House OKs 26 cent/barrel tax increase for Oil Spill Trust Fund

Before adjourning for Memorial Day, the House of Representatives narrowly passed a tax-extender package that includes an oil tax increase of 26 cents a barrel.

The bill increases a tax on the oil industry to 34 cents a barrel from 8 cents a barrel. This money would go into the Oil Spill Liability Trust Fund.

The fund helps cover economic and natural resource costs above the $75 million liability cap for private companies. The bill also raises the per-incident cap for payments from the Trust Fund to $5B from the current $1B.

The bill extends for one year (retroactive to Jan. 1) energy tax credits for biodiesel, renewable diesel, energy efficiency and alternative vehicles fuel.

It also extends the “doc fix,” which each year prevents drastic cuts in Medicare payments to doctors and hospitals.

A second bill passed that authorizes the Defense Department to spend $470M on energy efficiency, renewable energy and environmental cleanup. This is the bill that includes an amendment repealing “don’t ask, don’t tell.”

This bill provides $5M for a pilot project to develop a microgrid. Another provision says DOD can stop contracts with BP if it is not considered a “responsible source.”

It allows government agencies to buy alternative fuels whose lifecycle greenhouse gas emissions exceed conventional fuel (i.e. tar sands) so long as less than half of that fuel comes from such sources.

Both measures will move to the Senate after the break. Their future there is uncertain.

(Source E&E News PM)

Shale gas: energy game changer or pollution risk?

(Photo of hydraulic shale gas drilling from Flickr and photographer Melissa Peffs)

Shale gas is plentiful in the United States, and apparently all over the world. So the recent hydraulic fracturing (or “fracking”) and horizontal drilling that’s made it accessible and cheap could change not only the balance of energy sources but also geopolitical relationships – because most countries have it and could drastically reduce imports.

On the other hand, the process involves blasting shale rock with water, sand and chemicals like benzene, which some say is getting into the water table and contaminating it.

Shale gas was the talk of the CERAWeek forum in Houston last week. Now that it can be extracted from shale, natural gas reserves in the U.S. are sufficient to supply all our power for 100 years. It was called a “game changer” and an IHS CERA rep predicted the use of gas for power could nearly double by 2035. Three large reserves here are Marcellus in Pa., Barnett in Texas and Haynesville in La.

Companies that didn’t get in on the shale gas action here are rapidly looking for opportunities in Europe.
• Exxon Mobile is exploring in Germany and Poland.
• Chevron, Marathon and ConocoPhillips are also looking at Poland.
• Royal Dutch drilled its first well in Sweden and is looking in Ukraine.
• Paris-based Total is exploring in France and Denmark.
And there are others.

Natural gas emits about half the CO2 of coal, so many see it as a good bridge to renewable energy.

But there are concerns, serious ones.

There have been complaints of groundwater pollution. Investigations by the Ground Water Protection Council, an association of state regulators, has so far been unable to tie groundwater contamination directly to fracturing. But broken pipes and improper disposal of wastewater have caused problems, which suggests the need for closer monitoring.

GWPC has contracted with the Department of Energy to come up with a risk assessment of hydraulic fracturing. They also asked Congress, other federal agencies and state regulators to work with them to identify risks. The EPA will also conduct a study.

Sources: Greenwire, E&E Daily, Reuters, NPR

States see linked wind farms along East Coast

(Photo of offshore wind farm built in 2000 off Denmark from Flickr and United Nations photos.

I spent many days swimming and fishing on East Coast as I was growing up – summers in Rhode Island, occasional trips to Long Island or Fire Island, N.Y., and visits to grandparents in Florida. I still make frequent trips back to what feels like home. I love the Atlantic seaboard.

Fast-forward and envision a chain of interconnected offshore wind farms up and down the coast supplying much-needed power to the New England and Mid-Atlantic states. A source of electricity that doesn't release greenhouse gases.

I would much rather live with offshore wind turbines than offshore drilling platforms or belching coal plants. I saw the graceful, slow-turning turbines off Denmark a few years back – didn’t even know what they were, but they didn’t seem like an eyesore. And the vision is that these farms will be so far offshore you'll scarcely be able to see them, if at all.

Given the need for clean energy, I’ve been rooting for Cape Wind off Nantucket during it’s 8-year battle for approval, which is still going on. (Even Ted Kennedy said “not in my backyard.")

Wave of the future
So I was happy to see in September that some East Coast states, from Maine to Maryland, are joining together to develop a vibrant wind industry off their coastline. They have formed what they call the U.S. Offshore Wind Collaborative.

One goal is to get R&D funding to develop floating turbines that can function in rough seas and deep water far off the coast – beyond the horizon. That could take time.

Meanwhile the states are motivated to cooperate rather than compete, and to come up with a network of windfarms connected on the ocean floor by a shared grid that goes to onshore substations near cities needing power.

