Energy Exchange

The Price We Pay For Outdated Clean Air Standards

By Ramon Alvarez, Ph.D. / Published: September 27, 2011

The Environmental Protection Agency (EPA) is in the process of updating national safeguards to better protect Americans from the health impacts of natural gas and oil emissions. The standards address the emissions discharged during gas and oil drilling and development practices, known in the industry as ‘upstream’ activities.  

Residents around the growing number of drilling, processing and transmission sites will be relieved to hear this because while industry activity has increased dramatically in the U.S., the Clean Air Act standards that regulate the related air pollution are outdated.  Current standards are limited and fail to adequately protect public health.

These industrial activities discharge a host of air pollutants. Drilling rigs, wells and equipment emit hazardous air pollutants such as benzene, a known human carcinogen.  

A number of other airborne contaminants contribute to ground-level ozone or “smog” pollution, elevated levels of which can lead to:

  • decreased lung function, particularly in children who are active outdoors;
  • respiratory-related hospital admissions and emergency room visits  among both children and adults; and
  • lung inflammation, possible long-term damage to the lungs and premature mortality.

Upstream drilling activities were the single largest source of ozone precursor pollutants in Colorado in 2008. The Texas Commission on Environmental Quality reports that storage tanks used in the exploration and production of natural gas in Texas are the largest source of volatile organic compounds (VOCs) in the state. These contaminants contribute to smog and also are comprised of hazardous air pollutants. And according to a recent inventory, oxides of nitrogen and VOC emissions produced from gas production in the Barnett Shale are comparable to the combined emissions from all the cars and trucks in the Dallas Forth-Worth metro area.

Oil and natural gas activities also are the single largest source of U.S. methane emissions.  Methane is both a potent greenhouse gas and a contributor to smog.   In 2009, methane emitted from these activities was roughly equivalent to the carbon dioxide emissions from 60 coal-fired power plants. 

The media is starting to cover the plights of individuals and families who are suffering from exposure to these pollutants. National Public Radio did a story on a family in Pennsylvania that had a number of health symptoms due to drilling. “First Pam, her husband and two grown kids started getting headaches, and then fatigue set in. They’ve also had dizziness, nausea and nosebleeds. I’ve had a sore throat so long that I don’t know what it would be to not have a sore throat,” Pam says. For a week last summer, Pennsylvania state officials monitored the air at the Judys’ house and the compressor station. They found…toxic chemicals they say almost surely came from the compressor station.”

It is vitally important that EPA strengthen national emission standards. Improved emission standards will help protect millions of Americans, urban and rural, who live in the vicinity of oil and gas air pollution discharges.

Rigorous federal guidelines will also foster industry innovation and emerging technologies, and increase profits by using available best practices to capture saleable gas that’s otherwise released into the atmosphere.   

Updated safeguards are long overdue but there is no guarantee that they will be the strong standards that are essential to protect the public’s health. You can help ensure that they are.

We encourage everyone who wants to breathe cleaner air to let the EPA know you support strong and comprehensive standards for the natural gas and oil industry.

Please get involved by writing to the EPA in favor of updated protections. We also invite you to join us and share your thoughts with the EPA at the upcoming public hearings in: Pittsburgh, Sept. 27; Denver, Sept. 28; and Arlington, Texas on Sept. 29. If you can’t make the hearings, you can submit comments online, via fax or through the mail until Oct. 24. In your correspondence, please be sure to reference Docket Number EPA–HQ–OAR–2010–0505; FRL–9456–2.

Posted in Natural Gas, Washington, DC / Read 1 Response

MacArthur Energy Genius Wins Award For Innovation That Can “Change Our World”

By Lauren Navarro / Published: September 22, 2011

A 29-year old computer scientist, Shwetak Patel, was one of this year’s 22 individuals to receive a ‘genius award’ given out by the MacArthur Fellows Program. (He was also one of the youngest.)

Patel pioneered simple ways for households to monitor and manage how much water and energy they use from specific appliances and fixtures. His approach uses tiny, wireless sensors connected to: a home’s central utility hookups; existing infrastructure — such as gas lines and electrical wiring; and a smart machine that analyzes activity patterns of each appliance. When combined, the sensors help consumers measure how much energy and water they use and identify ways to be more efficient.  

Innovations like these that focus on managing and reducing energy use are desperately needed. A report just released by the Energy Information Administration (EIA) predicts that global energy use will rise 53% by 2035, boosting energy-related carbon dioxide emissions by 43%.

