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Dallas Fort-Worth Breathes Easier Following EPA’s Decision On Wise County Ozone Petitions

By EDF Blogs / Published: January 16, 2013

This commentary was originally posted on EDF’s Texas Clean Air Matters blog.

Just in time for the holidays, the U.S. Environmental Protection Agency (EPA) delivered a valuable gift to residents of the Dallas-Fort Worth area: the promise of stronger protections against the harmful public health and environmental impacts of ground-level ozone (the main component of smog). Specifically, EPA announced on January 7 that it has decided to deny 19 petitions filed by the state of Texas and other parties last summer — all demanding that the agency reverse its determination that Wise County, Texas contributes to high ozone levels in nearby Dallas-Fort Worth (EPA’s responses were signed December 14, 2012). EPA’s action means that polluters in Wise County will have to do their fair share to reduce ozone levels in Dallas-Fort Worth, which have been among the worst in the country for many years. Because of the importance of this issue to the public health of Texans, EDF has already taken steps to defend EPA’s action in Federal court.

Background

Ozone pollution has long been regulated under the Clean Air Act because of the tremendous hazards that ozone poses to public health and the environment. High ozone levels lead to respiratory distress and disorders; decreased lung function; increases in emergency room visits and sick days; and more. To address the serious problem of ozone, the Clean Air Act provides a multi-step process for ensuring that all areas of the country achieve acceptable ozone levels. First, EPA must establish nationwide air quality standards for ozone (called National Ambient Air Quality Standards), which are required to be strong enough to protect public health with an adequate margin of safety. Second, EPA must designate which areas of the country meet those standards, and which do not. Lastly, states are required to submit plans for achieving and maintaining compliance with EPA’s ozone standards — with especially strict requirements for areas that currently do not meet the standards.

EPA last updated its ozone air quality standards in March 2008. The revised standard requires that average ozone concentrations over an 8-hour period remain at or below 75 parts per billion (ppb) — a level that is more protective than the previous standard set in 1997, but still significantly higher than the range of 60 to 70 ppb recommended by EPA’s own Scientific Advisory Committee. EDF has consistently advocated for a stronger ozone standard, and has even taken EPA to court over this issue together with other public health and environmental organizations. At the same time, EDF has also fought hard against attempts to weaken the 2008 ozone standards or stop their implementation.

Designation of Wise County

On May 21, 2012, EPA issued a regulation designating 45 areas of the country as out of compliance with the 2008 ozone standards – including a group of ten counties in the Dallas-Fort Worth area, which had long failed to meet the earlier and less stringent ozone standards. For the first time, however, the Dallas-Fort Worth designation also included Wise County, Texas, due in large part to emissions of nitrogen oxides and volatile organic compounds from a recent boom in oil and gas production in the area.

As EPA explained in a detailed technical analysis, Wise County was included in the Dallas-Fort Worth ozone designation because of the county’s contribution to unhealthy levels of ozone. Among other things, EPA found that ozone monitors less than half a mile from the county line were recording unhealthy levels of ozone; that Wise County emits some of the highest levels of ozone-forming pollution in the 19-county area surrounding Dallas-Fort Worth; and that the prevailing winds on high-ozone days are responsible for bringing that pollution from Wise County to the nearby city.

Ensuing Litigation and Requests for Reconsideration

EPA’s determination was reached after a lengthy process during which the state of Texas and other stakeholders had ample opportunity to submit comments and data on Wise County’s contribution to ozone in Dallas-Fort Worth. However, this didn’t stop the state, some local governments, and various oil and gas producers and trade associations from trying to stop the designation of Wise County by filing a total of 19 petitions asking EPA to reverse its decision. The state of Texas, Wise County, and four industry parties also filed legal challenges to EPA’s determination in the D.C. Circuit Court of Appeals — and EDF responded by moving to intervene in defense of EPA’s action.

EPA’s Denial of Reconsideration and Next Steps

In detailed responses to the petitions, EPA reaffirmed its analysis of Wise County’s contribution to the local ozone crisis and offered rebuttals to each of the major arguments advanced by the petitioners. EPA’s responses confirm that the designation of Wise County rests on the best available science. EPA’s action is also an important advance for public health — ensuring that polluters in Wise County will do their fair share to address ozone pollution in the Dallas-Fort Worth area, and that the important protections of the Clean Air Act extend to ozone-contributing areas and sources that have been overlooked in the past.

