Post image for Keystone XL: Does Hatred Blind Peace Prize Winners?

Former President Jimmy Carter and nine other Nobel Peace Prize winners this week called upon President Barack Obama and Secretary of State John Kerry to “do the right thing” and “reject” the Keystone XL Pipeline. The Nobel Laureates’ open letter, published in Politico, is worth reading because it epitomizes the intellectual poverty of the anti-Keystone faction.

Asserting that Obama and Kerry’s stand on Keystone XL will “define” their “legacy” on climate change, the Nobels claim that rejection of the pipeline would (1) “have meaningful and significant impacts in reducing carbon pollution,” (2) “pivot our societies away from fossil fuels and towards smarter, safer and cleaner energy,” and (3) “signal a new course for the world’s largest economy.” Wrong on all counts.

As Cato Institute scientist Chip Knappenberger shows, using a climate model developed by the EPA, even if we make the totally unrealistic assumption that all the oil shipped via Keystone XL is additional oil in the global supply that would otherwise never be produced, the pipeline would have to run at full capacity for 1,000 years just to raise average global surface temperature by one-tenth of a degree Celsius. Climatologically, Keystone XL is irrelevant.

The Nobels might reply that the pipeline’s emissions are not the issue. According to them, Keystone XL is the “linchpin for tar sands [oil] expansion,” hence approving the pipeline would commit the world to a “dangerous” development path while rejecting it would move the world towards a new, cleaner path. Okay, time for a restatement of the obvious.

The U.S. economy is in the midst of a revolution in unconventional oil and gas, and the global appetite for oil and gas is growing by leaps and bounds. These trends are determined by basic economic and technological realities, not by a political decision about one infrastructure project. The Nobels’ conceit that Keystone XL is a “pivot” for the global economy and, thus, for the climate system is a reversion to the magical thinking of children.

The Nobels assert that, “The myth that tar sands development is inevitable and will find its way to market by rail if not pipeline is a red herring.” But alternate delivery via rail is not a myth, it’s a massive and growing reality. Maybe before writing to Secy. Kerry, the Nobels should read the State Department’s Final Supplemental Environmental Impact Statement (FSEIS) on Keystone XL, especially Chapter 4: Market Analysis.

As in the 2011 Final EIS and 2013 Draft Supplemental EIS, State again concludes that “the proposed Project is unlikely to significantly affect the rate of extraction in oil sands areas (based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenario).” A big difference, though, is that whereas the 2011 and 2013 reports “discussed the transportation of Canadian crude by rail as a future possibility,” the FSEIS “notes that the transportation of Canadian crude by rail is already occurring in substantial volumes.” Indeed, from January 2011 through November 2013, rail transport of Canadian crude to U.S. refineries increased from practically zero barrels per day (bpd) to 180,000 bpd.

Rail Transport Canadian Crude

The completed Keystone XL Pipeline is estimated to have a capacity to deliver 830,000 bpd of crude oil. According to the FSEIS, rail-loading facilities in the Western Canadian Sedimentary Basin (WCSB) are already “estimated to have a capacity of approximately 700,000 bpd of crude oil, and by the end of 2014, this will likely increase to more than 1.1 million bpd.”  [click to continue…]

Post image for NYT’s Paul Krugman Whiffs on Renewables

According to Paul Krugman’s column in today’s New York Times, there’s been a “technological revolution” in the energy industry, one that “many people don’t know about.” This unnoticed upheaval in the electricity market, per Krugman, was prompted by “the incredible recent decline in the cost of renewable energy, solar power in particular.”

Here’s his proof:

The [IPCC] notes that “many RE [renewable energy] technologies have demonstrated substantial performance improvements and cost reductions” since it released its last assessment, back in 2007. The Department of Energy is willing to display a bit more open enthusiasm; it titled a report on clean energy released last year “Revolution Now.” That sounds like hyperbole, but you realize that it isn’t when you learn that the price of solar panels has fallen more than 75 percent just since 2008.