Innovations like Patel’s can keep that growth in demand and emissions in check, while saving huge amounts of money for American families and businesses. For example, Since EDF launched our Climate Corps Program in 2008 – which places specially-trained MBA and MPA students in companies, cities and universities to build the business case for energy efficiency – our Climate Corps fellows have unearthed energy savings totaling more than $1 billion over their projects’ lifetimes.

Improving energy efficiency is in fact the easiest, least expensive and fastest way to reduce energy use and carbon emissions, according to Pulitzer-Prize winning author and oil expert Daniel Yergin. The New York Times called his new book about energy, The Quest, “necessary reading for C.E.O.’s, conservationists, lawmakers, generals, spies, tech geeks, thriller writers, ambitious terrorists and many others.” In it, he “focuses on the importance of thinking seriously about one energy source that ‘has the potential to have the biggest impact of all.’ That source is efficiency…More efficient buildings, cars, airplanes, computers and other products have the potential to change our world.”

Advances like Mr. Patel’s are part of a broader move to a “smart grid,” which uses information technology to make every part of the electric system more efficient.

So, to Mr. Patel, our Department of Energy, the utilities and clean tech companies that are inventing smart grid and other  technologies and services that let us do more with less electricity, and to the individuals and companies that are adopting those cleaner, cheaper alternatives, EDF congratulates and thanks you for your efforts. 

Your focus on industry-leading innovations is helping us change our world.

Posted in Energy Efficiency, Grid Modernization / Comments are closed

Innovations In Energy Efficiency Finance Conference

By Brad Copithorne / Published: September 22, 2011

By: Brad Copithorne, EDF’s Energy & Financial Policy Specialist

Earlier this week EDF and Citi co-hosted a successful conference on energy efficiency (EE) finance at Citi’s headquarters in Manhattan.  This is the third similar conference that Citi has hosted.  Four years ago, they had 10 people in a conference room.  Two years back, it was 40 participants.  This week, we were standing room only in a 200-seat venue.  More importantly, however, was the diverse makeup of the audience, including bankers, real estate owners, EE project developers, financial sponsors, government agencies, foundations and nonprofit organizations.  We are optimistic that this high level of interest indicates that we are close to a tipping point in toward the successful development of this market.

Some of the interesting transactions discussed included:

Public Buildings – Nobel Prize winner, John Byrne, explained an innovative structure that he developed and executed with Citi to aggregate, manage and finance $73mm of EE projects for public buildings in Delaware.  Citi is looking to expand this approach in other states.  (We hope to have a future blog post with many more details about this idea.)

Unsecured Loans – Cisco Devries of Renewable Funding discussed how he is working to aggregate a portfolio of unsecured consumer EE loans and how, to date, these loans seem to show much lower default rates than would be expected.  Several speakers at the conference discussed the importance of getting data on EE loan performance and we understand that there are several efforts in place to collect this data.

Energy Services Agreements – Green Campus, Serious Capital, Transcend, Metrus and Sustainable Development discussed their efforts to further develop this market.  We are hopeful for several favorable announcements in the near term.

Measuring and Managing EE Project Performance – Mary Barber of EDF described our project to create protocols to estimate future energy savings so that lenders and other investors can make informed investment decisions.  Angela Ferrante of Energi talked about an insurance contract that will guarantee the energy savings for a project.

On-Bill Repayment – Jeff Pitkin of NYSERDA described New York’s innovative plan to provide low-cost loans to consumers for EE projects.  The loans would be repaid through the customer’s utility bill.  Credit would be improved because nonpayment would eventually result in shut off of power.  Additionally, the obligation will stay with the meter if the customer moves.  I discussed a similar plan that we hope to implement in California.  We hope that the California strategy will work for commercial and multi-family in addition to single family homes.

Philanthropic Capital – Margot Brandenburg of Rockefeller Foundation, Jessica Boehland of Kresge Foundation and John Goldstein of Imprint Capital discussed how targeted investments for mission driven investors can help seed the market for EE finance. 

Lessons for Solar Project Finance – Michael Mittleman of SolarCity and Marshal Salant of Citi described the very long effort that was required to make solar projects viable for financing.  Currently, billions of dollars of solar projects are financed each year and the market is expanding rapidly.  They (and we) are hoping that we will have similar near term success in EE finance.

We want to express appreciation to Citi for co-sponsoring this week’s successful event.  Citi has committed significant resources to developing this market well before there is a likelihood of near term returns.  We recognize that this type of commitment is not easy to make in a difficult economic environment with shareholders primarily focused on quarterly earnings releases.

