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Keystone XL Pipeline Tradeoff Is Suggested

May 9, 2013 by Leave a Comment

But could some kind of deal be in the offing — a major climate policy announcement on, for example, power plant regulation or renewable energy incentives — to ease the sting of the pipeline approval?

White House and State Department officials insist a pipeline ruling will be made strictly on whether the 1,700-mile project is in the economic, environmental and security interests of the United States. They say the pipeline is not a fundamental piece of the nation’s climate policy nor is it a political bargaining chip to trade for other measures.

Administration officials have described the pipeline as a relatively simple permit application on an infrastructure project to transport oil from Alberta to refineries on the Gulf Coast.

But to many environmentalists, including some of the president’s most active campaign supporters, the issue has huge symbolic and political importance.

For that reason, the approaching decision — expected some time this summer or early fall — offers the president a rare opportunity to set the parameters of the energy debate for the rest of his term and cement his legacy as the first president to seriously address climate change.

“Presidents don’t get many opportunities to make big dramatic announcements,” said Paul Bledsoe, a former energy adviser in the Clinton White House and now a senior fellow at the German Marshall Fund. “If and when he announces approval of Keystone, he has a once-in-a-term teachable moment on climate.”

Mr. Bledsoe suggested that the president use the opportunity to announce a new regime of regulation for existing coal-fired power plants, which account for a third of the nation’s greenhouse gas emissions.

Others suggest Mr. Obama could tie the decision to a renewed push on a national clean energy standard, requiring that a set proportion of the nation’s electricity be produced from carbon-free sources by a given year. One former administration official even suggested an interesting formula — 18 percent by 2018. In 2011, renewable power — solar, wind and hydro — produced 13 percent of America’s electricity.

There are a number of problems with such proposals, however.

First, pipeline opponents say there is no possible deal that could compensate for the environmental damage created by the construction of the pipeline and expanded development of the Canadian oil sands. They have described the pipeline as a fuse to one of the biggest carbon bombs on the planet, and said that extracting and burning all the oil in the Alberta oil sands would mean the game was over for global climate.

“Approving the pipeline would be a deep self-inflicted wound on the Obama administration, greater than anything else he has done,” said Michael Brune, executive director of the Sierra Club and a leader of the antipipeline movement. “This was not inherited from the Bush administration and it can’t be passed off to his successor. It really is Obama’s alone. Whatever damage the decision would do to the environmental movement pales in comparison to the damage it would do to his own legacy.”

Mr. Brune and other environmental advocates say that Mr. Obama should veto the pipeline and pursue climate-friendly policies for their own sakes, not as part of some political deal. The danger to the climate of continuing on the current path demands strong steps like curbing coal-fired power and supporting renewable alternatives, he said.

“It’s hard to argue we should be developing new fossil fuel sources,” said Mr. Brune, who was arrested outside the White House at a Keystone protest earlier this year, “but particularly such a carbon-intensive source as the Canadian tar sands.”

There are other difficulties. Last year the Environmental Protection Agency proposed limiting carbon dioxide emissions from new power plants, effectively foreclosing construction of any new coal-burning facilities. But just last month the E.P.A. delayed the proposed rule, saying it needed to respond to public and industry concerns.

It is unlikely the administration will take on the far more contentious and costly project of curbing greenhouse gas emissions from existing power plants until the new plant rule is completed, or at least much further along than it is now. This week, Gina McCarthy, who is awaiting confirmation as the new E.P.A. administrator, told Senate Republicans in a written submission that the agency “is not currently developing any existing-source G.H.G. regulations.” G.H.G. is shorthand for greenhouse gas.

A clean energy standard, also known as a renewable portfolio standard, also presents problems. About 30 states already have such rules in place, with different targets and timelines. To impose such a regimen nationally, however, requires Congressional action, which is unlikely. A clean energy proposal last year from former Senator Jeff Bingaman, Democrat of New Mexico, went nowhere and there is even less enthusiasm in the current Congress.

“The president can’t do a clean energy standard on his own,” said Robert Dillon, spokesman for Senator Lisa Murkowski, the senior Republican from Alaska on the Energy and Natural Resources committee. “He can’t just order utilities to buy a certain amount of renewable energy.”