We hope that the parties challenging the Wise County designation will ultimately decide to demonstrate leadership by becoming part of the solution to the air quality challenges facing Dallas-Fort Worth. In the meantime, vital work remains to be done to defend EPA’s actions in court: the ongoing D.C. Circuit challenges to the original designation of Wise County, which were suspended while EPA processed the reconsideration petitions, are likely to resume in a matter of weeks. In addition, EPA’s decisions on the petitions may provide fresh fodder for additional legal challenges in the D.C. Circuit. EDF’s legal team stands ready to vigorously defend EPA’s decision in the months ahead.

Posted in Natural Gas, Texas / Comments are closed

EDF’s Investor Confidence Project Helps Achieve The Potential Of Energy Efficiency

By EDF Blogs / Published: January 15, 2013

This blog post was written by guest blogger Matt Golden, Senior Energy Finance Consultant.

The EDF Investor Confidence Project (ICP) has been a two-year process to help standardize the commercial energy efficiency industry. Working with a wide range of project advisors, the first set of protocols designed for large commercial building projects are now available for a public beta on our website www.EEperformance.org. The goal is to simplify the process of creating an investment-quality energy efficiency project, reducing engineering-related transaction costs and increasing deal flow and savings.

We believe that the Investor Confidence Project represents a “silver buckshot” that, when combined with other efforts underway such as On-bill repayment (OBR), Commercial PACE and benchmarking programs, can help deliver a sustainable, private capital-driven market.  This will help spur economic development in these challenging times and achieve the potential of energy efficiency as a clean and cost-effective climate and energy policy.

While there are many technical standards regarding how to engineer various aspects of a project, we currently lack a meta layer that creates standardization at the project level. Ultimately, a project’s performance is only as good as the sum of its parts. The ICP protocols are combinations of the existing technical standards in the market, offering clear definitions for how a project is engineered, documented and ultimately measured. In the short-run, this can greatly accelerate channels and increase volume, and, over the long-term, can lead to increased access to lower-cost capital.

The Investor Confidence Project is happy to announce (and thank) our new ICP Allies, who have committed to piloting the ICP protocols in 2013. SciEnergy, Energi, Sustainable Real Estate Solutions, Bright Power, The Association for Energy Affordability, kWhOURS, Inc., Performance Systems Development, Clean Energy Finance and Investment Authority, Rocky Mountain Institute, Institute for Market Transformation, The Centre for Building Performance and the Building Energy Retrofit Institute are moving towards adopting the ICP Energy Efficiency Performance Protocol for Large Commercial Projects as their preferred method for estimating, measuring and reporting savings for large commercial projects.

We have been experiencing a ground swell of support coming from both public programs and market players, who have been instrumental in helping us identify this critical need and develop a set of protocols that balance engineering best practices with market-based realities. While ICP initially focused on financial investors as the key customers, we are now seeing a wide variety of users, including utilities, public programs, insurers and energy service companies, in addition to equity and debt investors and of course building owners.

As we roll-out this initiative in 2013 and achieve critical mass, our focus is now on gaining real-world feedback. We are also embarking on developing two additional protocols tailored to multi-family building retrofits and smaller commercial projects. If you are interested in learning more, or getting involved, please let us know by visiting the ICP website for more details about the project and our Large Commercial protocol.

Posted in Energy Efficiency, Investor Confidence Project / Comments are closed

NERC Demands Action From ERCOT To Keep The Lights On In Texas

By / Published: January 14, 2013

This commentary was originally posted on EDF’s Texas Clean Air Matters blog.

Last week was a busy one in Texas, with the beginning of the 83rd Legislative session attention was focused on incoming lawmakers, both seasoned and freshmen, and the opportunity that only happens every two years to address serious issues in Texas including water scarcity, education, tax issues, and of course energy issues.

So it’s understandable that no one seems to have noticed a strongly worded letter to the Electric Reliability Council of Texas (ERCOT) from the North American Electric Reliability Corporation (NERC) last Monday demanding more action to ensure electric reliability in Texas, and asking ERCOT to report back to NERC by April 30 on additional actions taken. NERC isn’t some federal boogey man either; it’s a corporation founded by the electric industry to create commonly accepted standards for electric reliability across North America, usually through voluntary compliance. President Bush’s Energy Policy Act of 2005 gave the corporation “the authority to create and enforce compliance with Reliability Standards,” which is where this letter comes into play.

