Archive for the ‘Energy’ Category

The New York Times has an article describing how the TransCanada corporation is using eminent domain to forcibly acquire property to build the Keystone oil pipeline:

When the TransCanada men first came, Julia Trigg Crawford said, they were polite. They offered money. Seven thousand dollars to let the Keystone XL pipeline cross her family’s 600-acre farm on its way from the Alberta tar sands to the refineries on the Gulf Coast….

Ms. Crawford, 52, who serves as the farm’s manager, called the rest of the family. They agreed to sign. “We thought that at least if we signed we’d have some say in what happened,” she said.

They called the TransCanada representative. “He told us that if we could come up with a contract that worked for both parties, they wouldn’t condemn the land,” Ms. Crawford said…..

“I fully expected them to counter,” she said. “There were about five or six things we wanted, and we would have been happy to take one or two.”

Then, she said, TransCanada “went full radio silence.” The Crawfords never heard back from them — until October, when they got a letter saying their land had been condemned and a lease awarded to TransCanada.

But as the Crawfords discovered, when voluntary compensation agreements are not reached, Texas law allows certain private pipeline companies to use the right of eminent domain to force landowners to let pipelines through. This was true even for TransCanada, which has yet to get State Department permission to bring the Keystone XL across the Alberta border.

The article notes TransCanada’s claim that it has acquired the overwhelming majority of the property they needed for the pipeline through voluntary land sales. This may be true, but it is misleading. Like the Crawfords, these owners agreed to sell their land under the threat of eminent domain if they refused. Some might well have refused to sell for the price offered by the firm if eminent domain were off the table. The voluntariness of land sales undertaken in the shadow of threats of condemnation is dubious at best.

Back in 2006, co-blogger Jonathan Adler and I published an article explaining the environmental dangers of allowing the use of eminent domain for private economic development projects, as the Supreme Court ruled in the Kelo case. At the time, some environmentalists pooh-pooed the article, and one group even declared our article the environmental “outrage of the month” (it must have been a slow month for actual pollution). Ironically, as Jonathan explained here, several environmental groups are now trying to use post-Kelo reform laws restricting economic development takings to block the Keystone takings.

Such efforts are unlikely to succeed in Texas. As I described in this article, Texas is one of many states that have passed post-Kelo reform laws that pretend to constrain economic development takings without actually doing so. They might have a better chance in one of the other states through which the pipeline must pass.

Even if Kelo had been decided the other way, some pipeline takings might still be constitutional. The Constitution permits takings for “public use,” and even under the traditional definition of public use advocated by Kelo’s critics, condemnations for public utilities or common carriers that the general population has a legal right of access to are often permissible. However, pipeline takings would be subject to tougher constitutional constraints than under Kelo, and the government would at least have to prove that the pipelines in question really are public utilities or common carriers open to the general public.

Regardless, as Jonathan points out, the controversy over Keystone has led “some environmentalists… to recognize that allowing the government to seize private property for the purpose of encouraging private economic development can facilitate environmentally undesirable projects.”

UPDATE: In a response to this post, Mark Kleiman claims that Jonathan Adler and I “don’t seem interested in the fact that none of their friends on the side of inalienable property rights seems to have any problem with the use of eminent domain to build Keystone (any more than they objected to George W. Bush’s use of it to enrich himself and his business partners in the Texas Rangers by seizing private property to build, not merely a stadium, but a shopping mall).” Actually, people who are genuinely “on the side of inalienable property rights” are likely to be opposed to the use of eminent domain for this project. But if Kleiman means to refer to the GOP, I thought the fact that most Republicans support the pipeline is too well-known to require dwelling on. By contrast, (some) environmentalists’ change of heart on eminent domain is a development that is much less widely appreciated.

I have, however, criticized eminent domain abuses advocated by Republicans in many previous posts, such as here and here. In this 2006 post, I noted the inadequacy of the Bush administration’s response to Kelo. Few if any opponents of Kelo approve of the use of eminent domain to build sports stadiums. George W. Bush’s exploitation of it, of course, occurred many years before Kelo thrust the issue of eminent domain into the limelight, and few nonexperts remember it today.

Categories: Energy, Environment, Kelo, Post-Kelo Reform, Property Rights Comments Off

The folks at the Heartland Institute are mad, and that seems to have driven them a little mad. For years environmental activists have compared climate skeptics and those who raise questions about the likelihood of a warming-induced apocalypse to Holocaust deniers and worse. In 1989, then-Senator Al Gore famously compared those who downplayed the climate threat to those who ignored Hitler’s rise and NASA’s James Hansen compared coal-bearing trains to the rail cars headed to Nazi crematoria, drawing a moral equivalence between the use of coal and the Holocaust. Think Progress also trumpeted the “climate denial” views of Norwegian terrorist Andrew Breivik and claimed he was “inspired” by mainstream climate skeptics.

