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 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.

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.)

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.

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.

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.

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.

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

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.

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.

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.

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.

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 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.

Officials with American Bird Conservancy . . . cited data from the U.S. Fish and Wildlife Service that estimates 400,000 birds of various species are killed by turbine blades annually.

The conservation group’s concerns come as state and national officials push to expand wind energy development in the coming years.

“Golden eagles, whooping cranes and greater sage-grouse are likely to be among the birds most affected by poorly planned and sited wind projects,” said Kelly Fuller, a spokeswoman for the conservancy.

“Unless the government acts now to require that the wind industry respect basic wildlife safeguards, these three species will be at ever greater risk.”

Such concerns aren’t new.  (I wrote a piece for the Weekly Standard about such concerns over ten years ago). Nor do these concerns mean wind power is a bad idea.  They are nonetheless a good reminder that there is no “perfect” source of power, and even the “greenest” alternative energy sources have their environmental downsides.

Abengoa Solar Inc. expects to start construction in mid-2011 on a plant in Arizona that will store sun-generated heat to provide six extra hours a day of electric-generating capacity. The heat creates steam that is used to turn power turbines.

Abengoa’s $2 billion Solana plant is expected to be the first major stored-heat plant in the U.S. when it enters service in 2013. Some already exist in Spain and a few more are on the drawing board for Nevada and California. . . .

The Solana plant will be able to meet winter heating and lighting needs by putting electricity on the grid early in the morning—before the sun is shining—and help satisfy summer cooling demand by producing power after sundown. The plant, which can power up to 70,000 houses, has signed a 30-year agreement to sell electricity to utility company Arizona Public Service.

The deployment of stored-heat technology like that proposed for the Abengoa facility is a significant development, but it comes at a price.  Solar power is already more expensive than wind power and carbon-based alternatives, including natural gas.  The WSJ reports that adding heat storage increases plant construction costs by approximately 20 percent.

Back in 2000, then-Vice President Al Gore touted ethanol subsidies as good for farmers and the environment.  This was no surprise, as the Clinton-Gore Administration worked to expand ethanol mandates under the Clean Air Act.  However much ethanol programs helped corn farmers, they were never much good for the environment, something Gore now admits.  Reuters reports:

“It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol,” said Gore, speaking at a green energy business conference in Athens sponsored by Marfin Popular Bank.

“First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.

“It’s hard once such a programme is put in place to deal with the lobbies that keep it going.”

Meanwhile, on the other end of the political spectrum, Senators Tom Coburn (R-OK) and Jim DeMint (R-SC) are taking aim at ethanol subsidies as yet another special-interest energy policy boondoggle that should be opposed by free-marketeers and environmental activists alike.  Greg Sargent reports:

With billions in ethanol subsidies set to expire this year, including a 45-cent-a-gallon tax credit for ethanol blenders that heaped nearly $5 billion on to the deficit last year, it appears senators DeMint and Coburn are dead serious about pressing the point.

DeMint, who bucked the GOP establishment by successfully rounding up enough support for an earmarks ban, said in a statement emailed my way:

“Government mandates and tax subsidies for ethanol have led to decreased gas mileage, adversely effected the environment and increased food prices. Washington must stop picking winners and losers in the market, and instead allow Americans to make choices for themselves.”

“We need to let the ethanol subsidies expire and we need energy developed based on market forces,” Senator Coburn added in an interview with me. He said Senators who are not willing to let them expire are “just protecting a parochial interest ahead of the national interest.”

Coburn added that a failure to let the subsidies expire would show that Republicans were not heeding the message their electoral victory sent about reining in spending — precisely what Tea Partyers argued about earmarks.

As Jonathan Zasloff notes, the ethanol issue also presents Republicans with an opportunity to show how less government intervention can be better for the environment.

Ethanol is a lose-lose proposition any way you slice it: it costs a big chunk of money, it’s horrible for the environment, and it does nothing but enrich special interests.  It’s particularly bad on the climate, because the amount of emissions requiring to produce a liter of ethanol is actually more than just using gasoline.  Kudos to Senators Coburn and DeMint for pushing this.

If Republicans fail to take action on ethanol, it will demonstrate the shallowness of their commitment to limiting government largesse and give credence to arguments that Republicans are only for less government when it’s good for special interests.