Many reasons to do it
There are, of course, practical reasons for these states to work together:
• They import most of their power from the Midwest.
• The population is too dense to put windfarms on land.
• By working together they can reduce costs, cut through red tape and have an influential national voice.
• They can develop a strong offshore wind industry for the U.S., after ceding the onshore business to Europe years ago.
• They can, hopefully, speed things up so they can meet their self-imposed goals for renewable energy.
• The strongest, most reliable wind is offshore and the supply is endless.
(A curious difference about Europe’s offshore wind business versus ours. Their water is shallower so they’ve been able to adapt land towers for the sea, while we will need deeper water turbines if we want to place them some distance off the coast.)

Meeting last week
At the Clean Energy Summit in New Jersey last week, the states continued their talks. They will lobby together for an extension of the wind production tax credit beyond 2012. They will share public financing, technology and transmission lines. They'll work together to minimize environmental impact. (Yes there could be an impact on birds and marine life, but weigh it against the damage acidification from CO2 is causing oceans right now.) The states are even exploring the idea of making utilities buy a portion of their energy from offshore wind farms.

They said they will be able to save on costs and provide green jobs sooner than if each state proceeded on its own.

Many have already selected sites that meet state criteria. But the approval process involving the federal government is a complex one they hope to fast track, by agreeing among themselves.

Already underway
Several individual projects are already in the works:
• Cape Wind’s planned 130 turbines
• Delaware’s 450mw Bluewater Wind Co. project
• New Jersey’s work with several developers to produce 350mw
• Maine’s plan to test deep-water technology at 5 sites.
Rhode Island, Maryland and New York also are working on plans.

States have the right to put turbines up to 3 miles offshore, but the states want the federal government to begin issuing ocean floor leases for wind development beyond the 3-mile limit. Far better than issuing oil and gas leases.

(Sources: ClimateWire, usowc.org, NY Times.)

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Wind, solar and geothermal tax credits extended, but fossil fuels get incentives too

(Photo of wind farm in Texas from Flickr and photographer fieldsbh)

Washington Report: In case you missed it, the $700 billion bailout bill included renewable energy tax credit extensions, which just a week earlier had seem DOA for this session of Congress because the Senate and House couldn’t agree. It was the Senate version (the least desirable one) that was attached to the bailout. So we got good news and bad news: the good being that renewable energy companies can continue to grow – the bad being that coal, oil shale and tar sands got a break too. The $17 billion package of extensions included:
• 1 year of production tax credits for wind (the industry is already lobbying for longer-term extension of credits)
• 2 years of production tax credits for geothermal, biomass and other alternative sources.
• 8 years of investment tax credits of 30% for solar energy for homes and commercial properties and removal of the $2,000 cap (so an installation costing $30,000 would be reduced to $20,000).
• Biodiesel credits for the U.S. that put an end to Europeans shipping their product here to get the credit and then back again.
• New credits for plug-in electric hybrid vehicles of $2,500 to $7,500. The new Chevy Volt would qualify at the top level.
• New credits for wave and tidal energy projects.
• New employer tax credits to reimburse up to $20/month to those who use bicycles as their main commuter transportation
• New credits for refineries that process oil shale and tar sands.
• New credits for coal-fired plants that capture and store carbon dioxide, including pumping it into depleted oil fields to extract the remaining oil.
• Inclusion of coal-to-liquid fuel as an alternative fuel.
(Sources: Greenwire, E&E Daily)

Chicago Climate Action Plan here after long delay, calls for massive community effort to cut GHG

(Photo of Chicago skyline from Flickr and photographer Atelier Teee/Terrence Faircloth)

Weekly Angst: Finally, the long-awaited Chicago Climate Action Plan is here. Mayor Daley unveiled it last week, apparently after convincing the power structure in the city to go along with it.

In many ways it is very ambitious. The goal is to reduce greenhouse gases 80% below 1990 levels by 2050, with an interim marker of 25% reduction by 2020. But success will depend on the actions of business, labor, civic leaders and individual residents, so buy-in is important. And someone will need to be pushing the agenda.

CCAP is more comprehensive than many city plans, covering everything from retrofitted buildings to biking to roof gardens to power plants and beyond. Yet it is sparse on numbers.

The plan calls for a 30% increase in mass transit ridership and suggests some ways that could happen, but offers no dollar amounts or specific numbers. Likewise it calls for more efficient motor vehicle fleets, but gives no specifics – unlike New York City, which seeks a total turnover of taxis to hybrids in 5 years.

There are some numbers in the plan, and I’ll list some of them here. I like numbers because you can measure progress against them.

Strategies to reduce GHG
Overall, the 4 strategies for reducing greenhouse gases call for:
• 30% of the savings to come from making buildings more energy efficient
• 34% to come from clean and renewable energy sources
• 23% from transportation and
• 13% from reduced waste and industrial pollution.

