Archive | Energy

What Russia’s Piracy Charges Against Greenpeace Mean for International Law

Amazingly, Russia has brought criminal piracy charges against the crew of the Greenpeace ship Arctic Sunrise, which it had arrested on the high seas. The piracy charges make a mockery of international law, for reasons I’ve discussed. Moreover, such clearly abusive and politicized piracy charges are quite unprecedented in modern history, as far as I can recall. Indeed, I am quite surprised by the charges; I had thought Russia would consider the arrest and initial detention sufficient harassment. (But I was more on the mark with my comparison to Pussy Riot – apparently supporters of the Dutch-flagged vessel are now calling it the Pussy Sunrise.)

The charges are significant for international law because historically nations have been extremely wary of pre-textual or politicized piracy charges. To be sure, nations often publicly accused their enemies of piracy – the U.S. in the Quasi-War constantly denounced aggressive French privateering as “piracy.” In the Civil War, President Lincoln also called the obviously-unrecognized Confederate privateers as pirates. But in these cases the matter would almost never proceed from propaganda to prosecution.

One of the more recent politicized invocations of piracy was the Santa Maria incident of 1961, when anti-Salazar forces hijacked a Portuguese cruise ship. Lisbon denounced the attackers as pirates and demanded their arrest. But because the attackers had come on board as passengers, it did not satisfy the “two ship” requirement, just like in the present case, and the international community did not support the piracy characterization. (The terrorists ultimately got asylum in Brazil.) The point is that looks a lot more like piracy than this, and even still did not meet the requirements.

An internationalist explanation would suggest that this is because nations understood that piracy charges are heavy medicine. It is one of the very few justifications for arresting [...]

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The Impact of Automation on Environmental Impact Statements

Since the 1950s, the Long Beach Freeway has linked the massive Ports of Long Beach and Los Angeles to, roughly, the rest of the continental United States. Because much has changed in trade and traffic since then, California’s relevant transportation authorities have decided that perhaps this freeway should change as well.

The resulting Draft Environmental Impact Statement (EIS), released in 2012, includes several project alternatives that feature a dedicated four-lane freight corridor for the many trucks that service the ports. In two of these alternatives, all of the trucks on the corridor are assumed to have automated steering, braking, and acceleration that enables them to travel in closely spaced platoons of six to eight vehicles. Smoother flows and lower headways mean higher vehicular capacity.

Automation–or at least automation-related litigation–is coming to an EIS near you.

For a transportation project, automation may be relevant to many of the project alternatives, including the no-build. Potential highway expansions typically use a planning horizon of at least twenty years, and yet several automakers now forecast that they will market vehicles with some kind of advanced automation within a decade. (To put this in slightly more skeptical terms, the self-driving cars that have been twenty years away since the 1930s are now just ten years away.)

As I have argued, the ongoing automation of our transportation system could change land use patterns, increase both travel demand and roadway vehicular capacity, and improve the vehicular level of service at capacity. This means that some of the basic assumptions upon which an EIS’s alternatives analysis is based, like a freeway lane’s theoretical capacity of 2400 vehicles per hour, may be outdated by the time a project alternative is implemented.

In addition, as with the Long Beach Freeway analysis, particular alternatives may involve the automation of vehicles [...]

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EPA Proposes New Carbon Standards for Power Plants

Today the Environmental Protection Agency is proposing carbon dioxide emission standards for new power plants that will, in effect, bar the construction of new coal-fired power plants without costly carbon capture technology.  The proposed standards would require both natural gas and coal-fired power plants to meet stringent new limits — limits that most new natural gas plants can meet, but that are not (yet) met by any coal-fired plant in regular operation.  At present, the average U.S. coal plant emits over 1,700 pounds CO2 per megawatt-hour (Co2/MWh).   The average natural gas plant emits around 850 lbs CO2/MWh.  Although the new rule sets slightly different thresholds for coal and gas plants (and distinguishes between smaller and larger gas plants), if finalized, all power plants would have to meet an emission standard of 1,100-1,000 lbs. CO2/MWh. Here’s a graphic illustrating the standards.

