In a vote divided along partisan lines, the House voted to override the proposed Environmental Protection Agency rule limiting carbon emissions from future coal-fired electricity plants.
The Hill: “The bill is a response to a proposed EPA rule Republicans say would require new coal-fired plants to achieve an emission standard that is virtually impossible using today’s widely available technology. Rep. Ed Whitfield (R-Ky.), the bill’s sponsor, says that means the rule will effectively ban new power plants.”
“Democrats attacked the bill as an attempt to undermine efforts to control carbon emissions from electricity plants.”
The White House threatens to veto the bill.
Crossposted at Wonk Wire.
A new report by the British environmental group, Carbon Tracker Initiative, concludes that the State Department’s analysis of the Keystone Pipeline project’s environmental impact is seriously flawed.
Yahoo News: The report “directly challenges the State Department’s assertion that construction of the pipeline would not “significantly increase” demand for the extraction of Canadian oil sands.”
The analysis shows that “because the pipeline would lower the cost of transporting oil extracted from the tar sands (compared with current costs of rail transport), energy companies would be able to afford to take on additional projects—and extract more.”
The report “concludes the pipeline would double the U.S.’s annual greenhouse gas emissions by stimulating the production of up to 5.3 billion metric tons of carbon dioxide equivalent.”
Takeaways from the report:
The State Department analysis “did not consider the IEA’s global 450ppm low emissions scenario, which is in line with global efforts to limit carbon emissions. The capacity of KXL is equivalent to the net oil production growth for the entire OECD Americas region under the IEA 450ppm scenario. This makes it significant in the context of future production plans for the US and Canada.”
“The question of whether increased production and GHG emissions enabled by KXL are ‘significant’ is highly subjective.”
Crossposted from Wonk Wire.
National Journal: “The consulting firm that crafted the State Department’s environmental review of the Keystone XL pipeline is defending the company’s independence amid green-group allegations that its work was hobbled by conflicts of interest.”
Freddie Hospedales, global head of marketing at Environmental Resources Management, responded to criticisms of ERM’s role: “It is a bit like being an auditor of banks, of things like that. You need to understand how the banking system works … The same principle applies in this. We are an independent assessor.”
Crossposted at Wonk Wire.
Maclean’s reports that “Canadian and U.S. officials are actively ‘assessing’ potential cooperation on regulations to reduce carbon emissions in the oil and gas sectors, according to a letter from Canada’s Ambassador to Washington, Gary Doer, to the U.S. Secretary of State, John Kerry. Doer’s letter was submitted as part of the public comment period in the review of the proposed Keystone XL pipeline being run by the State Department. The pipeline would bring diluted bitumen from northern Alberta to refineries on the Gulf Coast and is being opposed by environmentalists.”
“Most of Doer’s letter makes the Harper government’s familiar case in favour of the pipeline. In a section on climate change, he also notes that there are now active efforts between the two countries to come up with measures to reduce emissions from the oil sands. President Obama has said he will only approve the pipeline if it does not significantly exacerbate carbon pollution.”
Reuters reports that “supporters of U.S. energy exports have pounced on the crisis in Ukraine to press their case for faster approvals of liquid natural gas (LNG) projects and for an end to the decades-long ban on exports of most U.S. crude oil.”
“LNG supplies from the United States could help some Western European countries react to any Russian aggression in coming years, but because of added transportation costs the fuel could be too expensive for others in Central Europe who are likely to remain dependent on neighbors, energy experts said.”
“As President Vladimir Putin’s forces tightened their grip on the Crimea peninsula in the Ukraine on Monday, the moves heightened concerns that the crisis could widen and that Russia could slash its shipments of natural gas to Europe, about half of which are sent through the Ukraine via pipeline.”
“The United States is the world’s top natural gas producer, due in recent years to hydraulic fracturing, known as fracking, and horizontal drilling. Surplus U.S. energy could go a long way to providing Europe an alternative to Russian supplies, supporters say.”
“The U.S. electric grid could take months to recover from a physical attack due to the difficulty in replacing one of its most critical components,” the Wall Street Journal reports.
“The glue that holds the grid together is a network of transformers, the hulking gray boxes of steel and copper that weigh up to 800,000 pounds and make it possible to move power long distances. Transformers were badly damaged in an attack on a California substation last year, and government reports have warned for years that saboteurs could cause sustained damage to the grid by targeting the massive machines.”
“Only a handful of companies build transformers in the U.S., and it can take weeks or months to ship transformers in from overseas. The manufacturing process itself can last more than a year, in part because a transformer can’t be bought off the shelf but rather must be made to measure for its substation.”
Boston Globe: “The Environmental Protection Agency plans to unveil a major regulation Monday that forces oil refiners to strip out sulfur, a smog-forming pollutant linked to respiratory disease, from American gasoline blends.”
“The EPA estimates that the new rule will dramatically reduce soot and smog in the United States, and thus rates of diseases associated with those pollutants, while slightly raising the price of both gasoline and cars. The rule will require oil refiners to install expensive equipment to clean sulfur out of gasoline and force automakers to install new, cleaner-burning engine technology.”
“EPA officials estimate that the new regulation will raise the cost of gasoline by about two-thirds of 1 cent per gallon and add about $75 to the sticker price of cars. But oil refiners say that it will cost their industry $10 billion and raise gasoline costs by up to 9 cents per gallon.”
Crossposted at Wonk Wire.
Some lawmakers are citing the crisis in the Ukraine as a reason to advance their energy policy agenda, such as expanding U.S. exports of natural gas to limit European reliance on Russian natural gas exports and promoting the Keystone Pipeline project.
