Thursday, December 18, 2014

Governor Andrew Cuomo To Ban Fracking in New York State

Governor Andrew Cuomo's environmental commissioner, Joe Martens, and acting Health Commissioner, Howard Zucker have recommended a ban on fracking across the state  of New York, citing excessive environmental and health concerns.  Governor Cuomo is deferring to their recommendations in making a final decision. A ban would end the state's current six-month moratorium on fracking.

The process of fracking involves shooting a mix of pressurized water, sand and chemicals to split rock formations to release natural gas and so-called tight oil.  The widely used, deep-drilling process, combined with horizontal drilling, has resulted in a surge in domestic-energy production.
State and local governments are pushing for bans over the health and environmental concerns, including the potential for earthquakes and the contamination of natural water supplies.

New York sits atop the Marcellus shale formation, which stretches 600 miles along the Appalachian Basin and is rich in natural gas deposits.

The state’s Department of Environmental Conservation will put out a final impact study early next year that will suggest a ban on fracking.  Martens will follow the report with an order prohibiting the process.  (Fox News, 12/18/2014)

Wednesday, December 17, 2014

2015 Gasoline Expenditures To be Lowest in 11 Years

graph of average annual household expenditures on gasoline and motor oil, as explained in the article text

Source: U.S. Energy Information Administration, Short-Term Energy Outlook

The average U.S. household is expected to spend about $550 less on gasoline in 2015 compared with 2014, as annual motor fuel expenditures are on track to fall to their lowest level in 11 years. Lower fuel expenditures are attributable to a combination of falling retail gasoline prices and more fuel-efficient cars and trucks that reduce the number of gallons used to travel a given distance.
Household gasoline costs are forecast to average $1,962 next year, assuming that EIA's price forecast, which is highly uncertain, is realized. Should the forecast be realized, motor fuel expenditures (gasoline and motor oil) in 2015 would be below $2,000 for the first time since 2009, according to EIA's December 2014 Short-Term Energy Outlook (STEO).
The price for U.S. regular gasoline has fallen 11 weeks in a row to $2.55 per gallon as of December 15, down $1.16 per gallon from its 2014 peak in late April and the lowest price since October 2009. Gasoline prices are forecast to go even lower in 2015. Gasoline prices are falling because of lower crude oil prices, which account for about two-thirds of the price U.S. drivers pay for a gallon of gasoline.
EIA's latest STEO forecasts that Brent crude oil prices will average $68 per barrel (bbl) in 2015, with prices up to $5/bbl below that annual average early in the year. The forecast for West Texas Intermediate (WTI) crude oil spot prices averages $63/bbl in 2015. However, the current values of futures and options contracts show high uncertainty regarding the price outlook. For example, WTI futures contracts for March 2015 delivery traded during the five-day period ending December 4 averaged $67/bbl. Implied volatility averaged 32%, establishing the lower and upper limits of the 95% confidence interval for the market's expectations of WTI prices at the expiration of the March 2015 contract at $51/bbl and $89/bbl, respectively. Last year at this time, WTI futures contracts for March 2014 delivery averaged $96/bbl and implied volatility averaged 19%, with only a $30/bbl spread between the corresponding lower and upper limits of the 95% confidence interval.
Increases in fuel economy are also contributing to lower motor fuel expenditures, as cars and trucks travel farther on a gallon of gasoline. According to the Environmental Protection Agency, the production-weighted fuel economy of cars has increased from 23.1 miles per gallon (mpg) for model-year (MY) 2005 cars to almost 28 mpg for MY2014, an increase of about 21%. Similarly, the fuel economy for trucks has increased 19%, from 16.9 mpg to 20.1 mpg in the same time frame.
In recent years, gasoline expenditures have accounted for about 5% of household expenditures. In the Bureau of Labor Statistics' (BLS) Consumer Price Index, gasoline accounted for 5.1% of consumer spending, as of October 2014. Reductions in the gasoline price ultimately impact the relative weight of gasoline compared to other expenditures (shelter, clothing, food, entertainment, and so on) in price indices compiled by BLS and the Bureau of Economic Analysis at the U.S. Department of Commerce.
The demand for gasoline is very price inelastic over short time periods, meaning changes in price have little impact on the number of gallons used. Falling gasoline prices allow households to spend their income on other goods and services, pay down debt, and/or increase savings.  (DOE-EIA)

Tuesday, December 16, 2014

Gasoline Prices Have Little Effect On Car Travel

The U.S. average retail price per gallon of regular motor gasoline has fallen 28% from its 2014 peak of $3.70 per gallon on June 23, to $2.68 per gallon on December 8. However, this price decline may not have much effect on automobile travel, and in turn, gasoline consumption. Gasoline is a relatively inelastic product, meaning changes in prices have little influence on demand.

