- Utility Dive: The trends behind the explosion in distributed resources
POLITICO Morning Energy for 6/30/2015
By ERIC WOLFF, with help from Andrew Restuccia and Elana Schor
COAL OFF THE MATS?: Fears of a Grexit drove a broad selloff in stocks yesterday, but coal company shares rebounded on the Supreme Court’s mercury rule decision. Stock in Peabody Energy, the largest U.S. coal company, gained 9.6 percent on the day and Arch Coal stock rose 4.5 percent — but both are still trading at small fractions of the levels they held just a few years ago. Alpha Natural Resources stock increased by 2.6 percent, or 1 penny, to finish the day at 33 cents per share. And it’s clear that Monday’s ruling won’t save coal, Pro’s Alex Guillen reports. The rule had already driven dozens of coal-fired plants into retirement, and still others converted to natural gas. Nick Akins, CEO, president and chairman of American Electric Power and also chairman of utility trade association Edison Electric Institute said, “We’re not bringing them back. Once that ball gets rolling, it’s not going to change.” http://politi.co/1IpZFxU
Coal has taken a beating in recent years, but only partly due to EPA rules. The crashing price of domestic natural gas has allowed many utilities to switch to a fossil fuel whose only major emission is carbon dioxide, and less of that than coal (ME knows that upstream methane leaks are also an issue). Politico’s Michael Grunwald has more in the Agenda: “In 2005, cheap coal provided 50% of our power, expensive gas provided 19%, and exorbitant wind and solar provided 2%. But coal has gotten much costlier as it’s been forced to account for much more of its mess, not just mercury but soot, smog, sulfur dioxide, and other air and water pollutants, with Obama’s plan to regulate carbon looming as the next big legal battle. At the same time, the costs of gas, wind and solar have plummeted in recent years. In April, coal was down to 30% of utility generation, gas was up to 31%, and wind and solar were up to 9 percent.” http://politi.co/1GLuUyV
How much is that MATS in the window? In his majority opinion, Justice Antonin Scalia said the quantified benefits of MATS were just $4 million to $6 million. Scalia deliberately did not include the benefits of the reduction in particulates and sulfur dioxide that come along with the mercury reductions, though calculation of these “co-benefits” is a long-standing agency practice. The court did not forbid the EPA from including co-benefits in evaluating rules, but it sure raised questions about what the future might hold. Pro’s Eric Wolff has the analysis: http://politico.pro/1CFxFAf
ME wonders: Will this push EPA to start quantifying direct benefits as fast as it can? It’s not like the mercury and acid gases regulated by MATS are actually improving anyone’s health.
Mercury rising: In what may be just be a remarkable coincidence, two studies on atmospheric mercury hit ME’s inbox this afternoon. Dartmouth scientists studying ice cores and showed that the atmospheric mercury peaked first in the late 19th century during gold and silver rushes in North America, and then hit a second peak in the 1970s after 30 years of post-World War II industrialization. It declined for a few decades until Asian nations started electrifying via coal-fired power plants, ramping up mercury levels through the end of the ice core record in 1998. “The ice core record shows clearly how efforts to reduce mercury emissions have decreased pollution in the past. But the recent rise in mercury pollution from coal burning and small-scale gold mining show that there is more work to be done,” lead author Sam Beal, a research chemist at the U.S. Army Corps of Engineers’ Cold Regions Research and Engineering Laboratory, said in a statement. The study appears in the journal Environmental and Science and Technology. http://bit.ly/1NuDR3y
Meanwhile, researchers at the University of Colorado at Boulder published a paper http://bit.ly/1CFV9VU in the Proceedings of the National Academy of Sciences explaining how mercury can remain in the air for far longer than one would expect. The researchers discovered that bromine from the ocean reacts with mercury from coal-fired plants to form mercury oxide, which remains stable in the atmosphere for decades.
CHINA WATCH GETS DOWN TO BUSINESS: China, the world’s largest greenhouse gas emitter, is expected to formally submit its domestic climate change plan to the United Nations today. The plan — which, when combined with other countries’ contributions, will form the foundation for the Paris climate change agreement — is expected to more precisely nail down when China will peak its greenhouse gas emissions. Chinese President Xi Jinping announced in a joint appearance with President Barack Obama in November that the country would set a target of peaking its emissions by around 2030, and possibly earlier. The key question for climate policy wonks eagerly anticipating the plan: How much before 2030 is China willing to go? Recent outside analyses say China’s emissions are on track to peak as early as 2025. China Beijing has also released a draft commitment, which lays out a plan to reduce emissions by 35 to 45 percent by 2030, but the hope is that the final pledge will be more ambitious.