National Journal: House Energy and Commerce “Republicans, who want the Energy Department to act faster on a backlog of export applications, released a report in early February touting the ability of U.S. gas exports to ease Russian influence on Eastern and Central European nations.”
“Russia supplies roughly one-fourth of Europe’s natural gas, and a significant amount is piped through Ukraine.”
“Sen. John Hoeven, R-N.D., used a wide-ranging statement on the Ukrainian crisis to offer fresh calls for approval of the Keystone XL oil pipeline, calling it part of an energy strategy that can curb Russian influence.”
Hoeven: “The United States needs to reduce our reliance on overseas energy … It also means building more energy infrastructure like the Keystone XL pipeline without delay.”
The New York Times reports that “despite rising anxiety over the possibility of a cyberattack on the power grid, the industry and government are not set up well to counter the threat, according to a report produced by leading energy security experts. Companies are reluctant to share information with one other, a critical step in reducing vulnerability, because they are afraid of being accused of failing to comply with cybersecurity rules, committing antitrust violations or giving away proprietary information, the report found.”
“And the federal rules intended to protect the electric system from cyberattack are inadequate because they do not give companies an incentive to continually improve and adapt to a changing threat, according to the report, which was released on Friday.”
“The report was produced by the Bipartisan Policy Center, a Washington nonprofit group, and led by Michael V. Hayden, the former director of the C.I.A.; Curt Hébert Jr., a former chairman of the Federal Energy Regulatory Commission; and Susan Tierney, a former assistant secretary of energy and former utility regulator in Massachusetts. The experts also found that while the government had focused on the high-voltage power grid, less work has been done on the lower-voltage distribution system, which could cause problems that would propagate up the chain.”
Reuters reports that “oil traders are past masters at handicapping geo-political risks, from war in the Middle East to resource nationalists in Latin America. Lately, they face another confounding political landscape: Washington.”
As a bounty of shale oil transforms the trading landscape across North America, U.S. policymakers are being confronted with a host of issues that hold immediate and material implications to energy companies, investors and traders.”
“While energy policy has typically moved at a steady, stately pace for much of the past few decades, Washington is now grappling with a host of pressing questions that will affect oil prices: easing a crude oil export ban that could raise domestic crude prices; adjusting ethanol quotas in order to curb gasoline rates; imposing new rules on tank car safety that could slow the nascent oil-rail boom.”
“These issues are coming to the fore amid wider policy shifts under President Barack Obama that have forced oil traders to pay closer attention to what’s going on in Washington, a place many find hard to pierce.”
CNBC asks: “Could the booming U.S. energy sector assume the mantle that Detroit’s big automakers once held in the economy?”
“Although it’s still too early to tell, recent trends suggest soaring energy production may replace automobile manufacturing as an economic powerhouse. Even as the U.S. recovery falters, manufacturing and energy are in the midst of a broad expansion that is helping to generate growth.”
“Analysts say both sectors are increasingly intertwined. Yet as Detroit’s economic influence has waned, soaring shale production—and the cheap energy it provides—is making its presence felt in multiple ways. On Thursday, the Energy Information Administration reported oil production in 2013 surged by nearly a million barrels per day (bpd), its fastest growth rate ever.”
In response to recent allegations from critics of the Keystone Pipeline review process, the State Department’s inspector general released a report concluding that the department followed appropriate guidelines in its selection of contractor Environmental Resources Management.
National Journal: “However, the report also finds that the ‘process for documenting the contractor-selection process, including the conflict-of-interest review, can be improved.’”
The report states: “In the case of concerns raised about ERM’s alleged lack of objectivity because current ERM staff had previously worked for TransCanada and other oil and pipeline companies, OIG found that the department’s conflict of interest review was effective and that the review’s conclusions were reasonable.”
Rep. Raul M. Grijalva (D-Ariz.) disagrees, arguing that the OIG report “is an important example of the problem. The I.G. only looked at whether the department followed its existing process for choosing a contractor. It should have looked at whether that process produces reliable outcomes.”
“Keystone is about more than one pipeline. It is about establishing once and for all whether we have moved on from the disastrous Bush-Cheney view of environmental policy. President Obama’s own Environmental Protection Agency has said in no uncertain terms that the pipeline will contribute significantly to greenhouse gas emissions. That should be the end of the conversation.”
Crossposted at Wonk Wire.
Secretary of State John Kerry doubled down “on his comments calling climate change a major national security threat,” The Hill reports.
“Kerry has come under fire from conservatives after calling global warming one of the “most fearsome” weapons of mass destruction threatening to destroy the planet during a speech in Indonesia earlier this month… Kerry championed the fight against climate change as a senator and has continued to make it a top priority as America’s top diplomat. He oversaw the signing of an agreement with China on cutting emissions. The Asian power is the world’s biggest greenhouse gas emitter.”
Said Kerry: “What I said about climate change is that it’s one of the … two or three weapons, or instruments, of mass destruction, which it is. It’s having a profound impact on a global basis, and will continue to.”
Sen. Barbara Boxer (D-CA) “wants to add a new element to the Keystone XL oil pipeline debate: its effects on health,” The Hill reports.
“The California Democrat claims negative health effects from the proposed pipeline’s development were ignored by the State Department’s environmental impact review… She said Keystone will add pollutants to the air that will increase the likelihood of peopel getting cancer or heart disease.”
Said Boxer: “I do believe the public health impacts are something that average people can really relate to because they know cancer is the second leading cause of death in this country — heart disease is number one -— and all of this filthy air contributes to both of those.”