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Archive for the ‘natural gas’ Category

2014-02-28 Drilling Rig explores the shale - Mladen Antonov AFP Getty Images

Drilling Rig Reflected in Wastewater Holding Pond
Photo by Mladen Antonov, AFP/Getty Images

Studies released over the past few months have linked pollution from natural gas extraction with birth defects.

In a study released in January by Environmental Health Perspectives, researchers examined data from 124,842 births between 1996 and 2009 in rural Colorado. They examined correlations between how close and dense natural gas development was to the pregnant mother and incidences of various birth defects, including congenital heart defects, neural tube defects, oral cleft, preterm birth and low term birth weight.

The study found that the most exposed mothers, who lived in areas containing over 125 natural gas wells per mile, were 30% more likely to have a child born with a congenital heart defect than a mother who does not live near any wells. One might ask – how is this possible?

Many pollutants from the natural gas extraction processes, including toluene, xylenes and benzene, are suspected to cause physiological abnormalities and mutations in human DNA. These pollutants are known to be able to cross the placenta blood barrier, raising the possibility of fetal exposure to these and other air pollutants.

Of course, air pollutants are not the only danger posed by natural gas extraction. The fluid used in this process is already known to contain over a hundred known or suspected endocrine disruptors – chemicals that can interfere with the body’s responses to estrogen and testosterone – which can lead to many health problems including infertility and cancer. What researches found in a late 2013 study was that groundwater samples taken from areas around natural gas extraction contained very high levels of these endocrine disruptors, while groundwater taken from an area without natural gas had much lower levels. In other words, natural gas extraction is linked with the contamination of groundwater with chemicals that cause infertility.

While researchers cannot say that their studies definitively prove that the natural gas extraction process causes birth defects or groundwater contamination, it is clear that more research needs to be done and the process needs to be further regulated before America continues on an ‘All of the Above’ energy policy. These studies suggest that the future health of generations to come depends on it.

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Updating the the Austin Energy Resource, Generation and Climate Protection Plan to 2020 to become the Austin Energy Resource, Generation and Climate Protection Plan to 2024 probably doesn’t sound super exciting, but there’s almost certainly some aspect of the choices that will soon be made on your behalf that you care about.

IMG_48691. Climate Change: I’m not going to try to convince anyone reading this that our planet’s climate is changing and that humans are largely responsible for that change.  Nor am I going to try to convince you that those changes are going to be largely detrimental to human prosperity.  But if you already recognize those two basic truths, then you will definitely want to listen up.  Austin Energy is proposing to not only run Austin’s portion of the Fayette coal plant until 2025, but also to dramatically increase its use of natural gas by adding a new 800 megawatt gas plant to its energy portfolio.  That’s bigger than Austin’s portion of Fayette.  And although natural gas emits less carbon dioxide per kilowatt hour of energy production than burning coal, once the substantial impact of the roughly 3% of gas that leaks into the atmosphere during extraction, processing and transportation is accounted for, natural gas is almost as harmful to the climate as coal.  That’s because the primary component of natural gas, methane, is 87 times more powerful of a greenhouse gas than carbon dioxide over 20 years.  Although many people focus on the 100 year time frame when talking about climate change, we can’t afford to ignore our more immediate future.  Central Texas has already experienced its share of climate impacts over the past few years in the form of drought, wildfires and floods.  We must stop those impacts from worsening at a greater rate than they already will be.  Natural gas isn’t going to save us.  Even without the massive problem of leaking methane, burning gas instead of coal only decreases our climate impact by about half, so it’s not a long term solution anyway – the best it could have been was a stopgap.  Instead of investing in infrastructure that won’t get us where we need to be, we can make better decisions now.

Attend one of Austin Energy’s stakeholder meetings this week and ask the staff to consider the full climate impacts of energy sources.

2. Jobs: Developing renewable energy sources creates 3 times as many jobs as developing fossil fuel energy sources per dollar invested.  Whereas a large chunk of the cost connected to a coal plan or a gas plant is for the coal and gas, the wind and sun are free.  So, instead of paying for the privilege of burning a limited resource, we can pay people to harness the energy from free and unlimited resources.

Across the U.S., solar energy jobs grew 20% from 2012 to 2013, compared to average job growth across all industries of 1.9%.  A large percentage of that growth was in Texas, but Texas still ranks 44th in solar jobs per capita.  Increasing Austin Energy’s solar goal will bring more jobs to Texas, but it’s increasing the local solar goal that will have the most impact on local job creation.  The Austin Local Solar Advisory Commission unanimously recommended that Austin Energy’s solar goal for 2020 be increased from 200 megawatts (MW) to 400 MW.  It also recommended that at least half of that solar development be local and at least half of that local solar be customer controlled (that’s what you see on residential and business rooftops and yards).  According to the LSAC’s calculations done using the National Renewable Energy Laboratory (NREL) Jobs and Economic Development Impact (JEDI) model, the $60 million it would take to develop that amount of local solar would bring the Austin area a net of $300 million in local economic benefits – wages, taxes, etc.  If Austin Energy adopts policies to give preference to local companies who hire local workers, our community can benefit even more.  On the other hand, we are currently sending $80 million to Montana each year for the coal we burn in the Fayette coal plant.

