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Friday, January 29, 2016

New Pipeline Projects Increase Northeast Natural Gas Takeaway Capacity

graph of natural gas pipeline capacity in the Northeast region, as explained in the article text


Source: U.S. Energy Information Administration, natural gas pipeline State-to-State Capacity and Pipeline Projects spreadsheets
Note: Capacity in 2015 reflects a combination of existing and planned or under-construction projects. Capacity in 2016 reflects only planned projects.

A number of recently completed and upcoming natural gas infrastructure projects are expected to increase the reach of natural gas produced in the Marcellus and Utica regions of the Northeastern United States (see map). These projects are intended to transport natural gas from production centers to consuming markets or export terminals.
Over the past several years, natural gas production in the Marcellus and Utica areas has grown significantly: their combined growth of 12 billion cubic feet per day since 2011 accounts for 89% of the United States's total growth in natural gas production. The Marcellus and Utica shale plays are located primarily in Pennsylvania, West Virginia, and Ohio. The pipeline infrastructure discussed here is mainly in the Northeast region, which includes Pennsylvania and West Virginia, but not Ohio, based on the regional breakouts in EIA's natural gas pipeline data.
Partly as a result of strong domestic production growth, both domestic natural gas consumption and exports of natural gas by pipeline have increased, and exports of liquefied natural gas (LNG) from the United States are set to begin this year. However, because infrastructure projects often have longer lead times than production projects, infrastructure growth in the Northeast has not kept pace with production growth, and capacity has been insufficient to move natural gas out of the Northeast to demand centers and export locations.
In the past several months, several new pipeline projects have come online to move natural gas either to nearby market areas in the Mid-Atlantic area (New York, New Jersey, and Pennsylvania) or to feed into existing infrastructure that delivers natural gas to more distant regions, especially the U.S. Gulf Coast.
Key projects that came online in late 2015 or early 2016 include:
  • The Rockies Express Pipline (REX) reversal project had added westbound capacity to flow natural gas to the Midwest in 2014. In late 2015, Texas Eastern Transmission Company’s (Tetco) OPEN project added 550 million cubic feet per day (MMcf/d) of pipeline takeaway capacity out of Ohio.
  • Columbia Gas Pipeline's East Side Expansion, a 310 MMcf/d project that flows natural gas produced in Pennsylvania to Mid-Atlantic markets.
  • Tennessee Gas Pipeline's Broad Run Flexibility Project, a 590 MMcf/d project originating in West Virginia that moves natural gas to the Gulf Coast states.
  • Tetco’s Uniontown-to-Gas City project flows up to 425 MMcf/d of natural gas produced in the Marcellus region to Indiana.
  • Williams Transcontinental Pipeline's Leidy Southeast project provides additional capacity to take Marcellus natural gas to Transco's mainline, which extends from Texas to New York. From there, the natural gas serves Mid-Atlantic market areas as well as the Gulf Coast.
graph of map of pipelines in northeast US, as explained in the article text
Source: U.S. Energy Information Administration

Several other projects plan to add natural gas transmission capacity later in 2016: The Algonquin Incremental Markets expansion project will add 342 MMcf/d of capacity to Algonquin Gas Transmission's pipeline in the highly constrained New England region. The Constitution Pipeline will have the capacity to transport up to 650 MMcf/d of natural gas from the Appalachian Basin to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York, which will provide access to markets in the Northeast and New England. The Wright Interconnect Project expands Iroquois's facilities and supports the Constitution Pipeline where the Iroquois and Constitution pipelines interconnect in Wright, New York.
Other projects currently under construction, including liquefaction projects in Maryland and along the U.S. Gulf Coast, will enable natural gas produced in the Appalachian Basin to reach markets overseas.
More information about existing natural gas pipeline infrastructure is available in EIA's spreadsheet of State-to-State Capacity. Projects that are planned or under construction are listed in the Pipeline Projects spreadsheet. (DOE-EIA)

Thursday, January 21, 2016

Nuclear Industry Recommendations For Obama Clean Power Plan

In comments filed today with the U.S. Environmental Protection Agency, the Nuclear Energy Institute recommends that the agency provide states with maximum flexibility to preserve existing nuclear energy facilities and take care not to worsen distortions in electricity markets that are placing some reactors at risk of premature closure. The Institute made these broad recommendations and more specific recommendations below on the agency's Federal Implementation Plan and model trading rules for the Clean Power Plan. 

