Coal: Hope in the Face of Pressure?

The coal industry has experienced substantial economic turmoil over the recent past, including bankruptcies – most recently by Peabody Energy Corporation – but also by Arch Coal, Inc., Walter Energy, Inc., and Patriot Coal Corp. Generally, the industry and associated users of coal, have attributed these problems to the designated “War on Coal,” the fashionable pejorative characterization of policies of the Obama Administration. Popular as it is among these groups to blame all the industry’s woes on the Administration, this may well distract from the real cause. Business and investment analysts commenting following the recent Peabody bankruptcy filing lay the blame primarily at cheap natural gas prices. (EE News) It seems reasonable to conclude that cheap natural gas prices have served to speed up the conversion of many power plants from coal to natural gas while the prospect of clean power regulations have served as a catalyst since emissions from natural gas are markedly lower than from coal burning. This current dynamic between coal and natural gas in the effort to provide energy for the nation’s immediate needs is playing out against a backdrop of interest and efforts to develop renewable energy sources sufficient to meet those needs at some point in the future.

That said, there is continuing research into the use of coal and particularly into methods which might allow coal to be used while markedly reducing emissions. A recent article describing a non-thermal plasma system makes the case that “clean” coal is not necessarily an illusion. (Environmental Leader).

While sufficient renewable sources of energy able to meet demand appear to be a hope, rather than a certainty, consumption of fossil fuels will remain significant and important to sustaining our economy. Natural gas seems poised to meet an increasing part of that demand, but the prospect of emerging technology may also provide a continued role for coal in the energy mix.

Renewable Energy Projects Are Making Impacts in Several Ways – – Nationally and Worldwide

Renewable energy investments (primarily solar and wind generation) set a record in 2015 with a collective investment of $286 billion. This according to a report from the United Nations Environment Progamme. (Climate Central News). The indication was that this amount was substantially greater than the total of $130 billion spent on fossil fuel plants last year. Moreover, much of the total is attributable to China, which has historically focused primarily on coal-fired electric generation.

Similar progress was noted in the United States at the recent National Renewable Energy Policy Forum held recently in Washington, D. C. The consensus was that recent tax and budget agreements in Congress will make available approximately $70 billion for investment in renewable energy. (Yahoo Financial Report). One commentator noted that the forum highlighted the fact that U.S. corporations are beginning to demand renewable sources for their production and workplace activities. He also noted that the increase in renewables is beginning to focus attention on the need to improve the nation’s grid system and other support activities. (Environmental Leader).

Another focus that is being driven by this increasing interest in renewables is the need to expand investment opportunities. (Clean Energy Investment Opportunities). Currently, the investment levels in the world are a few hundred billion dollars, whereas projections are that this should, of necessity, increase to over $1 trillion annually if goals for limiting global warming are to be achieved.

While corporations in all business sectors are increasingly showing an interest in the use of renewables, there is also an indication of an emerging willingness to embrace renewables in the nation’s historically conservative rural electric co-ops. Although many in this sector remain publically opposed to any mandates for the use of renewable energy and the consequent impacts on billing and system support costs that are associated with small renewable projects, some co-ops have begun to invest heavily in renewable sources. For example, Dairyland Power in Wisconsin is now sourcing about 12% of retail energy sales from a variety of renewable sources. (Community Power Network). And recently, the Central Iowa Power Cooperative announced plans to build and generate a total of 5.5 megawatts of solar power using a combination of six locations within the co-op. (Iowa Co-op Sets Standard).

Finally, the need to improve and expand the electric grid system is an ongoing effort by the U. S. Department of Energy. Accelerating the deployment of renewable energy is a part of that effort. Recently, the DOE announced that it will participate in the development of the Plains & Eastern Clean Line Project (Clean Line), a major clean energy infrastructure project that will bring wind generation resources in the Oklahoma and Texas panhandle regions and deliver up to 4,000 megawatts of power along a 700-mile direct current transmission line. This will provide electricity to power more than 1.5 million homes. (DOE Announcement).

While many continue to resist or downplay renewable sources, the progress and expansion seems undeniable. This would appear likely to accelerate if the technology continues to improve and investment opportunities and vehicles are made readily available.

