Clean Energy Initiative

The negotiators for the Senate and House have struck a deal to combine the transportation reauthorization, student loan bill and flood insurance legislation in a package that is expected to pass by the end of the week. Important, for the energy community and, frankly, the 2012 election, the House Republicans agreed to drop their demands for language expediting the authorization of the Keystone XL oil sands pipeline and loosening regulations on coal ash. In return, Republicans  won a concession from Democrats to streamline permitting of transportation projects.  Effectively, Keystone XL Pipeline is off the table for 2012.  This will most probably represent the last significant burst of legislating before the election, as lawmakers will become increasingly preoccupied by message votes and electioneering in the weeks ahead.  Lawmakers could not finish drafting the bill in time to post it online by 12 a.m. Thursday, which means House GOP leaders will either have to waive the three-day rule for reviewing legislation before a vote or delay passage until Saturday.   

In today's Energy and Commerce Hearings on Ambient Air Standards, Jeff Holmstead,  George W. Bush EPA's air chief, in his testimony said  the agency isn't properly considering the impact of complying with the proposed new rule. "My primary concern about the new proposed standards is that EPA is not being fully honest about the burden it will impose on state and local governments, companies and businesses and American consumers," he plans to say. "EPA is not, or at least should not be, just another advocacy group waging a public relations campaign. The agency and its officials should be open and honest about the implications of its regulatory actions."

eBay will soon become the first major tech company using renewable energy as a primary power source. The company will incorporate 30 Bloom Energy servers at their main data center just a few hundred feet from the center in order to limit utility grid losses as well. The fuel cells will be powered by biogas, but will serve only 15 percent of the nationwide energy needs of eBay, so the general dependence on the grid will otherwise continue for the company.

A new carbon capture project in Texas has received $9 million in investments to turn gas from a coal-fired kin into marketable chemicals. The hope is to turn a profit by selling the chemicals from the converted gas. Several oil and chemical companies have invested in the project set to begin in 2014. This project is an alternative to sequestration, making carbon capture less energy consuming and more commercially viable. The hope is that the project will capture both carbon from their plant as well as take more out of commission because other industries will no longer need to make the chemicals produced from the captured carbon conversion from their current sources.

The Federal Energy Regulatory Commission (FERC) has issued a final rule (Order No. 764) intended to facilitate the integration of variable energy resources (VERs), such as wind and solar, with the nation’s bulk power system. This rule requires two things:  (1) public utility transmission providers allow intra-hourly scheduling of transmission rights at 15-minute intervals, in order to reduce imbalance charges that VERs incur when their output departs from the transmission schedule; and (2) new variable energy resources that interconnect with jurisdictional transmission facilities must report meteorological and operational data to the public utility transmission provider in real-time, to enable improved forecasting of generator output.  

A new study by the National Renewable Energy Laboratory (NREL) reports that the United States could feasibly obtain 80% of its electricity from renewable resources by 2050 – provided that adequate investments in the nation’s transmission system are made and policies supporting clean energy deployment are instituted. According to the report, the intermittency of renewable energy technologies at this level of market penetration can be overcome by building new long-distance transmission lines, improving grid operations, and aggressively deploying existing storage technologies.  It should be noted that according to the report, deployment of renewables at this scale would cause retail electricity rates to increase by between 2.4 and 5 cents per kilowatt-hour by 2050, relative to a “business as usual” scenario.  This is some tall order and most likely not going to happen given this legislative environment.  Presently, renewable energy technologies, including large hydroelectric facilities, supply 10% of our country’s electricity.  

Speaking before a packed audience this afternoon, Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, outlined the Administration's accomplishements in  energy and climate.  Touting the All of the Above strategy, Ms. Zichal pointed out that the Administration is committed to traditional and alternative sources of energy. Zichal said that the Administration is strongly advocating for the PTC (Production Tax Credit) which President Obama says is essential to our economy.  Later this year, the Administration will finalize the toughest fuel economy standards in history, which will nearly double the efficiency of the cars and trucks we drive by 2025.

 Ms. Zichal noted that the Department of Interior  regulations to toughen oversight of hydraulic fracturing  on federal lands are on track despite a two-month extension of the public comment period announced last week.   Domestic oil and gas production have increased every year that President Obama has been in office resulting in a substantial gain in energy independence for the United States.

