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Utility MACT Takes Effect

The most expensive energy regulation in the history of the United States quietly took effect on April 16^th, as the Environmental Protection Agency’s Utility MACT rule, formally known as Mercury and Air Toxics Standards began its implementation phase. The formal implementation of Utility MACT starts the clock on a three-year compliance period mandated under the Clean Air Act.

Utility MACT will affect approximately 1,400 units at almost 600 power plants nationwide, including about 1,100 coal-fired units and some 300 that use oil. These units will be required to install technology to reduce emissions of mercury and other substances.

One of the EPA’s most unpopular rules, Utility MACT last year drew a legal challenge from attorneys general of twenty-five states and one territory (Guam), who argued that the rule’s compliance timelines were too short and that the rule could significantly harm the affordability and reliability of American power. Prior to the April 16^th implementation date for Utility MACT, a number of new groups filed suit against the EPA to challenge the rule. These groups include the Utility Air Regulatory Group (UARG), Colorado’s Tri-State Generation and Transmission Association, and the American Public Power Association (APPA), according to a report by POWER Magazine.

Those affected by the rule are not the only ones upset. Late last month, a contingent of fourteen members of the House Energy & Commerce Committee sent a letter to the White House questioning the EPA’s refusal to answer the committee’s concerns over the cost of Utility MACT. Specifically, the members believe that the EPA is calculating only a fraction of the costs that the regulation poses.

“While EPA moves ahead with what could ultimately be the costliest energy regulation in American history, it is good to see that a number of groups and elected leaders continue to ask important questions about the cost and total impact of Utility MACT,” said PACE Executive Director Lance Brown.

PACE Blasts EPA Politics in Houston Chronicle

The Houston Chronicle yesterday published an opinion piece from PACE entitled “Time for the EPA to Stop Putting Politics Before Facts.” An excerpt from that piece appears below.

It’s not too often that a government agency compares its own tactics to that of the ancient Romans – especially when it comes to the practice of crucifying several residents of a village in order to gain control over its entire population. Yet that is exactly how Environmental Protection Agency Regional Administrator Al Armendariz described his agency’s strategy of targeting oil and gas producers.

Armendariz, who resigned Monday, was the head of the Dallas-based region 6 offices, which is in charge of EPA oversight in Texas and surrounding states. In a discussion two years ago with colleagues that recently surfaced, Armendariz said, “The Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years.”

Armendariz’s rhetoric is not only shocking, it clearly validates what the EPA’s critics have been saying all along about the agency’s attitude toward energy companies.

In fact, in 2009 Armendariz told his colleagues to “find people who are not compliant with the law and you hit them as hard as you can and you make examples out of them.”

It’s time for the agency to stop invoking strategies of the Roman Empire and start working on policies that are appropriate for the 21st century.

Click here to read the full piece in the Houston Chronicle.

Energy & Commerce Leaders Press Administration for Utility MACT Costs

According to a recent press release from leaders of the House Energy & Commerce Committee, the Obama Administration has yet to respond to requests for an official cost estimate for the Environmental Protection Agency’s new Utility MACT rule. Many, including PACE, have estimated the new rule to be the most expensive rule ever for the purpose of limiting emissions from the nation’s power sector.

On January 24^th of this year, fourteen members of the House Energy & Commerce led by Rep. Fred Upton (MI) sent a letter to EPA Administrator Lisa Jackson asking the agency to calculate the total cost of Utility MACT, as EPA’s initial project included “only a share of those costs assigned to three select years from costs that are amortized over 30 to 40 years.” Receiving no reply to their request, on February 22^nd, the same authors of the initial letter sent a follow-up letter to White House Chief of Staff Jacob Lew asking the president to force EPA to provide answers to their committee.

Having received no response to date from the Administration, Rep. Upton and others on his committee last week sent yet another letter on the issue, again to Mr. Lew, expressing their concern over the potential high costs of the Utility MACT rule. The letter also highlights the lack of response from EPA and the White House on the question of the rule’s true cost.

READ THE FULL STORY HERE

What Are Your Six Words for EPA?

As part of its effort to create dialogue with the American people on environmental issues, the U.S. Environmental Protection Agency (EPA) recently launched a project in conjunction with SMITH Magazine called Six Words for the Planet. The project, officially housed at this site, invites all citizens of the world to submit their own six-word essay describing their feelings about Earth.

“Healthier families, cleaner communities, stronger America,” writes EPA Administrator Lisa Jackson in her own six-word offering.

