EIA, Others Report Renewable Energy Gained Significant Ground During 2015

The Energy Information Administration reports that during 2015, eleven states generated at least 10% of their total electricity from wind, a significant increase from 2010, during which only three states had at least a 10% wind share.  Of the states that reached or crossed the 10% wind share threshold, Iowa had the largest wind generation share, with 31.3%, followed by South Dakota, with a 25.5% wind share, and Kansas, with 23.9%.  On a national scale, wind generators produced 190,927 gigawatt-hours of electricity in 2015, roughly 4.7% of net U.S. electric power generation and more than double the 2010 wind production.

The year 2015 was not just a good one for wind.  According to the Department of Energy’s Revolution Now 2016 update, wind and utility-scale and distributed solar accounted for over 66% of all new capacity installed in the nation in 2015.  And the International Energy Agency, in its recently released Medium-Term Renewable Market Report, reports that in 2015 renewables collectively surpassed coal to become the largest source of installed power capacity in the world.

Reliance on renewables is expected to continue to climb.  EIA indicates that wind production is expected to be even higher for 2016, with monthly data through July indicating that 5.6% of U.S. generation in 2016 to date has come from wind.  And according to DOE’s report, analysts expect that over half of all solar capacity installations in 2016 will be driven by factors outside of Renewable Portfolio Standard obligations.

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Cross-State Air Pollution Rule Update Published in the Federal Register

EPA’s Cross-State Air Pollution Rule (CSAPR) Update for the 2008 Ozone National Ambient Air Quality Standards (NAAQS) was published in today’s Federal Register, 81 Fed. Reg. 74,504, triggering the start of the 60-day deadline to file a petition for review.*

As discussed in an earlier post, the update finalizes new or revised Federal Implementation Plans and sets new summertime (May–September) ozone season Nitrogen Oxide (NOx) emission budgets for power plants in 22 eastern states.  Although the Clean Air Act provides that petitions for review of EPA actions under 42 U.S.C. § 7410 should generally be filed in the federal appellate circuit where the action is applicable, the update includes a determination that the rulemaking is “nationally applicable” and of “nationwide scope and effect.”  As such, petitions for review of the update must be filed in the U.S. Court of Appeals for the D.C. Circuit.

* The 60th day falls on December 25. If you are considering a petition for review, you should consult legal counsel to clarify the appropriate date. This blog does not provide legal advice.

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CNAS Recommends a First 100 Days Energy Agenda for Next President

With the 2016 U.S. election just two weeks from today, several organizations have released reports examining the energy-related issues confronting the next president.  Earlier this month the Nicholas Institute at Duke published a report on the energy and environmental issues facing the next president, and last week the Center for a New American Security (CNAS) published a report entitled Increasing Prosperity, Resource Stewardship, and National Security: An Energy Policy Strategy for the Next President.

The CNAS report identifies vulnerabilities to both the international and U.S. energy systems that the next administration will have to address.  Internationally, the report focuses on geopolitical unrest in major energy producing regions, as well as developments in Europe, such as the recent U.K. vote to leave the European Union, that have hindered Europe’s ability to coordinate on energy-related issues.  At the national level, the report identifies several vulnerabilities related to infrastructure.  The increasing prevalence of renewable resources and distributed generation necessitates a modernizing of the U.S. electric system, and, even aside from grid modernization issues, existing energy infrastructure is aging and requires further investment to avoid congestion problems.  The report is also concerned that the domestic energy system is at major risk of a physical or cyber attack, or natural disaster, either of which could have widespread economic consequences.

The CNAS report concludes with policy recommendations and outlines a bipartisan energy agenda for the first 100 days of the next administration.  While two of the report’s authors disagree in some areas, one having served under President George W. Bush and another having served under Secretary of State Hillary Clinton and President Bill Clinton, they focus on a set of policies on which they believe there can be broad agreement across the political spectrum.

These recommendations include modernizing, upgrading, and expanding the U.S. electricity system to keep up with new energy sources and new physical and cyber threats.  Relatedly, the report recommends improving the infrastructure permitting process and proposes specific changes, such as having FERC, rather than the Department of State, conduct the environmental assessment of cross-border oil pipelines.  On the international side, the report recommends that the Department of State’s Bureau of Energy Resources and the Department of Energy’s Office of International Affairs engage in proactive diplomacy towards vulnerable oil-producing regions to ensure the stability and security of energy resources

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North Dakota Opening Briefs Filed in D.C. Circuit

Petitioners have filed their opening briefs in North Dakota v. EPA, the consolidated appeal of EPA’s carbon dioxide emission standard for new, modified, and reconstructed fossil fuel-fired power plants (also referred to as the New Source Performance Standards or NSPS).

The three opening briefs each assert that EPA concluded incorrectly that its Best System of Emission Reduction (BSER) for fossil-fuel-fired units is “adequately demonstrated” and “achievable.”  Clean Air Act Section 111(b) authorizes EPA to establish standards of performance:

which reflect[] the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

Petitioners allege that the EPA failed to identify a “real-world,” “commercial-scale,” “non-subsidized” project that adequately demonstrates the application of all of the components of its BSER.  North Dakota’s brief addresses specifically the application of the NSPS on lignite-coal-fired electric generating units, and the Non-State Petitioners address EPA’s alleged failure to account for regional variability when setting the BSER.

Both North Dakota and the other State Petitioners allege that EPA’s regulation treads on their authority over energy production.

State Petitioners (other than North Dakota)  and the Non-State Petitioners further allege that EPA failed to make the prerequisite “significant contribution” and “endangerment” finding as required under Clean Air Act Section 111(b)(1)(A).

Because the Clean Power Plan appeal is running on a faster schedule, it could be decided before the conclusions of the NSPS briefing schedule.  Nevertheless, the outcome of North Dakota could impact the ultimate legality of the Clean Power Plan because Section 111(d), under which the Clean Power Plan was promulgated, authorizes the Administrator to establish emission standards for existing sources “to which a standard of performance . . . would apply if such existing source were a new source.”  Should the court vacate NSPS in its entirety or should the court agree that EPA failed to make the prerequisite “significant contribution” and “endangerment” finding, it could raise the question as to whether the Clean Power Plan was authorized.  The impact of the NSPS appeal on the Clean Power Plan remains to be seen.

EPA is scheduled to file its responsive brief on December 14, 2016.

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West Virginia Court Directs EPA to Consider Impact of Regulations on Coal Jobs

Yesterday, a federal district judge in West Virginia presiding over a challenge brought by Murray Energy Corp. held that Section 321(a) of the Clean Air Act requires EPA to consider impacts of its Clean Air Act regulations on the coal industry. Section 321(a) requires the Administrator to “conduct continuing evaluations of potential loss or shifts of employment which may result from the administration or enforcement of the provision of this chapter and applicable implementation plans, including where appropriate, investigating threatened plant closures or reductions in employment allegedly resulting from such administration or enforcement.”

The court determined that undertaking these evaluations is a “mandatory duty upon the EPA.” And, while EPA “may have the discretion as to the timing” of these evaluations, EPA cannot “categorically refuse to conduct any such evaluations,” as Murray Energy alleged is the case.

In reaching this conclusion, the court looked at the EPA’s history of conducting evaluations, including through the Economic Dislocation Early Warning System, which began in 1972. The court noted that while EPA discontinued these evaluations at some point, it had not claimed—until this case—that its inaction complied with Section 321(a).  The court found that the most EPA does is “conduct proactive analysis of the employment effects of [its] rulemaking actions.” The court said this “is simply not what § 321(a) is about” and noted that EPA’s witness admitted the agency “is not investigating power plant and mine closures and worker dislocations resulting from the utility strategy on an ongoing basis.”

The court rejected EPA’s contention that Murray Energy lacked standing to pursue the action—i.e., that Murray had demonstrated an actual or threated injury traceable to EPA’s action that could be redressed by the court.  Instead, the court concluded that Murray Energy’s allegations “that the actions of the EPA have had a coercive effect on the power generating industry, essentially forcing them to discontinue the use of coal” were sufficient to meet constitutional standards.

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