I readily understand why no one knows about this “revolution,” because it exists only in Krugman’s mind. His evidence is a single Energy Department talking point and an imprecise statement from a recent IPCC report, neither of which tells us anything about the relative cost of renewables compared to conventional energy. There is, moreover, no mention of any countervailing facts, like the bankruptcies of rooftop solar power manufacturers Solyndra and Abound. And he utters nary a peep about the astronomical costs of utility-scale solar like the Ivanpah project in the California desert. Krugman also maintains total radio silence about the intermittent nature of solar energy, which renders it non-dispatchable, and therefore virtually worthless from a reliability standpoint. Perhaps most telling of all, the inequality crusader ignores the fact that solar is the energy of choice for the 1 percent; taxpayer and ratepayer solar subsidies are regressive.

In any case, Krugman is demonstrably wrong. Solar panels remain expensive relative to conventional energy, which is why the industry’s fate is wholly dependent on political favoritism. More to the point, it is absolutely incorrect to compare solar, a non-dispatchable electricity source, to conventional energy sources that can be relied on 24/7 at a moment’s notice. It’s apples to oranges.

In January, EPA proposed the Carbon Pollution Standard, a regulation that requires new coal-fired power plants to install carbon capture and sequestration (CCS) technology. Because CCS is not yet commercially viable, it is prohibitively expensive. As a result, EPA’s Carbon Pollution Standard effectively bans the construction of new coal-fired power plants.

Without further ado, here are the top six reasons that EPA’s proposed Carbon Pollution Standard is illegal:

#6. EPA’s Carbon Pollution Standard increases conventional pollution.

Capturing, transporting, and sequestering greenhouse gases from a power plant is an energy-intensive process that leads to a general energy penalty varying on the order of 15-25%. This energy penalty requires the additional consumption of fuel, which increases conventional pollution. While there are technologies to mitigate increases in nitrogen oxides and particulate matter pollution, nothing can mitigate a precipitous increase in emissions of ammonia pollution (see chart below) caused by use of carbon capture and sequestration. Also, because CCS-outfitted power plants use more fuel, they generate greater volumes of combustion wastes, primarily coal ash and boiler slag. Increases in conventional pollution, per se, don’t sink the Carbon Pollution Standard, but the Agency must address these adverse environmental impacts, at the very least. See Sierra Club v. Costle, 657 F. 2d 298, at 331. The proposed Carbon Pollution Standard fails to do so.

amonia inc#5. EPA’s Carbon Pollution Standard is not based on “adequately demonstrated” technology.

The Clean Air Act requires that the Carbon Pollution Standard be based on an “adequately demonstrated” technology, which the courts have interpreted as being “commercially demonstrated.” In a recent post for Master Resource, I compared the state of CCS technology today to past pollution control technologies whose commercial viability was adjudicated by the courts. The results of this analysis are summarized in the chart below and demonstrate that CCS is not “adequately demonstrated.”

Yeatman-Chart1#4. EPA’s Carbon Pollution Standard is not “achievable.”

In addition to requiring that the Carbon Pollution Standard be based on an “adequately demonstrated” (i.e., commercially viable) technology, the Clean Air Act requires that the regulation must be “achievable.” The D.C. Circuit Court of Appeals, in turn, has interpreted “achievability” to mean that the regulation is capable of being met in all parts of the country. See National Lime Association V. EPA, 627 F. 2d 416 at 443. This is a problem for the EPA, because the types of geological formations that are capable of storing vast volumes of greenhouse gases for sequestration are distributed unevenly throughout the country. Indeed, the agency identified only 12 States that practice the type of sequestration (enhanced oil recovery) that EPA believes will meet the requirements of the Carbon Pollution Standard.

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…”What an Energy Revolution Doesn’t Look Like,” a recent post by The Atlantic’s Alex Madrigal. It begins thusly,

When I started writing about energy in 2007, it seemed like a revolution was on the way! Concern about climate change seemed to be growing and the cost of wind and solar power were declining.

Fast forward six years, and no revolution has come. Instead, the US energy system looks remarkably like it did in 2008.

