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April, 2012 Archives
Low Prices a Problem? Making Sense of Misleading Talk About Cap-and-Trade in Europe and the USA
Posted: 04/28/2012 2:09 pm
Some press accounts and various advocates have labeled the Regional Greenhouse Gas Initiative (RGGI) as near "the brink of failure" because of the recent trend of very low auction prices. Likewise, commentators have recently characterized the European Union Emission Trading Scheme (EU ETS) as possibly "sinking into oblivion" because of low allowance prices. Since when are low prices (which in this case reflect low marginal abatement costs) considered to be a problem? To understand what's going on, we need to remind ourselves of the purpose (and promise) of a cap-and-trade regime, and then look at what's been happening in the respective markets.
The Purpose and Promise of Cap-and-Trade
A cap-and-trade system -- if well-designed, implemented, and enforced -- will limit total emissions of the regulated pollutant to the desired level (the cap), and will do this (if the cap is binding) in a cost-effective manner, by leading regulated sources to each make reductions until they are all experiencing the same marginal abatement cost (the allowance price). Thus, the sources that initially face the highest abatement costs, reduce less, and those sources that face the lowest abatement costs, reduce more, achieving system-wide minimum costs, that is, cost effectiveness. So, the purpose and promise, in a nutshell, is to achieve the targeted level of aggregate pollution control, and -- if the cap is binding -- do this at the lowest possible cost.
RGGI Allowance Prices
To read the entire article go to: http://www.huffingtonpost.com/robert-stavins/low-prices-a-problem-maki_b_1461501.html?ref=green
Share This PostViewpoints: Cap and trade has lessons for California
Special to The Bee Published Sunday, Apr. 29, 2012
Paul Hibbard is the former chairman of the Massa- chusetts Public Utilities Commission and now is vice president at Boston’s Analysis Group, a consulting firm specializing in economic and business issues.
It's not often that we Northeasterners get to brag about setting a trend that Californians are following. But when it comes to creating a cap-and-trade system for greenhouse gas emissions, we are the nation's first. And as California works to implement a carbon market of its own, Californians can learn from the Northeast's experience.
The Regional Greenhouse Gas Initiative, or RGGI (pronounced "Reggie"), is a cap-and-trade program for the six New England states, New York, Maryland, Delaware, and until recently, New Jersey. RGGI requires power plant owners to buy allowances at auction for the carbon dioxide they emit. If they pollute less, they need fewer allowances, and utilities can sell allowances they no longer need.
The design of the carbon market California is building is different, but the same basic principle applies: market forces will drive companies to find sensible ways to cut emissions.
Of course, people want to know if cap-and-trade programs kill jobs and hurt business – especially at a time when every penny counts. And my firm was commissioned to study that very question: What has RGGI meant in terms of cold, hard dollars? How has it affected the economies of its member states?
To read the entire article go to: http://www.sacbee.com/2012/04/29/4449306/cap-and-trade-has-lessons-for.html
Share This PostViewpoints: Mexico, California stand together on ‘green’ growth
Special to The Bee Published Sunday, Apr. 29, 2012
Carlos Gonzalez Gutierrez is the consul general for Mexico in Sacramento.
Behind the unfortunate images of violence that tend to dominate media coverage of Mexico, there is a solid, reliable and thriving nation that has been going surprisingly unnoticed in recent times: a democratic, open and pluralistic Mexico, with a flourishing middle class and a young population eager to participate and to find solutions to our major challenges. More than ever before there is a huge gap between Mexico's image and Mexico's reality. As the representative of Mexico in Sacramento I feel compelled to share with you this other side of the story.
A Pew Hispanic Center report released April 23 has shown that improving economic conditions in Mexico, coupled with the long-term decline in the country's birth rates, have had a significant impact on migration, so much so that migration flows from Mexico to the United States have come to a standstill. The study even suggests that in the past two years such flows might have reversed their historical direction.
For many decades Mexico experienced severe economic crises periodically. The last one to decimate its citizens' wallets occurred in 1995. Since then, my country has enjoyed economic stability and, despite the 2008-09 worldwide recession, its economic and social indicators have maintained a positive trend. As a result, Mexico has become the 14th largest economy in the world, a middle-income country with a per-capita GDP of $14,610.
To read the entire article go to: http://www.sacbee.com/2012/04/29/4449307/mexico-california-stand-together.html
Share This PostA Daunting Emissions Quest for U.S. Cities
By DYLAN WALSH April 26, 2012, 9:55 am
More than 1,000 American cities have voluntarily committed themselves to ambitious targets for reducing carbon dioxide emissions. A recent case study focusing on Allegheny County, Pa., home to Pittsburgh, highlights how hard it will be for some to meet those goals, however.
