Looming Sequester Has Implications for National Weather Forecasting, Energy

February 28, 2013
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

Unless Congress reaches a deal by Friday, a set of automatic spending cuts—known as the sequester—will take effect. According to the Obama Administration, this trigger, for $85 billion worth of across-the-board federal spending cuts, is expected to have significant implications for climate and energy.

Newly released estimates by the White House detail how the cuts are projected to impact programs in each state. Decreases in environmental funding will be in the multi-millions, with the hardest hits to clean air efforts in California, New York, Texas, Ohio and Illinois. Overall more than $100 million in budget cuts to the U.S. Environmental Protection Agency’s (EPA) air program are proposed. The acting chief of the EPA, Bob Perciasepe, warned of furloughs for staff. In a letter, he detailed the widespread potential effects of the cuts, which included reduced monitoring of oil spills, air pollution and hazardous waste.

The EPA isn’t the only federal agency that would be impacted by the cuts. For example, the operating budget for the National Oceanic and Atmospheric Administration (NOAA) is also at risk, which could potentially degrade the government’s ability to provide timely and accurate weather forecasts. Specifically, the sequester could cause a two- to three-year delay in the production and deployment of the first two next-generation weather satellites being developed through a program called GOES-R. “This delay would increase the risk of a gap in satellite coverage and diminish the quality of weather forecasts and warnings,” said Deputy Commerce Secretary Rebecca M. Blank. “It is unclear that future years of investment will be able to undo some of the damage—especially to our weather preparedness.”

The energy sector will also feel the effects if the cuts aren’t avoided by March 1. There could be a slowdown in the development of oil and gas resources as well as a decline in the permitting of solar and wind installations on federal lands. The cuts could also affect clean energy deployment, decrease the number of homes eligible for energy-efficiency upgrades and delay the cleanup of nuclear waste at sites in Tennessee, South Carolina, Washington and Idaho.

Obama has called a meeting with congressional leaders to discuss the sequester, but absent a deal, the cuts will begin at 11:59 p.m. Friday.

Obama’s Picks for Energy, Environment

Gina McCarthy and Ernest Moniz are still clear favorites to help lead President Barack Obama’s environment and energy team. Timing for formal announcements, however, are less clear, sources told Politico.

McCarthy is expected to replace Lisa Jackson, who stepped down as head of the U.S. Environmental Protection Agency last month. Moniz, currently the director of the Massachusetts Institute of Technology’s Energy Initiative, could replace Steven Chu as the head of the Department of Energy. Reuters says McCarthy “would likely become the face of Obama’s latest push to fight climate change,” while Nature says Moniz “would bring to the office a pragmatic support for nuclear power and natural gas, along with a candid desire to, in his own words, ‘innovate like hell’ on basic energy technologies.”

BP Oil Spill Trial Opens

Testimony began this week in the civil trial surrounding the deadly explosion and oil spill in the Gulf of Mexico on the Deepwater Horizon rig in 2010. Unless a settlement is reached, Federal District Judge Carl J. Barbier will determine who is liable for damages resulting from the rupture and discharge of millions of gallons of crude oil from BP’s high-pressure Macondo well. In addition, Barbier will assess whether BP, Transocean or other companies that worked on the project were grossly negligent in their handling of the rig and well in order to decide how much money will be paid.

A finding of gross negligence could mean more than $17 billion in Clean Water Act fines and other punitive damages, beyond the $8.5 billion settlement the company reached in 2012.

Record-Setting Renewable Energy Projects See Light

In a conference of leaders in the offshore wind industry, outgoing Secretary of the Interior Ken Salazar hinted at the nation’s energy future. “It is going to be very much a continuation agenda,” Salazar said. Though the sequester could slow offshore wind energy development in the Atlantic, he noted that Cape Wind—the first proposed offshore wind project in the U.S.—should break ground in 2013, despite earlier holdups.

Meanwhile, California Gov. Jerry Brown cleared the $1 billion McCoy Solar Project for fast-track approval. Estimated to provide enough electricity to power 264,000 homes, the solar project would be the world’s biggest (subscription required).

And across the pond, Saudi Arabia revealed a plan to install 54 gigawatts of renewable energy—a combination of solar, wind, geothermal and waste-to-energy plants by 2032. The project aims to reduce the amount of oil burned in power stations by the world’s top oil exporter.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Leave a Comment » | Uncategorized | Tagged: , , , , , , , , , , , | Permalink
Posted by timprofeta

A Wind Tax Credit, Indefinitely?

February 21, 2013

The Nicholas Institute for Environmental Policy Solutions at Duke University

In last week’s State of the Union address, President Barack Obama called for doubling research and development funding for renewable energy. A policy document released by the White House following the State of the Union proposes making the wind production tax credit—which was renewed in January for one year as part of the deal to avert the fiscal cliff—permanent.

