Energy Exchange

Latino Support Surges for the Environment

Wind turbine - renewable energy sourceCalifornia lawmakers take notice: Latino voters want a strong economy AND a clean environment, two things they believe are not mutually exclusive.

A new poll released by the California League of Conservation Voters finds that an overwhelming 90 percent of Latino voters believe that the state can “protect the environment and create jobs at the same time.”  This number mirrors national trends among Latino voters, including a recent national poll by the National Council of La Raza (NCLR) and the Sierra Club, which found that 90 percent of surveyed voters believe that protecting land and water resources is “critical to the economy.” Read More »

Posted in California, Clean Energy, Climate, General, Renewable Energy, State / Comments are closed

Natural Gas: A Question Of Sustainability

This commentary was originally posted on the EDF Texas Clean Air Matters Blog.

Today there are around 45,000 shale gas wells operating in the United States – triple the number in 2005 – and as a result, people are rightfully concerned about the extent of the shale boom’s potential damage to the environment.

The issue became the focal point of discussion this month in “Can Natural Gas Be Sustainable?,” a five-person panel presentation at the second annual SXSW Eco conference in Austin. As part of the panel, we discussed how stronger standards and employing best practices could minimize impacts of increased natural gas production in the wake of growing public concern about the health and environmental impacts of drilling.

Attendees of SXSW Eco represented a broad swath of perspectives, ranging from those who were against any natural gas development to those who wanted to see much more natural gas development. One attendee even criticized the title of the panel, presenting the position that developing any non-renewable resource is inherently not sustainable.

As for the sustainability question, one thing is clear: the natural gas industry has a lot of opportunity for improvement, and there is mounting public pressure to address environmental concerns. Nearly 61 percent of Americans have negative views about the oil and gas industry – higher than any other industry (David Blackmon, from FTI Consulting, actually joked that this was an improvement!)

As part of the discussion, I spoke about the many environmental and health impacts associated with natural gas development. Construction and drilling equipment can degrade local air quality with smog-forming pollutants and air toxics (Example: activities at the Barnett Shale in Texas). I also spoke about the implications of faulty well construction as one of the major causes of natural gas leakage, and emphasized that while natural gas is touted as a low-carbon fuel source, leaks from the production, distribution, and use of natural gas could undermine the greenhouse gas advantage combusted natural gas has over coal.

EDF is working hard to address the key problem areas associated with natural gas development: exposure to toxic chemicals and waste products; faulty well construction and design; climate impacts from methane leakage; local and regional air pollution; and land use and community impacts. Our team is engaging with community, government and industry stakeholders to help identify ways to minimize both human health and environmental risk, including:

  • Comprehensive disclosure of hydraulic fracturing chemicals
  • Modernization of rules for well construction and operation
  • Systems-based management of wastes and water
  • State and national standards for improving air quality and reducing climate impacts
  • Minimization of land use and community impacts from natural gas development

Fellow SXSW Panelists

Other speakers presented varying perspectives on natural gas issues. Chris Helman, Associate Editor of Forbes magazine, moderated the panel and emphasized the public interest on the topic, as well as the contribution of natural gas to the country’s energy portfolio.

George Peridas, a scientist from NRDC, prefaced his comments by saying, “We have a lot of work to do before we can call natural gas clean.” Peridas gave examples of numerous exemptions given the natural gas industry under the Safe Drinking Water Act, the Clean Water Act and the Clean Air Act. As well, those tasked with enforcing the state natural gas regulations that currently exist lack the ability to go out, fully inspect and enforce those standards. The result, he said, was that “industry is a self-policing entity right now.”

Much of his policy work focuses on climate change and correspondingly, Peridas said that natural gas could help with climate change and air quality when compared to coal. “The key is that gas needs to displace dirtier fuels,” he said. “A bridge is not the right frame of mind, and we cannot afford to treat gas as an abundant resource. We need to address its impacts now.”

Some of the solutions Peridas proposed included: designation of “off-limits” areas that provide fresh water resources or wildlife/conservation value; stopping those leaks that waste methane and contribute to greenhouse gas emissions; development of a comprehensive guide for how to drill safely (e.g., proper cement jobs at well sites); repealing the outrageous exemptions at the federal level that industry currently enjoys; focusing on measures and policies that promote solutions (e.g., solar energy); and ensuring that communities have a say in whether drilling proceeds in their areas.

Sister Elizabeth Riebschlaeger, a nun with Congregation Of The Sisters Of Charity Of The Incarnate Word, and community advocate for the Eagle Ford Shale, agreed strongly with co-panelist George Peridas and his push for more local regulations. She told the story of citizens in small, rural Texas towns being strongly impacted by the Eagle Ford shale, and even used the phrase “merciless exploitation” to describe her own such experience.