To recap: An energy beat reporter for The Atlantic wrote a story about the American energy industry over the last 6 years, and his thesis was that there have been no changes in the American energy industry over the last 6 years.

This is, quite obviously, ludicrous. Anyone with a pulse knows that the last six years have witnessed an American energy boom, one that was galvanized by technological breakthroughs in oil and gas drilling, collectively known as hydraulic fracturing, or “fracking.” Yet there’s no mention of this most conspicuous of revolutions, in a piece titled, “What an Energy Revolution Doesn’t Look Like.”  I understand that the author’s lodestar is Al Gore’s ridiculous promise to convert the electricity generating sector to 100% renewables within 10 years, but even so, Mr. Madrigal must accept the fact that a revolution in the “energy system” did occur. To say otherwise is to have one’s head in the sand, which is a most disagreeable posture for a reporter.

Post image for Judge Kavanaugh’s Dissent in the EPA Mercury Rule Case: Will the Supreme Court Review EPA’s $9.6 Billion Reg?

Yesterday, the D.C. Circuit Court of Appeals ruled 2-1 to uphold the EPA’s nonsensical Mercury Air Toxics Standards (MATS) Rule. The MATS Rule requires electric utilities to install maximum achievable control technology (MACT) to reduce emissions of mercury and other hazardous air pollutants (HAPs) from coal-fired power plants.

The rule is nonsensical because, as explained below, although one of the most expensive regulations in history (officially estimated at $9.6 billion in 2016), its health benefits are illusory.

In the case, titled White Stallion Energy Center LLC et al. v. EPA et al., Judge Brett Kavanaugh wrote a powerful dissenting opinion, as my colleague William Yeatman noted yesterday. Kavanaugh agreed with industry petitioners that EPA unreasonably excluded cost considerations (economic impacts) when determining whether MACT regulation of power plant HAPs is “appropriate and necessary.”

The two-judge majority partly based their opinion on the Supreme Court’s ruling in Whitman v. American Trucking Ass’ns (2001) that EPA may not take costs into consideration when setting national ambient air quality standards (NAAQS).

Kavanaugh argues the majority ‘misreads’ or ‘over-reads’ Whitman by ignoring a key difference between the Clean Air Act provisions governing NAAQS rulemakings – §108(a) and §109(b) – and the provision addressing potential MACT regulation of power plant HAPs – §112(n)(1)(A).

The NAAQS provisions clearly allow no room for cost considerations. If an air pollutant is emitted by numerous or diverse mobile or stationary sources and the associated air pollution is reasonably anticipated to endanger public health or welfare, then, pursuant to §108(a), EPA must establish NAAQS for those pollutants, and, pursuant to §109(b), the standards must be requisite to protect public health with an adequate margin of safety. Period. End of story.

In contrast, §112(n)(1)(A) requires EPA to study and issue a report on the public health hazards anticipated to occur as a result of power plant HAP emissions, and then apply MACT regulation “if” the Administrator “finds such regulation is appropriate and necessary.” The provision does not define the terms “appropriate” and “necessary.” Common sense suggests that a regulation is “appropriate” if the benefits justify the costs.

Perhaps more importantly, §112 tasks EPA to determine whether MACT regulation of HAPs is “appropriate and necessary” only for “electric steam generating units.” For all other major sources of HAP emissions, EPA has no discretion and is simply required to promulgate MACT regulations. The statute thus seems to contemplate that, in the special case of coal power plants, MACT regulation may not be appropriate even if the associated HAP emissions pose public health hazards. In other words, a less stringent form of Clean Air Act regulation (such as new source performance standards) or state-level regulation might be “appropriate.”

Yeatman opines that Kavanaugh’s dissent may persuade the Supreme Court to review the case. If so, the Court might rule that EPA is allowed or even required to consider costs when determining what is “appropriate” when regulating HAP emissions from power plants. That, in turn, could set the stage for litigation on whether the MATS Rule is too costly to be “appropriate” within the meaning of the statute.

Of course, EPA contends the MATS Rule is a bargain at almost any price, delivering $33 billion to $89 billion in annual health benefits. Litigation reviving public debate on such claims could be a great teaching moment.