Tell Austin Energy that you support growing local jobs by increasing our solar goals, including the local and customer owned solar goals.

3. Water: If you live in central Texas, I don’t need to tell you that water is a huge issue – in fact it’s just a big issue for Texas that the Legislature, with voter approval appropriated $2 billion dollars to fund water projects, with 20% of those funds to be used on water conservation efforts.  We can’t make it rain more, so we are going to have to make some choices about what we want to use water for.  The Fayette coal plant, which Austin Energy owns one third of, needs about 5 billion gallons of water per year to operate.  And lest you start thinking natural gas plants are the answer, know that over 39 billion gallons of water was used in fracking jobs in Texas between January 2011 and May 2013.  Producers in the Eagle Ford Shale play are especially wasteful, using an average of 4.4 million gallons of water per well.  That’s water that can’t be used for domestic, commercial, industrial, agricultural, or ecosystem uses.

Tell Austin Energy to focus investment on drought proof energy sources like wind and solar.

4. Health: Air pollution from burning coal and extracting natural gas are taking a real toll on human health in Texas.  The Fayette coal plant is responsible for over $55.5 million in health impacts from air pollution.  Those impacts include asthma attacks, chronic bronchitis, heart attacks and the associated hospital visits and deaths.  Even so, Austin Energy has proposed running its portion of Fayette until 2025.

Lack of regulation over the natural gas industry, which has operations strewn across vast areas has resulted in a tragic disregard for human well being.  If you haven’t already, read this excellent piece of investigative journalism about how your fellow Texans are being assaulted with toxic chemicals in the Eagle Ford Shale area.  Instead of building a large new gas plant to drive up demand for dangerous fracking, Austin Energy should focus on growing its renewable energy portofolio with more wind and solar and perhaps some geothermal energy.

Air pollution is much more than an environmental issue – it’s a public health issue.  That’s why you find medical professionals and health advocates supporting a transition to clean energy.

Sign up for one of Austin Energy’s stakeholder meetings and ask them to give up their plans for a giant new gas plant and to examine more options for retiring the Fayette coal plant in an affordable way.

5. Affordable Energy: Wind and solar energy are competitive with coal and natural gas already.  Meanwhile, electricity from coal plants is going to get more expensive because of various regulations to limit pollution.  Natural gas prices are low now, but have fluctuated greatly over time, making a big bet on natural gas risky.  When natural gas prices go up, Austin Energy raises our fuel charge to recover those costs.  Since affordable wind and solar are available now and can assure us a predictable price for 10-20 years, why would we not make those energy sources our priority?  Austin Energy has done a great job getting good wind contracts to keep customer rates low and is set to achieve its 35% renewable energy goal 4 years early in 2016.

Tell Austin Energy to keep up its momentum by expanding the renewable energy goal to 50% for 2020 and 60% by 2024.

Take Action:

Austin Energy is holding 3 stakeholder meetings to gather public input on the Austin Energy Resource, Generation and Climate Protection Plan update to 2024.

  • Tuesday, February 25: 10 am – 12 pm (noon)
  • Tuesday, February 25: 6 pm – 8 pm
  • Thursday, February 27: 1 pm – 3 pm

This is your chance to help determine how the money you pay for your electric bills is invested by our publicly owned utility.

Please sign up to attend one of the meetings.

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While we’ve all grown accustomed to seeing the words “natural”, “healthy” and “environmentally-friendly” thrown around in advertisements for a variety of consumer goods, it’s important to remember that household items are not the only things capable of being greenwashed – case in point, natural gas.

The word “natural” has been used to connote things such as ‘green’, ‘healthy’, ‘non-toxic’. Many people’s cursory understanding of natural gas is that if it’s “natural”, it must be good, right? Unfortunately the truth about natural gas is more complicated. While it is true that natural gas emits far less CO2 than coal upon combustion, there are a host of other ‘fine-print’ problems that come along with the switch, most notably, fugitive emissions.

Leaky pipes and valves allow methane, a powerful greenhouse gas, to escape into the atmosphere.  Photo by Kevin Moloney, NYT

Methane, a powerful greenhouse gas, escapes from wells and leaky pipes and valves into the atmosphere.
Photo by Kevin Moloney, NYT.

Fugitive emissions are the emissions not intended to take place and that usually result from pressurized equipment leaks. While these leaks are relatively tiny, when expanded to a large enough scale the amount of methane being leaked into the atmosphere can have a large impact on climate. While the EPA originally reported that average leakage rate in natural gas production was somewhere around 1.5%, a collaborative study by scientist from several universities and government agencies released this past October revealed that the figure should be much closer to 3%. Even worse, there have been reports of methane leakage upwards of 12% at some production sites.

Many climate change mitigation plans focus on reducing CO2 emissions, but methane and its effects should not be overlooked. The IPCC has reported that over a 100-year period, methane is 35 times more potent of a heat-trapping gas than CO2. When looking at the effects of methane over 20 years, this figure jumps to 87. Suddenly, that comparatively small amount of methane being leaked out of wells, pipes and valves is incredibly important. In other words, 1 ton of methane being released into the atmosphere has the same heat-trapping effect over a 20 year period as releasing 87 tons of CO2.