He asked, “Is the goal to make energy cleaner? Or just to subsidize certain favored sectors of the renewable energy industry like wind and solar?”

Another possibility could be for Mr. Obama to extract promises from Canada to make development and transport of the oil less harmful to the environment.

But Canadian officials bristle at such suggestions, saying Alberta has had a carbon tax in place since 2007 (although it is quite small) and that some of the proceeds are diverted to development of alternative energy. They also say overall carbon emissions from oil sands mining have dropped 26 percent a barrel since 1990 and will fall further. And Canada’s overall greenhouse gas reduction target — 17 percent below 2005 levels by 2020 — is the same as that of the United States.

“None of the environmental initiatives we have put in place were done to get the pipeline approved,” Alison Redford, the premier of Alberta, said in a recent visit to Washington to lobby for Keystone. “Anything we do has not and will not be done based on a quid pro quo.”

Article source: http://www.nytimes.com/2013/05/09/business/energy-environment/a-call-for-quid-pro-quo-on-keystone-pipeline-approval.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Some Hope Obama Offers Tradeoff if He Approves Pipeline

May 8, 2013 by Leave a Comment

But could some kind of deal be in the offing, a major climate policy announcement on, for example, power plant regulation or renewable energy incentives, to ease the sting of the pipeline approval?

White House and State Department officials insist a pipeline ruling will be made strictly on whether the 1,700-mile project is in the economic, environmental and security interests of the United States. They say the pipeline is not a fundamental piece of the nation’s climate policy nor is it a political bargaining chip to trade for other measures.

Administration officials have described the pipeline as a relatively simple permit application on an infrastructure project to transport oil from Alberta to refineries on the Gulf Coast.

But to many environmentalists, among them some of the president’s most active campaign supporters, the issue has an outsize symbolic and political importance.

For that reason, the approaching decision – expected some time this summer or early fall – offers the president a rare opportunity to set the parameters of the energy debate for the rest of his term and cement his legacy as the first president to seriously address climate change.

“Presidents don’t get many opportunities to make big dramatic announcements,” said Paul Bledsoe, a former energy adviser in the Clinton White House and now a senior fellow at the German Marshall Fund. “If and when he announces approval of Keystone, he has a once-in-a-term teachable moment on climate.”

Mr. Bledsoe suggested that the president use the opportunity to announce a new regime of regulation for existing coal-fired power plants, which account for a third of the nation’s greenhouse gas emissions.

Others suggest Mr. Obama could tie the decision to a renewed push on a national clean energy standard, requiring that a set proportion of the nation’s electricity be produced from carbon-free sources by a given year. One former administration official even suggested an interesting formula – 18 percent by 2018. In 2011, renewable power — solar, wind and hydro — produced 13 percent of America’s electricity.

There are a number of problems with such proposals, however.

First, pipeline opponents say there is no possible deal that could compensate for the environmental damage created by the construction of the pipeline and expanded development of the Canadian oil sands. They have described the pipeline as a fuse to one of the biggest carbon bombs on the planet, and said that extracting and burning all the oil in the Alberta oil sands would mean the game was over for global climate.

“Approving the pipeline would be a deep self-inflicted wound on the Obama administration, greater than anything else he has done,” said Michael Brune, executive director of the Sierra Club and a leader of the antipipeline movement. “This was not inherited from the Bush administration and it can’t be passed off to his successor. It really is Obama’s alone. Whatever damage the decision would do to the environmental movement pales in comparison to the damage it would do to his own legacy.”

Mr. Brune and other environmental advocates say that Mr. Obama should veto the pipeline and pursue climate-friendly policies for their own sakes, not as part of some political deal. The danger to the climate of continuing on the current path demands strong steps like curbing coal-fired power and supporting renewable alternatives, he said.

“It’s hard to argue we should be developing new fossil fuel sources,” said Mr. Brune, who was arrested outside the White House at a Keystone protest earlier this year, “but particularly such a carbon-intensive source as the Canadian tar sands.”

There are other difficulties. Last year the Environmental Protection Agency proposed limiting carbon dioxide emissions from new power plants, effectively foreclosing construction of any new coal-burning facilities. But just last month the E.P.A. delayed the proposed rule, saying it needed to respond to public and industry concerns.

