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September 4, 2014

EPA Considering Lower Ozone Standard, Methane Strategy

The Nicholas Institute for Environmental Policy Solutions at Duke University

In its Policy Assessment for the Review of the Ozone National Ambient Air Quality Standards report—released Friday—the U.S. Environmental Protection Agency (EPA) suggests revising the health-based national ambient air quality standard for ozone.

“Staff concludes that it is appropriate in this review to consider a revised primary [ozone] standard level within the range of 70 ppb [parts per billion] to 60 ppb,” the report said (subscription). “A standard set within this range would result in important improvements in public protection, compared to the current standard, and could reasonably be judged to provide an appropriate degree of public health protection, including for at-risk populations and life stages.”

The report is part of the normal EPA process to consider changing air quality standards. It recommends tightening current smog rules—now at 75 parts per billion—somewhere between 7 and 20 percent, echoing findings of the EPA’s science advisory committee in June. A final decision lies with EPA Administrator Gina McCarthy, who has a Dec. 1 deadline to issue a proposal on whether to retain or revise the existing standard.

Earlier in the week, McCarthy announced plans to issue a methane strategy emphasizing efficiency and reducing the need to flare gas—a strategy that could force oil and gas producers to cut emissions.

“We’re going to be putting out a strategy this fall and we hope everybody will pay attention to that effort,” McCarthy said at the Barclays Capital energy forum on Tuesday. “It will be addressing the challenges as well as the opportunities.”

Whether or not actual regulations for the industry will be issued is still being decided. McCarthy noted that the agency is “looking at what are the most cost-effective regulatory and-or voluntary efforts that can take a chunk out of methane in the system.”

This effort follows on the heels of an announcement by the White House that directed the EPA to develop an inter-agency strategy to combat methane emissions from oil and natural gas systems. If issued, rules to cut methane emissions would take effect in 2016.

China Eyes Carbon Market

Reuters reports that China will launch the world’s largest carbon market in 2016, although some provinces would be allowed to join later if they lacked the technical infrastructure needed to participate at the outset. “We will send over the national market regulations to the State Council for approval by the end of the year,” Sun Cuihua, a senior climate official with the National Development and Reform Commission (NDRC), told a conference in Bejing.

Confirming the earlier statement by Cuihua, Wang Shu, an official with the climate division of the NDRC said “We’ve brought forward this plan because it’s been prioritized in the central government’s economic reforms. The central government is pushing reforms, so everything is speeding up.” According to Reuters, as in other carbon markets, power plants and manufacturers would face a cap on the carbon dioxide they discharge. If an emitter needs to exceed its cap, it will have to purchase additional permits from the market to account for such emissions.

Court Finds BP Grossly Negligent in 2010 Gulf Spill

A U.S. District judge on Thursday ruled that BP was “grossly negligent” in the 2010 Deepwater Horizon explosion that killed 11 men and allowed millions of barrels of oil to flow out of the Macondo oil well into the Gulf of Mexico.

“The court concludes that the discharge of oil was the result of gross negligence or willful misconduct,” by BP, the ruling from U.S. District Court Judge Carl Barbier said. He found that BP was at fault for 67 percent of the spill. Two other companies involved—Transocean and Halliburton—were responsible for 30 and 3 percent, respectively.

“The law is clear that proving gross negligence is a very high bar that was not met in this case,” BP said in a statement. “BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court. The court has not yet ruled on the number of barrels spilled and no penalty has been determined. The District Court will hold additional proceedings, which are currently scheduled to begin in January 2015, to consider the application of statutory penalty factors in assessing a per-barrel Clean Water Act penalty.”

Judge Barbier’s ruling could result in as much as $18 billion in fines under the Clean Water Act, according to The Hill.

Bacteria Used to Make Alternative Fuel

A study in the journal Nature Communications suggests that Escherichia coli, or E. coli bacteria, which is widely found in the human intestine, can be used to create propane gas that can power vehicles, central heating systems and camp stoves.

“Although this research is at a very early stage, our proof of concept study provides a method for renewable production of a fuel that previously was only accessible from fossil reserves,” said Patrik Jones, a study co-author. “Although we have only produced tiny amounts so far, the fuel we have produced is ready to be used in an engine straight away. This opens up possibilities for future sustainable production of renewable fuels that at first could complement, and thereafter replace fossil fuels like diesel, petrol, natural gas and jet fuel.”

Commercial production is still five to 10 years away—the level of propane produced by the team is 1,000 times less than that needed to make a commercial product. The process, which needs further refinement, uses E. coli to interrupt a biological process to create engine-ready propane rather than cell membranes.

“At the moment, we don’t have a full grasp of exactly how the fuel molecules are made, so we are now trying to find out exactly how this process unfolds,” Jones said.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

August 21, 2014

Court Ruling Could Affect Nation’s Electric Grid

Editor’s Note: While Tim Profeta is on vacation, Jeremy Tarr, policy associate in the Climate and Energy Program at Duke’s Nicholas Institute for Environmental Policy Solutions, will author The Climate Post. Tim will post again August 28.

