By Emily Holden (@emilyhholden)
Today’s Washington Brief:
- Vox explains how the EPA's climate rule for power plants will play out in different states. Some states are already lashing out at the regulation, with at least 8 approving symbolic anti-EPA resolutions, Politico Pro reports.
- National Journal's Ben Geman explains why the biggest oil-and-gas lobby, the American Petroleum Institute, hates the plan, even though it will spur natural gas growth.
- Texas, the biggest carbon emitter, is well-positioned for the proposal, E&E reports. So is California, according to Los Angeles Times.
Today’s Business Brief:
- In the fight against fracking, cities and states are starting to prohibit oil-and-gas drilling in specific areas like near schools or scenic sites, Wall Street Journal reports.
- New York's highest court should decide by July 4 whether municipalities can use local zoning laws to ban fracking, a decision that is key to industry hopes to drill in the state's piece of the Marcellus Shale, AP reports.
- California is reviewing half of its carbon offset credits, $4.3 million worth, over wrongdoing at an incineration facility in Arkansas. Reuters reports.
Today's Chart Review:
Proposed State Emission Rate Targets (Click for Interactive Version)
from Center for Climate and Energy Solutions
Mark Your Calendars (All Times Eastern):
Thursday: Energy Storage Association conference @ 8:30 am
Thursday: American Association for the Advancement of Science climate change conference @ 8 am
Thursday: Resources for the Future seminar on EPA's greenhouse gas regulations @ 9 am
Thursday: United States Energy Association briefing on geologic carbon storage resources @ 10 am
Thursday: Senate Foreign Relations hearing on Ukraine @ 10 am
Thursday: Solar Energy Industries Association and GTM Research webinar on solar quarterly report @ 1 pm
Friday: Energy Storage Association conference @ 8 am
17-19: Natural Gas
20: Utilities and Infrastructure
OPINIONS, EDITORIALS, PERSPECTIVES
26: Los Angeles Times
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
28: Business Forward
1) Some States Already Lashing at Climate Rule
from Politico Pro by Andrew Restuccia
Long before President Barack Obama’s EPA unveiled its major climate rule for power plants this week, legislators around the country were working to undercut it with a big money conservative group nudging them along. In at least eight states, lawmakers have approved symbolic anti-EPA resolutions based on a model approved by the American Legislative Exchange Council, a group that has shaped controversial state measures on issues like stand-your-ground gun laws and opposition to Obamacare exchanges.
Kentucky has gone even further, enacting a law this spring that could block the state from complying with EPA’s rule. West Virginia and Kansas have new laws taking aim at the regulation one way or another, and states like Ohio, Louisiana and Missouri are considering similar measures.
2) Which States Get Hit Hardest by Obama's Climate Rule?
from Vox by Brad Plumer
There's no single nationwide policy here. Instead, the EPA will set different emissions goals for 49 states once the rule is finalized in June 2015. (Vermont and Washington DC are exempt because they don't have any large fossil-fuel power plants.) Those goals will require each state to reduce its emissions a certain amount by 2030. Each state will then have a year or two to come up with a plan for how to meet its emissions goal. States will have a lot of flexibility in devising those plans and will be able to use anything from efficiency upgrades to renewables to natural gas to nuclear.
3) EPA Says Its Climate Plan Will Help Natural Gas Beat Out Coal—So Why Does the Biggest Oil-and-Gas Lobby Hate It?
from National Journal by Ben Geman
Natural gas would be a winner in coming years under the Environmental Protection Agency's plan to cut carbon emissions from power plants, a proposal that would push electricity production away from coal toward cleaner-burning gas and renewables. But that doesn't mean the Beltway's most powerful oil-and-gas-industry lobbying group is going to endorse the proposal, or even stay neutral. Instead, the American Petroleum Institute has come out guns blazing, even though the rule is projected to boost demand for natural gas for several years (and the U.S. barely uses oil to make electricity anymore)...Beyond concerns about higher power prices expected under EPA's rule, industry sources say the petroleum industry has another motivation to battle regulation of carbon emissions under the Clean Air Act: They could be next.
4) Nation's Biggest Carbon Emitter is Well-Positioned to Weather EPA Rule
from E&E by Edward Klump
...Texas is the nation's largest carbon emitter from sources covered by the EPA proposal, according to federal data. But it's also the nation's top wind power producer, and solar power in the state is on an upswing. Last month, a report showed renewable energy production in Texas that is tracked through a credit program climbed about 12 percent in 2013 from a year earlier.
