Energy Exchange

Wyoming’s Energy Strategy A Potential Step Toward Improved Oil And Gas Regulations

By Jon Goldstein / Published: May 20, 2013

Source: Dustin Bleizeffer/WyoFile

Wyoming is one of the leading energy states in the country. It is the top overall energy exporter in the U.S., the third leading producer of natural gas, and number eight in oil production. In fact, if Wyoming were a country, it would rank tenth in the world in overall energy production.

It makes sense then that Wyoming would want to develop an energy strategy to ensure that these resources are developed wisely. A state that is also home to the nation’s first national park (Yellowstone) and a thriving outdoor recreation and tourism economy would not want one of its leading economic drivers to negatively impact another, or to harm the health of its citizens.

There is strong potential in the strategy released last week by Governor Matt Mead and his staff. The 47 policy prescriptions in the “Leading the Charge” document are broad and varied, but the ones pertaining to oil and gas regulation appear promising. These include:

Establishing a strong, scientifically-valid groundwater quality baseline testing program that gives landowners important information about potential impacts from oil and gas drilling.
An air quality management strategy and review of state flaring policies that can take into account the pollution problems in Wyoming’s Upper Green River Basin and seek to make improvements there and across the state.
Efforts to carefully examine the potential safe reuse of produced water from energy production.
Subjecting the state’s oil and gas regulations to a complete review by a broad group of experts through the nationally respected STRONGER process.
A review of state bonding requirements that can ensure well owners have the financial wherewithal to adequately plug wells and reclaim areas where drilling has occurred so the state is not left holding the bag for so-called orphan wells. Read More »

Is BLM Phoning It In?

By Matt Watson / Published: May 17, 2013

Source: Soundcheck-WNYC

Yesterday the Bureau of Land Management (BLM) released a new draft of its so-called “fracking rule.” To be fair, the proposed rule does represent a level of progress compared to sorely outdated rules on the books. But we’re dealing with critical issues here – not the kinds of things we can afford to only get half right. And unfortunately, “half right” is about all we got here.

The most significant failings of the proposed rule have to do with well integrity – the way an oil or gas well is constructed and operated to minimize risks to the environment and public safety. Proper casing, cementing and pressure management are critical to protecting groundwater resources and the lives of the men and women who work the rigs. The rule takes steps in the right direction, but it doesn’t include nearly the level of detail necessary to ensure casing is set where it’s needed, operators are getting good cement jobs and the whole system is checked for mechanical integrity at critical points in the well development process.

The rule also falls short on chemical disclosure. We’re pleased to see the agency propose the same basic disclosure framework that has already been established by leading states – including requirements that operators disclose all chemicals used in hydraulic fracturing fluids (not just chemicals subject to OSHA reporting), and requirements to post the information on a user-friendly, publicly accessible website like FracFocus. But the proposal is far too weak on trade secrets. For the public to have confidence trade secret protections aren’t being abused, there needs to be a clear path for challenging trade secret assertions and policing the system.

Finally, while we recognize that you can’t address every issue in a single rule, it’s still worth noting two areas where agency rules are in glaring need of an overhaul. First, BLM needs to improve its rules for the handling, storage and disposal of the huge volumes of wastewater produced by unconventional oil and gas operations (the proposed rule merely asks operators to submit a plan). Second, BLM needs to adopt requirements to minimize emissions of methane – a highly potent greenhouse gas – and other contaminants that create local and regional air quality problems like they’re seeing in Colorado and Wyoming. There’s long been talk of dealing with methane emissions at BLM, but so far we’ve yet to see action. We hope that changes soon. Read More »

Posted in BLM Methane, Natural Gas / Tagged BLM, Colorado, Hydraulic Fracturing, Wyoming | Comments are closed

Texas Legislature Update: Chapter 313 And Texas Wind Production

By Marita Mirzatuny / Published: May 16, 2013

Source: Texas A&M AgriLife Research and Extension Center

This week, the Texas Senate will likely debate House Bill (HB) 3390, introduced by Representative Harvey Hilderbran and sponsored by Senator Bob Deuell. This bill, which passed in the House and out of the Economic Development Senate Committee on May 14^th, reauthorizes Chapter 313 of the Texas Tax Code – commonly known as the Texas Economic Development Act. Chapter 313 is an economic development program that allows companies to apply for a temporary reduction in property taxes in exchange for a major capital investment commitment.

Chapter 313 has helped put Texans to work and grow rural economies. Wind energy is among the industries that take advantage of this program and, in the process, has attracted around $24 billion in wind energy investments to 56 counties throughout the lone star state – $15 billion of which was a direct result of Chapter 313. Wind energy projects create new jobs and employ meteorologists, surveyors, structural engineers, assembly workers, electrical workers, construction workers, lawyers, bankers, technicians and local service jobs associated with increased growth.

However, Chapter 313 is set to expire in 2014. If the Texas Senate does not renew this crucial bill as is (with renewable energy projects included), then the state stands to lose its competitive advantage in attracting wind and solar development to the state – potentially losing projects to the 34 other states offering clean energy incentives. Some states don’t impose a property tax on wind projects at all.

Furthermore, including renewables in Chapter 313 helps growing school districts’ tax bases, which benefit from the substantial investment that wind energy projects bring to their communities. The expected 30+ year life span of these projects makes them lucrative municipal assets. Additionally, landowners in rural Texas receive lease payments for each turbine installed on their property. These infusions of capital help farmers and ranchers support their land, particularly during times of extreme drought. 95 percent of land used for wind turbines can still be used for agricultural purposes, allowing farmers and ranchers to benefit from a second harvest – of wind.