Mary L. Kendall, the Interior Department inspector general, interviewed all the officials involved in preparing and editing the report and reviewed the e-mails between Interior and the White House in the final hours before the report was issued. She found that officials in the office of Carol Browner, the White House coordinator for energy and environment, had changed some wording and moved around some of the report’s findings in a way that made it look as though the independent scientists had endorsed the moratorium recommendation. Officials from the White House and Interior told Ms. Kendall that they had not intended to do so.

The original report said that the recommendations in the report had been reviewed by the panel of seven experts identified by the National Academy of Engineering. That statement was moved in the final report to come directly after the announcement of the six-month drilling ban, rather than after the safety recommendations. Ms. Kendall said that the placement of the sentence “implied that the experts had also peer reviewed and supported this policy decision.”

More from Politico and the AP.

This is not the only instance of misrepresenting science in the wake of the Deepwater Horizon blowout, further demonstrating that politicization of science is not a partisan phenomenon.

UPDATE: More from Greenwire and Dot Earth.

[Note: Post edited in response to a comment below.]

Exhibit A is Illinois’ Weatherization Assisatance Program, which received $242 million in stimulus money.  As the NYT‘s Green blog reports, a new Department of Energy Inspector General audit of Illinois’ program finds serious problems.

An audit by the inspector general focused on some work done by the Community and Economic Development Association of Cook County, one of 35 agencies in Illinois that are expected to share $91 million over three years. The audit looked at 15 homes and found that 12 failed final inspection “because of substandard workmanship.” In some cases, technicians who tuned up gas-fired heating systems did so improperly, so that they emitted carbon monoxide “at higher than acceptable levels.”

In eight cases, initial assessments of the houses and apartments called for “inappropriate weatherization measures.” In one case an inspector called for more attic insulation but ignored leaks in the roof, which would have ruined the insulation, the audit said. And for 10 homes, “contractors billed for labor charges that had not been incurred and for materials that had not been installed.’’ . . .

The federal audit said that Illinois had found a 62 percent error rate when it re-inspected homes weatherized by CEDA. And sometimes CEDA was spending more for materials than an individual homeowner would spend, the audit found. Some of the work created fire hazards, the audit said.

These results may not be representative of programs in other states, but there is good reason to be concerned.  Thanks to the stimulus, state agencies got lots more money to spend.  In Illinois’ case, the stimulus increased weatherization funds ten-fold.  Agencies received the funds even if they lacked the administrative capability to spend it wisely — particularly if they were expected to spend it quickly.    As a consequence, high levels of waste were to be expected, and results like those found in the IG’s Illinois audit should not be a surprise.

The proposal has sparked a range of reactions.  Doctrinaire environmentalists are concerned, but some thoughtful progressives seem to realize this sort of non-regulatory approach to climate policy may be the only game in town.  (See also here.) Those truly concerned about the accumulation of greenhouse gases in the atmosphere should see this as a good thing.  As David Leonhardt notes, even some supporters of cap-and-trade have acknowledged that Waxman-Markey was oversold.  Despite its tremendous costs, the bill would not have driven down U.S. emissions all that much, and it would have done nothing to prevent massive emission increases in China, India and the rest of the developing world.  The reality is that unless it becomes cheap to power the world in a low-carbon way, it will not happen, and regulatory mandates are no way to achieve this goal.

The biggest question about Post-Partisan Power is how to pay for the proposals.  As a general matter, it’s much easier to increase spending than to impose wide-ranging regulatory controls on energy (and, I would argue, it’s would  also be easier to adopt a revenue-neutral carbon tax than Waxman-Markey-style cap-and-trade, but that’s the subject for another post).   Nonetheless, in the current political environment, it will be difficult to find the $25 billion or so necessary to fund the “post-partisan” plan.  Eliminating energy subsidies could get us only part way there, and a carbon tax to fund additional federal spending would be DOA in the new Congress.