A unanimous ruling by the U.S. Court of Appeals for the District of Columbia Circuit could change the way utilities and regulators consider electricity transmission and open pathways for new renewable energy facilities.

The Federal Energy Regulatory Commission’s (FERC) Order 1000 rule, issued in 2011, requires participation by public utility transmission providers in regional planning processes, establishes methods to clarify who will pay for new transmission projects, and includes procedures to consider the effects of energy-related policies on the grid. In the lawsuit petitioners challenged FERC’s authority to adopt these reforms and whether they are supported by sufficient evidence

In its decision, a three-judge panel upheld Order 1000 and explained that “The Commission reasonably determined that regional planning must include consideration of transmission needs driven by public policy requirements.” The decision noted that “The Commission expects that many states will require construction of new transmission infrastructure to integrate sources of renewable energy, such as wind farms, into the grid and that new federal environmental regulations will shape utilities’ decisions about when to retire old coal-based generators. Plans that fail to account for such laws and regulations, the Commissioned reasoned, would not adequately reflect future needs.”

Some experts viewed the ruling as “progress”; others felt the decision sets the stage for future appeals.

Report Analyzes Wind Power Trends

A new report by the U.S. Department of Energy and the Lawrence Berkley National Laboratory highlights trends in the wind industry during 2013. It found that the wind industry remains strong in the United States, which ranked second only to China in installed wind power. The United States, however, represented only 3 percent of global wind additions in 2013.

Other key findings from the report:

Wind power purchase agreement prices reached all-time lows in the United States in 2013 thanks to 20–40 percent lower wind turbine prices (compared to 2008) and lower installed project costs, which are down more than $600/kW from 2009 and 2010 levels. The average price stream of wind power purchase agreements executed last year ($25 per megawatt hour) compares favorably with a range of projections of the fuel costs of gas-fired generation extending into 2040.
New wind installations are expected to increase in 2014 and 2015. Projections for 2016 and beyond are less certain.
A growing percentage of equipment used in U.S. wind projects is sourced domestically.

Arctic Drilling Subject of Interagency Review

No current regulations specifically govern Arctic oil development, but a draft proposal on drilling safety rules by the U.S. Department of Interior made its way to the White House’s Office of Management and Budget (OMB) for review Friday.

Details of the proposal remain undisclosed. According to the OMB website, the rules are designed to “promote safe, responsible, and effective drilling activities … while also ensuring the protection of Alaska’s coastal communities and marine environment.”

Some speculate the rules—which may be under review for months—could require oil companies to obtain leak containment equipment before beginning drilling activities. Federal rules may not be in place before Shell resumes a three-year break from drilling in the region.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

July 24, 2014

Rule for Regulating Existing Power Plants under Fire

U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy testified before the Senate Environment and Public Works Committee during a hearing on “EPA’s Proposed Carbon Pollution Standards for Existing Power Plants.” Debate about the proposed rule to regulate carbon emissions from existing power plants has swirled since the rule’s release last month. Coal-heavy states and others have criticized both the substance of the rule and the EPA’s authority to issue it.

Throughout the hearing McCarthy faced questions about whether the agency had stretched the parameters of the Clean Air Act. The proposed rule uses an infrequently exercised provision of the act to set state-specific emissions targets and provide states a wide range of flexibility when choosing how to meet those targets.

“EPA goes beyond the plain reading of the Clean Air Act Section 111 [by] directing states to achieve questionable emission reduction targets from a limited menu of economically damaging and legally questionable ‘options,’” said Senator David Vitter of Louisiana.

Defending the Clean Power Plan on Wednesday, McCarthy insisted the EPA followed proper legal procedure in conducting its analysis. She also dismissed suggestions that the rule was designed “miraculously” months ago and that the EPA has had it in its back pocket since then. She further stressed the flexibility of the rule.

“The proposal is designed to be moderate in its ask,” she told senators. “We will get significantly more benefit than we are requiring.”

She noted “The science is clear. The risks are clear. And the high costs of climate inaction are clear. We must act.”

A new paper by Duke University’s Nicholas Institute for Environmental Policy Solutions aims to address one question not answered in this debate: What will EPA’s rules mean for policy choices aimed at securing future mitigation goals? The analysis explores the long-term consequences of several key regulatory design choices, including mass-based versus rate-based standards, tradable versus non-tradable standards and separate standards for coal and natural gas power plants (differentiated standards) versus a single standard for all fossil plants. It finds that consequences may be significant. Differentiated standards lead to relatively greater investment in coal retrofits and non-tradable standards lead to relatively greater retirement of coal capacity—all of which could create different costs for securing deeper greenhouse gas reductions in the future. How the EPA’s proposed rule for existing power plants is viewed—as a final or interim solution—could also affect tradeoffs associated with key policy choices.

