Saturday, July 23, 2011
I am in Seoul participating in the Korea Legislation Research Institute's conference, "Architecting Better Regulation to Overcome Energy Crisis." The conference has produced a fascinating discussion about how best to transition to a renewable energy economy.
Korea has been using a feed-in tariff ("FIT") system to promote renewables deployment. That changed in 2008 when the system came under criticism, in large part because it placed a strain on government finances. This goes to show that how policies are designed very much matters. FITs that raise consumer prices too much are subject to challenge on that ground, but those that choke government coffers may make the point even more acutely.
The plan now is to switch to a renewable portfolio standard ("RPS"), much like what many of the states in the U.S. are using. It will be a very interesting case study that puts these two mechanisms in sharp contrast. Debates about whether FITs or RPSs are better at incenting renewables deployment are longstanding; others have advocated that they can work together. Korea's change may add some clarity to the discussion.
It may also prove to drive home some of the themes that emerged from the conference speakers:
- Jannik Termansen, a vice president at Vestas, noted that what industry needs is not as much one scheme over another, but rather, "TLC": not tender loving care, but "transparency," a "long-term, stable commitment," and "certainty." He noted that installed wind capacity in the Asia-Pacific region has now surpassed that of North America, and looks to grow even further in coming years.
- Penny Crossley from the University of Sydney argued that renewables are important not just from a climate change perspective but also from that of energy security. "Energy security is another reason why renewables are important," she said. She noted six different ways that renewables promote energy security, and argued that we should commoditize those security benefits.
- Prof. Wu Zhonghu and Libin Zhang reminded us of the heavy role China will play in shaping the world's energy future. They noted that China is now a leader in world energy consumption, and that China remains in a transition from a centrally planned system to a market-based one. How this affects renewables development long-term remains to be seen.
- Nicolas Croquet highlighted the EU's 20-20-20 challenge. It is ambitious indeed: By 2020, 20% renewable energy use, a 20% reduction of greenhouse gas emissions from 1990 levels, and 20% decreased primary energy use. Is this a goal to which Korea, the U.S., and others should aspire? Should we go further?
It is a lot to chew on, both for the energy outlook for Asia and at home in the U.S. as well.
Friday, July 22, 2011
On a day of record heat, with Newark hitting its highest temperature ever recorded (108!), the last thing that you want to think about, probably, is burning wood. Fireplaces, wood stoves, and wood furnaces are supposed to be winter topics. But today you may feel like you are in a furnace, and an interesting saga in northern New Hampshire involving climate change, electricity regulation, and changing small-town economies merits some attention.
Berlin, New Hampshire--an old pulp and papermaking town--shut down its pulp mill in 2006. Many other mills in the region permanently closed their doors around this time, apparently due to a combination of low global demand for paper and rising costs of wood and chemicals. Investors have since proposed to convert the plant into a wood-burning power plant--the Berlin Station Biomass Plant--but they have run up against several legal hurdles.
New Hampshire has a mandatory renewable portfolio standard, which requires electric utilities to "obtain and retire" a certain number of renewable energy certificates through 2025. This creates both opportunities and complications for renewable generators like the proposed Berlin plant, partially due to New Hampshire's system of regulating retail electricity rates--a system that many other states also follow.
New Hampshire became enthusiastic about restructuring its retail electric industry in the 1990s. Indeed, one of Enron's first projects to encourage deregulation was in Peterborough, New Hampshire, where the then-nascent company set up an office in this small town and sponsored a town picnic , among other events and give-aways, to tout its electric choice program for residents. Although retail electric service in New Hampshire has been partially restructured throughout the state, allowing consumers to choose their supplier of retail electricity (the electric distribution company), the New Hampshire Public Utilities Commission still regulates the rates that the state's four electric distribution companies may charge in tariffs issued to each of the companies. A tariff outlines the rules that an electric distribution company must follow (relating to providing service and cutting off service when customers fail to pay, for example), and it also includes a rate schedule that specifies the amount that the utility may charge customers per kilovolt-ampere or kilowatt-hour. You can see the tariff for New Hampshire's largest electric distribution company, Public Service Company of New Hampshire (PSNH), here.
