This report is intended to support participation by Texas stakeholders in offshore wind energy decision-making by providing an overview of the most relevant state laws, regulations, and intergovernmental authorities affecting wind energy development offshore of Texas. Texas has not enacted state laws or regulations specifically governing siting of wind energy facilities in its own jurisdiction, but other state policies will influence where and how offshore wind energy and related facilities are constructed and operated in and offshore of the state.
<p>Energy is the capacity of some object or system to do work. As such, it is essential for all of the activities we do as individuals and as a society. While virtually all of the energy potential on the Earth can be traced back to the sun, we use a variety of sources to power our everyday needs from transportation to industrial production to keeping the lights on at home. According to the U.S. Energy Information Administration, the United States consumed approximately 98 quadrillion British thermal units (Btu) of energy in 2010. Of this total, 83% comes from fossil fuels such as coal, crude oil, and natural gas, and some 22% represents net energy imports (see U.S. EIA's <a href="http://www.eia.gov/totalenergy/data/monthly/pdf/flow/total_energy.pdf">… Flow</a> and ELI's <a href="http://www.eli.org/sites/default/files/images/d19_07graphic_map.jpg">En… Flows in the United States</a> graphics).</p>
<h3>Legal Regime for Energy Production and Distribution</h3>
<h5>Federal Regulation of Energy</h5>
<p>Like other areas of law related to the environment, energy production and distribution are governed by both federal and state law. However, federal authority is generally limited to a few areas, while most regulation occurs at the state level. At the federal level, the Federal Energy Regulatory Commission (FERC) is responsible for regulating interstate transmission and transportation of electricity, natural gas, and oil, as well as handling permits for constructing hydroelectric dams and liquefied natural gas (LNG) terminals. A separate entity, the Nuclear Regulatory Commission (NRC), is responsible for regulating nuclear power generation.</p>
<p>The federal government began regulating energy with the Federal Power Act of 1920, which has been amended several times in the past century. In 1977, Congress established the <a href="#" title="Although the Department of Energy (DOE) is a cabinet-level agency of the federal government, it does not directly regulate energy production or consumption in the United States. Regulation is generally left to FERC, NRC, and state authorities. The DOE’s focus as an agency is on promoting science and technology to address energy needs and addressing nuclear security and cleanup issues. For example, the DOE funds advanced research projects on new energy sources and oversees the Energy Star energy efficiency program in conjunction with the EPA. DOE website - energy.gov; Energy Star website - energystar.gov; DOE Advanced Research Projects Agency (ARPA-E) - arpa-e.energy.gov.">Department of Energy</a> (DOE and reorganized energy regulation by creating FERC. FERC is governed by a five-member Commission and employs administrative law judges (ALJs) in its internal process for resolving disputes. Commissioners are appointed by the President for staggered 5-year terms, but as an independent agency, FERC decisions are not reviewed by the President or any cabinet agency, but instead are reviewable in federal courts in accordance with the Administrative Procedure Act.</p>
<h5>State public utility commissions</h5>
<p>At the state level, <a href="http://www.naruc.org/Commissions/CommissionsList.cfm" target="_blank">state public utility commissions</a> are generally responsible for regulating production and distribution of electricity. Although federal authorities regulate interstate transmission of electricity, state regulation and electricity pricing can vary significantly. Electricity distribution is a good example of a “natural monopoly” in that it would be impractical to build overlapping distribution systems due to high cost. While the majority of electricity sold to end users (residential, commercial, etc.) in the U.S. grid is distributed by privately owned entities, state commissions regulate these utilities in order to ensure fair and reasonable pricing. States may, for example, regulate prices by supervising auctions between electricity suppliers (i.e., generators) and distributors.</p>
<h5>Regulation of Energy Transmission and Distribution</h5>
<p>The electricity “grid” includes three components: electricity generators, transmission networks, and electricity distributors (i.e., utilities that provide electricity to end users). Over the past century, the trend has been toward interconnection of transmission lines in an effort to lower costs and spread out electricity loads, although occasional large blackouts, such as the Northeast Blackout of 2003, illustrate the potential risks of this approach. Electricity transmission in the United States is divided into <a href="http://www.npr.org/templates/story/story.php?storyId=110997398" title="NPR, Visualizing the U.S. Electric Grid">three independent transmission grids</a>—the Western Interconnect, which generally covers the area west of the Rocky Mountains; the Texas Interconnect, which covers most of the state of Texas, and the Eastern Interconnect, which includes the rest of the country. Regional reliability councils (one each in the Western and Texas Interconnects, and six in the Eastern Interconnect) oversee monitoring and compliance with standards designed to ensure the reliability of electricity in the U.S. <a href="http://www.nerc.com" title="Under the Energy Policy Act of 2005 (EPAct), FERC granted authority to a non-governmental entity, the North American Electric Reliability Corporation (NERC), to issue and enforce binding reliability standards.">grid</a><a href="#_msocom_5"></a>.</p>
<p>Since the 1970s, federal regulation has encouraged setting up competitive markets for electricity generators by requiring open access to transmission networks. In addition, for roughly two-thirds of the population of the United States, electricity transmission is now operated by independent system operators (ISOs) or regional transmission organizations (RTOs) that are independent of utilities and electricity generators. In other areas, vertically integrated utilities or government-owned or cooperative enterprises control transmission.</p>
<p>Concerns about pollution, climate change, and the finite nature of fossil fuel and nuclear power resources have led to demand for and development of energy from renewable resources. The most widespread form of renewable electricity generation is hydroelectric power, which is derived from energy that is replenished by the Earth’s water cycle. However, because hydroelectric dams have an impact on land and water environments, and because dams can only be efficiently located in a limited number of places, some newer laws have been designed to encourage electricity generation from other renewable sources, such as wind, tides, geothermal energy, solar energy (photovoltaic cells, concentrated solar power, and solar thermal energy), landfill gas, etc.</p>
