Innovation in the electricity market does not occur as it would in other markets. For starters, most areas of the country are served by monopoly providers. This means there is very little incentive to seek new ways to create electricity. Secondly, most providers are heavily regulated, often compounding risk-reluctant utilities with risk-averse regulators. In fact, according to a recent report from the American Energy Innovation Council, electric utilities spend a paltry 0.1 percent of their revenue on research and development, far below the U.S. industrial average.

The upside of this conservativeness has been the creation of ubiquitous, reasonably priced, reliable service. This has served our society well for the last hundred years, but unfortunately the future is unlikely to be like the past. Many parts of our electric system are facing the end of their useful lives and need to be replaced. In addition, the fuels we use to power the electric system are subject to risky and disruptive price volatility.

A new set of environmental considerations is forcing us to rethink the industry’s nearly complete reliance on traditional fuels. If we are going to “win the future,” we will need an electricity sector that is more 21st century and less 19th century. The challenge is how to innovate without jeopardizing the widely available, affordable, reliable service consumers have depended upon.

That’s where renewable energy standards can come in to play. The basic principle is similar to a fundamental concept in financial planning – build a diverse investment strategy that can weather changes. Renewable energy standards introduce diversity by lowering market barriers and creating an opening for renewable technologies that have different attributes and risk profiles than traditional fuels. Colorado’s experience shows that this approach has led to impressive results.

In six years, Colorado has diversified its electricity mix and built a thriving renewable energy industry while maintaining stable electricity bills. We have seen the cost of renewable energy credits for large photovoltaic solar projects decline by 75 percent, and wind in Colorado is now a least-cost energy resource.

In 2004, the voters of Colorado passed the renewable energy standard ballot initiative. This was the first voter-approved renewable energy standard in the country – and with legislative support it evolved over time to become one of the most progressive. The initiative set a requirement that Colorado’s investor-owned utilities generate 10 percent of their retail sales from renewable resources by 2015.

Economic Development
As it became apparent that the state’s largest utility would meet the renewable requirements years ahead of schedule, the Colorado General Assembly has increased the standard twice to the now-existing 30 percent by 2020. Finally, the voters and the General Assembly both mandated the entire program be halted if it increased utility bills by more than 2 percent. You get the picture: Innovate but contain the risk.

In 2004, Colorado’s IOUs had negligible amounts of wind and solar power. Today, 12 percent of their electricity comes from these resources. Colorado’s utilities have integrated these variable resources with only minor costs and have led the country in techniques to integrate intermittent resources on the grid.

On the economic development side, Colorado is now home to one of North America’s largest concentrations of wind turbine and tower production facilities. Our solar manufacturing cluster includes breakthrough thin-film technology that is revolutionizing the production of PV. As a first mover, Colorado is also home to many of the research, support, production and sales operations that are driving renewable energy expansion.

While Colorado’s largest utility, Xcel Energy, has exceeded its goals, it has stayed within the 2 percent cap set by the legislature. In fact, despite Xcel making the major capital investments in its Colorado system, the average residential electricity bill has failed to keep up with inflation over the last five years.

Colorado’s renewable energy standards proof is in the pudding. We have a much more diverse, robust, modern energy portfolio. We have seen significant economic development. We have kept costs reasonable. What else could you want?

Published In: EnergyBiz Magazine November / December 2011

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

What will the presidential election in November mean for U.S. environmental policy? Although we don’t yet know who the Republican candidate will be, we know all too well what will be on his environmental agenda. The endless televised debates have exposed what the New York Times called “the broken windows of the Republican idea factory.” It’s not a pretty sight.

The candidates all share the same approach to the environment. Ron Paul plans to govern primarily by abolishing things. His hit list includes America’s foreign wars, but also the Federal Reserve, most federal taxes, the Environmental Protection Agency (EPA), and all limits on offshore drilling and the use of coal and nuclear power. Rick Santorum agrees that energy companies must be entirely deregulated. Newt Gingrich will build a moon colony by 2020, and will replace the EPA with a new agency that “will operate on the premise that most environmental problems can and should be solved by states and local communities.” Mitt Romney promises to “eliminate the regulations promulgated in pursuit of the Obama administration’s costly and ineffective anti-carbon agenda,” and to slow down or block regulations in general whenever industry complains about their costs (i.e., always).

Do we really need to slow down the snail’s pace of current environmental regulation, and pay more attention to industry as it bemoans the cost of compliance? Consider the case of coal ash: produced in stupendous quantities by coal-burning power plants, it contains dangerous concentrations of arsenic, lead, mercury and other toxic metals. Improper disposal has led to contamination of groundwater in many communities, and to occasional disasters such as the billion-gallon sludge spill that inundated Kingston, Tennessee in 2008.

This looks like the poster child for hazardous waste regulation – except that the coal industry has consistently used its considerable political clout to win special treatment. Back in 1980, near the dawn of modern waste regulations, Congress directed EPA to study coal ash in detail before applying hazardous waste rules to it.

That process of study has already stretched over more than 30 years. Under the Obama administration, closure was finally in sight; in 2009, EPA Administrator Lisa Jackson said she would complete regulation of coal ash that year. It turns out that the industry’s clout is undiminished, and the revised Obama plan is to punt until after the election. In January a coalition of environmental groups announced plans to sue EPA to force regulation of ash disposal.

Industry’s grumbling about regulatory costs has taken two forms. One is the claim of job losses: regulation of coal ash as hazardous waste, according to an industry-sponsored report, would eliminate more than 300,000 jobs a year. I re-examined their report and found it to be close to a complete fabrication; using standard methods of economic analysis, regulation of coal ash as hazardous waste would cause a net annual gain of 28,000 jobs.

A more exotic claim is that the stigma created by regulation of coal ash disposal would destroy the market for ash reuse. More than one-third of coal ash is recycled, often used in construction materials such as concrete, cement, and wallboard. Although EPA’s proposed rules explicitly exempt ash recycling, the industry claims that regulation of ash disposal as hazardous waste would stigmatize all uses of ash, including recycling.

If coal ash disposal bears a regulatory stigma, is it deserved? Nuclear waste is stigmatized as dangerous, which is a huge setback for any plans you might have to bury it in your backyard. No one, however, would count the lost income from your inability to open a backyard nuclear waste dump as a cost of regulation. Nor would we count the loss of income if sales dropped for a different product that was mistakenly stigmatized as nuclear waste. The latter is exactly parallel to the purported stigma effect on coal ash reuse.

Liz Stanton and I critiqued the stigma theory in testimony on ash disposal rules in 2010. At the time, the idea seemed purely hypothetical. Now the industry alleges that regulatory uncertainty and “toxic” publicity are already driving down recycling; after soaring under the previous administration, the ash recycling rate stalled in 2008-2009 and declined in 2010.

The industry has missed the obvious explanation for these trends. Coal ash is created by electricity generation; ash reuse often occurs in construction. In the economic boom before 2008, construction grew more rapidly than electricity generation, so markets for ash reuse expanded relative to the supply. In the crash after 2008, the reverse was true: construction declined more steeply than electricity generation, so reuse markets shrank relative to ash supply.

