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Posts Tagged ‘Public Citizen’

In the greater Houston area, ozone season lasts from March to November. In 2018, we’ve already had 12 ozone action days. According to the Texas Commission on Environmental Quality, ozone action days are designated on warm, sunny days that are favorable to the formation of ozone, a compound that forms at near the ground in the atmosphere through complex reactions between nitrogen oxides and volatile organic compounds. While a lot of people think bad air quality occurs only in areas near the industry along the Houston Ship Channel, on some days readings at the ozone monitor near the Woodlands can be higher than at monitors along the Ship Channel. Public Citizen, along with Corey Williams from Air Alliance Houston, and a small group of Woodlands residents sat down with UH Professor Jimmy Flynn to learn more.

The Jones State Forest Air Monitor

University of Houston operates the Jones State Forest Air Monitor. The monitor is not part of TCEQ’s network of regulatory air monitors. It collects data on ozone, carbon monoxide, and meteorology. The monitor is attached to a tower and collects readings above the tree tops to help ensure that it is measuring ambient air quality.

Stagnant Air = Bad Ozone

Ozone is a harmful byproduct of a reaction between nitrogen oxides (NOx) and volatile organic compounds (VOCs). NOx and VOCs are emitted from transportation, industrial processes, and some natural processes. Ozone can cause serious problems especially for people who are already vulnerable, like children, the elderly, and people with pre-existing conditions.

One of the biggest risk factors for ozone formation, according to Dr. Flynn, is stagnant air. Stagnant air occurs when an air mass remains over a region for an extended period of time. There are no heavy breezes or precipitation to clear pollutants out of the atmosphere. Dr. Flynn also mentioned that for ozone in particular, rainfall events will not do much to clear ozone out of the air due to its lack of solubility. Ozone needs air movement to clear it out.

Do you know what to do on an ozone action day?

Learn how to protect yourself and your family when ozone action days occur. You can sign up for alerts through the TCEQ here. Dr. Flynn told us that staying inside on high ozone days is a great way to protect your health because ozone concentrations tend to be much lower inside. Stay safe!

 

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We will be at EarthX in Dallas this weekend giving a talk on the role of the mainstream media in covering the climate crisis.

Not going to EarthX? No worries – we are live streaming the presentation on our facebook page here on Saturday at 12 pm CT.

@publiccitizentx

 

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This week marks the six month anniversary of Hurricane Harvey, a catastrophic storm that killed 88 people and caused about $125 billion in damages. Scientists have shown that Harvey’s strength was fueled in part by climate change.

Houston Mayor Turner has voiced concerns about climate change and pollution, recently through an op-ed published in the Huffington Post entitled “Cities Must Get Creative In The Fight Against Air Pollution.” In this piece, Turner says that cities must address the poor air quality that too often disproportionately impacts low-income communities. Specifically, he states that he will protest permits for new concrete batch plants. Turner also plans to address climate change through using renewable energy to power city operations and through electric vehicle adoption.

Yet, the city of Houston can do more. The Houston Climate Movement came together last year before Harvey because we know that Houston is at risk for the impacts of climate change. The Houston Climate Movement advocates for a community-wide climate action and adaptation plan.

In response to Turner’s op-ed, we penned this letter to him:

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The Texas Senate Committee on Natural Resources held its hearing at Houston’s City Hall.

The Texas Senate’s Committee on Natural Resources and Economic Development held a hearing in Houston Thursday, February 1st on two interim charges, the first being on hotel occupancy taxes and the second on regulatory barriers.

The second interim charge reviewed at the hearing states: Identify options to maintain our state’s competitive advantage and make recommendations to remove or reduce administrative or regulatory barriers hindering economic growth, including permitting or registration requirements and fees.

Public Citizen’s Houston-based organizer, Stephanie Thomas, was one of six people to provide invited testimony. Others included representatives from the Texas Commission on Environmental Quality (TCEQ), the Texas Chemical Council, the National Federation of Independent Business, and the National Energy Association.

Our role at the hearing was to comment on specific aspects of regulation, including the issue of expedited permitting. Public Citizen recommended sufficient funding to the regulatory agencies like TCEQ to thoroughly and effectively review permits. Public Citizen also brought forth issues in reducing public participation that may come from the expedition of permits.

