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26Jul/16Off

New Survey Shows How Utilities Are Dealing With Increasingly Complex Markets


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Three takeaways from SEPA’s annual Solar Market Snapshot.

by Julia Pyper

July 25, 2016

The U.S. solar market is growing. At the same time, it's getting more diverse in terms of project types, relevant policies and related technologies.

The Smart Electric Power Alliance's (SEPA) recently released 2015 Solar Market Snapshot reports that total U.S. solar capacity reached 22.5 gigawatts AC (more than 25 gigawatts DC) last year. The amount of solar on residential rooftops across the country increased 50 percent, and the number of residential solar projects made up 97 percent of installations. However, utility-owned solar projects continue to deliver the most capacity -- nearly 3,500 megawatts AC in 2015, compared to 1,800 megawatts AC for residential.

It comes as no surprise that California's investor-owned utilities led the country in the number of megawatts installed last year. But the list looked quite different with respect to watts installed per customer, where the top five positions were taken by two small Ohio utilities (Village of Minster and Carey Municipal Power & Light), Dominion North Carolina, the City of Palo Alto and the Guam Power Authority.

The Solar Market Snapshot, which is based on market intelligence provided by about 350 utilities, includes several other highlights on the state of the U.S. solar market. Here are three more important takeaways.

http://www.greentechmedia.com/articles/read/New-Survey-Shows-How-Utilities-Are-Dealing-With-Increasingly-Complex-Market

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26Jul/16Off

LA County Choice Program Urged to Rely on Distributed Generation


21 JUL 2016

http://cacurrent.com/subscriber/archives/27808

Los Angeles County is seeking electricity suppliers for a community choice aggregation program that could begin Jan. 1.

“Community choice aggregators represent a significant opportunity for communities to band together and purchase green energy for their residents, at a lower price, than the current structure of for-profit investor-owned utilities now allow,” according to Los Angeles County Supervisor Sheila Keuhl.

Energy suppliers were to submit qualifications to the county by July 6 for review by Los Angeles County Community Choice Energy, a new joint powers authority being formed.

A business plan for the new choice organization is due any day, according to Howard Choy, Los Angeles County sustainability office general manager.

Under a tentative schedule, the new choice program could begin serving some 1,700 customers—largely county government facilities—with a peak load of about 40 MW on Jan. 1.

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26Jul/16Off

LA County sues SoCalGas to force installation of safety shut-off valves

Elizabeth Aguilera and Paul Glickman July 25, 12:59 PM

An aerial view of the leaking Aliso Canyon well pad near Porter Ranch on Dec. 17, 2015. EARTHWORKS VIA FLICKR CREATIVE COMMONS

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http://www.scpr.org/news/2016/07/25/62961/la-county-sues-socalgas-to-force-installation-of-s/

In the latest legal fallout from the massive Porter Ranch natural gas leak, Los Angeles County went to court Monday seeking to force Southern California Gas Co. to install underground safety shut-off valves on every active gas storage well and distribution pipeline it operates in the county.

The suit, filed in L.A. County Superior Court, claims SoCal Gas "put corporate profits before public safety" by failing more than 30 years ago to replace a faulty shut-off valve on the well that blew last fall at its Aliso Canyon storage facility.

The complaint says a number of the company's 229 active L.A. County gas wells "are plagued with corrosion, structural integrity problems, erosion, and other safety hazards," and refers to a number of other leaks that have occurred at three other SoCal Gas storage facilities elsewhere in the county.

The complaint also seeks "punitive and/or exemplary damages in an amount sufficient to punish, deter, and make an example of SoCal Gas." County attorneys say it would be up to a jury to determine the amount.

"The gas company has demonstrated time and time again that they are unwilling to uphold their responsibilities," says Supervisor Mike Antonovich. "They failed to reimburse the thousands of resident in a timely manner, they failed to adequately clean the impacted homes, they have failed to learn lessons from the leak and install common sense safety equipment."

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26Jul/16Off

Colorado business coalition reactivates to fight “economically damaging” oil and gas initiatives

Big money flowing in to fight “ill conceived” measures

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Anadarko drilling rig near Dacono, Colo. on May 19, 2014.