NOAA: Global Temperatures Rising

Global average temperatures surpassed previous records by 1.3 degrees Fahrenheit last month—making it the hottest June on record according to new National Oceanic and Atmospheric Administration (NOAA) data. It’s the second straight month the world set a warm-temperature record. In May, Earth’s temperature was 1.33 degrees above the 20th century average.

Warmer oceans made the difference—they were 1.15 degrees Fahrenheit hotter. Every month of 2014 except February has ranked among the four warmest on record for that respective month.

The finding piggybacks on another report co-authored by NOAA and published by the Bulletin of the American Meteorological Society—State of the Climate in 2013—which provides a detailed update on notable weather events, global climate indicators and environmental monitoring station data.

“These findings reinforce what scientists for decades have observed: that our planet is becoming a warmer place,” said NOAA Administrator Kathryn Sullivan. “This report provides the foundational information we need to develop tools and services for communities, business, and nations to prepare for, and build resilience to, the impacts of climate change.”

The global average temperature, which is a broad baseline used to measure the climate, was about 0.4 degrees Fahrenheit above average according to four of the most commonly used datasets. Among the report’s other findings: all major greenhouse gas emissions increased to new records, sea surface temperatures were among the 10 warmest on record and sea level continued to rise by about an eighth of an inch each year.

Department of Interior Plan, Warming Waters Expand Oil Exploration

The Obama administration approved a plan that next year allows energy companies to apply for permits for underwater oil exploration on the Atlantic Coast, from Delaware to Florida.

The final plan, compiled by the Interior Department’s Bureau of Ocean Energy Management (BOEM), requires oil and gas search methods—including seismic air gun testing—to pass several safeguards to mitigate risks to marine life.

“After thoroughly reviewing the analysis, coordinating with Federal agencies and considering extensive public input, the bureau has identified a path forward that addresses the need to update the nearly four-decade-old data in the region while protecting marine life and cultural sites,” said BOEM Acting Director Walter Cruickshank. “The bureau’s decision reflects a carefully analyzed and balanced approach that will allow us to increase our understanding of potential offshore resources while protecting the human, marine and coastal environments.”

The plan doesn’t permit actual oil drilling or guarantee that lease sales for drilling in Atlantic waters will be included in the Interior Department’s five-year plan for 2017–2022. Obama intended to open up the Atlantic Coast to drilling in 2010 but reversed course after the BP Deepwater Horizon oil spill in the Gulf of Mexico that April.

Meanwhile, melting ice in the Arctic is making the region’s icy waters more passable—allowing ships to deliver European oil to Asia and fueling South Korea’s hopes of becoming an oil hub.

“We’ve noticed a huge difference in trading routes,” said Erik Hanell, chief executive officer of Stena Bulk AB in Gothenburg, Sweden. “China is importing more and all the countries in the Far East are importing a lot more. South Korea has a very strong geographic position in today’s development of both Arctic oil and China’s growing demand.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

June 12, 2014

States, Studies React to EPA Rule Release

On the coattails of the U.S. Environmental Protection Agency’s proposed rule for regulating carbon dioxide emissions from existing power plants, the White House issued a report on the health effects of climate change. The seven-page report outlines six major risks linked to rising temperatures—asthma, lung and heart illnesses; infectious disease; allergies; flooding-related hazards and heat stroke.

But one week after release of the EPA rule, most conversation centered on how the states will undertake their role in executing it. States in the Regional Greenhouse Gas Initiative were hopeful their participation in the carbon trading program would help meet the requirements of the new rule. Lawmakers in at least eight states approved anti-EPA resolutions. Kentucky has enacted a new law that could block the state from complying with the rule, and West Virginia sent a letter to the EPA requesting the agency to withdraw the rule.

The proposal, which assigns each state interim and final emissions goals and asks the states to develop plans to reach them, accounts for the regional differences that affect how hard it will be to reduce emissions. The differences are both practical—how expensive one energy source is compared to another—and political. The proposal does say it “anticipates—and supports—states’ commitments to a wide range of policy preferences,” including decisions “to feature significant reliance on coal-based generation.”

States using a more traditional regulatory approach to execute their plans may be choosing a more costly approach than putting a price on carbon. New research from the Massachusetts Institute of Technology finds that a regulatory standards approach cut less carbon at a higher price than emissions reductions that could be achieved under a cap-and-trade system (subscription).

“With a broader policy, like cap-and-trade, the market can distribute the costs across sectors, technologies and time horizons, and find the cheapest solutions,” said a study author Valerie Karplus. “So the market encourages emissions reductions from sectors like electricity and agriculture, and requires reductions from vehicles and electricity at a level that makes economic sense given an emissions target. On the other hand, narrow regulations force cuts in ways that are potentially more costly and less effective in reducing emissions.”