As the Washington Post reports, the standard (if finalized) is sure to be challenged in court.  The relevant statutory provision provides that the EPA should set a

standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

The problem is that the only coal-fired power plant capable of meeting the new standard is a federally funded demonstration project set to open next year at which carbon capture and sequestration may be easier (and less expensive) than at other plants.  In the alternative, the only way to meet the standard would be to use natural gas instead of coal.

If the rule is finalized in its present form, coal interests will sue.  At issue will be whether such [...]

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Case Western Reserve Law Review Symposium on Hydraulic Fracturing

The Case Western Reserve Law Review has published its fall symposium on “The Law and Policy of Hydraulic Fracturing: Addressing the Issues of the Natural Gas Boom.”  I blogged about the symposium here.  The full issue is available onilne in PDF, and I’ve posted links to the articles below.

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Is a Wind Turbine a Nuisance?

Wind turbines may be a promising low-carbon power source, but the communities in which they are sited do not always welcome them with open arms. Residents of the Forest hills subdivision in Washoe Valley, Nevada, were none to pleased when one of their neighbors planned to erect a wind turbine to power his home. They sued, alleging the 75-foot-tall turbine would constitute a nuisance, and won. While noting that “the aesthetics of a wind turbine alone are not grounds for finding a, nuisance,” the Nevada Supreme Court ruled that “a nuisance in fact may be found when the aesthetics are combined with other factors, such as noise, shadow flicker, and diminution in property value.” On this basis, the court upheld the lower court’s determination that the wind turbine would constitute a nuisance, and could be enjoined. [...]

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Shultz and Becker Urge Revenue-Neutral Carbon Tax

Former Secretary of State George Shultz and Nobel laureate economist Gary Becker take to the pages of the WSJ to urge a revenue-neutral carbon tax.

we propose a measure that could go a long way toward leveling the playing field: a revenue-neutral tax on carbon, a major pollutant. A carbon tax would encourage producers and consumers to shift toward energy sources that emit less carbon—such as toward gas-fired power plants and away from coal-fired plants—and generate greater demand for electric and flex-fuel cars and lesser demand for conventional gasoline-powered cars.

We argue for revenue neutrality on the grounds that this tax should be exclusively for the purpose of leveling the playing field, not for financing some other government programs or for expanding the government sector. And revenue neutrality means that it will not have fiscal drag on economic growth.

They recommend that revenue neutrality be achieved by fully rebating proceeds from the tax, and doing so in the most direct and transparent way possible — both good ideas. Their piece also urges the elimination of loan guarantees and other attempts by the federal government to play venture capitalist in the energy sector. Now if only they’d endorse prizes too. [...]

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Swan Song for Nuclear Power?

Several years ago, many policymakers and industry experts believed nuclear power was on the verge of a renaissance.  New reactor designs, a streamlined approval process, and the desire for carbon-free electricity generation were to herald a rebirth for this power source.  Yet as the Washington Post reports, it has not worked out that way.

companies are holding back in the face of falling natural gas prices and sluggish and uncertain electricity demand. Only five new plants are under construction, while at least that many are slated for permanent closure or shut down indefinitely over safety issues.

On Monday, the Nuclear Regulatory Commission (NRC) reiterated its refusal to issue a license for a new unit at Calvert Cliffs, Md., that a French company had hoped to make the model for a fleet of reactors. A pair of reactors in Southern California are under scrutiny over whether a major contractor and a utility there concealed concerns about potential cracks in the tubes of a steam generator. And nuclear plants in Wisconsin and Florida are closing down because their owners said they cannot compete with less expensive natural-gas-fired electricity.

Significant regulatory hurdles for new nuclear plants remain. More importantly, low natural gas prices have undercut any economic arguments for nuclear power. Even if new environmental regulations constrain the use of coal, it looks increasingly unlikely that nuclear will be used to pick up the slack. [...]

