Post image for Cellulosic Ethanol “Mandate” Downgraded Again

Today the EPA announced its proposed 2012 Renewable Fuel Standard requirements:

The Energy Independence and Security Act of 2007 (EISA) established the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner, importer, and non-oxygenate blender of gasoline or diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The proposed 2012 overall volumes and standards are:

Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (3.45 – 12.9 million gallons; 0.002 – 0.010 percent)
Total renewable fuels (15.2 billion gallons; 9.21 percent) [click to continue…]

Post image for California Air Board Boasts Its GHG Standards Save More Fuel than DOT’s Fuel Economy Standards — But Denies GHG Standards Are Fuel Economy Standards. Huh?

The California Air Resources Board (CARB) boasts that its greenhouse gas (GHG) emission standards save more fuel than the National Highway Traffic Safety Administration’s (NHTSA) Corporate Average Fuel Economy (CAFE) standards – but denies that GHG standards are fuel economy standards. Huh?

Well, of course, CARB denies it, because the Energy Policy Conservation Act (EPCA) prohibits states from adopting laws or regulations “related to” fuel economy.

But CARB has to trumpet the fuel savings from its GHG standards to attack H.R. 910, the Energy Tax Prevention Act. H.R. 910, says CARB, would make America more dependent on foreign oil by prohibiting CARB and EPA from adopting tougher GHG standards.

H.R. 910 opponents talk as if policymaking were a game in which the regulatory option with the biggest fuel savings wins. By that criterion, why not just let EPA and CARB impose a de facto 100 mpg CAFE standard and declare America to be “energy independent”?

If Congress thinks NHTSA’s standards don’t go far enough, there is a simple fix. Pass a law! What H.R. 910 opponents want is for EPA and CARB to legislate in lieu of Congress. That is neither lawful nor constitutional. [click to continue…]

Post image for EPA Continues the E15 Push

Reuters is reporting that the White House has given its seal of approval to the EPA’s proposed label for E15 (85% gasoline, 15% ethanol). The picture above is of an earlier draft label, no actual images are public yet (to my knowledge) of what the final image ended up being. I suspect the label will be quite similar though it will change 2007MY to 2001MY.

Despite cheers from the ethanol industry, its not clear where the path goes from here. The EPA has suggested that E15 could be sold across the country by September, but a number of gasoline stations are in opposition. Here is a letter (.pdf) sent to Lisa Jackson from the National Association of Convenience Stores (NACS) and the Society of Independent Gasoline Marketers of America (SIGMA), whom together represent roughly 80% of retail fuel sales in the United States. In it they write:

[click to continue…]

Post image for NERA Economic Consulting Releases Study on Combined Impacts of EPA Utility MACT Rule and Clean Air Transport Rule

File this one under regulatory trainwreck. NERA Economic Consulting has just published a study on the combined economic impacts of EPA’s Clean Air Transport (CATR) Rule and Utility Maximum Available Control Technology (MACT) Rule.

NERA estimates the rules will impose $184 billion in cumulative costs on the electricity sector, increase average U.S. electricity prices in 2016 by 12%, and reduce net U.S. employment by 1.4 million jobsduring 2013-2020.

“It is important to note that this report only covers CATR and Utility MACT,” comments Brandon Plank of the Republic Policy Committee. “It does not include the costs of EPA’s greenhouse gas regulations under the Clean Air Act, New Source Performance Standards for refineries and utilities, ozone and particulate matter standards, reclassification of coal ash, etc.” (See chart below.)

Here is the NERA study’s summary of key results: [click to continue…]

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. My colleage, Troutman Sanders attorney Peter Glaser, just sent around a memo on the impacts of EPA’s regulatory surge on electricity prices. The memo is based on PJM auction reports (here and here).

Peter’s memo is too juicy not to share with a wider audience. I reproduce it below with his permission. — Marlo 

Reality has interceded in EPA’s attempt to play down the impact of its train wreck regulations on the electric utility industry.  First came the widely reported news that Louisville Gas & Electric had filed for a 19% rate increase by 2016 to pay for the upgrades that the regulations will require.
Now, we have the results of the capacity auction that PJM just conducted for the 2014-15 capacity year.  The resulting capacity prices were about 4.5 to 8 times as high as prices paid in the last two auctions and 2.5 to 3 times as high as market analysts had predicted. 
According to PJM, most of this increase can be laid at the feet of EPA.  Based on PJM information, we calculate that the portion of the increase attributable to EPA will cost load (customers) in the PJM region $2-3 billion just in capacity costs and just for a one-year period (2014-15).  
Here are the details.