Sister Elizabeth asked the rhetorical question: “Are we counting our natural gas clean energy chickens before they hatch?” She then emphasized that society must consider all of the activities required to produce natural gas, including activities she has observed in the Eagle Ford Shale: trucks and heavy equipment; travel trailers for workers; transporting of sand and chemicals, fracking equipment, and toxic waste (produced during operations); construction of huge batteries and tanks; rigs operating 24 hours a day; loud compressor stations; damage to land requiring clean up; and more.

David Blackmon, managing director at FTI Consulting, represented industry’s point of view, which touts the “reality that over half of our electricity generating capacity is natural gas.” The demand for natural gas includes backing up intermittent supply from solar and wind power. He said that natural gas was one of the only power sources that could be “cycled up” in a matter of minutes and that coal made this process more expensive.

Blackmon said that the key to making natural gas sustainable was ensuring public trust; trust that it is being appropriately regulated at federal, state and local levels. “I absolutely agree that there are not enough inspectors in the Texas Railroad Commission to regulate it,” he said. “The good news is that most companies in the industry recognize the need for public trust and are working towards that.”

Posted in Methane, Natural Gas / Tagged , , | Read 2 Responses

New Study To Provide Important, Direct Measurement Data On Methane Emissions From Natural Gas Production

While natural gas burns cleaner than other fossil fuels when combusted, methane leakage from the production, transportation, and use of natural gas has the potential to undermine some or all of those benefits, depending on the leakage rate.  Methane is the main ingredient in natural gas and a greenhouse gas (GHG) pollutant many times more potent than carbon dioxide (CO2), the principal contributor to man-made climate change.

In other words, leaks during the production, distribution, and use of natural gas could undermine, and possibly even overwhelm, the greenhouse gas advantage combusted natural gas has over coal and spell major trouble for the climate.

Up to this point, direct measurement data on methane leakage rates has been limited and subject to wide interpretation and debate.  Some studies have estimated the leak rate to be as high as 7.9%, while others have estimated the leak rate to be as low as 1% for some aspects of the drilling process.  Methane leakage matters, and has clear implications on whether natural gas can be seen as a lower carbon energy source.  To help overcome some of the debate, EDF is working with leading academic researchers and industry leaders from across the natural gas sector to take direct measurements of leak rates to help better define the natural gas leak rate across the natural gas supply chain in the United States.

In partnership with the EDF and nine leading natural gas producers, today the University of Texas Austin (UT) announced the first part of this study, focused on emissions from natural gas production.  The study will help provide a clearer picture of methane leakage rates occurring at natural gas drilling sites around the country.  It is particularly relevant because drilling and completion processes have evolved rapidly in recent years – thanks to breakthroughs in horizontal drilling and hydraulic fracturing – and the knowledge about the methane leaked during this shift has not.

The main objective of this study on production emissions is to obtain scientifically rigorous data from multiple gas producing basins. The study will focus on quantifying emissions from well completions, gas well liquid unloading and well workovers, in addition to other more routine well-site fugitive emissions, the areas of the production process with the greatest leak rate uncertainties

The study is unique in that it brings multiple, key stakeholders to the table to make measurements of emissions at the well pad that will be shared when completed. If natural gas is to become an accepted part of an energy independence strategy, while supporting a clean energy future, it is critical to work together to quantify, and where ever possible lower, the existing methane leakage rate. Such an approach could yield enormous added environmental and health benefits from existing and future natural gas infrastructure.

A research team led by UT, including engineering and environmental testing firms URS and Aerodyne Research, is conducting the extensive field study. Project partners include EDF, Anadarko Petroleum Corporation, BG Group plc, Chevron Inc., Encana Oil & Gas (USA) Inc., Pioneer Natural Resources Company, Shell, Southwestern Energy, Talisman Energy, USA, and XTO Energy, an ExxonMobil subsidiary.

For more information on ways to get sustained benefits from natural gas, EDF published a paper earlier this year titled, “Greater focus needed on methane leakage from natural gas infrastructure.”  Find more at edf.org/methaneleakage.

Posted in Methane, Natural Gas / Read 3 Responses

California Utilities Announce Innovative Financing For Energy Efficiency Retrofits

This commentary was originally posted on the EDF California Dream 2.0 Blog.

On-Bill Repayment

Yesterday, the California investor-owned utilities (Sempra, SoCalEd and PG&E) announced several financing programs including the first On-Bill Repayment (OBR) program using third-party capital to finance energy efficiency retrofits in commercial properties. Property owners would be able to access low-cost capital to finance upgrades and repay the investment through their utility bill. The OBR program will contain three design elements that EDF believes are critical to success:

  1. The obligation will ‘run with the meter’ upon change in ownership or occupancy including via foreclosure. This both improves the credit quality of the obligation and allows investment in longer-payback retrofits.
  2. Partial payments will be allocated pro rata between energy and financing obligations. The utilities will also use all standard collection procedures for unpaid obligations. These features insure that the obligation will be treated similarly to existing utility bills.
  3. The program will provide flexibility for vendors, contractors, project developers, lenders and other investors to design retrofit solutions, go-to-market strategies and financing products that meet the needs of their customers.