According to a Bloomberg national poll, Americans—by nearly a two-to-one margin—are willing to pay more for energy if it helps combat climate change. A recent Rasmussen Reports poll had similar findings, showing that most voters approve of the EPA’s new regulations even if there is a rise in energy costs. Here at the Nicholas Institute for Environmental Policy Solutions, we looked ahead to the possibility of a further expansion of Clean Air Act standards limiting carbon dioxide emissions from other sectors. In particular, a new policy brief identifies key differences between the electric power and refining industries, highlighting their potential significance for regulating the refining industry. A companion working paper more deeply examines policy design as well as options for maximizing cost effectiveness while accounting for differences among refineries.

Study: Agricultural Emissions Can Be Curbed

Worldwide, agriculture accounts for about 80 percent of human-caused emissions of nitrous oxide, a greenhouse gas with 300 times as much heat-trapping power as carbon dioxide. Overuse of nitrogen fertilizer is increasing these emissions.

A study in the journal Proceedings of the National Academy of Sciences found that soil microbes were converting nitrogen fertilizer (subscription) into nitrous oxide faster than previously expected when fertilizer rates exceeded crop needs. In fact, the change was happening at a rate of about one kilogram of greenhouse gas for every 100 kilograms of fertilizer.

“Our specific motivation is to learn where to best target agricultural efforts to slow global warming,” said Phil Robertson, author of the study and director of Michigan State University’s Kellogg Biological Station. “Agriculture accounts for 8 to 14 percent of all greenhouse gas production globally. We’re showing how farmers can help to reduce this number by applying nitrogen fertilizer more precisely.”

The study offers proven ways to reduce nitrogen use—applying fertilizer in the spring instead of fall and placing it deeper in the soil for easier plant access. It also provides support for expanding the use of carbon credits to pay farmers for improved fertilizer management.

This week, the first agricultural greenhouse gas emissions offsets were issued to a Michigan farmer whose voluntary decrease of nitrogen fertilizer use on corn crops reduced nitrous oxide emissions.

Crude Oil Production to Increase

U.S. crude oil production will reach its highest level—9.3 million barrels per day—in 2015, according to the latest Energy Information Administration (EIA) forecast, issued Tuesday. The EIA estimates 8.4 million barrels per day for 2014—the United States averaged 7.4 million in 2013.

The increase will not have a dramatic effect on gas prices. The EIA reports that the U.S. average price for gasoline is expected to fall to $3.54 a gallon in September and to $3.38 a gallon in 2015.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

January 23, 2014

Obama Doesn’t Need Congress to Move Forward on Clean Energy

A week before President Barack Obama’s State of the Union address, a new report says Obama could advance key measures of his Climate Action Plan with or without the cooperation of Congress.

“When they believed a national situation warranted action, some past presidents interpreted their authority broadly and exercised it aggressively,” the report said. “That is the practice of presidential authority Americans and the world need today.”

More than 200 recommendations for how Obama can use his executive authority to accelerate progress on climate change are contained in the 207-page Powering Forward report released by the Center for the New Energy Economy and developed with the help of CEOs, energy experts, academicians and thought leaders. The recommendations focus on clean energy solutions such as doubling energy efficiency, financing renewable energy, producing natural gas more responsibly, developing alternative fuels and vehicles and helping utilities adapt to a changing energy landscape.

Most of the recommendations aren’t all that new, but a few, says Oilprice.com, are interesting. One suggestion is to modify mortgage rules so that qualifying for federally backed mortgage loans requires new homes to be constructed with updated energy efficiency standards.

Despite the report’s ideas for the future, 2013 saw many clean energy developments. The Rocky Mountain Institute calls out 10—including growth in the electric vehicle sector and companies putting a price on carbon—that helped bring the country closer to a secure, prosperous energy future.

NASA, NOAA Label 2013 One of the Planet’s Warmest Years

A pair of reports simultaneously released Tuesday by the National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautics and Space Administration (NASA) reached different conclusions about where 2013 ranks among the world’s hottest years.

NOAA said last year’s average world temperature of 58.12 degrees tied with that of 2003 for the fourth hottest year since 1880—when record keeping began. NASA ranked 2013 the seventh warmest on record—tying 2009 and 2006. The slight difference in rankings, scientists said, could be explained by the methods used by the agencies to interpret the same weather data collected from more than 1,000 metrological stations across the globe. NASA, for example, uses more samples from Antarctica.

Regardless of the difference in rankings, both agencies found that nine of the 10 warmest years on record were in the 21st century. According to NASA, the level of carbon dioxide in Earth’s atmosphere peaked in 2013 at 400 parts per million—higher than any point in the last 800,000 years. The level was 285 parts per million in 1880.

“Long-term trends in surface temperature are unusual and 2013 adds to the evidence for ongoing climate change,” said Gavin Schmidt of NASA’s Goddard Institute for Space Studies. “While one year or one season can be affected by random weather events, this analysis shows the necessity for continued, long-term monitoring.”

Schmidt said 2014 is likely to be even warmer than 2013, remarkable partly because El Nino, the periodic warming of the equatorial Pacific Ocean, was absent in 2013.

“Through the second half of 2014 we are looking at the likelihood of an El Nino, which will help warm 2014 over 2013,” he said.