Because New Hampshire utilities operate under a Public Utilities Commission-approved tariff and must obtain PUC approval for recovering various costs through rates, they must follow certain steps in purchasing renewable energy as they attempt to comply with New Hampshire's renewable portfolio standard. One of these steps involves entering into a power purchase agreement (PPA) to buy power from a renewable source and having the Commission approve the PPA after determining that it is in the public interest.
And here, we finally return to Berlin, New Hampshire's retired pulp mill. Cate Street Capital, a green technology investor, proposed to convert the pulp mill into a biomass plant, and Public Service Company of New Hampshire agreed in a twenty-year power purchase agreement to buy electricity from this new plant. Where an electric generator and electricity supplier enter into a PPA in a state with a renewable portfolio standard, the PPA typically contains various provisions for renewable energy credits or certificates. Predictably, the PPA included an "obligation to purchase renewable energy certificates," and the Public Utilities Commission approved the PPA. Small, existing producers of electricity from biomass in New Hampshire objected to the Berlin biomass plant, and they challenged the PUC's approval of the PPA on several grounds. One interesting argument was that the PUC could not approve a twenty-year PPA because the PPA included a renewable energy certificate obligation linked to a renewable portfolio standard that would only last through 2025--before the twenty years of the PPA were up. For the "nine years beyond 2025," the producers argued, the PUC could not approve Public Service's cost-recovery obligations because renewable energy certificate requirements might be different for those nine years; costs might change. The PUC rejected this argument, both at the motion to dismiss stage and on a motion for rehearing after the PUC had conditionally approved the PPA; the PUC determined that it had the authority to "levelize a projection of PSNH’s REC purchase requirements."
The small biomass generators appealed to the New Hampshire Supreme Court and entered into negotiations with Cate Street Capital, where, according to the Manchester Union Leader, the small generators demanded their own long-term power purchase agreements with Public Service of New Hampshire in exchange for dropping their Supreme Court appeal. The negotiations broke down for a time, but it appears that Cate Street may still attempt to move forward with the plant.
Underlying these legal skirmishes is, of course, the larger issue of whether wood-burning biomass plants are a good thing--whether they're good for combating climate change, reducing air pollution, and encouraging local jobs, among other issues. Some environmental groups have argued that they are not carbon neutral. On the other hand, they improve the quality of life in towns like Berlin, and they rely on a local, abundant, renewable resource (wood). On a hot day like today, I have trouble thinking clearly enough to decide where I come out on the issue. Maybe I'll use it as a case study for my students this fall and let them decide.
This week has highlighted the ongoing scientific and political uncertainties in the aftermath of the BP Deepwater Horizon Oil spill. A new paper by a group of NSF funded scientists finds that hydrocarbon transfers from oil spills have different apportionments at depth than at the surface. Meanwhile, the public conversation about how penalty money should be used continues this week with the reporting on a Senate bill introduced by a bi-partisan group of 9 Gulf State Senators which would give 80% of the funds to the states and ecosystem restoration. These juxtaposed developments reinforce the need to continue to make progress on the difficult regulatory challenges posed by offshore drilling and oil spills, a subject which is the focus of one of my forthcoming articles.
Thursday, July 21, 2011
This might not have occurred to you. Even if you teach environmental law, and therefore are generally fascinated with environmental law questions, urban stormwater doesn’t exactly leap off the page. To me, until recently, it just seemed technical, dense, and a little obscure, and I didn’t understand it well at all. Then, about two years ago, I stumbled into the world of stormwater law and haven’t wanted (or been able; I just spent the morning in a meeting to discuss some innovative new stormwater regulatory initiatives) to leave. If you’re a professor, or a student looking for a research topic, or a professor helping a student find a research topic, I’d strongly encourage you to take the same step.