Is regulation too expensive because it calls hazardous materials hazardous, and clueless customers could accidentally extend the resulting stigma to other products? In rational debate in ordinary times, this notion would be greeted with derisive laughter, at best. Yet in a year when leading presidential candidates discuss statehood for a non-existent future moon colony, or plans to make immigrants engage in voluntary self-deportation, it’s hard to know what will count as serious.

The current administration’s environmental policies have frequently been a disappointment, but the choice in the November elections seems sure to be between disappointment and disaster.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Taxpayers took a bath with Kansas plant

While much has been made of the $535 million loan guarantee made to the failed Solyndra Corporation in 2009 to encourage alternative energy, you may have missed the court decision this week, halting expansion plans for a Kansas coal plant facing similar problems.

The ruling underscores how deadbeat coal plants can be even more costly for taxpayers.

Back in 1980, Sunflower Generation Corporation in Kansas received $543 million in federal loans and loan guarantees (taxpayer money). Like Solyndra, they were not able to pay that money back. So they arranged deals with the federal government to “restructure” the loans, multiple times. Sunflower was unable to repay taxpayers due to financial strain related to over-built Holcomb I, the existing coal plant Sunflower owns.

Sunflower now charges ahead with plans for an even bigger facility. The proposed multi-billion dollar, 895-megawatt coal-fired power plant expansion is designed to serve the western grid through a deal with Colorado-based Tri-State Generation and Transmission Association. Kasas gets the pollution, Colorado gets most of the power.

Fans of unEarthed may remember the outrageous backroom deals attempted by Kansas coal-boosters to get this project built.

This week, we received good news that the days of wasting taxpayer money on polluting, taxpayer-subsidized, coal plants may come to an end.

A decision by a federal district court in Washington, D.C. will require a thorough environmental examination to determine the public health impacts if the expansion plant is built, and whether alternatives for power generation might be available in one of the sunniest and windiest places in the continental USA.

For Americans who pay taxes (and breathe), this decision is a breath of fresh air.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Sunflower project will face thorough environmental review, new administration decision

Washington, D.C. — Judge Emmett Sullivan, in the federal district court today, effectively blocked an 895-MW coal-fired power project in western Kansas—the notorious Sunflower expansion—until a thorough environmental review of the project is finalized. The decision emphasized the significant impacts to human health that would arise if the project was constructed.

 

The current Sunflower Electric Power Plant in Holcomb, KS. (DOE)

The ruling is the latest chapter in a lawsuit brought by the Sierra Club against the Rural Utilities Service (“RUS”), an arm of the U.S. Department of Agriculture, over its ongoing financial support for and approval of the Sunflower expansion. In March 2011, the court found that RUS had failed to consider environmental impacts of the proposed Sunflower plant expansion, in violation of federal law. The government has a financial stake in the plant because of loan arrangements made with plant owners by the federal Rural Utilities Service.

In his decision, Judge Emmett Sullivan emphasized that the expansion will need additional approval from the federal government as a result of changes to the project from earlier configurations. He enjoined the government from issuing any additional approvals pending a full “environmental impact statement” (“EIS”) disclosing all of the environmental and human health impacts of the project, which includes harm to human health as well as contribution to climate change. An EIS must also discuss “alternatives” to a proposed project, such as renewable energy projects and energy conservation.

“The people of Kansas and downwind states will now get their legitimate public health concerns heard,” said Jan Hasselman of Earthjustice who led the lawsuit on behalf of the Sierra Club. “Once the facts of this dirty and dangerous project are exposed to the public, we think that the federal government will have to just say no.”

“The financial and public health risks involved in the development of this project have always made it a bad deal for those of us who will have to breathe dirty air and pay unnecessary costs for this coal plant,” said Lee Messenger of Garden City, an opponent of the expansion. “Sunflower needs to be accountable for the debt it has already created with its existing coal plant, not get in over its head again with another risky and unneeded coal plant.”

“From a public health and environmental perspective, coal-fired power is the most expensive option available,” said Scott Allegrucci of Sierra Club’s Beyond Coal Campaign. “We are confident that once the environmental impacts of this plant are considered in light of alternatives, the project’s impacts will be unacceptable and it will be rejected.”

According to recent American Wind Energy Association fourth quarter data, Kansas has the largest number of wind projects under construction in the nation. This decision comes as utility companies and developers across the country are abandoning planned coal plants as unnecessary and too costly and are moving toward a greater reliance on clean energy.

Background:

In this lawsuit, Sierra Club argued that the Rural Utilities Service (RUS), a branch of the U.S. Department of Agriculture, provided extensive financial support—including writing off millions of dollars of public debt—so that Sunflower could build the new power plant. These agreements left the RUS with close oversight of Sunflower’s business operations and required federal approval to proceed with the Holcomb project. Much of Sunflower’s financial struggles stem from overbuilding capacity at their existing unit, Holcomb I, which is a scenario that could be repeated if Holcomb II is constructed since neither Sunflower nor Tri-State, the Colorado partner, has demonstrated the project is needed. The lawsuit argued that, as an essentially federal project, greater environmental review and consideration of alternatives—like greater conservation and renewables—is required.

Meanwhile, when Kathleen Sebelius was governor, the state rejected the proposed plant because of its potential, massive contributions to climate change. While popular with citizens, the decision upset coal-connected legislators. But, try as they did, they couldn’t overcome Sebelius’ vetoes.

Even when Sebelius left office—and was replaced by a governor who quickly gave Sunflower the green light—the coal lobby was stymied by legal pressures and by Rod Bremby, the state environmental health chief who had first rejected the plant permit under Sebelius. He held the line for three years until finally being fired over the issue. His successor promptly issued the permit last December. An appeal of the air permit is pending in the Kansas Supreme Court.

• Read the Court’s March 2011 decision on the merits.
• Read today’s ruling effectively halting the project.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

As communities battle toxic air, business shapes EPA and state regulation

When the top environmental regulator in Kansas rejected its bid to build two new power units in 2007, citing health concerns, Sunflower Electric Power Corp. refused to take no for an answer. When the governor vetoed bills that would have paved the way for construction in 2008 and 2009, Sunfloweragain refused to relent.

The company’s persistence paid off. In 2009, the new governor approved construction of a new coal plant in the tiny city of Holcomb, so long as Kansas legislators backed renewable energy policies at the same time. The state regulator who initially denied Sunflower’s permit? He was let go.

Sunflower said it won the permit on merit, and that political influence was not a factor.

Yet the company’s success is a telling snapshot of how, when industry flexes its muscles over Clean Air Act issues, it often wins. From Kansas to Louisiana to Texas, Wisconsin and Ohio, community groups have fought new plants, expansions and chronic emissions – only to see industry score victories with regulators and politicians.

“We’re not protecting public health today,” said Jim Tarr, an air pollution consultant in California who worked as an engineer for the Texas Air Control Board in the 1970s. “One of the primary reasons we’re not is that the environmental agencies have been co-opted by the people doing the polluting.”

Industry’s influence plays out at every step of the process: From the campaign contributions it spreads to sway policy to its role shaping clean air rules to its resistance to enforcement actions brought by regulators.

Its reach is deeper than most realize.