Southern Leg of Keystone Begins Exporting Oil

TransCanada began delivering oil on Wednesday from Oklahoma to customers in Nederland, Texas, through the southern portion of a controversial proposed cross-border pipeline. The start of commercial operations for this leg of the Keystone XL pipeline came with little fanfare after approval by the president nearly two years ago. Although landowners in East Texas continue to challenge TransCanada’s right to take their land for the pipeline, it’s the northern leg of the pipeline, which is projected to carry oil from Canada, that’s been most controversial.

The northern portion of the pipeline still awaits approval by the U.S. State Department. Last week, Secretary of State John Kerry brushed aside pressure from Canada, offering that he’s not yet received a critical environmental report on the long delayed project.

“My hope is that before long, that analysis will be available, and then my work begins,” he said.

TransCanada acknowledged it has plans to look at building rail terminals in Alberta and Oklahoma if the Obama administration declines to approve the pipeline’s northern leg. Recent accidents involving oil-bearing trains may put more pressure on the administration to approve the pipeline.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

January 16, 2014

Study Says United States Tops List of Global Warming Offenders

A new study by Canadian researchers finds the United States, Germany, the United Kingdom, China, Russia, and developing nations Brazil and India were responsible for more than 60 percent of global temperature changes between 1906 and 2005. The U.S. alone was responsible for 22 percent of the warning; China followed at 9 percent and Russia at 8 percent. Brazil and India each contributed 7 percent; the U.K. and Germany were each responsible for 5 percent. The findings, authors said, are particularly important for diplomats working toward a deal in 2015 to limit emissions.

“A clear understanding of national contributions to climate warming provides important information with which to determine national responsibility for global warming, and can therefore be used as a framework to allocate future emissions,” researchers said in their paper, published in the journal Environmental Research Letters.

To restrict warming to U.N. targets of 2 degrees Celsius, rising world emissions would need to drop 40 to 70 percent by 2050, Reuters reports. U.N. Framework Convention on Climate Change Executive Secretary Christiana Figueres said number two historic emitter China is taking the right steps to address global warming with its energy-efficiency standards for buildings and other renewable energy commitments. In the U.S. carbon emissions from energy fell 12 percent between 2005 and 2012, but the U.S. Energy Information Administration estimates a 2 percent increase in these emissions in 2013.

Global Energy Demand Growth, Renewable Investment Slowing

Global energy consumption continues to grow, but slowly. The fourth annual edition of the BP Energy Outlook 2035 pegged growth at 41 percent compared with 55 percent the last 23 years. Although demand from emerging economies is predicted to rise steadily, energy demand elsewhere will slow through 2035.

The U.S., the report said, will be able to provide for its own energy needs in the next two decades with the acceleration of shale oil and gas production. Natural gas, in particular, will overtake oil as the country’s most used fuel as early as 2027—accounting for 35 percent of U.S. consumption by 2035. Oil, however, will be the slowest growing of the major fuels with demand rising on average 0.8 percent annually. Still, U.S. oil imports are expected to drop 75 percent through 2035.

In Europe, the energy market is predicted to rise just 5 percent by 2030 and to become more dependent on imports of gas. China’s energy production will rise 61 percent with consumption growing 71 percent by 2035.

The release of BP’s Energy Outlook comes the same day Bloomberg New Energy Finance revealed that global investment in clean energy fell 12 percent last year.

“Global investment in clean energy was USD 254 billion last year, down from a revised USD 288.9 billion in 2012 and the record USD 317.9 billion of 2011,” a release from Bloomberg stated. In Japan, clean energy investment spiked as a result of small-scale solar installations.

RGGI States Reduce Emission Cap in 2014

States participating in the Regional Greenhouse Gas Initiative (RGGI) dropped their carbon dioxide emissions cap for power plants 45 percent for 2014 to 91 million tons. The initiative, which partners New York, Delaware, Maryland, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire and Maine, aims to reduce these states’ power plant pollution by half of 2005 levels.

“RGGI has once again proven that state leadership provides the laboratory for innovation,” said Kenneth Kimmell, commissioner of the Massachusetts Department of Environmental Protection and RGGI chair. “RGGI is a cost-effective and flexible program that can serve as a national model for dramatically reducing carbon pollution for other states throughout the nation.”

Within the program, each power plant is assigned an amount of carbon dioxide it can release, but the plants can buy and sell allowances to increase or decrease their emissions. At the first allowance auction under the new limits March 5, states will offer up 18.6 million carbon dioxide allowances.

Appellate court arguments surrounding New Jersey’s 2011 exit from the trading program began this week.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

December 19, 2013

EIA Releases Early Predictions from Annual Energy Outlook

Editor’s Note: In observance of the upcoming holidays, the Climate Post will not circulate the next two weeks. It will return Jan. 9, 2014.

The Energy Information Administration (EIA) on Monday released a 20-page preview of its Annual Energy Outlook 2014, which includes projections of U.S. energy supply, demand and prices through 2040.