It is unlikely the administration would take on the far more controversial and costly project of curbing greenhouse gas emissions from existing power plants until the new plant rule is completed, or at least much further along than it is now. This week, Gina McCarthy, who is awaiting confirmation as the new E.P.A. administrator, told Senate Republicans in a written submission that the agency “is not currently developing any existing source G.H.G. regulations.” G.H.G. is shorthand for greenhouse gas.

A clean energy standard, also known as a renewable portfolio standard, also presents problems. About 30 states already have such rules in place, with different targets and timelines. To impose such a regime nationally, however, requires Congressional action, which is unlikely. A clean energy proposal last year from former Senator Jeff Bingaman, Democrat of New Mexico, went nowhere and there is even less enthusiasm in the current Congress.

“The president can’t do a clean energy standard on his own,” said Robert Dillon, spokesman for Senator Lisa Murkowski, the senior Republican from Alaska on the Energy and Natural Resources committee. “He can’t just order utilities to buy a certain amount of renewable energy.”

He asked, “Is the goal to make energy cleaner? Or just to subsidize certain favored sectors of the renewable energy industry like wind and solar?”

Another possibility could be for Mr. Obama to extract promises from Canada to make development and transport of the oil from Alberta less harmful to the environment.

But Canadian officials bristle at such suggestions, saying Alberta has had a carbon tax in place since 2007 (although it is quite small) and that some of the proceeds are diverted to development of alternative energy. They also say overall carbon emissions from oil sands mining have dropped 26 percent a barrel since 1990 and will fall further. And Canada’s overall greenhouse gas reduction target – 17 percent below 2005 levels by 2020 – is the same as that of the United States.

“None of the environmental initiatives we have put in place were done to get the pipeline approved,” Alison Redford, the premier of Alberta, said during a recent visit to Washington to lobby for Keystone. “Anything we do has not and will not be done based on a quid pro quo.”

Article source: http://www.nytimes.com/2013/05/09/business/energy-environment/a-call-for-quid-pro-quo-on-keystone-pipeline-approval.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

In Solar Power, India Begins Living Up to Its Own Ambitions

December 28, 2011 by Leave a Comment

Every five days or so, in a marriage of low and high tech, field hands with long-handled dust mops wipe down each of the 36,000 solar panels at a 63-acre installation operated by Azure Power. The site is one of the biggest examples of India’s ambitious plan to use solar energy to help modernize its notoriously underpowered national electricity grid, and reduce its dependence on coal-fired power plants.

Azure Power has a contract to provide solar-generated electricity to a state-government electric utility. Inderpreet Wadhwa, Azure’s chief executive, predicted that within a few years solar power would be competitive in price with India’s conventionally generated electricity.

“The efficiency of solar technology will continue to increase, and with the increasing demand in solar energy, cost will continue to decrease,” Mr. Wadhwa said.

Two years ago, Indian policy makers said that by the year 2020 they would drastically increase the nation’s use of solar power from virtually nothing to 20,000 megawatts — enough electricity to power the equivalent of 20 million modern American homes. Many analysts said it could not be done. But, now the doubters are taking back their words.

Dozens of developers like Azure, because of aggressive government subsidies and a large drop in the global price of solar panels, are covering India’s northwestern plains — including this village of 2,000 people — with gleaming solar panels. So far, India uses only about 140 megawatts, including 10 megawatts used by the Azure installation, which can provide enough power to serve a town of 50,000 people, according to the company. But analysts say that the national 20,000 megawatt goal is achievable and that India could reach those numbers even a few years before 2020.

“Prices came down and suddenly things were possible that didn’t seem possible,” said Tobias Engelmeier, managing director of Bridge to India, a research and consulting firm based in New Delhi. Chinese manufacturers like Suntech Power and Yingli Green Energy helped drive the drop in solar panel costs. The firms aggressively increased production of the panels and cut costs this year by about 30 percent to 40 percent, to less than $1 a watt.

Developers of solar farms in India, however, have shown a preference for the more advanced, so-called thin-film solar cells offered by suppliers in the United States, Taiwan and Europe. The leading American provider to India is First Solar, based in Tempe, Ariz.

