Lisa Jackson Testifies on Capitol Hill on EPA FY 2013 Budget

EPA Administrator Lisa P. Jackson, Testimony Before the U.S. House Committee on Energy and Commerce Subcommittees on Energy and Power, Environment and the Economy 2-28-2012

Excerpts

EPA's budget request of $8.344 billion focuses on fulfilling EPA's core mission of protecting public health and the environment, while making the sacrifices and tough decisions that Americans across the country are making every day.

the largest portion – 40% percent of EPA's funding request -- is directed to the State and Tribal Assistance Grants appropriation to support their efforts.

Specifically, this budget proposes that $1.2 billion - nearly 15% of EPA's overall request - be allocated back to the States and tribes, through categorical grants. This includes funding for State and Local Air Quality Management grants, Pollution Control grants and the tribal general assistance program.

The budget also proposes that a combined $2 billion - another 25% of EPA's budget request - also goes directly to the States for the Clean Water and Drinking Water State Revolving Funds. This funding will help support efficient system wide investments and development of water infrastructure in our communities. We are working collaboratively to identify opportunities to fund green infrastructure - projects that can reduce pollution efficiently and less expensively than traditional grey infrastructure.

FULL STATEMENT

Eastern U.S. Coal Futures Prices Down In Early 2012

The futures price for Central Appalachian coal, which is the main source of bituminous coal in the eastern United States, is down sharply so far in 2012, as coal demand by utilities declines due to a warm winter and low natural gas prices.

The 2012 futures price for Central Appalachian coal declined 11.7% toward the end of February, falling from $69.67 per short ton at the beginning of the year to $61.50 per short ton at the close of trading on February 24 at the New York Mercantile Exchange (see chart above). The average price for January 1, 2012 through February 24, 2012 of $61.69 per short ton for the NYMEX coal futures contract was down 16.3% from the average price of $73.72 per short ton in the same period last year.

The decline in coal prices reflects, in part, the expectation that the drop in the amount of electricity generated by coal will continue. The volume of coal consumed by the U.S. electric power sector is expected to decline by 1.3% during the first quarter of 2012 compared to the same period last year, while natural gas use by the power sector is forecast to rise by 12%, according to EIA's February Short-Term Energy Outlook.

In addition, warmer-than-normal temperatures this winter are expected to reduce household demand for electric heat, lowering coal use in the electric power sector. The Short-Term Energy Outlook projects U.S. households that rely primarily on electricity for heating will use on average 5.4% less electric heating this winter compared to last winter, and are forecast to have the lowest winter electric heat demand in ten years.

Lower natural gas prices could be contributing to lower coal prices. Estimated natural gas use for power generation is up about 20% so far in 2012 (January 1-February 24) compared to the same period in 2011 despite fewer heating degree days, according to Bentek Energy, LLC. Increased gas-fired generation may be displacing coal use at electric power plants.  (DOE-EIA)

The White House Recognizes: Dru Ealons

Each year America recognizes the month of February as National African American History Month. America reflects and celebrates the heritage and legacy of African Americans and many of their achievements. The theme for this year’s African American History Month is focusing on, “Black Women in American Culture and History.” In his 2012 proclamation, President Obama says, “During National African American History Month, we pay tribute to the contributions of past generations and reaffirm our commitment to keeping the American dream alive for the next generation.”

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Dru Ealons

Dru Ealons is a Presidential appointee in the Obama Administration. She serves at the Environmental Protection Agency as the Director for the Office of Public Engagement. Dru is responsible for the strategic development and implementation of EPA’s public engagement efforts on behalf of Administrator Lisa P. Jackson.

Prior to joining EPA, in 2010, Dru worked as the director of development for Pathways, a homeless shelter for women and children in Birmingham, Alabama. In this role, she served as the chief fundraising officer, managed Pathway’s board of directors and served as the official spokesperson for the Agency. Dru has also worked as the diversity and community relations executive for Southern Progress Corporation, a magazine and book publishing corporation.

Dru received her undergraduate degree in Marketing and Human Resource Management from the University of Alabama at Birmingham. She was born and raised in Birmingham, Alabama and currently resides in Silver Spring, MD with her husband Corey and her young son, Maxwell.

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What achievements are you most proud of being a successful black woman?