Then, earlier this year, Heartland was the target of directed smear campaign after the Pacific Institute’s Peter Gleick surreptitiously obtained internal Heartland documents by impersonating a board member. Gleick anonymously distributed the purloined documents together with a forged memorandum purporting to provide further evidence of Heartland’s internal dealings. Progressive bloggers trumpeted the materials, and the forged memo in particular, as evidence of Heartland’s sinister machinations. While it seems likely that Gleick himself forged the memo (or knows who did) Heartland may have difficulty seeking legal redress for his actions. I posted on what some call “Fakegate” here and here.

Instead of trying to retain the moral high ground by defending the substance of its views, Heartland took adopted the tactics of its most unhinged critics, purchasing a billboard comparing those who believe in global warming to the Unabomber. According to Heartland, this was to be the first in a series featuring famous “global warming alarmists,” including Osama Bin Laden, Fidel Castro and other “rogues and villians.” Heartland explained the campaign this way:

what these murderers and madmen have said differs very little from what spokespersons for the United Nations, journalists for the “mainstream” media, and liberal politicians say about global warming. They are so similar, in fact, that a Web site has a quiz that asks if you can tell the difference between what Ted Kaczynski, the Unabomber, wrote in his “Manifesto” and what Al Gore wrote in his book, Earth in the Balance.

The point is that believing in global warming is not “mainstream,” smart, or sophisticated. In fact, it is just the opposite of those things. Still believing in man-made global warming – after all the scientific discoveries and revelations that point against this theory – is more than a little nutty. In fact, some really crazy people use it to justify immoral and frightening behavior.

The response to this ad was quite negative from friend and foe alike, prompting Heartland to pull the ad within 24 hours. Heartland now claims the billboard was an “experiment.”

“This provocative billboard was always intended to be an experiment. And after just 24 hours the results are in: It got people’s attention.

“This billboard was deliberately provocative, an attempt to turn the tables on the climate alarmists by using their own tactics but with the opposite message. We found it interesting that the ad seemed to evoke reactions more passionate than when leading alarmists compare climate realists to Nazis or declare they are imposing on our children a mass death sentence. We leave it to others to determine why that is so.

Well lots of folks didn’t get the joke, including many of Heartlands friends and funders. Several speakers have withdrawn from Heartland’s annual climate conference, including Rep. James Sensenbrenner and IPCC critic Donna Laframboise. (More reactions here and here.) E&E News also reports the publicity stunt is costing Heartland financial support, and could prompt staff departures too.

Even if the billboard was initially designed as an “experiment,” it was a stupid idea. The implicit argument of the billboards is completely unjustifiable. So what if some tyrants and whackjobs believe in global warming. This is like arguing someone should eat meat because Hitler was a vegetarian. Lots of evil, crazy, and stupid people believe plenty of sensible things (and lots of brilliant people have embraced nutty ideas). Heartland’s justifiable anger at the vitriol spewed by its most extreme or unhinged opponents does not justify sinking to their level. If the folks at Heartland believe there is a double-standard — and I believe there is, even though I also believe anthropogenic global warming is a real problem — then they should explain why. There’s no need to provoke and offend countless commuters and others by suggesting that a believing in global warming makes one like the Unabomber. It was a know-nothing message, and not just because most so-called “skeptics” actually believe in global warming too, and only reject apocalyptic climate projections. I expect this sort of stunt from extreme animal rights groups, not those who purport to want an open and honest scientific debate. However angry the Heartland folks may be with some of those on the other side, this stunt was unjustified and unwise — and by all accounts it looks like it will cost Heartland dearly.

The New Orleans Times Picayune reports the White House denied the Department of Interior’s Office of Inspector General access to e-mails and communications about White House revisions to a report Interior Secretary Ken Salazar relied upon to justify a moratorium in oil drilling in the Gulf of Mexico. The story begins:

A senior federal investigator says he was denied access to a White House official and full email records as he tried to determine whether a BP oil spill report was intentionally edited to erroneously suggest outside experts supported the Obama administration’s deepwater drilling moratorium. The experts, in fact, did not endorse the moratorium the administration ordered after the 2010 spill. The White House and Department of Interior later said the mistake was inadvertent, a result of an early-morning edit that moved some material from the body of the report to the executive summary.