Two just-published reports – one from academic researchers, the other from the Environmental Protection Agency’s own inspector general – detail industry’s role in shaping Clean Air Act regulations meant to protect communities from dirty air.

The academics’ study – Rulemaking in the Shade: An Empirical Study of EPA’s Air Toxic Emission Standards – examined the level of input by industry and public interest groups at key stages as the EPA wrote rules for more than 100 major industries. Those stages: Before a proposed rule was published; once notice was given and the public weighed in; and during the final rule-writing process.

The results surprised even the study’s authors:

• At the early, pre-proposal stage, industry had an average of 84 informal communications with the EPA per rule compared to less than 1 for public interest groups;
• During the public comment period, industry provided more than 8 of every 10 comments;
• Changes to the final rule favored industry 4-1 over those benefiting public interest groups.

“We expected imbalance in engagement, but did not imagine it would be that badly skewed,” said co-author Wendy Wagner, a professor at the University of Texas School of Law.

For every two industry comments, she said, one change was made weakening the final rule.

Industry said its motivation is no secret.

“It’s survival,” said Robert Bessette, president of the Council of Industrial Boiler Owners, a trade group representing manufacturers that use boilers to power their operations. “Industry, when pushed up against the wall, reacts.”

The council is pushing back against a proposed EPA rule to curb toxic emissions from boilers – an effort that includes prodding Congress to pass legislation and meeting with the EPA and the Office of Management and Budget, Bessette said.

Political contributions help ease industry’s access. Thirteen states house three-fourths of the nation’s most worrisome air polluters – facilities listed on an EPA “watch list” of alleged violators that haven’t faced timely enforcement. Those companies, their corporate parents and executives have made nearly $60 million in overall state campaign contributions since 2006, the Center for Public Integrity found.

Facilities in the six congressional districts with the greatest number of watch list sites contributed $120,350 to their federal representatives since 2006.

Uneven state enforcement

In some states, industry influence is clear.

The EPA IG’s recent report, EPA Must Improve Oversight of State Enforcement, documents breakdowns in Clean Air Act enforcement that can translate into fewer health protections for communities in the shadow of power plants, refineries and chemical manufacturers.

“When neither states nor EPA takes enforcement actions when needed, these health benefits are not realized and premature deaths and illnesses are not prevented to the extent that they could be,” the IG concluded. “As a result, EPA cannot assure that Americans in all states are equally protected from the health effects of pollution or that enforcement of regulated entities is consistent nationwide.”

The IG said a culture of protecting industry was clear in some states with the weakest records of enforcing the Clean Air Act, such as Louisiana.

“State, EPA regional, and external interview responses attributed Louisiana’s poor performance to several factors, including a lack of resources, natural disasters, and a culture in which the state agency is expected to protect industry,” the IG found.

The EPA did not respond to the Center’s questions about Rulemaking in the Shade. In its reply to the IG’s report, the agency questioned some of the research methodology – but ultimately agreed “that state enforcement performance varies widely across the country.”

“We also agree that there are steps EPA Headquarters and regional offices can and should take to strengthen our oversight and address longstanding state performance issues,” the EPA replied.

That industry weighs in with frequency and success is no surprise to environmental activists, people who live near plant fence-lines and some political leaders who have long tangled with Big Oil.

“The fight that industry wages against any kind of threat to their pollution is across the board,” said James “Jim” Cox, a retired state senator from southwest Louisiana. “It boils down to the control the industry has of the community. It’s a jobs situation. It’s a well-organized lobbying situation.”

Health fears in Mossville

One long-running battle centers on Mossville, a small African-American community founded in the 1790s across from Lake Charles, La.

Fourteen major industrial facilities surround the community, including an oil refinery, a coal plant, chemical manufacturers and one of the largest clusters of vinyl production facilities in the United States.

For 15 years, residents have been asking government and industry to relocate them from the powerful odors and toxic chemicals released by the plants, citing reports showing dangerous levels of dioxins in the air. Dioxins, researchers say, can cause cancer and reproductive damage and slow child development.

In 1998, the federal Agency for Toxic Substances and Disease Registry found that Mossville residents had an average dioxin blood level three times above that in the typical U.S. community.

The report, however, did not identify the source of the exposure. A later ATSDR report said residents in the neighboring parishes of Calcasieu and Lafayette had typical blood dioxin levels. But, residents say, that report included a larger group outside Mossville. Their health fears continue.

Wilma Subra, a chemist from Louisiana who studied the community, produced a report linking dioxin levels to local industry.

As Mossville residents pressed for answers, the government continued to issue permits fueling industry’s growth. The EPA’s enforcement website lists more than a dozen facilities in Lake Charles out of compliance with the Clean Air Act.

In 2005, the people of Mossville filed an environmental racism petition with the Inter-American Commission on Human Rights, part of the Organization of American States. When the commission accepted the complaint last year, it became the first such U.S. case to move forward.

“Filing the human rights petition is really our last resort,” said one of the community’s lawyers, Monique Harden, co-director of the public interest law firm Advocates for Environmental Human Rights.

“It’s been 15 years of evolving strategies,” Harden said. “Residents want a voluntary relocation program that they help to develop. They want medical care services. They want pollution reduction and cleanup of contaminated sites. So it’s been years of trying to get both the industry in the Mossville area and governmental agencies to meet the community on these remedies.”

Some residents have been relocated, but the petition seeks a more far-reaching move-out for those who want it. It asks that the U.S. “refrain from issuing environmental permits and other approvals that would allow any increase in pollution.”

Lake Charles-area companies deny causing any harm to residents, saying they strive to curtail emissions.

“We strongly support efforts to reduce dioxins in the environment,” Georgia Gulf Corp., which makes a raw ingredient in polyvinyl chloride, or PVC, wrote on the Business & Human Rights Resource Centre website.

“Our industry is responsible for quality products that consumers want, buy and use every day. Medical supplies, medicines and pharmaceutical products, computer keyboards, PVC pipe, automobile dashboards, toys and sporting goods and food wrap are products Louisiana plants help make, and these products in turn help Louisianans enjoy a healthy and productive lifestyle,” the company wrote.

Echoing other facilities, PPG Industries said it operates “in a manner that is protective of public health, safety and the environment.” ConocoPhillips, the world’s fifth-largest refiner, declined an interview request but cited its website, saying it is committed to working with its neighbors.

‘They love their polluters’

In some communities, activists feel like lone wolves.

In Longview, in East Texas, the Eastman Chemical Co. plant is among the top national emitters of ethylene glycol, chloromethane and chloroform – compounds that can damage the nervous system, liver, kidneys or lungs. EPA records show $420,004 in Clean Air Act penalties levied in the last five years against Eastman, which manufactures more than 40 major chemical and polymer products.

Eastman said it diligently monitors emissions and its Longview site meets air-quality standards. “Protecting air quality is an essential and complex part of Eastman’s environmental program,” the company said in a statement. “The men and women at Eastman not only strive to improve Eastman’s compliance with the Clean Air Act because it is the law, but also because we and our families live in the adjacent communities.”

Over a five-year period from August 2005 to August 2010, no residents filed complaints about the facility with the Tyler office of the Texas Commission on Environmental Quality, records show.