I’ve received several awards, from being honored by a service organization in Birmingham as Woman of the Year to Ebony magazine’s 30 under 30. Now that I’m well past 30 and I look back over my life, I’m most proud of the woman that I’ve become. My spiritual life throughout my journey, the trials and the triumphs, have shaped me into the woman I am today. So, make no mistake about it, my greatest achievement is from allowing God to be the pilot of my life. To that end, my success comes from above and I’m very proud of that.

There are countless distinguished and notable black women of the past such as, Rosa Parks, Sojourner Truth, and pioneer Harriet Tubman, which historical figure would you say inspired you the most as a black woman?

I think I’m most inspired by Shirley Chisholm. What reigns as a theme of my life’s work stems from her quote “Service to others is the rent you pay for your room here on Earth.” This has been a guiding principle of my life and I hope my “dash” represents the sentiment of this quote.

What service do you feel you have to represent the historically prominent black women that have come before you?

Throughout my career, I’ve always chosen opportunities that provided service to the greater good, rather than an opportunity that would serve me best (financial gain, fame, etc.). I believe powerful prominent women that came before me, always sought opportunities that will benefit the well-being of others. They were selfless servant leaders that improved the lives around them. I only hope that my life reflects the same commitment of service to all mankind.

Many black women were pioneers of their time and serve as role models today. Reflecting on your personal journey through life, what advice would you impart on the next generation of black girls for them to be successful and be the next generation of leaders?

I would tell them, you are more than a conqueror. Recognize you are standing on the shoulders of others and they’ve already paved the way. Discover the strength you have within and know that you have the power to be victorious to achieve your goals. And always ask yourself “Is there anything too hard for God?”

During the State of the Union Address, President Obama laid out his blueprint for an America built to last. Explain what you believe is the most important aspect of the President’s address?

The substance of the blueprint is extraordinary. Our President was clear and concise about the direction and vision he has for our great country. But beyond the substance, which is very important, for me it was the tone in which our President delivered the blueprint for an America Built to Last. It was his fight, his determination, his strength and confidence that he cares for us all. It reminded me of the sentiment of his 2004 speech when he said “I believe we have the righteous wind at our backs and that as we stand on the crossroads of history, we can make the right choices, and meet the challenges that face us”. He reminded all of us, that by putting our differences aside, together we have the blueprint for an America Built to Last. Together we will meet the challenges that face us.

EPA GHG Permitting Requirements on Largest Emitters

Proposes Greenhouse Gas Options to Streamline Process to Help State/Local Permitting Authorities

The U.S. Environmental Protection Agency (EPA) is proposing not to change the greenhouse gas (GHG) permitting thresholds for the Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs. Today’s proposal is part of EPA’s common-sense, phased-in approach to GHG permitting under the Clean Air Act. EPA is also proposing steps that would streamline the permitting process for large emitters already covered by the agency’s program, including sources that account for nearly 70 percent of the total GHG pollution from stationary sources.

EPA’s proposal is consistent with its phased-in approach, announced in 2010, to “tailor” the requirements of the Clean Air Act to ensure that industrial facilities and state governments have the tools they need to minimize GHG emissions and that only the largest emitters need permits.

After consultation with states and evaluating the process, EPA believes that the current approach is working well, and that state permitting authorities are currently managing PSD permitting requests. Therefore, EPA has proposed not to include additional, smaller sources in the permitting program at this time.

EPAs GHG permitting program follows the same Clean Air Act process that states and industry have followed for decades to help ensure that new or modified facilities are meeting requirements to protect air quality and public health from harmful pollutants. As of December 1, 2011, EPA and state permitting authorities have issued 18 PSD permits addressing GHG emissions. These permits have required new facilities, and existing facilities that have chosen to make major modifications, to implement energy efficiency measures to reduce their GHG emissions.

The GHG Tailoring Rule would continue to address a group of six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). The PSD permitting program protects air quality and allows economic growth by requiring facilities that trigger PSD to limit GHG emissions in a cost effective way. An operating permit lists all of a facility’s Clean Air Act emissions control requirements and ensures adequate monitoring, recordkeeping and reporting. The operating permit program allows an opportunity for public involvement and to improve compliance.