Although some e-mails were provided eventually, the IG’s office was never able to validate their authenticity or completeness, the investigator claims. He also alleges the White House did not allow the IG to interview a White House official involved in editing the report. An official in the IG’s office told the Times Picayune that his office “does not have authority to compel” White House cooperation with its investigation.

Categories: Energy, Environment, Politicizing Science Comments Off

The Washington Post editorializes that the case for approving the Keystone XL pipeline was “always strong” and “has grown stronger.”

A key environmentalist argument against Keystone XL has been that the project would encourage the extraction of bitumen, a particularly dirty oil-like substance, from the “oil sands” in Alberta. If activists could “shut in” Canadian bitumen, limiting the ability of oil companies to sell the product, they argued, perhaps petroleum firms wouldn’t be able to fully develop the oil sands.

That hope always was unrealistic, and a recent announcement from Kinder Morgan, another pipeline company, illustrates why. The firm wants to nearly triple the capacity of its existing Trans Mountain pipeline between Alberta and Vancouver — a route from the oil sands to the world market — enabling it to carry even more product than the Keystone XL would. From there, much of it would probably head to Asia. Because the pipeline exists, expanding it may not face the same regulatory hurdles — particularly opposition from native groups — that other proposals to run new pipelines to Canada’s west coast have encountered.

There is already enough spare pipeline capacity running out of the oil sands to accommodate increasing production for much of this decade, a government report concluded in 2010. While Kinder Morgan’s expansion certainly wouldn’t sate all the future demand for pipeline capacity, it would add more time before the environmentalists’ strategy could seriously impact production. And it demonstrates a critical point: Even if environmentalists manage to stop one pipeline or another, given high world oil prices, the enthusiastic support of the Canadian government, the many transport options and the years available to develop infrastructure, it’s beyond quixotic to believe that enough of the affordable paths out will be blocked. Environmentalists might succeed, however, in relocating some construction jobs outside the United States.

The editorial also criticizes Republicans for trying to force the President’s hand. I think a better question is why this pipeline is subject to executive approval in the first place. The White House only has a say about Keystone XL because it crosses the U.S.-Canada border. Yet the stated reasons for not approving the pipeline — such as concerns about the potential environmental effect of a spill in Nebraska — have absolutely nothing to do with the pipeline’s transnational character and can be addressed through traditional regulatory controls and siting processes. Further, the legislation forcing an executive decision on the pipeline project expressly ensured state officials could alter the route to protect local environmental concerns. If there are no particular problems arising from the cross-border nature of this project, there’s no reason for the State Department to have any concerns — and it’s only the State Department’s review that is at issue. So before attacking the GOP for trying to force the President’s hand, the Post should ask how the President is able to hold up this project in the first place.

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EPA Adopts Fracking Rules

Today the Environmental Protection Agency announced new air pollution regulations for natural gas production including emission control standards for hydraulic fracturing.  The WSJ reports and Ron Bailey comments.

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The Washington Post reports the Environmental Protection Agency will release proposed regulations governing the emissions of greenhouse gas emissions from power plants this week, perhaps as early as today.   As described by the Post, this New Source Performance Standard regulation could put a halt to the construction of new coal-fired power plants unless and until carbon sequestration or some other GHG-emission-reducing technology becomes economically viable.

The proposed rule — years in the making and approved by the White House after months of review — will require any new power plant to emit no more than 1,000 pounds of carbon dioxide per megawatt of electricity produced. The average U.S. natural gas plant, which emits 800 to 850 pounds of CO2 per megawatt, meets that standard; coal plants emit an average of 1,768 pounds of carbon dioxide per megawatt.

Industry officials and environmentalists said in interviews that the rule, which comes on the heels of tough new requirements that the Obama administration imposed on mercury emissions and cross-state pollution from utilities within the past year, dooms any proposal to build a coal-fired plant that does not have costly carbon controls.

“This standard effectively bans new coal plants,” said Joseph Stanko, who heads government relations at the law firm Hunton and Williams and represents several utility companies. “So I don’t see how that is an ‘all of the above’ energy policy.”

The rule provides an exception for coal plants that are already permitted and beginning construction within a year. There are about 20 coal plants now pursuing permits; two of them are federally subsidized and would meet the new standard with advanced pollution controls.

These new regulations are but one piece of the surge in GHG regulations the EPA is adopting under the Clean Air Act as a consequence of Massachusetts v. EPA.