India does not have a large solar manufacturing industry, but is trying to develop one and China is showing a new interest in India’s growing demand. China’s Suntech Power sold the panels used at the Azure installation, which opened in June.

Industry executives credit government policies with India’s solar boom, unusual praise because businesses usually deride Indian regulations as Kafkaesque.

Over the last decade, India has opened the state-dominated power-generating industry to private players, while leaving transmission, distribution and rate-setting largely in government hands. European countries heavily subsidize expensive solar power by agreeing to buy it for decades at a time, but the subsidies in India are much lower and solar operators are forced into to greater competition, helping push down costs.

This month, the government held its second auction to determine the price at which its state-owned power trading company — NTPC Vidyut Vyapar Nigam — would buy solar-generated electricity for the national grid. The average winning bid was 8.77 rupees (16.5 cents) per kilowatt hour.

That is about twice the price of coal-generated power, but it was about 27 percent lower than the winning bids at the first auction held a year ago. Germany, the world’s biggest solar-power user, pays about 17.94 euro cents (23 American cents) per kilowatt hour.

India, to be sure, still significantly lags behind European countries in the use of solar. Germany, for example, had 17,000 megawatts of solar power capacity at the end of 2010. But India, which gets more than 300 days of sunlight a year, is a far more suitable place to generate solar power. And being behind is now benefiting India, as panel prices plummet, enabling it to spend far less to set up solar farms than countries that pioneered the technology.

Neha Thirani contributed research.

Article source: http://www.nytimes.com/2011/12/29/business/energy-environment/in-solar-power-india-begins-living-up-to-its-own-ambitions.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

I.H.T. Special Report: Energy: A Green Solution, or the Dark Side to Cleaner Coal?

June 19, 2011 by Leave a Comment

The silos, which are scheduled to start operation in July, are designed to blend cleaner-burning imported coal with China’s own high-polluting domestic coal, which is contaminated with sulfur and dust.

Coal blending will produce a mixture that will help electric utilities meet China’s steadily tightening environmental regulations. It will also increase the efficiency of coal-fired plants by slightly reducing the quantity of coal needed. Burning less coal means less greenhouse gases emitted.

But critics argue there is a darker side to cleaner coal.

“Anything that makes coal more cost effective, like blending, which is only enabling China to burn more coal, is bad news for the global struggle against carbon emissions,” said Orville Schell, the Arthur Ross director of the Center on U.S.-China Relations at the Asia Society in New York.

The Chinese government’s decision this month to import more coal in order to lessen power outages — and control rising coal prices — ensures that blending will increase rapidly.

Industry executives are quick to tout the practice’s environmental benefits. Blending “is a sound solution to reducing greenhouse gas and pollutants emissions from coal-fired power plants,” said Howard Au, the director and chairman of Petrocom Energy Ltd., which owns the blending facility here.

But environmentalists worry that by reducing the amount of sulfur and dust emitted from burning coal, blending makes coal more acceptable in the short-term and stalls the conversion to cleaner or renewable fuels. They say coal blending strengthens the case for companies — and countries — that want to continue to rely on coal for decades.

“Does it help with acid rain? Yes,” said Allen Hershkowitz, a specialist in Appalachian coal fields at the Natural Resources Defense Council, an environmental group based in New York. “It hurts us when it comes to global warming.”

Coal remains a particularly dirty form of electricity generation when it comes to producing climate-changing gases.

The global warming calculus for coal blending is less clear. Blending makes it easier to feed a power plant with exactly the right coal mixture at which its boilers work most efficiently. This means the plant can burn less coal and emit less greenhouse gas. How much less — and how does that improvement compare with switching to other fuels — varies a lot depending on the power plant and the coal it burns without blending. Better operating efficiency at the power plant helps offset the cost of blending, which can add up to 4 percent to the price tag of the coal.

China does not just have an ancient civilization, it also has a lot of very old coal. Much of it has been tightly compressed over millions of years. That has pluses and minuses.

Chinese coal releases a lot of heat when burned and has very little moisture left, two very desirable features, according to coal traders. But Chinese coal deposits also contain a lot of sulfur as well as so-called fly ash — dust that is not combustible and contributes to particulate air pollution.

China also has some deposits of young coal which has fairly low heat content and requires blending before it can be burned.

