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Obama Could Unveil Climate Strategy with Clean Air Act Tie Soon

The Obama administration could soon make an announcement detailing plans to address climate change, even in the face of continuing political barriers to progress on the issue. Unnamed administration officials pointed to July for the rollout, while an Administration aide was more vague.

“In the coming weeks and months, you can expect to hear more from the president on this issue,” White House environment and energy adviser Heather Zichal said at an environmental forum June 11. Though timing and details are still in flux, Zichal said the plan will expand on the administration’s efforts to permit more renewable energy on public land and to promote energy efficiency. A central part of the administration’s approach to deal with climate change, Zichal noted, would be to use the authority given to the U.S. Environmental Protection Agency (EPA) to address greenhouse gases from power plants under the Clean Air Act.

The EPA missed an April deadline to release final rules to limit greenhouse gas emissions from new power plants under the act and has shared no details about its plan for the rules since. Speculation about the public release of a climate strategy did delay the filing of a lawsuit against the EPA for that missed deadline; filers pledged to “wait to see” if Obama releases a plan in the coming weeks.

If the plan includes final rules for new fossil fuel-fired power plants, known as the new source performance standard, those rules will prompt a Clean Air Act provision—section 111 (d)—requiring the EPA and state governments to regulate greenhouse gases from existing fossil fuel-fired power plants. The White House has signaled that new rules securing reductions from existing power plants are likely to be part of its strategy. A new report by the Nicholas Institute for Environmental Policy Solutions and the American Council for an Energy-Efficient Economy outlines some of the key considerations that are likely to arise if energy efficiency is included as an option for states needing to secure reductions from existing sources. It explores how incorporation of energy efficiency into past state air quality programs can inform federal and state environmental regulators as they evaluate these section 111(d) issues.

second analysis by the Nicholas Institute identifies how potential regulatory tools under the Clean Air Act—beyond the greenhouse gas rules—could accelerate development and deployment of potentially game-changing clean air and energy technologies to reduce emissions in the nation’s key industrial sectors.

Holding Pattern Continues for McCarthy

The timing of Obama’s climate plan could complicate the nomination of Gina McCarthy, Obama’s pick to replace former administrator Lisa Jackson as head of the EPA. Senate Majority Leader Harry Reid (D-Nev.) announced last month that McCarthy’s nomination would be delayed until July.

The Senate Environment and Public Works panel backed McCarthy a month ago in a party line vote. The nomination remains in a holding pattern as a result of continued opposition by Republicans and urgings to release data the EPA uses to design air pollution regulations.

U.S. Tax Code Has Minimal Effect on Carbon Dioxide, Other GHG Emissions

Current federal tax provisions have minimal net effect on greenhouse gas emissions, according to a new report from the National Academies of Science. The report, which evaluates how key elements of the current tax code affect the nation’s greenhouse gas emissions, finds that several existing tax subsidies have unexpected effects, and others yield little reduction in greenhouse gas emissions per dollar of revenue loss (subscription).

Climate Commitment Renewed at G8 Summit

While the crisis in Syria and the economic downturn pushed climate change out of the spotlight at the G8 Summit, it was highlighted in a communiqué released following the close of the talks. G8 leaders dedicated a page to climate change—noting that it is “one of the foremost challenges for our future economic growth and well-being.”

The statement acknowledges “grave concern” the leaders have regarding failure to make deep emissions cuts and includes support for UNFCCC’s efforts to deliver a new global treaty to curb greenhouse gases in 2015 with a more ambitious framework than is currently in place.

“We remain strongly committed to addressing the urgent need to reduce greenhouse gas emissions significantly by 2020 and to pursue our low-carbon path afterwards, with a view to doing our part to limit effectively the increase in global temperature below 2°C above pre-industrial levels, consistent with science,” the statement reads. “We also note with grave concern the gap between current country pledges and what is needed, and will work towards increasing mitigation ambition in the period to 2020.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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    June 23, 2013, 8:58 pm

    The Natural Gas Bubble

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    Posted on Jan 4, 2013

    Flickr/Paul Hocksenar
    By Thomas Hedges, Center for Study of Responsive Law

    The natural gas industry is waging an aggressive public relations campaign to bolster investor confidence, despite evidence showing that shale gas is an unreliable resource and that the production process releases large amounts of methane into the atmosphere. Although hydraulic fracturing (or fracking) is in the media’s hot seat, the prospect of a drilling bubble coupled with the underreported problem of methane leakage may be the most destructive qualities of natural gas in the United States.

    From commissioning false field reports to flooding television with commercials, natural gas companies are convincing Americans that gas will save the U.S. market; it will not.

    The public relations push is an effort to revive a campaign that started in 2006 and was subsequently killed when the economic crisis hit two years later. Natural gas companies tripled the number of existing wells in those two years, hoping that a glut would attract a large consumer base before raising the prices back up again. Financial companies pumped billions of dollars into the industry, only to see it crumble.