By ALDO SVALDI | asvaldi@denverpost.com

PUBLISHED: July 22, 2016 at 7:48 pm | UPDATED: July 22, 2016 at 10:16 pm

Coloradans for Responsible Reform, a battle-hardened business coalition, is mobilizing to help the state’s petroleum industry fend off three ballot initiatives that target oil and gas development in the state.

“We will raise what we need to raise to be successful,” said Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce, and co-chair of the effort.

Brough expressed a mix of resolve and frustration that the group, first assembled in 1994, must redeploy to fight what it considers ill-conceived and economically damaging initiatives trying to become part of the Colorado constitution.

One way to think of the CFRR is as the political equivalent of a tested military reserve unit that the chamber calls into action when it believes business interests in the state face a serious threat.

RELATED ARTICLES

  1. July 24, 2016 Analysis of Initiative 78 ignores major costs of drilling
  2. July 15, 2016 Colorado oil and gas rig count reaches 20 again
  3. July 13, 2016 Court OKs driller Venoco’s plan to slash $1 billion in debt in restructuring
  4. July 11, 2016 Colorado firewater: mostly natural, industry leaks seldom to blame, CU study finds
  1. July 6, 2016 Big oil finding money for biggest projects

“We welcome anyone willing to publicly oppose these extreme measures that would eliminate responsible oil and natural gas development and let the government take private property without compensating the owners,” said Karen Crummy, spokeswoman for Protect Colorado, the first issue committee to oppose to the measures.

http://www.denverpost.com/2016/07/22/colorado-business-fight-for-oil-and-gas/

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26Jul/16Off

Here’s how a post-coal Appalachia could thrive


By Jeremy Deaton on Jul 25, 2016

http://grist.org/climate-energy/heres-how-a-post-coal-appalachia-could-thrive/

Last year, a pair of anthropologists traveled to central Appalachia to talk to locals about the so-called “War on Coal.” They trekked across nine counties in West Virginia and eastern Kentucky, recorded hundreds of conversations, and published the results in a report for the Topos Partnership, a public interest communications firm.

Appalachians told the researchers they want independence, and they believe independence comes from work. Work used to come from coal, but mining jobs are fleeing the region. In the last five years, Kentucky and West Virginia shed 15,000 coal jobs.

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“When we have coal, then we have money put into our communities, but when you don’t have coal, your coal miners leave. They go places,” said a woman from Logan County, West Virginia. Coal miners could make upwards of $80,000 a year, and they spent their hard-earned dollars at the grocery down the block and the bar around the corner.

As coal departs, Appalachia is being forced to reinvent itself. Amid reports of economic decline are stories of rebirth, of communities reclaiming their independence.

Computer programming

Kentucky tech startup Bit Source is hiring out-of-work coal miners and teaching them to write code.

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26Jul/16Off

How air-conditioning made America — and how it could break us all


By Katie Herzog on Jul 26, 2016 6:10 am

http://grist.org/food/how-air-conditioning-made-america-and-how-it-could-break-us-all/

Summers in the South are difficult. It’s often beautiful outside, with bright, blue skies and plenty of lush, green vegetation, but it’s also so hot that you can’t really enjoy it. The air is heavy, like you’re constantly being hugged by a sweaty person, and so you either stay inside, or you suffer. And it’s easy for most folks to stay inside because nearly everyone has air-conditioning.

At least, until they don’t.

In the summer of 2011, a heat wave seared North America. From the Southwest to the Eastern Seaboard and up to Canada, it was the hottest heat wave in 75 years, hitting an estimated 200 million people. It was also the weekend my air conditioner broke. In Durham, North Carolina, we experienced five triple-digit days in a row. All over the city, air conditioners just couldn’t keep up. From office buildings and grocery stores to coffee shops and movie theaters, the buildings you normally expect to provide sweet relief from the outside just sweltered. Inside my house, the thermostat hit the low 90s, and stayed there — all week.pastedGraphic.pdf

At first, I thought I could handle it. I didn’t grow up with air-conditioning, so I did what we did when I was kid: I drew the shades and closed the windows during the day, then opened everything up at night to let the cool air in. But even at midnight, my poorly insulated house felt like the inside of a dryer. To cope, I lay on my living room floor under a ceiling fan and held a frozen washcloth to my wrists and neck. When that didn’t solve the problem, I took cold showers. When my skin started to prune, I stuck my feet in a bag of ice. When the ice melted, I called a friend with working air-conditioning. I spent the rest of the week at her house, never so glad for good friends and good AC.