Our June 2012 study, All Pain and No Gain, provides a detailed critique of EPA’s MATS Rule health benefit estimates. Below is a summary of key points. [click to continue…]

A new report from the non-partisan Congressional Research Service confirms what we’ve long been saying: Oil and gas production has declined on federal lands during the Obama administration. Oil production is down 6%, while gas production is down a whopping 28%. These decreases have occurred despite the revolution in drilling productivity wrought by the advent of hydraulic fracturing technology, or “fracking.” During the same period that federal output has been falling, oil production increased 61 % on state and private lands, while gas production grew 33 %. The CRS report, which I’ve re-posted below, puts the lie once and for all to the President’s false claim that he’s somehow responsible for the U.S. oil and gas boom. In fact, drilling is up in spite of the President, not because of him.

CRS report on drilling on federal lands

Yesterday, the National Association of Manufacturers announced the launch of an ad campaign targeting EPA’s pending revision of the national ozone standard. The pitch, which I’ve re-posted immediately below, is running in 10 States: Arkansas, Colorado, Minnesota, North Carolina, Virginia, Iowa, Michigan, West Virginia, Kentucky, Ohio, and Missouri.

 

The National Association of Manufacturers has every reason to fear the ozone rule, as do all Americans. The minimum standard that EPA is considering would trigger the Clean Air Act’s ultra-onerous “Part D” controls for 75% of the country; at most, this unfortunate fate would befall 96 % of the country. By EPA’s own accounting, the regulation could cost up to $90 billion a year—even though the agency concedes that only $23 billion in ozone emissions controls is known to exist. To clarify, this means that the rule could necessitate the creation, out of whole cloth, of almost $70 billion a year in control technologies.

But it’s not EPA’s fault! In fact, the agency doesn’t have the discretion to set the ozone standard. Instead, this responsibility is given to an insular group of advisers, the seven-member Clean Air Science Advisory Committee (CASAC). There are trillions of dollars at stake—that’s TRILLIONS, with a T—yet CASAC is in no way accountable to U.S. voters. Indeed, virtually no voters know of this group’s existence.  Worst of all, CASAC is uniquely ill-suited to designate a standard for a non-threshold pollutant like ozone, due to a professional bias. In this post, I will explain briefly this undemocratic, yet ultra-powerful, institution of environmental policy-making.

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Post image for MoJo Not Always Wrong on Energy

Mother Jones (“MoJo”) is a lefty rag with an unrealistic outlook on life. Once in a while, though, they get it right.

For example, MoJo hates taxpayer subsidized high speed rail in California. Well, I also hate taxpayer subsidized high-speed rail in California. And for the same reason! We both see it as being an unrealistic boondoogle.

This week, MoJo again made a modicum of sense with a well-written and good-looking interactive piece that both explains and decries tax breaks for oil and gas producers. It’s a worthwhile read. Regardless MoJo’s evident disdain for an industry that has been the only bright spot in the U.S. economy since the great global recession, the article is fact-filled and it has some neat infocharts.

And again, MoJo’s is a message with which I agree. Industry specific tax breaks—indeed, all preferential tax treatments—are inefficient and wasteful. I’m with MoJo: Let’s do away with oil and gas’s perks…

….And, at the same time, let’s do away with wind and solar and ethanol and all other “green” energy subsidies and mandates. Then, let’s wait 5 years, and here’s what I bet we’ll see: the utter absence of green energy, having been wholly vanquished on the market by conventional energy sources*. Because green energy tends to be expensive, intermittent, or both, the industry cannot exist absent political favoritism. Otherwise, no one would buy its products. On the other hand, conventional energy sources, primarily fossil fuels, aren’t wholly reliant on taxpayer handouts and mandates, as consumers would buy these products of their own accord.

Don’t take my word for it! Even the top lobbyist for the wind energy industry admits that his clients would go “bust” if the Congress fails to extend a single subsidy, despite the fact that the industry enjoys mandates forcing ratepayers to buy their energy in 30 States.