At first glance, one would think that the county is on track. According to a study published this month in the journal Environmental Science and Technology, total carbon dioxide emissions in Allegheny County declined by an average of 1 percent a year from 1970 to 2000. And the Pittsburgh region’s current carbon reduction goals are, conveniently, 1 percent per year through 2023.
The difficulty here is that over the same three decades, Allegheny County lost one-quarter of its population and the bulk of its energy-intensive steel industry; that’s what accounts for the overall decline in fossil fuel emissions. Per-capita emissions were actually unchanged.
If continued economic contraction and depopulation were a policy prescription for the Pittsburgh area — and it’s not — the targets set through 2023 might seem more achievable.
More broadly, researchers at Carnegie Mellon University analyzed trends for energy use and fossil fuel emissions from 1900 to 2000 in Allegheny County. The team then paired these trends with historical changes in the local economy to shed light on the feasibility of the Pittsburgh area’s present climate commitments.
“The effort required to make significant change is truly astounding.”
Hard study of the numbers gives one “a sobering pause,” said H. Scott Matthews, a professor of civil and environmental engineering who co-authored the study with Rachel Hoesly, a doctoral student. “This isn’t going to be as easy as it looks.”
“We want the results to help people understand the magnitude of change that’s required,” Dr. Matthew said.
To read the entire article go to: http://green.blogs.nytimes.com/2012/04/26/a-daunting-emissions-quest-for-u-s-cities/?src=recg
Share This PostInterior Secretary Salazar Champions Green Energy Record
Bill Opalka | Apr 29, 2012
U.S. Secretary of the Interior Ken Salazar told a National Press Club audience in Washington, D.C. that the Obama administration has made great strides toward developing renewable energy on federal lands.
To read the entire article go to: http://www.energybiz.com/article/12/04/interior-secretary-salazar-champions-green-energy-record&utm_medium=eNL&utm_campaign=EB_DAILY2&utm_term=Original-Member
Share This PostNatural Gas Is on a Roll, Executive Declares
By ERIC LIPTON April 26, 2012, 4:11 pm
A “perfect storm” of economic and regulatory factors is driving major United States utilities to rapidly switch from coal to natural gas as an electric power source, the top executive of one of the nation’s largest utilities said on Thursday.
Nicholas K. Akins, chief executive of Ohio-based AEP, said the company plans to retire 5 of its 25 coal-burning plants and shut down coal-powered units at other plants it owns in a shift that collectively means the elimination of about 5,000 megawatts of capacity. The result will be that by 2020, only about half of the power AEP produces will come from coal, down from about 67 percent last year.
The surge in domestic production of cheap natural gas, largely yielded by the rise of the controversial technique of forcing gas out of shale through hydraulic fracturing, has been a big factor in this shift. A series of new environmental regulations and pressure from environmentalists are also leading major utilities to either shut down older plants or spend billions of dollars to upgrade them.
To read the entire article go to: http://green.blogs.nytimes.com/2012/04/26/natural-gas-is-on-a-roll-executive-says/?src=recg
Share This PostTrouble With the Top Man
By CLIFFORD KRAUSS April 26, 2012
HOUSTON — Aubrey K. McClendon, Chesapeake Energy’s audacious chairman and chief executive, has ridden the busts and booms in natural gas like a rodeo cowboy. He became a billionaire as the company he co-founded aggressively outbid competitors for land leases and drilled highly productive wells in virtually every major shale gas field in the country. And he acquired trophy assets like an N.B.A. team and a $12 million antique map collection.
But Mr. McClendon also borrowed heavily, with loans currently of $846 million, to finance his participation in an unusual compensation plan that allowed him to invest alongside Chesapeake in every well that it drilled, sharing in both the profits and the expenses.
Now Mr. McClendon may be about to tumble off the bucking bronco. Record low natural gas prices are undermining the value of the company’s investments and his own. Chesapeake announced on Thursday that it was phasing out the contentious compensation plan and undertaking a review of Mr. McClendon’s financial relationships with outside parties.
And a growing chorus of criticism about Mr. McClendon’s risk-taking management style and his compensation could force further changes at the company, the nation’s second-largest producer of natural gas, after Exxon Mobil.