<p>Many of these renewable sources present practical challenges. First, renewable electricity must be connected into existing transmission and distribution grids. Many renewable sources, particularly wind and solar, tend to be most plentiful in areas that are far from major population centers. Offshore sites provide potential wind resources closer to cities but are generally more expensive to develop and carry additional environmental risks. Second, because electricity cannot be easily stored—it must be transmitted and used immediately as it is generated—existing grids must be adapted in order to handle periodic generation. For example, solar energy is strongest during the middle of the day and varies according to seasons and weather conditions; these patterns generally do not match up with peak electricity demand periods that occur in the morning and evening as people wake up or return home from work. As a result, growth in renewable electricity does not necessarily translate to possibilities for reducing conventional capacity, because electricity providers must still turn to fossil fuel sources to meet demand at peak times.</p>
<p>As of 2012, 31 states and the District of Columbia have some form of mandate for renewable energy, although these vary widely both in the level of the mandate as well as the types of energy sources that can be counted toward the total. Most states use a percentage target for the state’s renewable portfolio by a certain year; a few states use targets measured in megawatts of capacity that the state must develop. An additional 7 states have non-binding renewable portfolio <a href="http://www.c2es.org/us-states-regions/policy-maps/renewable-energy-stan…; title="For a list and comparison of state renewable energy requirements, see Center for Climate and Energy Solutions, Renewable & Alternative Energy Portfolio Standards. ">goals</a>.</p>
<p>In many states, consumers can choose to pay an additional premium or opt to purchase electricity (distributed by the same utilities) from suppliers that use renewable sources. For example, in Maryland, many companies offer 100% renewable “green” electricity plans which are available for a higher price than conventional electricity <a href="http://webapp.psc.state.md.us/ecm/home.cfm">supplies</a>.</p>
<h3>Environmental Impacts of Energy</h3>
<p>What does energy have to do with the environment? Energy and environmental law are often interrelated because energy production and consumption represent a significant portion of human impact on air, water, and land resources, as well as the Earth’s climate.</p>
<p>Fossil fuels store useful energy potential in bonds between carbon atoms. Combustion reactions break these bonds, releasing energy, as well as carbon dioxide and water vapor as byproducts. However, when combustion is incomplete or impurities are present in the fuel, the reaction also leads to the emission of various other molecules that can adversely affect human health and the environment. Fossil fuels—especially coal in electricity generation and gasoline for transportation—are the biggest source of conventional air pollutants, such as sulfur dioxide (SO<sub>2</sub>), nitrous oxides (NO<sub>x</sub>), and carbon monoxide (CO). Fossil fuel burning also releases hazardous and toxic air pollutants; for example, coal-fired electricity generation accounts for over half of <a href="http://www.epa.gov/mercury/about.htm">mercury emissions in the United States</a>.</p>
<p><a href="http://www.eli.org/keywords/air-1">Emissions from energy production and consumption into the air are regulated under the Clean Air Act (CAA)</a>. Under the CAA, the EPA establishes nationwide air quality standards for each air pollutant and oversees state regulatory plans designed to meet those standards. Environmental authorities conduct reviews of major sources of air emissions, including power plants, in order to prevent significant deterioration of air quality or bring areas toward attainment of quality standards. In addition, Title II of the CAA regulates mobile sources of emissions, such as motor vehicles. Mobile source regulation includes standards for motor vehicle engine emission control systems as well as requirements for fuels and fuel additives.</p>
<p>Renewable energy sources can have additional or different air quality impacts. While wind energy does not produce any emissions of air pollutants, wind turbines can create air disturbances, noise, or hazards for birds and bats. Burning renewable fuels, such as ethanol, can reduce air pollutant emissions, but critics argue that gasoline blended with too much ethanol can interfere with emissions control systems in some automobiles and actually lead to higher emissions.</p>
<p>Energy production has an environmental impact on water resources both in terms of the quantity of water used, as well as effects on water quality, in the form of pollution or discharges that increase water temperature.</p>
<p>Many forms of energy production methods use water in various stages. Electricity generators typically use steam turbines to transform energy from the burning of fossil fuels such as coal into electricity that can be used for residential, commercial, industrial, or transportation purposes. Nuclear, fossil fuel, and concentrated solar power plants require methods for cooling plant equipment and/or cooling steam; this is often accomplished by cycling through large quantities of water, although technologies for “dry cooling” exist as well. In the United States, electricity generation accounts for roughly half of all water withdrawals. While some water used, especially in coastal areas, is saltwater, the majority comes from surface freshwater in lakes or <a href="http://ga.water.usgs.gov/edu/wupt.html" target="_blank" title="USGS, Thermoelectric Power Water Use">rivers</a>. Thus, energy production and consumption can have a tremendous impact on water availability in arid climates or other areas where freshwater resources are scarce.</p>
<p>In addition to the quantity of water used, energy production and electricity generation can affect the quality of water used or in surrounding areas. For fossil fuel and nuclear energy, processes for extracting raw materials, such as mining and drilling, can discharge pollutants into nearby waterways. Power plants, after using water to cool equipment or in other stages of electricity generation, must discharge the water back into oceans, rivers, or lakes. Excess heat from power-generating reactions increase the temperature of the water as it is discharged, which in turn raises the temperature of the overall aquatic environment. Significant temperature increases can make surrounding areas inhospitable for fish and other animals or plants.</p>
<p><a href="http://www.eli.org/keywords/water">The Clean Water Act</a> regulates the environmental effects of energy production on water resources. Under the Act, energy production facilities must obtain permits that are regulated by the EPA and state authorities for any discharges they make into waterways subject to the Act’s jurisdiction. One current issue is the EPA’s proposed standards for the design and location of cooling water intake structures under Section 316(b) of the Act (See EPA's <a href="http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/">webpage</a> and Cornell's <a href="http://www.law.cornell.edu/uscode/text/33/1326">webpage with the statute</a>).</p>
<p>One key issue in energy production is siting—that is, determining where power plants or other facilities should be located. Energy generating facilities can have a direct environmental impact on existing ecosystems, such as wetlands, that occupy the land converted for use in energy production. Hydroelectric power plants can disturb upstream land by creating reservoirs as well as downstream land by controlling or limiting water flow and changing water temperature. Nuclear power plants have the potential to disturb surrounding land in the event that radioactive material escapes and generate radioactive waste that must be carefully transported and stored.</p>