At their core, the environmental problems with stormwater are pretty simple. In undeveloped landscapes, most precipitation infiltrates into the ground, where it tends to stay cool and clean. It then flows slowly toward surface water bodies, which it then replenishes with a relatively steady supply of high quality water. Or, if it’s intercepted by wells, groundwater provides humans with a reliable and fairly clean water supply source. Either way, stormwater that enters the ground does good things for people and the environment. But when we develop, we build impervious surfaces—roads, roofs, and pavement—that prevent stormwater from infiltrating into the ground. Now, rather than providing valuable services, that stormwater becomes a problem. It flows rapidly into waterways, or, in many older cities, overtaxed wastewater treatment systems, picking up pollution along the way and causing all sorts of environmental degradation. And after storms subside, when people want to pump their wells and aquatic ecosystems need cool and clean recharge, not as much groundwater is available.
(both images are from the website of the city of Auckland, New Zealand)
These problems have a few features that ought to make them appealing to legal researchers. First, they’re all around us. Chances are very good that as you read this, you’re sitting in a watershed with a stream that doesn’t meet state water quality standards. Or you’re in a city with a wastewater treatment plant that gets overwhelmed and dumps raw sewage with every heavy rainstorm. Chances are also quite good that the building you’re sitting in, even if it’s your home, is contributing to that stormwater runoff problem, as is the parking lot or driveway where you parked your car, as are the roads you’ll drive on your way home, and as is the supermarket where you’ll stop to pick up groceries for your family. Our familiar, daily landscapes, in short, generally don’t work for stormwater. And chances are also quite good that someone in your town government is charged with spending a significant amount of time every day worrying about how to address these challenges. If you live in a city, it may be an entire department, and state and federal interest also can be intense.
The second reason why urban stormwater is legally interesting is that it’s hard to regulate. The legal landscape is complex, even by environmental law standards, with federal, state, and local governments all exercising significant authority. Their programs fit together awkwardly, and no one, as far as I can tell, thinks the current system is entirely coherent, let alone ideal. Figuring out how to reform that system is a challenge—stormwater is exactly the sort of dispersed, cumulative problem environmental law often struggles to solve—which is a headache for regulators but an opportunity for legal researchers. And the field is rapidly evolving, with new initiatives constantly emerging from EPA, some of the more environmentally progressive states, and at the municipal level (for just a few examples, see here, here, or here), so there are many interesting models to study.
You might think a subject this interesting would have drawn lots of legal attention. And there is some good stuff out there. Wendy Wagner has an incisive article about EPA’s stormwater regulatory program (9 Chapman Law Review 191 (2006); I couldn't find a link). Tony Arnold has written some excellent work (see here or here) about “wet growth,” a topic that includes and extends beyond stormwater management. In 2008, the National Science Foundation produced an encyclopedic study of urban stormwater management; the study incorporates and builds extensively upon the analysis in Wagner’s article. I’ve also tried my hand at the subject. But the amount of legal-academic coverage doesn’t match the level of attention regulators, planners, scientists, and engineers are devoting to urban stormwater, or the amount of money our society spends on stormwater management. And I’ve found that among the non-academics who work on stormwater management, there’s a real hunger for the kind of insight that legal-academic research can provide. I’m sure I’m not the only one who, upon completing an article, wonders if anyone will actually read it. With urban stormwater, I’ve learned, they will.
- Dave Owen
As a semi-related postscript, today’s New York Times has an interesting story about climate change adaptation and ecosystem restoration, with a little stormwater discussion thrown in. It’s worth a read.
Last week, I mentioned that I was wondering about what happened to Woodsy Owl. Since then, I have been looking high and low. I regret to inform you, however, my search has uncovered Woodsy's untimely and tragic end. While you will not find the following image on any U.S. government website today, a year or two you could have.