Catalyzing conversation about environmental topics is clearly a good thing for which EPA should be commended, but most people have concerns that go beyond the environment. Many have legitimate concerns about the national economy, our struggle to create and sustain quality jobs, and the affordability of energy for businesses and families. Those are concerns about which EPA needs to hear, especially since the agency is actively pursuing regulations and policies that have a tremendous impact on those issues.

That’s why PACE asked members of the public to submit their own six words for EPA. Here are some of our favorite responses.

Stop making rules. Just enforce them.
Healthy communities begin with quality jobs
Cleanest air, water in 100 years
Wanted: practical, logical, feasible environmental policies.
Full employment from science-based regulation
Balance of intelligent reason with stewardship
EPA should listen to power consumers

Submit your own six words by emailing lance@energyfairness.org

EPA Issues New Fracking Rules

Yesterday, April 18^th, the Environmental Protection Agency (EPA) issued new regulations to govern the process of hydraulic fracturing, also known as fracking, that allows enhanced recovery of oil and natural gas. According to EPA, the rules represent the “first federal air standards for natural gas wells that are hydraulically fractured.” The official EPA rule signed by Administrator Lisa Jackson is available here.

EPA refers to the new rules as “Oil and Gas Air Pollution Standards,” as the regulations aim to reduce emissions of so-called volatile organic compounds by almost 25% across the oil and gas industry and by 95% specifically from wells that use fracking techniques. In total, EPA estimates the new rule to result in the annual reduction of 190,000 to 290,000 tons of volatile organic compounds, 12,000 to 20,000 tons of air toxics, and between 1 million and 1.7 million short tons of methane. According to analysis by the Wall Street Journal, the rules do not address drinking-water quality, an issue raised by environmentalists in connection with hydraulic fracturing.

Unlike a proposal made by the agency last July that would have forced oil and gas wells to comply with a new rule immediately, EPA’s rule phases in the new requirements, allowing wells to attain compliance by January 2015. Although groups such as the American Petroleum Institute have estimated that the additional equipment needed to comply with EPA’s emission reduction goals could cost around $180,000 per well, the added flexibility under the new rule was considered a constructive development by some in the industry.

“The industry has led efforts to reduce emissions by developing new technologies that were adopted in the rule. EPA has made some improvements in the rules that allow our companies to continue reducing emissions while producing the oil and natural gas our country needs,” said American Petroleum Institute Director of Regulatory and Scientific Affairs Howard Feldman in a written statement. “This is a large and complicated rulemaking for an industry so critical to the economy, and we need to thoroughly review the final rule to fully understand its impacts.”

In addition to cost concerns cited by the oil and gas industry, there are significant logistical concerns about meeting EPA’s emission reduction deadlines. For example, while about 25,000 natural oil and gas wells are drilled each year, the American Petroleum Institute estimates that the equipment in circulation required to comply with EPA’s new rule would only allow 3,000 to 4,000 wells to come online. Over one million wells are producing oil and natural gas in the United States, with that number expected to grow.

Green Groups Push for Coal Ash Rules

Unhappy with the speed of EPA regulation of coal combustion by-products, a number of environmental organizations late last week filed a lawsuit to force EPA to finalize regulation of coal ash. Nearly a dozen groups were party to the lawsuit, including the Sierra Club, the Southern Alliance for Clean Energy, and the Environmental Integrity Project. The lawsuit comes just days after the EPA announced plans to regulate greenhouse gas emissions from the energy sector, which some believe will prevent the construction of new coal-fired power generation.

In its lawsuit, the groups claim that EPA is violating the Resource Conservation and Recovery Act (RCRA) by not including coal ash among the substances it regulates. The organizations are demanding that EPA regulate coal ash under Subtitle C of the RCRA, the title that deals with hazardous waste. PACE supports an alternative option being explored by EPA that would regulate coal ash under Subtitle D of the RCRA, allowing states to adopt rules at their own discretion.

“It is no surprise that groups with a stated mission of shutting down our nation’s use of coal for electricity would file such a lawsuit, because they understand that coal ash regulations present huge financial and logistical burdens for utilities,” explains PACE Executive Director Lance Brown. “The problem is these organizations have no real solutions for keeping the lights on and power bills affordable.”

PACE has written extensively about coal ash regulation, citing a study published in June 2011 that found EPA’s regulatory proposals on coal ash could cause as many as 316,000 job losses and cost $110 billion over a 20-year period. PACE’s recent mini-documentary, Unplugged, also covers the heavy toll that EPA regulation of coal ash as a hazardous waste could pose, citing concerns from energy insiders.

