Sonia Altieri Receives EPA Gold Award

PRESIDENT'S CORNER

By Norris McDonald

Sonia Altieri has received the EPA Gold Award.  The recognition was given at EPA's Office of Water Awards ceremony at EPA Headquarters in Washington, DC in January 2017. 

Ms. Altieri is part of a team that received the EPA Gold Award for the Clean Water Rule.  

This is the highest medal that an employee can receive.  The names are approved by the EPA Administrator (in this case Gina McCarthy-pictured below).  This is a special and rare occurrence. 

Sonia Altieri is 4th from right back row
EPA Administrator Gina McCarthy is far left 1st row

Interestingly, Sonia is the sister of Vern Altieri, who is arguably Catalina Island's best musician.  This brilliant musician holds court every Friday night at the Marlin Club in Avalon on the island.  He is an institution in the town.  Having moved to Avalon on Catalina Island a little over two years ago, Vern has brought great joy to my cultural life. 

Vern Altieri

I see the apple does not fall far from the tree.  Evidently, brilliance runs in the family.  My congratulations to Sonia and thanks to Vern for sharing this important information with me.  

So. Cal Air Regulators Should Not Ignore San Onofre Nuclear Plant

Air quality regulators are considering seeking an increase in vehicle registration fees for millions of Southern California drivers to help pay for smog reduction programs. The South Coast Air Quality Management District is burying its head in the sand though by not addressing the closure of San Onofre Nuclear Generating Station (SONGS).  The amount of money they recommend to spend on an array of air pollution mitigation approaches could pay for one or two new nuclear power units.  It could also easily pay for a fix at SONGS (replacement of the steam generators -- cost approximately $1 billion each for two new steam generators).

Increasing annual vehicle registration fees collected from more than 10 million drivers across Los Angeles, Orange, Riverside and San Bernardino counties by $30 would generate an additional $300 million a year for pollution-reduction programs.  The South Coast air district currently collects $2 per vehicle in annual registration fees through the Department of Motor Vehicles.

A draft plan released in June by the South Coast district proposes cutting smog-forming emissions from cars, trucks, oil refineries, ports, logistics centers and an array of other sources largely through voluntary, “nonregulatory” measures that encourage, rather than force, polluters to adopt cleaner technology. The plan, which could go to a vote of the AQMD governing board as early as December, relies on finding $1 billion a year for emissions-cutting incentive programs — a 10- to 20-fold increase over what is spent today.

The plan targets ozone, the lung-searing gas in smog that triggers asthma and other respiratory problems. Ozone reaches the nation’s highest levels in Southern California’s inland valleys and mountains. To meet a key federal deadline for reducing the pollutant, the region must slash emissions of smog-forming nitrogen oxides by 2031.

To meet federal health standards, the region must cut emissions of ozone-forming nitrogen oxides to under 100 tons per day by 2031, or 55% beyond all existing regulations, from the current level of about 500 tons per day. 

Central to the plan is a proposal to spend $11 billion to $14 billion on emissions-cutting incentive programs over the next 15 years, a nearly 20-fold increase from the $56 million a year in incentive funds the district receives now.

The plan identifies some traditional regulations to cut pollution from industrial flares, as well as from cooking burners in homes and restaurants. It also includes a proposal for additional pollution cuts to a cap-and-trade program for oil refineries and other major facilities that is likely to face opposition from the petroleum industry. But the strategies for cutting emissions from facilities in the freight sector -- including ports, warehouses and rail yards -- would be executed on a voluntary basis.  (L.A. Times, 9/21/2016, L.A. Times, 6/30/2016))

The Legal Case FOR the FitzPatrick Sale & NY State Nuclear Subsidies

Exelon Corp. agreed to purchase the FitzPatrick nuclear plant for $110 million only after New York regulators agreed to subsidize the facility and two other Exelon nuclear plants to help the state achieve its carbon-reduction goals. Payments for the first two years of the 12-year program will total almost $1 billion. 

Exelon, the beneficiary of almost $500 million in annual payments, is airing its legal defenses.

James FitzPatrick Nuclear Power Plant

Chicago-based Exelon Corp., owner of the R.E. Ginna and Nine Mile Point plants and the soon-to-be-owner of a third plant, James A. FitzPatrick has vetted all of the potential arguments its opponents could raise and its defense is airtight.