*Absent, of course, all of the expensive, long-term contracts that utilities have signed with green energy developers, in order to achieve the aforementioned green energy mandates in 30 States.

Updated: For an analysis of Judge Kavanaugh’s excellent dissenting opinion, see below the break.

Today, the D.C. Circuit Court of Appeals rendered a split 2-1 decision that upholds the Environmental Protection Agency’s Mercury and Air Toxics Standards regulation, also known as the Utility MACT. The decision in White Stallion Energy Center LLC et al. v. EPA et al. is available here.

As I explain here, the absurd justification for the mercury rule, one of the most expensive and consequential regulations of all time, is to protect a supposed population of pregnant subsistence fisherwomen, who consume hundreds of pounds of self-caught fish from exclusively the most polluted inland bodies of fresh water.

There is a “narrow” dissent by Judge Brett Kavanaugh, as described by InsideEPA. I’ll update this post when I’ve digested the decision. [See update after the break]. Below, I’ve posted an image depicting the costs and (supposed*) beneficiaries of EPA’s mercury rule.

coal retirments foto2

*EPA has never actually identified a pregnant, subsistence fisherwoman of the sort it purports to protect. Rather they are modeled to exist.

1:36 PM Updated: I’ve digested Judge Brett Kavanaugh’s dissenting opinion. As I note above, his dissent has been described in the press as being “narrow.” I disagree. In fact, it is a strong opinion, and, more importantly, it describes the exact path to obtaining Supreme Court review of the split decision.

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Post image for Bipartisanship Alive and Well in Opposition to O’s Anti-Energy Policies

We are bombarded daily with stories bemoaning the societal ills engendered by the hyper-partisanship of our present political discourse. It is, therefore, notable that both Republicans and Democrats can find common ground in opposing the worst excesses of this administration’s anti-energy policies.

Last week, for example, eleven Democratic Senators sent a letter to President Barack Obama urging him to stop dragging his feet over the Keystone Pipeline. Specifically, the letter demanded that the President make a final decision on whether to permit the pipeline by the end of May.  The signatories were Senators Heidi Heitkamp (ND), Mary Landrieu (LA), Mark Begich (AK), Mark Pryor (AR), Joe Manchin (WV), Joe Donnelly (IN), Claire McCaskill (MO), Mark Warner (VA), Jon Tester (MT), John Walsh (MT), and Kay Hagan (NC). To repeat:  twenty percent of the Senate Democratic caucus is goading the Democratic President on a Republican Party talking point. Bipartisanship lives!

Of course, the Senate is historically the more friendly of the two Chambers of Congress. The House is now widely perceived as being far more partisan, and therefore far more dysfunctional, relative to the Upper Chamber.

And yet, contrary to this perception, 15% of Democrats on the powerful House Transportation & Infrastructure Committee last week sided with ($) a unanimous Republican committee vote, and passed H.R. 524, legislation that would prohibit the Environmental Protection Agency from vetoing Clean Water Act permits that have already been issued by the U.S. Army Corps of Engineers.

The bill is a direct response to EPA’s January 2011 revocation of a Clean Water Act permit that had already been granted to a surface coal mining project in Logan County, West Virginia. (For much more, see here, here, and here). This was the first time EPA had claimed the authority to issue a retroactive veto; before, permits had been thought to have been akin to a property right (for their duration). EPA justified the veto as being necessary to protect an insect that isn’t an endangered species.

Evidently, EPA’s power grab was too much, even for members of the President’s own party. The bipartisan fear galvanizing H.R. 524 is that EPA now claims the authority to effectively end any business reliant on Clean Water Act permits, at any time, based on the flimsiest of justifications.

Thus, it was a banner week for bipartisanship. Not that you read or heard about it. To be sure, the media normally loves to trumpet whatever both parties can agree on, in this hyper-partisan age. In last week’s cases, however, the common ends (a decision on Keystone; checking the EPA) are uncomfortable for the opinion makers. I’ve noted previously media’s reluctance to acknowledge that opposition to climate change mitigation policies is also healthily bipartisan. (See here and here).