extraction. The government is responding to pressure from industry and consumers to develop new sources of fuel and reduce Germany’s dependence on gas imported from Russia. With domestic production dwindling, almost 90 percent of Germany’s gas is imported.
7) U.S. Bill Would Boost Ukraine's Energy Efficiency, Drilling
from Reuters by Timothy Gardner
A bill introduced by U.S. Senator Edward Markey on Thursday aims to ease Ukraine's fuel dependence on Russia by modernizing its heating infrastructure and updating its Soviet-era natural gas drilling capabilities.
Some U.S. lawmakers have called for a surge in U.S. fuel exports to help Ukraine wean itself from Russian energy supplies after President Vladimir Putin's invasion and annexation of the Crimean peninsula. But U.S. shipments of liquefied natural gas to global markets are not expected to begin until 2015, and Ukraine lacks a port to receive the imports. In addition, U.S. oil companies are held back by a 40-year domestic ban on crude exports.
8) China Says to Cap Greenhouse Gas Output Soon, but No Date Set
from Reuters by Alister Doyle
Beijing plans to cap its soaring emissions of greenhouse gases as soon as possible but there is still no decision on when, China's top negotiator at U.N. climate talks said on Thursday. Xie Zhenhua, vice chairman of China's National Development and Reform Commission, also welcomed U.S. measures to help combat global warming, saying that both nations were "working very hard to address climate change."
9) GOP Leader: Climate Change Science ‘Not Known’
from The Hill by Bob Cusack
The role that human activity plays in climate change “is not known,” according to a Republican leader in the Senate. Sen. John Barrasso (Wyo.), who serves on the GOP leadership team, has lambasted the Obama administration’s efforts to curb carbon emissions. Asked if human activity contributes to climate change, Barrasso responded, “The climate is constantly changing. The role human activity plays is not known.”
10) U.S. Index Futures Little Changed Before Payrolls Report
11) New Report on BP Oil Spill Points to Faulty Blowout Preventer Procedures
from Washington Post by Steven Mufson
The steel drill pipe on BP’s Macondo exploration well in the Gulf of Mexico buckled under extreme pressure and kept the blowout preventer from sealing the well during the April 2010 disaster that sank the Deepwater Horizon rig, according to a new report released Thursday...The board said other companies operating in the Gulf of Mexico should take steps to make sure that sequence of events does not happen again. “There are a lot of changes to be made,” an official said, adding that the investigation found “a litany of flaws with the blowout preventer.”
12) Canada Aims to Sell Its Oil Beyond U.S.
from Wall Street Journal by Chester Dawson
While the U.S. debates whether to loosen a decades-old prohibition on shipping its oil overseas, Canada is quietly positioning itself to become a significant exporter of North American oil beyond the continent. Canada's producers long ago came to rely on the U.S. to buy almost all of their exports, in an era when the American appetite for imported oil seemed sure to continue growing steadily. But that appetite is easing, thanks to the U.S. oil-shale boom, even as Canada's rich oil sands keep producing ever more oil. That leaves Canada a country with too much oil and not enough buyers.Overseas markets could solve this problem, and probably bring higher prices to boot. But there is one major obstacle. Canada's long reliance on the U.S. market has left it with few ways to get its oil to ocean ports.
13) Railroads Seek to Limit Oil Train Disclosures Despite Order in Wake of Explosions
from Houston Chronicle by Phuong Le (AP)
Two railroad companies want to prevent the public from getting ahold of details about oil shipments through Washington state, a disclosure the federal government ordered be given to state emergency managers in the wake of several oil train accidents. But restricting that information violates the state’s public records law, so the state has not signed documents from the rail companies seeking confidentiality, said Mark Stewart, a spokesman for the Washington Military Department’s Emergency Management Division.