Exelon and the  New York's Public Service Commission (NYPSC) are in agreement. The NYPSC designed the policy to avoid specific legal tripwires. Experts say there's likely to be a court challenge anyway, if only because of the money at stake and the precedent it could establish. If it survives, the plan could be a blueprint for other states to achieve the same policy goals, even after similar efforts have been blocked by judges and regulators.

This year, the U.S. Supreme Court overturned a Maryland incentive program for new gas-fired generation because it strayed too far into federal jurisdiction over wholesale electricity markets (Greenwire, April 19). And the Federal Energy Regulatory Commission blocked a plan approved by Ohio regulators to subsidize utility-owned coal and nuclear plants because it clashed with affiliate transaction rules (EnergyWire, April 28).

The New York PSC approved its clean energy standard (CES) on Aug. 1, formalizing the state's goal of getting half its power from renewable energy by 2030. Toward that end, the CES will subsidize three nuclear power plants, giving more time for wind and solar power to develop in New York.

Despite nuclear's place as a carbon-free source of bulk power, some environmental groups, rival generators and consumer groups are pushing back against the subsidy, and any or all of them could launch legal challenges. Those could come at the PSC, New York Supreme Court or FERC.

A court ruling validates the use of the U.S. government's Interagency Working Group's "social cost of carbon. In its order, the 7th U.S. Circuit Court of Appeals upheld the use of the government's estimate for carbon's economic damage in a challenge to new Department of Energy standards for commercial refrigeration equipment (Greenwire, Aug. 9).

The ruling demonstrates that the social cost of carbon isn't "funny science."  New York's zero-emissions credit (ZEC) program will be administered in six two-year periods, and electricity retailers will purchase credits from the New York State Energy Research and Development Authority (NYSERDA) in proportion to their load.  During the first two-year, three nuclear plants will receive payments under a formula based on the social cost of carbon and the megawatt-hours of energy they produce.

The most important consideration regarding potential legal challenges to the plan is that it's "indistinguishable" from renewable energy credit (REC) programs that have been "blessed" by the states and the courts.  Just as an REC represents the environmental attributes of a megawatt-hour of wind or solar energy, a ZEC is the same for nuclear energy.

It is a REC program for nuclear. It's a credit that's tied to production, not wholesale market participation. Nowhere in the country has an REC program, on the theories that have been advanced now, ever been successfully challenged.  FERC in an order four years ago said REC programs and sales of RECs unbundled with electricity fall outside its jurisdiction.

In its final order, New York's PSC said it had legal authority to approve the clean energy standard and, moreover, that it had been designed to avoid FERC's turf. The order, however, noted: "States may encourage production of new or clean generation through measures 'untethered' to a generator's wholesale market participation."

Regulators moved quickly to finalize the clean energy standard. Entergy Corp., the owner of FitzPatrick, planned to shut the plant in January. Exelon was willing to buy it and add to its nuclear fleet, but it wanted clarity about what their economics would be.

The purchase remains contingent on approvals from state and federal regulators. In the meantime, Exelon will refuel the plant in January if certain conditions are met, including the clean energy standard being in full effect and the execution of an NYSERDA contract that guarantees an additional income stream.

On July 8, the state Department of Public Service proposed its plan to rescue the nuclear plants with ZECs. The plan contemplated nearly $1 billion in subsidies for the first two years. It said the $4 billion net benefit, largely from cutting carbon, was worth it.  Regulators took public comments for two weeks and issued a final order on Aug. 1.

Opponents said the process moved too fast given the high stakes. They've said it's dubious to peg the subsidy to the social cost of carbon, and that it will lead to burdensome costs for large energy users, like manufacturers. And some environmentalists have objected to any support for nuclear power in a policy meant to advance renewable energy.

A group of upstate manufacturers submitted a 35-page brief objecting to aspects of the CES. But a lawyer for the group said he had no comment on a suit. Another group of merchant power plants, including Calpine Corp., said in a filing last month that the CES was a plain step into FERC jurisdiction. But the group did not comment with regard to a legal challenge.

Experts said it's only been two weeks, so these suits are probably still in the works.

Parties have 30 days to petition the PSC for a rehearing, said Jon Sorensen, a spokesman for the Department of Public Service. They have four months to challenge a decision at the New York Supreme Court.

At FERC, parties could lodge a complaint at any time.

Some parties question how regulators set the amount of the nuclear subsidy. At first, it was based on the cost of running the reactors. They ultimately decided to use the social cost of carbon.