To read the entire article go to: http://www.nytimes.com/2012/04/27/business/energy-environment/chesapeake-energy-to-end-chiefs-compensation-plan.html?_r=1
Share This PostTough Talks Loom at Chesapeake
Company Could Have to Pay CEO to End Contested Well-Ownership Perk
By RUSSELL GOLD April 27, 2012, 6:06 p.m. ET
Now come the awkward negotiations at Chesapeake Energy Corp., as the board and CEO Aubrey McClendon wrangle over how to end a controversial perk that has left Mr. McClendon deeply in debt but with a big potential payoff.
If oil-patch precedent is anything to go on, the company could end up having to pay millions of dollars to buy out Mr. McClendon's right to take a small stake in every oil or gas well Chesapeake drills as long as he covers his share of the costs.
That program has come under intense scrutiny by regulators and the board in the past couple weeks, after they learned that entities the Mr. McClendon controls had arranged for loans of up to $1.4 billion to cover the expense of his participation in the program.
To read the entire article go to: http://online.wsj.com/article/SB10001424052702303990604577370343158069850.html?mod=WSJ_Energy_leftHeadlines
Share This PostHow Chesapeake Energy Can Be Saved (From Itself): Opinion
Written by: Eric Rosenbaum 04/27/12 - 3:00 PM EDT
Tickers in this article: CHK XOM
NEW YORK (TheStreet) -- Poor, misunderstood Chesapeake Energy(CHK) CEO Aubrey McClendon. He's really the victim, isn't he, in the current controversy over his fiefdom otherwise known as a publicly traded company owned by shareholders.
One thing is likely: No matter what anyone else thinks -- including some of the biggest pension funds in the world that would like to see the Chesapeake CEO put on a leash -- McClendon probably thinks he is the one being unfairly targeted.
Last November, when I had the chance to interview McClendon on the sidelines of a conference in New York, it wasn't too long after the first in what's now been worked into a Moby Dick-sized volume from the collected financial press attacking the embattled CEO of the second-largest oil and gas driller in the U.S. after Exxon Mobil(XOM) . Chesapeake is actually No. 1 in terms of the number of rigs actively drilling on U.S. land right now.
To read the entire article go to: http://business-news.thestreet.com/denver-post-energy/story/how-chesapeake-energy-can-be-saved-opinion/11511473
Share This PostOil Spill Risk May Rise In Northwest With Exports Of Coal And Tar Sands Oil To Asia
Posted: 04/25/2012 5:39 pm Updated: 04/25/2012 6:17 pm
Like many residents of the San Juan Islands, Johannes Krieger's livelihood is inextricably tied to the sea. He runs kayak and whale-watching tours here in the northwest corner of Washington State.
"Any oil spill would be pretty devastating. An Exxon Valdez type of spill would blanket the entire San Juan Island area," says Krieger of Friday Harbor. "Even a 160-foot luxury yacht striking a rock can make for a pretty big spill."
To read the entire article go to: http://www.huffingtonpost.com/2012/04/25/oil-spill-risk-exports-asia_n_1453091.html?view=print&comm_ref=false
Share This PostFor Miners, Coal Is No Longer Hot
By MATT DAY April 29, 2012, 4:35 p.m. ET
It's been a bleak spring for U.S. coal miners—and the question for Arch Coal Inc. and Alpha Natural Resources Inc. is whether they can even meet lowered expectations.
Arch and Alpha, the No. 2 and No. 3 miners by production, report their earnings for the first three months of the year on Tuesday and Thursday, respectively.
Demand for the fuel from U.S. power plants is running about 20% lower than last year, according to government estimates, as utilities favor cheaper natural gas, and unusually warm weather limits total electricity use. Coal-company shares have crumbled under expectations that sagging demand may last through the year. On a 52-week basis, shares of both Arch and Alpha are down 72%.
To read the entire article go to: http://online.wsj.com/article/SB10001424052702304811304577368493308003200.html?mod=WSJ_Energy_leftHeadlines
Share This PostStop the nuclear-industry welfare program
By Sen. Bernie Sanders and Ryan Alexander
U.S. Senator Bernard Sanders is a member of the Energy and Natural Resources Committee and the Environment and Public Works Committee. He is chairman of the Green Jobs and the New Economy Subcommittee.
Ryan Alexander is the president of Taxpayers for Common Sense.
With this nation facing a $15 trillion national debt, there is no shortage of opinions about how to move toward deficit reduction in the federal budget. One topic you will not hear discussed very often on Capitol Hill is the idea of ending one of the oldest American welfare programs — the extraordinary amount of corporate welfare going to the nuclear energy industry.
Many in Congress talk of getting “big government off the backs of private industry.” Here’s an industry we’d like to get off the backs of the taxpayers.