14) Canada's Surprise Light Oil Boom Delights Oil Sands Producers Seeking Diluent
from Reuters by Nia Williams
Canada is enjoying an unexpected boom in production of ultra-light crude known as condensate, defying long-held predictions of dwindling supply. This surprising bounty from one corner of Alberta, better known as the home to Canada's vast tar-like oil sands reserves, is a boon for firms like Vermilion Energy Inc and Chevron who have built up positions in the Duvernay, now hotly tipped as one of North America's most exciting shale plays with vast reserves waiting to be tapped. It also is fuelling hope of cost relief for traditional heavy oil sands companies such as Cenovus Energy Inc, who in the past have paid premiums of up to $25 a barrel to buy imported condensate used to dilute their viscous oil sands production so that it can flow through pipelines.
Utilities and Infrastructure
15) Court Rejects FERC Request to Stay Enforcement Cases Due to Demand Response Ruling
from SNL by Glen Boshart
A U.S. district court addressing two FERC enforcement cases against demand response providers in New England has rejected the federal agency's request to stay the proceedings in light of a recent federal appeals court ruling vacating the commission's signature demand response rule, Order 745. FERC had made the request given that it is still considering whether to appeal a May 23 ruling by the U.S. Court of Appeals for the District of Columbia Circuit that found FERC overstepped its authority in issuing Order 745, which required the operators of organized wholesale power markets to pay demand response the market price for energy under certain conditions. The court held that demand response is solely a retail product that falls exclusively within states' jurisdiction (Electric Power Supply Association v. FERC, 11-1486).
16) Xcel Sues Over Push for City-Owned Utility in Colorado
from Minneapolis/St. Paul Business Journal
Xcel Energy Inc. has filed a lawsuit against the city of Boulder, arguing that the City Council went too far when it voted to create a city-owned utility last month. The suit, filed by Minneapolis-based Xcel in Boulder District Court Tuesday, claims that the City Council overstepped the limits voters imposed in a 2011 election on the matter.
17) Study Recommends Against Selling TVA
from The Hill by Timothy Cama
If the federal government sold the Tennessee Valley Authority (TVA), customers’ electricity rates would increase, while the TVA’s recreation and environmental programs could suffer, according to a federally funded study. The White House commissioned the $1 million study, after it recently considered selling off the TVA or otherwise divesting the government from the federally owned electric utility that serves Tennessee and other Southern states.
18) US Carbon Regulations May Spur New Nuclear Capacity in Long Term: S&P
from Platts by William Freebairn
Proposed US regulations proposed earlier this week that would require existing power plants to reduce carbom emissions could favor some new nuclear plant construction in the long term, as risks from the technology fade with new plant designs, Standard & Poor's Ratings Services said in a report Thursday. While natural gas generation will remain the "main option" for utilities seeking to add -capacity in coming years, nuclear reactors will offer companies a way to maintain fuel diversity in the face of a surge in gas-fired units, the report said.
19) On Nuclear Safety Issues, Republicans Prove to be NRC's Strongest Defenders
from SNL by Corbin Hiar
...The biggest fear for Republicans is that the new safety regulations that the NRC is considering in the wake of the 2011 Fukushima nuclear disaster and the EPA's water cooling rule could effectively price nuclear operators out of the power market. They attacked Democrats for not focusing on those threats.
20) Companies Seek to Grow Green Goods Trade
from Politico Pro by Doug Palmer
The United States edged closer on Thursday to starting talks with China, the European Union, Japan and 10 other countries on a new environmental goods trade agreement, hearing from business groups and even bicycle enthusiasts in support of a pact that cuts as many tariffs as possible... The final APEC list covered renewable and clean energy technologies, such as solar panels and gas and wind turbines; wastewater treatment technologies, such as filters and ultraviolet disinfection equipment; solid and hazardous waste treatment equipment, such as incinerators and crushing and sorting machinery; air pollution control technologies, such as soot removers and catalytic converters; and environmental monitoring and assessment equipment, such as air quality monitors...But U.S. companies hope the new effort within the WTO will lead to a much bigger agreement.
