On Monday the Senate passed a bill approving the Keystone XL pipeline in a procedural vote just shy of the 67 votes needed to override a veto, setting up what could be an extensive debate on energy policy and climate in next year’s presidential election. The move followed a bipartisan vote in which the House of Representatives passed a similar bill, Jan. 9.
The House vote came just hours after Nebraska’s Supreme Court cleared the way for the controversial project by upholding a 2012 law giving the governor permitting authority for major oil pipelines. The court overruled a lower court finding that allowing the governor and pipeline owner TransCanada to use eminent domain to lay the pipeline on private land was unconstitutional. However, an attorney for the landowners in the case suggested that the litigation was not over, stating that the outcome amounted to a “nondecision open to further review” because most judges agreed with the landowners on the standing issue and three declined to weigh in on the law’s constitutionality.
The ruling shifted the debate over Keystone to Washington, where Republicans are pushing for its final approval after more than six years of review by the U.S. State Department.
“Today’s court decision wipes out President Obama’s last excuse,” Republican Senator and chair of the Senate Energy and Natural Resources Committee Lisa Murkowski said.
“Regardless of the Nebraska ruling,” said White House spokesman Eric Schultz, “the House bill still conflicts with longstanding executive branch procedures regarding the authority of the president and prevents the thorough consideration of complex issues that could bear on U.S. national interests.”
In fact, it could take months for the administration to reach a final verdict because the State Department must take comments from eight agencies before reaching its own conclusion about the project.
Environmentalists and other opponents of the pipeline have highlighted the potential for extraction and transport of crude from Canada’s tar sands to contaminate water, pollute air, and harm wildlife. But the GOP, the oil industry, and other pipeline backers argue that Keystone will lead to jobs and increase oil independence as well as strengthen bonds with Canada.
“Boosting American-made energy results in more American jobs and improved international relations,” said Rep. Leonard Lance. “This is a winning combination for our Nation’s economy, our national security and a centerpiece in our relationship with our ally, Canada.”
Rep. Adam Smith had a different take: “Rather than focusing on Keystone XL, we should be working on bigger picture investments in clean energy and energy efficient technologies that will reduce our dependence on fossil fuels that hurt our environment.”
Obama Administration Targets Methane Emissions
The Obama administration has announced the first-ever national standards to cut methane emissions from new sources in the oil and natural gas industry. Methane accounts for some 9 percent of the country’s greenhouse gas emissions, but it has 20 times carbon dioxide’s planet-warming potency.
“This strategy will benefit the economy, the climate and public health,” said Dan Utech, President Obama’s advisor on energy climate change, though activists say the cuts fall short of those needed to reach the administration’s international climate change pledges.
Unclear is whether the proposed 45 percent reduction by 2025 would eventually apply to existing oil and gas installations as well as to future sources of carbon pollution.
Breakthroughs in hydraulic fracturing technology are projected to increase methane emissions from oil and gas operations. Methane leaks from oil and natural gas drilling sites and pipelines are 50 percent higher than previously thought according to a 2014 study published in the journal Science.
Estimates of Social Cost of Carbon Vary Widely, with Policy Consequences
The social cost of carbon (SCC) or the economic damage caused by a ton of carbon dioxide emissions—which the United States uses to guide energy regulations and, potentially, future mitigation policies—is $37 per ton according to a recent U.S. government study or, according to a new study by Stanford researchers published this week in the journal Nature Climate Change, six times that value.
The Stanford scientists say the current pricing models fail to reflect all the economic damage each ton of CO2 causes and that a higher value on that damage could change policy.
“If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis,” said study co-author Delavane Diaz. “Because carbon emissions are so harmful to society, even costly means of reducing emissions would be worthwhile.”
“For 20 years now, the models have assumed that climate change can’t affect the basic growth rate of the economy,” said study coauthor Frances Moore. “But a number of new studies suggest this may not be true. If climate change affects not only a country’s economic output but also its growth, then that has a permanent effect that accumulates over time, leading to a much higher social cost of carbon.”
But William Pizer, a faculty fellow at Duke University’s Nicholas Institute for Environmental Policy Solutions who has worked on and recommended regular updating of the SCC estimate, questioned the methodology of the Stanford analysis, pointing out that it relied on the impact on national economies of short-term temperature spikes rather than on long-term trends that might reveal permanent economic reductions.
“To me, it just seems like it has to be an overestimate,” Pizer said of the Stanford result of $220 (subscription required). “I think it’s great they’re doing this,” he added. “I just think this is another data point that someone needs to weigh as they’re trying to figure out what the right social cost of carbon is. But this isn’t like a definitive new answer.”
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.
The Environmental Protection Agency (EPA) is delaying the release of carbon emissions rules for all power plants and will publish them for new as well as existing plants at the same time mid-summer.
“It’s become clear to us … that there are cross-cutting topics that affect the standards for new sources, for modified sources and for existing sources, and we believe it’s essential to consider these overlapping issues in a coordinated fashion,” said Janet McCabe, the EPA’s acting administrator for air quality.
McCabe also announced that the EPA will begin drafting a “model rule” for states that do not submit individual plans to meet emissions reduction targets in the existing power plant regulations.
Under the proposed regulations for new sources, the EPA has functionally required new coal power plants to include carbon-capture technology, which critics of the emissions rules say lack proof of efficacy on a large scale and have a high cost to implement. In 2011, the American Electric Power Company reported that including carbon-storing processes at a West Virginia plant would cost an estimated $668 million.
California Cap-and-Trade System Includes Oil and Gas Sector
California’s cap-and-trade program—the country’s first multi-sector carbon emissions trading program—now requires gasoline and diesel producers to supply lower-carbon fuels or to buy carbon allowances—pollution permits—for the greenhouse gases emitted when those fuels are burned.
Key program stakeholders, industry leaders, public officials and environmental advocates agree that consumers will see a rise in gas prices, but the amount remains uncertain.
“There’s a very large universe of variables which could affect gas prices on a daily basis, and we don’t set fuel prices,” said California Air Resources Board spokesperson Dave Clegern. He added, “We don’t see them going up more than a dime, at the most, based on any current cap-and-trade compliance costs.”
It is estimated that 25 percent of secured funds from the emissions trading program will be allotted to the state’s high-speed rail project.
California’s program includes an allowance reserve initially proposed by Nicholas Institute and Duke University researchers that prevents carbon allowance prices from reaching levels beyond the scope of purchasers.
Congress Prepare to Vote on Keystone XL Pipeline
The Senate Energy and Natural Resources Committee has cleared legislation to approve the Keystone XL pipeline, which would deliver some 830,000 barrels of oil a day from Canada’s oil sands to Gulf Coast refineries. But White House press secretary Josh Earnest, citing the Obama administration’s “well-established” review process, said, “If this bill passes this Congress, the president wouldn’t sign it.”
The pipeline has become a flash point in the debate over climate change and economic growth.
In a December 19 press conference, the president said, “I want to make sure that if in fact this project goes forward, that it’s not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people, some of them long term, but significant costs nonetheless.”
Critics of Keystone have pointed to the carbon intensive production of the crude it will carry. In an op-ed in The Hill, the new president of the Natural Resources Defense Council, Rheh Suh, called production of oil from Canadian tar sands an “environmental disaster.”
Supporters argue that Keystone will be a source of economic stimulus. In a statement, Energy and Commerce Committee Chairman Fred Upton said, “After six years of foot-dragging, it’s time to finally say yes to jobs and yes to energy. It’s time to build [this pipeline].”
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.
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.