WALK SOFTLY TO PARIS BUT CARRY A BIGGER STICK: The Paris climate talks are months away but there’s been no shortage of status reports sizing up whether the U.S. can lead by example, come December. According to an Environment America report out today, the Obama administration and many of the states are putting their money where their mouth is — and they should go further. “The actions the United States has taken to date are necessary — but not yet sufficient — to prevent a catastrophic rise in global temperatures,” the report states. The report, which devotes quite a bit of space assessing state-level climate actions, argues that local governments ought to modify land use laws and planning, and states should set emissions-cutting targets that are more aggressive than the EPA’s Clean Power Plan and push harder for energy efficiency and renewables. The report: http://politico.pro/1NrNEYZ
WELCOME TO TUESDAY! I’m Eric Wolff, and this is where I offer a mea culpa for my way-wrong guess on the outcome of the MATS case. Anyone betting on Scalia over the weekend when the odds favored a majority opinion from Ginsburg must have made a killing. Congress is kicking up its heels out in the districts this week, so send your tips, quips, and comments to ewolff@politico.com, or follow us on Twitter @ericwolff, @Morning_Energy and @PoliticoPro.
** A message from Fuels America: Working men and women in the heartland sent a clear message to the EPA last week: The Renewable Fuel Standard is working for Rural America, supporting over 850,000 jobs and strengthening rural economies. EPA, don’t choose foreign oil over American workers. The RFS works for Rural America: http://bit.ly/1Gxh0QY **
NAM responds: the known unknowns: Yesterday ME commented on a National Association of Manufacturer’s study of the EPA’s proposed ozone rule which predicted the rule will be extremely expensive. ME said the study seemed to assume some very expensive programs would be needed to comply, while the EPA anticipated industry would innovate to comply cheaply. The manufacturers disagreed with ME: “In EPA’s analysis, those reductions do not get you all the way to compliance and a large percentage of the necessary reductions would have to come from what the agency terms ‘unknown’ controls. Like EPA, the majority of the costs in our study come from these ‘unknown’ or yet-to-be invented technology. Second, the primary difference between our cost analysis and EPA’s is that we assumed that as emissions are reduced closer to zero, the costs per ton of these reductions increase. EPA assumed that the last ton reduced from an ‘unknown’ control was the same cost as the first ton reduced from an ‘unknown’ control. EPA’s assumption is unrealistic, which we explain in our study,” Ross Eisenberg, NAM’s VP of Energy and Resources Policy, said in a statement.
SPACEX ‘MISHAP’ DELAYS NOAA SAT LAUNCH: The National Ocean and Atmospheric Association delayed the launch of the Jason-3 satellite in the wake of the “mishap” on Sunday in which a SpaceX’s Falcon 9 exploded on launch. The satellite, which would have gone up on the next Falcon 9 launch, must wait while investigators try to determine the cause. Jason-3’s mission is the measure sea elevations, providing insight into sea level rise and hurricane intensity. http://1.usa.gov/1Dr6cT0
HARPER’S RIVAL IN CANADA TALKS CLIMATE PLAN: Justin Trudeau, the Liberal party leader who’s considered the biggest threat to Prime Minister Stephen Harper ahead of the Canadian elections on October 19, fleshed out his environmental agenda Monday during a speech in Vancouver. Trudeau vowed to make good on a G-20 commitment Harper’s government made in 2009 to phase out fossil fuel subsidies, CBC reported http://bit.ly/1eXLEfE. He also pledged to craft a plan to create national emissions-reduction targets and ensure provinces have support in designing their own carbon pricing policies.The influential north-of-the-border green group Pembina Institute reacted warmly, with analyst Erin Flanagan releasing a statement that “applaud[ed] the commitment to put a price on carbon emissions nation-wide, and to work with Canada’s premiers in advance of the upcoming international climate negotiations in Paris.”
LEFTIES PWN AT SUPREME COURT: Monday marked the end of a Supreme Court session in which conservatives railed against what they perceived as the leftward lean of the court. Turns out, the conservatives were right. The high court ruled for liberal causes in 17 of 26 cases in which the vote was close and ideological, writes Tom Goldstein, member of the Supreme Court bar and publisher of SCOTUSBlog, the website to which we all flock on big court decision days. In the 10 cases Goldstein rates as the biggest of the term, the left won in 8 instances. http://bit.ly/1KpSUOt
QUICK HITS
— Duke Energy CEO getting pay raise year after coal spill. AP: http://apne.ws/1C3Hbm6
— Pennsylvania governor and fracking sector face off on budget, regulations. Wall Street Journal: http://on.wsj.com/1IHsfGM
— Dominion unveils new routes for huge power line through Prince William. The Washington Post: http://wapo.st/1BSpKnW
Tags: energy, fuel, gas, oil