21) Europe Faces Green Power Curbs to Stop Grids Overloading
Europe’s drive toward a power system based on renewable energy has gone so far that output will probably need to be cut within months because of oversupply. Network operators are likely to curb solar and wind generation at times of low demand to prevent overloading the region’s 188,000 miles (302,557 kilometers) of power lines, Entso-e, the grid association in Brussels, said last month. Renewable output is poised to almost double to 18 percent by 2020, according to Energy Brainpool GmbH & Co. KG, a consulting firm in Berlin. Europe’s fivefold surge in green energy in the past decade pushed prices to a nine-year low and wiped out $400 billion in market value of utilities from Germany’s RWE AG (RWE) to GDF Suez SA in Paris.
22) Wind Power Storage Generating Heat, Displacing Diesel
from Alaska Journal of Commerce
By implementing a complex power management system in four Kuskokwim Bay-area communities, the team at Intelligent Energy Systems has started to employ wind power for heat, expanding the use of a renewable energy source typically limited to electric generation...The thermal storage units are metal, wall-mounted boxes filled with ceramic bricks that are heated by an electric coil. Rather than dump excess power generated by the turbines when the wind is really whipping, the electricity is diverted from the traditional grid to heat the storage units, ultimately reducing the diesel, or fuel oil, burned for heating in Kwig as well.
OPINIONS, EDITORIALS, PERSPECTIVES
23) EPA Carbon Rules Set Modest Goals but May Enhance Decision Opportunities
from Brookings Institution by William Lucy
While the proposed rules are a major change in EPA’s institutional role, the substantive carbon emissions reduction goal seeks to keep recent momentum going rather than accelerate it. The most interesting questions are why progress in reducing carbon emissions occurred and the future prospects; and the impact on electricity costs to customers...Removal of many of these coal plants would not interrupt amortization of their construction costs, because more than 60 percent of coal plants are over 40 years old. The older plants are less efficient. New coal plants, which have been rare, produce electricity at higher cost than new natural gas combined cycle power plants. In addition, current natural gas electricity generating plants are not operating at full capacity. Boosting their use and substituting them for coal can reduce emissions quickly. Consequently, reducing the role of coal in producing electricity by substituting natural gas for it should not increase average electricity prices, although prices may rise in the service areas of some power companies.
24) The Politics of Being Green
from National Journal by Ronald Brownstein
The regulations that the Environmental Protection Agency announced Monday limiting carbon emissions from power plants will likely stand as President Obama's most consequential second-term domestic policy initiative. But the rules will also reinforce his presidency's central political dynamic: Both demographically and geographically, Obama's climate push will likely strengthen Democrats where they are already strong and weaken them in states trending toward the GOP. Taken together, that dynamic could solidify the balance of power that tilts the White House toward Democrats and Congress toward Republicans.
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
25) CSB Draft Report Finds Deepwater Horizon Blowout Preventer Failed Due to Unrecognized Pipe Buckling Phenomenon
from U.S. Chemical Safety Board
The blowout preventer (BOP) that was intended to shut off the flow of high-pressure oil and gas from the Macondo well in the Gulf of Mexico during the disaster on the Deepwater Horizon drilling rig on April 20, 2010, failed to seal the well because drill pipe buckled for reasons the offshore drilling industry remains largely unaware of..The CSB report concluded that the pipe buckling likely occurred during the first minutes of the blowout, as crews desperately sought to regain control of oil and gas surging up from the Macondo well. Although other investigations had previously noted that the Macondo drill pipe was found in a bent or buckled state, this was assumed to have occurred days later, after the blowout was well underway.
26) Actions Needed to Finalize Cost and Schedule Estimates for U.S. Contributions to an International Experimental Reactor
from Government Accountability Office
Since the International Thermonuclear Experimental Reactor (ITER) Agreement was signed in 2006, the Department of Energy's (DOE) estimated cost for the U.S. portion of ITER has grown by almost $3 billion, and its estimated completion date has slipped by 20 years. DOE has identified several reasons for the changes, such as increases in hardware cost estimates as designs and requirements have been more fully developed over time.