UPDATE: Here is EPA’s release and website on the new standard

Categories: Climate Change, Energy, Environment Comments Off

The Green Costs of Kelo Revisited

In 2006, Ilya and I co-authored “The Green Costs of Kelo: Economic Development Takings and Environmental Protection,” in which we argued that allowing the use of eminent domain for economic development was bad for environmental conservation.  Environmentalist advocates responded with disbelief.  The Community Rights Counsel (the precursor to the Constitutional Accountability Center) went so far as to label our paper the “outrage of the month” and labeled our argument “a skewed view from the libertarian fringe.”   Six years later, however, it appears some environmentalist advocates are coming around to our point of view.

Yesterday, E&E News reported (subscription required) that several major environmental groups are looking to block the use of eminent domain for the construction of portions of the Keystone XL pipeline that are still slated for construction.  In particular, they plan to argue that the use of eminent domain for the pipeline will violate state rules that preclude eminent domain’s use for private economic development.

In a conference call with reporters today, representatives of four environmental organizations — Bold Nebraska, the Natural Resources Defense Council, 350.org and the Sierra Club — said they believe they have a strong legal case against the company on eminent domain issues. The company is seeking to use condemnation power against a north Texas farmer.

The groups’ main argument is that, as a nonpublic entity looking to build a project for profit, TransCanada does not qualify for eminent domain power in most states.

Whatever the merits of the pipeline, it appears that some environmentalists are beginning to recognize that allowing the government to seize private property for the purpose of encouraging private economic development an facilitate environmentally undesirable projects. Indeed, insofar as such efforts are successful at promoting economic growth, the use of eminent domain for economic development necessarily results in more development than would have occurred absent its use. In other words, the use of eminent domain for economic development results in more environmental harm than if the market were left alone. Further, as we noted in our paper, limiting the ability of governments to use eminent domain for economic development, whether through the Constitution or legislative reform, does not preclude most environmentally beneficial uses of eminent domain, such as the eradication of blight or the provision of public goods.

I’m not sure whether any of the environmentalist groups involved in this dispute acknowledge our work, but it’s nice to see them come around to our way of thinking, even if only on this one issue.

Back in 2007, Congress created a biofuels mandate under which oil companies are required to use a minimum amount of cellulosic ethanol each year.  The mandate was supposed to encourage the development of a domestic cellulosic ethanol industry.  This has not happened.  Several years after the mandate was imposed, there is still no commercial cellulosic ethanol production.  This gets the oil companies off the hook, right?  Nope.  As the New York Times reports, companies are still paying fines, totaling nearly $7 million, for failing to meet a blending quota for a substance that does not exist.  Were that not bad enough, this year the cellulosic ethanol quota will increase, as will the fines for failing to meet it.

Who would defend mandating the use of a substance that, for all practical purposes, does not exist?  Not the renewable fuel industry.  As the NYT reports, they acknowledge that commercial production of cellulosic ethanol remains years away.

“From a taxpayer/consumer standpoint, it doesn’t seem to make a lot of sense that we would require blenders to pay fines or fees or whatever for stuff that literally isn’t available,” said Dennis V. McGinn, a retired vice admiral who serves on the American Council on Renewable Energy.

The EPA, on the other hand, defends the mandate:

Cathy Milbourn, an E.P.A. spokeswoman, said that her agency still believed that the 8.65-million-gallon quota for cellulosic ethanol for 2012 was “reasonably attainable.” By setting a quota, she added, “we avoid a situation where real cellulosic biofuel production exceeds the mandated volume,” which would weaken demand.

AEI’s Ken Green has trouble making sense of the EPA’s rationalization:

So what’s most important about biofuel quotas is that they prevent us from over-producing a product that we can’t produce so we don’t weaken demand for the product that the government mandates we use.

As Green notes, Congress might as well have mandated oil companies blend gasoline with rainbows and unicorn sweat.

The Keystone Pipeline Precedent

Others have commented on President Obama’s decision to punt on the Keystone XL pipeline project.  Ordering additional review pushes the decision past the next election and enables the Administration to evade responsibility should the project ultimately fail.  As those who study environmental law know, delays of this sort are often enough to derail major projects for good — and that’s certainly the outcome some environmentalists anticipate.

The CFR’s Michael Levi suggests environmentalists are being short-sighted, as “the tactics and arguments that have won the day are ultimately as likely to retard clean energy development as they are to thwart dirty fuels.”

oil pipelines are hardly the only pieces of energy infrastructure that will require government approval in coming years. This is particularly true if the United States wants to build a new clean-energy economy.

The country has already seen strong opposition to offshore wind energy in Massachusetts, including from environmental activists and local landowners, on the grounds that it will ruin spectacular ocean views. Solar plants will need to be built in sunny deserts, but local opponents continue to insist that the landscape blight would be intolerable. New long distance transmission lines will have to cross multiple states in order to bring that power to the places that need it most. Once again, though, a patchwork of local concerns and inconsistent state regulation is already making the task exceedingly difficult. . . .