Whether the recent appellate court ruling validates the social cost of carbon metric, some critics say the PSC staff didn't allow enough time (two weeks) for parties to vet the formula.

According to the National Energy Marketers Association (NEMA), the PSC's timetable violated the state's Administrative Procedure Act. 

Exelon is also bracing for challenges that claim the PSC strayed too far into FERC's jurisdiction.

Calpine joined a group of power generators that last month cited the Supreme Court's decision in Hughes v. Talen Energy Marketing LLC and said New York is making the same mistake Maryland did: interfering with wholesale power markets. But some lawyers say New York might have avoided this legal trap by using a different mechanism to support power plants.

In Hughes, Maryland was focused on the money that would be needed to prop up companies, to help them survive in the face of changing markets. New York's final CES decision does what it can to stay away from that approach; instead, it focuses on properly valuing the low-carbon attributes of nuclear plants separate from the wholesale markets.

The April court order was carefully crafted to leave states room to craft their own policies.  It was clear the Supreme Court wanted to reserve the option for states that were trying to tackle clean energy policy to have a way to do that.  (E&E Publishing, 8/19/2016)

Apple, Inc, which is spending $850 million on a 130-megawatt solar farm near San Francisco over 25 years, can begin selling power into wholesale markets in the latest foray by a technology company into the energy business. Apple’s subsidiary Apple Energy LLC may sell energy, capacity and other services needed to maintain reliable power, according to an order by the Federal Energy Regulatory Commission. In granting approval, the commission determined the company did not raise the risk of being able to unfairly hike up power prices.

The iPhone maker is among a group of companies investing in energy projects in a bid to tackle global warming and cut electric bills. Google, Microsoft Corp. and Amazon.com Inc. are backing wind turbines and solar farms to power their operations and lower their carbon footprint.

Apple entered into an agreement last year with First Solar Inc. to buy power from the California solar farm in what was at the time the largest-ever solar procurement for a company that isn’t a utility. Apple also owns 20 megawatts of generation in the Nevada Power Company service area and 50 megawatts in the Salt River Project service area in Arizona, according to the FERC order. All of Apple’s data centers are now powered by renewables.

Apple may begin wholesale power sales Saturday. Google gained similar rights in 2010.  (Bloomberg Markets, 8/4/2016)

Exelon Nuclear Plants Getting Assistance in New York and Maybe in Illinois

Norris McDonald at Fitzpatrick

The New York Public Service Commission (PSC) voted to pass the Clean Energy Standard (CES) supporting the Zero Emissions Credit (ZEC) program for New York's nuclear fleet on Monday, August 1.  Monday's vote by New York utility regulators approving nearly half a billion dollars in annual subsidies over the next two years for Fitzpatrick, Nine Mile Point and Ginna nuclear power plants.  Exelon Corp., owns two of the plants and is in talks with Entergy Corp. to buy Fitzpatrick.

Chicago-based Exelon's announced plans to shut the Clinton and Quad Cities nuclear plants in Illinois in mid-2017 and -2018.   The Illinois legislature is considering a measure similar to the New York CES and ZEC to keep the two plants open.

Just as in New York, where the nuclear subsidies are attached to the future of the state's renewable energy industry, the same is true in Illinois. There, legislators are trying to reconcile a suite of competing proposals to come up with a comprehensive energy bill that aims to achieve environmental and economic goals.

In addition to the sweeping 306-page bill offered by Exelon and utility affiliate Commonwealth Edison Co. in the final weeks of the regular session, a group of renewable energy advocates have lobbied hard for a measure that would significantly expand renewable energy and energy efficiency in Illinois.

The advocates are part of the Illinois Clean Jobs Coalition, which yesterday renewed a push for the Illinois General Assembly and Gov. Bruce Rauner (R) to approve the "Illinois Clean Jobs Bill," H.B. 2607/S.B. 1485, to catalyze wind and solar development and increased energy efficiency.

Coalition members held a conference call yesterday to emphasize the economic benefits of additional clean energy development. The call was a preface to a recent U.S. EPA hearing in Chicago on the Clean Energy Incentive Plan (CEIP), a voluntary program that's part of the Clean Power Plan. The CEIP is meant to help stimulate renewable energy development and energy efficiency, especially in low-income areas.