20 Year Climate Impact of Natural Gas vs CoalWhile the CO2 emissions from burning natural gas are about half what is produced by burning coal plant to produce the same amount of power, after accounting for fugitive emissions and converting leaked methane into CO2 equivalent (using the IPCC 87x factor referenced earlier), natural gas climate change impact is almost as bad as coal.

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During Tuesday’s State of the Union address, President Obama pledged to have it both ways on climate change and energy – taking action on climate change while touting an “all of the above” energy strategy.

Obama SOTU - credit Larry Downing,AP

President Barack Obama delivers the State of Union address before a joint session of Congress in the House chamber Tuesday, Jan. 28, 2014.
Larry Downing/AP

On the one hand, President Obama renewed his commitment to reducing carbon emissions and battling climate change. But on the other hand, he pushed for the expansion of domestic fossil fuel extraction and pledged his support for natural gas as part of his “all of the above” energy plan. He said, “The ‘all the above’ energy strategy I announced a few years ago is working, and today America is closer to energy independence than we have been in decades.”

The president threw his weight behind natural gas, saying, “If extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change.” He promised to “cut red tape” to spur the construction of natural gas fired factories and fueling stations for cars and trucks.

Even though natural gas emits half as much carbon dioxide as coal when combusted, the primary component, methane, is also released into the atmosphere during production. Methane is a potent greenhouse gas and traps significantly more heat in the short term than carbon dioxide. New reports are concluding that fugitive methane emissions from extraction, processing and transportation could be much worse than previously thought. An article from OilPrice.com says, “If the latest figures are accurate, it could mean that the greenhouse gas advantage that natural gas has over coal could be a mirage.”

The president also gave a shout-out to solar energy, saying, “It’s not just oil and natural gas production that’s booming; we’re becoming a global leader in solar, too.” “The shift to a cleaner energy economy won’t happen overnight, and it will require tough choices along the way,” said Obama. “But the debate is settled. Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

Although the president has made tremendous strides to address climate change, his administration is still encouraging the extraction of coal, oil and natural gas from our public lands and water. (Click here to see a report from the EIA: Sales of fossil fuels from Federal and Indian Lands) Fossil fuel industries are also looking to expand coal and liquid natural gas (LNG) export terminals. All of this on top of recent proposals to end a 40 year ban on crude exports extracted in America.

Sometime this year the proposed Keystone XL pipeline will come across the president’s desk. If approved, the Keystone XL pipeline will provide tar sands producers in Canada a supply line to refineries on the Texas Gulf Coast and an export strategy. Although the president made no mention of the pipeline in his speech, he will have to make a decision on the project later this year. He has said his decision will be based on whether or not the Keystone XL pipeline “significantly exacerbates” carbon pollution and is in the national interest. On Friday, the State Department released its environmental assessment that says the Keystone XL pipeline would cause minimal climate impact because the tar sands would get to market some other way without the Keystone XL pipeline – a strikingly fatalist position.

Both sides of the president showed up on Tuesday to address the nation. His “all of the above” energy side showed up to cheerlead the fossil fuel industry, while at the same time tossing a bone to environmentalists, pulling from his Georgetown Speech he made last summer. President Obama’s climate legacy still has yet to be shaped, and if wants be viewed by future generations as the president that made a firm commitment to fighting climate change, then he needs to quit talking out of both sides of his mouth.
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Small towns like Azle and Springtown, in the North Texas area have experienced about 32 earthquakes over the past two months leaving citizens concerned about what is happening to their home.

According to a recent study from the University of Texas, most earthquakes that are coming from the area are a few miles from the Barnett Shale region. The study also found correlation between injection wells and small earthquakes.  These disposal wells contain chemical contaminated wastewater from oil and gas drilling..  This is part of the process of hydraulic fracturing or “fracking”.

The Railroad Commission has not publicly acknowledge the link between disposal wells and quakes, even with evidence from several studies from Duke University, Cornel University, University of Texas, Texas Christian University, Southern Methodist University and other universities.

According to a story on NPR StateImpact, studies found that oil and gas wastewater disposal wells are a reason for the Eagle Mountain Lake quakes. Disposal wells that inject at higher rates are likely causing quakes.  Studies show that these large amounts of wastewater can cause inactive faults to slip, which causes an earthquake to occur.

In another NPR StateImpact story by Terrence Henry, he writes that under state law, the Commission cannot suspend a disposal well permit unless the operator is in violation of commission rules. There are currently no rules on seismicity, and without this rule the commission has no authority to shut it down. The article also goes on to say that the Railroad Commission is aware of such studies and research linking disposal wells and other drilling activity to man-made quakes, but publicly calls this evidence “theories.”