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Increasing Oil and Gas Reserves

How much has hydraulic fracturing and associated technological improvements in oil and gas development affected the economics of energy? In August of this year the Energy Information Administration reported a record increase in proved reserves of oil and gas in 2010.  Here are the relevant graphs:


Technological improvements deserve most of the credit, though higher energy prices, and the resulting incentive for increased exploration, played a role as well. This illustrates the potential significance of hydraulic fracturing. [...]

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Merrill on “Fear of Fracking”

This morning, Columbia’s Thomas Merrill delivered the keynote address at the Case Western Reserve Law Review symposium on “The Law and Policy of Hydraulic Fracturing: Addressing the Issues of the Natural Gas Boom.” His talk, “Fear of Fracking,” sought to addressed four important questions about fracking: 1) Why did fracking technology emerge in the United States rather than somewhere else? 2) Does fracking present any novel environmental risks? 3) Insofar as there are novel risks from fracking, how could they be best addressed? 4) What should a citizen concerned about climate change think about fracking?

These are important questions about an important topic. As Merrill noted, fracking has rapidly emerged as intensely polarizing environmental issue, celebrated by some as an economic and ecological savior and decried by others as a threat to landowners, local communities, and the environment. The Wall Street Journal believes fracking heralds the rise of “Saudi America,” while some environmental groups fear fracking will further feed America’s addiction to carbon-based fuels.

Whatever its ultimate ecological impact, the combination of hydraulic fracturing and horizontal drilling promises to dramatically increase domestic oil and gas reserves, drive down energy prices and fundamentally transform the energy sector. North Dakota now produces more oil than any state but Texas and the oil and gas boom in this state is enriching landowners tremendously. Every president since President Nixon has called for energy independence. Fracking’s rise could make this possible within the next few decades. Beyond that, fracking and the proliferation of cheap gas, Merrill suggested, likely means the end of the nuclear power industry in the United States and has thrown the coal industry into a tailspin. Cheap gas is a bigger threat to coal than any alleged “war on coal” waged by the Environmental Protection Agency. It also threatens the future of [...]

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Is It Time to Reconsider Daylight Savings Time?

Daylight savings time ends this weekend, but should it be ended for good? Georgia State economist Spencer Banzhaf has an op-ed in today’s WSJ questioning the case for shifting the clocks over the summer. Here’s a taste:

The United States adopted the annual use of daylight-saving time permanently in 1966, then lengthened its duration on the calendar in 1986 and again in 2007. For the past five years, an extended daylight-saving period has begun the second Sunday of March and ended the first Sunday of November. . . .

It is a fallacy to think that if something is good, then more of it must be better. In early November or mid-March, few people—college students excepted—are still sleeping through morning daylight. A household waking at, say, 6 a.m. and going to bed at 11 p.m. won’t experience any more daylight when its schedule is moved up an hour, to 5 a.m. and 10 p.m. No daylight wasted, no daylight to be saved.

So the extension of daylight-saving time gives us cold, dark mornings without the energy savings to compensate. Often it actually causes us to expend more energy: Even in my Atlanta home, for the past few weeks we’ve turned the heat on in the early-morning hours. The effect must be even more pronounced in colder climates.

The rationale for extending daylight savings time is that it’s supposed to save energy. But it doesn’t seem to actually work out that way. As Banzhaf notes, a study of several Indiana counties forced to adopt daylight savings time found that it actually increased energy use, likely due to increased residential air-conditioning use in the summer (due to more at-home daylight hours) and increased heating use in the winter (for fall mornings). Notes Banzhaf:

One could argue that long summer days are a

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President Obama Blocks Chinese-Owned Wind-Farm Development

As anticipated in yesterday’s post, today President Obama acted on the pending CFIUS report regarding the Chinese-owned wind-farm developer (Ralls Corp.) and its  four wind-farm projects in Oregon.  The President’s order is noteworthy for being even broader than the two CFIUS orders it supersedes (which are described in my first post).

Such presidential orders are quite rare; a colleague of mine thinks this may be only the second or third such order since 1988.