That is not surprising, some say, in a region proud of the economic jolt industry provides, where Eastman Road runs astride the plant and where, in 2009, the Texas Chemical Council awarded Eastman its “Excellence in Caring for Texas” award. The plant employs more than 1,500, placing it among the largest employers in a region replete with industry.

Tammy Cromer-Campbell, a professional photographer and environmental activist, is a rare breed in Longview: a critic who stands up against pollution. She said the mission has been lonely. “They love their polluters,” Cromer-Campbell said with a laugh while driving near Longview’s industrial hub.

A co-founder of a group called WECAN – Working Effectively for Clean Air Now – she rose up at meetings of the Northeast Texas Air Care, a cooperative association of local governments and industries. Cromer-Campbell found herself the outsider looking in.

“Whenever I go to those meetings, I don’t have a crowd of people behind me, supporting me. It’s all industry,” she said. “I got burnt out. We couldn’t get a lot of other people to join me.”

Picking up the slack

Some Texas officials are frustrated, too.

Two veteran lawyers with the Harris County Attorney’s Office – whose jurisdiction includes Houston and the nation’s largest petrochemical complex – seem to be in perpetual conflict with the Texas Commission on Environmental Quality.

One, Terry O’Rourke, called the agency “a lap dog for polluters” and said state regulators are too quick to overlook companies that poison the air and water. O’Rourke said his office, which represents the Harris County Pollution Control Services Department, has picked up the slack.

“We have to stop the pollution at its source,” said O’Rourke, who began prosecuting polluters as an assistant state attorney general in 1973. “You do it the same way you write speeding tickets. If you don’t enforce the law, everybody will be driving 100 miles per hour.”

His colleague, Rock Owens, said the TCEQ “treats the regulated community as if they are customers. It’s always with an eye toward the convenience and the bottom line of the major players.”

Owens cited a recent example. On five occasions from April 2008 through March 2010, according to a civil complaint drafted by the county attorney’s office, a Shell Chemical plant east of Houston “illegally released over eight tons of toxic petrochemicals into the air in Harris County, including known carcinogens such as benzene and butadiene. . .”

Shell, however, failed to report the releases to the county within 24 hours, as required. The TCEQ fined Shell $71,900 for one of the incidents in 2008. Owens’s office deemed this insufficient and went after Shell, preparing a complaint in 2010 that sought more than $6 million in penalties.

The case was settled this year, with Shell agreeing to pay $500,000 to the county. O’Rourke said he remains annoyed the TCEQ didn’t move more aggressively.

“That, to me, is fundamentally offensive,” O’Rourke said. “TCEQ slapped their wrist. We’ve got kids who play in schoolyards in the shadow of these [plants]. Most of them are black and brown, and a lot of them are poor. Just because they’re poor doesn’t mean they should have to breathe crap.”

He added: “We can have the largest petrochemical complex in the United States and still have a clean environment. They are not incompatible.”

In a written statement, Shell said that while it “disputes the claims and allegations made by Harris County, we are complying with the settlement in the interest of securing a timely and effective resolution to this matter.”

The TCEQ said in a statement that it has fined Shell more than $1.4 million over the past five years as a result of 26 enforcement orders, many involving “unauthorized emissions and failure to comply with permitted emission limits.”

The TCEQ “emphasizes compliance to protect our citizens from harm, coupled with swift, sure and firm enforcement for those who do not comply,” the statement said.

Owens scoffed at the amount of the TCEQ penalties, saying large companies like Shell consider them “just another part of doing business in Texas. Pay a little fine, go about your way – that’s not an effective deterrent.”

Shell, which reported profits of $18.6 billion in 2010, cited $7 billion in profits in the third quarter of 2011 alone.

Working Washington

Big industry pays big lobbying fees to press its agenda in Washington.

The Washington lobby shop for San Antonio-based Valero Energy Corp., for instance, spent $496,000 in the first three quarters of this year pressing environmental issues ranging from air and water quality to fuel specifications.

The company also hired outside lobbyists to work the aisles of Congress and federal agencies, according to Senate lobbying disclosure records.

One firm, Bracewell & Giuliani, spent $140,000 lobbying for Valero on “clean air, energy legislation and other environmental issues relating to the refining industry.” Among the lobbyists is a former acting general counsel for the EPA.

Six Valero plants – five refineries and one ethanol plant – are on the EPA’s November Clean Air Act watch list.

Still, the company’s message to its shareholders has been reassuring. Even if “one or more [enforcement actions] were decided against us, we believe that there would be no material effect on our financial position or results of operations,” Valero said in its 2010 annual report.

A Valero spokesman declined to comment, saying, “Our advocacy efforts are outlined in required filings.”

‘There were abuses’

Industry often prevails over critics – and, sometimes, regulators.

In Holcomb, Kan., residents so far have been unable to stop the Sunflower power plant even after the state initially shot it down.

After Roderick Bremby, then head of the Kansas Department of Health and Environment, denied Sunflower’s initial permit application, project supporters pushed bills in the state legislature clearing the way for construction.

In 2008 and 2009, Democratic Gov. Kathleen Sebelius vetoed the bills.

Less than a month after an April 2009 veto, Sebelius left to become secretary of the U.S. Department of Health and Human Services. Lt. Gov. Mark Parkinson took over, and, by May 4, had struck a deal with Sunflower.

Before the plant could be built, it had to get a permit – a lengthy process allowing public input. The clock was ticking: If the permit wasn’t issued by January 2011, new rules would require the plant to do more to reduce greenhouse gas emissions.

In November 2010, as the January deadline loomed, Parkinson fired Bremby.

In a statement the week after the firing, Parkinson said the decision wasn’t related to the Sunflower permit. “When evaluating the permit application,” Parkinson said, “what I have told the acting Secretary is simply this: I don’t care whether you approve the permit or not, but I do care that Kansas follows the laws and regulations governing the process.”

But Bremby, who is now commissioner of the Connecticut Department of Social Services, said during a speech at a Kansas community college this February that the permit approval process “was not a benign, pristine, routine bureaucratic process. Unfortunately, there were abuses.”

On Dec. 16, 2010, the Kansas department approved Sunflower’s permit.

Earthjustice, a nonprofit environmental law firm, soon challenged the permit in court, accusing state officials of rushing the permitting process because of pressure from Sunflower and the governor’s office. The result, the firm alleged, was a flawed permit.

Among the concerns expressed in Earthjustice’s legal brief: State regulators allowed Sunflower to underestimate the amount of toxic air pollution it would release, shielding it from requirements to install better pollution controls.

Sunflower spokesperson Cindy Hertel said the permit “was thoroughly vetted” by state regulators. “As far as influencing anyone, we certainly did not,” she said.

Some in Holcomb want the new plant for the economic boost Sunflower promises will come, but others are worried. Lee Messenger, who lives a few miles from the current plant and the proposed site for the new one, fears the expansion will drain the town’s water supply and pollute the air.

“We don’t get a chance to vote on anything,” said Messenger, 81. “These politicians like to think we elected them to take care of us. But they take care of themselves first. “

Kansas regulators declined to comment on Sunflower’s permit, citing the ongoing court case. In a brief, lawyers with the state attorney general’s office wrote, “The accusations of political bias and procedural impropriety are factually unsupportable in the administrative record.”