But this nightmarish experience made me think: What in the hell did people do before air conditioning?

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REUTERS/Rodrigo Garrido

A very short history of cooling

Primitive air-cooling systems have been around for eons, from ancient Rome, where the wealthy cooled their homes by circulating water between walls, to 2nd century China, where the first fan large enough to cool a room was developed (it was also powered by hand).

The first modern cooling system was invented by John Gorrie, a Florida physician who believed that cold was good for healing. Gorrie had been cooling sickrooms by suspending basins of ice from the ceiling, but the ice had to be imported from the North. It was expensive, difficult to store, and, predictably, prone to melting. Rather than relying on this limited natural resource, Gorrie started experimenting with artificial cooling by using a steam engine to force air through a tank of chilled brine. It worked, and Gorrie was granted a patent for his cooling machine in 1851.

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26Jul/16Off

There’s a new global climate deal that you probably haven’t heard of yet


By Katie Herzog on Jul 25, 2016

http://grist.org/news/theres-a-new-global-climate-deal-that-you-probably-havent-heard-of-yet/

The nations of the world are on the verge of reaching a new deal to fight climate change — while also protecting the ozone layer.

Talks in Vienna, Austria, have been leading toward a worldwide agreement to phase out the use of hydrofluorocarbons (HFCs). They were widely adopted to replace chlorofluorocarbons (CFCs) in air conditioners and refrigerators after it was discovered that CFCs were creating a hole in the ozone layer. The Montreal Protocol, a landmark treaty, phased CFCs out. But while HFCs don’t damage the ozone layer, it turns out they are potent greenhouses gases, trapping thousands of times more heat than carbon dioxide, so now they need to go too. Researchers think that by cutting HFCs globally, we could prevent up to 0.5 degrees C of global warming by 2100.

Negotiators are currently working on adding an HFC-cutting amendment to the Montreal Protocol, which would be the single largest measure to fight climate change since the Paris Agreement was reached last December. Under the current draft of the amendment, developed nations like the United States would eliminate HFCs by the 2030s, while developing nations would have until the 2040s. Developed nations would also help pay for the transition. The deal could be finalized in Rwanda in October.

U.S. Secretary of State John Kerry, who’s been playing a key role in the negotiations, says, “an HFC phase-down amendment is a critical piece of the climate puzzle.”

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26Jul/16Off

Subsidy cuts are working their way through Britain’s solar industry.

Insult to Injury: As Britain Prepares to Leave the EU, Solar Installers Shed More Than 12,000 Jobs

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by Stephen Lacey

July 25, 2016

It's still unclear how Britain's coming split with the European Union will impact its energy markets. Will regional energy trading suffer? Will energy bills rise? Will investors walk away?s still unclear how Britain's coming split with the European Union y?

Those questions are still unanswerable. But even if Brexit doesn't dramatically change the U.K. energy system, there are already radical changes underway in one market: solar.

A series of deep cuts to Britain's solar promotion programs over the last year is finally catching up to installers.

According to a new industry survey from PwC and the Solar Trade Association, U.K. solar companies have shed 12,500 jobs over the last year. And more job cuts are likely on the way. Nearly one-third of businesses surveyed by the organizations said they expect to lay off more employees in the next year.

In addition, nearly 40 percent of solar companies surveyed are considering shutting down business altogether -- or may fully exit the market in favor of international opportunities.

http://www.greentechmedia.com/articles/read/britains-solar-industry-sees-massive-wave-of-layoffs

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26Jul/16Off

British Nuclear Power Stations May Be Too Big A Risk For French EDF

JUL 25, 2016 @ 07:08 AM

Marcel Michelson , CONTRIBUTOR

I write about European business; firms, people, politics and economy.