The energy debate has been dormant in Illinois since the General Assembly adjourned on May 31 without taking action. Two days later, Exelon announced plans to close the two nuclear plants.

State Sen. Don Harmon, a Democrat from the Chicago suburb of Oak Park, Ill., and lead sponsor of the "Illinois Clean Jobs Bill," agreed that whatever energy legislation emerges would include expansions of renewables and energy efficiency, as well as language to address financial challenges faced by Exelon's unprofitable nuclear plants.

Norris McDonald & colleagues at Clinton Plant

Exelon has indicated that it faces a late-September decision to purchase fuel for the 1,068-megawatt Clinton plant. The company is seeking a mechanism similar to the one approved in New York, though the maximum amount of annual payments required to keep the Illinois plants running would initially be far less.

While there are similarities between New York and Illinois, including the owner of the affected nuclear plants and the zero-emission credit mechanism proposed to keep them profitable, there are also important differences.

Among them, the decisionmakers. In New York, Democratic Gov. Andrew Cuomo's CES was approved by the four-member Public Service Commission, three of whom were appointed by the two-term Democratic governor.

In Illinois, by contrast, an energy bill will require legislative approval. And while the debate has so far centered on the tension between the renewable energy industry and Exelon, other political interests have made their voices heard.

The coal industry, which employs more than 3,000 people in downstate Illinois, faces its own threats because of pressure from natural gas and stricter environmental regulations. The Illinois Coal Association has opposed the Exelon bill.  The same for big industrial energy consumers and Illinois Attorney General Lisa Madigan, who continued to refer to the Exelon legislation as a "bailout."  (E&E News, 8/3/2016)

Clean Air Interstate Rule (CAIR) Allowance Trading Program Ends

Dear CAIR Designated Representatives and Authorized Account Representatives:

As you know, the Clean Air Interstate Rule (CAIR) trading programs ended after 2014. This e-mail is to inform you that EPA will remove all remaining CAIR NOx ozone season and NOx annual allowances from all allowance accounts on Wednesday, August 10^th, 2016. When the allowances are removed you will receive an e-mail confirmation report for your records.  After removal of these allowances, EPA will end account representative associations with CAIR for both compliance and general accounts in the CAMD Business System (CBS). A few items such as updating screens in the CBS will be finished later.

If you have any questions about these activities, please contact any of the following persons:

Paula Branch at (202) 343-9168 or branch.paula@epa.gov

Kenon Smith at (202) 343-9164 or smith.kenon@epa.gov
Robert Miller at (202) 343-9077 or miller.robertl@epa.gov

Janice Wagner, Chief
Market Operations Branch
Clean Air Markets Division

cc:

Alternate Designated Representatives

State Holding Account Primary Representatives

State Holding Account Alternate Representatives

Exelon Would Save FitzPatrick Nuclear Plant If State Okays Subsidies

Entergy aims to sell FitzPatrick nuclear plant by mid-August

Entergy Corp. has confirmed that it is negotiating to sell the FitzPatrick nuclear plant in Oswego County to Exelon Corp. Entergy said it will close the plant in January, as previously announced, if the sale cannot be completed.

Entergy said in a news release that it aims to complete the negotiations with Exelon by mid-August. The transaction depends on approval by the New York Public Service Commission of a new nuclear subsidy program that was proposed Friday as part of the state's clean energy standard.

The proposed nuclear subsidy program, estimated at $482 million a year split between FitzPatrick and three other nuclear reactors in Upstate New York, still faces review by the commission. The PSC scheduled a brief 10-day period for public comments on the proposal, which would allow the commission to consider it at its Aug. 1 meeting.

Entergy announced in November 2015 that it would close FitzPatrick in January 2017 because the plant loses money. Gov. Andrew Cuomo, whose administration helped facilitate the negotiations, issued a statement today applauding the developments.

A sale to Exelon would require regulatory approval by the U.S. Nuclear Regulatory Commission and others before it could be finalized.That process is likely to take nine months to a year, company officials said.  Entergy said it will begin preparations for both of the plant's possible futures -- a shutdown, or continued operation and sale. (Syracuse .com, 7/13/2016)

Subsidies For New York Nuclear Power Plants?

State utility regulators today released a proposal to subsidize Upstate nuclear plants with annual payments totaling an estimated $482 million a year. The public has a brief opportunity to comment -- until July 18 – an indication that the PSC is likely to rule on the proposal at its Aug. 1 meeting.