Business-friendly regulators

Some grassroots groups worry that state environmental agencies lean too heavily toward business interests.

In Wisconsin, Scott Walker swept into the governor’s office in 2010 on a message of job creation. Soon after, he appointed Cathy Stepp, a former Republican state senator, to head the state’s Department of Natural Resources.

Stepp had been a vocal critic of the department she now leads. In June 2009, she posted on aconservative blog that some who worked at the state agency “tend to be anti-development, anti-transportation, and pro-garter snakes, Karner blue butterflies, etc. … So, since they’re unelected bureaucrats who have only their cubicle walls to bounce ideas off of, they tend to come up with some pretty outrageous stuff that those of us in the real world have to contend with.”

The department’s No. 2 official, Matt Moroney, said that before joining the department, Stepp “was representing a constituency. She was listening closely to some of her business friends and looking at how to improve DNR.”

Her current job, he said, “is a completely different role for her.” Stepp has focused on cutting waste and streamlining the agency. This October, department officials testified in favor of a bill in the state legislature that would restrict the number of times regulators could ask companies for more information on a permit application. It would also impose stricter time limits for the department to approve permits.

Environmental groups say the department’s new approach, coupled with tightening budgets, will undermine attempts to curb pollution. “They are going to these public hearings and advocating for taking their own authority away,” said Shahla Werner, director of the state’s Sierra Club chapter. “It’s surreal to watch.”

Paint-eating pollution

Middletown, Ohio, has lived under the cloud of AK Steel for nearly a century. The largest employer in the Ohio town 40 miles north of Cincinnati, AK Steel has for decades pumped out pollution that takes the paint off residents’ cars and settles in their siding, some say.

“It got into people’s gardens, and kids playing in the yard would come in with their feet black from the soot,” said longtime resident Rachael Belz.

In 2000, the Department of Justice sued AK Steel over violations of the Clean Air and Clean Water acts. The Ohio Environmental Protection Agency joined the suit, which settled out of court and required the company to clean up Dicks Creek, which runs between the facility and a neighboring school. AK Steel committed to $66 million in pollution-control upgrades.

The facility remains on the EPA’s Clean Air Act watch list, and some say problems linger. “We still have soot in our house,” said Belz, who suffers from asthma. “You can’t sit outside on your porch for more than 10 to 15 minutes without crap flying into your coffee.”

An AK Steel spokesman said the company does not know why it is on the watch list and has complied with regulations. He declined further comment.

During the civil case, residents launched a campaign to pressure the company to meet its promises. Elected officials, community organizer Belz said, made themselves scarce.

But politicians, from the city council to the governor’s office to U.S. Rep. John Boehner – a regular beneficiary of AK Steel contributions – were on hand to cheer the company’s 2010 expansion plan. Boehner did not reply to interview requests.

“We do our campaigns in part,” Belz said, “because we can’t count on our politicians.”

Paul Abowd, Rachael Marcus and Fred Schulte contributed to this report.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

WASHINGTON – Today the U.S. Environmental Protection Agency (EPA) announced the first national standards to protect American families from power plant emissions of mercury and air toxics like arsenic, acid gas, nickel, selenium, and cyanide. These new Mercury and Air Toxics Standards will slash emissions of these dangerous pollutants by relying on widely available, proven pollution controls that are already in use at more than half of the nation’s coal-fired power plants. Here’s what people across the country, including environmental, faith, public health and business leaders are saying about Mercury and Air Toxics Standards:

Albert A. Rizzo, MD, American Lung Association:

“Since toxic air pollution from power plants can make people sick and cut lives short, the new Mercury and Air Toxics Standards are a huge victory for public health. The Lung Association expects all oil and coal-fired power plants to act now to protect all Americans, especially our children, from the health risks imposed by these dangerous air pollutants.”

American Businesses for Clean Energy, American Sustainable Business Council, Ceres, Environmental Entrepreneurs, Main Street Alliance and the Small Business Majority:

“Our experience has shown that the Clean Air Act yields substantial benefits to the economy and to businesses, and that these benefits consistently outweigh the costs of pollution reductions. We believe the finalization of MATS [Mercury and Air Toxics Standards] is a meaningful step towards economic recovery and growth.”

New York City Mayor Michael Bloomberg:

“Today, the President has done the right thing by ignoring the false claims of a narrow special interest and siding with the public health and the public good. The new EPA mercury standards will save countless lives and improve the quality of life for millions. The new rules will also accelerate the country’s move away from heavily polluting coal power plants to cleaner energy sources that will continue to stimulate investment and economic activity long into the future.”

Howard Learner, Environmental Law & Policy Center:

“These standards mean power plants will invest in modern pollution controls, and that investment will create jobs, cleaner air and better public health. Illinois adopted mercury pollution reduction standards in 2006 and modern control equipment has been installed at almost all coal plants in the state. The technology works, the lights have stayed on, mercury pollution has been reduced and children’s health is better protected. It’s time for the holdout utilities to stop crying wolf, stop stalling and clean up their pollution to protect children’s health and our rivers and lakes.”

Chicago Mayor Rahm Emanuel:

“I commend the U.S. Environmental Protection Agency (EPA) for introducing new standards to reduce levels of dangerous toxins in our air. Limiting emissions of mercury and other pollutants from coal and oil-fired power plants will save thousands of lives, protect public health, and create jobs for Americans. Our experience in Illinois has shown that mercury emissions can be dramatically reduced without any impact on reliability, cost, or quality of service. We must continue to clean our air and clean up this industry across the country, to create opportunities for Americans and allow all Americans to lead healthier lives.”

Alan Baker, American Public Health Association:

“The dangerous health risks associated with coal-burning power plants is no longer an elusive, distant threat. Exposure to air pollution and toxic chemicals can cause asthma and heart attacks, harm those suffering from respiratory illness and in some cases lead to death. Implementing these critically needed standards could mean the difference between a chronic debilitating, expensive illness or healthy life for hundreds of thousands of American children and adults.”

The Rev. Fletcher Harper, GreenFaith:

“The EPA’s new rule is a vital step forward morally and religiously.  The great religious traditions to which so many US citizens belong – from Judaism, Christianity and Islam to Hinduism, Buddhism and more – are overwhelmingly clear that protecting life and the environment represent a moral responsibility, and that we are called to steward and protect an earth which, ultimately, does not belong to us.  By saving thousands of lives – many of them from our nation’s most vulnerable communities – and by preventing toxic emissions, this rule will help ensure that future generations inherit a healthier, cleaner planet.”

Shannon Baker-Branstetter, Consumers Union:

“The health risks that mercury exposure poses are serious, especially since those most at risk are children and other vulnerable populations. Mercury from large industrial sources contaminates the air we breathe and common foods that many Americans eat. Regulating mercury emissions is just a common sense way to protect consumers from these health hazards and today’s announcement is a critical step towards that goal.”

Rev. Canon Sally G. Bingham, President of Interfaith Power & Light President:

“This is good news for the religious community across America. The finalization of the Mercury and Air Toxics Standards shows us that the 40-year old Clean Air Act is still an invaluable tool to carry out our call to be stewards of God’s Creation and to serve the least among us.”

