Energy Exchange

Are Natural Gas Vehicles Good For Climate Change?

By Drew Nelson / Published: February 1, 2012

Source: Pike Research

Last week, in a speech in Las Vegas, President Obama called for getting more natural gas vehicles (NGVs) on the road in the United States.  NGV proponents applauded the speech and immediately reiterated the conventional wisdom that because natural gas burns cleaner than gasoline or diesel, NGVs lead to reduced greenhouse gas emissions.  However, recent science shows that the conventional wisdom may not be right.

While it is clear that the actual combustion of natural gas is cleaner than the combustion of gasoline or diesel, there are other emissions associated with the production, delivery and use of those fuels.  Natural gas is essentially methane, a potent greenhouse gas.  Over 2o years, a pound of methane is 72 times more potent than a pound of carbon dioxide.  As natural gas is produced and piped across the country, there are plenty of opportunities for it to leak into the atmosphere. EPA estimates that leak rate to be somewhere between 2-3%, but the exact amount is the subject of much debate. 

What we do know is that whatever the percentage of methane that is lost to the atmosphere, it erodes the climate benefits of combusting natural gas.  In other words, the higher the leak rates the less the benefits.  If leakage is high enough, NGVs can actually be worse for climate for some period of time. A newly published study concluded that over 20 years, NGVs were worse for the climate than gasoline or diesel vehicles unless current leak rates are reduced.  With current leak rates, even after 100 years NGVs are no better for the climate than gasoline or diesel vehicles.

Because methane is more potent over shorter time frames, if we remove more methane now,  we can reap quick benefits for the climate system.  However, if we emit more methane now, it will have a greater negative impact on the climate system.  This may be precisely the outcome we get if we aren’t careful in how we proceed with NGVs.  Before large-scale policies encouraging NGVs are written into law, we should better understand the leak rate of methane from the natural gas supply and take actions to ensure it is low enough that putting more NGV on the road does not harm the climate. Understanding and reducing leak rates is critical to accepting NGVs as a legitimate GHG strategy. EDF is working to do this, but until we have better data and see an industry committed to reducing leaks, we will reserve judgment on whether the President’s call for accelerating NGVs is justified.

Posted in Natural Gas / Comments are closed

Improving New York’s Proposed Hydraulic Fracturing Regulations

By Mark Brownstein / Published: January 31, 2012

Around the country, states are taking a serious look at their regulations to manage shale gas development.  New York has the potential to be a leader among these states. Environmental Defense Fund (EDF) believes that strong regulations and aggressive enforcement is critical to protecting public health and the environment from high-volume hydraulic fracturing and other hydrocarbon extraction activities in New York State. To that end, we have submitted detailed comments on the New York State Department of Environmental Conservation (NYSDEC)’s proposed rules and permitting conditions for hydraulic fracturing. The NYSDEC can put New York at the forefront of safe and clean shale gas development by implementing our suggestions in several critical areas:

1)      Chemical Disclosure: Full public disclosure is rapidly becoming the industry norm across the country, but the proposed NYSDEC disclosure rules for chemicals used in the hydraulic fracturing process only covers chemicals with Material Safety Data Sheets (MSDS), thus failing to capture perhaps half or more of the chemicals used. This is especially problematic because MSDS only explore hazards in occupational settings and do not consider implications for public health or the environment. Further, the proposed rule only requires disclosure of additive products proposed to be used in hydraulic fracturing, as opposed to the chemicals actually used during the hydraulic fracturing process. EDF feels strongly that operators should disclose all hydraulic fracturing chemicals used on a well-by-well basis, posted on a searchable, publically accessible website.

2)      Well Construction: Properly constructed, tested and maintained wells are critical to protecting New York’s precious groundwater and surface water aquifers from contamination by drilling fluid, wastewater and natural gas seepage. The proposed well construction regulations and permitting conditions need improvement to meet industry best practice standards. Furthermore, some of the proposed rules represent potential safety hazards for well pad workers. A model regulatory framework EDF, and others, are developing could be used to greatly improve NYDEC’s proposed well construction regulations.  

3)      GHG Emissions/Methane Leakage: EDF is a leading advocate of strict standards on limiting methane emissions from natural gas production. Methane is a pernicious greenhouse gas, many more times more powerful than carbon dioxide.  To reduce the peak warming and improve air quality, it is critical to minimize the amount of methane vented or flared at the production site or leaked during storage and transmission. We strongly urge the NYSDEC to impose specific Green Completion and other emission-reducing requirements on operators, and to formulate hard emissions targets that provide incentives for operators to reduce methane leakage even further.