Although the full report won’t be released until spring 2014, the preview projects a spike of 800,000 barrels a day in domestic crude oil production in 2014. By 2016, U.S. oil production will reach historical levels—close to the 9.6 million barrels a day achieved in 1970. The feat—made possible by fracking and other advanced drilling technologies—is expected to bring imported oil supplies down to 25 percent, compared with the current 37 percent, by 2016. Eventually though, the boom will level off, and production will slowly decline after 2020.

Natural gas will replace coal as the largest source of U.S. electricity. In 2040, natural gas will account for 35 percent of total electricity generation, while coal will account for 32 percent. Production of natural gas is predicted to increase 56 percent between 2012 and 2040; the U.S. will become an overall net exporter of the fuel by 2018—roughly two years earlier than the EIA projected in last year’s forecast.

“EIA’s updated Reference case shows that advanced technologies for crude oil and natural gas production are continuing to increase domestic supply and reshape the U.S. energy economy as well as expand the potential for U.S. natural gas exports,” said EIA Administrator Adam Sieminski. “Growing domestic hydrocarbon production is also reducing our net dependence on imported oil and benefiting the U.S. economy as natural-gas-intensive industries boost their output.”

Total energy-related carbon dioxide emissions in the U.S. are also predicted to remain below 2005 levels—roughly 6 billion metric tons—through 2040.

Oil to Flow from Southern Leg of Keystone Pipeline in 2014

Next month some 700,000 barrels per day are expected to begin flowing from Cushing, Okla. to Texas through the 485-mile pipeline that forms the southern leg of the Keystone XL pipeline project. Initial testing, before the Jan. 22 launch, is showing no issues with the pipeline or shippers, according to project lead TransCanada.

Construction of the southern leg required only state environmental permits and permission by the U.S. Army Corps of Engineers. The northern leg—bringing crude oil from the Alberta tar sands to the Gulf Coast—has been more controversial. It awaits presidential approval on a trans-border permit.

Even so, TransCanada announced it has reached an agreement with 100 percent of landowners in five of the six states through which the 1,700-mile northern leg will pass. The remaining holdouts are in Nebraska, where the pipeline’s route was reworked to avoid crossing the Sand Hills aquifer.

U.S. Military to Utilize More Biofuel

On the heels of a proposal by the U.S. Environmental Protection Agency to lower the country’s 2014 biofuel mandate, the U.S. military announced plans to make biofuel blends part of its regular “operational fuel purchase” through a collaboration of the Navy and the U.S. Department of Agriculture.

“The Navy’s intensifying efforts to use advanced, homegrown fuels to power our military benefits both America’s national security and our rural communities,” said Agriculture Secretary Tom Vilsack. “Not only will production of these fuels create jobs in rural America, they’re cost effective for our military, which is the biggest consumer of petroleum in the nation.”

Sudden fuel price spikes—responsible for as much as $5 billion in unbudgeted fuel increases—were cited as one reason for the program, which will begin in 2014. Deliveries are expected in mid-2015.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

November 21, 2013

EPA Proposes Lower Biofuel Mandate

Editor’s Note: In observance of the Thanksgiving holiday, the Climate Post will not circulate next week. It will return Dec. 5.

The U.S. Environmental Protection Agency (EPA) on Friday announced cuts to a federal mandate dictating how much ethanol must be blended into gasoline. The mandate—under the Renewable Fuel Standard—would have been scheduled to reach 18.15 billion gallons in 2014, up from 16.55 billion gallons this year. The EPA instead proposes to set the 2014 requirement at 15.21 billion gallons, equal to the 2012 mandate.

“We believe that the ethanol blend wall represents a circumstance that warrants a reduction in the mandated volumes for 2014,” the EPA said of the technically feasible amount of ethanol that can be used in today’s vehicles. The agency’s 204-page proposal also suggests rolling back the 2011 cellulosic biofuel target and refunding oil companies nearly $5 million for their costs in trying to meet it.

If finalized after public comment, the proposal is unlikely to have much of an impact on consumers, but it could affect sales of one of the primary ethanol crops: corn.

“I’m in a state of shock,” said Michael McAdams, president of the Advanced Biofuels Association, in a response similar to many others in the biofuels industry. “This rule is a departure from the last five and a half years.”

Refiners welcomed the reduced blending requirements, but warned they may not address long term problems.

“While we are pleased that EPA has taken steps to avoid the blendwall in 2014, we remain concerned that the proposed rule leaves open the possibility that the biofuel mandates will exceed the maximum amount of ethanol that can be safely added to our gasoline supply,” said Charles Drevna, president of the American Fuels & Petrochemical Manufacturers.

News of the proposed rule comes on the heels of a report by the National Research Council drawing attention to some of ethanol’s hidden costs (subscription). The report, which was co-authored by a Nicholas Institute for Environmental Policy Solutions researcher, finds that ethanol consumes so much energy and requires so much land use change that its impact on greenhouse gas emissions is at best neutral.