Lauren Randall, Environment America:

“Today President Obama stood up to the polluters and protected kids’ health. This landmark achievement reflects what every parent knows, which is that powering our homes should not poison kids.”

Roberto Carmona, Voces Verdes:

“Voces Verdes applauds the Obama Administration’s important new standard to control and curb mercury and other toxic air pollution from power plants. This historic rule will benefit our nation as a whole and Latino families everywhere preventing the harmful effects of these pollutants, such as respiratory diseases, developmental problems and heart attacks in our communities. This rule protects our health while also creating thousands of jobs from the manufacturing, engineering, installation and maintenance of pollution controls to meet these standards, potentially including 46,000 short-term construction jobs and 8,000 long-term utility jobs. This is an important move to protect the public health while ensuring a brighter future for our communities.”

Robert D. Brook, M.D., University of Michigan and American Heart Association:

“This historic action taken today by the EPA will mean that all of us now and in the future can expect to suffer fewer cardiovascular problems caused by breathing harmful air pollutants from power plants, and also see a reduction in other health issues related to mercury and fine particulate matter. Though much progress has been made in cleaning our nation’s air over the past few decades, these added safeguards should help to further reduce cardiovascular disease, the No. 1 killer in the United States. With these standards in place, generations of Americans will now be able to breathe even cleaner air, a fact we should all be proud of as a nation.”

Benjamin Todd Jealous, NAACP:

“This rule is a smart, sensible and overdue step to limit the dangerous effects of these toxins and address the racially disparate impact of air pollution. The standards will save millions of dollars in medical expenses by helping to prevent new cases of asthma attacks and other respiratory diseases that often strike families that can least afford it, while advancing a healthier quality of life for families across the nation.”

Larry Schweiger, National Wildlife Federation:

“Our children and grandchildren will inherit a safer world thanks to the leadership of President Obama and Administrator Jackson. At long last, these prudent and overdue limits on unchecked mercury and toxic air pollution will ensure our fish will be safe to eat, and our children can breathe easier.”

Gene Karpinski, League of Conservation Voters:

“Today is a historic day for the health and safety of our children. We strongly applaud the Obama administration for setting new limits on mercury and other toxic air pollution from power plants – limits that will save lives, prevent illnesses like asthma and bronchitis and create jobs in pollution control technology.”

PJM:

“PJM and four other RTO/ISOs proposed in comments to the EPA a process to ensure that reliability in our respective regions can be maintained as the final Mercury and Toxics Standards (MATS) Rule is implemented. The final MATS rule will have different degrees of impact in various parts of the country. We at PJM are pleased that the EPA Administrator has included the key elements of our proposed process to preserve reliability into documents accompanying the Final Rule. We at PJM intend to work with EPA, FERC, the states and others to ensure that process can be effectively utilized to address particular reliability challenges and ensure that the reliability of the electric grid is maintained during this critical period.”

Senator Patrick Leahy (Vt.):

“I commend the Environmental Protection Agency for doing the right thing, under tremendous special interest pressure, in standing up for the public’s interest. The Utility Air Toxics Rule to control toxic air pollutants such as mercury is a health and environmental breakthrough for the American people, and especially for Vermonters. Finally, after 20 years of dodging regulation, coal- and oil-fired electric power plants, the largest contributors of these toxics, will be held accountable for the pollution they emit, just as many other industries are.”

Senator Ben Cardin (Md.):

“Clean air is essential for the health of every American and it’s also good business. It’s time for the rest of the country’s electricity generation sector to catch up with Maryland and do what our power producers have been doing for years now to protect children from toxic mercury and air toxics pollution…Mercury is an extremely harmful neurotoxin that our country’s largest source producers, power plants, must act to address. The doomsday scenarios described by our nation’s power companies who irresponsibly continue to operate the nation’s oldest and dirtiest power plants are not based in reality. The rule being finalized today is the result of litigation demanding EPA to comply with the Clean Air Act.”

Senator Tom Carper (Del.):

“With this decision, I believe the Environmental Protection Agency has provided a reasonable and achievable schedule for our dirtiest power plants to reduce harmful air toxic emissions. At the same time, I believe the Environmental Protection Agency has given enough flexibility to industry and states to meet those targets and address any possible local reliability concerns. These clean air investments will be a win-win-win as we save thousands of lives, save billions of dollars in health care costs and work productivity, and create good paying jobs here at home by cleaning up these dirty power plants. In fact, this new rule is expected to produce 46,000 jobs in the near term during the installation of the needed clean air technology, and thousands more for long-term utility jobs.”

Senator Bernie Sanders (Vt.):

“I strongly support the Clean Air Act standards announced today that will slash toxic air pollution, such as mercury and arsenic, from our nation’s power plants. We know from the Centers for Disease Control and Prevention that mercury can cause brain damage and is particularly harmful to infants and young children. We also know that installing the necessary pollution control scrubbers and equipment will create jobs as we update our power plants. This clean air rule is long overdue, and I commend EPA Administrator Lisa Jackson for protecting our families’ health and wellbeing.”

Frances Beinecke, Natural Resources Defense Council:

“The magnitude of these health benefits could make this rule one of the biggest environmental accomplishments of the Obama administration. I applaud the administration’s continued leadership in making our air cleaner and safer to breathe.”

U.S. Commerce Secretary John Bryson:

“For business leaders, there are few challenges greater than uncertainty, and by issuing today’s ruling, this Administration has answered definitively a question that has hung over the U.S. energy industry for nearly 20 years,” Bryson said. “These new standards have benefits that far exceed costs, and the flexibility built into their adoption will help guarantee that implementation will proceed in a thoughtful, common-sense way that limits negative impacts on businesses.”

U.S. Agriculture Secretary Tom Vilsack:

“By reducing emissions of highly toxic pollutants such as mercury, we are ensuring that our air and water are cleaner and American families are safer. Folks in rural America have a great appreciation for the land and work hard to preserve our environment for future generations. These standards support their efforts by improving millions of acres of polluted ecosystems that will create better habitat for fish and wildlife and provide more recreational opportunities for all Americans to enjoy.”

Energy Action Coalition:

“Young voters are thrilled that EPA Administrator Lisa Jackson and the Obama Administration are standing up to big polluters to protect our generation’s health and spur job creation in the clean energy economy. This decision shows the Obama Administration’s commitment to stand up to Big Coal and Oil to protect the air we breathe. We hope the Administration will continue to stand up for the health and safety of Americans and the environment in the coming year.”

Senator Sheldon Whitehouse (R.I.):

“Today, the EPA has taken an important step to protect public health, particularly the health of children. After years of Rhode Island receiving pollution from out-of-state power plants, the largest sources of toxic air pollution will finally be required to reduce emissions of these dangerous chemicals. I applaud our local utility, National Grid, for its support of these new clean air protections.”

Senator John Kerry (Ma.):

“The bottom line is, this will mean fewer heart attacks and asthma attacks, fewer kids exposed to mercury, and thousands of good jobs for the American workers who will build, install, and operate the equipment to reduce these toxic pollutants. Smart health and environmental protections go hand in hand with economic growth and reliable, affordable energy.”