Young witness at RRC Hearing on Seismic Activity in North Texas - Photo by Sierra Club

Young witness at RRC Hearing on Seismic Activity in North Texas – Photo by Sierra Club

A town hall meeting in Azle, Texas hosted by the Texas Railroad Commission on January 2nd drew 850 residents. The residents had concerns about cracks in their property, sinkholes, earthquake insurance, and possibly having their ground water affected.  They wanted the commission to explain what was happening and asked if disposal wells were the reason for the recent problems. Click here to read more.

The Commission told attendees it would further study the issue of injection wells and quakes, but residents felt they were getting a runaround. Days after this first meeting the Commission announced it would hire a seismologist to investigate local drill sites.
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In a report by TruthOut, Mike Ludwig tells how federal regulators have failed to enforce pipeline safety despite spills and deadly accidents.  Each year more than 250 significant pipeline accidents cause explosions, pollution, property damage, injury and death across the country.  Since 2006, 96 people have been killed, yet no one seems to be there to protect the interests of the public.   Click here to read this report.

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There’s a lot to like in the president’s plan that he announced today, but there is a lot that falls short, too. Certainly on the most important measure, reducing coal-burning plant emissions, the president is a day late and a dollar short. The lack of specificity on the standard eventually to be issued makes it impossible to know how far reaching it will be.

But Texas shows how it can be done!  See below.

Associated Press/Charles Dharapak - President Barack Obama wipes perspiration from his face as he speaks about climate change

Associated Press/Charles Dharapak – President Barack Obama wipes perspiration from his face as he speaks about climate change

Catastrophic climate change poses a near-existential threat to humanity. We need a national mobilization — and indeed a worldwide mobilization – to transform rapidly from our fossil fuel-reliant past and present to a clean energy future. We need a sense of urgency – indeed, emergency – with massive investments, tough and specific standards and binding rules which are missing from the president’s plan.

The administration is finally using the authority ratified by a conservative Supreme Court to regulate greenhouse gas emissions under the Clean Air Act. The Administration will re-write rules for new plants and develop rules for all existing power plants. This is the most important tool the Administration has, and if the rules are written the way they should be, it will go a long way towards protecting consumers and our climate. This initiative builds on the successful and strong automobile tailpipe standards that have already been successfully rolled out. The downside is that the late 2015 final rule date is far off in the future, and will likely see lengthy legal challenges.

The plan also, helpfully, builds on existing programs and plucks some low-hanging fruit to reduce carbon emissions: Increasing renewable targets and efficiency on federal land, in the federal government’s operations, in the Pentagon, and in federally-assisted housing.

The Administration set the table recently by increasing the estimated cost of greenhouse gas (GHG) emissions to society, from $23.80/ton to $38.

Targeting oil industry subsidies, as the Administration proposes here, is also commonsense, and much needed policy.

However, there is no mention in the plan of using a uniform, strong climate change impact assessment under the National Environmental Policy Act, which would require the costs and impacts of GHG in every federal environmental impact statement. The failure to utilize NEPA for GHG assessment is a huge oversight.

Reserving the troubled loan guarantee program for “clean coal” is a taxpayer boondoggle waiting to happen. A case in point is the Obama-backed Kemper IGCC coal plant owned by Southern Co, which has seen costs balloon from $2.4 billion to $4.2 billion, with costs still rising further.

In general, the President’s embrace of an “all of the above” strategy, including oil and gas expansion, is a disaster. His focus on fossil fuel exports — including the explicit promotion of LNG (liquefied natural gas) and his failure to curtail coal exports – threatens to undo any positive elements of the plan. By promoting LNG, the Administration is moving full-speed-ahead on fracking – with no mention of how to control fugitive emissions, water contamination and other environmental problems posed by the controversial process. And while the proposed EPA rules over existing and new coal power plants will result in significant GHG reductions here at home, all of that will be negated (and more) if we ramp up our coal exports to China. Using NEPA and other statutes to ensure that the emissions of coal exports – and the fugitive emissions of fracked gas – are included in the environmental impact study (EIS) for export projects is essential.

The same goes for Keystone XL. Awaiting approval by the State Dept, the Keystone XL pipeline’s EIS is fatally flawed. The Administration has a chance to re-write the EIS to take into account the true GHG impact of the tar sands, which would require this gas-price boosting project to be rejected.  And Obama’s welcome announcement on KXL won’t affect the southern segment of the line being built from Oklahoma to Houston, nor will it stop the conversion of existing pipelines to carry tar sands. These are the back door ways that tar sands and its carbon pollution will leak into the international markets

At the end of the day, it would be helpful if the Administration would lend its support to an existing climate bill – the Climate Protection Act of 2013. This legislation places a price on carbon, sending revenues back to families and into investments for a sustainable energy economy (not to mention regulating fracking and repealing oil industry subsidies).

“Texas Shows How It Can Be Done”

The good news is that the solutions to global warming from the energy sector are within reach — and Texas shows how it can be done. We can power our state with renewable energy, energy efficiency demand side management and energy storage technologies and techniques that exist or are being developed right now.