Public Citizen also provided comment on Texas Commission on Environmental Quality’s use of exceptional events for determining National Ambient Air Quality Standards (NAAQS) designation, i.e. whether a location is in attainment or nonattainment for levels criteria pollutants. According to the US Environmental Protection Agency, exceptional events “are unusual or naturally occurring events that can affect air quality but are not reasonably controllable using techniques that tribal, state or local air agencies may implement in order to attain and maintain the National Ambient Air Quality Standards. Exceptional events include wildfires, stratospheric ozone intrusions and volcanic and seismic activities.”

Public Citizen argued that the TCEQ should not use exceptional events to make it seem as though an area is in attainment of an air quality standard when it is not. This practice of using exceptional events to avoid nonattainment status is particularly dangerous because people still have to breath air pollution regardless of whether it comes from a refinery or it comes from agricultural fires in Mexico.

Many of what seems like regulations to industry are public safeguards, with tangible benefits to human health and quality of life.

To read Public Citizen’s written testimony, click here: Regulatory Barriers hearing comments – Public Citizen.docx.

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Houston Mayor Turner, City Council Members, and community members displaced by Harvey speaking at a City of Houston press conference.

Months after Hurricane Harvey, Houstonians are still suffering. Over 5,000 people are not in their homes, some housed in hotels, others hopping between family or friends to ensure a roof over their heads. City of Houston urgently requests funding from the federal government to help the most vulnerable rebuild as well as to mitigate future flooding disasters.

As the U.S. House approved $81 billion for hurricane relief today, Texans await for the U.S. Senate to follow in their footsteps to help support hurricane-ravaged Texas, Florida, and Puerto Rico. Yet this, according to Houston Mayor Sylvester Turner, is not enough. He called the reluctance to fully fund the $61 billion aid request from Texas a “formula for failure,” stating that the current proposal will not do enough to help those most vulnerable. In order for Houston to become a stronger and more resilient city, it needs strong support from the state and federal governments.

Gov. Abbott’s request for $61 billion, which the House did not fully fund in their package, includes $12 billion for what’s known as the “Ike Dike.” The Ike Dike is a proposed barrier that would be constructed in order to reduce the impact of storm surge on the petrochemical plants and refineries that line Galveston Bay and the Houston Ship Channel. It would also include $466 million for the Port of Houston to “create resiliency” and harden the Houston Ship Channel.

Who Pays for Harvey?

While a 20 foot storm surge would no doubt create untold ecological, environmental, and health crises, the real impetus behind the Ike Dike is to protect the assets of the petrochemical industry, and this is $12+ billion  taxpayer-funded bailout. Public Citizen joins Center for Climate Integrity as part of a campaign called Who Pays for Harvey. Scientists have demonstrated that the rainfall and flooding from Harvey was made worse due to climate change-related effects. Furthermore, many of the major petrochemical companies that line the Houston Ship Channel have been aware of the impacts of climate change for decades, yet have actively funded denial campaigns to mislead the American public. Rather than another corporate bailout, government should hold corporations accountable for their role in climate change. Corporations should at the very least foot the bill for the infrastructure projects that serve to protect their assets, while leaving federal dollars to help the most vulnerable rebuild and put their lives back together.

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holiday-greeting1.jpg

As you close out 2016, consider joining or making a gift to Public Citizen’s work – click here.

Thank you and we wish you a safe and happy holiday.

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Freight ShuttleOn September 9th, Adrian Shelley and I went to Bryan, Texas, to watch the unveiling of the Freight Shuttle System (FSS), a technology  currently being built and tested by Freight Shuttle International. Dr. Stephen Roop, chief scientist at Freight Shuttle International and a professor at the Texas A&M Transportation Institute, opened the unveiling with a press briefing sharing his vision. The FSS is an electric, autonomous shuttle powered by a linear induction motor, providing low friction to the steel wheels running on steel lines, similar to train tracks. The FSS combines elements of truck and train transport – single shuttles run on a track similar to a train track, and according to Dr. Roop’s vision, those tracks would be elevated from other modes of transportation to reduce congestion, provide a strong level of predictability and non-stop service, and reduce infrastructure damage often associated with truck transportation. 