Drinking Water Contamination in Flint and Other Communities Reveals Much More Extensive Problems

Flint, Michigan’s problems with lead in its drinking water have been well documented, and this has prompted reports of similar problems detected in other communities, even though these are apparently not as extensive as the situation in Flint. The situation has also revealed that the current procedures to identify and evaluate lead contamination may be flawed and prompted attention to the fact that many other potential contaminants of concern are currently unregulated.

Lead contamination has been documented in a surprising number of communities in addition to Flint over the past few years. (New York Times: Unsafe Lead Levels Nationwide). Communities in Ohio, North Carolina and Mississippi are only a few of those that have experienced issues with lead in the drinking water. Moreover, the actual presence of lead in water systems is probably misunderstood as a result of the procedures EPA uses both to judge the levels of lead that would raise a concern and when the presence of lead contamination requires a response by the water system in regulatory officials. Currently, EPA considers the concentration of lead requiring federal action to be 15 parts per billion, whereas CDC and other public health officials generally consider any concentration of lead in drinking water to be of concern. Moreover, EPA’s methodology for determining whether this concentration requires action is triggered only if less than 90% of the samples in a given system show levels at or above 15 parts per billion. (Detroit Free Press: 90% Is a Passing Grade). Thus, up to 10% of the homes in a given system that are sampled could contain levels of lead in the tap water in excess of 15 parts per billion and yet no regulatory action would be required. Moreover, much of this is not communicated to the customers on a timely basis, even when EPA requires the local water system to take remedial actions.

Beyond the question of lead and its concentration and measurement, the New York Times article also points out that there is a list of potentially risky chemicals and microbes that EPA has compiled but which the has not yet attempted to regulate. In fact, efforts to regulate just one of those contaminants, perchlorate, has been pending for a number of years. As a result, the Natural Resources Defense Council recently sued EPA in an effort to require the agency to proceed with regulation arguably required by provisions of the Safe Drinking Water Act. (NRDC Press Release). EPA effectively missed two deadlines imposed by the Act, thus prompting NRDC’s action.

Flint’s situation revealed failures by officials at all levels of government, initially to avoid the problem, and thereafter to respond to it promptly and decisively. We also know that, even using current measures, problems with lead exist in other communities. What we apparently don’t know is the actual potential for lead contamination in communities that currently meet EPA’s existing standards and avoided the trigger for remediation. Beyond that, the potential threats posed by dozens of other constituents have apparently never been fully evaluated. It seems fair to say that, even when properly administered by officials at each level of operation and oversight, the current regulatory system may be inadequate to fully detect and prevent the problems we know about, much less to detect other threats.

Obama Administration Suffers Environmental Setback

On February 9, 2016, the United States Supreme Court dealt the Obama administration a setback when it temporarily blocked the Obama administration’s efforts to regulate emissions from coal-fired power plants in its attempt to combat global warming. In a 5-4 opinion, with the Court’s four liberal members dissenting, the Court granted a request by 29 states, along with dozens of corporations and industry groups, to temporarily halt an Environmental Protection Agency (“EPA”) regulation[1] before the matter was fully considered by a federal appeals court.

The EPA issued the challenged regulation in 2015. The regulation requires states to make major cuts to greenhouse gas pollution generated by electric power plants, which happen to be the United States’ largest source of greenhouse gases. The aim of the regulation is to transform the generation of electricity in the nation by cutting emissions from existing power plants by a third by 2030, by closing hundreds of heavily polluting coal-fired plants, and by increasing production of wind and solar power.

The 29 states challenging the regulation filed suit to stop its implementation because they contend the rule is unlawful, exceeds EPA’s authority, and constitutes an unlawful invasion of the State’s historic powers.

The Supreme Court’s decision to issue the stay was a shocking development. The Court has never halted a regulation before review by a federal court of appeals.

The Circuit Court of Appeals has expedited the case and scheduled oral argument for June 2, 2016.

 

[1]  80 Fed Reg. 64,662 (October 23, 2015), “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.”

Avoiding A Water Crisis Similar to That of Flint Will Require Both Technical and Practical Effort

The problems with the quality of drinking water in Flint, Michigan, are not necessarily an isolated collection of failures. From a technical standpoint, the potential for lead leaching into drinking water systems in many places in this country is a real issue. That potential is compounded if we see a repeat of the range of bureaucratic failures that occurred in Flint.