5) California is Two Steps Ahead on Climate Rules Proposed by EPA
from Los Angeles Times by Evan Halper
When California launched its landmark global warming law in the final years of the George W. Bush administration, it was a risky act of defiance from a state frustrated by federal inaction on climate change. Now, the federal government is trying to catch up — and that could position the state to cash in on its energy policy gamble. California's laws are stricter than the Environmental Protection Agency rule, formally proposed Monday. The EPA would require the nation's power plants to cut carbon dioxide emissions 30% by 2030 from 2005 levels. If the rule is finalized in its current form next year, California can easily adhere to it. In addition, other states are likely to clamor for California's help.
6) Some Indications that China May be Preparing to Cap its Carbon Emissions
from E&E by Lisa Friedman
A leading Chinese scholar's assertion that China is poised to enact a carbon emissions cap was met with praise and caution in the United States yesterday. He Jiankun, a professor at Tsinghua University and deputy director of China's National Expert Committee on Climate Change, set off alarm bells when Reuters reported his comments that China will make its greenhouse gas emissions peak in 2030. Coming on the heels of the Obama administration's announcement of a 30 percent cut in power plant emissions by 2030, He's statement heightened hope for the international climate negotiations.
7) Experts Say EPA Rules Flawed, but CO2 Policy Needed ASAP to Fight Climate Change
from SNL by Corbin Hiar
The U.S. EPA's proposed limits on greenhouse gases released by existing power plants is not the most effective way to combat climate change, but the economic harm caused by the so-called Clean Power Plan will actually get worse the longer the administration takes to implement it or a carbon tax, a panel of energy experts said June 3 at an event sponsored by the left-leaning Brookings Institution think tank. The panelists — including scholars from right-leaning think tanks, academics and a former EPA attorney — all generally asserted that quickly implementing a national tax on carbon dioxide, the most common greenhouse gas, would be the most economically efficient way to curb U.S. carbon emissions.
8) Landrieu Admits Energy Gavel May Have Limits
from The Hill by Laura Barron-Lopez
Democratic Sen. Mary Landrieu's highly touted chairmanship on the Senate Energy and Natural Resources Committee might not allow her to dive into the administration's new climate rule as much as she'd like. Landrieu, who is facing a tough reelection battle this year, has run multiple ads boasting her powers as head of the Senate panel, and what it means for her pro-fossil fuels state of Louisiana. And while Landrieu slammed the administration for its new proposal calling for 30 percent cuts in carbon dioxide emissions from the nation's existing power plants by 2030, she admitted the standards are out of her jurisdiction.
9) The Fracking Fight's New Front Line
from Wall Street Journal by Russell Gold
As the U.S. oil-and-gas boom rolls into its second decade, a new idea is starting to resonate with regulators and communities: Certain places should simply be off-limits to drilling. That is not how it has worked up until now. Over the past decade, oil and gas wells have been drilled for hydraulic fracturing in suburban subdivisions, airports, public parks and golf courses. As long as energy companies leased the mineral rights, they could drill almost anywhere. Now this all-or-nothing approach is starting to weaken as the fracking juggernaut, which has created jobs and lowered the U.S. trade deficit, has left some communities feeling trampled. Some cities have used their zoning authority to keep fracking far from schools and set back from homes.
10) Kansas Pushes Back on Lesser Prairie Chicken
from Houston Chronicle by John Hanna (AP)
Kansas Gov. Sam Brownback announced Tuesday that he is pushing the federal government to assume some costs for protecting the lesser prairie chicken by expanding incentives for farmers to enroll their land in a longstanding conservation program. Brownback also said Kansas will return to federal court this week to seek additional time for farmers, ranchers, and oil and natural gas producers to respond to the federal government’s decision in March to list the bird as threatened. Kansas residents were supposed to decide last month whether to participate in conservation efforts. They faced restrictions and federal fees to continue business activities in areas with prairie chicken habitats.
11) Mexico Senate Pushes Back Talks on Key Energy Reform Legislation
Mexico's upper house on Wednesday pushed back discussions on the final touches to the country's landmark energy reform, which seeks to lure new investment into the sector and boost growth in Latin America's second-largest economy. Congress passed the basic legislation last year to open the oil and gas industry and end the 75-year-old stranglehold that state oil company Petroleos Mexicanos (Pemex) has held over the sector. But it must still approve so-called secondary laws to implement those changes. Select committees in Mexico's upper house were set to begin official discussion of the secondary laws on Friday, with talks due to stretch to June 17. But on Wednesday, lawmakers agreed to push back the window for talks to between June 10 and June 23, with a commission-wide vote on June 25.