“The public needs to understand that half of the 130 million tons of coal ash being generated each year ends up in places like our roads and our carpet. The rest is being stored safely under close supervision,” says Brown. “There is a way to handle coal ash that protects the public while not taking almost half of America’s power generation off the grid. Let’s hope the courts and policymakers have the wisdom to acknowledge that fact.”

Mississippi Conference Spurs Energy Discussion

What challenges and opportunities does Mississippi’s energy sector face in its mission to provide reliable, affordable power in the coming years? That was the topic of discussion on April 4th in Starkville at a conference co-hosted by PACE, the Mississippi Chapter of the Air & Waste Management Association and Mississippi State University’s Bagley College of Engineering. The conference was attended by students, faculty, environmental professionals, regulators with the Mississippi Department of Environmental Quality (MDEQ), and others interested in the crafting of U.S. energy policy.

Among the speakers was Chuck Barlow, Associate General Counsel for Environment at Entergy and former General Counsel for MDEQ, who spoke about regulatory challenges that are shaping the landscape of power generation. Barlow highlighted recent EPA rules that are resulting in the closure of coal-fired generation and spoke to the effect of low natural gas prices on the addition of new nuclear capacity. Glenn McCullough, Jr., former Chairman of TVA and current head of Advance Mississippi, also spoke to the need for smart U.S. energy policy that uses American ingenuity and native resources to achieve both environmental and economic goals.

“Right here in Mississippi, we are building an integrated gasification combined cycle (IGCC) plant that will use state-of-the-art technology and native lignite coal to create one of the cleanest fossil fuel projects in the world today,” said McCullough. “Not only will this plant have very low emissions, but 65% of the carbon dioxide will be captured and used in enhanced oil recovery. That is a great proposition for the people of our state.”

Also speaking was former EPA Region 4 Administrator Jimmy Palmer, Jr., who formerly served as chief of MDEQ for more than a decade. Palmer spoke about the ways that regulatory policy in the U.S. has changed in past years in terms of both substance and process. The conference also featured a viewing of the trailer of PACE’s mini-documentary, Unplugged, and a discussion by Executive Director Lance Brown of the need to insert power customers into energy policy debates.

Coal, Nuclear Key Parts of Chinese Energy Vision

In a recent presentation to China’s legislature, Chinese Premier Wen Jiabao offered a glimpse into the nation’s energy future as it grapples with growing power demands. In short, while coal will remain a staple of the Chinese electricity portfolio in the short term, the nation is aggressively adding nuclear power capacity. The trend keeps with China’s 12^th Five-Year Plan, released last year, that announced a goal of reducing the nation’s carbon intensity by 17% by 2015.

“While American politicians debate over whether all of the above is the right approach to domestic energy policy, China’s long-term energy plan seems to be more of the above,” explains PACE Executive Director Lance Brown. “Their national leaders seem to recognize, as ours should, that the future we want will require not only smarter energy, but more energy.”

Poll Shows Shifting Landscape on Energy Issues

Are public opinions about alternative energy and fossil fuel development shifting? Maybe so according to a Pew Research Center poll released this past Monday. The telephone poll gauged the opinions of 1,503 adults in all 50 states and the District of Columbia.

Among other conclusions, the poll found that support for “developing alternative energy sources” has dropped from almost two-thirds of all respondents to just 52% since last year, while support for “expanding exploration and production of oil, coal, and natural gas” rose 10% from its 2011 mark of just 29%. In other words, the wide margin between those preferring new sources of energy over old ones has narrowed significantly.

PACE to Co-Host Energy Conference in Mississippi

On April 4^th, 2012, PACE will join with Mississippi State University’s Bagley College of Engineering and the Mississippi Chapter of the Air & Waste Management Association to host a conference on energy issues. The conference will be held at the Colvard Student Union on the campus of Mississippi State University in Starkville and is tentatively scheduled for 10:00 AM to 2:30 PM, including a luncheon.

Focused entirely on current issues in energy, the conference will highlight major themes of American energy policy with a focus on the consequences for Mississippi businesses and families. Scheduled speakers include former EPA Region 4 Administrator James Palmer, Jr., who also headed the Mississippi Department of Environmental Quality (MDEQ) for more than a decade; Chuck Barlow, Associate General Counsel for Environment at Entergy and former General Counsel for MDEQ; former TVA Chairman and Advance Mississippi Chairman Glenn McCullough, Jr.; and PACE Executive Director Lance Brown.

Sponsorship opportunities for the conference remain available. Interested businesses or organizations should contact Dallas Baker at 601.961.5670 or e-mail dbaker@deq.state.ms.us. For professional engineers and attorneys, CE and CLE credits are pending approval with more information to come.

Click Here to Download a Registration Form.
Deadline is April 1st

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