“Here’s what Texas has shown in recent years:

  • In 1999 Texas adopted renewable energy goals – partially to reduce global warming. Now Texas leads the nation in production of wind energy, which is now so cheap that it is reducing consumers bills;
  • Renewable energy is now employing more people than coal plants and coal mines are  in Texas;
  • If we were to  develop more solar and geothermal, and employ energy  storage, we could meet our energy needs around the clock without relying on coal;
  • With the combination of those tools we could phase out and shut down our 22 climate killing coal plants;
  • Adopting building energy codes has reduced statewide carbon emissions by as much a coal plant would produce.”

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It wouldn’t be a Texas legislative session without some truly backwards bills.  Today we have House Bill 2026 by freshman Representative Sanford of Collin county that would eliminate our state renewable energy goals.

BeachWindIn 1999, the state of Texas made a commitment to renewable energy in the form of the renewable portfolio standard (RPS).  That decision played a major role in spurring the development of the wind industry in Texas.

We have now exceeded the renewable energy goals established in the 2005 update to the RPS and Texas has more wind energy capacity than any other state.[1]  On the surface that may seem to indicate that the RPS has been 100% successful and is no longer needed, but that isn’t the case.

One of the major reasons for establishing the RPS was to encourage diversification of our energy sources, which ultimately makes us more resilient to physical and economic forces that can impact the availability and price of energy sources.  While wind energy has increased from zero percent when the RPS was first established to around ten percent today, other renewable energy sources are still largely absent from our energy portfolio.

With more solar energy potential than any other state, Texas should be the center point of the solar industry as well.[2]  Instead we are lagging behind states with far less solar resources, such as New Jersey and Pennsylvania,[3] and are paying the price in missed opportunities for job growth and new generation capacity that can produce during peak demand.

Solar companies invest in California and other states, because smart policies created attractive markets in those places.  California has 1,505 solar companies compared to Texas’ 260. Even New Jersey has more, with 382.[4] Texas should be doing more, not less to attract solar businesses to our state.

SolarInstallProjections showing that we won’t have enough electricity to meet demand by 2020.[5]  The maximum wholesale price of electricity has been set to triple by 2015, without even determining what the cost to consumers will be.  There have been workshops and meetings to consider the prospect of implementing a capacity market in Texas, which would raise costs even more.  But little time has been spent considering simpler, cheaper solutions such as expanding efficiency and demand response (where customers get paid to reduce there energy usage for short periods of time when demand is high) and getting more solar capacity built in Texas.  Solar is most productive when we need it the most – on hot, sunny afternoons.

The RPS should be retooled to focus on solar and other renewable energy resources that are most capable of producing during peak demand.  Millions of dollars could be saved in the wholesale electric market if we had more solar panels installed.[6]

Solar, like wind, also has the benefit of needing very little water to operate.  Solar photovoltaic (PV) installations need an occasional cleaning to keep performance high, but the amount of water need is minimal in comparison to fossil fuel options.  Coal-fired generators need billions of gallons of water to operate each year[7] and while natural gas-fired generations consume less water than coal-fired generators, they still use more than solar, even without accounting for the millions of gallons of water used to extract the gas with hydraulic fracturing.[8]  Including more renewable energy in our portfolio will make our electric grid less vulnerable to drought[9] and will free up water supplies that are desperately needed for human consumption and agriculture.

Abandoning the RPS now would send a terrible signal to renewable energy companies that are deciding where to establish their businesses.  Our state made a commitment that isn’t set to expire until 2025 at the earliest.  There is no good reason to abandon the policy now.  We should be moving in the opposite direction of what is proposed in HB 2026.  Instead of giving up on a policy that has been successful, we should be looking at ways to build on that success and benefit our state.


[1] AWEA. “Wind Energy Facts: Texas.” Oct 2012. http://www.awea.org/learnabout/publications/factsheets/upload/3Q-12-Texas.pdf.

[2] NREL. “U.S. Renewable Energy Technical Potentials: A GIS Based Analysis.” July, 2012. Pg. 10-13. http://www.nrel.gov/docs/fy12osti/51946.pdf.

[3] SEIA. Solar Industry Data. http://www.seia.org/research-resources/solar-industry-data#state_rankings.

[4] SEIA. State Solar Policy. http://www.seia.org/policy/state-solar-policy.

[5] “Report on the Capacity, Demand, and Reserves in the ERCOT Region.” Dec 2012. Pg 8. http://www.ercot.com/content/news/presentations/2012/CapacityDemandandReservesReport_Winter_2012_Final.pdf.

[6] Weiss, Jurgen, Judy Chang and Onur Aydin. “The Potential Impact of Solar PV on Electricity Markets in Texas.” The Brattle Group.  June 19, 2012. http://www.seia.org/sites/default/files/brattlegrouptexasstudy6-19-12-120619081828-phpapp01.pdf.

[7] “Environmental impacts of coal power: water use” Union of Concerned Scientists http://www.ucsusa.org/clean_energy/coalvswind/c02b.html

[8] http://www.ucsusa.org/clean_energy/our-energy-choices/energy-and-water-use/water-energy-electricity-natural-gas.html

[9] Wu, M. and M. J. Peng.  “Developing a Tool to Estimate Water Use in Electric Power Generation in the United States.” Argonne National Laboratory – U.S. Department of Energy. http://greet.es.anl.gov/publication-watertool.