12) California Investigating Validity of 4.3 Mln Carbon Offset Credits
from Reuters by Rory Carroll
California is reviewing half of the offset credits it has issued for its carbon market while regulators investigate whether wrongdoing at an incineration facility in Arkansas rendered those credits out of compliance with the cap and trade program's rules. The California Air Resources Board (ARB), which polices the market, notified carbon account holders late last week that the credits would be frozen while it examines 4.3 million credits issued for the destruction of ozone depleting substances (ODS), primarily CFC refrigerants recovered from old refrigeration and air conditioning equipment, which are powerful greenhouse gases.
13) U.S. Stock-Index Futures Are Little Changed Before ECB
14) KXL Looms Large As Some Greens Hold Back on Praising EPA
from E&E by Elana Schor
Even as environmentalists lined up this week to cheer for U.S. EPA's proposed carbon limits on power plants, some outside-the-Beltway green groups that have taken leading roles in the fight against Keystone XL are raising concerns that the Obama administration did not go far enough. The hesitance among some climate activists to fully embrace EPA's plan is tempered by their hopes to push for a stronger target than the envisioned 30 percent emissions cut from existing power plants by 2030 before the rule is finalized next year. Smaller green groups are liberated from the need for pragmatism as they push the administration to act more aggressively, on both coal and KXL, but their leaders are reluctant to be too harsh on EPA.
15) Keystone XL Pipeline Vulnerable to Attacks, NextGen Report Says
from Reuters by Timothy Gardner
The Keystone XL oil pipeline would be vulnerable to attacks threatening water supplies for millions of homeowners and farmers, according to a report by NextGen Climate, a political group led by billionaire activist Tom Steyer. Attackers could wreck remote pump stations along the pipeline's route in the northern Great Plains with just 4 pounds (1.8 kg) of readily available explosives, Dave Cooper, a former Navy Seal and a senior operative on the mission that killed Osama bin Laden, said in the 14-page NextGen report released Wednesday. Under Cooper's most likely scenario, coordinated bomb attacks could cause a spill of 68,095 barrels of oil that would be difficult to clean up from an important aquifer.
16) BP, Andarko Must Face Fines for U.S. Gulf Oil Spill: Court
from Reuters by Jessica Dye
A U.S. appeals court on Wednesday said BP Plc and Anadarko Petroleum Corp must face penalties under federal pollution laws in connection with the 2010 Gulf of Mexico oil spill, which could expose the companies to billions of dollars in potential fines. The 5th U.S. Circuit Court of Appeals affirmed a 2012 decision from U.S. District Judge Carl Barbier in New Orleans that the companies could be held liable for civil penalties under the Clean Water Act. BP and Anadarko owned a respective 65 percent and 25 percent of the Macondo well that was drilled by Deepwater Horizon, which blew out in 2010 and resulted in a massive oil spill.
17) NY Top Court Considers Local Bans on Gas Drilling
from Houston Chronicle by Mary Esch (AP)
New York’s highest court is expected to decide by the Fourth of July whether municipalities can use local zoning laws to ban shale gas development using hydraulic fracturing within their borders. The seven-member Court of Appeals heard oral arguments Tuesday in two cases where a midlevel appellate court unanimously concluded last year that state oil and gas law doesn’t trump the authority of local governments to control land use. The challenges have been closely watched by an industry hoping to drill in New York’s piece of the Marcellus Shale formation and by environmentalists who fear drilling could threaten water supplies and public health.
18) Natural Gas Storage Refill Race Too Early to Call
from Natural Gas Intelligence by Alex Steis
With the brutally cold 2013-2014 winter firmly in the rearview mirror, the question that now looms is whether it will be possible to refill natural gas storage reservoirs in time for next winter, and at what price. Answering these questions would require an idea of how much gas should be in storage by the start of the heating season, according to NGI Markets analyst Nathan Harrison. "Over the past five years the average total winter withdrawal has been roughly 2,150 Bcf so, to be able to support winter heating demand, there should be at least that much working gas in underground storage heading into the 2014-2015 heating season," Harrison said.
19) PG&E Expects New Indictment Over Explosion
from AP by Channing Joseph
Pacific Gas & Electric Co. expects to be hit with a new federal indictment next month over a deadly pipeline explosion that leveled a suburban California neighborhood in 2010, a regulatory filing says. The superseding indictment by the U.S. Attorney's Office would nullify a previous indictment issued in April and could include new or altered charges. The filing by the utility on Tuesday with the Securities and Exchange Commission did not indicate what changes are expected.
Utilities and Infrastructure
20) US Federal Court Denies Requests to Halt NYISO Capacity Zone
from Platts by Bobby McMahon
A US appeals court on Wednesday rejected request to halt the implementation of a capacity zone in the New York Independent System Operator, despite concerns from lawmakers and others that the zone will lead to a sharp spike in local electricity costs. The 2nd US Circuit Court of Appeals denied requests by Central Hudson Gas & Electric and the New York Public Service Commission to stay two Federal Energy Regulatory Commission orders associated with the zone, which includes the state's Lower Hudson Valley. The court held oral argument on the matter on Tuesday and petitioners had asked judges to rule by June 6, three days before the next ISO monthly spot market auction is to occur.