<p>For other types of facilities, environmental factors to be considered include air and water quality in surrounding areas that may be affected by emissions or discharges. Land impacts for fossil fuel energy also include disturbances associated with resource extraction, such as land used for mining coal and drilling for natural gas or oil. Siting for electricity generation or other facilities can also raise issues of environmental justice if it causes a group of people to bear a disproportionate burden of negative effects that result from proximity to those facilities.</p>
<p>When the federal government is involved in developing an energy project, the <a href="http://www.eli.org/keywords/natural-resources">National Environmental Policy Act (NEPA)</a> requires a review of the project’s impacts on the environment, including consideration of potential alternatives. Impacts on wetlands are governed by the <a href="http://www.eli.org/keywords/water">Clean Water Act</a>.</p>
<p>Energy production raises specific issues regarding the handling and treatment of waste. Nuclear power generation produces extremely hazardous radioactive byproducts that must be safely handled, transported, and stored for long periods of time. The NRC is responsible for regulating the processing of radioactive source material, such as uranium, as well as radioactive byproducts, although many states have agreements with the NRC under which they exercise their own regulatory authority (see NRC's <a href="http://www.nrc.gov/about-nrc/radiation/protects-you/reg-matls.html">Reg… of Radioactive Materials</a> and <a href="http://www.nrc.gov/about-nrc/state-tribal/agreement-states.html">Agreem… State Program</a> webpages). The EPA, on the other hand, sets standards for radioactive air emissions and drinking water contamination.</p>
<p>One current controversy in managing waste from energy production involves coal combustion residuals, or coal ash—a byproduct of coal-fired power plants. Coal ash contains a variety of toxic compounds and can present a health concern if it leaches into groundwater or escapes from storage sites. A major spill of coal ash in Tennessee in 2008 drew attention to the issue, and in 2010, the <a href="http://www.epa.gov/osw/nonhaz/industrial/special/fossil/ccr-rule/index…; title="EPA page on coal ash.">EPA proposed regulating coal ash</a> under the <a href="http://www.eli.org/keywords/toxic-substances#rcra">Resource Conservation and Recovery Act</a> (RCRA), either under RCRA’s hazardous waste provisions, which would give EPA more extensive authority, or under the non-hazardous waste provisions.</p>
<p>In advanced industrialized economies such as the United States, energy consumption is the main driver of greenhouse gas (GHG) emissions that contribute to global climate change. Fossil fuel combustion (including transportation and electricity generation) accounts for nearly three-fourths of U.S. emissions of the most significant GHG, carbon dioxide (<a href="http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventor…; target="_blank" title="EPA, 2012 US GHG Inventory, Executive Summary.">CO<sub>2</sub></a>). While the United States does not have a comprehensive national plan for mitigating climate change or addressing GHG emissions, federal and state governments have developed a number of regulatory programs designed to limit the climate impacts of energy generation and consumption.</p>
<p>Since 2009, when the EPA issued its endangerment finding regarding CO<sub>2</sub>, the Agency has taken steps toward regulating <a href="http://www.eli.org/keywords/climate-change-0">GHG emissions under the Clean Air Act</a><a href="#_msocom_21"></a>. Regulating GHGs under the CAA includes mobile sources as well as stationary sources, such as power plants, that emit large quantities of CO<sub>2</sub>. Setting standards for stationary sources will be challenging because the CAA uses technology-based standards for setting emissions levels. Unlike other air pollutants, CO<sub>2</sub> is an intended and necessary product of combustion, which means that CO<sub>2</sub> emissions cannot be “reduced” in the same way that SO<sub>2</sub> can, for example, by eliminating impurities or scrubbing flue gas at power plants; rather, reducing emissions will likely require efficiency improvements or some method of CO<sub>2</sub> capture for storage or reuse.</p>
<p>In addition, the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 added renewable fuels mandates to the CAA with the goal of reducing net CO<sub>2</sub> emissions from the transportation sector. The <a href="http://www.epa.gov/otaq/fuels/renewablefuels/index.htm">Renewable Fuels Standard</a> (RFS) program requires fuel suppliers to incorporate a minimum quantity of renewable, biomass-based ethanol or biodiesel into gasoline supplies.</p>
<p>National Association of Regulatory Utility Commissioners – <a href="http://www.naruc.org" target="_blank">www.naruc.org</a></p>
<p>North American Electric Reliability Corporation (NERC) – <a href="http://www.nerc.com" target="_blank">www.nerc.com</a></p>
<p>Electric Power Research Institute – <a href="http://www.epri.com" target="_blank">www.epri.com</a></p>
<p>Edison Electric Institute – <a href="http://www.eei.org" target="_blank">www.eei.org</a></p>
<p>-Public Policy Advocacy page – information on federal and state legislation and regulation – <a href="http://www.eei.org/whatwedo/PublicPolicyAdvocacy/Pages/default.aspx" target="_blank">http://www.eei.org/whatwedo/PublicPolicyAdvocacy/Pages/default.aspx</a>…;
<p>U.S. Energy Information Administration – <a href="http://www.eia.gov" target="_blank">www.eia.gov</a></p>
<p>Federal Energy Regulatory Commission (FERC) – <a href="http://www.ferc.gov" target="_blank">www.ferc.gov</a></p>
<p>MIT Study on the Future of the Electric Grid – <a href="http://web.mit.edu/mitei/research/studies/documents/electric-grid-2011/…; target="_blank">http://web.mit.edu/mitei/research/studies/documents/electric-grid-2011/…;
<p>NPR, Visualizing the U.S. Electric Grid – <a href="http://www.npr.org/templates/story/story.php?storyId=110997398" target="_blank">http://www.npr.org/templates/story/story.php?storyId=110997398</a></p>
Enforceable policies (EPs) are the backbone of federal consistency review. They provide the substantive standards on which state and territorial coastal management programs (CMPs) rely to influence federal actions in and affecting the coastal zone through the federal consistency process, pursuant to Section 307 of the Coastal Zone Management Act (CZMA) (16 U.S.C. § 1456).
In the midst of accelerating global warming, tens of billions of dollars continue to flow from private and public international banks into financing new coal-fired power plants, especially in Asia and Africa. Until recently, Japan has been one of the biggest culprits, accounting in 2019 for over 10 percent of the external financing of new coal plants in developing countries, particularly in South and Southeast Asia — some 24.7 gigawatts.
The nation’s export credit agency, the Japan Bank for International Cooperation, has been a major funder, and so has Tokyo’s bilateral development assistance agency. Over the past year or so, international criticism of Japanese coal funding has grown sharply, encountering nothing less than “opprobrium” at the last conference of the parties to the climate convention, according to the Financial Times. Protests by local nongovernmental groups against Japanese coal projects in Indonesia and Bangladesh have proliferated as well.