Under the approach maintained in this proposal, new facilities with GHG emissions of at least 100,000 tons per year (tpy) carbon dioxide equivalent (CO2e) continue to be required to obtain PSD permits. Existing facilities that emit 100,000 tpy of CO2e and make changes increasing the GHG emissions by at least 75,000 tpy CO2e, must also obtain PSD permits. Facilities that must obtain a PSD permit, to include other regulated pollutants, must also address GHG emission increases of 75,000 tpy or more of CO2e. New and existing sources with GHG emissions above 100,000 tpy CO2e must also obtain operating permits.

EPA will accept comments on this proposal for 45 days after it is published in the Federal Register. A public hearing will be held on March 20, 2012, in Arlington, Virginia to listen to public comment about the proposal.  (EPA)

More information

Center Supports Obama's "All Of The Above" Energy Strategy

Excerpts

We’re taking every possible action to develop, safely, a near hundred-year supply of natural gas in this country -- something that experts believe will support more than 600,000 jobs by the end of the decade. We supported the first new nuclear power plant in three decades. Our cooperation with the private sector has positioned this country to be the world’s leading manufacturer of high-tech batteries that will power the next generation of American cars -- that use less oil; maybe don't use any oil at all.

And after three decades of inaction, we put in place the toughest fuel economy standards in history for our cars and pickup trucks -– and the first standards ever for heavy-duty trucks. And because we did this, our cars will average nearly 55 miles per gallon by the middle of the next decade. That's nearly double what they get today.

I said this at the State of the Union -- a century of subsidies to the oil companies is long enough. (Applause.) It’s time to end taxpayer giveaways to an industry that has never been more profitable; double down on clean energy industries that have never been more promising -- that's what we need to do. (Applause.) This Congress needs to renew the clean energy tax credits that will lead to more jobs and less dependence on foreign oil. The potential of a sustained, all-of-the-above energy strategy is all around us.

 FULL SPEECH

Environmental Group Takes Millions In Fracking Money

Environmentalists viewed the natural gas industry as an ally against the coal industry and some groups took very large donations from a laeding natural gas hydraulic fracturing (fracking) company.

The Sierra Club took $26.1 million in contributions from Chesapeake Energy and its affiliated companies between 2007 and 2010. 

Last year, the Sierra Club walked away from Chesapeake and an offer of an additional $30 million in donations, stating, “Identifying a common area of interest is very different from having our financial health dependent
on a particular industry, or particular company,”

The American Lung Association also has accepted an undisclosed amount from the company since 2009 for its “Fighting for Air” branding campaign.

Natural gas entrepreneur T. Boone Pickens gave $453,250 to the liberal think tank Center for American Progress (CAP) in 2008 and 2009 through his nonprofit groups, to support its National Clean Energy Project events.

The Natural Resources Defense Council (NRDC), whose leaders Mc-Clendon wooed and who toured field operations, ultimately declined the funding he offered.  (Wash Post, 2/20/2012)

Hunan Yonker Environmental Protection Institute Co., Ltd

The Hunan Yonker Environmental Protection Institute Co., Ltd. (Yonker EPI) was established in 2011 with a registered capital of RMB 10 million. Yonker EPI is controlled by the Hunan Yonker Investment Group. Mr. Liu Zhengjun, the Chairman of of the group, is also the Chairman of Yonker EPI. Yonker EPI is located in the Environment Protection Industrial Park in the Changsha high-tech development Zone.  As a scientific research institution that keeps up with international advanced environmental protection technologies, Yonker EPI was established to lead a modern environmental protection industry.

Yonker EPI focuses on R&D for new technology, new process and new products on environmental protection; introduction of advanced environmental protection technologies and equipment; water treatment; solid waste treatment; and environmental service consultation, among other fields.

Yonker EPI aims for the utilization of advanced technological achievements in the field of international environmental protection. The Institute will introduce, digest and absorb advanced environmental protection technologies at home and abroad, and establish an international cooperation platform for better communication and cooperation.

Hunan Yonker EPI held an MOU signing ceremony last week when Chinese Vice President Xi Jinping was visiting Washington, D.C.  The MOU was with a number of U.S. environmental firms.  Center President Norris McDonald attended the MOU ceremony. The ceremony was held at the Washington Hilton Hotel in Washington, D.C.