Opinions expressed by Forbes Contributors are their own.

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A model of an European Pressurised Reactor project (EPR) is presented at the stand of French nuclear giant Areva during the World Nuclear Exhibition in Le Bourget, near Paris, on June 28, 2016. (ERIC PIERMONT/AFP/Getty Images)

French state-controlled power group EDF is set to hold a supervisory board meeting on July 28 to decide whether to go ahead or not with a project to build and operate two nuclear power stations at Hinkley Point in Britain.

It might be wise to call the 22 billion euro investment off due to the many risks and the weak financial situation of the power group that also needs to phase out and replace ageing stations in France.

The project has already cost more than two billion euros and two initial partners have dropped out – Britain’s Centrica and French nuclear power station builder Areva . Areva, in financial dire straits, is facing serious problems with the construction of EPR stations in Finland and in France.

http://www.forbes.com/sites/marcelmichelson/2016/07/25/british-nuclear-power-stations-may-be-too-big-a-risk-for-french-edf/?

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26Jul/16Off

ran’s Natural Gas Exports Mandate U.S. LNG Support

JUL 24, 2016 @ 03:21 PM 3,841 VIEWS

Jude Clemente , CONTRIBUTOR

I cover the oil, natural gas, electricity, and LNG markets

Opinions expressed by Forbes Contributors are their own.

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Iran’s South Pars in the Persian Gulf is likely the largest gas field in the world. Source: The Iran Project

  1. “EU Energy Chief Sees Significant Role for Iranian LNG in Europe,” The Wall Street Journal, April 18, 2016
  2. “Iran-India energy cooperation opens new horizons,” AL Monitor, January 14, 2016
  3. “Iran eyes exporting natural gas to China,” Natural Gas Europe, November 14, 2015

Since Iran is the “largest state sponsor of terrorism in the world,” the above headlines mandate required public and legislative support for U.S. exports of liquefied natural gas. Iran’s natural gas industry has been hampered by U.S. and European-led sanctions that have restricted the flow of foreign direct investment and the transfer of technology, but Iran is swimming in natural gas and wants to make a splash on the international export stage.

As Western sanctions are lifted, Iran seeks to become a major player in the rapidly globalizing gas market. Today, traded gas accounts for a rising 30% of all use and will expand in volume by 30% by 2025. Gas will be the primary fuel under COP 21 set last November (here), and annual global demand is rising by 6-8 Bcf/day. Iran produces around 6 Tcf per year, and consumption has been just under that. Production will reach over 10 Tcf by 2030 (here). “Iran has a high success rate of natural gas exploration, which is estimated at 79% compared to the world average success rate of 30% to 35%.”

Despite Western sanctions, Iran’s natural gas production continues to grow as more phases of its largest natural gas field, South Pars, come online. In all, the field Iran shares with neighboring Qatar is being developed in 24 phases. About half of the phases have been completed, and Iran hopes the field, including those centered on oil, will be fully operational in 2018. Located over 60 miles offshore, South Pars holds nearly 40% of Iran’s gas reserves.

Iran contributes just 1% to the total global natural gas trade, with almost 90% of exports going to Turkey. But, a huge buildout in infrastructure means that India, Pakistan, Kuwait, and UAE could all become targets for Iran’s gas. And planned reductions in subsidized pricing, which will help reduce wasteful usage, will free up more of Iran’s gas for exports.

http://www.forbes.com/sites/judeclemente/2016/07/24/irans-natural-gas-exports-mandate-u-s-lng-support/?

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26Jul/16Off

Shell Oil Workers in North Sea Threaten to Strike


By STANLEY REEDJULY 25, 2016

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Oil rigs off the coast of Scotland. A strike is being threatened by 400 maintenance workers on oil production platforms operated by Royal Dutch Shell.

Credit

Jeff J Mitchell/Getty Images

LONDON — As energy prices start to rebound, a group of oil workers in the North Sea are gearing up for a strike, saying the industrywide cuts have been too deep.