Note: Only Nine Mile Point and Ginna have one cooling tower each.

Exelon Corp., which owns three of the four Upstate nuclear reactors, recently told the commission that the oldest two facilities might close unless subsidies were approved by September.  The proposal unveiled recommends that the PSC sign 12-year agreements with nuclear operators, as Exelon had previously recommended. The subsidies would be set administratively by the PSC.

According to estimates provided in the proposal, the subsidies would start at $17.48 per megawatt-hour for the first two years and rise gradually to $29.15 per MWH in years 11 and 12. At the expected combined output of 27.6 million MWH for the Upstate nukes, the total cost would be up to $482 million a year during the first two years, rising to $805 million per year for the final two years.

Those estimates appear to anticipate the continued operation of the FitzPatrick plant, which is scheduled to close in January 2017. FitzPatrick typically accounts for more than 20 percent of the Upstate nuclear output. The subsidies are based on wholesale electric prices of about $39 per MWH. If future prices rise above that level, as the PSC staff expects, the subsidies will decrease commensurately.

The PSC staff argues that the cost, which would be borne by utility ratepayers, would be dwarfed by the benefits of preserving reliable sources of carbon-free electricity. The staff proposal estimates that continued operation of the nuclear plants provides benefits of at least $2.5 billion a year, including the societal benefit of preventing additional carbon emissions plus other positive impacts such as jobs and property tax payments provided by the nukes.

Nuclear operators have complained that wholesale electric prices are too low in Upstate New York to sustain the cost of operating nuclear plants. Entergy Corp. announced last fall that it would close the 850-megawatt FitzPatrick plant in Scriba in January 2017. Exelon told the PSC last month that the 620-megawatt Nine Mile 1 reactor in Scriba and the 580-MW Ginna nuclear plant in Wayne County might close next year too unless subsidies are approved soon. Nine Mile 1 is scheduled to be refueled next spring, a $55 million expense Exelon might forego if the plant is still losing money, company officials said.

According to a study by The Brattle Group, paid for by Exelon and Upstate Energy Jobs, the four nuclear power reactors in Upstate New York are responsible for $3 billion in economic activity and nearly 25,000 jobs.  (Syracuse. com, 7/8/2016)

Low Gasoline Prices At The Pump

The national average for gasoline is $2.29 a gallon. That’s 48 cents cheaper than last year on the same date and 4 cents cheaper than a month ago. Throughout 2016, prices nationally averaged $2.07, compared with $2.43 in 2015, $3.36 in 2014 and $3.50 in 2013.

The drop in price is a reflection of the huge worldwide surplus in crude oil. Production in the United States has jumped as companies used a process called fracking and horizontal drilling to extract oil from shale, while Iran saw its exports soar with the lifting of economic sanctions after it agreed to reign in its nuclear program. Iran’s reentry into the global market came as Saudi Arabia and other Persian Gulf region players continued to pump freely as well.

Crude is about $48 per barrel right now.  

Low gas prices ranged this week from $1.99 a gallon in South Carolina up to $2.90 in California.

Gas prices tend to be higher in the Washington area than the nation as a whole. Within the District, the average on Wednesday was $2.54 a gallon, according to GasBuddy.com, a website that tracks gas prices at 130,000 stations in the United States and Canada. Just over the D.C. border in Bethesda, prices topped $3. Prices were hovering around $2.40 in Silver Spring and $2.30 in Tysons Corner. Gas in Manassas is averaging above $2 and around $2.20 in Annapolis. It’s below $2 a gallon in Virginia Beach.  (Wash Post, 6/30/2016)

Compton To Catalina Program - Trip 6

The Center conducted its 6th Compton To Catalina Island Trip on Friday, December 5, 2014. The trip included the following participants: Dimond Williams, 15, King Drew High School, Jasmin Bumpas, 15, King Drew , Jessica Cortez,10, Ritter Elementary School, and Jaela Bumpas, 17, King Drew High School.

The trip included a tour of the Southern California Edison Pebbly Beach electricity power plant and submersible underwater tour of Avalon Bay where they observed numerous fish species and submerged aquatic vegetation. An interesting footnote is the the sea kelp were totally wiped out by recent storms.

Jaela Bumpas aspires to be a marine biologist and she was particularly impressed by the experience.