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No Bailout for Energy Future HoldingsEnergy Future Holdings, formerly TXU, of Dallas might be looking for a handout – from you.

Back in January, Moody’s changed Energy Future Holdings Corp’s rating outlook to negative and made it impossible to ignore what anyone who had been paying attention to the company’s quarterly reports already knew: Energy Future Holdings is on a path heading towards bankruptcy.  Now there are rumors floating around that the company may ask the Texas Legislature to approve a public or ratepayer-funded bailout.

Neither option would benefit majority of Texas citizens and we urge everyone to sign our petition in opposition to any bailout proposal for Energy Future Holdings

You might wonder how the profitable TXU end up as the failing Energy Future Holdings.  The answer is twofold.

First, in Texas, electricity prices are set based on the price of natural gas.  When natural gas prices were high, this meant that coal-fired power plants could reap additional profit.  This made TXU an attractive acquisition because the company owned many coal-fired power plants.  But now, natural gas prices have plummeted and those same coal-fired power plants, especially the oldest and most inefficient, are dragging Energy Future Holdings down.  The private equity investors made a big bet on the wrong energy source.

The second problem is that Energy Future Holdings was acquired in a leveraged buyout.  What that means is that instead of the investors paying the full amount to buy TXU, they financed the deal partially through loans to the company.  While the company has done a good job of staving off the day of reckoning by refinancing many of those loans, many are approaching maturity and additional refinancing options are limited by the negative prospects for the company.

So, while TXU was a profitable company with relatively low debt, Energy Future Holdings is an unprofitable company (because of low natural gas prices) with massive debt (because of the leveraged buyout) that is approaching maturity.  This isn’t a good combination and some people are going to lose money on the deal (many already have).  However, those losses shouldn’t be placed on Texas taxpayers or ratepayers.

Tell your state representatives and senators that you oppose bailing out failed corporations.

Most of us have to live with the consequences of our bad decisions.  Help us make sure that Wall Street and private equity firms must do the same.

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StateImpact is a collaboration among NPR and local public radio stations in eight pilot states to examine issues of local importance. The project seeks to inform and engage communities with broadcast and online news about how state government decisions affect people’s lives.

In Texas, a collaboration between local public radio stations KUT Austin, KUHF Houston and NPR with reporters Mose Buchele, Terrence Henry and Dave Fehling traveling the state, the focus will be on reporting on how energy and environmental issues affect you.  Click here to read their reports or listen to them on NPR member stations.  Below are links to just a few of the stories StateImpact – Texas has reported on recently.

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Public Citizen was lucky enough to have been invited to the release of the new study Flowback: How Natural Gas Drilling in Texas Threatens Public Health and Safety.  We had to split the press conference into three different pieces to get them uploaded, but here we get started with Sharon Wilson and State Rep. Lon Burnam of Ft Worth.

[http://www.youtube.com/watch?v=5byZatNW85o]

After that, several other folks dealing with the health impacts of hydraulic fracturing stepped up to the mic: Calvin Tillman, the Mayor of Dish, TX, a city at the heart of the frack debate, Tammi Vajda a resident of Flower Mound and Sister Elizabeth Riebschlaeger who lives on the Eagle Ford Shale, who absolutely brought the house down.

[youtube=http://www.youtube.com/watch?v=RcnFpnARVV4]

The final clip features my remarks, which you can mostly fast forward through to get to  Alyssa Burgin of the Texas Drought Project.

[youtube=http://www.youtube.com/watch?v=dziPeOX36xE]

We heartily recommend you read the report and call your legislators about the problems Texas faces with fracking. And special thanks to Donna Hoffman at the Sierra Club who took this video.  You can check out their blog at texasgreenreport.wordpress.com

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By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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A new study from Cornell Professor Robert Howarth shows that natural gas from shale beds extracted through hydraulic fracturing or “fracking” has the same effect on the climate as burning coal, tarnishing one of the natural gas industry’s major claims of being a less polluting and more climate friendly fossil fuel.

A megawatt of electricity from a natural gas power plant will generally produce anywhere from 1/3 to 1/2 of the greenhouse gas emissions, specifically CO2, compared to a megawatt from a coal plant.  And since coal plants have rightfully been targeted as the biggest climate polluters the natural gas folks have been positioning themselves as the cheaper, cleaner alternative.

Not so fast, since methane, the main component of natural gas, is also a greenhouse gas that the EPA rates as having 20 times the heat-trapping capacity of CO2.  Since so much methane is released into the atmosphere during the fracking and drilling process, Howarth’s study questions that assumption, implying the climate benefits are minimal, if they even exist.  From The Hill:

More broadly, many gas supporters see domestic reserves as a “bridge” fuel while alternative energy sources are brought into wider use.

Howarth’s study questions this idea.

“The large GHG footprint of shale gas undercuts the logic of its use as a bridging fuel over coming decades, if the goal is to reduce global warming,” the study states.

But [natural gas industry spokesmen] also note that gas has other advantages over coal as an energy source, due to its lower emissions of conventional pollutants including nitrogen oxides and sulfur dioxide.