Price elasticity measures the responsiveness of demand to changes in price. Almost all price elasticities are negative: an increase in price leads to lower demand, and vice versa. Air travel, especially for vacation, tends to be highly elastic: a 10% increase in the price of air travel leads to an even greater (more than 10%) decrease in the amount of air travel. Price changes have greater effects if the changes persist over time, as opposed to being temporary shocks.
Automobile travel in the United States is much less elastic, and its price elasticity has fallen in recent decades. The price elasticity of motor gasoline is currently estimated to be in the range of -0.02 to -0.04 in the short term, meaning it takes a 25% to 50% decrease in the price of gasoline to raise automobile travel 1%. In the mid 1990s, the price elasticity for gasoline was higher, around -0.08, meaning it only took a 12% decrease in the price of gasoline to raise automobile travel by 1%.  (DOE-EIA)

Federal Agencies Support State Water Trading Program

Federal Agencies Support Virginia’s Innovative Market-based Approach to Improving Water Quality in Chesapeake Bay
Virginia program to serve as model for similar programs across the country
U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy today joined U.S. Department of Agriculture Secretary (USDA) Tom Vilsack, Mike Boots of the White House Council on Environmental Quality (CEQ), Commonwealth of Virginia Governor Terry McAuliffe, a private investor and an Appomattox, Va. farmer to recognize an innovative, market-based nutrient trading program run by Virginia to improve the water quality of Chesapeake Bay. 

The cost-effective program has saved the Commonwealth more than $1 million, demonstrating an innovative means of meeting Clean Water Act stormwater requirements and Virginia state water quality goals for the bay. The program encourages economic investment while reducing phosphorus pollution to local waterways in order to meet water quality goals for the Chesapeake Bay.  It is expected similar programs will be established around the nation to provide new revenue sources for agricultural producers while reducing soil erosion and runoff.  
Virginia’s Department of Environmental Quality has created a demand and supply market for land conservation projects that are protective of water quality for future generations.  The agency’s stormwater program requires reductions of phosphorus runoff from certain types of road construction projects that can be achieved by purchasing phosphorus credits from state-certified credit banks. Credits purchased are generated by Virginia farmers in the Potomac and James River watersheds, whose farming practices have permanently reduced the amount of phosphorus flowing into those rivers and, ultimately, the Chesapeake Bay. 
The farm practices are certified by the state as “nutrient credit banks” and come solely from private investors, reducing reliance on public funds and generating a new revenue stream for participating farmers. These credits cost VDOT approximately 50 percent less than other, more traditional engineered pollution reduction practices, such as detention ponds, and underground filters. In addition, these banks advance other goals such as wildlife habitat, stream buffers and land preservation.‎
By advancing the goals of improving the health and regional economy of the Chesapeake Bay as laid out in President Obama’s 2009 Executive Order, nutrient trading is giving farmers additional income opportunities that help keep agricultural lands in production and stretch limited budgets by tapping private sector investments.
EPA and USDA are working together to implement and coordinate policies and programs that encourage water quality trading and will release a web-based water quality trading roadmap tool in early 2015. As part of a joint memorandum of understanding to support trading and environmental markets, the two agencies are centralizing information for buyers and sellers to utilize water quality trading. This resource library will be searchable and help users find information specific to their needs. Both agencies will sponsor a national conference in 2015 for stakeholders to share experiences and move forward with trading as a valuable tool for driving environmental improvement.  (EPA)

Friday, December 12, 2014

DOE Issues Final $12.5 Billion Nuclear Energy Loan Guarantee Solicitation

Today, the Department of Energy issued the Advanced Nuclear Energy Projects loan guarantee solicitation, which provides as much as $12.5 billion to support innovative nuclear energy projects as a part of the Administration’s all-of-the-above energy strategy. With the issuance of this solicitation today, the Department’s Loan Programs Office(LPO) now has open solicitations in four areas, also including the $8 billion Advanced Fossil Energy Projects Solicitation, the $4 billion Renewable Energy and Efficient Energy Projects Solicitation, and the $16 billion Advanced Technology Vehicle Manufacturing (ATVM) loan program.
Authorized by Title XVII of the Energy Policy Act of 2005, the Advanced Nuclear Energy Projects Solicitation would provide loan guarantees to support the construction of innovative nuclear energy and front-end nuclear projects in the U.S. that reduce, avoid, or sequester greenhouse gas emissions. While any project that meets the eligibility requirements may apply, the Department has identified four key technology areas of interest in the solicitation: advanced nuclear reactors, small modular reactors, uprates and upgrades at existing facilities, and front-end nuclear projects.
The full solicitation can be found online at The first deadline for Part I applications is March 18, 2015, followed by rolling deadlines approximately every six months.  
To date, LPO has supported a diverse portfolio of loans, loan guarantees, and commitments, supporting more than 30 projects nationwide. The projects that LPO has supported include the first nuclear power plant to begin construction in the U.S. in the last three decades, one of the world’s largest wind farms, several of the world’s largest solar generation and thermal energy storage systems, and more than a dozen new or retooled auto manufacturing plants across the country.  (DOE)