The basic conditions that exist in Flint are not unique; they are prevalent at least in the older water systems of the Northeast and Midwest. (National Geographic). As that article points out, the potential for leaching of lead has been known for many years, and EPA enacted regulations twenty-five years ago intended to avoid the problem. However, the mere fact that applicable regulations are in place clearly is not sufficient if those regulations are not diligently enforced. And compliance must be checked by periodic inspection, monitoring, and testing. (Environmental Leader).

The problems in Flint were not inevitable, but were essentially caused and then exacerbated by the failures of some to comply with regulatory obligations and of others to enforce those requirements. Initially, the lead problem probably could have been avoided or at least substantially limited when the source of drinking water changed from Lake Heron to the Flint River if regulatory requirements had been followed to evaluate the potential for the river water to cause leaching. The fact that state and local officials apparently failed to anticipate potential problems was compounded by the failure of federal, state and local officials to respond to the problems quickly when they became apparent, or even to respond with genuine concern to initial complaints from City residents. Instead, those complaints were reviewed with something bordering on disdain. (New York Times). While the response to known or suspected problems presumably would not have prevented the initial leaching, a prompt and substantive response would have prevented lead exposures from occurring for so long a period of time, especially for the most at-risk residents, the children. Indeed, State officials were providing their employees in Flint with bottled water for several months before publicly acknowledging the problem last October. (CBS and ABC).

Conditions similar to that in Flint are present in many places, but so are the protections, if government observes and follows them. The ultimate fix – that of removing all lead pipe from these systems – is extraordinarily expensive and probably unrealistic. However, applicable rules do require steps that should be taken and which can be expected to prevent similar problems at manageable cost. What Flint demonstrates is that at all levels – local, state and federal – the requirements of practical safeguards were simply not appreciated or followed.

 

Some Things Upcoming in 2016

As the New Year begins, a number of issues will compete for attention from Congress and the courts, and we may even get some final determinations about matters that have been long simmering. Much of the substantive work of the Obama Administration has been put into place and is currently subject to various challenges. Many of these will either be decided or will progress substantially during the coming year. Nonetheless, EPA has proposed a full agenda of rulemaking activities for 2016, including both projected notices of proposed rulemaking and publication of final rules for a wide variety of areas that it regulates. (OMB Fall 2015 EPA Rule List see also EPA Regulatory Development Tracker). Among these will include proposals for final rules for things such as standards for management of hazardous waste pharmaceuticals, changes to the hazardous waste generator rules, and a NESHAP for certain industrial commercial institutional boilers.

From an enforcement standpoint, EPA has indicated in its Biennial National Program Manager Guidance and its National Enforcement Initiatives that it will be focusing on several specific areas in the various media that it regulates. Within its national enforcement agenda we apparently will see some focus on areas including: large air emission sources, energy extraction, minerals processing, and animal waste management.

Much will also be going on in the courts as various EPA final regulations have been challenged and we will see those challenges progress. This involves a long list of regulations, but perhaps some of the most significant will be challenges to the Administration’s Clean Power Rule, the Waters of the United States Rule, and the Mercury and Air Toxics Rule. Regarding the Clean Power or Carbon Rule addressing carbon emissions from power plants, this is pending and is subject to a briefing schedule initially on the issue of whether to grant a stay of the rule pending further litigation. The D.C. Circuit set a briefing agenda and apparently oral arguments will be scheduled during the first few weeks of the new year. (Washington Examiner). A stay has been granted by the Sixth Circuit with respect to the Waters of the U.S. Rule (WOTUS) and EPA has issued a statement indicating that it will comply with the stay and, in the interim, will administer the wetlands protection programs along with the Corps of Engineers using its previous approach interpreting existing regulations in accordance with its view of the relevant case law. (EPA Clean Water Rule litigation statement).

The status of the Mercury and Air Toxics Rule appears to be that the rule can be implemented even though EPA must propose certain changes or provide additional substantiation for the rule. The Supreme Court overturned the rule on the basis that the agency had not taken into account economic factors that might tend to make the rule untenable as a result of excess cost of compliance. (Michigan v. EPA). Despite this ruling, the D.C. Circuit refused to grant a stay of the rule while EPA seeks to evaluate the economic issues identified by the Supreme Court. (Utility Dive). The EPA has issued some updated information more recently intended to address the Supreme Court’s concerns. (EPA Mercury Air Toxics Site).