    As time passes, data on natural gas production, which goes back only a few years, indicate that shale gas is an unreliable energy source. Reserves are declining up to 70 percent per year. Where corporate reports show that decline leveling off through the use of theoretical models, figures point to an unrelenting decline that predicts the reserves will dry up in a few years.

    Financial backers such as Goldman Sachs and AIG are hurriedly funding the development of the natural gas sector to attract other investors before reality sets in. If they fail, the billions of dollars spent from 2006 to 2008 will have been wasted.

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    These firms are financing energy companies to buy up cheap land, quickly drill wells, label the fields as profitable, and then bundle up those leases and sell them for up to $30,000 per acre to clueless investors. The average acre, according to the founder of Energy Policy Forum and former investment banker Deborah Rogers, is sold to developers for no more than $1,200, and sometimes as low as $100.
    These industries are doing the same thing they did leading up to the 2008 crash, only swapping out subprime mortgages for unproved shale gas reserves.

    Just as in 2008, companies control the ratings agencies. They “guide” them, arguing that these deals are too complex for the agency to rate by itself.

    They’ve created confusing financial products as well, luring investors in with Volumetric Production Payments (VPP), which are indecipherable structures of payments much like derivatives.

    The hype surrounding natural gas is a last push to take toxic assets—literally, in this case—dress them up as fancy investments, and then sell them off to unsuspecting Americans.

    “Public policymakers need to be very aware of the promotional aspect of shale gas,” petroleum geologist Art Berman says. “This is a very efficient public relations and business machine. They have done a really good job of convincing public policymakers that shale is revolutionary.”

    The industry’s reach, many say, infects the Department of Energy and its Energy Information Agency.

    Geologists such as Berman and Post Carbon Institute fellow Dave Hughes have looked at figures in the reports and say the conclusions do not match the findings.

    “Companies [which influence the EIA] are applying a hyperbolic decline model to the data,” Hughes says, “which is just an equation with different input parameters. It has nothing to do with reality. The only data we have to fit is from four years ago. And then these companies are saying that, after using the hyperbolic model, these wells are going to last for 40 years. So you get a lot of gas but it’s all theoretical.”

    A series of emails released in 2011 from within the EIA shows that some employees were skeptical of the agency’s reports.

    “The Annual Energy Outlook 2011’s rosy view of shale gas is what you get when the current senior managers’ predilections are in effect and their modeling minions are forced to rely way too much on data from press releases and journalists’ reports, i.e. incomplete/selective and all too often unreal data,” David Morehouse wrote in an April 2010 email to a colleague within the agency.

    The oil and gas industry is influential enough that politicians refuse to introduce reform to the agency for fear of losing campaign contributions.

    “The [EIA] is corrupt,” says Rogers, who was featured in a 2011 New York Times article “Insiders Sound an Alarm Amid a Natural Gas Rush.” “There’s no way that the Department of Energy and the EIA, which falls under its auspices, is not corrupted by the oil and gas industry. There’s just too much money involved as far as political contributions.

    “The EIA has found itself between a rock and a hard place. It’s the same thing that’s happened with the Environmental Protection Agency in a way. The U.S. government isn’t as powerful as the oil and gas industry. It doesn’t have deep pockets. If they come out with anything that’s not favorable to the industry, the industry sues.”

    The industry’s public relations exercise is also a grave threat to the green energy movement. As the U.S. seeks to wean itself off oil and coal, scientists say that within the next few years the country must use the interim period to build an infrastructure that supports clean energy.

    The campaign for investment in natural gas could distract U.S. policymakers from beginning to fund and build an infrastructure that favors wind, solar and biomass, which climatologists say needs to happen immediately.

    Hughes says that, beyond this issue, many scientists say that natural gas is worse for the environment than oil or coal.

    A 2011 report from Cornell University found that methane leaks at all stages of the production process, from the wellhead to when you turn on your stove. Methane is 70 times more effective at trapping heat than is CO2, but it escapes the atmosphere faster. In the first 40 to 50 years, gas is worse for the environment than oil or coal. After that, it is cleaner, but Hughes and Berman say gas won’t last half that long.

    Hughes says that this corporate campaign has killed a crucial conversation. He says we should be talking about how to couple renewable sources of energy with more mass transit.

    “We should be rethinking cities,” he says, “and bringing food production back home.

    “The forecasts coming out of the EIA are saying that we can continue to ramp up energy consumption ad infinitum,” he says, “and that’s not a realistic worldview. The average U.S. citizen consumes 22 barrels of oil per year. The average citizen in China consumes 2.8. The average U.S. citizen consumes about five times as much oil as the world’s average. … We can’t keep going on forever.”