The labor action, by unions representing about 400 maintenance workers on seven oil production platforms operated by Royal Dutch Shell, is part of the broad struggle to find a new equilibrium.

“Pressure is mounting not just in the North Sea but in many different regions for producers to start spending as oil prices rise,” said Richard Mallinson, an analyst at Energy Aspects, a London-based research firm.

When oil prices soared to more than $100 a barrel, costs followed. Oil companies spent heavily to ramp up production and invested heavily in big, expensive projects.

The drop in prices naturally prompted a sharp pull back. Oswald Clint, an analyst at Bernstein Research in London, estimates that the industry has cut operating costs by about 45 percent in the United States, and 20 percent elsewhere.

http://www.nytimes.com/2016/07/26/business/international/shell-oil-workers-in-north-sea-threaten-to-strike.html?ref=energy-environment&_r=0

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26Jul/16Off

Exxon Mobil Acquires InterOil for $2.5 Billion

By MICHAEL J. de la MERCEDJULY 21, 2016

Exxon Mobil agreed on Thursday to buy InterOil, a driller focused on projects in Papua New Guinea, for at least $2.5 billion as the petroleum giant seeks newer fields.

Exxon beat out a competing bid by Oil Search Limited, a Papua New Guinea oil and gas exploration and development company, which had offered to pay about $2.2 billion.

InterOil’s holdings in Papua New Guinea are a potential source for liquefied natural gas. The deal includes interests in six licenses in Papua New Guinea covering about four million acres, including a field called Elk-Antelope where the proposed liquefied natural gas project would be anchored.

http://www.nytimes.com/2016/07/22/business/dealbook/exxon-mobil-acquires-interoil-for-2-5-million.html?ref=energy-environment

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25Jul/16Off

Elon Musk of Tesla Sticks to Mission Despite Setbacks


By MATT RICHTELJULY 24, 2016

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“The faster we can transition to low carbon, maybe, ultimately, to a negative carbon economy, the better,” Elon Musk said.

Credit Bobby Yip/Reuters

FREMONT, Calif. — Elon Musk, the chief executive of Tesla Motors, sat in a glass-walled conference room here last week in the company’s auto factory. Around him, workers and robots were building the $70,000 luxury vehicles that have redefined how people think about electric cars.

But autos are just one of Mr. Musk’s many projects. A South African-born billionaire and entrepreneur, he is the top investor in the country’s largest provider of rooftop solar power, runs a private rocket company, and in a blog post last week pledged to create a ride-sharing car service and battery-powered trucks and buses.

And then there is his plan for the world’s largest battery factory. The so-called Gigafactory, in Nevada, is to be unveiled this week.

“What’s going to be really crazy about the Gigafactory is not just that it’s giant,” Mr. Musk said. “You can’t change the world with tiny factories that move slowly,” he said. “We need big factories with high-velocity output.”

Scale and speed are watchwords for Mr. Musk and his save-the-world view of business, which addresses some of the biggest pressure points in climate change. Mr. Musk wants to create an alternative to fossil fuels by popularizing solar power and by using batteries to store energy from the sun and wind to power homes, cars and businesses at any time of day and in any season.

But while his clean-energy empire is viewed as visionary — even urgently necessary — by scientists worried about climate change, it has hit a major speed bump. In late June, federal safety officials opened an investigation into the death of Joshua Brown, who was killed when his Tesla Model S smashed at full speed into a tractor-trailer that had turned across its path.

It was the first known fatality of someone operating Tesla’s Autopilot system, a technology meant to prevent such disasters by controlling both steering and braking. Tesla acknowledges that neither the car nor Mr. Brown engaged the brakes, and it says that the Autopilot system failed to see the white trailer against a bright Florida sky.

Critics say Tesla was premature in putting the collision-avoidance system on the market last October — technology that Mr. Musk hailed soon after as “probably better than a person right now.”

And they say Tesla sent a dangerous message by calling it Autopilot, suggesting that the system could operate the car by itself, even though it requires drivers to stay completely engaged in case something goes wrong.

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The site of the Tesla Gigafactory, which the company says will eventually put out more lithium-ion batteries each year than were produced globally in all of 2013.