As a senator who is the longest-serving independent in Congress, and as the president of an independent and nonpartisan budget watchdog organization, we do not necessarily agree on everything when it comes to energy and budget policy in the United States. But one thing we strongly agree on is the need to end wasteful subsidies that prop up the nuclear industry. After 60 years, this industry should not require continued and massive corporate welfare. It is time for the nuclear power industry to stand on its own two feet.
Nuclear welfare started with research and development. According to the nonpartisan Congressional Research Service, since 1948 the federal government has spent more than $95 billion (in 2011 dollars) on nuclear energy R&D. That is more than four times the amount spent on solar, wind, geothermal, biomass, biofuels, and hydropower combined.
To read the entire article go to: http://grist.org/nuclear/stop-the-nuclear-industry-welfare-program/
Share This PostArizona Tea Party-Backed Bill Gutting Sustainability Efforts Advances
The Huffington Post | By Lucia Graves
Posted: 04/26/2012 7:11 pm Updated: 04/26/2012 7:12 pm
WASHINGTON -- An Arizona Tea Party-backed bill that would gut government-run green programs in the state may have the support it needs to go before Gov. Jan Brewer (R).
In a preliminary voice vote on Wednesday, the Arizona House approved a bill introduced by Tea Party member Rep. Judy Burges (R-Sun City West) with the stated goal of preventing "social engineering ... including where we live, what we eat."
Burges' bill, Senate Bill 1507, targets a United Nations declaration promoting international environmental sustainability, which was adopted by the governments of 172 nations -- including the United States under the George H. W. Bush Administration -- in 1992. Conspiracy theories about the non-binding plan to foster environmental stewardship have long been entertained by conservative organizations such as the John Birch Society, which refers to the declaration as "Agenda 21."
To read the entire article go to: http://www.huffingtonpost.com/2012/04/26/arizona-tea-party-sustainability-green-programs_n_1457392.html?ref=green
Share This PostUtility watchdog seeks funds to enforce safety regulations
April 27, 2012 | Will Evans
Original source: http://californiawatch.org/dailyreport/utility-watchdog-seeks-funds-enforce-safety-regulations-15953
Serious safety violations at power plants go uncorrected because regulators have never used their formal enforcement powers, the California Public Utilities Commission stated in a budget request being considered by legislators.
Profit-driven power plant operators need prodding to correct problems that "put worker and public safety at risk," but the commission lacks staff to litigate a formal enforcement action, according to the budget proposal. Commission staff regularly identify violations but can't fine plant owners without a formal action.
Buffeted by criticism after the deadly San Bruno gas explosion in 2010, the utilities commission is requesting funding for 41 new positions to improve oversight of gas pipelines, electrical lines and railroads. One of those positions is for the power plant safety program. But the agency faces skepticism from legislators over whether additional funding actually will sharpen the commission's regulatory teeth.
"I want to know that if the funds are allocated and the positions are filled that there will be a demonstrable improvement in public safety," said Sen. Joe Simitian, D-Palo Alto, chairman of the budget subcommittee considering the proposal. "The tragedy in San Bruno has highlighted a larger set of systemic shortcomings."
Subcommittee staff recommended rejecting the additional funding, suggesting that a "cultural change" is needed instead. Subcommittee members decided Wednesday to keep the issue open.
Share This PostCase of missing control-room video haunts PG&E
jvanderbeken@sfchronicle.com (Jaxon Van Derbeken)
Posted: 04/27/2012 4:00 AM
Pacific Gas and Electric Co., accused by state regulators of destroying a potentially significant surveillance video taken in a gas-system control center the night of the San Bruno pipeline explosion, now says the recording never existed.
The California Public Utilities Commission recently charged the company with nearly 100 record-keeping and safety violations related to the Sept. 9, 2010, explosion and fire that killed eight people and destroyed 38 homes. Some of them concern a video recording that investigators believe could have shed new light on how PG&E's control center in Brentwood dealt with the crisis in the minutes before and after the blast happened.
For more than five months, PG&E said the video had been inadvertently recorded over. Then, in March, the company told state investigators that the recording system hadn't been configured properly the night of the explosion and that no video had been made.
An investigator for the utilities commission, which had demanded that PG&E turn over any video taken that night, said the company either was wrong when it gave its initial story, is wrong now, or both.
It's unclear what a video might have shown of what was happening in Brentwood as gas-system managers struggled first to understand why pressure on a Milpitas-to-San Francisco gas transmission line spiked uncontrollably, then plunged when the line ruptured in San Bruno.
PG&E confusion
To read the entire article go to: http://m.sfgate.com/sfchron/db_108287/contentdetail.htm?
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