July 2014 – The Climate Post

July 31, 2014

Report, Initiatives Aim to Take Action on Climate Change

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: While Tim Profeta is on vacation, Jeremy Tarr, policy associate in the Climate and Energy Program at Duke’s Nicholas Institute for Environmental Policy Solutions, will author The Climate Post. Tim will post again August 28.

The Climate Post will also take a break from circulation August 7 and will return August 14.

A new report from the White House Council of Economic Advisers finds that for each decade of delay, policy actions on climate change increase total mitigation costs by approximately 40 percent. The cost of inaction—letting the temperature rise 3 degrees Celsius above preindustrial levels instead of 2 degrees— could increase economic damages by about 0.9 percent of global output.

“To put this percentage in perspective, 0.9 percent of estimated 2014 U.S. Gross Domestic Product (GDP) is approximately $150 billion,” according to the report. “Moreover, these costs are not one-time, but are rather incurred year after year because of the permanent damage caused by increased climate change resulting from the delay.”

The report is the first of several announcements by the Obama administration on climate change. On Tuesday, the U.S. Department of Energy announced initiatives to curb methane emissions, which accounted for about 9 percent of the country’s greenhouse gas pollution in 2012. The Energy Department recommended incentives for modernizing natural gas infrastructure, and it plans to establish efficiency standards for natural gas compressors as well as improve advanced natural gas system manufacturing.

The same day, several companies and nongovernment groups committed to support a new Food Resilience theme in the president’s Climate Data Initiative. The initiative leverages data and technology to help businesses and communities better withstand the effects of climate change. Companies like Microsoft are helping to organize data sets and tools in the cloud that will enable the assessment of vulnerable points in the food system, such as the effects of climate change on our food system and the reliability of food transportation and safety.

Hearings Fuel Debate on Clean Power Plan

During public hearings in Denver, Atlanta, Pittsburgh and Washington, D.C., the U.S. Environmental Protection Agency (EPA) heard testimony from the public on its proposed Clean Power Plan, which would limit greenhouse gas emissions from existing power plants.

In Washington, D.C., many utilities and industry groups were critical of the plan’s climate benefits and called on the EPA to conduct further economic analysis before issuing its final rule in June 2015. In Atlanta, others said the plan did not account for steps they’ve already taken to reduce emissions.

“This rule is flawed,” said Mississippi utility regulator Brandon Presley (subscription). “States like Mississippi, who have fought to pull themselves up and get a program to help customers reduce energy costs and reduce energy consumption, kind of get slapped away from the table.”

In their testimony, many environmental groups sought greater emissions reductions from the power sector as well as increases in renewable energy generation and programs that reduce electricity demand. Some members of the public, like retired coal miner Stan Sturgill of Kentucky, agreed with these groups’ request for tougher restrictions.

“Your targets to reduce carbon dioxide pollution by 2030 are way too low and do not do enough to reduce our risk of climate change,” said Sturgill, who suffers from black lung and other respiratory ailments. “The rule does not do near enough to protect the health of the front line communities from the consequences of this pollution. We’re dying, literally dying, for you to help us.”

The EPA is asking states to meet carbon emissions targets that would result in a 30 percent reduction in power sector carbon dioxide emissions from 2005 levels by 2030. States are given flexibility in how they achieve the targets.

Representatives from 13 western states met last week to discuss the EPA’s proposal and to begin considering the advantages of working together in response to the rule.

“We’re in the process of determining what makes sense for us, including working with other states in a regional market,” said Camille St. Onge, spokeswomen for Washington’s Department of Ecology.

United States Imposes Energy-Related Trade Constraints

The U.S. Commerce Department placed proposed new import penalties on solar products from China and Taiwan. These penalties come on top of anti-subsidy tariffs imposed on some panels from China last month.

The new proposed penalties, still to be confirmed, aim to curb the sale of low-cost solar panels and cells, a practice known as dumping, from other countries in the U.S. market. If confirmed, they would impose duties as high as 165 percent on some solar companies in China and 44 percent on those in Taiwan. The Commerce Department has issued only preliminary findings, but final rulings are expected from the Commerce Department later this year.

The move has China’s Commerce Ministry saying Washington’s actions risk damaging the solar industry in both countries.

“The frequent adoption of trade remedies cannot resolve the United States’ solar industry development problems,” an unnamed Chinese official told Reuters.

In the United States, reactions to the news were mixed.

“Today’s actions should help the U.S. solar manufacturing industry to expand and innovate,” said SolarWorld Industries America President Mukesh Dulani. “We should not have to compete with dumped imports or the Chinese government.”