Credit

Jason Henry for The New York Times

“Tesla shouldn’t make guinea pigs of its buyers,” said Joan Claybrook, a former administrator of the National Highway Traffic Safety Administration.

In essence, critics say, a company bent on speed needs to understand when to slow down. But Mr. Musk said a regret of his was not having introduced Autopilot even sooner.

With a view of the Tesla factory floor, and searching an invisible horizon as he collected his thoughts, he said that Mr. Brown’s death was “very sad.” Still, the technology enhances safety, he insisted, and one death in what the company counts as 140 million miles driven using Autopilot does not undermine that idea.

“The easy decision would be to, or easier, I suppose, from the standpoint of minimizing attacks and criticism, would be to delay it and try to wait for some point where it’s theoretically better,” Mr. Musk said of Autopilot. “But if you wait for any point past the point that it’s better than the cars that exist, you’re making a decision to kill people with statistics.”

Other automakers, some with their own versions of collision-avoidance technology, have been publicly silent about the Autopilot controversy, while privately muttering about Tesla.

Some of it could be schadenfreude. Mr. Musk has made a point of ridiculing the mainstream auto industry as too slow to change. And there is no doubt that Tesla, by proving that electric cars can be cool, must-have consumer products that can travel 200 miles between charges, has put pressure on other automakers to step up their own electric-vehicle efforts.

But many on Wall Street say it matters little whether Tesla changes the world if it also keeps losing hundreds of millions of dollars a year. Electric utility companies also view Mr. Musk warily, filing regulatory challenges to his bid to revolutionize the way energy is generated, transported, stored and paid for.

In June, Tesla announced a bid to take over SolarCity, which is valued at roughly $2.6 billion. Mr. Musk, SolarCity’s chairman, described the acquisition as a way to complete his vision of a single company capable of providing solar power, electric cars and battery storage.

Although many in the financial community dismiss the merger proposal as mainly a way for Mr. Musk to have Tesla shareholders protect his investment in SolarCity, environmentalists say the consolidation plan makes a lot of sense.

TIMELINE

Elon Musk, a Serial Entrepreneur

From Zip2 to OpenAI, a look at the entrepreneur’s many companies.

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OPEN TIMELINE

Musk devotees say his great talent is taking green-energy ideas, which others have long discussed in theory, and turning them into realities.

“He makes a reasonable bid to be the Henry Ford of this era,” said Bill McKibben, the environmental activist and author. “He’s trying to kick off the mass market for renewable energy.”

Mr. Musk says there’s no time to spare.

“It’s the most serious thing that humanity faces,” he said of climate change. “It’s the biggest problem in the world.”

“The faster we can transition to low carbon, maybe, ultimately, to a negative carbon economy, the better.”

http://www.nytimes.com/2016/07/25/business/despite-roadblocks-for-tesla-elon-musk-is-moving-full-speed-ahead.html?

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25Jul/16Off

With Gigafactory, Elon Musk makes “bid to be the Henry Ford of this era”

MONDAY, JUL 25, 2016 05:00 AM PDT


As an M.I.T. professor told The Times, "the first time a green product...has been the thing everybody wanted"

SCOTT ERIC KAUFMAN

TOPICS: BUSINESS, ELON MUSK, GIGAFACTORY, INNOVATION, TECHOLOGY, INNOVATION NEWS, SUSTAINABILITY NEWS, TECHNOLOGY NEWS, BUSINESS NEWS

FILE - In this Sept. 29, 2015 file photo, Elon Musk, CEO of Tesla Motors Inc., introduces the Model X car at the company's headquarters in Fremont, Calif. A Tesla in Autopilot mode can drive itself but it's not a "self-driving" vehicle, at least as far as safety regulators are concerned. So, instead of coming under heavy government scrutiny before being sold to the public, Tesla can mass-produce cars that automatically adjust speed with the flow of traffic, keep their lane and slam the brakes in an emergency. (AP Photo/Marcio Jose Sanchez, File)(Credit: AP)

In a lengthy New York Times profile Monday, Elon Musk attempted to shift the conversation about the future of his companies from the recent failures of the perhaps inappropriately named “Autopilot” to his new “Tesla Gigafactory,” which Musk contends will one day produce more lithium-ion batteries per year than were produced in by the rest of the world of in 2013.