Over the next 10 years, EDF estimates that OBR could generate $6 billion of private sector investment in commercial energy efficiency investment. During the next few years, EDF hopes to expand this initial program to additional states, and to cover residential properties.

EDF has been assuming that the California OBR program would only cover energy efficiency retrofits. In a sidebar conversation with a senior California Public Utilities Commission (CPUC) staff member, yesterday, I learned that it may be possible to extend OBR to renewable and demand response projects. We expect to be working closely with relevant stakeholders and the CPUC to make this a reality.

OBR is expected to be operational in California by the end of March 2013. EDF will be working closely with energy efficiency project developers, energy services companies, lenders and other investors to develop a robust pipeline of OBR projects that can be executed soon after program initiation.

Posted in California, Energy Efficiency, On-bill repayment / Tagged , | Read 1 Response

San Diego’s New “Smart Energy Community”

This commentary was originally posted on the EDF California Dream 2.0 Blog.

San Diego Gas & Electric Co. (SDG&E) and Sudberry Properties have announced plans to incorporate breakthrough smart grid technology in the construction of Civita, the new master-planned development in Mission Valley, California. With a focus on sustainability and energy-efficiency, the “smart energy community“ will be home to vehicle charging stations, solar and fuel cell electricity, battery storage and energy management tools for residents.

“The Civita project is consistent with what we are trying to achieve here in San Diego,” said Mayor Jerry Sanders. “By integrating solar power, clean transportation and energy efficiency into the very foundations of our homes and businesses, we can help preserve the environment while strengthening our community overall.”

With plans to build nearly 5,000 homes and around a million square feet of office properties, apartment living, public parks, and a civic center over a once 230 acre gravel quarry, Civita could become one of the first communities in the nation to be “fully upgraded with smart grid technology and stand at the forefront of the broader transformation of the electric grid the community.” Civita aims to surpass current California energy efficiency standards by at least 15 percent by using energy star appliances, highly efficient residential lighting and onsite power sources, and by allowing some buildings and areas within community to operate independently of the grid.

Posted in California, Grid Modernization / Tagged | Read 2 Responses

Leveraging Data To Move Markets

Recently, I blogged here about the fact that significant improvements in the efficiency of existing buildings – a critical and potentially cost-effective part of our carbon reduction strategy – are not easy to achieve, and described how doubts about the likely success of energy upgrade projects are a barrier to “scaling up” efficiency in buildings.  I also touched on EDF’s efforts to change that.

Today I’m happy to report further on some of the progress being made toward a future in which energy efficiency (EE) project originators and funders will have greater reason to expect success in energy upgrades involving existing buildings.

Last week, EDF partnered with Bloomberg New Energy Finance to host ‘Leveraging Data to Move Markets,’ a half-day discussion among government, real estate, Wall Street, real estate entrepreneurs and NGOs, with participation from the Department of Energy (DOE) and the White House Center for Environmental Quality (CEQ).  The discussion focused on DOE and EDF efforts to address key data and standardization requirements to meet the needs of private capital markets to facilitate comprehensive energy efficiency projects.

It was clear based on the conversation throughout the day that investors and other market players are looking for accurate, reliable, and transparent forecasts of savings from EE projects and related loans in order to manage risk associated with investing.  The lack of standards for data and for the various practices that make up the lifecycle of an EE retrofit are not only affecting the ability to rely on the savings being delivered, but also impeding the origination of projects and creating significant transaction costs to all players. 

As Jonathan Powers described at the opening of the meeting, the White House’s CEQ is keenly interested in stimulating discussions among private market actors and parties in possession of data, with an eye toward how data sets can be leveraged to achieve purposes above and beyond the capabilities of the entity that collected it in the first place.  The DOE is actively engaged in creating data sets with the potential to change the landscape in which energy efficiency projections are made.

Ron Herbst of Deutsche Bank observed during the day’s opening panel that “Data informs where you should hunt for opportunity.”  He also noted that auditable energy performance data would be a substantial step forward, and emphasized the power of transparency to correct malfunctioning markets.  Jeff Pitkin, of the New York State Energy Research and Development Authority (NYSERDA, a New York State authority with a mandate to run energy efficiency programs), seconded the need for transparency. Mr. Pitkin noted that the ability to ground projections in something that is “seen as a credible process,” and transparency with respect to the distinct track records of different market actors, would be powerful levers for building better programs and making prospective projects more attractive to property owners.  Angela Ferrante of Energi, an insurance company seeking to underwrite performance risk in energy upgrade projects, similarly stressed that the variability among project proposals is itself a real barrier to efficient underwriting. Read More »

Posted in Investor Confidence Project, On-bill repayment / Tagged | Read 1 Response