In the much anticipated vote on Senator James Inhofe’s (R-OK) efforts to block the Environmental Protection Agency’s emissions regulations, the Senate voted 46-53 against the resolution early Wednesday afternoon. The vote comes in the midst of a long Republican crusade against the EPA, which isn’t likely to end despite this result. While the resolution was not likely to pass, senators on both sides of the aisle switched teams to vote with the opposite party on the issue, with the Republicans stressing the loss of jobs and increasing energy costs and democrats touting the public health benefits and denying the exaggerated economic claims made by their opponents. The five Republican Senators who joined the Democrats were Senator Olympia Snow (ME), Kelly Ayotte (NH), Susan Collins (ME), Scott Brown (MA), and Lamar Alexander (TN). The Democrat Senators who supported Inhofe and made it an even five-for-five trade were Mary Landrieu (LA), Joe Manchin (WV), Ben Nelson (NE), Mark Warner (VA), and Jim Webb (VA).

Please join us for a luncheon featuring Heather Zichal, Deputy Assistant to the President for Energy and Climate.  Ms Zichal will deliver remarks on the Administration's "All of the Above" approach to American energy, including the important role that natural gas plays in our nation’s 21st century energy economy. 

The lunch will be held on Monday, June 25th at the NDN/NPI offices at 729 15th Street, NW.  Lunch will be served at noon, and the program will begin promptly at 1215pm.  Please RSVP today and arrive early to get a good seat.

Petitioners including the Electric Power Supply Association, the American Public Power Association, and Edison Electric Institute, along with the National Rural Electric Cooperative Association and Old Dominion Electric allege that the Federal Energy Regulatory Commission has overstepped its bounds recently when it began offering payments to retail consumers for reducing their electricity consumption, according to a recent article. The FERC has no authority to regulate sales of electricity, and thus claims have been made against the body for attempting to “circumvent” limits on authority. 

A front page Politico article by David Samuelsohn has a provocative story on environmentalists and their concerns on Obama’s reelection. The President’s inability to pass substantive progressive energy policy legislation throughout his first term have led to waning enthusiasm from the Green party and environmentalists. Although furious with the lack of results, they may have no choice but to “shut up and fall in line” behind Obama again because of even stronger potential opposition from Romney.

Obama was able to pass remarkable legislation that would greatly increase fuel economy standards to 54.5 miles per gallon by 2025, but with the rejection of the Keystone XL pipeline as the only other major environmental success of the administration, and the decision to send Hillary Clinton to the Rio conference rather than attend himself, Obama has not fared well in placating green voters, who want determined action from the President. Plus, there is skepticism about his true commitment to the environment; he rarely if ever mentions the term “climate change” in speeches or on his website, and has shied away from being a clear voice on taking action. Regardless of whether it is because he is truly not an environmentalist, or because he is being stymied by a bafflingly obstructionist anti-environmental congress, Obama risks alienating a large group of environmental voters if he doesn’t at least try to take direct action on the climate change crisis.

Senator Lamar Alexander (R-TN) continues to reiterate his opinion on the upcoming Congressional Review Act vote of the EPA’s mercury and air toxics standard. Alexander believes that, in an action of compromise, the rules should just be delayed, and has partnered with Senator Mark Pryor (D-AK) on presenting that stance. Alexander sees some merit to some of the clean air rules within the EPA regulations, such as the MATS and Cross-State Air Pollution Rule, because they have prevented “dirty air from blowing into Tennessee,” a state surrounded by more heavy coal producing states than any other.

A New York Times editorial piece delved into Mitt Romney’s “energy Etch A Sketch” policies over the weekend. While serving as governor of Massachusetts, Romney previously endorsed the closing of major coal plants, embraced wind and solar energy, and supported the reduction of greenhouse gas emissions. Now Romney is a staunch fossil fuel champion, climate change skeptic, and sworn enemy of the much maligned EPA. From his time as governor to the 2008 and 2012 campaigns, Romney has either changed or completely reversed his course on environmental issues, often in a direction that is disastrously hurtful for the future of the environment and the planet. Romney is quick to shake his hypocritical Etch A Sketch policies clean and redraw new ones for political gain—a scary willingness to have for a potential president.