Preserving and extending the operation of existing nuclear power plants is essential to achieving meaningful, sustainable carbon reductions from the U.S. electric sector. States should use the tools and techniques available under the Clean Power Plan to preserve nuclear power plants, which produce 63% of America's carbon-free electricity. Given this, as it finalizes the federal plan and the model rules, EPA should strive to achieve two broad objectives:

1)    Provide states flexibility to use the tools and techniques available under the Clean Power Plan to preserve existing nuclear energy capacity and promote cost-effective compliance; and 
2)    Prevent further electricity market distortion that is placing existing reactors at risk, or do not pick technology winners and losers when there is no factual or justifiable basis for doing so.

Specifically, NEI believes EPA should:
 
  • Develop and finalize rate-based and mass-based model rules, to provide states maximum possible flexibility based on their particular circumstances.
  • Ensure state plans demonstrate reasonable assurance that they will preserve existing carbon-free generating capacity, particularly the nuclear energy capacity on which the Clean Power Plan depends. 
  • The mass-based compliance option incorporating existing and new reactors is the only compliance pathway in the Clean Power Plan that preserves existing nuclear power plants. In those states that choose not to cover both new and existing sources, the Clean Power Plan should ensure that states use the tools available under a mass-based approach, including structuring allowance allocation, to preserve existing reactors.
  • Treat all forms of zero-carbon generation comparably, with respect to plan implementation elements like the CEIP and credit for allowance trades between mass- and rate-based plans.
  • Ensure that state plans provide market signals and incentives for companies to maintain existing nuclear power plants and undertake the capital investment necessary to renew reactor licenses for additional 20-year increments. Absent second license renewals, carbon reductions achieved between 2022 and 2030 may not be sustainable beyond 2030.
States have several options to recognize the carbon-free value of nuclear power plants, and thereby ensure that they continue to produce electricity. Illinois, for example, is considering a low-carbon portfolio standard that would preserve nuclear plants that provide 91% of its carbon-free electricity.  Similarly, New York Gov. Andrew Cuomo has instructed the state Public Service Commission develop a clean energy standard that would achieve the same effect – continued operation of nuclear power plants that provide 60% of the state's carbon-free electricity.  (NEI)