“To once again double generation from wind, solar and geothermal sources by 2020, the President has called on Congress to make the renewable energy production tax credit permanent and refundable, as part of a comprehensive corporate tax reform, providing incentives and certainty for investments in new clean energy,” the policy document states. Internal analysis by the American Wind Energy Association indicates phasing out the credit—over the course of six years—would give the industry the time it needs to establish a “stable base market” in the U.S.

But some in Congress have set their sights on challenging the tax credit and subjecting it to increased oversight.

According to the Federal Energy Regulatory Commission’s latest report, 100 percent of electricity capacity added in January 2013 was from renewables, with the majority coming from wind.

Vote Saves EU Trading Scheme, for Now

The world’s largest carbon market was saved from collapse this week. The European Parliament’s environment committee voted to support a proposed plan to remove a record surplus of emissions permits from their carbon trading scheme, which imposes emission limits on some 12,000 power plants and factories. The surplus—a result of the recession and factors such as an increase in carbon auctions—has driven carbon prices to an all-time low. The “backloading” plan delays the scheduled release of permits by up to five years. The vote did fail to provide a hoped-for boost to carbon allowance prices, which dropped 20 percent following the announcement.

The backloading plan still needs approval by the full European Parliament and the governments of the 27 member states.

Studies Put Arctic Ice Loss under Microscope

A reduction in summer Arctic ice cover reached a record low in 2012. But new research published in the journal Geophysical Research Letters suggests this melting doesn’t stop in cooler months. It finds sea ice volumes have declined 9 percent during the winter and 36 percent during autumn months over the course of the last decade.

This widespread reduction of ice is disrupting the balance of the region’s greenhouse gases. The melting affects both the uptake and release of gases such as methane and carbon dioxide, which can end up in the soil and cause lasting negative effects.

As the ice retreats and more shipping routes are opened, access for oil and gas exploration has also become easier. The United Nations Environment Programme says the region needs to be better protected as a result. Their report, UNEP Year Book 2013, recommends using economic instruments to create financial incentives that would improve chemical safety. A better understanding of how exploration would affect the region’s ecosystems and populations, Reuters reports, is also needed before taking further steps to develop the Artic.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Leave a Comment » | Uncategorized | Tagged: , , , , , , , , , , , | Permalink
Posted by timprofeta

Deep-Sea Methane, Wind that Could Power World?

September 13, 2012

The Nicholas Institute for Environmental Policy Solutions at Duke University

The U.S. Energy Department announced plans to spend more than $5 million researching the potential to produce natural gas from deep-sea methane hydrates—ice-like formations that contain natural gas and are stable at depths of more than 300 feet. The Energy Department calls them “the world’s largest untapped fossil energy resource”—some estimate they are twice as abundant as all remaining natural gas and petroleum reserves. According to William Dillon of the U.S. Geological Survey, “The worldwide amounts of carbon bound in gas hydrates is conservatively estimated to total twice the amount of carbon to be found in all known fossil fuels on Earth.” This is the same methane hydrate that could be released into the atmosphere if Antarctica’s ice sheets thin as a result of climate change.

Another abundant resource sharing headlines is wind: there may be enough wind on Earth to meet global power demands (subscription), at least technically, according to a new report. Wind power to such a degree would require covering much of the Earth’s surface and oceans with turbines. Though wind power currently supplies about 4.1 percent of U.S. electric power, the study concludes that we could produce about 400 terawatts of wind power from the Earth’s surface and 1,800 terawatts of power from the upper atmosphere.

Challenges of Climate Change

In the U.S., drought and rising temperatures are posing challenges for power plants. The Washington Post details the burdens these factors are placing on coal-fired, nuclear and hydroelectric power generators—including the Hoover Dam, where low water levels make meeting demand difficult. The news has Henry Waxman and Bobby Rush calling for a probe into whether climate change could threaten the nation’s electricity supply. In their letter, the two cite several cases in which power plants were forced to cease operation or cut back output when nearby water sources became too warm to cool the plants.

Despite suffering the worst drought in 50 years, farmers will collect far more corn crop than previously predicted. Still, at 10.727 billion barrels and the U.S. Department of Agriculture predicts prices will remain at $7 per bushel. The corn yield is still projected to be the worst since 1995.

While climate conditions are impacting farmers, more and more big businesses are seeing the potential impact to their operations. A new report indicates approximately 81 percent of the largest global companies that report sustainability strategies and greenhouse gas emissions include disruptions from climate change among corporate risk disclosures. Thirty-seven percent of those companies consider droughts, fires and the like a serious threat.

Arctic Drilling Sees More Delays

Drifting ice halted Shell’s efforts to drill its first well in the Arctic’s Chukchi Sea just one day into the already-delayed project. The arrival of the ice is the latest in a series of regulatory and equipment setbacks for the company, which has already spent about $4 billion on the effort. Though the federal government estimates the Alaska Arctic offshore region contains close to 26 billion barrels of recoverable oil, sea ice and harsh conditions make for a short drilling season. The moving ice may bring them closer to the Sept. 24 close of the drilling season—stated in the terms of their permit—with little progress toward their goal. “Depending on conditions, it could be a few or, potentially, several days before it’s safe enough to resume drilling,” said Shell spokesman Curtis Smith.

Shell has petitioned for an extension of the season because its projections had shown the arrival of ice much later in the season. The area’s unforgiving conditions have led some doubt how safely these efforts could be carried out—despite extra efforts to beef up the same equipment that failed in the BP Deepwater Horizon spill in the Gulf of Mexico. Even so, the U.S. Coast Guard’s Paul F. Zukunft, who served as the federal coordinator on the 2010 BP spill, said, “I would never be confident [we could handle a major spill]. You’ll never get all the oil.”

In Louisiana, that’s been the case. Nearly two years after the BP spill Hurricane Isaac has churned up tar balls positively identified as originating from the 2010 event. BP has proposed a “deep clean” of these beaches—sifting as deep as 4 feet—to remove contaminants before sand deposited by new storms covers over the tarballs. Researchers at Louisiana State University are looking at other methods—more specifically, blooms of bacterial biomass and whether they could consume oil and gas from the BP spill trapped about a half-mile below the water’s surface. Tests so far say yes—showing these microbes have consumed about 200,000 tons of this oil.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Leave a Comment » | Uncategorized | Tagged: , , , , , , , , , , , | Permalink
Posted by timprofeta

As Markets Dive, Clean Energy Stocks Hit by “Triple Whammy”

August 11, 2011

The Nicholas Institute for Environmental Policy Solutions at Duke University

The stock market took a beating this week, after the rating agency Standard & Poor’s downgraded U.S. bonds—but clean tech stocks have been falling even faster than the market as a whole.

Shares in clean energy companies have been hit by a “triple whammy”—producing too much capacity for the demand, problems with government debt, and broader risk aversion among investors. As a part of this, clean energy venture capital funding has dropped 44 percent when compared with last year.

Analysts from the global bank HSBC said wind energy stocks are undervalued and their prices could fall more as debt crises in both the United States and European Union stand to cut wind subsidies further. There are more than seven gigawatts of wind projects under construction now—but few planned beyond 2013 because of uncertainty about policies.

Solar stocks were down after many companies reported dismal second-quarter results, as prices on panels fell—but not as fast as the costs of producing them—and as their margins shrank. First Solar, the biggest solar panel manufacturer outside of China, boosted production but suffered a large drop in profits—and their share price. Suntech, the biggest manufacturer, also saw its stock fall, hitting a one-year low.

But some analysts say renewables stocks are bottoming out, and are set to rise again.

Adjusting to No Nukes

Germany decided to phase out nuclear power within 10 years and rely more heavily on renewables, and the country’s utilities are scrambling to adjust. E.ON, the world’s biggest utility in terms of sales, suffered its first-ever quarterly loss and is laying off 11,000 workers as it aims to boost its spending on renewables.

Another utility, RWE, is also selling off assets to cope with poor performance—but is planning to stick with its renewables investments.

Making the Military Green

The U.S. military is the single biggest user of oil in the world, and has been warned by analysts its dependence is a security threat. Now the U.S. Army has formed a new renewables office that may spend $7 billion over the next decade on renewable and alternative energy power.

Although the military has a target of using 25 percent renewable energy by 2025, many installations lack the expertise to move forward quickly enough, said the U.S. Department of Defense, and the new office aims to fill that gap.

Meanwhile, units within the mega-corporations Boeing and Siemens have teamed up to pursue military contracts for smart-grid technologies, which the military could develop and bring down the costs, helping them reach the market later.

Risky Business

With oil prices high and political uncertainty in many oil-exporting countries, the U.S. faces near-record energy security risks, according to a new U.S. Chamber of Commerce report. In 2010, their energy risk index is as high, as in the late 1970s and early 1980s, and near the record high of 2008. The Chamber predicts the risk level will remain high for another 25 years.

With gloomy economic prospects, the International Energy Agency (IEA), the U.S. Energy Information Administration, and the Organization of Petroleum Exporting Countries all agreed oil demand later this year is likely to be less than they had thought.

With Saudi Arabia boosting its production to the highest level in 30 years, oil prices have fallen a bit in recent weeks, but this is largely because of weak economies, the IEA said.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Leave a Comment » | Uncategorized | Tagged: , , , , , , , , , , | Permalink
Posted by masoninman

OPEC Discord May Be “the Beginning of the End” of the Oil Cartel

June 9, 2011

The Nicholas Institute for Environmental Policy Solutions at Duke University

With oil prices high, the International Energy Agency (IEA) last month made a rare plea for the world to produce more oil. So the latest meeting of the Organization of Petroleum Exporting Countries (OPEC), where they set their production quotas, was closely watched. After a rancorous meeting, most member countries refused to raise quotas.