Posted in Energy Efficiency, New York / Read 2 Responses

Energy Producers Capture More Today Than In “Good Old Days” But We’ll All Benefit If They Do Better

By Ramon Alvarez, Ph.D. / Published: September 22, 2011

In the frontier days of drilling in the 1900s, discoveries such as Spindletop in Texas and the Drake in Pennsylvania heralded a new era of energy for America. Back then, the gaseous by-product produced at the wellhead was considered a nuisance and flared (burned) or released into the air. Today, it’s considered a valuable energy source and routinely harnessed, which results in economic and  environmental benefits. Capturing gas cuts emissions that contribute to ground-level ozone, cause cancer, and contribute to climate change.

Given that it’s 2011, we’re way past the conditions of the 1900s. But, whereas the process of capturing natural gas as an energy source has come a long way, many improvements must still be made to ensure producers capture the maximum amount of natural gas “upstream” at wellheads and throughout the gas processing and transportation network.

Just because the gas can’t be seen doesn’t mean it isn’t hazardous. In the last three years, new data shows that natural gas leaks might be twice as high as previously thought. This means that a lot more air pollution is fouling the air we breathe.

The pollution comes from equipment on-site (tanks, valves, compressor engines, flanges), at processing plants (where raw natural gas is purified for residential and commercial use) and throughout the pipeline system.

If you know anyone that lives near drilling sites — such as the Barnett Shale in Texas, the Marcellus Shale in Pennsylvania, Piceance and big chunks of Colorado and Wyoming — you’ve likely heard stories about their public health and environmental impacts.

EDF sponsored a study showing that the emissions produced by natural gas operations around Barnett Shale rival those from 4 million cars and trucks in the Dallas-Fort Worth metro area. Around the country, those who live nearby drilling sites have reported higher incidents of health concerns including respiratory and skin irritation, neurological problems, dizziness and headaches. And in some instances, elevated levels of benzene — a known carcinogen — have been detected.

The Environmental Protection Agency (EPA) has proposed rules that would require use of technologies and practices to capture more of the natural gas now being allowed into the air. These clean air standards are sensible, which makes you wonder why it’s taken a century to put these rules into place at the national level. It also makes you wonder why industry would fight them when they can capture more natural gas and bring it to market. Indeed, in addition to the health and environmental benefits of the rule, there are economic benefits.

A number of natural gas companies already use the practices that the EPA is proposing to cut methane and are touting the resulting economic benefits.

Similar requirements to those the EPA proposed have been in place in Colorado and Wyoming without adverse affects on companies’ profits. Who isn’t for a win-win solution?

I’ll be blogging more about this proposal in the coming days. Please get involved by writing to the EPA in favor of updated clean air protections. We also invite you to join us and share your thoughts with the EPA at the upcoming public hearings in: Pittsburgh, Sept. 27; Denver, Sept. 28; and in Arlington, Texas on Sept. 29. If you can’t make the hearings, you can submit comments online until Oct. 24.

There’s no better time than now to make your voice heard and show your support for clean air.

 

 

 

Posted in Climate, Natural Gas / Comments are closed

Reasons To Be Cheerful: EDF Climate Corps Finds $650 Million In Energy Savings

By Michael Regan / Published: September 21, 2011

By: Victoria Mills, Managing Director of Corporate Partnerships for EDF, and Michael Regan, Director of Energy Efficiency, EDF

Recent headlines paint a gloomy picture of our economy, with its looming deficits and stubborn unemployment rate. And let’s not forget the steady stream of evidence that climate change is already happening.  But today, a ray of sunshine breaks through these cloudy skies:  the news that companies, cities and universities  have found ways to save millions of dollars while avoiding hundreds of thousands of metric tons of carbon pollution.  How did they do it?  EDF Climate Corps.

Today, EDF announced that this summer’s class of Climate Corps fellows uncovered efficiencies in lighting, computer equipment, and heating and cooling systems that can:

  • Cut 600 million kilowatt hours of electricity use and 27 million therms of natural gas annually, equivalent to the annual energy use of 38,000 homes;
  • Avoid 440,000 metric tons of CO2 emissions annually, equivalent to the annual emissions of 87,000 passenger vehicles; and
  • Save $650 million in net operational costs over the project lifetimes.

Thanks to the work of our EDF Climate Corps fellows, organizations as diverse as McDonald’s, Target, the New York City Housing Authority, and North Carolina Agricultural & Technical University all found significant cost savings and greenhouse gas reductions through energy efficiency.  This is indeed cause for celebration.