Fortunately there are other options.  If the goal is to increase economic investment in clean energy innovation, not all of the money has to come from the federal government.  Indeed, if the goal is to induce $25 billion in investment, this does not require $25 billion in federal funding.  As I discuss in this paper, technology-inducement prizes can greatly leverage R&D investments.  The Ansari X-Prize offered $10 million for reusable, manned spacecraft but induced an estimated $100 million in investments in pursuing the prize.  Equally important, the resulting innovation sowed the seeds of a fledgling space travel industry, showing how properly designed prizes can lead to commercially viable technologies.  A ten-to-one multiplier is not guaranteed for all prizes, but with prizes the federal government need not put up $25 billion to spur that level of investment.  Federal procurement can also be used to increase the incentive for private sector investment in clean energy R&D  without greatly increasing costs to the taxpayer.

If there’s “post-partisan” support for increased investment in clean energy technology, there should also be such support for prizes.  John McCain proposed a battery prize in the 2008 presidential campaign and the Obama Administration has endorsed greater reliance on prizes in technology funding.  The authors of Post-Partisan Power are correct that there is no solution to climate change without substantial breakthroughs in clean energy technologies.  If their vision of increased clean energy R&D is to become a reality, technology-inducement prizes would be a great place to start.

UPDATE: I should have added that the lifting of the moratorium does not mean that drilling will automatically resume.  Would-be drillers will have to apply for and obtain permits from BOEMRE, and this could take some time — weeks, if not months.

in light of the continuing and ongoing uncertainty created by the Office of Management and Budget’s inability to address significant problems with its methodology for determining the project’s credit subsidy cost and the unreasonably burdensome conditions a loan guarantee under this approach would require, we regret to inform you that Constellation Energy does not see a timely path to reaching a workable set of terms and conditions that would be economically reasonable and statutorily justifiable.

Constellation Energy’s decision is a potentially significant setback for the revival of nuclear power in the United States.  The Calvert Cliffs reactorwas supposed to be the first of several new reactors that Constellation would build with a French company, Electricite de France.

The Post further reports:

economic factors have made nuclear power projects more challenging. Low natural gas prices make that fuel an attractive alternative. Congress also failed to pass climate legislation that would have boosted fossil fuel prices. And steep construction costs make the projects a financial stretch for utilities like Constellation. . . .

Obama administration officials said that they had proposed terms consistent with their fiduciary duty. “We want to see this industry go forward, but we also have a duty to protect the taxpayers’ money,” one senior administration official said.

The administration has approved only one conditional loan guarantee for a nuclear power project and that went to a Georgia plant to be built by Southern Co., which under state law can begin to recover costs while the plants are under construction. Maryland regulations say that power plant construction costs can be passed through to customers only once the plant is operating.

From the AP:

The Obama administration blocked efforts by government scientists to tell the public just how bad the Gulf oil spill could become and committed other missteps that raised questions about its competence and candor during the crisis, according to a commission appointed by the president to investigate the disaster. . .

Citing interviews with government officials, the report reveals that in late April or early May, the White House budget office denied a request from NOAA to make public its worst-case estimate of how much oil could spew from the blown-out well. . . .

The report shows “the political process was in charge and science really does not have the role that was touted,” said Christopher D’Elia, dean of environmental studies at Louisiana State University.

From the NYT:

In August, top administration officials said that 75 percent of the oil had evaporated, dissolved or been collected, implying that their efforts had been largely successful and that ecological damage had been limited. Carol Browner, the White House coordinator for energy and climate change, declared on Aug. 4: “I think it’s also important to note that our scientists have done an initial assessment and more than three-quarters of the oil is gone. The vast majority of the oil is gone.”

But the commission staff members said the government’s own data did not support such sweeping conclusions, which were later scaled back. A number of respected independent researchers have concluded that as much as half of the spilled oil remains suspended in the water or buried on the seafloor and in coastal sludge. And it will be some time before scientists can paint an accurate picture of the ecological damage.

More from FDL.

This filing places the Obama Administration in an awkward position. On the one hand, the Administration would like to support its union allies.  On the other, the Administration has sought to promote the deployment of clean energy technologies, including solar and wind.  The legal merits of the steelworkers’ case aside, China’s actions have made the purchase and installation of wind and solar technologies less expensive in the United States.  Given that cost is the greatest barrier to the proliferation of wind and solar power, China’s allegedly unfair trade practices have been a blessing for clean energy development in the United States.

Bradford Plumer has more here.