You might ask, "Who thought of this? Who gave the order to take out Woodsy?" The culprit left his fingerprints--or should I say claw prints--all over the scene of the crime. Who else would call for incineration but in doing so would also mandate the strict supervision of a Forest Service law enforcement officer?
Smokey!? As Woodsy found out the hard way, it turns out that Smokey signs like this are more of a threat than they are a warning--fire dangers are extreme indeed! Now that we see Smokey for what he is, I will admit that I have always thought it was a little fishy that he carried that shovel with him everywhere he went... What are you burying over there Smoky? We should have known. Smokey, you are one twisted Ursus Americanus. You act all civilized and caring in public, but it turns out that when you are out of the spotlight, you are just some kind of wild animal.
For a bird who made "give a hoot, don't pollute" his life calling, it is more than a little ironic that Woodsy's end was a plume of smoke that the Forest Service described as incineration.
-- Brigham Daniels
Wednesday, July 20, 2011
The Problem of the Prehistoric Refrigerator (and it's Neanderthal environmental law professor owner)
The other night I made my hourly (it seems) trip out to the garage to get some scholarly clarity....ah-hem....Pepsi Max or some other equally caffeinated drink (why are my teeth so sensitive, by the way?). See, in my benevolence and high-minded environmental consciousness (please note sarcasm) I decided to keep the previous homeowner's prehistoric refrigerator, seen to the right (literally, Neanderthals kept frozen dinosaur meat in this thing). It not only makes a great home for my summer stipend....er...caffeinated go-juice....but it also preserves the functionality of a still-working appliance and keeps it from unnecessarily entering the waste stream (why do we always feel we need "new" stuff anyway?). Forget the fact that I don't need two refrigerators, the amount of extra electricity it consumes....look, just leave me alone. Anyway, nothing brings the high and mighty environmentally unassailable down like reaching into the refrigerator for a Pepsi Max, only to discover that YOU - and YOU alone - are responsible for the Montreal Protocol. YOU kept the international community tied up with trying to fix the ozone layer during much of the 80's, rather than focusing on more important things like the harm caused to children by slap bracelets, or the amount of carbon fiber sequestered by Hammer pants, or [insert next cliche 80's joke here]. Alas, when I looked into the refrigerator, this is what I saw:
My heart sunk. No longer were CFC's a ghost of my youth or something "over there" in the less environmentally conscious developing world (sarcasm, again), but they were right there in my own d@!%, Bluebookin' garage. I was single-handedly harming public health and the environment by destroying the upper atmosphere. I felt like a villain in a Superman movie, and just knew he was going to swoop down, fly around the earth 100 times-a-minute to take us to a future where this evil dump truck of an appliance had finally blown a fuse. Or perhaps an upgraded "Refrigerterminator" would come BACK in time and eliminate the GE-1000 to save us all from a future ozone apocalypse.
In all seriousness - to the extent that this post can be serious - it did raise in my mind the issue of lag time on policies aimed at improving the environment. It is easy to wax poetic to students about how "we need to transition fast to energy star appliances....more fuel efficient vehicles..." and on and on. Even when the prices are competitive with less environmentally friendly products, this simply isn't always so easy. It's also not clear that when pitted against the problems of consumption it is always so desirable. I spend a lot of time thinking about how we need to buy less stuff and use what we have longer so that we can lower our consumption rates, which would require 5 earths to sustain if the U.S. per capita rate of consumption went worldwide. Yet buying a bunch of new stuff and discarding perfectly useable stuff is exactly what I promote when it comes to innovative new products that are better for the environment.
The highlight of my law school career was having my 1994 Ford Ranger pick-up truck (I am from Alabama, after all) stolen right off the street. Of the 250 (seriously) cars stolen in Durham that month (no joke), I am certain this had to be the theft that generated the greatest ridicule for this thief by his professional colleagues. Why would anyone besides a broke law student want a 1994 Ford Ranger? Well, first it was paid for, and a second it still worked. When the thief finally had a moment of lucidity, a month later (who waits a MONTH before deciding a 1994 Ford Ranger is not the vehicle for them!?.....ahhh, besides me that is?), he graciously deposited my vehicle behind a crack house. I paid my $500 to the wrecker company to get it back (it's Blue Book value [Kelley Blue Book, that is] was $900 - thank goodness I didn't file an insurance claim), and guess what....I still drive it today. I'll be Bluebooked if I'm getting rid of it till it croaks, nevermind it's gas mileage is about 20 mpg's these days. As for the fossil of a refrigerator sitting in my garage, I'm still on the fence. Do I send it to the trash heap, for my kids to figure out what to do with it, or keep it and have them simply apply stronger SPF? Tough call.
- Blake Hudson
Tuesday, July 19, 2011
Last week I posted about the overallocation of pollution allowances in the Acid Rain Program. Another celebrated cap-and-trade program that suffers from overallocation is the Regional Greenhouse Gas Initiative (RGGI).
RGGI began in January 2009 with the participation of ten Northeastern and Mid-Atlantic states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. The program was designed to cap the carbon dioxide emissions from about 250 power plants in those states at 2009 levels for the years 2009 through 2014. Then from 2015 through 2018 the cap declines 2.5% per year such that 2018 emissions would be 10% lower than 2009 emissions.
The problem is that the projected level of 2009 emissions (upon which all those caps were based) was way too high: 188 million tons. Actual 2009 emissions from the power plants were only 124 million tons (see a report here) -- far below the cap of 169 million tons that RGGI aspired to reach by 2018. Emissions in 2010 were 137 million tons (see a report here), a 10% increase over 2009 but still far below the 2010 and 2018 caps.
The result is a huge oversupply of allowances. RGGI allowances are auctioned quarterly, and the overallocation is evident in declining prices and volumes of auctioned allowances. In the most recent auction, in June 2011, allowances sold at the reserve price, $1.89, and less than a third of the allowances offered were bid on and sold (see a report here). In contrast, in the first auction of 2009, the average bid price was $3.51, and the demand for allowances was 2.5 greater than the supply (see chart here).
Now, as you might have heard, overallocation isn’t the only problems that RGGI is dealing with. New Jersey and New Hampshire have threatened to pull out (here and here), and a lawsuit is pending that challenges New York’s participation (for a link to the complaint and a good summary of recent developments see here).
All of this goes to show the difficulty of designing an effective cap-and-trade program. The European Union Emissions Trading Scheme (EU ETS) provides a good example of the type of active management and reform that seems necessary for a successful program. More on that next week…
- Lesley McAllister
Monday, July 18, 2011
We hear so much about the perils of invasive species, their spread, and the havoc they wreak on our native environment. It is great to hear of citizens actually doing something about it - and young citizens at that. The short video below details the innovative approach of one young man from Georgia, who has invented a process of eradicating kudzu, commonly referred to as "the vine that ate the south." He injects the ground where kudzu is growing with helium, which kills the kudzu but leaves the other plants perfectly in tact and in good health. Now if we could enlist some youth from the south to inject some common sense into the craniums of Floridians who release their pet pythons into the Everglades, the South's invasive species problem would continue to improve.
- Blake Hudson
* Following up on its earlier final rule expanding controls on interstate air pollution, EPA proposed to include six additional states in its summer nitrogen oxides program (nitrogen oxides are important ground-level ozone (smog) precursors)). The states are Iowa, Kansas, Michigan, Missouri, and Wisconsin.
* A move to repeal the federal mandate to increase the energy efficency of light bulbs failed in the U.S. House of Representatives (legal planet).
* The Brookings Institute released a major study on the "clean economy." A summary and links are available here.
* American Electric Power Company scrapped what had been the country's largest carbon sequestration research project. As an un-named "senior Obama Administration official" explained to the New York Times, "this is what happens when you don't get a climate bill."