The study cautions that the research is not meant to justify continued use of oil and coal, but rather to show that using shale gas as a substitute might not provide the desired checks on global warming.

Howarth and Cornell engineering Prof. Anthony Ingraffea, who also worked on the study, acknowledged uncertainties in the nexus between shale gas and global warming in a presentation last month.

“We do not intend for you to accept what we reported on today as the definitive scientific study with regard to this question. It is clearly not. We have pointed out as many times as we could that we are basing this study on in some cases questionable data,” Ingraffea said at a mid-March seminar, which is available for viewing on Howarth’s website.

“What we are hoping to do by this study is to stimulate the science that should have been done before, in my opinion, corporate business plans superceded national energy strategy,” he added.

This is an incredibly important discussion to have, especially given the impacts that fracking is having on our air, water, health, and our state budget.

UPDATE: The Texas Energy Report got some good response from around the Capitol and we couldn’t help include it:

“Sounds like the coal industry may have funded it,” joked Sen. Troy Fraser (R-Horseshoe Bay), author of Senate Bill 15, which would create a 20-year energy and environmental policy council for Texas.

“The direction they’re going is exactly opposite of what we hear that natural gas is cleaner with less greenhouse emissions. We’ve always worked under that premise,” said Fraser who is also chair of the Senate Natural Resources Committee.

***“I would like to see it. I don’t know what they’re drawing their conclusions on. I would say it’s interesting – significant I don’t know,” said Rep. Jim Keffer, chairman of the House Energy Resources Committee.  “We’ll have to take a look at it. I’m sure there’ll be another side.”

Keffer is the author of a bill to require oil and gas companies drilling for shale gas to disclose the contents of chemicals they inject into the ground with water and sand during fracking. Fracking involves high-pressure injections of water into the ground to fracture rock formations and release gas.

The Environmental Defense Fund of Texas, which has embraced Keffer’s bill as the most significant fracking disclosure measure in the nation, said more work is needed to determine the air quality implications of fracking.

“Though we have questions about the study’s emissions estimates, it nevertheless highlights the importance of getting better data,” said Ramon Alvarez of the EDF.

###

By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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Texas oil and gas officials will plead with House Appropriations Committee members next week that the industry needs its $1.2 billion annual tax break, more than children need fully funded schools or the elderly need nursing homes to stay open.

The committee will take testimony on April 14 from industry representatives and others on the controversial tax break for producing “high-cost” shale gas. The tax incentive has been for a controversial drilling method known as fracking in which rock formations are broken with high-pressure water injections. It has come under fire in recent weeks as lawmakers grapple with a budget shortfall estimated at $27 billion.

As it would happen, Public Citizen will be participating in a press conference that same morning of Thu Apr 14, at 10am, on the South Capitol steps, with great folks actually living up on the Barnett Shale and who have been documenting the health impacts. If you’d like to show up to show solidarity both for folks living with drilling and to support getting rid of this corporate welfare tax loophole in favor of fixing our budget deficit, feel free to come by.

For folks living in the Barnett Shale region of the state, leaving this tax break in place would just add insult to injury.  Many in North Texas are grappling with environmental impacts from the natural gas drilling that they believe are adversly impacting their water, their air quality and their health.  To suffer the economic impacts of cuts to vital and important services while giving this highly lucrative industry a corporate welfare “tax break” would be too much to ask of these Texas citizens.

The state has been giving out this ‘high-cost’ gas exemption to wells that only cost $24,000 and above to drill, while a leaked interim report from the Legislative Budget Board that was never published shows that eliminating the oil and gas industry’s tax break would bring in $2.4 billion to the state per budget cycle.

It is going to be an interesting hearing.

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In another effort to stave off critics who call a $1 billion annual tax break for high-cost gas producers in Texas outrageous, a study paid for by the industry has emerged intended to scare folks into believing that for every $1 the state spends in tax breaks it gets back about $4 in related economic activity and that will disappear if we take their tax break away.

Former Deputy State Comptroller and current lobbyist Billy Hamilton has produced an industry-backed study for the American Natural Gas Alliance on what they claim the impact of the withdrawal of the tax incentive would have on Texas.   The  industry is rightly concerned that the tax break would come under attack as the state tries to close a $27 billion budget gap.

Hamilton’s analysis concludes that ending the tax break would result in an immediate loss in 2012 of 35,000 and $3.8 billion in economic output, estimating Texas would lose 94,400 jobs each year and $10.4 billion each year in economic output.

The industry has been saying for some time that if Texas dumps this tax break, states like Pennsylvania will get the driller’s business, but Texas has the largest reserve of natural gas in the nation and it is hard to believe the industry would pull up stakes to move elsewhere.  It is not like they aren’t making plenty of money here in Texas.  And the state hasn’t seemed concerned that they are losing renewable energy manufacturing jobs by not providing that industry with tax breaks/incentives, so no sympathy here.

Worthy of discussion here is exactly who is getting these state tax cuts, and according to the Houston Chronicle, it’s mostly companies from out of state.