Tom Fowler wrote a piece in the Wall Street Journal on replacing gasoline with natural gas in automobiles. Natural gas vehicles would generate cleaner emissions and the fuel is substantially cheaper than gasoline. Although barriers remain, Fowler contents that development of the technology is the right direction for the industry.

An important first technological hurdle is the fuel tank. Natural gas must be stored in a pressurized tank, making it heavier and bigger than gas tanks, and also driving up costs. But one of the most pressing issues isn’t technology at all—it’s consumers overcoming the obstacle of initial price-point and fuel convenience. A bigger market would bring prices down, and consumers may not realize that the savings in the long term can be generous. But those savings cannot come if you cannot find a station to fill up at. The public natural gas filling stations that dot the country are few and far between, and in-home filling devices have steep costs that turn buyers off. Research is being done to convert natural gas into a liquid that can be pumped at normal filling stations and used in conventional engines, but again the development costs are too much to make enough sense.

Finally, consumers tend to think “electric” when thinking of alternative fuel vehicles. It will take strong efforts to get the idea of natural-gas vehicles in to the minds, and then into the garages, of consumers. A domestic fuel product with a low price-point might be enough to get a hold in the market.

The National Research Council released a report today on the potential of energy technologies to cause seismic activity. Much of the focus of the report is centered on the effects of natural gas drilling through the process of hydraulic fracturing, “an adverse side effect of which is the potential to cause earthquakes” says the NRC in an announcement of the analysis. According to the NRC, the report “examines the scale, scope, and consequences of earthquakes caused by subsurface fluid injection during energy production.” A hearing has been scheduled by the Senate Energy and Natural Resources Committee on the report.

The immensely heated issue of Keystone XL pipeline provisions on the transportation bill has been temporarily set to the back burner. Congressional leadership currently intends to settle all other policy issues on the transportation bill itself before engaging in negotiations and discussions on the matter of Keystone. The hope is that the rest of the bill will be settled and generally agreed upon before the elephant in the room, and potential deal breaker, is finally dealt with. It is unknown at this point whether the rest of the transportation issues can be settled, so Keystone will take a backseat in the matter until the gist of the bill is agreed upon in order to delay what will surely be the most controversial ingredient in the bill.

The Senate Environment and Public Works Committee will meet today to hold a hearing on who will replace the head of the Nuclear Energy Commission, Greg Jaczko. Allison McFarlane, Obama's leading nominee to replace him, will be one of those speaking today at the hearing.  Her opposition to the Yucca Mountain nuclear waste repository will draw questioning from Republicans. The panel will also hear from Kristine Svinicki, a Republican NRC member nominated for a second term by Obama, but Bernie Sanders (I-VT) has a tough interrogation planned for her, whom he believes is too pro-industry. Despite the potential for a heated session, many believe that the hearing will go smoothly and without controversy. 

Danny Hakim tells us in an article for the New York Times that New York Governor Andrew Cuomo and his administration are pushing a plan to limit the number of hydraulic fracturing sites across the state. With the hopes of reducing groundwater contamination, drilling will only be permitted in areas that agree to it. Hydraulic fracturing, "fracking", must still receive approval from state regulators, but protestors have come out in force against the process. The administration is now walking on the fine line between recognizing those with economic need who would benefit from the use of fracking, and limiting the antagonism of environmentalists, who see the chemicals used in drilling as a danger to water supply.

While the jury is technically still out on the safety of fracking, New York is currently grappling with arguments from all sides. Some regions, which have already leased land to drilling companies, have saved many residents from financial misfortune. On the other hand, many residents have already been outspoken on banning fracking sites in their regions.

The Federal Energy Regulatory Committee has recently approved of a $26 billion merger between Duke Energy and Progess Energy, with the stipulation that they meet a few conditions primarily in regard to reduced wholesale competition. In what the utilities called "a positive decision" by the FERC, they will embrace the conditions and work to fulfill them in time for the planned date of the merger, July 1. The only real hurdle that remains is acceptance by the regulators in North and South Carolina, which they hope to receive by the same July 1 deadline in order to finalize closure on the merger.