In June, a climate shareholder resolution introduced at the annual meeting of Japan’s third-largest bank, Muzuo Fincancial Group, obtained nearly 35 percent of the votes cast. It was backed by major northern European banks and investment funds — something that would have been unthinkable several years ago. Although the resolution did not pass, Muzuo has already agreed to halt approval of new loans for coal-fired plants, although it still has $2.8 billion outstanding in already-approved financing for coal energy.
In July this year, the Japanese environment minister announced that the government will change its public finance policies to drastically limit funding coal in developing nations. South Korea too is jumping on board. It has been a major financer of new coal plants in the developing world, but recently Seoul endorsed its own green new deal, aiming to exit coal financing both domestically and internationally. These changes are coming about in part because Japan and South Korea have relatively transparent public and private financial sectors, where the voices of concerned foreign investors and civil society can be heard.
Unfortunately, the world’s largest financer of coal by far, both at home and abroad, has actually been increasing its coal finance over the past year — and it is not known for transparency. In 2019, China reversed its policy, announced in 2016, of drastically cutting back (by around two thirds) domestic construction of coal-fired plants. As of June, it is committed to adding 249.6 GW of new coal power. That is roughly equal to total installed coal power in the United States. According to Global Energy Monitor and the Center for Research on Energy and Clean Air, “plans for new coal plants have steadily increased since 2019, after the central government began relaxing restrictions on new coal plant development.”
Beijing has become the lender of last resort for coal plants in developing countries, accounting for 70 percent built in the world outside China. Last year 60 coal plants abroad supported by China (over 70 GW worth) were under construction or in planning, nine of which are delayed because of protests or legal opposition, for example in Kenya and Turkey.
In Sub-Saharan Africa, Chinese coal finance dominates, with 13 projects under construction and another nine in planning. In South Africa, Power China is constructing a 3 GW coal plant in Limpopo Province that the South African press and civil society have vehemently criticized. In the words of Business Insider South Africa, the Limpopo coal plant “will only be used by the Chinese,” since it will serve a multi-billion-dollar China-controlled industrial park with seven metallurgical plants.
In Zimbabwe, the Industrial and Commercial Bank of China, and Sinosure (the Chinese export credit insurance agency), approved in May support for the first phase of the $4.2 billion, 2.8 GW Sengwa coal plant complex, including a 250-kilometer pipeline to transport its cooling water all the way from the Kariba Dam reservoir. According to the Japan Times, the reservoir is already seriously depleted by recurrent droughts associated with climate change — the dam’s power turbines are forced to operate at seriously reduced capacity.
China for the past decade has been the world’s largest producer and financer of climate-friendly renewable energy infrastructure, both at home, and abroad. The central government continues to claim its commitment to a greener, cleaner energy path. But the only thing that counts in terms of avoiding a looming global climate disaster will be a much more rapid switch from fossil fuels, particularly coal. Given the scale of China’s global energy footprint, like it or not, our climate fate is literally in China’s hands.
World’s Coal Lender of Last Resort Doubles Down as Warming Worsens.
The COVID-19 pandemic has caused the U.S. unemployment rate to reach levels last experienced during the Great Depression. The shock’s adverse impacts on households, businesses, and state and local governments will likely persist for years beyond the public health crisis. Economic stimulus and recovery programs will be key to bringing the unemployed back to work and deploying capital.
Economists, energy experts, and some political leaders have called for climate change-oriented investments in economic recovery efforts. The International Monetary Fund emphasized the importance of a “green recovery” and the International Energy Agency argued for putting “clean energy at the heart of stimulus plans.” In July, presidential candidate Joe Biden proposed $2 trillion in spending on clean energy and climate-related infrastructure.
The development of recovery efforts can benefit from the lessons learned from the programs addressing the Great Recession, which included about $100 billion in clean energy spending and tax credits. These experiences driving major investments in renewable energy, energy efficiency, the grid, and transportation provide four key insights for future policy design.
First, administratively simple spending policies with little or no political discretion — such as investment tax credits and grants as well as production tax credits for renewable power — can quickly drive clean energy investment. Wind and solar power capacity today are 4 and 100 times greater, respectively, than they were in 2008. This reflects both accelerated buildout of these technologies under the 2009 Recovery Act’s tax and grant programs, and the positive effect such investment has had in driving down technology costs.
Second, the clean energy package was designed to leverage other sources of finance, but this is a double-edged sword. When successful, clean energy tax credits attracted more private financing of renewable power, which amplifies their stimulus impacts. The challenge lies in those cases when leveraging requires partners who later abandon the project. Several high-speed rail projects failed to move forward when governors opted against their state’s participation. Commercial-scale demonstration of carbon capture and storage technology did not move forward when a coalition of utilities would not satisfy the cost-sharing requirements.
Third, driving change in the energy system and creating new jobs requires effective targeting of policies. Poorly designed programs may invest in efforts that would have happened anyway. For example, Sébastien Houde and I found that about 90 percent of the households that claimed a rebate for buying an EnergyStar-rated refrigerator would have done so without the Recovery Act’s rebate program.
Finally, there are potential pitfalls in clean energy programs with government discretion. The Department of Energy loan guarantee program became notorious in the case of Solyndra, a solar manufacturing company that defaulted. This program moved more slowly than automatic programs, such as tax credits and investment grants, and by the time it sunset in late 2011, it had used less than one-third of its initial appropriation to support clean energy innovation. The discretionary nature of the program made it a political lightning rod, even though it represented less than 2 percent of clean energy spending in the Recovery Act.
In considering these lessons, one should also recognize how the current circumstances differ from 2009. A decade ago, the climate-oriented spending in the Recovery Act focused almost entirely on clean energy investments, reflecting an emission mitigation approach to climate change. Over the past decade, global greenhouse gas emissions have increased, and serious climate change damages have become more likely. To reduce exposure to climate change shocks, future public spending should also facilitate adaptation and resilience to a changing world.
The policy landscape is also considerably more complex today than in 2009. State carbon dioxide cap-and-trade programs and renewable power mandates create incentives for deploying clean energy. The prospect of future federal climate policy — such as Clean Air Act regulations, a carbon tax, or a national clean energy standard — would also drive investment in climate-friendly technologies. The challenge for stimulus lies in crafting programs that complement and accelerate the investment that would already occur under these existing and future policies.