In their 2012 report, NERC highlighted ERCOT as the only region in North America that was not maintaining adequate electric reserves to meet demand, and with this letter they made it very clear that the actions taken to date have not done enough to mitigate that risk. In the letter, NERC President Gerry Cauley notes that the PUC and ERCOT are continuing to address energy reliability issues, but finds that “solutions have not yet sufficiently materialized to address NERC’s reserve margin concern.”

Cauley goes on to say that “it is still unclear to us how ERCOT intends to mitigate issues that may arise on the current trajectory and when new resources may be available to meet growing demand.” So according to the corporation whose membership consists mostly of utilities, grid operators, large and small customers, and electric regulators, the actions that the PUC and ERCOT have taken at this point are not enough to ensure we’ll have reliable electric supply, risking blackouts as soon as this summer.

As lawmakers settle into Austin for the next few months they’ll certainly be paying close attention to this issue, though many have indicated they would prefer that ERCOT and the PUC develop the solutions to this problem. Cauley’s letter serves as notice that the PUC and ERCOT need to be more aggressive if they want to ensure a reliable supply of power in Texas. Certainly both agencies are putting serious time and effort into keeping the lights on in Texas, including effort so expand existing demand response programs, but NERC clearly thinks they need to be doing more.

All of this reminds me of the Texas drought: a year ago it was a huge looming crises, but a break in the weather took everyone’s mind off of the drying rivers and lakes, even though they never really recovered. Lately the drought has been back in the news as Texans realize that we’re basically in the same place that we were in 2011.

No one could accuse ERCOT or the PUC of sitting idly by or pretending this risk isn’t real. However, they have yet to send a strong enough signal to the market to spur investors in demand response or any other resources to develop new projects. About the only thing that has been done is the extension of the federal production tax credit for wind energy, which has wind developers racing to build new projects in Texas. The concern is that the solutions they’ve begun work on to date may not get us to where we need to be by this summer.

This letter is a reminder that the energy crunch hasn’t gone away, things are not likely to change in the near term if serious action isn’t taken soon. That is a risk we can’t afford to take given a looming drought, a growing economy and a stagnant electric market. NERC has asked ERCOT to report to them on their progress by April 30, near the end of our biennial legislative session, and one in which the critical PUC/ERCOT sunset legislation is expected to pass, maybe legislators should consider a similar request.

Posted in Demand Response, Energy Efficiency, Texas / Tagged , | Comments are closed

Wind Update: The PTC And A Christmas Day Record

By Marita Mirzatuny / Published: January 9, 2013

This commentary was originally posted on EDF’s Texas Clean Air Matters blog.

Source: Houston Chronicle

Good news came out of the fiscal cliff ordeal last week when Congress voted to extend the Production Tax Credit (PTC) for renewables, which had expired on January 1. While the 2.2 cent-per-kilowatt-hour credit has only been extended through 2013, it provides some certainty to an industry that was holding its breath. As we’ve discussed previously, while the tax breaks for the oil and gas industry are written into the permanent tax code, the credits for wind and other renewables are not. Created under the Energy Policy Act of 1992, the PTC income tax credit is allowed for the production of electricity from utility-scale wind turbines, geothermal, solar, hydropower, biomass and marine and hydrokinetic renewable energy plants.

While this extension through the year does not appear to provide a great deal of long-term certainty, my colleague Colin Meehan points out that “an important distinction with this extension is that prior to 2013, the tax credits were awarded to facilities operational by the end of 2012. The extension now applies to facilities for which construction begins by the end of 2013. As a result, this is more like a two-year extension.” Cameron Fredkin, director of project development at Cross Texas, further emphasizes the point by highlighting that “the key provision in the extension is the requirement to begin construction in 2013 versus previous one-year extensions that required wind developers to complete construction and begin operations in 2013. Wind developers in the Panhandle region in the interconnection study process would have had difficulty achieving commercial operations in 2013.”