But imagine how good the news would be if everyone reaped the full benefits of energy efficiency.  The opportunity is enormous:  McKinsey & Co. estimate that by 2020, the U.S. could reduce its energy consumption by 23 percent through energy efficiency measures, cutting CO2 emissions by over a gigaton and saving over a trillion dollars.

EDF created Climate Corps to cut carbon pollution by overcoming the barriers that prevent organizations from investing in energy efficiency.  Now in its fourth year, EDF Climate Corps has grown from 7 fellows in 2008 to 96 in 2011, and expanded to a nationwide program that spans corporate, academic and government sectors.  For us at EDF, the best news of all is our implementation rate:  to date, projects accounting for 86 percent of the energy savings identified by 2008-2010 EDF Climate Corps fellows are complete or underway.

We’d love to bring some of this good news to your organization.  Visit edfclimatecorps.org to learn how to hire an EDF Climate Corps fellow in 2012, or email us at info@edfclimatecorps.org.

EDF Climate Corps places specially-trained MBA and MPA students in companies, cities and universities to develop practical, actionable energy efficiency plans. Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit our Facebook page or follow us on Twitter to get regular updates about this project.

Posted in EDF Climate Corps / Tagged , | Read 1 Response

The Solyndra Panic

By Jackie Roberts / Published: September 20, 2011

Source: Solyndra / BusinessWire

Bad news from Solyndra has set off a bit of a panic around everything from the future of solar in the U.S., the role of government in supporting innovative technologies, and prospects for clean energy jobs.  Caution is advised and perspective is needed lest we walk away from a pivotal new global market.  Let’s start with the big picture on solar.  I believe it is critical that we focus on the full value chain for energy and environmental solutions to better understand the economic growth inherent in the clean energy market.  In the case of solar, an analysis released last month by GTM Research examined the entire value chain – from raw material inputs and capital equipment needs to panel assembly and installation and maintenance.  The results show that the U.S. has a trade SURPLUS with rest of the world AND with China in the solar sector defined across the entire value.

Let me highlight some of the key findings: 

  • The U.S. was a significant net exporter of solar energy products with total net exports of $1.9 billion in 2010.
  • The U.S. solar industry had a positive trade balance with China with net exports of $247 million – $540 million.
  • The largest solar energy export product is polysilicon, the feedstock for crystalline silicon photovoltaics, of which the U.S. exported $2.5 billion in 2010.
  • 2010 U.S. solar energy installations created a combined $6.0 billion in direct value, of which $4.4 billion (75%) accrued to the U.S.

This is a good news story, and not surprisingly to me as over the past several years we’ve heard positive stories from companies like Komax Solar, an equipment supplier.  Six years ago, Komax took a risk and transitioned itself from medical technology and electronic machines to supplying the equipment needed in the assembly plants for solar panels.  Komax is exporting, has tripled its workforce, and has leveraged its expertise in precision machining to move into new solar markets.

What role the government played in the larger solar story is hard to pinpoint, but many solar companies had real and critical capital needs during the recession that the American Recovery & Reinvestment Act of 2009 (ARRA) filled.  Project Sunburst, a Maryland Energy Administration (MEA) initiative that benefitted greatly from the ARRA funding, created demand for solar panels installation on public buildings and triggered $36 million private investment.  In addition, while the primary goal was making it easier for public entities to go solar, “It had an additional goal or larger goal to encourage the growth of solar energy generation in the state as a resource,” MEA spokesperson Ian Hines said. The investment helped give the industry the extra push that put it over the tipping point as a maturing industry in Maryland.

This leads me to believe that ARRA has indeed been an important ingredient.  The government has also taken a portfolio approach that includes companies like Nanosolar, which received almost $44 million as a 48C tax credit (one of the ARRA programs) and is currently hiring.  This is a company whose prospects excite me.   

At the end of the day, experience shows that the private sector is better at picking winners and losers, and the government is much better at “setting the table” – for example, investing in core, enabling innovations such as developing a well-designed, open-platform smart grid that enables new entrants such as solar power to compete with old electricity providers (the value chain for smart grid solutions, by the way, is extremely promising for US firms and job creation).  And, equally as important, the government must put into place energy policies that provide a level playing field and ensure that the full costs to society of energy products and services are accounted for, policies that ultimately put a price on carbon.

Posted in Grid Modernization, Renewable Energy, Washington, DC / Tagged , , | Read 1 Response