Not surprisingly, the top five firms that saved the most as a result of the exemption represent the largest oil and gas producers in Texas:

Oklahoma-based Devon Energy, saved $113.8 million in fiscal year 2010 under the exemption. Devon reported net earnings last year of $4.6 billion.

Next on the list was XTO Energy Inc., a subsidiary of Exxon, which saved $113.2 million on its “high cost” gas operations in Texas. XTO reported $2 billion in net earnings last year. Others who received top financial benefits were: Canadian-based EnCana, which saved $60.6 million, Oklahoma-based Chesapeake Energy, which saved $59.4 million and Enron spin-off EOG Resources of Houston, with $58.6 million in savings.

These tax breaks really amount to little more than subsidies of some of the most profitable companies around. It would be one thing if these were Texas companies, but when Texas taxpayers are subsidizing Oklahoma and Canadian companies, something is very, very wrong. We can expect the corporate welfare queens to cry when their gravy train is threatened, but their protected status at the Legislature, thanks to millions in campaign contributions to Texas politicians, insures that they won’t actually be in danger of cuts.  Not like our schools, or grandma’s nursing home. Perhaps if our teachers and the elderly were represented by out of state special interests who can dip into their huge profits to bribe donate to politicians, they could be safe from cuts, too.

If, in fact, there are no sacred cows as the legislature tries to deal with the budget deficit, then this tax break needs to be on the table too.

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Map of Texas highlighting counties served by t...

Texas counties served by AACOG

San Antonio, which sits just north of what many say is one of the largest oil and gas reserves in the country known as the Eagle Ford, is a heart beat away from violating federal air quality standards for ground-level ozone. It seems it is only a matter of time before the increased emissions from the Eagle Ford could drift up on prevailing winds, pushing the area out of compliance.

With drilling expected to increase over the next decade, those responsible for this region’s air quality say the increased pollution could make it difficult to remain under federal limits.  In the past decade, San Antonio’s ozone levels have decreased by 13 percent while its population has increased 13 percent, managing to stay just ahead of federal standards.  However, once a region falls out of compliance, efforts to get back in are time-consuming, politically unpopular and expensive.

It is going to be a tough contest for the environment to compete with the hype about the economic benefits (which always fail to take into account the economic costs to the region for these types of activities – increased health care costs, decreased quality of life costs, and the cost of coming back into compliance with federal air quality standards).

According to a study by the Center for Business Research at the University of Texas at San Antonio and commissioned by America’s Natural Gas Association:

Activity in the Eagle Ford in 2010 alone generated more than $2.9 billion in total revenue, supported roughly 12,600 full-time jobs and provided nearly $47.6 million in local government revenue.

Last year there were 72 active oil leases, some of which may have more than one well, and 158 producing gas wells.

However, the number of drilling permits issued by the Texas Railroad Commission, which regulates the state’s oil and gas industry, has reached 1,132 as of February. In just one year, the output of crude oil, condensate and other liquids nearly quadrupled to 3.9 million barrels.

And the boom has just begun; the UTSA study forecasts that 5,000 more wells could be drilled by 2020.

So far, no regulatory agency has begun comprehensive air monitoring in the Eagle Ford area, meaning there’s no baseline to measure any increased pollution.

Models for other regions of the country show drilling and related emissions can increase ground-level ozone significantly and the sheer volume of drilling that’s expected over the next decade, will require Alamo Area Council of Governments (AACOG) to add a new category, for drilling and recovery, into its air pollution forecasting models.

The San Antonio Express News writes about the area:

The Eagle Ford shale covers a swath roughly 50 miles wide and 400 miles long, from Maverick and Webb counties sweeping north and east up to Leon and Houston counties, but not including Bexar County. Unlike other large shale formations that have recently been tapped, the Eagle Ford includes a good deal of oil, mostly along the northern reach.

Because oil prices are high and natural gas prices low at the moment, there’s more activity in the oil region at this time, industry analysts say.

Drilling has occurred in South Texas for decades, but the oil and gas trapped in the deeper, dense rock layers once were too expensive to reach. Advances in drilling technology, most notably hydraulic fracturing and horizontal drilling, have allowed an unprecedented amount of hydrocarbons to be extracted.

“Fracking,” as it’s known, forces millions of gallons of water, mixed with sand and a variety of chemicals, into shale formations, forcing open fissures to allow the natural gas and oil to escape. Horizontal drilling allows for one hole to be drilled vertically, then one or more pipes to branch out into the shale.

Together, these techniques have spawned a natural gas boom in the country, with some industry experts estimating a 100-year supply of a fuel that burns more cleanly than coal and could help push the country toward energy independence.

In other parts of the country the boom is well under way, and as drilling has increased, so have complaints about its environmental impacts, most notably drinking water contamination.  While it remains unclear whether fracturing has contaminated drinking water, the EPA last month agreed to study the entire life cycle of the gas production process, to determine how it can affect drinking water supplies.

While water has gotten the lion’s share of the attention thus far, air quality concerns also are increasing and seem to be the area of most concern to San Antonio as they look toward increased drilling activities in the region.  Let’s hope they can stay ahead of this new boom.

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