February 2015

Post image for EPA, the Keystone XL Pipeline, and the Green Campaign to Restrict Trade in Fossil Fuels

The State Department’s Final Supplemental Environmental Impact Statement (FSEIS) on the Keystone XL Pipeline vexes environmentalists. While acknowledging that petroleum made from Canadian oil sands emits 17% more CO2 than other types of heavy crude (FSEIS, ES-15), State concluded that U.S. refiners would obtain roughly the same amount of Canadian crude whether permission to build the pipeline is granted or denied.

If denied, the oil would just come by alternate modes of delivery, principally trains but also incremental pipelines and barges. Those other routes are not only more costly but also less energy efficient than transport via the proposed KXL. Thus, State concluded, compared to the KXL, transport by rail would emit 28% to 42% more CO2. [FEIS, ES-34] Implication: If you’re really worried about global warming, then you should support the Keystone XL Pipeline. Beautiful!

Keystone XL GHG Compared to Alternative Delivery Modes

 

 

 

 

 

In a letter sent Monday Feb. 2, EPA Assistant Administrator for Enforcement and Compliance Assurance Cynthia Giles asked State to revisit that assessment. State estimated that as long as crude oil sells for $75 per barrel or higher, “revenues to oil sands producers are likely to remain above the long-run supply costs of most projects responsible for expected levels of oil sands production growth.” [FEIS, ES-12]. Producers would still earn profits notwithstanding the extra cost – roughly $8 per barrel — to ship the oil by rail rather than through a big new pipeline.

Times have changed, Giles argues. State published its FSEIS in January 2014, when West Texas Intermediate (WTI) crude sold at about $94 per barrel. In recent weeks, WTI crude has been selling below $50 per barrel.

Giles quotes State’s conclusion that if oil prices decline to $65-$75 per barrel, the higher transport costs of shipment by rail “could have a substantial impact on oil sands production levels — possibly in excess of the capacity of the proposed project.” Indeed, State goes on to say,  “Prices below this [$65-$75] range would challenge the supply costs of many projects, regardless of pipeline constraints, but higher transport costs could further curtail production.” [FSEIS, ES-12]

Giles concludes: “In other words, the Final SEIS found that at sustained oil prices within this range, construction of the pipeline is projected to change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur.” She advises State to give “additional weight” to the “low price scenario” in the FSEIS “due to the potential implications of lower oil prices on project impacts, especially greenhouse gas emissions.”

Allow me to translate. The future of Canada’s oil sands industry may have looked bright a year ago. Today that future is clouded by falling prices and profit margins. A long period of low prices could force a large contraction and throw tens of thousands of people out of work. So let’s kick ‘em while they’re down! Let’s deny oil companies the option to invest their own money to cut operating expenses, protect their capital investment, or just plain survive.

To opponents, the Keystone XL Pipeline is objectionable precisely because it will increase the economic efficiency of an industry they believe should not exist. [click to continue…]

On last night’s Real Time with Bill Maher, the eponymous host went off on a bizarre rant (goaded by the audience, alas) during which he said that we perfectly understand the climate, but we “don’t know” about vaccines, fake  sugar, genetically modified foods, and the benefits of moderate drinking. Wacky stuff. I’ve provided a partial transcript below.

BM: Could I make one more point about the media that bothered me this week. The analogy that I see all the time where if you ask any questions [about vaccines] then you are the same thing as a global warming denier. I think this is a very bad analogy. Because I don’t think that all science is alike. I think climate science is rather straightforward, cause you’re dealing with the earth. It’s a rock. I’m not saying that I know how to deal with it. But climate scientists, from the very beginning, have pretty much said the same thing. And their predictions have pretty much come true. It’s atmospherics. And its uhhh geology and chemistry. That’s not true of the medical industry. I mean, they’ve had to retract a million things. Because the human body is infinitely more mysterious. People get cancer, and doctors just don’t know why. They just don’t know why, and they don’t know how to fix it. And they put mercury in my teeth. I remember my father had ulcers, and they treated it wrong when I was a kid. I mean, I could go on with all the times that they’ve been wrong. So to compare the sciences, I just think, is wrong.

[Applause]

Again, about this era that we live, where we can’t ask any questions. I’m going to ask a few questions…

Maher then went on to question vaccines, sugar substitutes, genetically modified foods, and the benefits of moderate drinking. He concluded thusly:

There’s a lot we don’t know, unlike global warming, which we do know.  [click to continue…]

Leading global warming alarmists often claim that saving the world from global warming will be easy.  Research reports from universities and environmental groups are regularly published that show the costs will be minimal and the costs of not doing it will be astronomical.  As former Vice President Al Gore, Nobel Prize and Oscar winner, puts it, how can it be costly to replace dirty, expensive energy from coal, oil, and natural gas with clean, free energy from wind and solar?

unfccc hqBut every year or two, a leading alarmist lets the cat out of the bag.  At a press conference in Brussels on 3rd February, Christiana Figueres, the executive secretary of the UN Framework Convention on Climate Change, said that completely transforming the global economy in a few decades “is probably the most difficult task we [the UN? Mankind?] have ever given ourselves.”