Finally, historically low-interest rates — effectively negative inflation-adjusted government borrowing rates over 30 years — imply significantly lower costs to finance recovery programs today compared to a decade ago. The low borrowing costs coupled with the dire economic conditions we are encountering justify historically large economic recovery efforts. Moreover, this low-interest rate environment would enable a longer-term, climate-oriented public spending program.
Crafting a Climate-Oriented Stimulus Recovery Program.
Weeding Out Pollution: ELI Innovation Lab makes headway with new industry on promoting sustainable growth of legal cannabis
The burgeoning legal cannabis industry continues to be a hot button topic across the nation, especially as the environmental implications of cultivation emerge. David Rejeski, Kasantha Moodley, and Azi Akpan, the team behind ELI’s Innovation Lab, are building partnerships with stakeholders to advance the environmental performance of this new industry.
In 2017, the first industry estimate of energy use was made, 4.1 million megawatt-hours in one year, with demand set to increase by 162 percent in just 5 years. There are also several environmental and public health implications associated with the industry’s nutrient-rich water discharges, air emissions, pesticide use, plant waste, and packaging waste.
A total of 33 states have legalized marijuana for medical use. 10 of these states and Washington, D.C., have also legalized it for adult recreational use. With no federal oversight and a fragmented regulatory system, states and industry alike are challenged with addressing these concerns.
The Lab’s podcast series “Conversations with Environmental Disruptors” has brought together a diverse set of weed visionaries. ELI’s Akpan interviewed Kaitlin Urso on her role at Colorado’s state government Cannabis Environmental Assistance Program. Urso consults with cannabis cultivators on sustainability, and brings awareness about potential permitting requirements. Her job is to support cultivators in their compliance efforts, without imposing requirements or restrictions on these new and growing businesses.
She also promotes voluntary actions such as the installation of water collection and re-use systems and waste management systems. Air emissions are also a concern — terpenes emitted from cannabis plants are volatile organic compounds and can affect ozone levels when accumulated on a large scale. Urso strongly emphasizes the necessity to gather baseline data, quantify impacts, and determine benchmarks to inform environmental approaches to tackling these problems.
In a recent podcast titled “A Cannabis Cultivator — Breaking the Grass Ceiling,” Jesse Peters, founder of EcoFirma Farms, shows visitors to the ELI website his 23,000-square-foot, indoor, carbon-neutral farm operation in Portland, Oregon. The farm utilizes sensors and automation systems linked to a software platform that monitors and regulates the nutrient feed, light, and water needed for optimal plant growth.
Peters has made significant capital investments and explains how the added technology transformed the financial and environmental sustainability of EcoFirma Farms. He touts that automation and tracking has made EcoFirma much more successful and accountable, has saved costs on labor, and has successfully maintained the quality and quantity of products at a competitive price. Peters believes that technology development will play a crucial role in the sustainable growth of the industry.
Beyond these episodes and at the forefront of current efforts, the ELI Innovation Lab is developing and disseminating informative and accessible materials to promote understanding of industry-wide impacts and the actions (regulatory or voluntary) that could be taken to address them.
In April, ELI staff attended the National Cannabis Festival in D.C., where they distributed materials to raise awareness on lawful pesticide use for the cannabis industry. The materials were developed in collaboration with the American Bar Association’s Pesticides, Chemical Regulation, and Right-to-Know Committee.
The Lab will continue this work in the future through a series of educational materials focusing on the full spectrum of environmental challenges facing the industry.
Conference, ELR special issue showcase year’s best articles
In late March, ELI held the 12th Environmental Law and Policy Annual Review Conference in Washington D.C. Each year, Vanderbilt Law students work with an expert advisory committee and senior staff from ELI to identify the year’s best academic articles that present legal and policy solutions to pressing environmental problems, some of which are then presented at the conference.
In a panel on federal energy leasing, winning author Jayni Foley Hein of the Institute for Policy Integrity at NYU School of Law argued that the Department of the Interior should update fossil fuel leasing and royalty rates on federal lands to maximize public benefit and social welfare. Panelists Tommy Beaudreau of Latham & Watkins and Rebecca Fischer and Daniel Timmons of Wild Earth Guardians delved into how Hein’s proposed reforms could result in less fossil fuel production, fewer greenhouse gas emissions, and more revenue than under existing rules.
In another panel discussion, author Richard Schragger of University of Virginia Law School proposed that in order for cities to fight against state preemption of environmental laws they should forge alliances with national interest groups, powerful corporations, and metropolitan regions to preserve their power to regulate and promote their interests. Gus Bauman of Beveridge & Diamond, Kim Haddow of Local Solutions Support Center, and Lewis Rosman from the City of Philadelphia Law Department provided their perspectives on the challenges cities face in passing environmental legislation.
In the final panel, on free trade and selective enforcement of environmental laws, author Timothy Meyer of Vanderbilt University Law School argued that the World Trade Organization investigations of trade remedies should be reformed by creating a centralized enforcement procedure. Jay Campbell of White & Case, Sharon Treat from the Institute of Agriculture and Trade Policy, and Steve Wolfson of the Environmental Protection Agency discussed their analysis of the proposal based on their practitioner and policymaking experience.
The winning articles by Professor Hein, Professor Schragger, and Professor Meyer, as well as the comments from this year’s panelists, will be published in a special issue of ELR in August.
ELI 50th anniversary celebration rolls out series of policy events
Special programming in ELI’s 50th anniversary year recently featured themes of compliance and re-imagining governance.
In February, ELI co-hosted with Greenberg Traurig, LLP, a discussion about the foundational objectives of the Superfund law. Panelists from the firm and Exponent and the Chesapeake Legal Alliance delved into how these objectives have evolved over time. They talked about issues surrounding the remediation and cleanup of Department of Defense sites, approaches to working with regulatory agencies, and cutting-edge and emerging technologies for damage assessments and remediation.
The same month, ELI held a webinar that explored the opportunities presented by increased state autonomy in environmental protection. Moderated by Donald Welsh, executive director of the Environmental Council of the States, it featured experts in interstate environmental coordination and attorneys with compliance experience.
In line with the theme “re-imaging environmental governance,” ELI hosted a conversation in March about UN General Assembly Resolution 72/277, known as “Toward a Global Pact for the Environment.” While many experts agree that the measure could help fill the gaps in international environmental law by providing guidance and transparency for adjudication in courts, bolstering the importance of human rights in environmental protection, and promoting a greater integration of environmental principles in non-environmental fields, questions still remain.