Congress will continue in its collective efforts to undo much of the regulatory agenda put in place by the Administration. Apparently this includes efforts with respect to the carbon (clean power) rule, efforts to defund implementation of the Clean Water or Waters of the U.S. rule and various efforts intended to limit or untrack the Administration’s implementation of the Global Warming Summit held recently in Paris. There will also be an effort to enact legislation to change the method of regulation of coal combustion residuals. That rule, which became effective in the fall, has also been challenged in court.

To conclude on what may be considered a more positive note, Congress did agree to extend tax credits for alternative energy sources. As a result, the development of alternative domestic sources, primarily wind and solar, is now assured for the next five years. (Wall Street Journal) These credits have had some significant impact on the development of this type of power generation (The Hill and National Renewable Energy Laboratory) and would now appear that those sources will continue to develop and expand play an increasingly greater role in power production in the United States.

 

Climate Change: Nations United-Nations Divided?

The third global summit on climate change has begun its meetings in Paris. Unlike the two previous summits, in Kyoto (1997) and Copenhagen (2009), there is optimism that an agreement under the auspices of the United Nations might be reached. (Paris Deal Important First Step). This optimism apparently has its origin, in substantial part, based on an agreement between the United States and China, the two largest carbon pollution emitters in the world.

Yet, while the President may have made inroads to persuading China that emissions reductions are merited, and he has also put his own Clean Power Plan into regulations that may survive court challenge, he has been unsuccessful in pulling together a political majority that recognizes and seeks to act on issues related to climate change. The leadership in the House and the Senate are squarely opposed to any position that might affect U.S. industry or its economy. (The Hill). The House is scheduled to vote today on two joint resolutions to disapprove EPA regulations on emissions for new and existing electric power plants. (Majority Leader’s Floor Schedule). And last Friday, Senate Majority Leader McConell laid out a reminder that the Senate would certainly not go along with any treaty that may come out of the Paris conference. (Op-Ed). Indeed, the legal debate rages over to what extent any agreements made in Paris would become enforceable in the United States. (Washington Post).

This divide is not necessarily merely political, but it does reflect recent polling indicating the sharp party-line split over the climate debate. A Washington Post-ABC News Poll indicates that, while 8 in 10 persons identifying themselves as Democrats believe global warming is a serious problem, nearly 6 in 10 Republicans say it is not. And, of the latter group, apparently two-thirds think there is “a lot of disagreement” among scientists over the existence of global warming, or at least the likelihood that such warming is caused by human activity. [A January 2015 report from the Pew Research Center indicates that 87% of scientists connected to the American Association for the Advancement of Science believe that climate change is mostly due to human activity.] Interestingly, Post-ABC survey finds that the biggest partisan disagreements exist among those with more education with Democratic-leaning college grads 43 percentage points more likely than Americans who lean Republican to say scientists agree on global warming. [As a side note, this may dispel the perception that all liberal arts majors are Democrats.]

The likelihood of success in Paris seems greater than a translation of that success in the United States, and thus, at least within the U. S., the entire process may be doomed from the outset.

 

Climate Change and Creative Problem Solving

A story in the New York Times recently portrays the ice cap in Greenland as rapidly disappearing. (NYT). Indeed, the pictures are dramatic. The story is based on experiences and observations from scientists working in the area, and it tends to support similar claims made by researchers in recent years about changing conditions in Greenland. At the same time, those who deny that global warming is occurring, or at least that it is not significantly caused by human activity, have pointed to other reasons for the reduction in the ice cap there. (Junk Science) Thus, observations are made that this may be part of a recurring trend of expansion and contraction of the ice cap or the result of geothermal activity or, perhaps, for some other reason not caused by human activity. And, indeed, there are some legitimate points and for both sides as explained in a recent BBC summary of the global warming issues. (Guide to Climate Change)

Can both positions be embraced, more or less? It seems so, at least to the Governor of Alaska. Recently he was quoted in a BCC interview as noting that climate changes are significantly affecting living conditions for native Alaskans in remote villages, particularly in the arctic region where villages are being threatened by rising sea levels. This means that the State may be obliged to assist those villages including through relocation. How would he pay for this apparent result of global warming? Through additional drilling for oil and natural gas in Alaska. (BBC Interview)

An ironic circle of reasoning? You be the judge.