[click to continue…]

Post image for What Should Drive Fuel Efficiency?

What should drive fuel efficiency? Select the answer you think is correct: 

(a) Government;

(b) Markets; or

(c) Please pass the sweet and sour shrimp.

If you chose (a), then go straight to www.allsp.com (Season 10) and watch my favorite South Park episode, “Smug Alert.”

If you chose (c), then you’re on your way to a promising career as a diplomat.

Today, on National Journal’s energy blog, I explain why the correct answer is (b).

Post image for Irony Alert! Greens Regret Not Having Played “Hardball”

Recently, an environmentalist special interest group engendered a political backlash in Massachusetts after running a particularly sleazy television advertisement that equated baby abuse with Sen. Scott Brown’s (R) admirable vote for excellent legislation that would have reined in the Environmental Protection Agency’s runaway regulatory regime for greenhouse gas emissions. I wrote about it here; suffice it to say, Sen. Brown turned lemons into lemonade by painting himself as a sympathetic father-figure under attack from unscrupulous sleazebags.

In the immediate wake of this blowback, I find it interesting that Politico’s Morning Energy Report (I recommend signing up here) reported today on how the greens feel that they have failed to achieve a cap-and-trade energy rationing scheme because they have been too timid. According to the Politico writeup,

[click to continue…]

A staple of climate alarmism is the claim that snow pack in the arid West is shrinking and melting earlier in the spring season, diminishing supplies of water needed for irrigated agriculture in the hot summer months. But this year, snow pack is at record highs. Indeed, snow is piled so high that the big worry is not about summer drought but flash floods.

[click to continue…]

Has the EU met its emission reduction targets under the Kyoto Protocol? Not if emissions associated with goods Europe imports from Asia are taken into account. So finds a study published this week in Proceedings of the National Academy of Sciences (PNAS).

The study, Growth in emission transfers via international trade from 1990 to 2008, calculates the net increase in global carbon dioxide (CO2) emissions resulting from developed countries’ imports of goods produced in developing countries. The study provides additional evidence of Kyoto’s futility, although the authors, a team of Norwegian, German, and U.S. researchers, don’t draw this conclusion and would likely deny it.

Some key findings: [click to continue…]

Post image for EPA Shuts Down Drilling in Alaska

Shell announced today, for now, it must end a project to drill for oil off the coast of Northern Alaska, because of a decision made by an EPA appeals board to deny permits to acknowledge that Shell will meet air quality requirements. This is not part of ANWR.

Companies that drill for oil must go through extensive permitting processes and invest billions of dollars as payments for leasing the land, exploring for possible oil fields, equipment, etc. This is all done with the understanding that assuming they follow the letter of the law, there is a chance that this investment won’t be flushed down the toilet at the end of the tunnel. It appears that in this case Shell has followed procedure and that emissions will be below any standards required by the EPA:

The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.

“What the modeling showed was in communities like Kaktovik, Shell’s drilling would increase air pollution levels close to air quality standards,” said Eric Grafe, Earthjustice’s lead attorney on the case. Earthjustice was joined by Center for Biological Diversity and the Alaska Wilderness League in challenging the air permits.

Talk about moving the goalposts. They must have been really desperate to cancel this project given that this was the best straight-faced excuse they could muster. Not only do you have to be below the legally required emission limits but you must also not even be “close” to the limits, as defined by unelected officials, one of whom is a former attorney for the Environmental Defense Fund.

Events like this are a prime example of why many in Congress want to strip authority from the EPA. Shell had reportedly invested over $4 billion in this project. When companies make investment decisions, consideration is given to whether or not bureaucrats can make arbitrary decisions to shut the project down halfway through a multi-year process. There are many other countries with natural resource reserves who do not subject economic activity to such unpredictable insanity, and in the eye of a corporation, after an event like this these locations begin to look more preferable to dealing with the United States.