The fish hatchery uses about 34,000 kilowatt hours (kwh) of electricity annually. At 10 cents per kwh, that means a bill of $3,400. The solar panels, we are assured, will generate 75% of the hatchery’s electricity, at zero cents per kwh. Assuming so, the annual electric bill will fall by $2,550. Applying that sum to the cost, the recovery period for the solar panels (ignoring interest rates) is 70 years.

Solar panel experts say that panels have about a 25-year life, but the latest models, which no doubt are used in Ennis, may have a 40-year life. Taking that estimate, the panels leave us in the financial dark by 30 years. The rate of return looks like Las Vegas housing the past couple years.

The latest gambit, according to Politico, is to propose a utilities-only cap-and-trade plan (a plan that looks something like what then-candidate Bush proposed in 2000).  While many utilities like the idea of carbon cap-and-trade – indeed, some utilities helped write key provisions of the House bill – they don’t like being singled out.  In return for their support, utilities are apparently demanding relief from other regulatory programs, including limits on emissions of mercury and sulfur dioxide.  EPA has been clamping down on these emissions, and some utilities see the opportunity to make a deal.

Trading carbon caps for relief from mercury and sulfur dioxide regulations would be a “disaster” according to TNR’s Bradford Plumer.  He’s not exaggerating by much.  Some of the regulatory measures from which utilities would obtain relief have actual near-to-medium-term public health consequences.  A single-industry cap-and-trade proposal does not, nor will it have any meaningful effect on atmospheric greenhouse gas concentrations, let alone projected warming.  The more comprehensive bill that passed the House will not do much of anything to regulate the planet’s thermostat, even if one makes the implausible assumption that it will deliver on its promised emission reductions, but a single-sector bill would do even less.  (More on Waxman-Markey here and here.) Scaling back existing rules for traditional pollutants could well have a meaningful impact on ambient concentrations and exposures. Even if some of these rules are overly rigid and burdensome, they do reduce emissions, and the utilities appear to be asking for direct relief, not reforms to make existing rules more flexible, cost-effective, or efficient.

On May 27, 2010 the Secretary issued a Report, which reviews all aspects of drilling operations and recommends immediate and long term reforms to improve drilling safety. In the Executive Summary to the Report, the Secretary recommends “a six-month moratorium on permits for new wells being drilled using floating rigs.” He also recommends “an immediate halt to drilling operations on the 33 permitted wells, not including relief wells currently being drilled by BP, that are currently being drilled using floating rigs in the Gulf of Mexico.” Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them. A factor that might cause some apprehension about the probity of the process that led to the Report.

The draft reviewed by the experts, for example, recommended a six-month moratorium on exploratory wells deeper than 1000 feet (not 500 feet) to allow for implementation of suggested safety measures. The Report makes no effort to explicitly justify the moratorium: it does not discuss any irreparable harm that would warrant a suspension of operations, it does not explain how long it would take to implement the recommended safety measures. The Report
does generalize that “[w]hile technological progress has enabled the pursuit of deeper oil and gas deposits in deeper water, the risks associated with operating in water depths in excess of 1,000 feet are significantly more complex than in shallow water.”

Given this background, it will be difficult for the Secretary to use the report as the primary basis for reimposing the moratorium.  As Judge Feldman explained in his initial opinion (excerpted here), there does not appear to be a rational relationship between the agency’s findings and the scope of the moratorium.  If a broad moratorium is justified (and it may well be) the agency will have to make additional findings or provide a more coherent justification for why the risks and uncertainty about deepwater drilling justify a more expansive, prophylactic moratorium.  The purpose of this explanation will be to demonstrate that the decision was motivated by reasoned analysis, and not just political considerations.  In this regard, the Secretary’s statement that the moratorium will be reimposed shortly is not particularly helpful, as it suggests the sort of decision-first, analysis-later sort of administrative decision-making that is the hallmark of arbitrary decision-making.

None of this means the Interior Department will be unable to justify the broader moratorium.  It will simply have to provide a fuller explanation for its policy choice and why it prefers an expansive moratorium, as opposed to a more limited set of restrictions, such as a halt to drilling focused on the deepest wells or contingent upon the adoption of additional safety measures at affected installations.  Reasons could include continued uncertainty about the precise causes of the BP spill and the government’s inability to provide adequate review and oversight of other wells while coping with the current spill.  The agency could also seek to appeal the district judge’s ruling, but it is unlikely an appeal would succeed.  Appellate review of a district court’s grant of a preliminary injunction is even more deferential than judicial review of agency action.