Representative Elijah Cummings (Md.):

“These new standards, which have been twenty years in the making, will safeguard American families and protect our environment from dangerous mercury and toxic air pollution. I commend the EPA for finalizing rules that will prevent thousands of premature deaths and hundreds of thousands of heart attacks and other illnesses. These new national standards will create thousands of American jobs and generate health and economic benefits worth tens of billions of dollars.”

Representative Ed Markey (Mass.):

“This rule to limit mercury and other dangerous toxics is one of those times when you can truly say ‘we’re doing it for the kids. While the Obama administration wants to cut mercury pollution to protect kids and pregnant mothers, Republicans want to knife the MACT, stopping these standards from ever going into effect. The 91 percent reduction in mercury in Massachusetts since 1996 shows that these standards are attainable. The standards will reduce mercury by increasing innovation, as entrepreneurs and inventors will discover new and better ways to cut pollution and move to cleaner forms of energy that produce no pollution at all, like wind and solar power. I commend the Obama administration, EPA Administrator Lisa Jackson, and the staff at the EPA for their dedication to the health and well-being of America’s kids.”

Business Council for Sustainable Energy:

“Uncontrolled toxic air emissions are real and sizeable threats, both to public health and to the economy. Families, companies and investors need certainty on air emissions policy for healthier living and for economic growth. The finalization of the Mercury and Air Toxics Standards provides more certainty on emissions policy and will drive investment in innovative technologies and America’s energy infrastructure. American businesses can keep the lights on and grow the economy while protecting public health. Shifting to lower emissions technologies and resources while upgrading our nation’s electric generation infrastructure will help drive economic growth and create jobs.”

Senator Barbara Boxer (Calif.):

“Power plants are not only the nation’s largest source of dangerous mercury emissions, but they also pollute the air we breathe with lead, arsenic, chromium, and cyanide. These hazardous air pollutants are known to cause cancer, harm children’s development, and damage the brain and nervous system of infants. EPA estimates that this new clean air rule will annually prevent up to 11,000 premature deaths, 4,700 heart attacks, 130,000 asthma attacks and many other health benefits. The science and methodology used to determine these benefits have been extensively peer reviewed by EPA’s independent Science Advisory Board and the National Academies of Science. The agency estimates that this clean air rule will also provide up to 46,000 construction jobs and 8,000 long-term jobs in the utility industry. EPA’s action today will generate jobs and protect the health and safety of families across the country.”

Illinois Governor Pat Quinn:

“In Illinois, we have seen the benefits of enacting stringent requirements for reducing mercury emissions over the last several years. As a result, thousands of pounds of harmful mercury emissions have been kept out of our air. The President’s action will protect millions of Americans from these dangerous emissions just like we have been doing in Illinois.”

U.S. Health and Human Services Secretary Kathleen Sebelius:

“When the Environmental Protection Agency announced achievable new standards today for mercury and other toxic pollutants from power plants, it took a critical step forward in promoting a safe and healthy environment where all families can raise their children free from dangerous chemical exposure. At the Department of Health and Human Services, we know that people’s health is not just determined by what happens in the doctor’s office. It depends on where we live and work, what we eat and the air we breathe.”

And here is a link to a statement by President Barak Obama regarding the announced Mercury and Air Toxics Standard (MATS):

President Obama Announces Historic New Mercury Emissions Standards

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Historic ‘mercury and air toxics standards’ meet 20-year old requirement to cut dangerous smokestack emissions

WASHINGTON – The U.S. Environmental Protection Agency (EPA) has issued the Mercury and Air Toxics Standards, the first national standards to protect American families from power plant emissions of mercury and toxic air pollution like arsenic, acid gas, nickel, selenium, and cyanide. The standards will slash emissions of these dangerous pollutants by relying on widely available, proven pollution controls that are already in use at more than half of the nation’s coal-fired power plants.

EPA estimates that the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks a year. The standards will also help America’s children grow up healthier – preventing 130,000 cases of childhood asthma symptoms and about 6,300 fewer cases of acute bronchitis among children each year.

“By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health– and especially for the health of our children. With these standards that were two decades in the making, EPA is rounding out a year of incredible progress on clean air in America with another action that will benefit the American people for years to come,” said EPA Administrator Lisa P. Jackson. “The Mercury and Air Toxics Standards will protect millions of families and children from harmful and costly air pollution and provide the American people with health benefits that far outweigh the costs of compliance.”

“Since toxic air pollution from power plants can make people sick and cut lives short, the new Mercury and Air Toxics Standards are a huge victory for public health,” said Albert A. Rizzo, MD, national volunteer chair of the American Lung Association, and pulmonary and critical care physician in Newark, Delaware. “The Lung Association expects all oil and coal-fired power plants to act now to protect all Americans, especially our children, from the health risks imposed by these dangerous air pollutants.”

More than 20 years ago, a bipartisan Congress passed the 1990 Clean Air Act Amendments and mandated that EPA require control of toxic air pollutants including mercury. To meet this requirement, EPA worked extensively with stakeholders, including industry, to minimize cost and maximize flexibilities in these final standards. There were more than 900,000 public comments that helped inform the final standards being announced today. Part of this feedback encouraged EPA to ensure the standards focused on readily available and widely deployed pollution control technologies, that are not only manufactured by companies in the United States, but also support short-term and long-term jobs. EPA estimates that manufacturing, engineering, installing and maintaining the pollution controls to meet these standards will provide employment for thousands, potentially including 46,000 short-term construction jobs and 8,000 long-term utility jobs.

Power plants are the largest remaining source of several toxic air pollutants, including mercury, arsenic, cyanide, and a range of other dangerous pollutants, and are responsible for half of the mercury and over 75 percent of the acid gas emissions in the United States. Today, more than half of all coal-fired power plants already deploy pollution control technologies that will help them meet these achievable standards. Once final, these standards will level the playing field by ensuring the remaining plants – about 40 percent of all coal fired power plants – take similar steps to decrease dangerous pollutants.

As part of the commitment to maximize flexibilities under the law, the standards are accompanied by a Presidential Memorandum that directs EPA to use tools provided in the Clean Air Act to implement the Mercury and Air Toxics Standards in a cost-effective manner that ensures electric reliability. For example, under these standards, EPA is not only providing the standard three years for compliance, but also encouraging permitting authorities to make a fourth year broadly available for technology installations, and if still more time is needed, providing a well-defined pathway to address any localized reliability problems should they arise.

Mercury has been shown to harm the nervous systems of children exposed in the womb, impairing thinking, learning and early development, and other pollutants that will be reduced by these standards can cause cancer, premature death, heart disease, and asthma.

The Mercury and Air Toxics Standards, which are being issued in response to a court deadline, are in keeping with President Obama’s Executive Order on regulatory reform. They are based on the latest data and provide industry significant flexibility in implementation through a phased-in approach and use of already existing technologies.

The standards also ensure that public health and economic benefits far outweigh costs of implementation. EPA estimates that for every dollar spent to reduce pollution from power plants, the American public will see up to $9 in health benefits. The total health and economic benefits of this standard are estimated to be as much as $90 billion annually.