Wednesday, December 10, 2014

Subsequent License Renewal: Nuclear Plant 60 Years & Beyond

When nuclear power plants are built, the Nuclear Regulatory Commission (NRC) has the authority to issue initial operating licenses for a period of 40 years. Beyond that, the reactors need license renewals, and the NRC hasgranted 20-year license renewals to 74 of the 100 operating reactors in the United States. These reactors may now operate for a total period of 60 years. They represent a cumulative capacity of a little more than 69,000 megawatts (MW). The NRC is currently reviewing license renewal applications for an additional 17 reactors, and expects to receive seven more applications in the next few years.
With the bulk of the existing nuclear fleet licensed before 1990, nearly all existing reactors will be more than 60 years old by 2050. Unless a utility applies for and receives a Subsequent License Renewal (SLR) that could further extend the operating lives of their reactors up to 20 additional years, the reactors will not generate power beyond age 60. Although no applications for an SLR have been submitted, several utilities are evaluating whether to apply for one, including Dominion Resources for its Surry Power Station Units 1 and 2 in Virginia (current license expiration dates of 2032 and 2033) as well as Exelon for its Peach Bottom Atomic Power Station Units 2 and 3 in Pennsylvania (current license expiration dates of 2033 and 2034).
From a regulatory perspective, the NRC determined in August 2014 that existing license renewal regulations were sufficient to support the SLR process. The NRC's determination was supported by the May 2014 findings of the NRC's Advisory Committee on Reactor Safeguards, which stated that the current NRC license renewal framework would support SLR.
In making the decision to extend the operating lives of nuclear reactors beyond 60 years, the NRC will consider the long-term safety and security of continued reactor operation. In addition to the NRC, the U.S. Department of Energy, through its Light Water Reactor Sustainability Program, is one of several organizations studying the effects of aging on nuclear power plant systems, structures, and components. Other industry groups involved in studying SLR include the Electric Power Research Institute and the Nuclear Energy Institute. International groups, such as the International Atomic Energy Agency and the Organization for Economic Cooperation and Development's Nuclear Energy Agency, are also involved in addressing life extension issues in support of nuclear power plants around the world.
U.S. utilities already make significant investments in maintaining and upgrading the current fleet of U.S. nuclear power plants to ensure safe, secure, and reliable operation throughout their 40- or 60-year lifetimes. The Electric Utility Cost Group estimated that the industry invested $6.4 billion in capital projects to upgrade and maintain nuclear power plant systems during 2013.  (DOE-EIA)

Wednesday, November 26, 2014

EPA Proposes Smog Standards

Based on extensive recent scientific evidence about the harmful effects of ground-level ozone, or smog, EPA is proposing to strengthen air quality standards to within a range of 65 to 70 parts per billion (ppb) to better protect Americans’ health and the environment, while taking comment on a level as low as 60 ppb. The Clean Air Act requires EPA to review the standards every five years by following a set of open, transparent steps and considering the advice of a panel of independent experts.

EPA last updated these standards in 2008, setting them at 75 ppb. EPA scientists examined numerous scientific studies in its most recent review of the ozone standards, including more than 1,000 new studies published since the last update.  Studies indicate that exposure to ozone at levels below 75 ppb -- the level of the current standard -- can pose serious threats to public health, harm the respiratory system, cause or aggravate asthma and other lung diseases, and is linked to premature death from respiratory and cardiovascular causes. 

Ground-level ozone forms in the atmosphere when emissions of nitrogen oxides and volatile organic compounds “cook” in the sun from sources like cars, trucks, buses, industries, power plants and certain fumes from fuels, solvents and paints. People most at risk from breathing air containing ozone include people with asthma, children, older adults, and those who are active or work outside. Stronger ozone standards will also provide an added measure of protection for low income and minority families who are more likely to suffer from asthma or to live in communities that are overburdened by pollution.

According to EPA’s analysis, strengthening the standard to a range of 65 to 70 ppb will provide significantly better protection for children, preventing from 320,000 to 960,000 asthma attacks and from 330,000 to 1 million missed school days. Strengthening the standard to a range of 70 to 65 ppb would better protect both children and adults by preventing more than 750 to 4,300 premature deaths; 1,400 to 4,300 asthma-related emergency room visits; and 65,000 to 180,000 missed workdays.

EPA estimates that the benefits of meeting the proposed standards will significantly outweigh the costs.  If the standards are finalized, every dollar we invest to meet them will return up to three dollars in health benefits. These large health benefits will be gained from avoiding asthma attacks, heart attacks, missed school days and premature deaths, among other health effects valued at $6.4 to $13 billion annually in 2025 for a standard of 70 ppb, and $19 to $38 billion annually in 2025 for a standard of 65 ppb.  Annual costs are estimated at $3.9 billion in 2025 for a standard of 70 ppb, and $15 billion for a standard at 65 ppb.  

A combination of recently finalized or proposed air pollution rules – including “Tier 3” clean vehicle and fuels standards – will significantly cut smog-forming emissions from industry and transportation, helping states meet the proposed standards.  EPA’s analysis of federal programs that reduce air pollution from fuels, vehicles and engines of all sizes, power plants and other industries shows that the vast majority of U.S. counties with monitors would meet the more protective standards by 2025 just with the rules and programs now in place or underway. Local communities, states, and the federal government have made substantial progress in reducing ground-level ozone. Nationally, from 1980 to 2013, average ozone levels have fallen 33 percent. EPA projects that this progress will continue.

