Energy Exchange

Major polluters funding skewed analysis of the costs and benefits of environmental regulations is a long-standing tradition in regulatory circles. In a recent version of this phenomenon, CARE (Californians for Affordable and Reliable Energy), an industry funded front group aimed at attacking clean energy and clean fuel policies in California, hired Navigant Consulting to do just that.

Last week, EDF economists pulled back the curtain on the recently released CARE report and found more of the same scare tactics: one-sided costs estimates yielding unfounded results and cherry-picked outcomes.

Unsurprisingly, our economists found that the CARE study “focused exclusively on the costs of California’s complementary clean energy and clean fuels policies while avoiding comparative assessment of the benefits.” Additionally, the study was found to “rely on sources that have not been peer reviewed, and misinterpret analyses and energy market trends.”

Due to the noted inaccuracies of the study, the memo makes the point that “policy makers should treat the Navigant study with extreme caution; it likely overstates costs while considering neither the benefits to be enjoyed nor the cost-minimizing aspects of policies carefully designed to deliver environmental benefits as efficiently and quickly as practicable.”

A CARE funded analysis that results in a one-sided finding shouldn’t come as a shock. The group is funded by some of the largest polluters and fossil fuels producers in California – those that have the most obligations to change under the state’s comprehensive clean energy and climate change laws. CARE members include the Western States Petroleum Association, the California Manufacturers & Technology Association and the California Chamber of Commerce, as reported on its website.

As California transitions to cleaner, more diversified sources of energy, many businesses will be faced with the stark choice of participating in the modernization of our energy and transportation system or fighting against progress and innovation. Whichever way those businesses trend, the recent CARE report prepared by Navigant shows that misinformation will continue to be a part of the portfolio approach used by polluters to undermine California’s progress.

For other analysis of industry reports that have overblown costs and underestimated benefits of California’s clean energy and clean fuels policies, read here, and here.

By Tim O’Connor and Larissa Koehler

Last week, we saw a big win for California’s Low Carbon Fuel Standard (LCFS) – a regulation to diversify the state’s fuel mix with lower carbon sources of energy. After almost a year of deliberation, the United States 9^th Circuit Court of Appeals filed a decision in the case Rocky Mountain Farmers Union, et al. v. Corey, in favor of California.

In its 79-page decision, the Court addressed two major constitutional issues: 1) whether the LCFS was invalid because it directly regulated wholly out-of-state ethanol producers (extraterritoriality); and 2) whether the LCFS was invalid because it impermissibly discriminated against out-of-state producers based solely on origin, thereby violating the Commerce Clause. The court overturned a District Court ruling on both grounds, finding that the state can move forward with the LCFS unimpeded. Of course, the ruling is only a temporary win for California, as additional legal process at the District court — and possibly U.S. Supreme Court — is forthcoming.

Although not required to do so, the Court of Appeals went to great lengths to recognize the importance of California’s leadership in developing and implementing environmental policy. The Court said it did not wish to “block California from developing this innovative, nondiscriminatory regulation to impede global warming… [as] it will help ease California’s climate risks and inform other states as they attempt to confront similar challenges.”

These words of support for the LCFS and California’s leadership are supported by tremendous growth in alternative fuels industries like California biodiesel, and also by analysis that shows fuel diversification can yield long-term price reductions at the pump. The 9^th Circuit’s decision which allows these trends to continue is not just a win for the state in a long legal battle, but also a win for California’s consumers and environment.

Source: Julia Schmalz/Bloomberg

After being caught off guard by the early winds of the shale gale, Pennsylvania officials have been in a near-constant state of regulatory and legislative activity for the last few years, working to put rules in place to reduce the risks posed by the increase in natural gas development.  We’ve given PA high marks on some of those efforts, and we’ve disagreed strenuously with others.  But we believe in giving credit where credit is due – and the Keystone State certainly deserves credit for the long hours that officials and stakeholders have devoted to improving regulations.

In some critical areas, such as reducing air pollution from leaky equipment located at natural gas processing plants and compressor stations, the Bureau of Air Quality at the Pennsylvania Department of Environmental Protection (DEP) has demonstrated real leadership.

Now, DEP has revised its technical guidance document known as Exemption 38, narrowing the eligibility criteria for the air quality permit exemption.  Astonishingly, under the previous version almost all oil and gas production facilities were exempted from the state’s air quality requirements. Past guidance for Exemption 38 considered well sites and all the equipment associated with them to be “minor sources” – even though they can individually contribute to poor air quality conditions, particularly in densely populated areas.   In Pennsylvania 90 percent of wells are concentrated in ten counties, with just three counties accounting for 50 percent of all wells.  Without proper pollution controls and monitoring, this intensive development can easily lead to unhealthy local air quality. Read More »