Moderated by ELI’s Xiao Recio-Blanco, panelists discussed principles needed to realize the potential impact of the pact on the developing world. Panelists included Justice Antonio Herman Benjamin, minister of the National High Court of Brazil, Roy S. Lee, professor at Yale University School of Forestry and Environmental Studies, and Nicholas Robinson, professor at Elisabeth Haub School of Law at Pace University.
Programming in May will highlight wetlands protection and in June will feature gender and the environment. Join the Environmental Law Institute in discussing the forefront of policy issues as we celebrate 50 years of environmental progress.
Field Notes: 30th annual National Wetlands Awards on May 7
This year marks the 30th edition of ELI’s annual National Wetlands Awards. Since 1989, over 200 champions of wetlands conservation have been honored.
The program recognizes individuals who have demonstrated exceptional effort, innovation, and excellence in wetlands conservation at the regional, state, and local levels.
Please join the Environmental Law Institute at this year’s National Wetlands Award Ceremony, taking place on Tuesday, May 7, from 6 to 8 p.m. at the U.S. Botanic Gardens in Washington, D.C.
This year’s awards include the 30th Anniversary Lifetime Achievement Award, to be presented to Richard Grant of Narrow River Preservation Association at the ceremony. Categorical awards will go to Greg Sutter of Westervelt Ecological Services for the Business Leadership award, Joel Gerwein at California State Coastal Conservancy for the Conservation & Restoration award, Robert Thomas for the Education & Outreach award, Tom and Mary Beth Magenau of Tri-State Marine for the Landowner Stewardship award, Robert Gearheart of Arcata Marsh Research Institute for the Science Research award, and hydrologist Angela Waupochick of the Stockbridge-Munsee Band of Mohicans for the State, Tribal, and Local Program Development award.
ELI congratulates these awardees on their achievements in advancing wetlands protection through their outstanding leadership.
In January, expert panelists explored in an ELI public webinar how focused efforts in states of the upper Mississippi River that bring together farming, wastewater treatment, and state financing agencies can provide new funding for on-farm polluted runoff projects.
Panelists from Iowa, Illinois, and the National Association of Clean Water Agencies discussed how flexible funding structures that pair farmland with wastewater treatment providers can achieve targeted nutrient reduction in their respective states, and what they plan to achieve in the future.
Recent experience has shown that water and sewer financing programs can provide additional flexible funding for projects on farms while meeting the nutrient management goals of wastewater treatment authorities.
In an effort to improve communication and environmental compliance globally, the International Network for Environmental Compliance and Enforcement, whose secretariat ELI hosts, has created Compliance Conversations, a network and capacity-building tool to support those working in the environment, development, or justice spaces. Through webinars launched in February, INECE convenes individuals from all over the world to discuss the cutting-edge environmental challenges their communities are facing.
The goal of the platform is to connect participants with experts from a variety of different backgrounds, experiences, and disciplines.
The first set of compliance conversations explored how stakeholders in off-grid communities can work to facilitate greywater treatment and reuse standards, led by Clive Lipchin, director of the Center for Transboundary Water Management at the Arava Institute.
Since shortly after the 2010 Deepwater Horizon oil spill, the Environmental Law Institute has received support from the Walton Family Foundation to work with communities throughout the Gulf Coast region on advancing sustainable and inclusive restoration.
A primary focus of ELI’s work is on supporting public participation in the processes that govern disbursement of restoration funds under the Natural Resource Damage Assessment process and the RESTORE Act, as well as through the National Fish and Wildlife Foundation.
ELI’s Gulf Team regularly hosts training sessions and workshops for communities throughout the region. In February, ELI experts met with community leaders and local government officials in Gulfport, Biloxi, and Moss Point, Mississippi, to elucidate the process of developing and submitting proposals for restoration projects.
Legal weed means legal means to reduce pollution.
From the halls of Congress to the hearing rooms of state legislatures, policymakers are debating a range of actions to reduce U.S. carbon emissions. All plans to sufficiently reduce emissions to avoid the worst climate impacts rely on two prongs: deep decarbonization of electric generation and widespread electrification of remaining fossil-fuel uses.
As to the first prong, methods for decarbonizing the generation fleet are well understood; the challenging questions are what policy tools are best and what rate of change is most cost-effective for customers. And electrification of transportation, heating, and industrial processes presents novel questions about the role of the power company as the foundation on which the transition from fossil fuels can be built.
The questions raised by both prongs are no less daunting than the call in the 20th century to bring electricity to all Americans once the benefits were widely understood. Society treated that as the moral obligation it was — and it was done. We need the same level of national attention to the current challenge.
Our nation’s utilities are well positioned to support the “electrify everything” charge. Electric service already reaches the vast majority of homes, businesses, and people. No other energy source does that. We can build on the ambitious legacies of the New Deal, including rural electrification, to expand service to replace high-emitting fossil fuels.
Transportation represents the greatest opportunities in the near term. Widespread adoption of electric vehicles will require an infrastructure buildout akin to that needed to create the current petroleum distribution network. But because of the vast reach of the electric system, this new network can be built around humans, not cars. While drivers must travel to specific locations to fill up with gasoline, EVs offer the opportunity to charge where drivers actually want to be: at home, work, or shopping.
Being tied to a few dedicated locations for recharging hinders the spread of EVs. While technological advances will surely help reduce the long “refill” times that cause “range anxiety,” we can also make charging infrastructure ubiquitous, taking advantage of the fact that there are few destinations that are not already served by an electric utility.
In fact, not only can power companies facilitate the availability of charging stations where people actually are, utilities can align this buildout with the development of the grid of the future by incorporating additional technologies like storage to ensure that as we increasingly rely on electricity for more energy needs, the grid remains reliable and resilient.
Electrifying mass transit also brings clean energy advancements directly to traditionally underserved populations by offering clean, quiet, and reliable transportation while eliminating significant sources of localized air pollution, such as bus depots, which are frequently located in environmental justice and other overburdened communities.
Admittedly, electrification of heavy-truck fleets is less technologically ripe now, but innovation in this space is moving quickly. Seemingly every week, companies are bringing new trucks and modular work vehicles to market. Power companies can support the commercialization of these technologies by integrating them into the fleets we use to serve our communities. This is more than a showpiece — given the far lower maintenance requirements of electric vehicles and better reliability, they are attractive to utilities.