The Clean Air Act provides states with time to meet the standards. Depending on the severity of their ozone problem, areas would have between 2020 and 2037 to meet the standards. To ensure that people are alerted when ozone reaches unhealthy levels, EPA is proposing to extend the ozone monitoring season for 33 states. This is particularly important for at-risk groups, including children and people with asthma because it will provide information so families can take steps to protect their health on smoggy days.

EPA is also proposing to strengthen the “secondary” ozone standard to a level within 65 to 70 ppb to protect plants, trees and ecosystems from damaging levels of ground-level ozone. New studies add to the evidence showing that repeated exposure to ozone stunts the growth of trees, damages plants, and reduces crop yield.  The proposed level corresponds to levels of seasonal ozone exposure scientists have determined would be more protective.

EPA will seek public comment on the proposal for 90 days following publication in the Federal Register, and the agency plans to hold three public hearings. EPA will issue final ozone standards by October 1, 2015. (EPA)

The proposal 

Wednesday, November 19, 2014

Keys Energy Center To Build Power Plant in Maryland

Keys Energy Center, a subsidiary of Genesis Power LLC, is a planned 780Mw combined cycle, natural gas-fired electric power generating facility located on 30 acres of a 170-acre parcel 1.25 miles east Brandywine. The estimated assessed value of the plant, which will generate enough electricity, according to Genesis, to power roughly 500,000 homes, will be $627 million. 
The County Council on Nov. 6 approved a payment in lieu of taxes for the plant project, under which Genesis will pay Prince George's $43.4 million over 18 years, roughly half of what it would have paid with no tax break. The Maryland-National Capital Parks and Planning Commission will receive $12.7 million over the life of the PILOT. The annual PILOT payments decline year-over-year as a result of plant depreciation.
The Keys Energy Center will be financed by EIF Keys LLC, a wholly-owned subsidiary of EIF United States Power Fund IV LP, a $1.7 billion private equity fund.
The project, located on a former gravel mine, will feature two combustion turbine generators, two heat-recovery steam generators, one condensing steam turbine generator, an air-cooled condenser, and a natural gas-fired boiler. It will connect to Pepco's power grid via a transmission line that passes adjacent to the plant, and an on-site substation. There will be a 140-foot-tall stack, and an anticipated 272 warm and hot start-ups per year.
The rural Brandywine site was chosen, according to Genesis, to minimize impacts on ecology, air quality, water supply, view sheds, noise pollution, transmission capacity and "adverse social economic impacts." On Oct. 31, the Maryland Public Service Commission approved the project, reporting "no witnesses or local residents objected to construction and operation of the project on any grounds."
Construction of the Keys Energy Center is expected to take 32 months and require 400 workers. Genesis will need another 25 full-time employees to manage the plant once it is operational in 2017.  (Washington Business Journal, 11/12/2014)

Keystone Pipeline Fails In Senate: Warren Buffet Benefits


By Norris McDonald

I have written about how any rejection of the shortcut Keystone Pipeline addition will benefit Warren Buffet by shifting transportation of the Canadian oil from pipeline to rail.  Buffet owns the rails that would transport that oil.  The U.S. Senate just voted to kill the Keystone Pipeline (even though it is already operating) by one vote (59 - 41) [S. 2280]*.  The approval of the pipeline needed 60 votes to be approved.

Buffet is banking on cancellation of the Keystone XL pipeline to increase his share of oil-by-rail shipments.

Warren Buffett's Berkshire Hathaway announced through a regulatory filing with the Securities and Exchange Commission that it bought $524 million worth of Suncor stock last quarter. Suncor is a Canadian oil company that derives most of its current oil production -- and future expansion plans -- from Alberta's oil sands. 

Buffett bought Suncor to help ensure a steady supply of oil for his Burlington Northern Sante Fe (BNSF) railroad.  Oil currently accounts for about 4% of BNSF's freight. That's expected to double over the next several years. 

Suncor owns huge tracts of oil sands resources from which oil production is projected to continue to grow.

Suncor doesn't have the same transportation issues as some other oil sands producers. It has locked up more than enough pipeline and rail capacity to move its current and planed production for several years. Plus, it owns several refineries, which help the firm avoid having to sell its crude for the depressed, mid-continent prices.

* S. 2280 uthorizes TransCanada Keystone Pipeline, L.P. to construct, connect, operate, and maintain the pipeline and cross-border facilities specified in an application filed by TransCanada Corporation to the Department of State on May 4, 2012.

Tuesday, November 11, 2014

Low Gasoline Prices Leading To More Guzzler Purchases

Over the last month consumers have shown a fresh interest in the kind of SUVs — Hummers, Lincoln Navigators, Ford Explorers — that typified America’s bigger-is-better mindset of twenty years ago. The new mindset among some car buyers is a consequence of a domestic oil boom that has helped cause global crude prices to plummet in recent months, with the cost of a gallon of gas now below $3. 