“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the industrial revolution,” Figueres said. [click to continue…]

Cooler Heads Digest 6 February 2015

The Latest, Most Concise News in Environmental Special Interest Shenanigans

  • Late last week, an EPA Science Advisory Board (SAB) pooh-poohed the agency for carrying water for the Environmental Defense Fund in the preamble to a toxicity assessment of three chemicals known as trimethylbenzene isomers. In Thursday’s InsideEPA ($), Maria Hegstad reported that the SAB’s draft review of EPA’s assessment objects to the agency’s inclusion of, inter alia, the claim that “funding source can downgrade the credibility of studies”; in a conference call, one member called it “absolutely anti-science.” In fact, EPA borrowed this “anti-science” concept from the greens.* Hegstad reports: ‘Environmental Defense Fund in comments last June “strongly recommend[s] that funding source be included in the risk of bias evaluations of studies.”’ Not for the first time, EPA effectuated a policy priority for environmental special interests, in seeming contravention to sound scientific and administrative procedures (not to mention common sense).
  • On Monday, Washington Free Beacon’s Lachlan Markay reported on the assertion by a prominent Sierra Club writer on a Sierra Club blog that that the House of Saud is “our best ally in the fight against Keystone XL.” According to the Sierra Club, the Saudis did the green movement a solid by maintaining production in the face of declining prices and thereby perpetuating cheap oil, which renders Keystone XL less economic. Of course, sustained lower prices—by engendering greater demand—would lead to far more GHG emissions than any single infrastructure project. This is further evidence that opposition to the pipeline is based on ill-considered emotion far more so than reality.
  • Sticking with Sierra Club: The green group was party to a “sue and settle” consent decree that was proposed in Thursday’s Federal Register and which serves as an exquisite example of this litigious practice. In mid-December, Sierra Club filed an amended complaint in a northern California federal court (Sierra Club v. McCarthy, CA No. 4:14-cv-3198 (N.D. Cal.)); the agency immediately moved to settle; and, finally, the two parties (EPA & Sierra Club) negotiated how the agency would employ its limited resources in order to process plans for a 2008 ozone standard by 25 States—none of which were California. Thus—behind closed doors in a northern California court—did the agency and the Sierra Club hash out environmental policy affecting a number of States east of the Mississippi. Ladies & gentlemen, THAT is sue and settle.  [click to continue…]

EPA is not a monolith; in addition to the agency’s headquarters in D.C., there are 10 regional offices located in large cities across America. Of course, each of these 10 offices implements the same enabling statutes that empower EPA as a whole. Nonetheless, despite this inherent similarity, different offices have developed different functional expertise, through a combination of internal dynamics, external stimuli, and bureaucratic inertia.

For example, Philadelphia-based Region 3 over the last decade invented a new (highly dubious) Clean Water Act pollution metric, known as “conductivity,” to stifle surface coal mining in Appalachia. And San Francisco’s EPA Region 9 office colludes best with the major environmental special interests, due to the simple fact that many of these green groups have headquarters in northern California. The purpose of this post is to draw your attention to the pioneering statism perpetrated by EPA Region 6, regarding a Clean Air Act regulation known as Regional Haze.

Congress created the Regional Haze program to protect and improve visibility. Because it is an aesthetic regulation—rather than a public health measure—the Congress delegated an unusual degree of power to the States vis a vis the EPA, relative to all other regulatory programs established by the Clean Air Act. Simply put, States are supposed to call the shots on Regional Haze. However, during the Obama administration, EPA Region 6 has innovated a means by which the agency can trump the states’ rightful authority on Regional Haze.

Idiomatically speaking, Region 6’s inventive Regional Haze strategy is to move the goalposts. Here’s how it works. [click to continue…]

Post image for FutureGen: Another Triumph of Government-Directed Energy Transformation

FutureGen to be shut down after feds withdraw $1B in funding,” reads the title of an AP story published yesterday afternoon. This news is significant for the future of U.S. energy policy:

  1. FutureGen’s financial unsustainability further debunks EPA’s mythos that carbon capture and storage (CCS) is an “adequately demonstrated” technology.
  2. If CCS is not adequately demonstrated, then EPA’s Carbon Pollution Standard rule is unlawful.
  3. If the Carbon Pollution Standard rule is unlawful, then so is the far more consequential regulation predicated upon it — the Clean Power Plan.

Here are some key excerpts from the AP story:

Coal companies working with the government on the long-planned $1.65 billion FutureGen clean-coal project said Tuesday they have no choice but to shut it down after the Department of Energy suspended the majority of its funding.

The department confirmed that it will not provide the $1 billion in stimulus funding it had committed to the project, which aimed to refit a coal-fired power plant near Meredosia in western Illinois and store carbon dioxide from the coal underground.

The FutureGen Alliance, the companies working on the project in western Illinois, said they were disappointed by the news but had no way to make up the money.

“The federal funding was the key component,” FutureGen Alliance spokesman Lawrence Pacheco said, adding that the Department of Energy told the alliance that the project couldn’t realistically use the federal stimulus funds by the September deadline to do so.