Flint, Michigan Water Crisis

Nearly two years ago, Flint Michigan, which is about 70 miles from the Great Lakes, decided to save money by switching it's water supply from Lake Huron (which they were paying the city of Detroit for), to the Flint River, a notorious tributary that runs through town known to locals for its filth.
    The switch was made during a financial state of emergency and was supposed to be temporary while a new state-run supply line to Lake Huron was ready for connection. The project was estimated to take about two years.  Soon after the switch, the water started to look, smell and taste funny. Residents said it often looked dirty.
    It was actually iron. The Flint River is highly corrosive: 19 times more so than the Lake Huron supply, according to researchers from Virginia Tech.
    According to a class-action lawsuit, the state Department of Environmental Quality wasn't treating the Flint River water with an anti-corrosive agent, in violation of federal law. Therefore, the water was eroding the iron water mains, turning water brown.
    But what residents couldn't see was far worse. About half of the service lines to homes in Flint are made of lead and because the water wasn't properly treated, lead began leaching into the water supply, in addition to the iron.
    This had been the status quo for nearly two years, and until September, city and state officials told worried residents that everything was fine. Former Flint Mayor Dayne Walling even drank it on local TV to make the point.
    But in August, a group of skeptical researchers from Virginia Tech came up and did in-home testing and found elevated levels of lead in the drinking water and made those findings public. State officials insisted their own research was more accurate.
    Later it became publicly known that federal law had not been followed. A 2011 study on the Flint River found it would have to be treated with an anti-corrosive agent for it to be considered as a safe source for drinking water.
    Adding that agent would have cost about $100 a day, and experts say 90% of the problems with Flint's water would have been avoided.
    But Flint residents say they were kept in the dark for 18 months until a local doctor took things into her own hands.  In the pediatric ward of Flint's Hurley Medical Center, Dr. Mona Hanna-Attisha was seeing more and more worried parents fretting over rashes and hair loss.  No one believed state and local officials when they said that this icky brown water was safe.
    At first, the state publicly denounced her work, saying she was causing near hysteria. They spent a week attacking her before reversing their narrative and admitting she was right.  They were being told by the DEQ that there wasn't a problem.
    In October, the city reverted to using Detroit's Lake Huron water supply, but the damage was done to the lead pipes.  Even with properly treated water flowing in, Virginia Tech researchers still detected lead levels -- albeit lower ones -- in water in Flint homes.
    The state is now handing out filters and bottled water.
    In 2011, Flint was declared to be in a financial state of emergency, and the state took budgetary control. Therefore, all the decisions made during the water crisis were at the state level, which state officials confirmed, not by the City Council or the mayor.
    When the governor appointed an emergency financial manager (in 2011), that person came here ... to simply do one thing and one thing only, and that's cut the budget.
    Lead poisoning is irreversible.  It drops your IQ, it affects your behavior, it's been linked to criminality, it has multigenerational impacts. There is no safe level of lead in a child.
    A state-appointed task force preliminarily found that fault lies with the state DEQ, and on December 29.  Last week, three months after high lead levels were detected in Flint children, Michigan Governor Rick Snyder declared a state of emergency over the issue.
    The U.S. Attorney in Michigan and the federal Environmental Protection Agency are also investigating why the state chose to ignore federal law and go without the anti-corrosive agent, as the lawsuit contends
    Residents, the former mayor, the current mayor, Congressman Kildee, city workers -- they all blame the governor's office and the state Department of Environmental Quality for what happened to Flint.  (CNN, 1/19/2016)

    Wednesday, January 20, 2016

    2015 Hottest Year on Record

    The heat record set in 2014 was shattered by the high temperatures in 2015, making last year the hottest year ever recorded, based on data going back to 1880, according to the NASA and the National Oceanic and Atmospheric Administration (NOAA). 
    Specifically, the year was 0.23 degrees Fahrenheit hotter than 2014, according to NASA. The measurement recorded by NOAA was slightly worse: 0.29 degrees Fahrenheit hotter than 2014. According to NOAA, 2015 was 1.62 degrees Fahrenheit above the 20th century average.
    NASA and NOAA both keep independent global surface temperature datasets, measuring temperatures over both the land and the oceans using thermometers, ocean buoys and ship readings. The datasets do not always agree perfectly, but they showed relatively little disagreement this year.
    2015’s record heat — enhanced, especially in later months of the year, by a strong El NiƱo event that released warmth from the Pacific Ocean — was apparent long before the official declaration of the current record.
    Every month in 2015 except for January and April was the hottest of that month on record globally, according to NOAA. In other words, September of 2015 was the hottest September in 136 years, as was October of 2015, November of 2015, and so on.  (Wash Post, 1/20/2016)

    Friday, January 08, 2016

    Methane Leak In Aliso Canyon California


    An enormous amount of  methane gas is currently erupting from an energy facility in Aliso Canyon, California, at a rate of 110,000 pounds per hour. The gas has led to the evacuation 1,700 homes so far. Many residents have already filed lawsuits against the company that owns the facility, the Southern California Gas Company.
    Footage taken on December 17 shows a geyser of methane gas spewing from the Earth, visible by a specialized infrared camera operated by an Earthworks ITC-certified thermographer. The Environmental Defense Fund (EDF) released the footage last week.
    In early December, the Southern California Gas Company (SCGC) said that plugging the leak, which sprang in mid-October, would take at least three more months. Right now, the single leak accounts for a quarter of the state's entire methane emissions.
    SCGC's efforts to stop the flow of gas by pumping fluids directly down the well have not yet been successful, so they have shifted their focus to stopping the leak through a relief well.  They are also exploring other options to stop the leak. The relief well process is on schedule to be completed by late February or late March.
    Part of the problem in stopping the leak lies in the base of the well, which sits 8,000 feet underground. Pumping fluids down into the well, usually the normal recourse, just isn’t working. Workers have been ”unable to establish a stable enough column of fluid to keep the force of gas from coming up from the reservoir” The company is now constructing a relief well that will connect to the leaking well, and hopefully provide a way to reduce pressure so the leak can be plugged.
    Methane, the main component of natural gas, is 25 times more potent than carbon dioxide when it comes to climate change impact. About one-fourth of the anthropogenic global warming we’re experiencing today is due to methane emissions, according to the Environmental Defense Fund. Leaks like the current one in California, it turns out, are a major contributor.So far, over 150 million pounds of methane have been released by the leak, which connects to an enormous underground containment system. The cause of the leak is still unknown.  Research has also revealed that more than 38 percent of the pipes in Southern California Gas Company’s territory are more than 50 years old, and 16 percent are made from corrosion- and leak-prone materials.
    Right now, relief efforts have drilled only 3,800 feet down—less than half of the way to the base of the well. At that rate, the torrent of methane pouring into California won’t be stopped any time soon. (Motherboard, 12/26/2015)