According to the American Wind Energy Association, “America’s 75,000 workers in wind energy are celebrating over the continuation of policies expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. Half the American jobs in wind energy – 37,000 out of 75,000 – and hundreds of U.S. factories in the supply chain would have been at stake had the PTC been allowed to expire, according to a study by Navigant Consulting.”

As I wrote back in November, many of those projects and jobs that were on the line while Congress delayed are here in Texas. In Amarillo, Walt Hornaday, president of Ceilo Wind Energy, said the tax credit helped “dust off projects [they] had put on the shelf.” Hornaday says he is “impressed wind was in the bill with big-ticket items like Medicaid and the Farm Bill. It used to be wind wouldn’t have a chance to be included. I thought we’d be left out in the cold.” According to The Hill, “The wind industry has floated a phase-out plan for the credit as a way to cement some stability and avoid annual battles to extend the credit. Securing the extension now sets the table for those discussions.”

Andy Geissbuehler, head of Alstom’s North American wind business, a manufacturer of wind turbine equipment, believes that “the extension of the Production Tax Credit for wind power is a positive development for our company, our customers, and the many workers across the country employed directly and indirectly by the wind power industry. As an equipment supplier, we stand ready to provide the equipment that can be manufactured in our Amarillo facility to project developers across North America. We remain optimistic about the long-term market for wind power market in North America, especially now that the U.S. Production Tax Credit has been extended another year.”

One possible casualty of Congress’ stalling is the $5 million, 80,000-square-foot facility left behind by Zarges Aluminum Systems. The German company planned to produce wind tower components, such as ladders and platforms. A spokesman at the time blamed the recession and uncertainty regarding the tax credits as well as low natural gas prices for putting pressure on its customers and the company itself.

This extension comes at a time when wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America, according to the Energy Information Administration, leading the electric sector compared with 30 percent for natural gas, and lesser amounts for coal and other sources. Here in Texas, wind set another record, providing 8,638 megawatts (MW) of power on Christmas Day, with 6,600 MW coming from West Texas wind farms and 1,600 MW coming from the Texas coast. This adds up to nearly 26 percent of the system load, which is 117 MW higher than the previous record set in November 2012.

As Kent Saathoff, vice president of grid operations and system planning at the Electric Reliability Grid of Texas (ERCOT), points out, “Unlike traditional power plants, wind power output can vary dramatically over the course of a single day, and even more so over time. With new tools and experience, our operators have learned how to harness every megawatt of power they can when the wind is blowing at high levels like this.”

Those new tools and experience are exactly why the PTC is an important component of this emerging energy sector’s ability to grow and innovate, especially as ERCOT reviews an additional 20,000 MW of wind power capacity. This is in addition to the more than 10,000 MW it already has installed, which is the highest amount in the nation.

Posted in Renewable Energy, Texas / Tagged | Read 2 Responses

Measuring Fugitive Methane Emissions

By Steven Hamburg / Published: January 4, 2013

In recent days, news reports and blog posts have highlighted the problem of fugitive methane emissions from natural gas production — leakage of a potent greenhouse gas with the potential to undermine the carbon advantage that natural gas, when combusted, holds over other fossil fuels. These news accounts, based on important studies in the Denver-Julesburg Basin of Colorado and the Uinta Basin of Utah by scientists affiliated with the National Oceanic and Atmospheric Administration (NOAA) and the University of Colorado (UC) at Boulder, have reported troubling leakage rates of 4% and 9% of total production, respectively —higher than the current Environment Protection Agency (EPA) leakage estimate of 2.3%.

While the Colorado and Utah studies offer valuable snapshots of a specific place on a specific day, neither is a systematic measurement across geographies and extended time periods  and that is what’s necessary to accurately scope the dimensions of the fugitive methane problem. For this reason, conclusions should not be drawn about total leakage based on these preliminary, localized reports. Drawing conclusions from such results would be like trying to draw an elephant after touching two small sections of the animal’s skin: the picture is unlikely to be accurate. In the coming months, ongoing work by the NOAA/UC team, as well as by Environmental Defense Fund (EDF) and other academic and industry partners, will provide a far more systematic view that will greatly increase our understanding of the fugitive methane issue, though additional studies will still be needed to fully resolve the picture. What follows is a briefing on the fugitive methane issue, including the range of measurements currently underway and the need for rigorous data collection along the entire natural gas supply chain.