Dr. Roop noted the emissions of the FSS are tied to the source of power. What that means is that the FSS itself would generate no point-of-source pollution like the cancer-causing pollution created by diesel engines currently on the road. Furthermore, because the FSS would operate under DC voltage, it could be tied easily to renewable energy. In that way, the FSS could take advantage of the increasing access to renewable energy in Texas and potentially be net zero in terms of carbon pollution.

Adrian and Stephanie with Freight Shuttle

Adrian and Stephanie with Freight Shuttle

The FSS is not designed to transport hazardous or toxic materials, and although it could possibly be used to transport people, it is intended now to be separate from people – that is to be contained within a separate line so that the roads and highways can be used for people, not cargo.

The Port of Houston Authority signed a memorandum of understanding with Freight Shuttle International and is planning to use the FSS to transport cargo between its container terminals, Bayport and Barbour’s Cut. Freight Shuttle International stated that the FSS line could be operational within 3 years.

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IMG_1653Around 10:10 AM on Sunday July 17th, a pipeline leaked propylene in the community of Baytown, TX, near the ExxonMobil Baytown refinery. Propylene is a dense, colorless gas that is considered non-toxic but flammable. The pipeline leak highlights some of the challenges associated with emergency response along within the Houston region.

At 10:30 AM, according to the Houston Chronicle, three houses were evacuated and all others within the vicinity of the leak were told to shelter in place. The emergency response was mixed. Residents who signed up for city notifications through Baytown Alert were apparently notified by phone and by email around 10:30 AM about the order to shelter-in-place. Yet some confusion remained – who exactly did the shelter-in-place include? What had happened, and what kind of chemical was released – something flammable or something toxic? Should residents downwind be concerned?

The CAER line, which is supported by the East Harris County Manufacturers Association, provides a hotline for Harris County residents to call to obtain more information regarding emergency situations. During the incident on Sunday, several people known to us called CAER to hear the messages it posted regarding the situation. It is unclear how quickly the first message regarding the incident was posted to CAER; a Baytown resident stated that it took about an hour following the incident before CAER posted a message. On Sunday at 1:05 PM, there were no current messages, even though the shelter-in-place had not yet been lifted. At 2:30 PM, CAER’s message stated that a propylene leaked resulted in the shelter-in-place warning. The City of Baytown reported via twitter that the shelter-in-place had been lifted at 2:38 PM. At 3:30 PM, CAER’s message line mentioned the leak without any mention of a shelter-in-place. Around 4:20 PM there were no current messages on the CAER line.

Although the City of Baytown notified residents of the shelter-in-place, the residents we spoke with never received the all clear and were not informed when the shelter-in-place had been lifted either via siren or via email and phone. In fact, it is unclear if sirens were used to communicate the shelter-in-place, which is an important way to inform people who may be visiting the area or who may not have access to other technology. Many questions remain unanswered and the Healthy Ports Community Coalition (HPCC) is actively researching to fully understand the emergency response.

The HPCC is also proposing a system like an amber alert system to make use of our modern technology so that residents can be informed immediately when emergency evacuations or a shelter-in-place is called for, notified when it is all clear to return to normal, and they can be instructed specifically on what steps to take to keep themselves and their families safe and healthy. In this case, Baytown residents were lucky that the chemical leaked was not deemed toxic and that no one suffered any known health impacts from the leak. HPCC is working to keep residents safe and informed for when the next incident happens.

hpcc

 

The Healthy Port Communities Coalition is growing a strong base of well-informed and active local residents who engage public and private stakeholders directly on priority issues including jobs, pollution, health, neighborhood safety, and economic opportunities.

 

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Porter Ranch - photo by Maya Sugarman KPCC

Porter Ranch – photo by Maya Sugarman KPCC

The massive natural gas leak in Porter Ranch, CA, just outside of Los Angeles, has been temporarily capped. That’s the good news. The bad news is that the leak isn’t yet permanently stopped and that it has already done incredible damage over the 111 days it spewed methane and toxic chemicals into the air.

The state of emergency called by Governor Jerry Brown is still in effect for what is being named the largest environmental disaster since the BP oil spill. Over 94,700 metric tons of methane has escaped since October 23, which is one of the largest leaks ever recorded. This incident has taken California two steps back in its progress towards greenhouse gas emissions reductions especially since methane is 87 times more potent of a greenhouse gas than carbon dioxide. For perspective, the amount of methane released so far from the natural gas leak will have the same impact on climate over the next twenty years as emissions from seven coal power plants. Despite these environmental crimes, not one person has been arrested, although this past week, the citizens of Los Angeles County have begun taking legal action.