The MOU was signed with three U.S. entities. The first memorandum was signed by the Milwaukee Water Association, which is an international leader in water treatment research, education and economic development. The Milwaukee Association of cooperation will develop water research and the sharing of water-related technology. The second memorandum was signed with the H & S company, which is committed to two important areas: providing users with safe drinking water and controlling water pollution to protect the environment. They will cooperate in the management of water companies, water resources management and water related technologies. The third memorandum of cooperation was with  Ze-gen, which is a renewable energy company with a clean and efficient gasification technology patents.

Hunan Yonker EPI is affiliated with Hunan Yonker Environmental Protection Company.

U.S. Coal Production Rises Slightly In 2011

U.S. coal production increased slightly during 2011 for the second year in a row, rising about 0.4% from from its 2010 level, after falling sharply during 2009, according to EIA's weekly coal production report. Exports drove gains in production, as U.S. coal shipments to other countries climbed to their highest level in two decades, while domestic coal consumption for electricity generation fell.

Production varied by region. Western coal production, which includes the Powder River Basin in Wyoming, declined 1.2% last year to 584 million short tons. Western coal has lower sulfur content and much of it is used as fuel to run power plants because it produces fewer emissions than coal mined in other parts of the country. However, the decline in western coal output mirrored the drop in electricity generation from coal, as utilities switched to more affordable natural gas to fuel their power plants. Western production was also affected by severe flooding in the spring and summer, particularly Montana, which had a decrease in production of 7% from 2010. The decrease in Montana production was enough to move it out of the top five producing states.

Appalachian coal output increased 0.6% to 339 million short tons. The region produces bituminous coal, which is used for both electricity generation and as metallurgical coal to produce coke that is used in the steel-making process. The increase in this region's production reflects the large jump in exports, of which a large portion is metallurgical coal.

Production from the Interior region of the United States rose 6.4% to 166 million short tons. Coal production in Texas was up nearly 4 million short tons in 2011 and accounted for about 40% of the Interior region's output increase. Several power plants that run on coal went online in Texas in 2010 and 2011. Most of this region's coal is used to generate electricity.

Of the total coal consumed in 2011, about 93% was used in the electric power sector. However, electric sector coal consumption fell last year by an estimated 40 million short tons, or 4%, compared to 2010, as attractively-priced natural gas encouraged operators to increase the use of natural gas-fired generation to service load, according to EIA's February Short-Term Energy Outlook (STEO). At the same time, projected U.S. electricity generation was down about 0.3% last year.

Much of the coal that was not used by utilities was transported by train, in most cases, to major U.S. seaports where it was exported. Flooding last year disrupted the coal mining in Australia, the world's largest coal exporter, contributing to increased United States coal trade with India, Japan, and South Korea.

The United States exported a total of 107 million short tons of coal in 2011, up 31% from the year before and the most since 1991, according to the STEO. U.S. exports of steam coal, used mainly to fuel power plants, were an estimated 37 million short tons in 2011, the highest since 2008. Estimated exports of metallurgical coal reached record levels in 2011, about 70 million short tons.  (DOE-EIA)

NRC Approves Two New Reactors at Plant Vogtle

Today, in a 4-1 vote, the Nuclear Regulatory Commission (NRC) approved two new nuclear reactors (3 & 4) at the Plant Vogtle facility in Burke County, Georgia.  The reactors are the first to be built in the United States in almost 30 years and are expected to be completed in 2016 and 2017. The project is estimated to cost roughly $14 billion-dollars. The nuclear regulatory commission last gave a utility permission to start building a nuclear plant in 1978.

The NRC Combined Operating License (COL) will authorize Southern Company to build and operate two AP1000 reactors at the Vogtle site, adjacent to the company's existing reactors approximately 26 miles southeast of Augusta, Ga.

Plant Vogle Reactors 1 & 2

Southern Company submitted its COL application on March 28, 2008 and the NRC completed its environmental review and issued a Final Supplemental Environmental Impact Statement for the Vogtle COLs on March 24, 2011. The NRC completed and issued the FSEIS on Aug. 9, 2011.