This week I drove through at least three national forests created by Theodore Roosevelt--Cache, Unitah, and Wasatch. T.R.'s interest in protecting public lands and wildlife set him apart from other American Presidents. During his presidency, he created or expanded 150 national forests. He also put into place more than 50 bird or wildlife preserves, 6 national parks, and almost 20 national monuments. His attempt to protect these resources, gained him some political enemies, particular in the West and among some captains of industry. Despite these challenges, he proved himself a great leader. From the historian Douglas Brinkley, he won the title of the Wilderness Warrior.
T.R. is quite the contrast to President Obama. Granted, when Obama is on the campaign stump, I often think I see a T.R.-like passion in Obama, not only for the environment but also many other issues. However when it comes to the environment, President Obama's actions do not match the spunk of his words as a candidate.
As President, it seems quite rare that Obama even brings up the environment (and getting rarer all the time). Granted, he likes to talk about green jobs when he talks about job creation, and he did funnel some of the recovery money in that direction. And, admittedly, some of the agencies in his administration have taken quite firm stances on environmental and resource protection. Yet, it seems that he is unwilling to own an environmental issue. He has let the environment slip off the national agenda. He has not been willing to engage in a public and serious way those who want to roll back environmental protections, delist endangers species, or dismantle the EPA.
I am not expecting Obama to push through climate legislation through Congress (though it would be great if he somehow could). However, what I do expect is for him to own and stand firm on a subset of environmental issues and not to let others do the leading. T.R.'s legacy shows that a president does not have to solve every environmental problem to be remembered as a great environmental president: T.R.'s leadership on resource preservation did little for the polluted cities that characterized urban areas of his time. So far, Obama's actions to protect the environment do not add up to much. And, I have a hard time giving him credit for agency actions that he ignores in public. I can't help but think that T.R. and Obama the candidate would agree with me.
-- Brigham Daniels
Sunday, July 17, 2011
Every summer, it seems, I am reminded of something I always think I will never forget.
For the past several years, I have made a point every summer of visiting a national park. Living in Utah, which is blessed with five of these most beautiful and amazing places, this is a relatively easy task.
Last year, I spent several days with my sons hiking and camping in what has become one of my favorite parks: Capitol Reef. Not only does Capitol Reef sport some of the most breathtaking canyons I have ever seen, but it is, at least from my perspective, a relatively less used park. Sometimes solitude is nice. In Capitol Reef, I have found myself on many hikes, for hours, with no one but those in my party. Add to this the chance to see ancient rock art, find desert creatures like snakes and lizards, and partake of a searing summer heat, and I can think of few places that make a nicer getaway for a few days from the city. (It also doesn't hurt that the nearby town of Torrey also features some amazing food.)
This past week, I camped with my sons as part of my wife's family reunion in Yellowstone. It has been almost two decades since I was there last, in a frigid winter to snowmobile. Two things immediately overtook me as we drove in through West Yellowstone in a misting rain turning to dusk. I was reminded of just how gorgeous the place is; there is a reason why it was the first national park. And I realized how each of these parks has their own personality, their own story to tell. Capitol Reef and Yellowstone could not be much more different, but I love them both.
Toward the end of the trip, as I looked into the brilliant turquoise and coral pools at Mammoth Hot Springs, I contemplated this. I recalled Prof. Daniels' comment from earlier this year about why he got into environmental law in the first place, and how each of us has our own back-story about why we did too. For me, I realized, much of it is bound up in my childhood, and part of that was a trip I took when I was about the age of one of my sons to this same park. I recall standing face to face with a bison; I remember hiking into the aspen with my father; I see clearly in my mind the awe I felt then, that I feel now.
As we drove out of the park, having just hiked Geyser Hill near Old Faithful, we came into a valley. We were on our way out, and on its way in was a lone gray wolf, undisturbed, traversing the greens, following the Gibbon River to the trees.
Once again, I was reminded. I was so glad I was.