    Thursday, January 07, 2016

    Electric Vehicles Can't Compete With Internal Combustion Engines


    The 2015 car-sale data are in: Americans bought a record 17.5 million passenger vehicles in the United States, of which 113,588 — 0.6 percent — were either plug-in hybrids or all-electrics, according to insideevs.com. That was about 10,000 fewer than in 2014.

    Automakers have sold 404,176 electrics (EVs) since they hit the market in 2010. That is 0.16 percent of the 250 million-plus U.S. passenger vehicle fleet. Assuming all are still on the road, carmakers must sell 300,000 this year and next to reach 1 million, or 0.3 percent of the fleet, by 2018.

    The limiting factor is, was and will be for years the value proposition: Given the cost of advanced batteries, which has not come down as swiftly as EV boosters assumed, most EVs are still very expensive. Gas savings, however, can’t offset the higher purchase price, even when you factor in the $7,500 federal tax credit EV buyers get.  Unless and until that’s solved, the raison d’etre of electric cars, and of federal policies to favor them — making a significant dent in carbon emissions — will be null and void.
    Take the 2016 Chevy Volt, a plug-in hybrid that can go 50 miles or so on battery power before a gas motor kicks in. The Volt’s annual fuel cost (gas and electricity) is $250 less than the yearly gas tab for a comparable Mazda 3, according to the Energy Department.  However, the Volt’s list price (with all the options and after the tax credit) is $3,525 more than a similarly equipped Mazda 3’s. Do the math: The Volt’s gas savings will offset the price differential in 14 years.  Two-dollar-a-gallon gas isn’t doing anything to help the EV value proposition.

    Tesla? Priced north of $100,000.  Tesla did sell 50,580 vehicles worldwide in 2015.  Tesla owes its survival to subsidies.   This Silicon Valley start-up has gotten $4.9 billion in state and federal support over the past decade, according to a May 30 Los Angeles Times report.   The Times’s figure doesn’t include the tax breaks and other incentives for EV buyers in Norway, whose inhabitants had purchased 8,700 Tesla Model S’s as of October — roughly 10 percent of Model S sales worldwide since its introduction — according to the Norwegian Embassy in Washington.
    In September 2012, the Congressional Budget Office estimated that the U.S. government was on course to subsidize EV production and sales to the tune of $7.5 billion through 2019.  We might have gotten more carbon reduction, sooner, if the government had spent that much money on things other than tax breaks for retrofitting coal plants to burn natural gas or nuclear power. (Wash Post, 1/6/2016)

    Tuesday, January 05, 2016

    Natural Gas Spot Price in 2015 Lowest Since 1999

    graph of monthly and annual average natural gas spot price at Henry Hub, as explained in the article text


    Source: U.S. Energy Information Administration, based on Natural Gas Intelligence

    Natural gas spot prices in 2015 at the Henry Hub in Louisiana, a national benchmark, averaged $2.61 per million British thermal unit (MMBtu), the lowest annual average level since 1999. Daily prices fell below $2/MMBtu this year for the first time since 2012. Henry Hub spot prices began the year relatively low and fell throughout 2015, as production and storage inventories hit record levels and fourth-quarter temperatures were much warmer than normal.
    graph of monthly average natural gas spot prices at key trading hubs, as explained in the article text
    Source: U.S. Energy Information Administration, based on Natural Gas Intelligence