2010 BP Spill Data Made Public

A new website launched by BP contains raw, uninterpreted data from studies on the massive 2010 Gulf of Mexico oil spill and its effects on the environment and ecology of the area. It provides scientific data gathered as part of the official Natural Resource Damage Assessment that BP and the federal government agreed to during the disaster. The assessment also includes 2.3 million lines of water chemistry data collected since April 2010 as well as information on the composition of oil released from the Macondo well and analyses of the oil in various degrees of degradation and weathering.

More information covering oil, water, sediments, environmental toxicology, birds and marine life will be made available next year. BP is awaiting a ruling in a civil trial in New Orleans regarding just how much oil gushed into the Gulf and whether it was guilty of gross negligence for the spill. The oil giant is among the 90 companies said to have produced nearly two-thirds of the greenhouse gas emissions generated since the dawning of the industrial age, according to a new study published in the journal Climatic Change.

Warsaw Climate Talks Enter Final Days

As a new report suggests global carbon emissions from cement production and burning fossil fuels are on track to hit a record high this year, negotiations to reduce greenhouse gas emissions around the world entered their final week during the United Nations Climate Change Conference (subscription). The two-decades-old negotiations hit a few snags in producing an agreement to replace the Kyoto Protocol by 2015:

Japan—one of the world’s largest emitters of greenhouse gases—opted to drastically scale back its emissions reduction target. The new target calls for decreasing emissions by 3.8 percent from 2005 levels by 2020, rather than by 25 percent from 1990 levels, a goal set four years ago. According to Reuters, the change represents a roughly 3 percent rise from the earlier target. The new target reflects the country’s increased reliance on fossil fuel after idling of Japan’s nuclear fleet following the 2011 Fukushima Daiichi nuclear plant disaster, which the country is still cleaning up.
Negotiations on how to set up new carbon markets and global standards to cut greenhouse gas levels also broke down after developing nations refused to move forward until rich nations made more efforts to cut their own emissions. Further talks on the issues have been postponed until June 2014.
Poor countries walked out of the U.N. climate talks after rich nations refused to discuss climate change compensation until after 2015. The question of who is to blame for climate change is central for developing countries, which contend they should be given support from rich nations to green their economies. Meanwhile, forest protection pledges—specifically from Norway and the United Kingdom—were made and expected to be one of the only significant financial offers from richer, developed nations at the conference.

Despite all the setbacks, the U.N. did propose a draft document outlining a roadmap to a 2015 climate agreement. It clarifies some of the steps nearly 190 nations must take to reach a binding greenhouse gas reduction deal to go into effect in 2020.

If the Obama administration has its way, the 2015 agreement would for the first time make the United States and emerging powers like China equally obligated to curb carbon (subscription). According to State Department Special Envoy for Climate Todd Stern, the administration has begun crunching numbers to determine how much the United States can cut greenhouse gas emissions after 2020.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

November 14, 2013

U.N. Climate Conference Kicks Off Amid Reminders of Deal Urgency

The 12-day United Nations Climate Change Conference, which aims to forge an agreement to cut climate-altering greenhouse gas emissions, began in Warsaw, Poland, this week. The goal set by the U.N.: limit warming to 2 degrees Celsius over pre-industrial levels.

Representatives from nearly 200 countries are debating an agreement that would take effect by 2020. Major breakthroughs are not expected at the conference, which is pervaded by a mood of “realism” about the scale of what can be achieved. The Washington Post reports the talks will only lay a foundation for a global agreement to be reached in time for the 2015 talks in Paris, France.

As the conference began, there were reminders of what’s at stake. Devastation caused by Typhoon Haiyan was on the minds of many, along with reports spelling out how nations are falling further behind their collective goal to reduce greenhouse gas emissions. The International Energy Agency (IEA), in its newly released World Energy Outlook, forecast energy-related carbon dioxide emissions to rise 20 percent by 2035, leaving the world on a trajectory for a long-term average temperature increase of 3.6 degrees Celsius—far above the internationally agreed target of 2 degrees Celsius.

The U.N. Intergovernmental Panel on Climate Change also amended carbon dioxide estimates for policy makers in a report designed to provide guidelines for the representatives working to devise a climate agreement. The panel cut its estimate of total emissions since 1870 to 515 gigatons, down from 531 gigatons, and raised its estimate of total carbon emissions since 1750 to 555 gigatons, up from 545 gigatons.

Ethanol Mandate to Be Announced Soon

Although the IEA predicts fossil fuels will provide 75 percent of the global energy mix by 2035—causing oil prices to continue to rise—current U.S. prices for oil tumbled to their lowest in more than five months. Gas prices have fallen to their lowest in 33 months, in part due to the moderate decrease in oil prices.

Some view prospective ethanol volume requirements, which could be weakened for 2014 partly as a result of a decline in the price of renewable energy credits, as a contributor to the low gas prices. As early as this week, the U.S. Environmental Protection Agency could announce how many billions of gallons of ethanol refiners will be required to blend into gasoline and diesel fuel next year. Those numbers could be on par with 2012 totals if the agency sticks with a draft version of the mandate leaked in October.