NRECA Names Former U.S. Rep. Jim Matheson New CEO

Norris McDonald, Jim Matheson, Jim Lyon Circa 1983

Christmas In April Weatherization Program, Washington, DC

The National Rural Electric Cooperative Association (NRECA) today announced that former U.S. Rep. Jim Matheson has been selected to serve as NRECA’s 6th chief executive officer. Matheson will succeed Jo Ann Emerson, who was stricken by a severe illness in August of last year.  He will join the association and assume his duties as CEO in July.

Matheson currently serves as principal, public policy practice for Squire Patton Boggs, a large well-respected international law firm based in Washington, D.C.  During his tenure in the U.S. House of Representatives, from 2001 to 2015, he served as a member of the House Energy & Commerce Committee.  The respect Matheson has on both sides of the aisle, and his ability to bridge political and policy divides to find common ground, will serve NRECA and all member cooperatives very well.

In addition to his extensive background in Congress and public policy, Matheson worked in the energy industry for several years.  He was a project development manager in the independent power industry. He worked at two consulting companies, including his own firm, providing services to large energy consumers.

Jim was born and raised in Salt Lake City, Utah.  He attended public schools in Salt Lake City, received a Bachelor’s Degree in Government from Harvard University, and an MBA in Finance and Accounting from UCLA.

The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.  (NRECA)

SCOTUS Leaves Intact EPA Mercury Rule

The Supreme Court on Monday left intact a key Obama administration environmental regulation, refusing to take up an appeal from 20 states to block rules that limit the emissions of mercury and other harmful pollutants that are byproducts of burning coal. The high court’s decision leaves in place a lower-court ruling that found that the regulations, put in place several years ago by the Environmental Protection Agency, could remain in effect while the agency revised the way it had calculated the potential industry compliance costs. The EPA finalized its updated cost analysis in April.

Power plants are the largest source of mercury in the United States. Mercury is a neurotoxin that can damage children’s developing nervous systems, reducing their ability to think and learn. All told, for every dollar spent to make these cuts, the public is receiving up to $9 in health benefits.

In March, a month after voting againsy the Clean Power Plan — the Obama administration’s signature regulation on climate change — Chief Justice John G. Roberts Jr. rejected a separate request to stay the Mercury and Air Toxic Standards rule.

More than 20 states had joined a lawsuit opposing the MATS rule, arguing that the controversial pollution controls mandated by the regulation are too expensive relative to the health benefits.

The White House and environmental groups argued that the rule was not only economically sound, but also an important public health measure. Decades of mercury pollution from coal-burning also has contributed to elevated levels of the toxin in fish. In April, the EPA issued an updated analysis of the estimated costs and benefits of the regulations, arguing that the cost for the industry to comply would amount to a fraction of annual revenue and probably would not lead to steep increases in customer bills. As the fight over the MATS rule has worked its way through the courts in recent years, many utilities have already complied with the new requirements.  (Wash Post, 6/13/2016)

Energy

PRESIDENT'S CORNER

By Norris McDonald

I have worked on energy issues for 36 years and felt that I had a pretty good handle on the issue until recently.  Now don't get me wrong, energy has always been a complex issue area, but lately things have gone upside down on me. The biggest confounding variable in my energy thinking has been the mixed phenomenon of fracking and horizontal drilling.  This technology changed the entire American energy game.

Fracking has been around for decades but when it was combined with horizontal drilling, it revolutionized the recovery of natural gas and petroleum. About a million wells used fracking before it was seriously applied to horizontal drilling.  Now, instead of being dependent on Arab or OPEC nations for oil, America is exporting oil and natural gas.  Amazing.  I am still trying to digest the full implications of how this technology has revolutionized American energy policy.

I also suspect that although only one percent of our electricity is currently generated by oil, I think this will go up by several percentage points in the next decade.

Below is some interesting energy information from the U.S. Department of Energy Energy Information Administration.

----------------------------------------------------------------------------------------------------------------------

Americans use many types of energy

Click to enlarge »

Petroleum, natural gas, coal, renewable energy, and nuclear electric power are primary sources of energy. Electricity is a secondary energy source that is generated from primary sources of energy.

Click to enlarge and see chart footnotes »

Energy sources are measured in different physical units: liquid fuels in barrels or gallons, natural gas in cubic feet, coal in short tons, and electricity in kilowatts and kilowatt hours. In the United States, British thermal units (Btu), a measure of heat energy, is commonly used for comparing different types of energy to each other. In 2015, total U.S. primary energy consumption was about 97.7 quadrillion (10¹⁵, or one thousand trillion) Btu.

In 2015, the shares of total primary energy consumption of the five energy-consuming sectors were:

• Electric power—39%
• Transportation—28%
• Industrial—22%
• Residential—7%
• Commercial—4%


The electric power sector generates most of the electricity in the United States, and the other four sectors consume most of the electricity it generates.


The pattern of fuel use varies widely by sector. For example, petroleum provides about 92% of the energy used for transportation, but only 1% of the energy used to generate electricity.

Domestic energy production is equal to about 91% of U.S. energy consumption



Click to enlarge »


In 2015, energy produced in the United States was equal to about 89 quadrillion Btu or about 91% of U.S. energy consumption. The difference between production and consumption was mainly in net imports of petroleum.


The three major fossil fuels—petroleum, natural gas, and coal—accounted for most of the nation's energy production in 2015:


• Natural gas—32%
• Petroleum (crude oil and natural gas plant liquids)—28%
• Coal—21%
• Renewable energy—11%
• Nuclear electric power—9%

The mix of U.S. energy production changes



The three major fossil fuels—petroleum, natural gas, and coal—have dominated the U.S. energy mix for more than 100 years. Several recent changes in U.S. energy production have occurred:


• Coal production peaked in 2008 and trended down through 2015. Coal production in 2015 was about the same as production was in 1981. The primary reason for the general decline in coal production was the decrease in coal consumption for electricity generation.
• 
  
• Natural gas production was higher in 2015 than in any previous year. More efficient and cost-effective drilling and production techniques have resulted in increased production of natural gas from shale formations over the past ten years.
• 
  
• Crude oil production generally decreased each year between 1970 and 2008. In 2009, the trend reversed and production began to rise. More cost-effective drilling and production technologies helped to boost production, especially in Texas and North Dakota. In 2015, crude oil production was at nearly the same level as in 1972.
• Natural gas plant liquids (NGPL) are hydrocarbon gas liquids that are extracted from natural gas before the natural gas is put into pipelines for transmission to consumers. NGPL production has increased along with increases in natural gas production. In 2015, NGPL production was about two times greater than it was in 2005.
• 
  
• Total renewable energy production and consumption both reached record highs of about 9.7 quadrillion Btu in 2015. Hydroelectric power production in 2015 was about 18% below the 50-year average, but increases in energy production from wind and solar helped to increase the overall energy production from renewable sources. Energy production from wind and solar were at record highs in 2015.

(EIA)

Electricity Generation By Energy Source

In 2015, the United States generated about 4 trillion kilowatthours of electricity.¹  About 67% of the electricity generated was from fossil fuels (coal, natural gas, and petroleum).

Major energy sources and percent share of total U.S. electricity generation in 2015:¹ 

• Coal = 33%
• Natural gas = 33%
• Nuclear = 20%
• Hydropower = 6%
• Other renewables = 7%
  • Biomass = 1.6%
  • Geothermal = 0.4%
  • Solar = 0.6%
  • Wind = 4.7%
• Petroleum = 1%
• Other gases = <1 li="">

¹ Preliminary data; based on generation by utility-scale facilities.

(EIA)

Two Pacific Northwest Coal Terminal Proposals Denied

In a decision issued on May 9, the U.S. Army Corps of Engineers (“Corps”) denied permit applications for a coal export terminal on Puget Sound in Washington state, determining that the proposal would have more than a de minimis impact on treaty fishing rights and, therefore, could not be approved without Congressional authorization.

The decision by the Corps to deny permit applications under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act for the Gateway Pacific Terminal (GPT) mirrors in some important respects a decision by the Oregon Department of State Lands (ODSL) in 2014. In that decision, ODSL denied a permit for removal/fill in waters of the state for a Columbia River coal terminal, part of the Morrow Pacific Project. ODSL’s decision was based in part on a determination that “the project would unreasonably interfere with a small but important and long-standing fishery in the state’s waters at the project site.” The ODSL determination, however, was not based expressly on the existence of treaty rights, but was based on testimony regarding fishing by tribal members.

Both projects would provide facilities for exporting coal from the Powder River Basin to Asian nations and both have been highly controversial due in large measure to concerns about the impacts of transporting coal by train and the potential for expanded coal exports to contribute to climate change. Those concerns, however, played no explicit role in either decision.  (More at Marten Law)

H.R. 4979: Advanced Nuclear Technology Development Act of 2016

We support passage of the Advanced Nuclear Technology Development Act of 2016 [H.R. 4979].

H.R. 4979 was introduced earlier this month by Congressmen Bob Latta (R-Ohio) and Jerry McNerney (D-Calif.). The legislation is designed to foster civilian research and development of advanced nuclear energy technologies, improve licensing and enable commercial deployment.

NRC

The bill adopts a straightforward approach to making Nuclear Regulatory Commission fees more equitable. It would continue to require the industry to pay for all agency activity attributable to a licensee or a class of licensees, but disallow collection of fees associated with the agency’s corporate support. This approach would require the NRC to justify corporate support costs to Congress in order to receive appropriations and, in turn, prompt the NRC to control its budget and reduce or eliminate wasteful spending.

The NRC’s budget is approximately $1 billion per year despite significant declines in its workload, including recent premature plant shut downs. The NRC collects 90 percent of its budget from licensees, but the budget has not correspondingly declined, and the remaining licensees are responsible for paying higher annual fees. 

With recent premature shutdowns—and additional reactors decommissioning in the coming years—the current fee structure virtually guarantees that remaining licensees will continue to bear even higher annual fees. And it is effectively impossible to determine whether the fees charged are justified.  (NEI, 4/29/2016)

California Sustainable Groundwater Management Act

The California Department of Water Resources recently wrapped up the public comment period for its draft regulations on Groundwater Sustainability Plans under the 2014 Sustainable Groundwater Management Act (“SGMA”).  The finalized regulations, due June 1, will have a significant impact on the developing role of Groundwater Sustainability Agencies and on just how much control is left at the local level.

Water districts and counties especially should be following these regulations closely and should talk to experts about how best to meet their interests while complying with the new requirements. Likewise, groundwater users should be making sure that their local authorities stay on top of SGMA developments.

In September 2014, Governor Jerry Brown signed into law a three-bill suite collectively known as the Sustainable Groundwater Management Act. The signing of SGMA made California the last of the Western states to enact a comprehensive regulatory scheme for its groundwater resources.

SGMA requires groundwater basins to be managed sustainably at the local level. It provides for the creation of local Groundwater Sustainability Agencies (“GSAs”) with various financial and enforcement powers, tasked with developing and implementing Groundwater Sustainability Plans (“GSPs”) for the basins or sub-basins under their jurisdiction. GSPs must be in place by 2020 or 2022, and must achieve sustainability by 2040 or 2042. At the state level, the Department of Water Resources (“DWR”) supplies technical recommendations and monitors technical sufficiency, and the State Water Resources Control Board (“SWRCB”) exercises the police power to step in if local agencies fail.

GSAs may be existing local agencies or may be newly created for the purpose of SGMA compliance. Existing local water agencies can first elect to be the GSA, but not every groundwater user is under the jurisdiction of an existing local water agency. Counties are made the default GSA for remaining areas, and allowed to opt-out if they so choose. If no other agency then forms a GSA for the left-out areas, groundwater users in those areas must report directly to SWRCB, which can charge fees for having to assume management responsibility.

SGMA defines sustainable groundwater management as the “management and use of groundwater in a manner that can be maintained during the planning and implementation horizon without causing undesirable results.” Six “undesirable results” are enumerated, forming the key criteria for a GSP’s success: (i) chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply; (ii) significant and unreasonable reduction of groundwater storage; (iii) significant and unreasonable seawater intrusion; (iv) significant and unreasonable degraded water quality; (v) significant and unreasonable land subsidence; and (vi) surface water depletions that have significant and unreasonable adverse impacts on beneficial uses of the surface water

Several milestones in the implementation of SGMA have already been achieved. These include the initial prioritization of basins, completed by Jan. 1, 2015; regulations for modifying groundwater basin boundaries, completed by Jan. 1, 2016; and the identification of “critically overdrafted” basins, completed in January 2016. DWR’s GSP and Alternatives regulations are due June 1, 2016. DWR regulations regarding water available for replenishment and best management practices are both due Jan. 1, 2017. An interim update to Bulletin 118, which delineates groundwater basins based on the latest hydrological and geological data, is due in January 2017 with a comprehensive update due in 2020. (Martens Law, 4/27/2016)