4)      Wastewater: Hydraulic fracturing produces huge volumes of potentially toxic and radioactive wastewater. New York recognizes this problem but does not seriously address the lack of capacity for processing or safely storing hydraulic fracturing waste materials within the state. Current technology does not allow for safe, cost-effective purification of hydraulic fracturing wastewater at treatment centers for re-introduction into the water system, and should be banned. Insofar as it appears that the final disposition of the bulk of the wastewater produced in New York will be trucked out of state to deep injection wells, the proposed regulations and permitting conditions must grapple with this expensive and perhaps unsustainable practice. Finally, since wastewater recycling will likely be the dominant treatment option undertaken by shale gas operators in New York, this practice needs to be more thoughtfully and transparently regulated.

5)      Phase-in: Even with the best rules on the books, it will take time to hire and train the necessary staff to implement and enforce the rules properly.  New York is essentially building a regulatory program from scratch.  EDF believes the NYSDEC should learn how to walk before it can run.  Our suggestion is that New York phase in the regulatory program region by region.  In this way, the state can be sure that the pace of drilling activity will not outpace its ability to adequately administer the regulations.  So, too, this phase-in approach will allow the state to acquire valuable experience in step-wise fashion. The key is not doing it quickly, but doing it correctly.

These and other adjustments to the proposed rules and permitting conditions are necessary to protect public health and the environment in New York. Shale gas extraction can be made safe through strong regulations and aggressive enforcement to protect communities. EDF is committed to working with the NYSDEC on these issues to produce the most responsible hydraulic fracturing regulatory framework in the nation.

EDF’s full comments on New York’s hydraulic fracturing regulations are available here.

Posted in Natural Gas, New York / Tagged , | Read 6 Responses

Demand Response: A Key Component In Texas’ Electricity Market. Why Isn’t The State Taking Advantage Of It?

By / Published: January 12, 2012

On Monday, the Texas Senate Business and Commerce Committee took up the critical issue of the impact of extreme drought conditions on electric generation capacity and state officials’ plans to respond to those risks.   A number of important issues and policy solutions were raised, from on-bill financing of energy efficiency to renewable energy to send the right ‘market signals’ to incentivize the construction of new power plants.  Public Utility Commission (PUC) Chair Donna Nelson singled out, in particular, the state’s energy efficiency and renewable energy goals.  These policies have helped reduce pollution, saved customers money and have the added benefit of reducing our dependence on water for electricity production.

Another important part of the solution discussed was raised by a number of panelists: demand response (aka load management).  The ability of end-use customers to reduce their use of electricity in response to power grid needs or economic signals has helped the Electric Reliability Council of Texas (ERCOT) avoid rolling blackouts and, in other regions of the country, it has helped markets avoid the need for new capacity.  As ERCOT CEO Trip Doggett and PUC Chair Nelson pointed out in their testimony, demand response is a market competitive resource that uses no water and, as such, it may prove to be a valuable resource in view of the state’s record drought. 

The Texas Capacity Crunch – Obstacles and Opportunities
The historic drought of 2010-2011 has put Texas’ conventional power plants at risk, threatening a return of the rolling blackouts caused by extreme winter conditions just a year ago.  State Climatologist, Perry appointee John Nielsen-Gammon says, “Statistically we are more likely to see a third year of drought.” 

At the same time, ERCOT faces a challenging capacity crunch caused largely by “low natural gas prices, an influx of low marginal cost wind power, increased wholesale market efficiencies, low wholesale power prices, tight credit markets” and other issues according to TXU Energy.  With limited ability to invest new capital given the current market conditions, and over 11,000 MW of power dependent on water sources at historically low levels, Texas needs to tap into resources that can be deployed rapidly and require less capital and much less water.

Demand Response – Low Cost, Zero Water Resource
Fortunately Texas has ample resources to meet these needs with demand response.  If allowed to participate fully in Texas’ energy markets as it does in other regions, demand response can benefit customers and increase grid reliability.  Unfortunately Texas continues to lag behind other states and regions, which have seen market-competitive demand response grow rapidly as market barriers have been removed. 

    • The definition of “demand response” is “end-use customers reducing their use of electricity in response to power grid needs or economic signals from a competitive wholesale market.”
    • The potential for cost competitive demand response is tremendous – according to the Federal Energy Regulatory Commission (FERC) Texas could add as much as 19 GW in capacity by 2019 if we open up our electric market to allow customers to compete alongside generators.

Texas currently is among the lowest states in terms of load management, despite having the highest potential by far according to FERC and the Brattle Group. 

Source: FERC

Why Does Texas Lag the Nation in Demand Response?

  • In 2011, demand response amounted to 9% of the PJM’s (a grid operator in the Mid-Atlantic/Midwest) system peak demand, greatly benefitting customers and improving reliability. 
  • At ERCOT, despite great potential, demand response only amounted to just over 2% of peak demand, limited by unnecessary market barriers. 
  • Texas leads the nation in smart meter deployment, intended by the legislature to “facilitate demand response initiatives.”  Why is ERCOT so far behind?

Market Barriers Prevent Customers from Competing in ERCOT

  • ERCOT’s legacy demand response program is capped at 1150 MW and is effectively limited to large industrials within ancillary services markets.
  • ERCOT’s Emergency Reliability Service is the only program in the market that allows any customer to participate if they qualify.  The program is limited in scope (it can only be called on twice per year) and to date has been unable to reach the original goal of 500 MW.  Despite these limitations, the program helped avoid rolling blackouts last summer.

Source: NERC

Regulators are Focused on Building New Power Plants

  • Instead of looking to all possible solutions, regulators seem focused only on how to get new power plants built.
  • Other grid operators have successfully created programs for smaller commercial and residential customers to compete through aggregation.  In Texas, residential and small commercial customers have been put on the back burner.
  • Despite the PUC’s reluctance to act on other clean energy opportunities, such as the 500 MW non-wind RPS or increasing the energy efficiency standards, it is clear that these programs have been successful in creating clean, “water-proof” power.
  • In the midst of a capacity crunch caused by extreme drought and market structure problems, demand response provides an opportunity to address both by enabling cheaper, water-free capacity by simply opening markets to customers.
Posted in Energy Efficiency, Grid Modernization, Renewable Energy, Texas / Tagged | Read 1 Response

In Defense of California’s Low Carbon Fuel Standard

By Tim O'Connor / Published: January 12, 2012

In late December, a federal court district judge in Fresno ruled that California’s Low Carbon Fuel Standard (LCFS) was unconstitutional because it violates the limits imposed on states by the Commerce Clause of the United States Constitution. The ruling halted its enforcement pending appeal to the U.S. Court of Appeals for the Ninth Circuit.

The suit was filed by refiners, truckers, and fuel production companies – most of which have the bulk of their operations out of state and would rather litigate than innovate, putting profits before people. It is yet another industry attack on the state’s landmark climate and energy law, AB 32, which consists of measures such as the LCFS that will be used to reduce California’s greenhouse gas pollution to 1990 levels by 2020.

California’s LCFS is a scientifically credible standard that was carefully designed to cut climate change pollution, protect and improve public health and drive innovation that delivers economic benefits. These are among the key reasons why Environmental Defense Fund joined California and three other environmental organizations in an appeal of the suit asking to keep the LCFS intact.

Cutting climate pollution

As designed, the LCFS reduces the amount of carbon released during the production, shipping and use of transportation fuels sold in California by 10% between now and 2020. This “lifecycle” approach to managing emissions from fuels was pioneered by Argonne National Labs and is the accepted standard used by the federal EPA and other states and nations.

Improving air quality

California has some of the worst air quality in the country. In addition to fighting climate change, the LCFS cuts pollution that poisons our air and water and results in respiratory ailments and diseases that cost us tens of billions of dollars a year in health care costs. By facilitating newer, less polluting transportation fuels, the LCFS can help California finally achieve attainment of federal health standards for air quality.

Driving innovation

The standard would deliver significant benefits to the state and national economy. California is home to the world’s most advanced biofuel and electric car companies, hydrogen infrastructure, and transportation fuel research institutions. These entities operate here because California has created an environment where scientific enterprises can prosper, and in the case of the LCFS, earn a return on investment by reducing pollution cheaply and quickly. Over the next decade, the standard provides new opportunity for innovators in and out of California to reap the rewards of developing cheap and lasting alternatives to gasoline.

The deep-pocketed oil industry can easily afford to protect its profits. Yet, as The New York Times recently noted in an editorial under the headline, ‘California’s Persistence,’ the industry is up against a state that ‘has a long and productive history as a leader in environmental policy, requiring cleaner cars and power plants and more energy-efficient appliances.’

We are confident that this standard will be restored on appeal, enabling California to continue doing what it excels at: driving advances in energy that grow the economy and protect our environment.