Southern California Gas Co (SoCal Gas), a subsidiary of Sempra Energy, is the responsible company for the Aliso Canyon Methane Leak, and is finally facing charges for this disaster. District Attorney Jackie Lacey announced the criminal charges filed against SoCal Gas for failing to immediately report the gas leak at its Aliso Canyon facility to the proper state authorities. The site leaked for three days before SoCal Gas officials contacted the city’s fire department.

Major public health concerns are also leading to lawsuits. Residents across the county are reporting health issues such as nose bleeds, female health problems (excessive bleeding), rashes, vomiting, headaches, and dizziness, and have packed town hall meetings voicing their concerns. One Porter Rach resident, Christine Katz, stated, “Even though you can’t see the gas, it’s there. And that’s the saddest part — people don’t understand it. Because it’s not a mudslide, it’s not an earthquake. You just don’t see the devastation, but it’s there.”

SoCal Gas has yet to release a full listing of the chemicals being emitted from the leak, furthering distrust and anxiety from the community. Local law firms have organized a website (www.porterranchlawsuit.com) for citizens to reach out if they have been impacted. More than 25 lawsuits have been filed pursuing damages from the SoCal Gas and Sempra Energy. For example, a family of an elderly woman has filed a wrongful death lawsuit against the gas company, claiming that the leaking chemicals led to the worsening of her health and untimely death this past January.

Legal actions will certainly hurt these gas companies financially, but is this an effective way of enforcing the law? History says no. Time and time again, environmental crimes are punished with fines, and these disasters continue to happen putting the public at risk. New regulations, transparency, and stricter criminal enforcement on the individuals responsible very well could bring justice in these incidents.

Crimes committed under a corporate veil are still crimes and should be treated as such. No amount of money will ever reverse the harsh health and environmental effects the Aliso Canyon Methane Leak is having on the region. But we can put into place policies that make corporations take the environmental risks of their operations much more seriously. A proactive justice process would be exponentially more effective means of dealing with environmental crimes than merely reacting after the fact.

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The Keystone XL pipeline in Texas is slated to start up next week, pumping toxic tar sands to refineries along the Texas Gulf Coast, unless Texas Attorney General Greg Abbott steps up to protect our land and water.

Now is the time to email Texas Attorney General Abbott and ask him to use his broad powers to demand the federal government conduct safety inspections of the Keystone XL before it starts.

Junk pipe with signLast November Public Citizen came out with a report detailing hundreds of anomalies at over 125 sites where pipeline was dug up along the route in Texas. CBS News reported on Public Citizen’s report and on warning letters (click here and here to see two from last September) issued by PHMSA, the federal agency that oversees pipelines, to get TransCanada to fix their faulty pipes.

We already know the dangers that communities face from toxic tar sands, whether it’s the land owners whose property is at risk from a spill or the fence line communities that live adjacent to the referies and have to breathe the toxic emissions .

Director of Public Citizen Texas Tom “Smitty” Smith says, “Attorney General Abbott claims to believe in private property rights. If he really does, he should take action now to protect landowners in East Texas from tar sands contamination.”

Click here now to help pressure Attorney General Abbott to protect Texas landowners and water supplies before it is too late.

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Dear Senators and Representatives,

Last Tuesday (Nov. 12), CBS reported that nearly 50 percent of the welds on a section of the southern segment of the Keystone XL pipeline were faulty. That revelation was based on a Sept. 26, 2013, warning letter to pipeline owner TransCanada from the Pipeline and Hazardous Materials Safety Administration (PHMSA).  It was part of a broader story about problems with Keystone XL’s southern segment that included Public Citizen’s own investigative report, also released last week.

In the report, we documented 125 excavations TransCanada made to remedy possible “anomalies,” welds, dents or other problems in the southern segment of the pipeline, which runs from Oklahoma through Texas. In conjunction with the report, we sent a letter on Nov. 11 to Congress asking for oversight hearings.