The NRC certified Westinghouse's amended AP1000 design on Dec. 30, 2011. The AP1000 is a 1,100 megawatt electric pressurized-water reactor that includes passive safety features that would cool down the reactor after an accident without the need for electricity or human intervention. (WTOC11, 2/11/2012)

Center Supports Donald Trump's Old Post Office Renovation

The General Services Administration announced Tuesday that the New York real estate magnate Donald Trump’s hotel company (Trump Hotel Collection) has been selected to turn Washington’s Old Post Office Pavilion into a luxury hotel. The Trump Organization should bring some real spark to the nation's capital.

Built in the 1890s, the Old Post Office is listed on the National Register of Historic Places. The Old Post Office is located partway between the Capitol and the White House on Pennsylvania Avenue. It is right across the street from the U.S. Environmental Protection Agency.

Trump prevailed with a plan to team up with California private equity company Colony Capital to invest $200 million in acquiring the building and turning it into a luxury hotel of at least 250 rooms that would include conference space, a spa, restaurants and museum space focused on the history of the building.

The Trump Hotel Collection already operates luxury hotels in Chicago, New York, Las Vegas, Hono­lulu and Panama. Its newest hotel opened in Toronto this year. The Old Post Office hotel could open as early as 2016. (Wash Post, 2/7/2012)

Emissions Allowance Prices For SO2 and NOX Remain Low

Emissions allowances are a component of policy tools used to reduce emissions of air pollutants such as SO2 or NOX. Such programs cap the total level of emissions, typically for a geographic area, without setting plant-by-plant limits. The price of emissions allowances is one important indicator of how the program is affecting the operating costs of polluting power plants, which in turn affects the order in which power plants are dispatched to meet demand, determining how often those plants run to generate power and produce the accompanying emissions.

The Center, through one of its outreach arms, is registered in EPA's SOx and NOx Allowance Program.

The prices of annual sulfur dioxide (SO2) and summer seasonal nitrogen oxides (NOX) emissions allowances from the EPA's Clean Air Interstate Rule (CAIR) and the NOX Budget Trading Program (NBP) have fallen dramatically in recent years. Average SO2 prices in 2007 were $534/ton, and fell to an average of $2.12/ton in 2011. NOX prices showed a similar dramatic drop from $807/ton in 2008 to $15.89/ton by 2011. The drop in the value of allowances began after the D.C. Court of Appeals struck down CAIR, in July 2008, and continued through the end of 2011.

Several factors continued to contribute to lower prices for SO2 and NOX emissions allowances in 2011:

• Regulatory changes. CAIR was struck down by the D.C. Court of Appeals in July 2008. The same court temporarily reinstated the rule until EPA finalized a replacement. In its ruling, the court made clear that banked SO2 allowances could not be used in the replacement program, like they could be under CAIR. Furthermore, the court ruled that the NOX allowances awarded to states under CAIR were done illegally. After the court ruling, the value of SO2 and NOX emissions allowances plummeted.

• Environmental controls added. Contributing to the decline of emissions that freed up allowances for sale and reduced demand was the installation of new flue gas desulfurization (FGD) and selective catalytic reduction (SCR), pollution controls for SO2 and NOX reduction, respectively, by coal plants in anticipation of CAIR, state control requirements, and New Source Review settlements. After the court's CAIR rule decision, most of the projects were completed. From 2008 through 2011, FGD equipment and SCR equipment was added to about 69 gigawatts (GW) and 23 GW, respectively, of coal-fired generating capacity.

• Lower coal generation. There were two other factors that helped lower coal generation since 2009: reduced electricity demand overall and lower spot natural gas prices. Lower electricity demand from lagging economic activity since 2009 and warmer-than-normal weather in the fall of 2011 have contributed to lower coal generation. Moreover, historically low natural gas prices have increased the use of natural gas for power generation at the expense of coal. Coal generation in 2010 was 8% lower than in 2007 and 13% lower in 2009. Since significant amounts of SO2 and NOX emissions from the power sector come from coal plants, the reduction in coal generation contributed to the surplus of allowances.
 