The ambitious project dovetails with Musk’s bid to take over SolarCity, paving the way for the creation of a single network of commonly controlled companies capable of providing not only the solar energy required to power electric vehicles, but the cars themselves and the batteries that charge them.

As Bill McKibben told The Times’ Matt Richtel, Musk “makes a reasonable bid to be the Henry Ford of this era. He’s trying to kick off the mass market for renewable energy.”

http://www.salon.com/2016/07/25/with_gigafactory_elon_musk_makes_bid_to_be_the_henry_ford_of_this_era/

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25Jul/16Off

Cap-and-trade market could raise pressure on dairies, jet makers and refineries

JULY 23, 2016 6:00 AM

California refineries face a $369 million expense in 2018

Dairies, food processors and jet makers will also lose some cap-and-trade assistance

Industry representatives say businesses may move

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California refineries in 2018 are scheduled to lose 25 percent of the greenhouse gas emission credits that the state has been giving them to help them adjust to young cap-and-trade market. In 2014, California refineries released about 67.6 million tons of greenhouse gas emissions. This is the Valero Benicia Refinery in Benicia, on Thursday, June 5, 2014. Manny Crisostomo Sacramento Bee file

BY ADAM ASHTON

aashton@sacbee.com

California companies that refine gas, make cheese and build satellites may face bigger bills in the state’s underperforming cap-and-trade market very soon.

But their counterparts that extract oil from the earth, turn wood into paper or produce fertilizer are in line for a longer cap-and-trade honeymoon.

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Morning Star Packing Company and other California food processors may have to buy more credits in the state’s greenhouse gas cap-and-trade market in 2018 when they lose a large share of the free assistance they’ve been receiving since the climate change program launched four years ago. Anne Chadwick Williams Sacramento Bee file

The disparities are laid out in a California Air Resources Board plan to wean industries off the free carbon emission credits they’ve been receiving since the state launched its greenhouse gas market four years ago. Those credits help ease companies, and California consumers, into the state’s still-wobbly climate change program.

So far, large California businesses have not had to buy many carbon credits to comply with the state’s greenhouse gas reduction law. The Air Resources Board every year gives them enough allowances to cover 90 percent of their emissions, a number that will be ratcheted down over time.

Industries that the Air Resources Board believes can withstand a growing cap-and-trade bill without shifting operations to other states, such as aerospace manufacturing and large dairies, will start losing their share of free carbon credits in 2018.

The rest will continue receiving enough cap-and-trade assistance to account for most of their carbon footprint until 2021 without buying allowances from other businesses or offsetting their climate change impact in other ways.

The biggest reduction in carbon emission credits will come from petroleum refineries. They accounted for 67.6 million tons of carbon emissions in 2014, and they’re scheduled to lose 25 percent of their free assistance from the state in a year and a half, according to the Air Resources Board.

In 2018, the drop in free carbon credits coupled with a lowered emissions limit for the industry would cost refineries about $369 million, according to the Air Resources Board.

67.6 million Tons of carbon emissions released by California oil refineries in 2014

To environmental advocates, the state can’t move fast enough to strike out the cap-and-trade transition assistance it’s been giving away. Those free pollution allowances are valuable, they say, and handing them out at no cost undercuts both the strength of the overall market and the pressure companies should feel to reduce their carbon emissions.

In a May auction, the cost of carbon credits clung to the floor of $12.73 per ton. Just 11 percent of the available allowances sold, suggesting that businesses believe they have enough credits to meet their needs without buying more.

The Air Resources Board has “overcompensated” by giving away pollution credits, said Alex Jackson, an attorney at the Natural Resources Defense Council who is urging regulators to eliminate cap-and-trade assistance.

He called the free assistance a “wealth transfer” because businesses can make money off those credits by selling them to other companies. “On their books, it’s an asset,” Jackson said.

Canneries anticipating a hefty bill

http://www.sacbee.com/news/politics-government/article91372272.html

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