    Natural gas prices at key regional trading hubs ended the year lower than their starting point. At northeastern locations, where natural gas transmission infrastructure is often constrained, prices spiked in the early months of 2015, which were colder than normal compared to much of the United States. Prices at the Algonquin Citygate, which serves Boston, and at Transcontinental Pipeline's Zone 6, which serves New York City, began the year much higher than the Henry Hub spot prices in early 2015, but then fell below the national benchmark for much of the rest of the year. The annual average spot price at Henry Hub of $2.61/MMBtu was $1.78/MMBtu, or 41%, lower than the 2014 average.
    Despite declining prices, total natural gas production, measured in terms of dry gas volume, averaged an estimated 74.9 billion cubic feet per day (Bcf/d) in 2015, 6.3% greater than in 2014. This increase occurred even as the number of natural gas-directed drilling rigs decreased. As of December 18, there were 168 natural gas-directed rigs in operation, only about half the number of rigs at the beginning of 2015, according to data from Baker Hughes Inc. However, the remaining rigs are among the most productive, and producers have continued to make gains in drilling efficiency.
    graph of monthly natural gas production and consumption, as explained in the article text
    Source: U.S. Energy Information Administration, Natural Gas Monthly

    Low prices and strong production led to increase use of natural gas for electric power generation, which is projected to be about 26.5 Bcf/d in 2015, exceeding the 24.9 Bcf/d level in 2012. Natural gas surpassed coal as the leading source of electricity generation on a monthly basis for the first time in April, and again in each of the four months from July through October.
    In the residential and commercial sectors, which use natural gas primarily for heating, consumption in 2015 declined 6.7% and 4.4%, respectively, from the previous year largely because of warmer weather. Natural gas consumption in the residential and commercial sectors was particularly high in 2014 because of cold temperatures in the first and fourth quarters. Although 2015 had a cold start, temperatures in the fourth quarter were warmer than normal throughout most of the United States.
    graph of natural gas in underground storage, as explained in the article text
    Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report

    Growth in production also allowed for strong builds in working natural gas inventory. Inventories surpassed 4,000 Bcf for the first time, reaching 4,009 Bcf in the week ending November 20.
    With much of the growth in natural gas production in the Marcellus and Utica shale regions in the Midwest, several major pipeline projects came online in 2015 to transport natural gas from these plays to consumers. In August 2015, the Rockies Express Pipeline (REX) reversal was completed. REX, one of the longest natural gas pipelines in the United States, began service in 2009 to bring Rockies gas eastward. As Marcellus production increased, however, demand in the East for natural gas produced in the Rockies declined. The REX reversal added westbound capacity to enable the transport of natural gas produced in the Marcellus and Utica Shale regions to consuming markets in the Midwest. Several other new pipeline projects began to take natural gas produced in the Marcellus and Utica regions to consumer areas on the East Coast, Midwest, and Gulf Coast area. (DOE-EIA)

    Saturday, December 26, 2015

    Union Gas Receives Approval to Transport Natural Gas from Ohio to Ontario


    Union Gas recently received approval from the Ontario Energy Board (OEB) for a 15-year contract to move natural gas from supply basins located near Ohio, into the Union Gas Dawn Hub on the proposed NEXUS Gas Transmission system (NEXUS), starting November, 2017.



    Over the past five years, there has been a significant increase in the development and production of natural gas within the Appalachian Basis in Ohio and Pennsylvania. The proposed NEXUS project, which is being developed jointly by Spectra Energy and DTE Energy, will connect Ontario gas consumers to these new and growing supplies and provide Ontario consumers with greater supply diversity, security and cost competitiveness.

    The goal is to ensure that Ontario gas consumers, including homes, businesses and industry, have secure access to a diverse supply of competitively-priced natural gas. 