21) What Mark Warner Could Learn From Terry McAuliffe
from National Journal by Lucia Graves
The Washington Times on Monday posted a lengthy piece on coal politics in Virginia, exploring whether President Obama's new environmental regulations affecting coal-fired power plants put Sen. Mark Warner, a Democrat who's running for reelection, in a bind. "Mr. Warner burnished his political credentials in part by forging inroads with voters in coal-mining towns in southwestern Virginia," writes the Times's S.A. Miller. "That support could be in jeopardy if his likely Republican opponent, Ed Gillespie, convinces voters that Mr. Warner has helped wage the presidents' alleged 'war on coal.' " But Warner no longer needs to cling to coal. Now it's true that when Warner ran for governor in 2001, he built strong alliances in coal-mining towns in Southwestern Virginia. But the demographics have changed since then, and there are fewer coal voters now than ever.
22) China's Planned Shift Off Coal Puts $21 Bln investment at Risk -Report
from Reuters by Stian Reklev
China's increasing efforts to shift away from coal to cleaner fuels could put annual investments of around $21 billion at risk of being stranded, a research report estimated on Thursday. China has relied heavily on coal to fuel its economic growth over the past three decades, and it now burns half the coal that the world consumes each year. But a nationwide pollution crisis, increasing water scarcity and growing concerns over climate change mean Beijing wants to shift to cleaner energy sources. Analysts expect China's coal consumption to peak sometime between 2020 and 2030.
23) Boxer Rips NRC Over San Onofre Documents
from Politico Pro by Darius Dixon
The San Onofre nuclear plant may have shut down last year, but it’s still causing big headaches on Capitol Hill for the NRC. The high cost to replace the faulty steam generators that crippled the plant and the loss of power sales prompted Southern California Edison to permanently close the facility, and the plant’s troubles drew another round of criticism against federal regulators from Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) on Wednesday. For more than a year, Boxer has been investigating how the flawed steam generators were allowed to be installed. Boxer’s frustration with the NRC has seemed to grow, mainly because the agency has declined to provide the panel documents she insists EPW “has a right to receive.”
24) EU Solar Firms Accuse Chinese Rivals of Violating Agreement
from Wall Street Journal by Matthew Dalton
European solar-panel manufacturers alleged widespread violations of a settlement between the European Union and China over solar-panel exports, a move that could reopen a dispute that threatened to explode into a trade war last year...If confirmed by the commission, the EU's executive arm, the violations would be grounds for annulling the settlement and imposing steep tariffs on Chinese solar-panel exports...Separately, China on Wednesday warned that a preliminary U.S. decision to close a loophole that allowed some Chinese solar-equipment makers to avoid tariffs would worsen trade relations between the two countries.
OPINIONS, EDITORIALS, PERSPECTIVES
25) EPA Goes (Relatively) Easy on Coal
from Reuters by John Kemp
Despite the heated war of words between supporters of the coal industry and environmentalists, the Obama administration's Clean Power Plan is relatively generous to coal interests. By carefully selecting the baseline against which emission reductions will be measured and giving states a long period to come into compliance, the proposed rule is much less radical than it appears. The principal effect of the regulations, if they are implemented, would be to foreclose any return to coal-fired power generation if natural gas prices rise in future.
26) Don't Buy the Smear of the EPA
from Los Angeles Times by Frances Beinecke
The nation's worst polluters and their allies have launched a propaganda campaign to convince you that the Environmental Protection Agency's new carbon pollution standards are nothing more than a backdoor energy tax that will kill jobs and cost you money. That campaign is a lie. And what's at stake is too important to let the lie stand, or even start.
27) Obama Isn't Killing Power Plants. The Sun Is.
from Bloomberg by Carl Pope
President Barack Obama released this week his much-anticipated regulations for controlling carbon emissions. Opponents are claiming the new rules are so onerous they will imperil the electric utility industry. Actually, it's a little too late for that; solar power got there first.
RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES
28) Severe Weather and Manufacturing in America
from Business Forward
Earlier this week, the EPA proposed new standards that will reduce greenhouse gas emissions at existing power plants by 30 percent by 2030. Critics argue the standards will force manufacturers to shift production overseas. Supporters argue the standards are a necessary response to climate change. Who's right? The answer depends largely on (1) how much manufacturers actually spend on electricity; (2) how much rates will rise; and, (3) how much manufacturers are already losing because of severe weather.