Posted in General / Comments are closed

Top 10 Clean Energy Stories Of 2011

By Marita Mirzatuny / Published: January 5, 2012

Although we have said goodbye to 2011, the advances and achievements in clean energy last year have propelled us into 2012 and will only become more widespread and successful with each passing year. As Steven Lacey at Climate Progress points out in his “Top 10 Clean Energy Stories of 2011”, it was an “odd” year for the clean energy sector, but with great successes. While public demand favors a move to a clean energy economy and environmental sustainability necessitates it, some politicians and their corporate cronies are doing their best to demonize and stall the inevitable leap forward. The reasons why there is obstruction are obvious but it still is a pretty bad calculation and ultimately they are on the wrong side of history. My colleague Colin Meehan responded just a few weeks ago to Grover Norquist’s ill-informed rant against renewable energy. But once we break through the noise and distraction, the reality of what the future holds becomes encouraging. While deniers love to isolate the Solyndra scandal as their defining proof that we must keep and accelerate fossil fuels, it hardly defines the activity and achievements on the ground. In fact, as Lacey articulates, there are much better parameters to judge the new energy revolution:

1.     Renewable Power Investments Top Fossil Fuels for First Time

According to Bloomberg New Energy Finance, “electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal.” And they project that renewable energy investments will “double over the next eight years and reach $395 billion per year.”

2.     Cost Reductions Make Solar PV Competitive

While complete grid parity will be more of a phased process than a singular result, according to Tom Dinwood, CTO of SunPower, Dan Shugar, CEO of Solaria, and Adam Browning, Executive Director of Vote Solar Initiative, “solar PV is no longer a fringe, cost-prohibitive technology, but rather, a near-commodity that is quickly becoming competitive with nuclear, natural gas, and soon coal.”  Solar power is quickly becoming more than cute.

3.      Regional Greenhouse Gas Initiative (RGGI) Is A Success

As the aforementioned deniers (in this case the Koch Brothers front group Americans for Prosperity) cried wolf about the RGGI, claiming it would “inflate bills 90% in New Jersey,” the reality of the situation was much different –“RGGI generates greater economic growth in every one of the 10 states that participate than would occur without a carbon price.” This is from a new report, which found that “America’s first mandatory, market-based carbon cap and trade system added $1.6 billion in value to the economies of participating states, set the stage for $1.1 billion in ratepayer savings, and created 16,000 jobs in its first three years of implementation.

4.     Pension Funds & Large Companies Invest Big in Energy Efficiency

Further proving you can bet on energy efficiency projects to pay off, two of the largest US pension funds, CalPERS and CalSTERS announced in September they would invest $1 billion toward efficiency projects. In June, the AFL-CIO and the American Federation of Teachers announced over $150 million in similar investments, which utilize product retrofits that have over 90 percent of the content made right here in the USA. “If we retrofitted just 40 percent of the nation’s residential and commercial building stock, we would mobilize a massive amount of domestic labor— more than half a million (625,000) sustained full time jobs over a decade. This would generate as much as $64 billion per year in cost savings for U.S. energy ratepayers. That’s means $300 to $1,200 in savings for individual families.” These are wise investments that “out-perform investments in new oil and gas exploration as a form of job creation or economic stimulus by a factor of 3-to-1.”

5.     Geothermal Potential is Massive

Texas’ own SMU recently released a map that shows how much “potential [geothermal] energy is locked beneath America.” While there is still a lot of ground to cover, so to speak, in realizing this resource, we at least know that under our feet lies a huge source of impending power.

6.     Green Jobs Reach 2.7 Million

While much of the economy has declined and stagnated over the last few years, green jobs have actually increased, with the “clean economy growing by 8.3% from 2008-2009 — almost double what the overall economy grew during those years.”  Not only is this providing jobs in the sectors of energy, transport, building, etc. they are better paying jobs as well at “$7,727 more than the median wages across the broader economy.”

7.     Google Phases Out Clean Energy R&D in Favor of Deployment

(credit: www.thinkprogress.org)

While it was reported that Google was abandoning renewables, the media failed to accurately depict the situation. The truth is that Google is “now shifting its focus to project financing rather than R&D, citing the need for more sophisticated research on CSP technologies beyond Google’s scope, and the rapidly changing economics of solar PV switched.” This includes investing more than $850 million in renewable technologies.

8.    America is a $1.9 Billion Exporter of Solar Products

Despite the notion that China is outperforming the U.S. in this field, a report from GTM Research and the Solar Energy Industries Association found that the U.S. has a $247 million trade surplus with China.  Here is a great chartto illustrate:

9.     What Free Market? Subsidies Have Always Been a Big Part of Energy Industry, New Report Shows

This one is pretty self explanatory and frankly, states the obvious. I don’t think we needed a study to tell us that the fossil fuels lobby on Capitol Hill has a pretty good ROI. But it’s always nice to have backup. There is really no clearer depiction of hypocrisy than with the false outrage, served with a little red herring on the side, associated with the Solyndra scandal (as mentioned above).  While railing against subsidies for clean energy, these same politicians are not only all too willing to subsidize fossil fuels but prior to politicizing it, were keen on renewable energy monies as well.  As Lacey points out, “apparently, many in Congress have forgotten about the last 100 years of government investments in oil, gas and nuclear — all of which have far outpaced investments in renewable energy like solar PV, solar thermal, geothermal and wind.” To be clear, “energy industries have enjoyed a century of federal support. From 1918-2009, the oil and gas industry received $447 billion (adjusted for inflation) in cumulative energy subsidies. Renewable energy sources received $6 billion (adjusted for inflation) for a much shorter period from 1994-2009.  There is a striking divergence in early federal incentives. For example, federal support for the nuclear industry overwhelms other subsidies as a percentage of federal budget, but equally striking is the support for oil and gas which was at least 25% higher than renewables, and in the most extreme years 10x as great.”

10.   Being Anti-Clean Energy is Bad Politics

Despite all the findings listed in this blog, for some reason those with a vested interest in maintaining the fossil fuel polluting status quo just don’t get it! Americans want to be free of fossils and want to embrace the new energy revolution.  According to a poll by the non-partisan Civil Society Institute, “77% of Americans— including 65% of Republicans surveyed — believe ‘the U.S. needs to be a clean energy technology leader and it should invest in the research and domestic manufacturing of wind, solar and energy efficiency technologies.’” And as a segue from number 9 on the list above, the poll found that, “Americans support subsidies for renewable energy over fossil energy 3 to 1. When asked to choose between only subsidizing clean energy or fossil energy, 38% of respondents said they’d choose renewables, while 13% would choose fossils.”

2012 is going to be an intense year. February brings us a leap on the 29th, politicians will be battling each other leading up to November, and then a new sun begins, according to Mayan tradition a month later on December 21st. Let’s hope that the clean energy momentum continues and that the will of the people and the condition of the environment that sustains us all is truly at heart. The future looks so bright!

Posted in Climate, Energy Efficiency, Renewable Energy / Read 1 Response

ERCOT Reliability: “It’s Complicated”

By / Published: December 20, 2011

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

It seems like only yesterday that ERCOT was issuing dire warnings of rolling blackouts as a direct result of regulations required by the court system to ensure cleaner, healthy air for Texans and our neighboring states.  Well, maybe not yesterday, but at least as recently as this month.  Buried deep within the report was ERCOT’s tacit acknowledgement that they have allowed companies to idle more than 1,000 MW of power plants because those plants are not economic in today’s hyper-competitive market.

Source: Texas Tribune

Of course, no announcement made as much news as Luminant’s claim that they were shutting down two of their Monticello lignite power plant units in response to EPA regulations.  Those claims have been pretty well debunked over the last few months as people began to realize that market economics and poor planning were responsible for Luminant’s decision.  As we discussed in September, it was as convenient for Luminant to blame the EPA as it was reflexive of Texas politicians and regulators to threaten rolling blackouts as a result of Luminant’s decision.  ERCOT’s decision to let other power plants shut down for economic reasons calls those claims into serious question, and their recent decision (password required) that idling the Monticello units at the heart of this debate  does not threaten system reliability will hopefully end this cycle of unfounded recrimination and backtracking.

As ERCOT has made clear, the real threats to system reliability are of our own making: market failures have lead to a lack of proper signals to encourage the building of new power capacity; and this year’s record breaking drought, made more extreme by climate change, has threatened to shut down more than 11,000 MW of power plants.  What all of this means is that ERCOT’s reliability issues are far more complicated than a political slogan, and getting rid of sensible regulations that protect our children, elderly and general population from real health risks will do nothing to solve our problems. 

Instead of focusing on the easy political score, our leaders should be looking for real solutions that don’t pose risks to human health or to our water supply.  The solutions are out there: dry-cooled power plants, energy efficiency programs like demand response, as well as wind, solar and other non-water consuming renewable energy. 

The most recent decision by ERCOT that idling Luminant’s power plants poses no threat to grid reliability should end the cycle of unfounded accusations for political gain.  It should focus our state leadership on solutions that will work instead of distractions that only delay solving the problem.  It should also serve as a signal to those who are all too ready to accept unfounded claims for the sake of a good story or a convenient target. When it comes to ERCOT and reliability, the issues are complicated, but the solutions are out there and it will take real focus and effort to prevent Texas from experiencing the same rolling blackouts we had last winter.  It’s winter again (even if it’s just barely starting to feel like it), and next summer looks to be another scorcher. We don’t have a lot of time, so let’s get to work.

Posted in Grid Modernization, Texas / Tagged | Comments are closed