Meanwhile, Secretary Salazar has renamed the Minerals Management Service as the Bureau of Ocean energy Management, Regulation and Enforcement.

In other spill-related news, the Times-Picayune reports that Georgetown University law professor Richard Lazarus has been named staff director of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

UPDATE: As has been widely reported, the moaratorium was the one measure recommended by Interior Secretary Salazar that had not been reviewed and endorsed by a National Academy of Engineering panel, suggesting it was driven more by political considerations than anything else.  The language of Judge Feldstein’s opinion is likely to reinforce that view.  Here is an excerpt of the relevant portion of the opinion:

After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium. The Report, invoked by the Secretary, describes the offshore oil industry in the Gulf and offers many compelling recommendations to improve safety. But it offers no time line for implementation, though many of the proposed changes are represented to be implemented immediately. The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the thirty-three permitted rigs also reached by the moratorium. It is incident specific and driven: Deepwater Horizon and BP only. None others. While the Report notes the increase in deepwater drilling over the past ten years and the increased safety risk associated with deepwater drilling, the parameters of “deepwater” remain confused. And drilling elsewhere simply seems driven by political or social agendas on all sides. The Report seems to define “deepwater” as drilling beyond a depth of 1000 feet by referencing the increased difficulty of drilling beyond this depth; similarly, the shallowest depth referenced in the maps and facts included in the Report is “less than 1000 feet.” But while there is no mention of the 500 feet depth anywhere in the Report itself, the Notice to Lessees suddenly defines “deepwater” as more than 500 feet.

Of course, the present state of the Administrative Record includes more than the Report, the Notice to Lessees, and the Memorandum of Moratorium. It includes a great deal of information consulted by the agency in making its decision. The defendants have submitted affidavits and some documents that purport to explain the agency’s decision-making process. The Shallow Water Energy Security Coalition Presentation attempts at some clarification of the decision to define “deepwater” as depths greater than 500 feet. It is undisputed that at depths of over 500 feet, floating rigs must be used, and the Executive Summary to the Report refers to a moratorium on drilling using “floating rigs.” Other documents submitted summarize some of the tests and studies performed. For example, one study showed that at 3000psi, the shear rams on three of the six tested rigs failed to shear their samples; in the follow up study, various ram models were tested on 214 pipe samples and 7.5% were unsuccessful at shearing the pipe below 3000psi. How these studies support a finding that shear equipment does not work consistently at 500 feet is incomprehensible. If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavyhanded, and rather overbearing.

The Court recognizes that the compliance of the thirty-three affected rigs with current government regulations may be irrelevant if the regulations are insufficient or if MMS, the government’s own agent, itself is suspected of being corrupt or incompetent. Nonetheless, the Secretary’s determination that a six-month moratorium on issuance of new permits and on drilling by the thirty-three rigs is necessary does not seem to be fact-specific and refuses to take into measure the safety records of those others in the Gulf. There is no evidence presented indicating that the Secretary balanced the concern for environmental safety with the policy of making leases available for development. There is no suggestion that the Secretary considered any alternatives: for example, an individualized suspension of activities on target rigs until they reached compliance with the new federal regulations said to be recommended for immediate implementation. Indeed, the regulations themselves seem to contemplate an individualized

determination by authorizing the suspension of “all or any part of a lease or unit area.” 30 C.F.R. §250.168. Similarly, OCSLA permits suspension of “any operation or activity . . . pursuant to any lease or permit.” 28 U.S.C. §1334(a)(1). The Court cannot substitute its judgment for that of the agency, but the agency must “cogently explain why it has exercised its discretion in a given manner.” State Farm, 463 U.S. at 48. It has not done so.

The Deepwater Horizon oil spill is an unprecedented, sad, ugly and inhuman disaster. What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm. While the implementation of regulations and a new culture of safety are supportable by the Report and the documents presented, the blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.

On the record now before the Court, the defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review. The plaintiffs have established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium.