Energy & Climate Notes 022716

The EPA Clean Power Plan – are we better off without it?

Clean energy proponents were dismayed – to say the least – by the Supreme Court’s 5-4 decision to delay implementation of EPA Clean Power Plan rule limiting carbon dioxide emissions from existing power plants.  It was an unprecedented action by the court; for the first time in history the court “stayed” (put on hold) an administrative rule where a lower court has refused to issue a stay and where an appellate court had not yet ruled on the matter.

The EPA Clean Power Plan was hugely important as a signal of the U.S. commitment on climate change that helped build global consensus for the Paris Climate Agreement limiting greenhouse gas emissions.  And like the Paris Agreement, the CPP galvanized public debate on the criticality of addressing climate change, helped broaden support, and most importantly, lubricated the politics of reducing carbon pollution by providing cover for governors, state legislatures, utilities and public utility commissions to address carbon even if they were disinclined to do so.

While the symbolic significance of the Clean Power Plan cannot be overstated, substantively, it is unremarkable. And, it is fundamentally flawed in a way that could actually inhibit timely action addressing climate change.

The reality is that the Clean Power Plan sets a very tepid goal: a 32 percent reduction in greenhouse gas emissions from a 2005 base year.  States generally, and Michigan in particular, having aging coal fleets with long-scheduled plant retirements that will reduce emissions rapidly in even in absence of the rule. In fact, Michigan can forego any further advanced energy policy and still be in compliance with the EPA rule through 2028 and states with aggressive renewable energy standards are already compliant.  Emission reductions, enabled by the obsolescence of old central power plants combined with the rapid penetration of economical clean energy alternatives have made it easy for governors and legislatures – including Republicans – to embrace the EPA rule.

But the Clean Power Plan also has a fatal flaw inherent in its accounting system for carbon emissions.  The CPP encourages fuel switching from coal to natural gas plants because natural gas, when burned, produces about 50 percent less CO2 and virtually no acid gases, heavy metals or particulate pollution.  That’s great. The CPP, however, does not take into account the loss of methane occurring with the production, processing, transportation, or storage of natural gas.

Methane is a powerful greenhouse gas 86 times more potent than CO2 over a 20 year time period and 25 times more potent or 100 years (given the urgency of addressing climate change right now the former metric is compelling).  A scientific consensus has emerged confirming that “fugitive methane” loss associated with natural gas development and use greater than 2 – 3 percent results in more greenhouse gas warming than from burning coal.

A recent meta-analysis of studies examining the amount of fugitive methane loss from natural gas found that development from conventional sources may be 3.8% (±2.2%), but fugitive methane losses from unconventional sources (i.e. shale gas from fracking) may be as high as 9.5 percent or more.  (Here is a list of more than 15 studies estimating fugitive methane losses).  Compounding the problem is the potential emissions from improperly closed or failing fracking wells.  Data from oil and gas development companies show a high incidence of casing failures that potentially leak methane to the atmosphere with shale gas wells having a greater than 50 percent leakage rate than conventional wells.  EPA estimates that 25,000 – 30,000 fracking wells are drilled annually in the U.S. The fact that as many as 175 oil and gas development firms may file for bankruptcy in 2016, means a significant amount of abandoned wells that have not been properly closed may vent methane to the atmosphere. The bankruptcies may also transfer remedial responsibility for proper closures to the public.

To avoid the most catastrophic effects of climate change we must keep carbon in the ground.  Investing  in natural gas plants and pipelines that are designed to be in service 25 years or more is an improvident long-term investment for everyone including oil and gas developers and utilities.  The Clean Power Plan’s incentives for natural gas are not what’s needed now or later.

And speaking of keeping fossil fuels in the ground…

Analysts are beginning to predict a near-term transformational surge in electric vehicles.  Battery prices fell by 35 percent in 2015 and Bloomberg New Energy Finance predicts that electric vehicles will have a lower lifetime operating cost than gasoline powered cars within 6 years, even without subsidies.  A consequence of the predicted market shift is that the world will use less transportation fuels and the downward pressure on oil prices will continue.  (Another is the Koch brothers’ declaration of war on EVs). As unconventional sources of oil cannot be produced profitably when oil prices are above $50 per barrel, ‘tight” oil from fracking and tar sand development may stall permanently, keeping more carbon in the ground.

On topic – A large increase in U.S. methane emissions over the past decade inferred from satellite data and surface observations

“The global burden of atmospheric methane has been increasing over the past decade but the causes are not well understood. National inventory estimates from the US Environmental Protection Agency (EPA) indicate no significant trend in US anthropogenic methane emissions from 2002 to present. Here we use satellite retrievals and surface observations of atmospheric methane to suggest that US methane emissions have increased by more than 30% over the 2002–2014 period. The trend is largest in the central part of the country but we cannot readily attribute it to any specific source type. This large increase in US methane emissions could account for 30–60% of the global growth of atmospheric methane seen in the past decade.”