Power companies also can support electrification in the building sector. Technology has made important leaps recently in heat pumps and cooking, offering customers not just cleaner but better performing and more efficient appliances. Several utilities, particularly in California, offer significant incentives to build or retrofit all-electric homes with the latest comforts and safety, including induction cooktops.
At the other end of the supply chain, sources of electric generation are being similarly transformed. Distributed generation, storage, and microgrids require a fundamentally different overall grid than the poles and wires designed for a world powered by fossil fuels. Electric utilities must modernize the grid to support these innovations while hardening our infrastructure to withstand weather and cybersecurity threats.
Decarbonization presents opportunities to create a national electricity system that connects our communities in ways that drive down greenhouse gas emissions while improving reliability and affordability. All of these opportunities have one common thread — the electric utility, which may soon be more appropriately termed the energy utility, as it serves the complete power needs of customers. Thus, the electric company, which was the indispensable economic development tool of the 20th century, has now become the indispensable climate tool of the 21st.
The author is grateful for the assistance of Kathy Robertson in developing this column.
The role of the electric utility in powering deep decarbonization.
Civilization is built on technologies that capture energy from coal, oil, natural gas, atoms, wind, water, and the sun. Over the long pull of human history, fossil fuel and renewable energy technologies have both become increasingly efficient and less polluting — for example, the advent of supercritical coal power plants and the modern photovoltaic cell. Regardless of the ever-shifting fashions of energy law, policy, and politics, energy technology — like science and engineering more broadly — will continue to improve.
But it is a long, bumpy road, with no guarantee whatsoever any specific thread will ever succeed. It can be decades between laboratory discovery and large-scale commercialization — think of the 1970s promise of nuclear fusion, still a far-off dream despite massive international investment pursuing several engineering strategies. There is a surfeit of opportunities to make wrong turns, leading to wasted research effort and incinerated investor capital.
What is the chance that the research and development project announced by the Department of Energy last fall to create the “coal plant of the future” will succeed? What are the large-scale chances of DOE’s research on highly efficient quantum dot solar cells? How about ongoing efforts by for-profit corporations to commercialize perovskite solar cells, touted as not only more efficient but lower in cost? Will the micro nuclear reactors currently under development actually be deployed in the next decade?
I commend to my readers Wikipedia’s Timeline for Solar Cells, stretching from 1839 to the present. Now imagine you are living at some haphazard point on that timeline, say in 1905 when Einstein published his seminal paper on the photoelectric effect (eventually awarded a Nobel Prize). Imagine an engineer in that decade trying to find a practical application of Einstein’s scientific advance. That is in essence the task facing today’s energy policymakers.
Principals of physics, chemistry, biology, engineering, and economics place constraints on what energy technologies are possible. One might hope that we could use that knowledge to evaluate DOE’s Coal FIRST as well as the other mentioned technologies. Alas, though some of these constraints are well known — for example, the laws of thermodynamics and quantum physics — other constraints are currently unknown to science. For instance, the maximum possible efficiency of as yet undiscovered photovoltaic materials. Moreover, the relevant science is often so technically dense that, as a practical matter, it is accessible only to those who have spent years on the problem.
Even if there is a working prototype, commercializing at scale is a separate and distinct endeavor, subject to its own risk of failure. Even worse, as one approaches commercialization, capital investment requirements rise sharply — one can operate a medical research laboratory with a budget of a few million dollars a year, but the Phase III clinical trials that immediately precede drug approval can and do run into billions of dollars. Economic difficulties often appear only after the investment of immense amounts of time and capital, often in a failed attempt at large-scale commercialization.
Sometimes the technological advances in energy efficiency and pollution control are counter-intuitive and circuitous. There really is an overall trend toward less pollution. But that trend is not entirely because of a shift to renewables. Contrast the pollution control technology and worker safety protections employed in modern coal power plants to the abysmal worker conditions and uncontrolled pollution in aspects of renewable energy production, for example central Africa mines of cobalt, a key metal in the batteries needed for many “clean” technologies.
Some novel energy technologies do represent hope. Increased energy can improve medical care and sanitation and meet basic living requirements among the poorest two billion.
But will new energy technology really increase individual well-being for the rest of the planet? As the literature on Jevons Paradox documents, technological advances that allow us to capture energy more efficiently seem often to lead, not to reduced societal energy use as one might hope, but rather to novel uses for the additional energy that meet no real additional need, with the end result that overall energy consumption increases. For example hybrid versions of some cars use as much fuel as normal cars because they use the energy savings from the design to power a bigger gasoline engine and increase acceleration.
Can we circumvent Jevons Paradox? There is plenty of energy already for the needs of those living in Western societies. So any one individual can decide themselves that they have enough energy and consumption, rather than seeking ever more. I doubt, however, that very many will adopt that strategy. From the perspective of addressing global climate change, technology that makes energy cleaner and more efficient would appear to power a Sisyphean treadmill.
Realizing promise of clean tech is a battle with no obvious strategy.
Working with their customers as well as with cities and states, electric companies are making significant investments in clean energy and smart infrastructure. As of 2017, the power sector’s carbon dioxide emissions are down 28 percent from 2005 levels — the lowest since 1988 and lower than transportation. More than one third of the nation’s electricity comes from carbon-free sources, like nuclear and renewables, and another third comes from low-carbon sources.
Emissions will decrease even more as electric companies transform their energy mix to meet their customers’ expectations for clean power. Since 2005, the percentage of renewable sources in the energy mix has quadrupled, and more than half of new capacity is wind and solar.
The industry’s carbon reduction efforts can be amplified if we enable the transportation sector to electrify, providing substantial environmental benefits by reducing both CO2 emissions and other air pollutants. Transportation electrification is the bridge that connects our cars, trucks, buses, and trains to the energy grid and to cleaner electricity and lower carbon emissions. And electric companies are ready to help.
In a major milestone, the number of electric vehicles on U.S. roads surpassed one million last year. The Edison Electric Institute and the Institute for Electric Innovation project this number will grow to more than 18.7 million in 2030. This growth will only happen, however, if purchasing an EV is an easy choice for customers and ownership is rewarding as well.
Electric companies are well suited to address two of the primary barriers holding customers back today: awareness about the benefits of EVs and the availability of charging infrastructure. Generators can use existing customer communication channels to increase interest in EVs and help streamline the buying process, and they can give customers more charging options by deploying infrastructure at homes, workplaces, multi-family dwellings, and public locations.