Energy experts often note that it would be impossible to recreate today’s energy infrastructure, given the intensity of opposition to pretty much any new development. The environmentalists’ victory against Keystone XL will only reinforce that judgment. But realizing their broader vision — a low-carbon economy that enhances the nation’s security and helps avoid dangerous climate change — will require defeating the same sort of local opposition that they have just embraced.

The experience of Cape Wind confirms this conundrum, as I have noted for some time.

A Prize for Ocean Cleanup

Last month, the X-Prize Foundation announced the winners of the Wendy Schmidt Oil Cleanup Challenge.  The challenge was created to spur the development of more effective oil spill cleanup methods.  Specifically, the challenge offered $1.4 million in prizes for the development of removing oil from the ocean’s surface.  The aim was to double the industry’s best oil recovery rate in controlled conditions.  The winning team, Elastec/American Marine, demonstrated an oil recovery rate more than three times the industry’s previous best and was awarded the top prize of $1 million.

This is another example of how technology inducement prizes can spur the development of valuable technologies, and further evidence that such prizes are far more cost-effective than ex ante R&D grants or government investments in speculative ventures like Solyndra.  The latter may be more politically popular, but prizes would be a better use of taxpayer dollars.  As I’ve argued at length, if we’re serious about problems like global climate change, we should invest more in prizes and less in conventional approaches to government-sponsored R&D.

(Thanks to Roger Meiners for the pointer.)

Another Setback for Cape Wind

In 2002, federal reguators predicted it would take between 18-months and three-years for the proposed Cape Wind energy project in Nantucket Sound to receive federal approval.  Nearly ten years later, the project is still awaiting full federal clearance, and has yet to begin construction.  Full operation remains at least two years away.

On Friday, the Cape Wind project suffered yet another setback when the U.S. Court of Appeals for the D. C. Circuit vacated and remanded the Federal Aviation Administration’s determinations that the project would pose no hazard to air traffic.  A unanimous three-judge panel concluded that the FAA had failed adequately explain the basis for its decision.  Even though formal FAA approval is not required for the windfarm, the Interior Department has made its approval of the plan conditional upon FAA clearance and full compliance with any FAA-recommended mitigation measures.  So until the FAA can provide an explanation for its “no hazard” determination the D.C. Circuit will accept, construction will be on hold.

Friday’s decision is not merely a setback for Cape Wind.  It worsens the climate for offshore wind energy development more generally.  The longer and more uncertain the regulatory process for such projects, the harder it will be to encourage private firms to invest — and the more difficult it will be to expand wind power offshore.

The Cape Wind experience also shows that it does not take much to gum up the regulatory gears for new projects of this sort.  Opposition to Cape Wind has been driven by a few dozen families willing to invest their time and money to influence the regulatory process — and it’s worked.  It does not matter whether a proposed project is popular with local residents, as a relatively small group of naysayers can exploit existing regulatory requirements to slow things down in the hope of eventually killing the project altogether.  If other offshore wind projects are to succeed where Cape Wind has (thus far) failed, they must prepare for similar opposition, and encourage regulatory reforms that will streamline wind project development and approval.

EPA To Regulate Fracking

Last Friday, the Environmental Protection Agency announced that it planned to propose regulations governing the disposal of wastewater from hydraulic fracturing.  The WSJ reported on the announcement and initial reactions here.

The LA Times reports on a Mythbusters investigation into whether motorcycles are a more environmentally friendly mode of transportation than cars, at least with regard to their fuel consumption and emissions. The investigation involved road-testing vehicles of each type from the 1980s, 1990s, and 2000s while monitoring the vehicles’ fuel consumption and emissions. The results:

Motorcycles were indeed more fuel-efficient than cars and emitted less of the greenhouse gas carbon dioxide, but they emitted far more smog-forming hydrocarbons and oxides of nitrogen, as well as the toxic air pollutant carbon monoxide. For the most recent model year vehicles tested — from the ’00s — the motorcycle used 28% less fuel than the comparable decade car and emitted 30% fewer carbon dioxide emissions, but it emitted 416% more hydrocarbons, 3,220% more oxides of nitrogen and 8,065% more carbon monoxide.

So, if you’re primarily concerned about greenhouse gas emissions — and don’t need to transport passengers or much luggage — motorcycles might reduce your environmental impact. But if you’re concerned about traditional air pollutants — the kind that can affect people’s health here and now — motorcycles are far worse. This should not surprise, as automobiles are subject to far more stringent emission control requirements — and it’s that much easier to add emission controls to a car than a bike as well.