Sixth Circuit Issues Nationwide Stay of Clean Water Rule

The U.S. Court of Appeals for the Sixth Circuit issued a nationwide stay of the controversial EPA/Corps of Engineers Clean Water Rule which was effective August 28, 2015. A copy of the decision is HERE. Some 30 states, industry and environmental groups had petitions pending in a number of circuit courts and all were consolidated in the Sixth Circuit. In what appears to be an interesting ruling, the three judge panel essentially expressed a desire to have the rule fully litigated before enforcing it. According to the Court:

A stay temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new Rule and whether they will survive legal testing. A stay honors the policy of cooperative federalism that informs the Clean Water Act and must attend the shared responsibility for safeguarding the nation’s waters. See 33 U.S.C. § 1251(b) (“It is the policy of Congress to recognize, preserve, and protect the primary responsibilities and rights of the States to prevent, reduce, and eliminate pollution.”).

However, the Court did not answer the question as to whether it had subject matter jurisdiction to stay the rule in the first place, but stated it still had authority to stay the rules pending resolution of the jurisdictional question. Briefing on that aspect is to begin shortly.

 

Flint Water System Troubles May Signal Numerous, Potentially Broad-Ranging Problems

For the City of Flint, Michigan, the immediate problem is that the water it provides its citizens is not safe to drink. For many other communities across the nation, the problem may be whether they can do the things necessary to avoid a similar fate.

On Thursday, October 1, local health officials in Flint declared a public health emergency warning that the City’s public water supply is causing elevated lead levels in children (Water Crisis in Flint). Residents were warned not to drink the water unless it has been filtered at the tap, and the State’s governor promised to provide $1 million for filters and for water testing in public schools. Even before the discovery of lead concentrations, the City’s water was found to contain high levels of E. coli and other harmful bacteria. The City’s efforts to control the bacteria using large amount of chlorine created dangerously high levels of trihalomethanes, a carcinogenic by-product of chlorine (NPR).

Some of Flint’s drinking water problems are the result of things that are specific to its situation, including the judgments and diligence of local and State governments. Other factors seem to be more broadbased and likely to present problems in varying degrees in other communities.

Certainly Flint has experienced the types of financial problems increasingly common in the aging factory communities of the Midwest. Unlike Detroit, Flint did not declare bankruptcy, but for almost three-and-one-half years it was under the control of an emergency financial manager appointed by Michigan’s Governor, with that arrangement ending only last April. Among other things, the manager balked at paying increasingly higher prices for water being provided by Detroit, Flint’s historic source of drinking water. Construction of a water line from Lake Huron offered the prospect of a less expensive source, but that line won’t be completed until mid-2016. Yet Flint decided to sever ties with the Detroit system in April, 2014, and replace it for the interim with water from the Flint River. We now know that the river water not only contains high levels of harmful bacteria, it is corrosive, causing lead to leach from joints in the piping system. Although the use of river water was approved by State officials, the many problems leading to the declaration of a health emergency force the conclusion that the idea was not thoroughly considered nor was it adequately monitored in the early days of implementation. This pattern seems to have continued with efforts to solve initial problems, such as the E. coli concentration, causing additional public health risks.

More generally, Flint’s situation may reflect problems that will soon face many other communities around the nation. While the financial problems experienced by both Flint and Detroit have a number of causes, an issue for both cities is the increasing expense of maintaining and operating aging water systems. These issues are not isolated or unique as many communities are facing similar problems with infrastructure and operating costs. A 2011 report by the American Water Works Association estimates that restoring existing water systems as they reach the end of their useful lives and expanding them to serve a growing population will cost at least $1 trillion over the next 25 years (Buried No Longer).

Providing funding for these costs will be a difficult task, but that is only a part of the problem. To avoid the problems facing the residents of Flint, governments, and private operators where they are involved, must do a better job of assessing the potential risks from particular sources of water and diligently monitoring the quality of the water provided to assure that public health is protected.

Update: Late Thursday, October 8, Michigan’s Governor Snyder announced his support for an interim solution that would reconnect Flint to the Detroit water system. The Governor will ask the legislature to provide most of the money needed to renew the connection and provide water through the middle of next year (Star Tribune).