But Rhone Resch, CEO of the U.S.-based Solar Energy Industries Association, condemned the decision, saying the answer lies in a negotiated solution.

Chinese companies supplied 31 percent of the solar modules installed in the United States in 2013 and more than 50 percent in the distributed solar market.

On Tuesday, the United States and the European Union issued new economic sanctions on Russia, citing the country’s involvement in the Ukraine crisis. The sanctions ban the export of energy-related technology for use in Russian oil production from deepwater, Arctic offshore and shale oil production rock reserves. However, exports of technology for gas projects to the country, which holds the world’s largest combined oil and gas reserves, will continue.

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.

July 24, 2014

Rule for Regulating Existing Power Plants under Fire

U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy testified before the Senate Environment and Public Works Committee during a hearing on “EPA’s Proposed Carbon Pollution Standards for Existing Power Plants.” Debate about the proposed rule to regulate carbon emissions from existing power plants has swirled since the rule’s release last month. Coal-heavy states and others have criticized both the substance of the rule and the EPA’s authority to issue it.

Throughout the hearing McCarthy faced questions about whether the agency had stretched the parameters of the Clean Air Act. The proposed rule uses an infrequently exercised provision of the act to set state-specific emissions targets and provide states a wide range of flexibility when choosing how to meet those targets.

“EPA goes beyond the plain reading of the Clean Air Act Section 111 [by] directing states to achieve questionable emission reduction targets from a limited menu of economically damaging and legally questionable ‘options,’” said Senator David Vitter of Louisiana.

Defending the Clean Power Plan on Wednesday, McCarthy insisted the EPA followed proper legal procedure in conducting its analysis. She also dismissed suggestions that the rule was designed “miraculously” months ago and that the EPA has had it in its back pocket since then. She further stressed the flexibility of the rule.

“The proposal is designed to be moderate in its ask,” she told senators. “We will get significantly more benefit than we are requiring.”

She noted “The science is clear. The risks are clear. And the high costs of climate inaction are clear. We must act.”

A new paper by Duke University’s Nicholas Institute for Environmental Policy Solutions aims to address one question not answered in this debate: What will EPA’s rules mean for policy choices aimed at securing future mitigation goals? The analysis explores the long-term consequences of several key regulatory design choices, including mass-based versus rate-based standards, tradable versus non-tradable standards and separate standards for coal and natural gas power plants (differentiated standards) versus a single standard for all fossil plants. It finds that consequences may be significant. Differentiated standards lead to relatively greater investment in coal retrofits and non-tradable standards lead to relatively greater retirement of coal capacity—all of which could create different costs for securing deeper greenhouse gas reductions in the future. How the EPA’s proposed rule for existing power plants is viewed—as a final or interim solution—could also affect tradeoffs associated with key policy choices.

NOAA: Global Temperatures Rising

Global average temperatures surpassed previous records by 1.3 degrees Fahrenheit last month—making it the hottest June on record according to new National Oceanic and Atmospheric Administration (NOAA) data. It’s the second straight month the world set a warm-temperature record. In May, Earth’s temperature was 1.33 degrees above the 20th century average.

Warmer oceans made the difference—they were 1.15 degrees Fahrenheit hotter. Every month of 2014 except February has ranked among the four warmest on record for that respective month.

The finding piggybacks on another report co-authored by NOAA and published by the Bulletin of the American Meteorological Society—State of the Climate in 2013—which provides a detailed update on notable weather events, global climate indicators and environmental monitoring station data.

“These findings reinforce what scientists for decades have observed: that our planet is becoming a warmer place,” said NOAA Administrator Kathryn Sullivan. “This report provides the foundational information we need to develop tools and services for communities, business, and nations to prepare for, and build resilience to, the impacts of climate change.”

The global average temperature, which is a broad baseline used to measure the climate, was about 0.4 degrees Fahrenheit above average according to four of the most commonly used datasets. Among the report’s other findings: all major greenhouse gas emissions increased to new records, sea surface temperatures were among the 10 warmest on record and sea level continued to rise by about an eighth of an inch each year.

Department of Interior Plan, Warming Waters Expand Oil Exploration

The Obama administration approved a plan that next year allows energy companies to apply for permits for underwater oil exploration on the Atlantic Coast, from Delaware to Florida.

The final plan, compiled by the Interior Department’s Bureau of Ocean Energy Management (BOEM), requires oil and gas search methods—including seismic air gun testing—to pass several safeguards to mitigate risks to marine life.

“After thoroughly reviewing the analysis, coordinating with Federal agencies and considering extensive public input, the bureau has identified a path forward that addresses the need to update the nearly four-decade-old data in the region while protecting marine life and cultural sites,” said BOEM Acting Director Walter Cruickshank. “The bureau’s decision reflects a carefully analyzed and balanced approach that will allow us to increase our understanding of potential offshore resources while protecting the human, marine and coastal environments.”

The plan doesn’t permit actual oil drilling or guarantee that lease sales for drilling in Atlantic waters will be included in the Interior Department’s five-year plan for 2017–2022. Obama intended to open up the Atlantic Coast to drilling in 2010 but reversed course after the BP Deepwater Horizon oil spill in the Gulf of Mexico that April.

Meanwhile, melting ice in the Arctic is making the region’s icy waters more passable—allowing ships to deliver European oil to Asia and fueling South Korea’s hopes of becoming an oil hub.

“We’ve noticed a huge difference in trading routes,” said Erik Hanell, chief executive officer of Stena Bulk AB in Gothenburg, Sweden. “China is importing more and all the countries in the Far East are importing a lot more. South Korea has a very strong geographic position in today’s development of both Arctic oil and China’s growing demand.”

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.

July 17, 2014

White House Announces New Climate Change Initiatives

The White House on Wednesday announced executive actions to help states and communities build their resilience to more intense storms, high heat, sea level rise, and other effects of climate change. The actions, which involve several federal agencies, were among the recommendations by the president’s State, Local and Tribal Leaders Task Force on Climate Preparedness and Resilience.

“…Climate change poses a direct threat to the infrastructure of America that we need to stay competitive in this 21st century economy,” said President Obama. “We’re going to do more, including new 3D maps to help state, local officials in communities understand which areas and which infrastructure are at risk as a consequence of climate change. We’re going to help communities improve their electric grids, build stronger seawalls and natural barriers, and protect their water supplies. We’re also going to invest in stronger more resilient infrastructure.”

The National Journal runs down the individual efforts by agency, which include a more than $236 million award to fund eight states’ efforts to improve rural electric infrastructure and a new guide by the Centers for Disease Control that will help local public health departments assess their area’s vulnerabilities to health hazards associated with climate change.

States Focus of Work after EPA’s Proposed Power Plant Rule

More than a month after the U.S. Environmental Protection Agency (EPA) announced a proposed rule to reduce carbon dioxide emissions from existing fossil fuel-fired power plants, a new study says states are well positioned to handle the rule’s requirements.

The rule, which uses an infrequently exercised provision of the Clean Air Act to set state-specific reduction targets and devise individual or joint state plans to meet those targets, has garnered some negative reactions. But the study conducted by the Analysis Group sees real benefits. The research examined states that have already taken steps toward reducing power plant emissions and found that if states design programs effectively, electricity rate increases will be modest in the near term, and electric bills will fall in the long term.

“Several states have already put a price on carbon dioxide pollution, and their economies are doing fine,” said Susan Tierney, senior adviser of the Analysis Group. “The bottom line: the economy can handle—and actually benefit from—these rules.”

States that work together to form carbon markets and other collaborative initiatives could experience even greater rewards, according to the Analysis Group.

“Experience shows that states that work together on market-based compliance initiatives—like RGGI [Regional Greenhouse Gas Initiative] in the Northeast—can provide net economic benefits in terms of jobs and economic output,” said study co-author Paul Hibbard. “And RGGI shows that each state can have control over its own program design, so that combined efforts don’t step on states’ rights.”

Earlier this week environmental attorneys and representatives from states, industry, and NGOs gathered to discuss the EPA’s proposed Clean Power Plan—specifically state choices under and the potential impacts of the proposal—at an event hosted by the Environmental Law Institute and Duke University’s Nicholas Institute for Environmental Policy Solutions. Keynote speaker and U.S. EPA Senior Counsel Joseph Goffman highlighted three aspects of the rule: the EPA developed state emission goals based emission reduction strategies already being used by states, the proposal allows each state maximum flexibility to optimize strategies given local considerations, and state flexibility with the timing of implementation allows the coordination of compliance strategies with other dynamics in the energy sector.

Mountaintop Removal Focus of Court Case, Study

The U.S. Court of Appeals for the District of Columbia Circuit has ruled in favor of the EPA’s permitting process for mountaintop mining, a controversial practice to extract coal by way of clear cutting trees and removing mountain tops with explosives. The ruling overturned a decision by a lower court that found the EPA did not have authority to require mountaintop removal coal permits to go through an enhanced review process to crack down on water contamination from mining operations.

In 2009 the EPA and the Army Corps of Engineers adopted the Enhanced Coordination Process, allowing the EPA to screen and review individual mining permits submitted to the Army Corps of Engineers under the Clean Water Act. By 2011, the EPA recommended states impose more stringent conditions for issuing permits under the act—issuing a final guidance document relating to these permits.

“In our view, EPA and the Corps acted within their statutory authority when they adopted the Enhanced Coordination Process,” wrote Judge Brett Kavanaugh (subscription). “And under our precedents, the Final Guidance is not final agency action reviewable by the courts at this time.”

A new study by the U.S. Geological Survey finds that mountaintop removal mining negatively affects downstream fish populations.

Researchers compared samples collected from nearby bodies of water in 2010 and 2011 to samples collected by Penn State University researchers in 1999 and 2001. They found that mountaintop mining creates landscape changes, including changes in water flow that have significant impacts on fish.

“We’re seeing significant reductions in the number of fish species and total abundance of fish downstream from mining operations,” said Nathaniel Hitt, a study co-author.

Solar on the Rise in the U.S.

Solar power is becoming a vital part of the American economy, according to a report from the Interstate Renewable Energy Council (IREC).

“Solar markets are booming in the United States due to falling photovoltaic (PV) prices, strong consumer demand, available financing, renewable portfolio standards (RPSs), and financial incentives from the federal government, states and utilities,” said Larry Sherwood, vice president and COO of the IREC. “Thirty-four percent more PV capacity was installed in 2013 than the year before accounting for 31 percent of all U.S. electric power installations completed in 2013.”

The report, produced annually, highlights major factors affecting the solar market and ranks the top 10 states in several categories.

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.

July 10, 2014

China and U.S. Sign Pacts on Climate Change

The world’s two largest carbon emitters have signed pacts to cut greenhouse gas emissions. The deals—actually eight projects demonstrating smart grids and carbon capture, utilization and storage—were made through the China-U.S. Climate Change Working Group and will involve companies and research bodies.

“The significance of these two nations coming together can’t be understated,” said U.S. Secretary of State John Kerry at the sixth U.S.-China Strategic and Economic Dialogue. “We are working hard to find a solution together that can have an impact on the rest of the world.”

The two countries also reached agreements to adopt stronger fuel efficiency standards for cars and trucks and to conduct a study on gas use in industrial boilers.

The U.S. and China have been at odds over how much each should contribute to reducing climate change and how the costs of cutting emissions should be distributed between rich and poor nations. Consensus on these issues will be crucial to any pact to replace the 1997 Kyoto Protocol.

Only broad-stroke goals are being discussed at the U.S.-China Strategic and Economic Dialogue.

“We are certainly not at a point where anybody is talking about concrete numbers,” said Todd Stern, the U.S. State Department’s special climate change envoy. “It is more, what is your process for developing a target, what sort of form you think your target is going to take. What are the policies that underpin the target you are going to develop?”

New EPA Rules under the Renewable Fuel Standard

The U.S. Environmental Protection Agency (EPA) finalized two rules that will allow new fuels pathways and provide a voluntary quality assurance plan for the renewable fuel standard (RFS) program. Under the first rule, compressed or liquefied natural gas from landfills, water-treatment facilities or farms can be classified as a cellulosic biofuel, and electricity produced from these sources and used to power electric vehicles can be used to meet biofuel targets.

“These pathways have the potential to provide notable volumes of cellulosic biofuel for use in complying with the [Renewable Fuel Standard] program, since significant volumes of advanced biofuels are already being generated for fuel made from biogas,” the EPA said.

The new pathways could affect the EPA’s final 2014 biofuel targets. Production of cellulosic biofuels has lagged behind previous targets set by the agency under the RFS program.

The second rule finalizes the RFS Renewable Identification Number (RIN) Quality Assurance Program, first proposed in January 2013. The voluntary, third-party-auditing program would help to ensure the validity of RINs that petroleum refiners use to demonstrate their compliance with the RFS.

The EPA also approved for commercial usethe first “bug” that eats carbon dioxide and converts it into ethanol.

Keystone XL Pipeline Decision Delayed, Again

The Keystone XL Pipeline, which would carry roughly 830,000 barrels of crude oil a day from Canada to the Gulf Coast, will have its day in court this September. The Nebraska Supreme Court announced it will hear oral arguments on the pipeline’s proposed route early that month, likely pushing any decision by the White House until after mid-term elections in November.

At issue is the correctness of an earlier ruling that found that pipeline’s plans to be unconstitutional. That ruling reversed a decision by state Gov. Dave Heineman—under a 2012 Nebraska law—to approve the new 300-mile route through the state. The Obama administration has said it will await the court’s decision before making a final ruling on the pipeline.

Despite these developments, industry groups are pressing Secretary of State John Kerry to resume and complete final review of the Keystone project.

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.

July 3, 2014

Supreme Court Says EPA Can Regulate Greenhouse Gas Emissions

In the latest decision on the U.S. Environmental Protection Agency’s (EPA) authority to regulate carbon pollution, the U.S. Supreme Court reaffirmed EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act, but voted 5-4 to limit permitting requirements. The ruling does not directly affect the EPA’s latest proposed rule to reduce greenhouse gas emissions from existing power plants, and generally reaffirmed the EPA’s authority to regulate greenhouse gases under the Clean Air Act.

The court narrowly defined the question to decide in the case, limiting its review to the EPA’s authority to require permits for greenhouse gas emissions from new and modified sources. EPA interpreted the Clean Air Act to require permits for all such sources of greenhouse gas emissions, but initially limited permitting requirements to large sources out of administrative necessity. Justice Antonin Scalia, writing for the majority, concluded that the Clean Air Act does not permit EPA’s interpretation—the EPA cannot opt only to regulate the large sources because it is easier. But Justice Scalia read the Clean Air Act differently from the EPA in a way that arrived at a similar end point. According to the court, greenhouse gas emissions do not trigger permitting requirements, but the EPA can require sources to minimize greenhouse gas pollution when they are required to obtain permits for other pollutants. Because almost all new and modified large sources could trigger permitting requirements via emissions of traditional pollutants, the court’s decision left the EPA largely with what it desired—the authority to forego enforcement against small sources but permit greenhouse gas emissions from large sources.

“It bears mention that EPA is getting almost everything it wanted in this case,” said Scalia. “It sought to regulate sources that it said were responsible for 86 percent of all the greenhouse gases emitted from stationary sources nationwide. Under our holdings, EPA will be able to regulate sources responsible for 83 percent of those emissions.”

The ruling follows another decision this spring that upheld the EPA’s authority to regulate air pollution that crosses state borders.

Satellite to Study Key Greenhouse Gas

On Wednesday the National Aeronautics and Space Administration (NASA) satellite designed to track atmospheric carbon successfully launched. The Orbiting Carbon Observatory-2, twin to the original failed 2009 satellite, will study how oceans, soils and forests absorb carbon dioxide.

“Knowing what parts of Earth are helping to remove carbon from our atmosphere will help us understand whether they can keep doing so in the future,” said Michael Gunson of NASA’s Jet Propulsion Laboratory. “Quantifying these sinks now will help us predict how fast CO2 will build up in the future.”

Carbon dioxide exists in the atmosphere in trace amounts: 400 parts per million. Cars and factories are adding 40 billion tons of the gas per year. The satellite will spend at least two years examining carbon dioxide from 438 miles above the Earth’s surface. According to NASA, the satellite will produce the “most detailed picture to date of natural sources of carbon dioxide.” NASA will use this data to study how these sources and sinks are distributed and change over time.

Methane Leaks, Bans Related to Fracking

A New York Appeals Court voted 5-2 on Monday to uphold bans on hydraulic fracturing, or “fracking,” in two upstate New York towns. The ruling affirmed a lower-court decision that state oil and gas laws do not preempt town ordinances.

“The towns both studied the issue and acted within their home rule powers in determining that gas drilling would permanently alter and adversely affect the deliberately-cultivated, small-town character of their communities,” the Appeals Court ruling concluded.

The state is still waiting on a health impact review before lifting its own 6-year-old moratorium on fracking.

In Pennsylvania, gas wells—especially newer and unconventional wells—are leaking methane, according to a study in the Proceedings of the National Academy of Sciences. Using data from more than 75,000 state inspections of wells conducted from 2000 to 2012, researchers found newer traditional wells drilled after 2009 had a leak rate of about 2 percent; rising to about 6 percent with unconventional wells. By comparison, older wells drilled before 2009 had a leak rate of about 1 percent.

For Rob Jackson, who has studied methane leakage at Duke University, the basic conclusions hold. “Hydraulically fractured shale wells appear to have more problems than conventional wells,” Jackson said. “If so, it’s probably because the wells are longer, must bend to go horizontal and take more water and pressure than in the past. The combination makes well integrity a challenge.”

Industry officials like Marcellus Shale Coalition Spokesman Travis Windle aren’t in agreement with the study’s findings, calling the conclusions a “clear pattern of playing fast and loose with the facts.”

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.