    Abundant North American supplies are keeping prices low for natural gas consumers. In fact, the price Union Gas customers pay for natural gas has steadily declined and is lower today than it was 10 years ago. In addition.  (State of Ohio)



    LNG Export Update


    The U.S. currently has two export terminals, one in Sabine Pass, Louisiana, and the ConocoPhillips LNG export terminal in North Cook Inlet, Alaska. The DOE recently gave its preliminary approval for Dominion Resources to retrofit its Cove Point, Maryland import terminal to export liquefied natural gas. The facility is already connected to an interstate pipeline system that would bring gas straight from Marcellus Shale wells in Pennsylvania. About 16 other export proposals now await approval by the DOE.  (NPR)

    Friday, December 25, 2015

    Mapping System Highlights Energy Infrastructure

    EIA’s mapping system highlights energy infrastructure across the United States

    image of U.S. energy mapping system, as explained in the article text

    For the next two weeks (Dec. 21–Dec. 31), Today in Energy will feature a selection of our favorite articles from 2015. Today's article was originally published on Jun. 16, 2015.
    EIA's energy mapping system is a data-intensive visual reference tool that includes several map layers defining energy infrastructure components across the United States. Using this series of maps, viewers can see crude oil, petroleum, natural gas, or hydrocarbon gas liquid pipelines, terminals, and ports in their area, as well as high voltage electric transmission lines. The mapping system combines information from many government agencies as well as public and private sources. Understanding infrastructure components is helpful as energy supply and consumption patterns change.
    map of crude oil pipelines and rail terminals, as described in the article text

    Source: EIA Energy Mapping System

    Crude oil pipelines and rail terminal locations are based on publicly available data.
    These map layers can be presented over several base layers with geographic, topographic, street, or satellite image detail, as well as with state, county, and congressional district borders.
    Each state's map is also included as part of EIA's State Energy Data System. For instance, within North Dakota, viewers can see several components of energy infrastructure (pipelines, rail terminals, transmission lines) in addition to parts of the energy system, such as the locations of natural gas processing plants, coal mines, and wind power plants (including individual turbines).
    map of SEDS data in North Dakota, as explained in the article text

    (DOE-EIA)

    Oil Export Ban Lifted

    Congress’s bipartisan spending bill lifted the ban on crude oil exports.  The annual appropriations bill included a provision to lift the ban that had been put in place in 1975 to protect consumers from international crises like the OPEC oil embargo.
    The deal allowed a five-year renewable energy tax credit extension.
    The Democratic leadership traded this ban for a small extension of taxes that support renewable energy. (The Hill, 12/16/2015)

    Tuesday, December 08, 2015

    Data On Spent Nuclear Fuel In the USA

    graph of spent nuclear fuel discharged and stored at U.S. nuclear reactors since 1968, as explained in the article text


    Source: U.S. Energy Information Administration, Form GC-859Nuclear Fuel Data Survey

    The U.S. Energy Information Administration recently released data from its Nuclear Fuel Data Survey on the amount, type, and characteristics of spent nuclear fuel once it is discharged from a reactor. As nuclear electricity generation has continued to increase, the inventory of discharged spent fuel from nuclear reactors has grown steadily since the 1970s.
    The latest Nuclear Fuel Data Survey data show that a total of 241,468 fuel assemblies, with an initial loading weight of about 70,000 metric tons of uranium (MTU), were discharged from and stored at 118 commercial nuclear reactors operating in the United States from 1968 through June 2013. Illinois, Pennsylvania, and South Carolina have the highest amount of stored nuclear material, with more than 4,000 MTU in each state.
    Nuclear reactors are fueled by fissionable material, most commonly uranium, that has been enriched and formed into fuel rods. These rods are bundled together to form fuel assemblies, which are loaded into the reactor core and irradiated. These assemblies are used in the reactors for multiple cycles, with each cycle typically lasting between 18 and 24 months. After being irradiated, the spent fuel assemblies are highly radioactive and must be properly stored.
    There are two storage methods used for spent fuel: spent fuel pools and dry cask storage. The spent-fuel-pool approach involves storing spent fuel assemblies in large pools of water that cool the assemblies and provideshielding from the radiation. Dry cask storage allows spent fuel already cooled in a spent fuel pool for several years to be stored inside a container, called a cask, filled with inert gas. Each cask is surrounded by steel, concrete, or other material to provide shielding from radiation. All spent fuel storage is regulated by the U.S. Nuclear Regulatory Commission.
    Approximately two-thirds of total spent nuclear fuel is from pressurized-water reactors, and about one-third is fromboiling-water reactors. In the United States, nearly all spent nuclear fuel is currently stored on-site at commercial nuclear power plants. A very small amount, less than 1%, has been shipped to away-from-reactor, off-site facilities.
    map of commercial spent nuclear fuel in storage by state, as explained in the article text