Annette Smith, executive director of Vermonters for a Clean Environment (VCE), is raising questions about “utility scale” wind developments in Vermont.  In a recent op-ed, she identified numerous environmental concerns and suggested postponing proposed wind farm developments until there is an opportunity to evaluate the environmental consequences of a planned 16-turbine development near Sheffield.  Former Vermont governor Jim Douglas has also warned against placing “utility-scale” turbines on Vermont’s ridge lines.  Is this a sign of things to come?  More here.

Categories: Energy 151 Comments

24-Hour Solar Power

James Wimberley reports on a potentially significant technological breakthrough for solar power.

Categories: Energy 128 Comments

Wind Power Clipping Wings

Wind power provides substantial environmental benefits, not the least of which is that it produces electricity without emitting greenhouse gases or traditional air pollutants.  It can also be useful source of distributed power.  But (like anything else) it also has its drawbacks, such as its unsuitability for baseload power and (as some environmentalists are increasingly realizing) the threat it poses to birds.  The federal government estimates wind power kills almost one-half million birds per year — a number that will dramatically increase if wind power expands in accord with the federal government’s plans. Those areas best for wind production are often those areas that pose the greatest risk to birds.

Today’s Washington Post reports on a Fish & Wildlife Service investigation of the deaths of several golden eagles at a California wind farm.

Over nearly 30 years, none of the nation’s 500 wind farms, where 35,000 wind turbines operate mostly on private land, have been prosecuted for killing birds, although long-standing laws protect eagles and a host of migrating birds.

If the ongoing investigation by the Fish and Wildlife Service’s law enforcement division results in a prosecution at Pine Tree, it will be a first. The conservancy wants stronger regulations and penalties for the wind industry, but the government has so far responded only with voluntary guidelines.

The story also notes that the guidelines have been watered down to accommodate industry complaints. The LA Times has more here.

Renewable Energy Sprawl

A new California law mandate that one-third of the state’s electricity come from “renewable” sources by 2020.  What will this mean in practice?  Robert Bryce explored some of the numbers in an NYT op-ed last week.

The state’s peak electricity demand is about 52,000 megawatts. Meeting the one-third target will require (if you oversimplify a bit) about 17,000 megawatts of renewable energy capacity. Let’s assume that California will get half of that capacity from solar and half from wind. Most of its large-scale solar electricity production will presumably come from projects like the $2 billion Ivanpah solar plant, which is now under construction in the Mojave Desert in southern California. When completed, Ivanpah, which aims to provide 370 megawatts of solar generation capacity, will cover 3,600 acres — about five and a half square miles.

The math is simple: to have 8,500 megawatts of solar capacity, California would need at least 23 projects the size of Ivanpah, covering about 129 square miles, an area more than five times as large as Manhattan. While there’s plenty of land in the Mojave, projects as big as Ivanpah raise environmental concerns. In April, the federal Bureau of Land Management ordered a halt to construction on part of the facility out of concern for the desert tortoise, which is protected under the Endangered Species Act.

Wind energy projects require even more land. The Roscoe wind farm in Texas, which has a capacity of 781.5 megawatts, covers about 154 square miles. Again, the math is straightforward: to have 8,500 megawatts of wind generation capacity, California would likely need to set aside an area equivalent to more than 70 Manhattans. Apart from the impact on the environment itself, few if any people could live on the land because of the noise (and the infrasound, which is inaudible to most humans but potentially harmful) produced by the turbines.

In short, while wind and solar power result in lower greenhouse gas emissions, they require large amounts of land — and that’s not even including the need for transmission lines, or the energy and material requirements of facility construction. In the case of wind turbines, it takes approximately 50 tons of steel to build a single megawatt of capacity. Yet a single megawatt of gas turbine capacity can be built with less than one-quarter ton.

Renewable energy sources have their place, but they should not be oversold. Wind and solar may reduce greenhouse gas emissions, but at the expense of other environmental impacts — impacts that should also be considered.

On Tuesday, Senate Republicans blocked a vote on legislation to repeal $2 billion in tax breaks for the five largest oil companies. Even had the bill passed, it would not have had much effect, however. Equivalent legislation is unlikely to move in the House. More importantly, as TPM reports, passage of the bill would likely have been unconstitutional, as revenue-raising measures are required to originate in the House.