Why methane leakage matters. Natural gas, which is mostly methane, burns with fewer carbon dioxide emissions than other fossil fuels. However, when uncombusted methane leaks into the atmosphere from wells, pipelines and storage facilities, it acts as a powerful greenhouse gas with enormous implications for global climate change due to its short-term potency: Over a 20-year time frame, each pound of methane is 72 times more powerful at increasing the retention of heat in the atmosphere than a pound of carbon dioxide. Based on EPA’s projections, if we could drastically reduce global emissions of short-term climate forcers such as methane and fluorinated gases over the next 20 years, we could slow the increase in net radiative forcing (heating of the atmosphere) by one third or more.

Fugitive methane emissions from natural gas production, transportation and distribution are the single largest U.S. source of short-term climate forcing gases. The EPA estimates that 2.3% of total natural gas production is lost to leakage, but this estimate, based on early 1990’s data, is sorely in need of updating. The industry claims a leakage rate of about 1.6%. Cornell University professor Robert Howarth has estimated that total fugitive emissions of 3.6 to 7.9% over the lifetime of a well.

To determine the true parameters of the problem, EDF is working with diverse academic partners including the University of Texas at Austin, the NOAA/UC scientists and dozens of industry partners on direct measurements of fugitive emissions from the U.S. natural gas supply chain. The initiative is comprised of a series of more than ten studies that will analyze emissions from the production, gathering, processing, long-distance transmission and local distribution of natural gas, and will gather data on the use of natural gas in the transportation sector. In addition to analyzing industry data, the participants are collecting field measurements at facilities across the country. The researchers leading these studies expect to submit the first of these studies for publication in February 2013, with the others to be submitted over the course of the year. Read More »

Posted in Methane, Natural Gas / Tagged , , | Read 4 Responses

“Promised Land”: A Love Letter To Longmont

By Mark Brownstein / Published: December 27, 2012

Source: The Daily Digger

Promised Land is not a movie about “fracking.” You will be sorely disappointed if you go to the theatre expecting to see lurid visuals of sinister-looking waste water ponds, plumes of diesel soot and road dust, or bucolic landscapes scarred by roads and pipes. You will see none of that.

Promised Land is a movie about what happens before the drilling rigs and man camps rumble into town. It is the story of a rural community, proud but poor, struggling to reconcile itself with an enormous economic opportunity that comes at an enormous cost.

And, despite what you may have read in the blogosphere, it is not reflexively anti-natural gas. The movie actually does a fairly decent job of presenting all sides of the shale gas development debate. I was intrigued to read a Pittsburgh Post-Gazette article from this past June where John Krasinski, a star in the film and co-author of the screenplay, revealed that he originally conceived the story as a community facing major wind farm development. Krasinski made the switch because natural gas development is more topical, and more visceral, than wind development.  His primary point in making the film was to explore what happens when money and power come to a rural community that has neither.

I suspect the reason why the natural gas industry is so on edge about this movie is because the plot device which propels the story forward is a community referendum on whether development will be allowed within its borders. This is exactly the situation the industry faces in Longmont, Colorado, and to the same or similar degree in many other communities around the country.

The central question the movie poses is whether any amount of potential future prosperity is worth sacrificing a pastoral way of life that has defined a community for generations. Worry over polluted water is part of what fuels the townspeople’s anxiety over what to do, but it is far from their only concern.

Does a community have the right to regulate or prohibit industrial development in its borders?  It’s a tricky legal question currently playing out in Colorado and elsewhere around the country, and there is no simple answer.

One thing is certain: the natural gas industry must be forthcoming and honest about the risks that unconventional oil and gas development create, proactive in taking the steps necessary to minimize those risks, and willing to collect and publicly disclose the data necessary to enable communities to evaluate for themselves whether their health and environment are being fully protected. Many people distrust whether industry can develop shale gas safely, and it’s understandable why they are concerned – especially given recent media reports about industry hiding many of the chemicals they use behind questionable “trade secret” claims.  It appears that even the most basic steps toward greater transparency are grudging and incomplete.

In Promised Land, citizens are repeatedly lied to with predictable results. In real life, the natural gas industry has the ability to write a different story through the actions it takes to address community concerns, measure performance and disclose results. That’s a story I want to see.

Posted in Natural Gas / Tagged , | Read 4 Responses