Before the OPEC meeting, the chief economist of the IEA, Fatih Birol, told the New York Times: “Oil prices are hurting the economy.” He added, “I hope to see more oil in the markets soon.”

Saudi Arabian Oil Minister Ali al-Naimi declared it “one of the worst meetings we ever had,” with opposing views from the “haves” and “have-nots”—in terms of spare production capacity.

Saudi Arabia had been pushing to boost production by more than 1.5 million barrels per day, above current levels. Already OPEC members have gone beyond their quotas, producing an estimated 28.8 million barrels per day, compared to the current overall quota of 24.8 million barrels per day. “Everybody in OPEC is cheating and everyone knows that,” an oil analyst told the New York Times.

The Saudi oil minister suggested his country would decide on its own production levels, telling Platts, “let the buyers come and we will supply them with what they want, whatever they need.” The Wall Street Journal quoted one Gulf-state delegate as saying it’s “the end of the quota system,” and the Guardian reports some analysts say the split could mark the beginning of the end for the cartel.

Some analysts argued OPEC doesn’t matter, and Russia is the big winner, since they have added more to exports in the past few years than Saudi Arabia, and have the ability to boost their production further.

Is Increasing the Gas Tax the Answer?

The head of General Motors’ North American unit predicted gasoline prices will continue to climb in coming years. While, General Motors’ CEO, Dan Akerson, called for higher gas taxes to push people to buy more efficient cars. “We ought to just slap a 50-cent or a dollar tax on a gallon of gas,” Akerson said.

Meanwhile, the Liveable Communities Taskforce in the U.S. House of Representatives issued a report titled “Freedom From Oil.” “Providing a range of transportation choices can help break auto dependence,” the report said, and it encouraged a range of measures from more efficient cars, to better city planning, to “pay-as-you-drive” auto insurance.

Clean Energy Trade Wars

Subsidies for clean energy and emissions trading schemes were also a source of discord, within countries and internationally. China agreed to end subsidies that favored wind power firms using domestic parts, after the U.S. complained it was protectionism that broke World Trade Organization rules.

Starting next year, the European Union plans to include flights in and out of Europe in its greenhouse gas emissions trading system. But China may threaten a trade war over this issue, following on U.S. carriers, who have already started a legal battle to fight European Union levies on flights.

In several countries, feed-in tariffs that subsidize renewable energy are on the chopping block. The United Kingdom is considering slashing its subsidy by 40 to 70 percent for installations producing more than 50 kilowatts, but the solar industry pleaded for a re-think, saying the move would “decapitate” the industry. The chief policy director of the Confederation of British Industry said “business confidence has clearly been bruised by sudden and unexpected policy shifts,” including the reversal of these tariffs.

Climate Talks Stumble, Coal Rises

A few countries are starting to oppose an extension of the Kyoto Protocol. The climate treaty expires in 2012, and countries have been trying to negotiate a successor, but with limited success. At the latest round of talks in Bonn, Germany, one of Canada’s delegates said their country would not take on any emissions targets under an extension of the treaty. Russia and Japan also took a similar stance. The European Union’s lead negotiator said it may take until 2014 or 2015 to create a full successor treaty.

To help cut emissions and cope with a decline of nuclear power, the world could create a “golden age of gas,” according to a new IEA report. However, renewable energy such as wind and solar is often competing with natural gas—so the rise of natural gas could “muscle out” renewables, delaying their deployment.

Only six months ago, the IEA was warning about a gas glut, but that is already beginning to dissipate as gas demand has surged. In part this is due to increased imports by Japan of liquefied natural gas, after shutting another of its nuclear power plants.

The world may be moving increasingly toward coal, according to numbers published in the latest BP Statistical Review. Coal consumption  rose to 29.6 percent of the world’s energy—its highest share of the energy mix since 1970—with China’s use growing 10 percent in 2010, but richer countries also consuming 5 percent more in 2010. To reflect the rise of renewables, BP added them to their report for the first time, reporting that in 2010, solar grew 73 percent and wind close to 25 percent.

A New Kind of Crude

Instead of relying one kind of black goop—crude oil—to power cars, researchers at MIT developed another liquid they call “Cambridge crude.” The conductive liquid can store electrical charge, so that the battery could be slowly charged by plugging it in, or could be quickly “refueled” by draining the liquid and pumping in a new, pre-charged batch—giving electric cars the flexibility of fuel cars.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Leave a Comment » | Uncategorized | Tagged: , , , , , , , , , , , , , , | Permalink
Posted by masoninman