China has the third-largest coal reserves, after the United States and Russia, and consumes more coal than any other country. It accounted for nearly half the 7.3 billion metric tons burned around the world last year.

Four-fifths of China’s reserves, however, do not comply with the country’s standards for industrial use, according to the government-run China Coal Research Institute. Complicating matters, the China’s environmental regulators have signaled plans to reduce further the allowable levels of sulfur.

China led the world last year in clean energy investments, with $54.4 billion, according to a study by the Pew Charitable Trusts. But coal is still China’s dominant energy source, accounting for 73 percent of electricity capacity.

Because coal-fired plants run day and night — while alternatives like wind turbines and hydroelectric dams only run when enough wind or water is available — coal accounted for 83 percent of electricity generation last year.

Article source: http://www.nytimes.com/2011/06/15/business/energy-environment/15iht-sreCHINA15.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Power vs. Profit

May 25, 2011 by Leave a Comment

Balking at the high price of coal that fuels much of China’s electricity grid, the nation’s state-owned utility companies are defying government economic planners by deliberately reducing the amount of electricity they produce.

The power companies say they face financial ruin if the government continues to tightly limit the prices they can charge customers, even as strong demand is sending coal prices to record levels. The chairwoman of one giant utility, China Power International, recently warned that one-fifth of China’s 436 coal-fired power plants could face bankruptcy if the utilities cannot raise rates.

The utilities’ go-slow tactics include curtailing the planned expansion and construction of power plants, and running plants for fewer hours a day. And in a notable act of passive defiance, the power companies have scheduled an unusually large number of plants to close for maintenance this summer — right when air-conditioning season will reach its peak.

So far there have been no public confrontations between Beijing officials and utility executives. But the dispute indicates that China’s unique marriage of market competition and government oversight may be starting to fray after three decades of phenomenal economic success.

“The Chinese electricity companies are firing a shot across the bow, and essentially saying they’re not going to just sit there and take massive losses,” said Jeremy C. Carl, a Stanford University researcher on Chinese energy issues. “It’s almost the equivalent of a corporate sick-out.”

The official Xinhua news agency reported late Monday that the country’s main electricity distribution company, the State Grid, had warned that power shortages this year could be worse than in 2004, when China had its worst blackouts in decades. That year, the problem involved railroad bottlenecks in getting coal to power plants — an issue largely resolved with the subsequent investments in more rail lines.

This time, the impasse between government and industry is not the only cause of China’s electricity shortages. Surging electricity demand is also a factor.

China’s 700 million rural residents have been on a two-year buying spree of electric devices, purchasing hundreds of millions of air-conditioners and other energy-hungry appliances with government subsidies aimed at narrowing the gap in living standards between cities and rural areas.

In a little-noticed milestone, the latest data from Beijing and Washington shows that China passed the United States last year as the world’s largest consumer of electricity.

Since March, responding to the power shortages, government officials in six provinces have begun rationing electricity, including here in Hunan province. At least five more provinces are preparing to do so, according to official reports.

In Yiyang, a town of 360,000 in south-central China, electricity shortages are so severe this spring that many homes and businesses receive power only one day in three. Even gasoline stations in this region are silent more days than not, because the pumps lack electricity.

Meanwhile, blackouts are starting to slow the nation’s torrid growth of energy-intensive industries like steel, cement and chemicals. Unlike garment makers and other small manufacturers, the big factories cannot easily switch to backyard diesel generators.

To accommodate businesses that do use diesel back-ups, China last week banned exports of diesel fuel to conserve scarce supplies.

The power cuts are a reason the year-on-year growth rate of China’s industrial production dipped last month — to 13.4 percent in April, down from 14.8 percent in March — and seems to be continuing to fall.

The lower productivity of factories, plus high diesel costs for those using generators, is likely to further raise average prices of American imports from China. Prices of Chinese exports are already up 2.8 percent in the last 12 months, after years of gradual decline that helped restrain inflation in the United States.

Michael Wines contributed reporting from Wenzhou, China, and Jonathan Kaiman contributed research from Beijing.

Article source: http://feeds.nytimes.com/click.phdo?i=8029c8e2cc25f5ef1aba616c7cf2ebed

Filed Under: Business News Tagged With: , ,