The ethanol mandate was under fire this week, following an investigation by the Associated Press, which suggests it comes with an unadvertised environmental cost, namely incentivizing farmers to grow corn on environmentally sensitive land and increasing use of nitrogen fertilizers, leading to high nitrate levels in some water supplies.

Obama Names New Climate Advisor

Heather Zichal, a key architect of President Barack Obama’s Climate Action Plan, stepped down from her post last week as top energy and climate change advisor. Zichal said she will take time to “decompress and take on a few projects” before deciding on formal next steps. In a statement, Obama praised Zichal’s five years of service to the administration.

“She crafted my energy and climate change agenda in the 2008 campaign, then again on my presidential transition, and as my top energy and climate advisor at the White House, she has been a strong and steady voice for policies that reduce America’s dependence on foreign oil, protect public health and our environment, and combat the threat of global climate change,” Obama said.

Zichal’s deputy, Dan Utech—formerly a senior adviser to Energy Secretary Steven Chu and Hillary Clinton when she was senator—will take over the role. In his new position, Utech will be tasked as the lead coordinator of the administration’s stand on energy and environmental issues such as the Keystone XL pipeline and new rules to cut greenhouse gas emissions from power plants. In his first blog post since assuming the new role, Utech praised the president’s energy and climate strategy for helping oil production hit a 24-year high.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

September 26, 2013

EPA Issues New Source Rules, Separates Requirements for Coal and Gas-Fired Plants

The U.S. Environmental Protection Agency (EPA) issued a long-awaited revised proposal for Clean Air Act standards to curb carbon pollution from new power plants. The rule sets separate standards for new gas-fired and coal-fired plants. It would require future coal-fired plants to limit emissions of carbon dioxide to 1,100 pounds per megawatt hour (MWh). The average U.S. coal-fired plant currently emits nearly 1,800 pounds per MWh. Large combined cycle natural gas plants producing at least 850 megawatts of electricity would be limited to 1,000 pounds per MWh, while smaller plants could emit up to 1,100 pounds per MWh. The new proposal replaces an earlier standard issued in 2012 that would have required all types of facilities to limit emissions to 1,000 pounds per MWh (subscription).

“We have proven time after time that setting fair Clean Air Act standards to protect public health does not cause the sky to fall,” EPA Administrator Gina McCarthy said. She went on to say that the proposal, “rather than killing future coal, actually sets out a certain pathway forward for coal to continue to be part of a diverse mix in this country.”

New coal plants would likely need to implement carbon capture and sequestration (CCS) technology, under the rule set to be finalized next year. That rule will trigger the drafting of standards for existing sources under section 111(d) of the Clean Air Act. Much of the opposition surrounding the rule, which is set for proposal in June 2014, is likely aimed at limits for these existing coal and natural-gas fired plants, which vary in age. There may be one significant difference between the new source and existing source rules, the Washington Post reports. Carbon capture and sequestration may not be part of existing source rules.

In preparation for the proposal to cut carbon from existing sources, public comment sessions will begin around the country this fall. Although the EPA would create and enforce the rules directly, states would determine how to meet limits.

Studies Look at Arctic Ice, Drilling

Ahead of the U.S. Department of Interior’s release of minimum standards for oil and gas exploration in federal waters off Alaska’s Arctic coast, Pew Charitable Trusts has put out a 142-page document offering suggestions for how these guidelines might look. The study covers roughly 80 recommendations that include everything from the length of the drilling season to equipment durability and emergency spill protocol.

“We are recommending both exploration and production drilling restrictions and operational restrictions during certain hazardous Artic conditions,” said Marilyn Heiman, director of Pew’s U.S. Arctic Program. “Our report is clear: If you can’t clean up a spill in Arctic conditions, then we recommend that drilling operations be limited to periods of time when you can clean up a spill.”

Arctic sea ice experienced record melts that opened shipping lanes for offshore drilling in 2012, but it appears to be making a comeback, according to the New York Times. That doesn’t necessarily mean the ice is recovering—measurements taken September 13 were still the sixth-lowest on record.

Higher Risk of Storms Forecast

Research in the journal Proceedings of the National Academy of Sciences suggests the eastern and central United States faces a higher risk of severe weather as global warming causes an increase in the conditions producing thunderstorms. By the middle of the century, the eastern U.S. could see severe storms an average of 7.5 spring days, with the largest increase to 2.4 days from March through May across portions of Texas, Oklahoma and Louisiana.

“We’re seeing that global warming produces more days with high CAPE [convective available potential energy] and sufficient shear to form severe thunderstorms,” said Noah Diffenbaugh, study co-author and associate professor of environmental Earth system science at Stanford. This pattern, revealed by the research team’s computer modeling, may have been missed in previous work. Earlier studies concluded that although global warming increases CAPE, it decreases wind shear, and the two phenomena cancel each other out.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.