Some other numbers
The plan calls for the following:
• Retrofit 50% of the commercial and industrial building stock (that’s huge if you think about it)
• Improve efficiency at 50% of residential buildings (also major, in a city of 3 million people)
• Upgrade or re-power 21 power plants
• Procure enough renewable energy to reduce electricity emissions 20%
• Double household-scale renewable electricity
• Increase roof gardens to cover 6,000 buildings and plant 1 million trees
• Recycle 90% of waste by 2020.

This last – recycling – is a sore point for Chicago. The blue bag system never worked well and is slowly being shifted over to a suburban-type blue cart system, ward by ward. The plan calls for all blue carts by the end of 2011, and in the meantime, there will be communal recycling boxes throughout the city, within a mile of any residents who don’t yet have blue carts. The plan also touts the city’s toxic and electronic waste center, which is open three days a week for disposal.

City government plans to upgrade building codes and have energy audits for its 500-plus buildings, including schools, with the goal of reducing energy costs 30-40%. The Department of Water Management will put solar panels on the filtration plant and Park District employees will be taught to install solar panels.

Programs and tools
The plan emphasizes tools and programs to help businesses and individuals retrofit their buildings and take other steps to cut emissions. Among them are a “one-stop shop” for financing and technical assistance in retrofitting buildings. The city and CTA have a task force to encourage transit-supportive neighborhoods. Businesses will compete with one another to reduce CO2. And a Chicago Offset Plan will invest in renewable energy, trees and retrofitting.

Do it yourself
The plan also lists steps businesses can take to reduce their emissions, including (a favorite of mine) turning off the lights when they’re not in use, switching to efficient CFL bulbs, lowering the thermostat 3 degrees in winter and raising it 3 degrees in summer, turning off electronics in off-hours, reducing auto trips and driving the most fuel-efficient cars available, using videoconferencing instead of travel, buying green products and recycling.

There’s also a list for residents, which includes: switching to public transit (getting rid of a car could save $400/month) or at least keeping your car tuned up and tires inflated, re-using shopping bags, using CFLs and turning off lights and unplugging electronics when not needed, and planting or adopting a tree.

The plan, available for download at http://chicagoclimateaction.org, includes information about current emissions, expected impacts from climate change and a strategy for adaptation to extreme weather and ecosystem changes that are inevitable.

All-in-all it’s a good blueprint for reduction of greenhouse gases. Now it needs to be implemented. That will require a huge community effort by business, labor, government and residents -- and most of all, leadership from the mayor, just as Mayor Bloomberg is pushing for major change in New York City. A powerful mayor should be able to make it happen.

Offshore drilling battle could lead to government shutdown Oct. 1

(Photo of Capitol Building from Flickr and photographer seansie/Sean Hayford O'Leary)

Washington Report: Republicans and Democrats may be headed for a showdown in Congress that could shut down government, halting paychecks and benefits and causing layoffs. Unable to reach agreement on an energy bill, Dems may add the yearly extension of the offshore drilling moratorium to a short-term government funding bill that will be needed at the end of September, which 3 dozen GOP senators have vowed to “fight vigorously.” Offshore drilling is an issue Republicans think could work for them politically if Dems continue to oppose it. Both parties’ leaders have agreed to an Energy Summit when Congress returns Sept. 8, but details have yet to be worked out. Democrats’ answer to high gas prices is release of oil from the Strategic Petroleum Reserve, a requirement that oil companies drill on the 68 million acres they have under lease before bidding on new leases, and curbs on energy futures speculation. They also want repeal of oil tax breaks, a renewable energy standard of 15% by 2020 and extension of renewable tax credits. The Republicans’ fossil-fuel-heavy plan calls for repealing the offshore drilling moratorium on the east and west coasts, drilling in ANWR, oil shale extraction in the Rockies, increased incentives for nuclear energy, extension of credits for wind, solar and hydrogen, new tax breaks for coal-to-liquid, tax breaks for electric cars and speeding up permits for oil refineries. “The Gang of 10,” a bipartisan group of senators, came up with a compromise bill just before the August break, which might have a chance of breaking gridlock, so long as one side doesn’t see a political advantage in stalling. But it’s going to be hard to get agreement when the parties are so far apart, and the petroleum industry opposes it. Main provisions include:
• Drilling in the eastern Gulf of Mexico
• Drilling offshore from 4 Southeast states – Virginia, Georgia, North and South Carolina – if the states agree
• Repeal of billions in oil company tax breaks
• Extension of tax credits on renewable energy sources like wind and solar
• New loan guarantees for coal-to-liquid
• Speeding of permits for nuclear plants
• Billions for R&D for advanced biofuels and batteries
To read more see the Grist blog. (Souces: Greenwire, San Francisco Chronicle)