    Source: U.S. Energy Information Administration, Form GC-859, Nuclear Fuel Data Survey
    Note: Includes discharges stored at commercial sites only

    Tuesday, December 01, 2015

    COP-21 Paris Climate Conference

    The COP-21 is drawing about 10,000 government representatives to the Le Bourget conference center in a northeastern Parisian suburb, plus 7,000 observers per week and 3,000 journalists.  French President Francois Hollande and President Obama made kick off speeches. 
    Key Points On the COP-21 Agenda 
    1)      Intended Nationally Determined Contributions (INDCs) – The Paris agreement is anticipated to be a bottom-up treaty, with each country setting goals based on their unique national circumstances. These Intended Nationally Determined Contributions, or INDCs, will form the basis of the country-specific commitments under the new UN climate treaty. It is also expected that periodic review of these commitments will be instituted along with measuring, reporting, and verification to ensure the integrity and ambition of the commitments.  While may seem to be making INDCs, there are many questions as to whether countries will live up to these commitments.  Even the US commitment is being questions by experts as not adding up to the 26-28% reduction.  
    2)      Green Climate Fund – Financing issues are among the most controversial in Paris, and they could easily derail any agreement. Many developing country INDCs are conditioned on financial support and technology transfer.  The Green Climate Fund (GCF) was proposed at COP-15 in Copenhagen in 2009, refined in subsequent meetings, and became operational in 2014. GCF aims to provide support to developing country efforts to reduce their GHG emissions and to adapt climate change.  However, this breaks down, it is clear that a significant portion of the expected funds—certainly tens if not hundreds of billions of dollars over many years—would be coming from public sources and would have to be appropriated by Congress. 
    3)      Intellectual property – Developing countries have used this provision deftly to justify their attempts to weaken intellectual property rights (IPR) protections, ostensibly to remove the supposed “barriers” to technology transfer raised by IPR. Compulsory licensing and a fund supported by developed countries to buy down IP are two of many proposals being bruited. IPR serve as a fundamental catalyst of innovation, and study after study has shown that it is not a barrier to technology transfer. A weakened IPR regime such as that being proposed above would provide precious little incentive for companies to invest in advanced technologies if after years of research and development and millions or even billions of dollars invested, their inventions could be expropriated outright by companies in developing countries and manufactured and sold around the world at reduced cost. Under such a circumstance, some of the most innovative companies in the developed world would simply abandon the development of advanced energy technologies. 
    4)      Technology Transfer – Tied to INDCs and the Green Fund, Technology Transfer is one fundamental issue that could bridge the gap.  It frankly is a better way to move toward a positive goal transforming our energy economy:  engage developing countries with advanced technology transfer to help them grow their economies more efficiently and cleanly.   
    5)      Verification – An issue that does not receive the attention it deserves is measuring, reporting, and verification of climate policies. As things stand now, the system of MRV that is likely to come out of Paris will focus not on whether a country meets its emissions goal, but on whether it implements the policies and measures designed to meet its goal. In other words, MRV is more about process than results. MRV will be especially challenging in developing countries. Transparency is a key to open markets and planning, and businesses will be reticent to invest in developing economies without assurances that its investments in emission reduction and offset projects are real and that government activities in support of INDCs have integrity. 
    6)      Binding Legal Commitments Or Non-binding Political Agreement – The Paris Agreement will not be a treaty.  The Paris Agreement will be a multilateral international agreement that will include almost every country in the world. Yet some believe that If the outcome of the Paris Conference is to make promises to reduce emissions legally binding, then the Paris Agreement must be submitted to the Senate for approval as a treaty under Article II.  This will continue to be a contentious point of negotiating among parties and one that US Senators will be watching closely.