Since then, we have reviewed the two letters cited by CBS, reviewed other PHMSA warning and corrective action letters sent to TransCanada, and spoken to a PHMSA official about some of the correspondence.

The Sept. 26 letter from PHMSA to TransCanada said that “TransCanada experienced a high weld rejection rate” on the section of the pipeline known as “Spread 3” and that “205 out of the 425 welds, or 48.2 percent,” required repairs.  The letter explained that TransCanada employed a welding process that was not a “previously qualified procedure” and “failed to use properly qualified welders.”

In an earlier, Sept. 10 warning letter, PHMSA said field inspectors found dents in pipe that appeared to be the result of rocks in the backfill used around it. The letter said TransCanada did not ensure that the pipe was installed “in a manner that minimizes the possibility of damage to the pipe.”

Damon Hill, a Washington-based public affairs analyst for PHMSA, said in a phone interview that after the letters were sent, PHMSA had “gone out and conducted inspections.” However, he said he could not provide dates of the inspections, confirm that they focused on the problems identified in the letters, or give even an approximate time frame for providing information on the results of these inspections.

Hill said, “The results of the inspections won’t come out until we issue an enforcement order.” He also said, “You’re trying to get me to say something specific, and I am not going to tell you something specific.”

Meanwhile, that section of the pipeline is scheduled to be filled with tar sands crude within a matter of weeks.

The construction problems and the lack of information about inspections are particularly alarming because of TransCanada’s history. The first phase of Keystone XL spilled 14 times in the first 14 months of its operation, according to a U.S. State Department report, and TransCanada’s Bison natural gas pipeline exploded within the first six months of operation.

Moreover, the number of weld problems has implications for the entire southern segment. If 205 repairs are needed on a single section, how many flaws are there likely to be in the rest of the pipeline’s 485 miles?

In light of the above, we firmly believe that the following should take place:

  • PHSMA should ensure correction of the problems identified in its letters, inspect the corrected work, and make the process and results publicly available and readily accessible.
  • PHMSA should inspect all of the “anomalies” indicated by our report and make the process and results publicly available and readily accessible.
  • Because of the high number of problems identified in PHMSA letters and our report, PHMSA should inspect the entire southern segment of Keystone XL. PHMSA should conduct a quality assurance review, and because the quality of the welds is critical to ensuring that the pipeline won’t leak or rupture, another hydrostatic test and caliper inline test should be complete before it is filled.
  • Congress should conduct oversight hearings to ensure that the pipeline is safe for the public and the environment.
  • All of the above should be completed before the pipeline is filled with tar sands crude and put into use.

Our report and PHMSA’s own letters raise the specter of a pipeline rife with construction flaws from its start in Cushing, Oklahoma, to its end at Texas’s Gulf Coast. Congress has a responsibility to ensure that flaws already identified and any undiscovered flaws do not result in a public health or environmental disaster. Texas’ waters should not be put at risk of contamination from pipeline breaks or spills.

Sincerely,

Tom “Smitty” Smith, Director
Public Citizen’s Texas Office
1303 San Antonio St.
Austin, Texas
(512) 477 1155
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UPDATE:  If you didn’t catch the CBS national news report on Tuesday, November 12th on the problems with the Southern Segment of Keystone XL, click here.

Public Citizen Calls for Congressional Oversight Hearings and Delay in Startup 

As the Obama administration considers whether to approve the Keystone XL pipeline’s northern segment, owner TransCanada faces serious questions concerning construction and pipeline integrity issues on the Texas portion of the pipeline that throw its safety into question, Public Citizen said today.

In light of the problems – documented in Public Citizen’s newly released report, “TransCanada’s Keystone XL Southern Segment: Construction Problems Raise Questions About the Integrity of the Pipeline” – citizens and elected officials should call for a delay in startup until an investigation into its safety is completed.

The report documents construction problems and apparent engineering code violations along the Texas portion of the southern segment of the pipeline. The full southern segment, scheduled to be filled with oil by the end of 2013, will run from Cushing, Okla., to refineries on the Gulf Coast of Texas. It traverses 631 streams and rivers in Texas alone (see http://texaspipelinewatch.files.wordpress.com/2013/09/watersheds.pdf).

The apparent problems documented in the report include pipe being installed as part of new construction that had excessive bending or sagging, and peeling patches of field coating applied to cover damage on pipe about to be placed into the ground.