Posted in Renewable Energy, Texas / Read 5 Responses

Don’t Be Fooled By Recent Lows: The Texas Energy Crunch Is Still A Big Issue

By / Published: May 10, 2013

This past month, we experienced refreshing, cool and somewhat wet weather in Texas. However, those working on energy issues know all too well that this weather change doesn’t mean we have escaped the worst of the “energy crunch.” As the farmers say: “If you don’t like the weather in Texas, wait ten minutes and it will change.” Despite cooler temperatures, an unplanned power plant outage during a warm day late last month forced the Electric Reliability Council of Texas (ERCOT) to issue an advisory, demonstrating just how quickly things can change.

At the same time, recent ERCOT reports indicate that reserves will be tight this summer due to an anticipated record level of high energy demand and stunted growth in new electricity resources – thus making conservation notices likely and rolling outages probable. All of this points to the important role conservation programs, like demand response, can play for ERCOT. Some ERCOT staff and stakeholders have recognized the importance of demand response, which allow customers to voluntarily reduce electricity use in response to a signal from utilities. Others have called explicitly for programs that pay customers for reducing energy the same way generators are paid for producing energy, an approach EDF has advocated for several years.

ERCOT and a few retail electric providers already have conservation programs, albeit limited, in pilot phases that compensate customers for their participation. But in comparison to other regions, Texas lags far behind other states – despite having the highest potential for conservation and clean energy resources in the U.S. That’s why the three remaining weeks of the legislative session are so important: two critical pieces of legislation that would open up demand response in Texas to meet our electricity reliability goals and drive further market competition are under review.

Senate Bill (SB) 1351 from Senate Business & Commerce Chairman John Carona would require ERCOT to allow customers to participate in all competitive energy markets; the bill passed the Senate earlier this week and is now on its way to the House of Representatives. SB 1351 is an excellent piece of legislation to propel demand response in Texas, but alone it is not enough to ensure Texas can keep the lights on during the hottest summer days. A separate bill from Senator Kirk Watson, Senate Bill (SB) 1280, would accomplish just that by requiring ERCOT to secure enough demand response to meet its reliability needs if existing resources fall short; the bill passed unanimously out of the Senate Business & Commerce committee.

These bills will make all the difference this summer and for many summers to come. The Texas Legislature has the opportunity to ensure that ERCOT and the Public Utility Commission (PUC) have all the necessary tools to avoid rolling blackouts over the next several years as we wait for new energy resources to come online. Read More »

Posted in Demand Response, Texas / Read 2 Responses

Ohio Consumers And Businesses Come Together To Support Energy Efficiency

By John Finnigan / Published: May 9, 2013

Most states have long-term renewable energy and energy efficiency targets. Ohio’s energy efficiency resource standard saves over 700,000 kilowatt-hours of energy annually, more than the energy generated by a new fossil fuel power plant. Ohio’s energy efficiency law is under attack, even though Ohio’s targets are right in the middle compared to other states’ targets.

Source: Clean Energy Ohio

Ironically, the consumers who pay for energy efficiency are not leading this attack. Rather, the attack comes from certain electric utilities and the advocacy groups they support: the American Legislative Exchange Council and the Heartland Institute. The utilities claim to be protecting consumers from the costs of the energy efficiency programs, but they really want to protect their own electricity sales.

One argument raised against energy efficiency programs is that they cost too much. Energy programs, however, must pass a cost/benefit test. The programs will be offered only if the value of energy savings exceeds the program costs. In many cases, the energy savings are two or three times greater than the program costs.

Another argument is that all consumers pay for the programs, but only those who use the programs benefit. A few large Ohio industrial companies have raised this argument. But these companies develop their own energy efficiency programs, so they don’t pay for utility-sponsored energy efficiency programs. Read More »

Posted in Energy Efficiency / Tagged Ohio | Read 2 Responses

Hawaii Passes Bill To Democratize Clean Energy

By / Published: May 8, 2013

Last week, Hawaii passed a landmark bill, SB 1087, which will allow the state to create and issue a “Green Infrastructure Bond.” This bond structure will secure low-cost financing for a variety of clean energy installations, with a focus on reaching populations that cannot afford or do not have access to these energy saving improvements today. The bond proceeds will be used to fund an on-bill program currently under development at the Hawaii Public Utilities Commission (PUC). The on-bill program, which is very much in line with EDF’s recommendations for on-bill repayment (OBR), will provide access to low-cost financing for clean energy projects for residential and small commercial customers.

The bill’s intent is to use this low-cost capital to expand access to affordable clean energy for all of Hawaii’s consumers, acknowledging that “Existing programs and incentives do not serve the entire spectrum of the customer market, particularly those customers who lack access to capital or who cannot afford the large upfront costs required-thus creating an underserved market.” Funding projects with a focus on serving populations that do not have access to other means of financing is especially important in the Aloha State, where electricity rates are the highest in the nation.

The state will issue the bonds and then repay bondholders with funds collected from a utility surcharge, providing a secure form of repayment. The framework enables a portion of the existing Public Benefits Fee (PBF), currently charged to customers, to be redirected so that overall customer bills are not expected to increase. Read More »

Posted in Energy Efficiency, On-bill repayment / Tagged Hawaii, Hawaii PUC | Comments are closed