The President first finds–without additional detail–that Ralls and its affliates and subsidiaries, through their control of the wind-farm projects, “might take action that threatens to impair the national security of the United States.”  The President does not specify how, but the Department of the Treasury issued a press release that provides one possibility, stating that “The wind farm sites are all within or in the vicinity of restricted air space at Naval Weapons Systems Training Facility Boardman.” (As noted here, Ralls relocated one project  at the Navy’s request to avoid that airspace, and Ralls’ lawsuit alleges that after it did so, the Navy recommended that Oregon regulators issue the necessary approvals–although they did emphasize that even the new location “may have negative national security implications”.)  In light of some of the order’s restrictions, I don’t think the proximity of the Naval base is a full explanation of the government’s concerns.

The President’s order then prohibits Ralls’ already-completed acquisition of the four projects and their assets and orders Ralls to divest them within 90 days (with a possible  three-month extension on such terms as CFIUS may require).  Ralls is even required to divest all interests in the projects’ “intellectual property[ and] technology.”  Ralls is given just 14 days to  remove “all items, structures, or other physical objects . . . (including concrete foundations),” from [...]

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Update on Lawsuit Challenging CFIUS Action Blocking Chinese Wind-Farm Development

With my firm’s CFIUS experts, I put together a fuller analysis of the potentially significant CFIUS lawsuit I blogged earlier this month.  For those just tuning in now: the U.S. government’s Committee on Foreign Investment in the United States issued an order that blocked a Chinese-owned developer from proceeding with four wind-farm projects in Oregon; the developer sued, challenging not only the lack of transparency in CFIUS’s procedures and decision making, but also CFIUS’s authority to block  or unwind the transaction.

There have been a few noteworthy developments in the case.  First, just hours before the government was due to file its opposition to Ralls’ motion for a TRO, Ralls withdrew the motion after reaching an agreement with the government that allowed it to resume  preliminary construction at the wind-farm site while the suit is pending; the CFIUS order previously directed Ralls to “cease all [c]onstruction and [o]perations at the site.”  Although correlation does not imply causation, it suggests that the suit has improved Ralls’ position with respect to CFIUS.

Second, although correlation still does not imply causation, the day after the suit was filed, CFIUS sent a report to the President describing its assessment of the risks; by statute, once CFIUS sends such a report, the President has 15 days to  decide whether to take action (e.g., to block or mitigate the transaction).  The deadline runs tomorrow.

Because the  Foreign Investment and National Security Act of 2007 provides that the President’s actions and supporting findings “shall not be subject to judicial review,” there would be a question whether the President’s own actions (if any) would moot the lawsuit.  Ralls has a response (that the suit could continue under the “capable of repetition but evading review” exception to mootness doctrine. as CFIUS reviews each transaction in the first [...]

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Dispatches from the Duke Conference on “Conservative Visions of Our Environmental Future”

Today I am at Duke to participate in a conference on “Conservative Visions of Our Environmental Future,” sponsored by the Duke Environmental Law and Policy Forum, Nicholas Institute for Environmental Policy Solutions, Nicholas School for the Environment, Duke Federalist Society, Duke College Republicans and the Energy & Enterprise Initiative. The conference is being live streamed here, and I’ll be offering comments on the proceedings below. [...]

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Landmark Foreign-Investment Suit Filed

If you deal regularly with the federal government, there are more candidates for the “most important government office that you’ve never heard of” than you can count.  My post tonight concerns not an office, but a federal interagency committee: the Committee on Foreign Investment in the United States, known by its acronym CFIUS, which is undeniably powerful, but sufficiently obscure that even the hardcore law nerds of the Volokh Conspiracy have mentioned it only once before.

On Wednesday, a Chinese-owned wind-farm developer sued CFIUS to seek review of recent CFIUS orders that effectively require the developer to unwind its purchase of four wind-farm projects in Oregon.  The suit is a rarity in a field that has seen virtually no efforts to obtain judicial review.  Even partial success by the plaintiff in obtaining review of CFIUS’s decision could have major implications for foreign direct investment in the United States and increase the transparency of a historically opaque government approval process.  More after the jump. [...]

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