As oil prices hit a three-year low, it creates the potential to push the U.S. further away from its dreary post-recession mindset, leaving instead a nation with more affordable air and road transportation options, higher consumer confidence, and more gas guzzlers driving around.
Demand in developed countries (including the United States) is down over the last few years, the result mostly of improving automotive fuel efficiency. Meantime, supply is way up, helped by U.S. wildcatters riding the “fracking” boom in the prairies of North Dakota and the plains of Texas.
The current $78 for a barrel of the benchmark West Texas Intermediate could scale back exploration and production plans if prices continue to drop.
Before the financial crisis, trucks almost always outsold cars, in some months grabbing as much as 59 percent of the market. Post-recession, the industry has flip-flopped; cars are more popular.
But not in recent months. In September, the truck market share was 53.5 percent. In October, it was 53.6. That is the best sustained two-month stretch since 2005.
The environmental concerns are significant. All told, automobiles account for about 50 percent of an average household’s emissions, but that can swing widely based on the vehicle. A big SUV will produce about three times the annual greenhouse gas tonnage emitted by a Prius. (Wash Post, 11/10/2014)

Monday, November 10, 2014

President Obama's Net Neutrality Plan

The President's Statement
An open Internet is essential to the American economy, and increasingly to our very way of life. By lowering the cost of launching a new idea, igniting new political movements, and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known.

“Net neutrality” has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted. We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas. That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality.

When I was a candidate for this office, I made clear my commitment to a free and open Internet, and my commitment remains as strong as ever. Four years ago, the FCC tried to implement rules that would protect net neutrality with little to no impact on the telecommunications companies that make important investments in our economy. After the rules were challenged, the court reviewing the rules agreed with the FCC that net neutrality was essential for preserving an environment that encourages new investment in the network, new online services and content, and everything else that makes up the Internet as we now know it. Unfortunately, the court ultimately struck down the rules — not because it disagreed with the need to protect net neutrality, but because it believed the FCC had taken the wrong legal approach.

The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include:
  • No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.
  • No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences.
  • Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.
  • No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.
If carefully designed, these rules should not create any undue burden for ISPs, and can have clear, monitored exceptions for reasonable network management and for specialized services such as dedicated, mission-critical networks serving a hospital. But combined, these rules mean everything for preserving the Internet’s openness.
The rules also have to reflect the way people use the Internet today, which increasingly means on a mobile device. I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks.
To be current, these rules must also build on the lessons of the past. For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business. That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call, or a packet of data.
So the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.
Investment in wired and wireless networks has supported jobs and made America the center of a vibrant ecosystem of digital devices, apps, and platforms that fuel growth and expand opportunity. Importantly, network investment remained strong under the previous net neutrality regime, before it was struck down by the court; in fact, the court agreed that protecting net neutrality helps foster more investment and innovation. If the FCC appropriately forbears from the Title II regulations that are not needed to implement the principles above — principles that most ISPs have followed for years — it will help ensure new rules are consistent with incentives for further investment in the infrastructure of the Internet.
The Internet has been one of the greatest gifts our economy — and our society — has ever known. The FCC was chartered to promote competition, innovation, and investment in our networks. In service of that mission, there is no higher calling than protecting an open, accessible, and free Internet. I thank the Commissioners for having served this cause with distinction and integrity, and I respectfully ask them to adopt the policies I have outlined here, to preserve this technology’s promise for today, and future generations to come.

Friday, November 07, 2014

DOE Funds Cyber Attack Prevention Program For Utilities

The Department of Energy, as part of the Cybersecurity Risk Information Sharing Program (CRISP), awarded Norse Corp. a $1.9 million contract to give utilities within the program early warning of potential cyberattacks.  Since 2010 the Department of Energy has invested more than $150 million in cybersecurity research, development and commercialization projects led by industry, universities and national labs.

Norse runs a network of eight million sensors and crawlers that continuously analyze Internet traffic to identify compromised hosts, malicious botnets and other sources of digital attack. The network, located in data centers in 50 countries, also contains honeypots that emulate electrical industrial control systems, to lure in adversaries and determine which nation-states are probing certain types of software in the electric grid.

The announcement between CRISP and Norse marks the latest support by the federal government for platforms that facilitate cyberthreat information sharing between organizations. It also comes as Norse itself fends off a distributed denial of service attack against its own servers.

CRISP began over the past several years as a small DOE-funded pilot with five electric sector companies to help facilitate two-way sharing of unclassified and classified threat information. Previously utilities had complained that the government was not doing enough to share threat intelligence. In August, the CRISP program transitioned to an industry-managed and funded public-private partnership, managed by the Electricity Sector Information Sharing and Analysis Center, according to an October 31 blog post.

For utilities, having bigger picture threat information is quite useful.  There are some concerns about the type of information utilities are asked to share in CRISP, such as internal email and Web searches by employees. Municipal utilities can’t afford to hire cybersecurity experts, so access to the data Norse provides can be helpful in preventing a massive breach.

The contract with Norse is intended to give utilities access to early indicators of threats before they land in an energy company network. Norse will integrate its live attack intelligence with hardware from network security company FireEye Inc. to provide live threat analysis of traffic within and outside of the networks of energy companies participating in CRISP.

While there are other threat intelligence services, Norse differentiates itself in terms of the scale and velocity of information it can process. The company is registered as an Internet service provider (with only one customer, itself) but it processes data on a similar scale to a tier 1 ISP. It is in 50 countries, in 200 data centers and processes 160 terabytes of traffic per day.

Distributed Denial Of Service (DDOS) attacks try to flood a target’s servers with Internet traffic in order to knock it offline. (WSJ,  11/6/2014)

2 Japanese Nuclear Reactors Approved For Restart

Japanese Prime Minister Shinzo Abe has described nuclear power as essential to economic growth because Japan is now relying mostly on imported natural gas and coal for power.

One of the last major hurdles to restarting nuclear reactors in Japan was cleared Friday when a southern prefecture gave its approval.  Kagoshima prefecture’s decision clears the way for two reactors operated by Kyushu Electric Power Co. to reopen as soon as early next year, giving the nation its first electricity from nuclear power since September 2013 when the last of 48 reactors went offline.

Japan toughened safety regulations after the March 2011 triple meltdown at the Fukushima Daiichi nuclear power plant. The two reactors in the Kagoshima prefecture city of Satsuma Sendai cleared the regulations earlier this year.

Polls have consistently shown the public opposed to nuclear restarts by a 2-to-1 margin. In a poll conducted Oct. 18-19 by Kyodo News, 60% of respondents said they were against restarts, while 31% were in favor. Still, in the same poll, 48% said they supported the Abe administration, in line with other recent polls.

Other power companies hope to follow Kyushu Electric Power’s lead and reopen reactors next year. However, many of the nation’s 48 reactors are aging or located in seismically sensitive zones, and it is unclear when, if ever, the nation will once again get a significant portion of its power from nuclear plants.

The nuclear outages have hit the local economies of cities where plants are located, and electricity prices nationwide have risen some 20% since 2011 to cope with the rising cost of imported fuel.  (WSJ, 11/7/2014)

Monday, November 03, 2014

Availability of 2013 Greenhouse Gas Emissions Data

The Air Resources Board (ARB) and Québec’s ministère du
Développement durable, de l’Environnement et de la Lutte contre
les changements climatiques (MDDELCC) will release the 2013
greenhouse gas emissions data at 12:00 pm (noon) Pacific Time,
3:00 pm Eastern Time, on Tuesday, November 4th. 

The California 2013 GHG emissions data was collected under the
ARB’s Mandatory Greenhouse Gas Reporting Program and will be
posted on ARB’s Mandatory Reporting webpage at:

The Quebec 2013 GHG emissions, for emitters subject to the
Regulation respecting a Cap-and-Trade System for greenhouse gas
emission allowances (Cap-and-Trade Regulation), were reported and
verified under the Regulation respecting mandatory reporting of
certain emissions of contaminants into the atmosphere and will be
available at: 

Background and History


The Global Warming Solutions Act of 2006 (Assembly Bill 32, or AB
32) requires ARB to adopt regulations for the mandatory reporting
of greenhouse gas emissions. The Regulation for the Mandatory
Reporting of Greenhouse Gas Emissions went into effect on January
1, 2009. Over 700 entities, including facilities, fuel
suppliers, and electric power importers, are required to report
their greenhouse gas emissions data to ARB. Emissions data
reports from entities with 25,000 metric tons carbon dioxide
equivalent or greater emissions must be verified by
ARB-accredited third-party verifiers. The information in the
emissions data reports is used to support ARB’s climate change
programs, including California’s Cap-and-Trade Program.

More information about the Mandatory GHG Reporting Program is
available here: 


The Cap-and-Trade Regulation is intended for businesses that emit
25,000 metric tons or more of CO2 equivalent annually, reported
and verified under the Regulation respecting mandatory reporting
of certain emissions of contaminants into the atmosphere,
excluding emissions specified in the second paragraph of section
6.6. For the first compliance period (2013–2014), only the
industrial and electricity sectors are subject to the
Cap-and-Trade System. However, with the start of the second
compliance period (2015-2017) in January 2015, businesses that
distribute fuel will also be subject to the Cap-and-Trade

More information about the Cap-and-Trade System is available

California is in a drought emergency.
Visit for water conservation tips.

Thursday, October 30, 2014

NRC Resumes License Renewals For Nuclear Power Plant

graph of license expiration dates for operating U.S. nuclear reactors, as explained in the article text
Source: U.S. Energy Information Administration, based on U.S. Nuclear Regulatory Commission

Following a two-year hiatus, the U.S. Nuclear Regulatory Commission (NRC) has resumed issuing license renewals for nuclear power plants. On October 20, the NRC renewed the operating licenses for Limerick Generating Station Units 1 and 2, located northwest of Philadelphia, extending their license expiration dates by 20 years, to 2044 and 2049, respectively. With this action, the NRC has granted license renewals providing a 20-year extension to a total of 74 of the 100 operating reactors in the United States. Nuclear power accounted for 20% of total power sector electricity generation in 2013.

NRC has the authority to issue initial operating licenses for commercial nuclear power plants for a period of 40 years. The decision to apply for an operating license renewal is made by nuclear power plant owners, and it is typically based on economics and the ability to meet NRC regulations. Operating licenses are renewed by NRC for a period of 20 years. To date, no applications for a second, or subsequent, license renewal, which could extend nuclear plant operating lives to 80 years, have been filed.

Renewing an operating license is contingent on several factors, including the safe management and disposal of waste. The NRC must determine that it has reasonable confidence that spent nuclear fuel can and will, in due course, be disposed of safely. This is known as waste confidence. Waste confidence enables the NRC to license new reactors or renew their operating licenses without examining the effects of extended waste storage for each individual site pending ultimate disposal.

In June 2012, following the termination of the repository program at Yucca Mountain, the U.S. Court of Appeals for the District of Columbia Circuit struck down certain provisions of NRC's Waste Confidence Rule and stated that NRC should have analyzed the environmental consequences of never building a permanent waste repository. In response, the NRC issued an order in August 2012 that suspended actions related to issuing license renewals as well as new operating licenses, although the nuclear power industry continued to submit applications for license renewals. On September 18, 2014, the NRC issued the revised and renamed Continued Storage of Spent Nuclear Fuel rule, which became effective on October 20. With the issuance of the revised rule, the NRC may now resume issuing license renewals as well as new operating licenses.

NRC is currently reviewing license renewal applications for 17 reactors, including one for Indian Point Unit 2. Although the September 2013 expiration date of the original 40-year operating license for that plant is already past, NRC rules allow for continued operation of a reactor until the NRC completes its review of a pending license renewal if the application was submitted at least five years before the current license expires. Indian Point Unit 2, located on the Hudson River north of New York City, currently continues to operate according to this process, known as timely renewal. To date, Indian Point Unit 2 is the only reactor that has entered the process of timely renewal.

NRC also expects to receive license renewal applications from seven more reactors between 2015 and 2018. Plans for only one plant have not yet been announced; however, license expiration for this plant is not a near-term issue.

map of licensed renewal status of operating U.S. nuclear reactors, as explained in the article text
Source: U.S. Energy Information Administration, based on U.S. Nuclear Regulatory Commission


Tuesday, October 28, 2014

EPA Clean Power Plan

Additional Information
Agency requests public comment on additional information 
As part of the U.S. Environmental Protection Agency’s extensive outreach since issuing the propose dClean Power Plan, EPA is making additional information and ideas available for public comment in a notice of data availability (NODA). At the same time, EPA is following through on its commitment made in June to propose goals to reduce carbon pollution in areas of Indian Country and U.S. Territories where fossil-fuel power plants are located.
EPA has engaged in outreach to stakeholders since proposing the Clean Power Plan, including states, utilities, industry, public health and environmental groups, labor, and community groups. During the many meetings, conference calls, and the nearly 1.5 million public comments the agency has received so far, stakeholders have identified a wide range of ideas and information.
In issuing today’s NODA, EPA is seeking to ensure that all interested parties are aware of the issues and ideas that have been consistently raised by a diverse group of stakeholders, so that everyone has the opportunity to consider them as they formulate their comments, which are due on Dec. 1, 2014. Notices of data availability are commonly used to present additional information for the public to consider. They do not change a proposal, nor are they a complete summary of the wide variety of ideas that have been raised. They allow EPA to continue seeking ideas and comments on these and many other issues as the agency works toward a final rule that is flexible and empowers states to chart their own, customized path to meet goals for reducing harmful carbon pollution.
Today’s actions are part of the common-sense steps laid out in President Obama’s Climate Action Plan and the June 2013 Presidential MemorandumPower plants account for roughly one-third of all domestic greenhouse gas emissions in the United States. While there are limits in place for arsenic, mercury, sulfur dioxide, nitrogen oxides, and particle pollution emissions, there are currently no national limits on carbon pollution from power plants.
 In 2009, EPA determined that greenhouse gas pollution threatens Americans' health and welfare by leading to long-lasting changes in our climate that can have a range of negative effects on human health and the environment. Taking steady, responsible steps to cut carbon pollution from existing power plants will protect public health, continue the United States’ international environmental leadership, and move the nation toward a cleaner, more stable environment for future generations, while supplying the reliable, affordable power needed for economic growth.
Fact sheets and details about the NODA and the supplemental proposal
More information on President Obama’s Climate Action Plan:

Big Environmental Groups Contributing To Campaigns

Five environmental groups are on track to spend more than $85 million on key races this year according to spending plans in an internal memo.  This is the largest amount ever spent by environmentalists in an election cycle.  Te five green groups:
1) the Environmental Defense Action Fund,

2) Natural Resources Defense Council Action Fund,
3) League of Conservation Voters,
4) Sierra Club and
5) Billionaire Tom Steyer’s NextGen Climate — 

The record spending comes as green groups are worried about the fate of the Senate and the future of President Obama’s climate agenda, which they say is crucial to helping the U.S. and other nations curb greenhouse gas emissions and stave off disastrous climate impacts.
Out of those six Senate races, the groups have spent the most in Sen. Mark Udall’s (D-Colo.) reelection bid, totaling roughly $12.1 million. They have spent the second most in Rep. Bruce Braley’s (D) Senate bid in Iowa, totaling $7.2 million. 
The groups have also spent $6.6 million on Rep. Gary Peters (D) in Michigan, $4 million on Sen. Jeanne Shaheen (D) in New Hampshire, $2.4 million for Sen. Kay Hagan’s (D) reelection in North Carolina and $1.9 million on Sen. Mark Begich (D) in Alaska. 

NextGen Climate, founded by Steyer in 2013, has spent a little over $50 million in both state and congressional races as of Oct. 20. That puts NextGen in front as the biggest spender among the climate groups this election cycle. The League of Conservation Voters comes in second as it is poised to spend $25 million on campaigns. (The Hill, 10/27/2014)

Wednesday, October 22, 2014

Allison Macfarlane Stepping Down As NRC Chair

Allison Macfarlane
Allison M. Macfarlane, chairman of the Nuclear Regulatory Commission, announced Tuesday that she will resign to take a teaching job at George Washington University.

Macfarlane, who still has more than three years left in her term, will leave Jan. 1 and become director of the university’s Center for International Science and Technology Policy.  Macfarlane is trained as a geologist and a former professor at George Mason University. Macfarlane has served as NRC chair since July 9, 2012.

Macfarlane’s announcement comes one month after the Senate confirmed two new commissioners, Jeff Baran, an aide to departing Rep. Henry A. Waxman (D-
Calif.), and Stephen Burns, a former NRC general counsel. (Wash Post, 10/21/2014)

Monday, October 20, 2014

Watts Bar 2 Almost Ready To Produce Electricity

Watts Bar 2, the nuclear reactor now approaching completion in Tennessee was dropped by the Tennessee Valley Authority in 1988 after spending about $1.7 billion, when it was supposedly 80 percent complete. In 2007, the T.V.A. board voted to restart work.  The reactor is expected to cost $4 billion. The reactor will be a source of almost 3,000 jobs. It will be the first reactor of the 21st century.

Watts Bar 1, also mothballed in the 1980s, finally started in 1996. (NYT, 10/19/2014)

Thursday, October 16, 2014

PG&E Fined $1.4 billion For San Bruno Natural Gas Explosion

After nearly four years of investigation and hearings, Administrative Law Judges for the California Public Utilities Commission (CPUC) have recommended that PG&E be fined $1.4 billion for a series of violations of State and Federal law related to a gas leak, explosion and fire in San Bruno, California in 2010 that result in 8 deaths, dozens of injuries and extensive property damage. The CPUC also proposed fines associated with PG&E’s alleged failure adequately to maintain its gas facilities and to maintain records over several decades.
In four separate opinions, the ALJs found that PG&E committed 3,708 violations of various provisions the Code of Federal Regulations.  According to the ALJs’ orders, many of these violations occurred over a number of years, for a total of 18,447,805 days in violation. The $1.4 billion penalty, plus other amounts that the CPUC previously ruled must come from PG&E shareholders for expenditures to improve the safe operation of natural gas pipelines  brings the total of fines and required expenditures to more than $2 billion. PG&E has disclosed that the pre-tax impact of the fine on the Company, with related costs would be $4.75 billion.[
In addition to the civil penalties that have been proposed, PG&E has been accused in Federal indictments of criminal violations that would potentially expose the company to an additional $1.13 billion in fines if the company is convicted. The Company has pled not guilty to the criminal charges. A federal judge rejected PG&E’s motion  to remove reference to the San Bruno explosion from the criminal indictment against the company, ruling that the incident is a permissible count in  the government’s case.
The National Transportation Safety Board (NTSB) issued a Pipeline Accident Report following the tragedy finding:
the probable cause of the accident was the Pacific Gas and Electric Company's (PG&E) (1) inadequate quality assurance and quality control in 1956 during its Line 132 relocation project, which allowed the installation of a substandard and poorly welded pipe section with a visible seam weld flaw that, over time grew to a critical size, causing the pipeline to rupture during a pressure increase stemming from poorly planned electrical work at the Milpitas Terminal; and (2) inadequate pipeline integrity management program, which failed to detect and repair or remove the defective pipe section.
Contributing to the accident were the California Public Utilities Commission's (CPUC) and the U.S. Department of Transportation's exemptions of existing pipelines from the regulatory requirement for pressure testing, which likely would have detected the installation defects. Also contributing to the accident was the CPUC's failure to detect the inadequacies of PG&E's pipeline integrity management program.
The ALJ’s penalty order found a staggering range for potential fines under California’s statutes:
[T]he range of potential fines that could be imposed in light of the violations is from $9.2 billion to $254.3 billion. Nonetheless, the amount of the penalty to be imposed must be significantly decreased in consideration of PG&E’s financial resources.
The ALJs’ fines and remedies order found that the CPUC is required by California law to remit any penalty portion of its order to the General Fund. PG&E argued that such a result is only necessary resulting from a civil action in state Court.  (Martens Law)