Categories: Congress, Energy 21 Comments

A new study by researchers at Duke University found high levels of methane contamination in drinking water associated with hydraulic fracturing in Pennsylvania and New York — contamination that could be the cause of the infamous “flaming faucets” featured in “Gasland.” On the other hand, the study found no evidence “no evidence of contamination from chemical-laden fracking fluids, which are injected into gas wells to help break up shale deposits, or from “produced water,” wastewater that is extracted back out of the wells after the shale has been fractured.”

This new study is sure to heat up the debate over hydraulic fracturing. More from “Dot Earth” and ProPublica.

The Cato Institute’s Jerry Taylor and Peter Van Doren argue that Republicans should take up the President’s offer to eliminate subsidies for the oil and gas industry.  Indeed, limited government conservatives should do the President one better, and call for the elimination of energy subsidies across the board.  I doubt the President would accept this offer — but no more than I doubt Republicans would offer it in the first place.

UPDATE: Some argue that the “subsidies” to oil and gas development are not subsidies at all, but rather the same sorts of tax deductions that all industries get.  Yes and no.  One of the subsidies at issue is the manufacturing tax credit which oil and gas companies get on the same terms as all other manufacturers.  I would agree it does not make sense to single out oil and gas companies and repeal the tax credit only for them, but I don’t think the tax credit makes sense in the first place for anyone.  But other examples are subsidies, pure and simple.  The best example is the percentage depletion allowance which, as applied in some cases, enables oil companies greater depreciation than the value of the initial investment.  No extractive industries get no such benefit, nor should they.  It makes no sense to allow a company to deduct as depreciation more than they invested, and there is no reason why any specific industry should receive this sort of special treatment.  It’s worth noting that this allowance primarily benefits smaller oil companies, not oil giants such as ExxonMobil or BP, but it is a subsidy nonetheless.

Categories: Energy 117 Comments

Jerry Taylor and Peter Van Doren explain why evil oil “speculators” are not behind the recent rise in oil prices.

There is no need to repair to conspiracy to answer the question about why gasoline prices are going up. The loss of Libyan crude–about 2% of global supply–has reduced the amount of oil available in the market and gasoline prices track global crude oil prices.

Prices must necessarily rise to reduce global oil consumption because we can’t consume what isn’t there. How much do prices need to rise to reduce oil consumption by 2%? It takes a big increase in gasoline prices to get us to drive even a little less. Economists estimate that prices must rise anywhere from 10 to 20 times the percentage reduction in quantity to reduce demand enough to equal the lower supply. Thus for a 2% supply reduction, prices must rise between 20% and 40%. Average gasoline prices have risen 20% since early February, on the low end of what economists predict.

There’s every reason to believe oil prices will rise even higher in the coming months, and gasoline prices will follow. In fact, gasoline prices could rise even faster, particularly during the summer months, when various boutique fuel requirements effectively balkanize the domestic gasoline market, making it more vulnerable to supply disruptions. No need to find look for sinister speculators hiding in the wings. The causes of gasoline price increases will be easy to find.

Categories: Energy 139 Comments

Defanging Fang

Lee Fang is a blogger at Think Progress who spends a great deal of time trying to demonize the Koch brothers. His conspiracy theories are quite fanciful, such as this effort trying to show that Wisconsin Supreme Court justice David Prosser conspired to allow more phosphorous pollution by Koch Industries. (For a critique of the post, see here.)

His latest effort attempts to implicate Koch Industries in massive oil market manipulation. It’s a fanciful and remarkably uninformed post. John Hinderaker dismantles it here. If anything, he’s too kind. I don’t expect to agree with much on Think Progress, particularly not on regulatory issues, but I would expect some minimal effort at quality control.

Categories: Energy 92 Comments

In Defense of Fracking

The NYT‘s Joseph Nocera defends hydraulic fracturing (aka fracking) for natural gas.

To begin with, fracking is hardly new. In Texas and Oklahoma, it has been used for decades, with nobody complaining much about environmental degradation. It must be a coincidence that these worries surfaced when a natural gas field called the Marcellus Shale was discovered in the Northeast, primarily under Pennsylvania and New York. Surely, East Coast residents wouldn’t object to having the country use more natural gas just because it’s going to be drilled in their own backyard instead of, say, downtown Fort Worth. Would they? . . .

The truth is, every problem associated with drilling for natural gas is solvable. The technology exists to prevent most methane from escaping, for instance. Strong state regulation will help ensure environmentally safe wells. And so on. . . .

The country has been handed an incredible gift with the Marcellus Shale. With an estimated 500 trillion cubic feet of reserves, it is widely believed to be the second-largest natural gas field ever discovered. Which means that those of you who live near this tremendous resource have two choices. You can play the Not-In-My-Backyard card, employing environmental scare tactics to fight attempts to drill for that gas.