The benefits of electric transportation are not limited just to passenger vehicles. While about 60 percent of transportation-related carbon emissions in the United States is from passenger cars and light-duty trucks, nearly 25 percent comes from medium- and heavy-duty vehicles. As electrification becomes an economic choice for a growing number of commercial applications, power companies can take this same model — educating their customers and providing charging options — and apply it to commercial operators.
Electrifying fleet vehicles like buses and trucks, and even material handling operations at ports, airports, and warehouses, reduces emissions and can improve local air quality, which is critical for affected communities. Transit systems and new ridesharing and carsharing platforms can benefit from transportation electrification as well.
Power companies are critical to ensuring that EV charging is integrated with the energy grid in an efficient manner. Generators already are working with customers to site infrastructure where the grid has the capacity to support it. While this is not typically an issue for home charging, it is important for high-power applications like public direct current fast charging or charging infrastructure to support large fleets. Power companies also are providing customers with rate structures that facilitate transportation electrification in an equitable and efficient manner, including testing new options to see what works best for this new type of energy customer.
EVs are flexible resources that can charge at different times, which creates an opportunity to manage charging in a way that benefits both customers and the grid. For example, in states with large amounts of solar energy, electric companies might send price signals to encourage charging during hours of peak sunshine. Programs that encourage charging to occur when the grid has available capacity will minimize costs and help it operate more efficiently — effectively lowering the average system cost for all users. Electric companies are evaluating a range of solutions that meet customers’ needs, including not only education but also improved rate design and smart charging platforms.
The benefits of electric transportation are clear, and America’s power companies stand ready to deploy the infrastructure needed to power a clean energy future that benefits all customers and communities. 17 states have approved power company electric transportation programs, with Maryland and Michigan the latest, and there are in addition numerous pilots promising further transformation. This momentum is critical in helping to leverage the carbon-free transition of our generating fleet already underway into a cleaner vehicle fleet as well. Let’s keep it going.
I bought a Tesla Model 3 this year, and it is perhaps the coolest car I have ever owned. It’s an iPhone on wheels, with a minimalist driver interface. It’s a stoplight dragster with instant torque. It’s an apex-carving athlete with a low center of gravity. It’s a fuel saver.
Yet the Tesla’s inherent limitations as an electric vehicle make it — like the Toyota Prius last decade — a fashionable niche car rather than a harbinger of a broader, battery-powered future.
EVs are still hobbled by range, infrastructure, and customers that don’t see the environmental urgency of going electric. If there is a mass application for electric cars, it’s likely an autonomous future with electrified, self-driving fleets.
The first viable auto startup in my lifetime, Tesla has brought Silicon Valley’s unique perspective to the automobile. Like other digital geniuses (Uber’s Travis Kalanick, Google’s Sergei Brin, Amazon’s Jeff Bezos) who have re-defined services and products from taxis to books, Elon Musk has re-imagined the car. Most reminiscent of Apple’s Steve Jobs, Musk is a brash, controversial figure who understands the allure of bold design in selling a technological vision.
But as new as the Model 3 feels, battery-powered vehicles have been around a long time.
They are clean and easy to operate, but their cost and range disadvantages have doomed them to play second-fiddle to the internal combustion engine for a hundred years. In the early 20th century companies like Detroit Electric enjoyed success with wealthier customers by producing easy-starting battery cars compared to cranky, crank-start gas-mobiles. The advent of the starter motor spelled electrics’ doom.
Battery-power made a resurgence in the early 21st century as Greens rose to political power — stoking fears of peak oil and global warming. The wildly popular Toyota Prius became the first battery-powered car to sell over 100,000 units a year in the United States.
The egg-shaped “Pious” was a must-have accessory for eco-conscious celebs as gas prices pushed $4 a gallon in 2008. Manufacturers flooded the market with gas-battery vehicles like the Ford Fusion hybrid, Ford C-Max, Chevy Bolt, Honda Insight, Lexus ES, and more.
Pundits predicted a hybrid sales boom, and in 2011 Toyota declared that the Prius would eclipse the Camry as its best-selling vehicle by the end of the decade.
Everyone was wrong.
The oil shale boom vaulted the United States to the world’s number-one oil supplier, gas prices plunged under $2 a gallon, and not only are Prius sales down 35 percent (to less than 90,000 units), but the best-selling Toyota model is now an SUV — the RAV4, at 400,000-plus annual sales. Hybrid sales have stalled at below 3 percent market share, and the Volt and C-Max are in the dustbin.
Electric vehicles face similar challenges. The Model 3 has electrified EV marketing, but range issues persist. Most EV sales have been in California where the weather (temperate) and political climate (big subsidies) are favorable. But here in Michigan, my 310-mile range Model 3 could not make a routine, 240-mile business round-trip to Battle Creek this December because cold weather degrades range by 30 percent.
I had to add 30 minutes into my commute in order to refuel at a Battle Creek Tesla Supercharger. While I waited, another plugged-in Model 3 owner lamented the challenges of his weekly Chicago-Detroit business trips.
The problems are more acute for EV owners without access to Tesla’s exclusive charging network. Most of my peers cringe at the complications of charging EVs outside their homes. Just as in the early 20th century, Teslas make sense to upscale households with multiple vehicle options.
Mainstream EVs like the Chevy Bolt, meanwhile, have struggled to gain sales traction. Meanwhile, governments are forcing EVs on a reluctant American public and carmakers who are reluctant in turn. Essentially, manufacturers are now required to make two types of vehicles — profitable gas cars popular with customers and money-losing EVs popular with pols.
In the Bolt General Motors sees an opportunity to satisfy both constituencies, and the predicted Age of Autonomy may be EVs best chance of adoption. With the Chevy EV as the flagship of its emerging self-driving Cruise Automation fleet, GM — and competitors like Waymo, Uber, and Argo — see batteries as best-suited to ferry passengers and goods 24-7 in cities. In short-range urban environs, fast-charging seems a natural fit for their daily routine.
Of course, superchargers aren’t cheap and pose huge grid challenges as manufacturers push 350 kW charging (beyond Tesla’s current 120 kW draw). That’s a business problem. In the meantime, look to Tesla as the Apple computer of passenger cars: high style, low market volume.