* * * [click to continue…]

On EPA’s FY16 Budget

  1. EPA’s FY16 budget unabashedly avows that the President’s Climate Action Plan is the agency’s lodestar.* This is an unfortunate (and unwise) state of affairs, because the centerpieces of the President’s Climate Action Plan are discretionary regulations. (Indeed, the whole regulatory regime could’ve been avoided). Meanwhile, the agency remains woefully out of compliance with hundreds of non-discretionary duties as stipulated by Congress in the Clean Air Act. These regulations—the mandatory ones that EPA refuses to perform—pertain to conventional pollutants of the sort that could pose a threat to living human beings. By contrast, EPA’s climate regs would stave off sea-level rise equal to the thickness of three sheet of paper, a century from now. To recap: The EPA is ignoring its non-discretionary responsibilities regarding regulations that might achieve a human health benefit; instead of addressing this glaring and ongoing problem, the administration wants to pour resources into discretionary climate regulations that wouldn’t actually impact the climate.
  2. E&E PM’s Jeremy Jacobs reports ($) that EPA is seeking 3.5 million in order to hire 20 full-time-equivalent layers and associated staff “to provide legal counsel in support of EPA’s Clean Power Plan.” WOW! For starters, they might as well call this the ‘NRDC Full Employment Fund,’ because the green group obviously stands to win big were this provision to see the light of day. After all, what better lawyers to hire than the NRDC staffers who wrote the rule? Setting aside the special interests who stand to benefit, $50 million for 40 lawyers’ yearlong service seems steep to me, especially given that the agency doesn’t have nearly enough resources to perform its non-discretionary duties (see above). [click to continue…]

During his State of the Union Address two Tuesdays ago, President Obama said that “no challenge—no challenge—poses a greater threat to future generations than climate change.” Yet last Sunday morning, for the second weekend in a row since the President’s SOTU, the four political talkies failed to field a single question on climate change, our greatest threat to future generations.

Platts Energy Week is missed!

Platts Energy Week was replaced by a ‘Celeb Skincare’ infomercial, alas

Of course, all four shows spoke at length about the Super Bowl, that monument to carbon-intensive consumption. NBC Meet the Press’s Chuck Todd even broke down the numbers on Americans’ snack preferences. But no one asked a question about climate change, the most terrifying, awfullest threat ever.

To be fair, there was at least a full mention of climate change, which is twice as many as last week. In probing Sen. Lindsey Graham about his presidential aspirations, CBS Face the Nation’s Norah O’Donnell listed the senior South Carolina’s senator’s “belie[f] in global warming” as being among his many electoral liabilities in any Republican primary. So “global warming” was indeed uttered on Sunday, albeit in a fashion meant to highlight the issue’s lack of voter appeal.

Apart from the absence of global warming talk, the energy/environment highlight of the weekend was, without a doubt, an informative discussion on the President’s new anti-energy policy for Alaska on Saturday’s McLaughlin Group. The smart segment led off the program, and aptly demonstrates why the show is the finest of the remaining weekend political broadcasts. I’ve reposted video and the opening of the transcript after the break. I recommend at least reading the excerpt from the transcript; it lends a concise history of the issue. [click to continue…]

With the recent addition of Chris Mooney as an energy/environment beat reporter, the Washington Post continued its unfortunate habit of hiring partisan bloggers to perform supposedly straight journalism. Mooney’s previous stops include DeSmogBlog, American Prospect, and Mother Jones; more to the point, he wears his progressivism on his sleeve. Now, he’s reporting on energy and environment issues for the primary newspaper read by U.S. policymakers. In the formatted brackets below, I’ve fisked the opening of a piece he wrote last week, starting with the title:

Title: “The Climate Debate Is Brutal and Dysfunctional, But There’s Still a Way Out”
by Chris Mooney, 29 January 2015

[The article title seemingly bemoans the “brutal and dysfunctional” state of the climate debate. But does Mooney have a leg to stand on? This is, after all, the ultra-partisan author of The Republican War on Science and The Republican Brain: The Science of Why They Deny Science – and Reality. In the latter, Mooney makes the “scientific” case why Republicans are scientifically illiterate. Thanks to this body of divisive work, no one has done more to render the climate debate “brutal and dysfunctional” than Mooney.]

As we watch the new GOP-controlled Congress clash over the Keystone XL pipeline, it’s rather depressing to realize that this is just the beginning of the pitched, drag-out battles to come over climate change in the next two years.

[Where’s the “clash over the Keystone Pipeline”? The GOP-controlled Senate just engineered a filibuster-proof, bipartisan majority to pass a bill that would force approval of the “dirty” Keystone pipeline. Nine Democrats voted for the bill–about 20% of the party’s Senate caucus. In passing the bill, the new majority afforded the minority a procedural openness long unseen in the upper congressional chamber during the reign of Harry Reid and his party. This is hardly a “clash”! Mooney’s opening sentence foreshadows a problem with his post: contrary to what he’d have the reader believe, all the evidence suggests that opposition to climate change mitigation policy is healthily bipartisan in the U.S. Congress (see below)] [click to continue…]