Or you can embrace the idea that America needs the Marcellus Shale, accept the inconvenience that the drilling will bring, but insist that it be done properly. If you choose this latter path, you will be helping to move the country to a fuel that is — yes — cleaner than oil, while diminishing the strategic importance of the Middle East, where American soldiers continue to die.

UPDATE: Just because fracking can be done in an environmentally sound manner, does not mean it always has been or will be. This NYT report suggests some producers have not followed best practices in their choice of injection fluids.

In an order issued yesterday, federal district court judge Martin Feldman held the Department of Interior in contempt for seeking to reimpose a blanket moratorium on deepwater drilling in the Gulf of Mexico in defiance of the court’s decision to enjoin the initial moratorium.  From the order:

The plaintiffs civil contempt claim focuses on the government’s imposition of a second blanket moratorium hurriedly on the heels of the first; plaintiffs argue that moratorium amounts to a flagrant and continuous disregard of the Court’s Order.  But a finding of contempt of the preliminary injunction Order for that reason alone falls short.  The plaintiffs read this Court’s preliminary injunction Order too broadly; that Order emerged from the Court’s finding that the plaintiffs were substantially likely to prove that the process leading to the first moratorium was arbitrary and capricious as a matter of law.  As an answer to the plaintiffs’ quarrel with the second moratorium, the government maintains that it merely met the Court’s concerns and resolved each of the procedural deficiencies the Court found in the first. Perhaps. Under these facts alone, then, the Court could not, at least not clearly and convincingly, find the government in contemptof the preliminary injunction Order . . .

There is, however, more to the story.  The Plaintiffs also stress that the government did not simply reimpose a blanked moratorium; rather, each step the government took following the Court’s imposition of a preliminary injunction showcases its defiance: the government failed to seek a remand; it continually reaffirmed its intention and resolve to restore the moratorium; it even notified operators that though a preliminary injunction had issued, they could quickly expect a new moratorium.  Such dismissive conduct, viewed in tandem with the reimposition of a second blanket and substantively identical moratorium and in light of the national importance of this case, provide this Court with clear and convincing evidence  of the government’s contempt of this Court’s preliminary injunction Order.  To the extent the plaintiffs’ motion asserts civil contempt based on the government’s determined disregard of this Court’s Order of a preliminary injunction, it is GRANTED.

This may seem harsh, and holding the government in contempt is somewhat unusual. I suspect Judge Feldman’s conclusion was influenced, at least in part, by his perception that the federal government was less-than forthright with the court.  In a footnote referencing the controversy over White House edits to a federal report that created the misleading impression that the Interior Department’s decision was supported by outside experts, Judge Feldman suggests government attorneys made representations to the court at odds with subsequent accounts.  If so, the Interior Department brought this upon itself.

As a consequence of Judge Feldman’s ruling, the companies that challenged the original moratorium will obtain legal fees from the federal government.  More coverage of the decision can be found here and here.

Meanwhile, in another proceeding, another federal district court judge in Louisiana held that oil spill compensation fund administrator Kenneth Feinberg is not wholly independent from BP and should not represent himself as such to claimants.  That order is here.  It’s not immediately clear whether this could impact already-settled compensation claims.

The Obama Administration may have lifted the moratorium on deep water oil and gas development in the Gulf of Mexico, but the federal government has yet to authorize any new drilling activity.  As a consequence, according to the WSJ, industry experts do not expect to see any new wells in the Gulf before late 2011 or even 2012. And it’s not just deep-water drilling that’s been affected. Operations in shallower water have been subject to increased regulatory scrutiny as well.

The impact of the delays goes beyond the oil industry. The Gulf coast economy has been hit hard by the slowdown in drilling activity, especially because the oil spill also hurt the region’s fishing and tourism industries. The Obama administration in September estimated that 8,000 to 12,000 workers could lose their jobs temporarily as a result of the moratorium; some independent estimates have been much higher.

The slowdown also has long-term implications for U.S. oil production. The Energy Information Administration, the research arm of the Department of Energy, last month predicted that domestic offshore oil production will fall 13% this year from 2010 due to the moratorium and the slow return to drilling; a year ago, the agency predicted offshore production would rise 6% in 2011. The difference: a loss of about 220,000 barrels of oil a day.

Gulf drilling operations will rebound, but won’t reach pre-BP-spill levels for some time. The imposition of new regulatory requirements is a particularly tough burden for smaller operators and is inducing some companies to shift their operations elsewhere. Is it worth it? That depends on whether one thinks the new regulatory requirements will enhance environmental protection. I am skeptical.