The Mercury and Air Toxics Standards and the final Cross-State Air Pollution Rule, which was issued earlier this year, are the most significant steps to clean up pollution from power plant smokestacks since the Acid Rain Program of the 1990s.

Combined, the two rules are estimated to prevent up to 46,000 premature deaths, 540,000 asthma attacks among children, 24,500 emergency room visits and hospital admissions. The two programs are an investment in public health that will provide a total of up to $380 billion in return to American families in the form of longer, healthier lives and reduced health care costs.

More information: http://www.epa.gov/mats/

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

A couple years ago I had lunch with a top executive of one of the state’s leading utilities. Here’s the gist of the question I put to him.

“I know you guys want to build a new coal plant nearby here, and I believe you when you say you fully intend to sequester CO2 down the road. But here’s the problem. You can’t even begin building without first raising the price of electricity. We can argue how much – 15, 20, 30 percent – but we all know it’s going to go up.”

He nodded.

“Well, I’m not an economist, but I do remember from Econ 101, that if you raise the price of something, demand goes down. Furthermore, if you raise the price of something, for which the market is already soft, where demand is already flat or declining, and for which people have readily available alternatives – demand could go down a lot. So you raise rates – demand goes down, revenue goes down, you can’t pay the cost of your note for the new plant.”

“So you raise your rates again. See what I’m getting at? It’s a downward spiral. We’ve seen this before in the 70s and 80s, when, in the wake of the oil price rises, people realized for the first time that energy conservation made sense, and electrical use flattened out – completely flummoxing the economic planners who said that would destroy the economy.”

“Your position is unenviable. If you build a giant new power plant, you’re riding into a box canyon economically – the economics of the death spiral are unassailable – and frankly, I think the last thing this state needs is another one of our flagship companies to be circling the drain.”

We finished our lunch and parted amicably.

A few months later, the company put the project on hold.

Now, 18 months later, that particular project has been cancelled. The reasons, according to acompany press release:

The utility said it was cancelling the new clean coal plant project because of the same market factors that led it to defer development of the project in May 2010.  Those primarily are reduced customer demand for electricity due to the recession and slow economic recovery, surplus generating capacity in the Midwest market, and lower natural gas prices linked to expanded shale gas supplies.  Lower natural gas prices make new coal-fired power plants less economically attractive.

I wonder if it also had anything to do with this recent announcement out of Minnesota?

Minneapolis Star-Tribune:

Minnesota’s second-largest electric company has spent $437 million on a recently completed coal-burning power plant 85 miles west of Fargo.

Built with the encouragement of North Dakota’s political leaders, the plant burns lignite mined in that state. It has best-available pollution controls and draws city wastewater instead of fresh water. At full power, the new plant could supply about 63,000 homes.

Instead, owner Great River Energy is shutting it down.

While investing hundreds of millions of dollars in power plants always carries risks, the tale of the Spiritwood Station is an extreme case. The head of an industry trade group couldn’t remember another new U.S. coal plant built to supply power all the time that was immediately mothballed.

A combination of factors made Spiritwood a financial drag on Great River Energy (GRE), a Maple Grove-based wholesale cooperative serving 650,000 customers from the Iowa state line to the Canadian border. These included slower-than-expected growth in electricity demand, lower prices on power sales to the grid and the loss of a key industrial customer for some of the plant’s steam.

“We could run it, and lose money half the time,” said Rick Lancaster, vice president for generation at GRE.

A soft economy is certainly a factor in this situation. But soft or not, the economic fundamentals don’t change. And the dynamic is the same, whether the new facility is coal, nuclear, or gas. The advantage that gas turbines have over coal and nukes is that they are quicker to build, meaning cost of capital is lower.

And, a quicker build means you don’t have as distant a time horizon to project electrical demand and economic conditions. Renewables, particularly, at this stage, wind, are even much quicker to build, and can be built incrementally – 10, or 50, or 200 MW at a time, instead of betting the farm on a 5 or 10 billion dollar project, you can plan, and build within your means, in a time frame you can see much more clearly.

Making it even more interesting is the emerging economics of solar photovoltaics, which have only come into sharper focus in the last year. You can argue the time frame, but at some point, in most parts of the country, over the next 3, or 5, or 10 years, photovoltaics become cheaper to install than buying power from a coal burning utility.  That’s when the paradigm shift begins, with unpredictable results — but a coal project starting today might well be nearing completion just in time for its obsolescence.

A lot of the ideas we’ve had about power generation for the last 80 years or so are about to go out the window, in an industrial revolution that’s going to make the internet seem like a minor speed bump.  In fact, the new electrical grid will use the technology of the internet, and look a lot more like the internet than the current centralized arrangement.  This will be a time of creative destruction for utilities – some of whom won’t make it.

There’s no guarantee for anyone, but those that tie themselves up with enormous financial commitments to centralized projects that do not support the emerging paradigm are sure to have a tougher time surviving.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Amid criticism from environmentalists, a power plant developer said Monday it would suspend plans for a new coal-fired unit in northeastern Arkansas for at least five years and stop efforts altogether to build a facility in southern Georgia.

LS Power Group of New York said it had reached an agreement with the Sierra Club to temporarily halt its effort to build a 665-megawatt Plum Point II power plant near Osceola, Ark., north of Memphis, Tenn., and permanently give up plans to build the 1,200-megawatt Longleaf Energy Station near Blakely in far southwestern Georgia.

“We’ve agreed not to resubmit plans for at least five years,” LS Power representative George Sciencki said Monday evening after the Sierra Club’s announcement. “The intent at Plum Point is a five-year hold.” He said poor market conditions made it easy to agree to the delay.

But Glen Hooks, spokesman for the Sierra Club in Little Rock, said the delay is as good as a death sentence for the Arkansas plant.

“It’s effectively the same thing,” Hooks said. “No matter what kind of spin they want to put on it, this plant is not going to be built.”

Environmentalists have long targeted coal-fired plants, saying their emissions can foul broad areas downwind. Hooks said tight federal regulations, particularly on mercury emissions and haze, would make it too expensive for anyone to operate a coal-fired plant.

“They will force these plants to spend hundreds of millions of dollars,” Hooks said.

Another 665-megawatt unit at Osceola, called Plum Point, began operating last year using pulverized coal from Wyoming. It was built at a cost of $1.3 billion and opened under ownership of an insurance company, a collection of municipal utilities and a Houston-based holding company.

The head of the city-owned Conway Corp. utility told the city’s Log Cabin Democrat newspaper for a story to be published Tuesday that he was not surprised the Osceola plan was on hold. Conway Corp. CEO Richie Arnold said his city was considering buying power from the Missouri Joint Municipal Electric Utility Commission, which would have been a co-owner of the plant.

“We’re not surprised that the project’s on hold,” Arnold told the newspaper. “We’ve not seen any activity toward development of the plant in the last 18 months.” He also cited upcoming regulations and market risks for the delay.

The slightly smaller John W. Turk plant being built by SWEPCO in southwestern Arkansas is to have a capacity of 600 megawatts, making it capable of powering 300,000 to 450,000 homes, depending on the time of year. The Sierra Club and other groups are fighting its construction.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.