 
SO₂ emissions from the electric power sector fell from 9.0 million metric tons in 2007 to 5.4 million metric tons in 2010 (see chart above). NO_X emissions fell from 3.7 million metric tons in 2007 to 2.5 million metric tons in 2010. (DOE-EIA)

San Onofre Steam Generator Leak

San Onofre nuclear generating station (SONGS), right, hasn't been generating power since 5:31 p.m. Tuesday, when Southern California Edison shut down its Unit 3 reactor ---- one of two reactors ---- announcing that operators had detected a leak in one of two giant heat exchangers installed in 2010. The leak could be a safety concern because it allows water that can can contain radioactive particles to mix with clean water used to make steam. The steam travels outside the protective concrete domes that are designed to protect the public from a radiation release. Once it leaves the radioactive side of the plant, the water can evaporate and travel through the plant's electricity-generating turbines.

Given that the new components were supposed to last for decades, industry experts were quick to question why the expensive equipment was already leaking at a rate of between 50 and 100 gallons per day. At the time the leak was detected, San Onofre's other reactor ----- Unit 2 ----- was already shut down for refueling and maintenance.

Steam Generator

The vertical steam generators generally have a feedwater ring supply header on the outer edge of the steam generator. The water is directed downward and flows along a wrapper sheet then is directed upwards to flow along the steam generator tubes where the water picks up heat, increasing in temperature until boiling occurs and the water is converted to steam. In the upper part of the steam generator is a moisture separator region which forces the steam-water mixture through channels which allow steam to pass, but not water. A vane arrangement in these steam generators also force a swirling action that enhances the steam-water separation.

The water supplied to the steam generators must be very pure, free of particles, and chemicals. In the boiling environment of the steam generator these chemicals can concentrate resulting in undesired corrosion.


SC Edison began replacing the steam generators at San Onofre in 2009 with new units manufactured by Mitsubishi Heavy Industries. Edison has indicated the new generators would last until the plant's license expires in 2022. But on Tuesday a leak developed in one of the tubes in the number 2 steam steam generator at Unit 3. Radiation monitors detected an increase in radioactivity levels, plant operators diagnosed the leak, and the unit was depowered at 4:30 p.m. and shut down fully at 5:31 p.m.

Steam Generator

While there is still no quantitative information available on the radioactivity release, an NRC spokesman noted that: “all of our information so far indicates it was very, very small, and well within federal regulatory limits. It posed no danger to workers on site or to the public offsite.”  Meanwhile, according to the NRC, SONGS workers doing maintenance at the second reactor, unit 2, checked that new steam generator as part of routine maintenance and found that:

“Two of the tubes have thinning so extensive that they need to be plugged and taken out of service. Sixty nine other tubes have thinning greater than 20 percent of the wall thickness, and a larger number have thinning greater than 10 percent of wall thickness.”

It should be noted that the nuclear power industry, now with 30 years of experience with this problem, is well equipped to plug or sleeve degraded tubes and return the steam generator to service. The generator contains thousands of tubes so even if some must be blocked the generator can still be used.

HOW NUCLEAR PLANTS WORK

(North County Times, 2/3/2012, The Orange Country Register, 2/2/2012)

Natural Gas Spot Prices Near 10-Year Lows

Warm Weather Creates Robust Supplies

Natural gas prices have continued their downward trend this winter as a result of warmer-than-normal temperatures, ample natural gas in storage, and growing production. Population-weighted heating degree days since November 1, 2011 are down 12% nationally from the 30-year average. Total working natural gas in underground storage in the lower 48 states was 3,098 Bcf for the week ending January 20, 21% above the storage levels from one year ago. Daily dry gas production averaged about 64.2 billion cubic feet per day (Bcfd) in January, up almost 10% from last January.

Click on the tab headers below to see charts highlighting factors affecting natural gas prices.

Spot Prices
Weather
Storage
Production
Futures Prices

Average spot natural gas prices for January were $2.68/MMBtu. Spot natural gas prices in January 2012 reached their lowest level in 10 years except for a 4-day period over the Labor Day weekend in 2009. (EIA)

End Of Wind Tax Credit Could End Wind Projects

If Congress does not to renew the wind production tax credit, the industry could collapse in 2013. The credit will expire in December and there is doubt that Congress will renew the tax credit.  Currently U.S. tax credits are available only for facilities that come online before the end of 2012.

Bills to extend the credit so far have not gone anywhere in Congress.  Several key ethanol and biodiesel subsidies expired at the end of last year.