The report also notes more than 125 excavations in 250 miles of possible “anomalies” on pipe that had been buried for months. Those anomalies included dents, sags and other problems that could lead to spills or leakage of toxic tar sands crude.

“The government should investigate, and shouldn’t let crude flow until that is done,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office. “Given the stakes – the potential for a catastrophic spill of hazardous crude along a pipeline that traverses hundreds of streams and rivers and comes within a few miles of some towns and cities – it would be irresponsible to allow the pipeline to start operating.”

Public Citizen also urges President Barack Obama and Secretary of State John Kerry, when deciding on the northern leg of Keystone XL, to consider TransCanada’s record of construction problems and code violations, and the pipeline’s potential impact on the sensitive areas of the Ogallala aquifer, which provides drinking water for millions of people, and the Sand Hills region of Nebraska, which the pipeline route crosses.

The report, available at http://www.citizen.org/documents/Keystone report – November 2013.pdf, encapsulates information gathered by Public Citizen, whose consultant traveled the area from May through June. Public Citizen collaborated with former TransCanada engineer and whistleblower Evan Vokes, who worked for TransCanada from 2007 to 2012 in the division responsible for construction standards.

For the report, landowners were interviewed, excavation sites were observed, video was reviewed and hundreds of photos of damaged pipe and work sites were examined. Observers also flew over the pipeline route several times.

In some areas, observers noticed stakes marked with “anomalies,” placed by TransCanada, with companion stakes marked “welds” and “dents.” One landowner reported that TransCanada contractors said as many as 70 anomalies were found in a 60-mile stretch between the Sulphur and the Sabine rivers in Texas.

TransCanada has claimed that the excavation and replacement of new pipe demonstrates its commitment to implement 57 special conditions of quality assurance and to build a “state-of-the-art” pipeline.However, TransCanada has had a history of problems with pipeline construction and safety for two decades:

  • During the construction of Keystone I, TransCanada pledged to meet 50 special conditions. But more than 47 anomalies along the line in four states had to be retested, and the Keystone I line spilled 12 times in the first year of operation.
  • In July 2011, TransCanada’s Bison natural gas pipeline exploded within the first six months of operation, blowing out an approximate 40-foot section of pipe. TransCanada had been warned of potential quality problems with construction and inspection.
  • In the 1990s, Iroquois Pipeline Operations, a subsidiary of TransCanada Pipelines Ltd., and four senior executives pleaded guilty to knowingly violating environmental and safety provisions of the pipeline construction permit. Iroquois executives had promised a pipeline of exceptional safety.

Public Citizen is calling on the Pipeline and ­­Hazardous Material Safety Administration (PHMSA) to review TransCanada’s construction quality assurance records, determine whether state and federal laws have been violated, and not permit the start of operations on the southern leg of the Keystone XL until the entire line has been hydrostatically retested – a sophisticated process that sends water through a pipeline at a specified level of pressure higher than the maximum operating pressure to test the integrity and strength of a pipeline. The southern segment also should be tested by an inline caliper device called a smart pig to look for integrity problems.

Public Citizen also calls on Congress to hold oversight hearings to ensure that PHMSA investigates and addresses the safety of the pipeline.

“TransCanada’s history with pipeline problems speaks for itself,” Smith said. “I fear we could be looking at another pipeline whose integrity may be in question.”

Citizens can:

  • Call upon Congress to hold oversight hearings to assure that the pipeline is retested and its safety is ensured;
  • Attend one of seven upcoming citizen hearings on the safety of the pipeline in East Texas (see http://texaspipelinewatch.org/calendar/ for schedule and addresses);
  • Meet with local first responders and ask county governments to develop tar-sands-spill- emergency response plan; and
  • Ask legislators to reform Texas common carrier laws pipeline and pipeline safety standards.

 

For  video of pipeline issues, see http://nacstop.org/EastTexasObserver.html.

June 16, 2013 tape

  • sagging, 4.38-4.59 minutes;
  • coating problem, 5.25-6.12 minutes;
  • anomaly mark, 6.24-7.10 minutes.

See May 31, 2013 tape

  • sagging, 26-31 seconds;
  • water, 4.59 minute
  • unsupported pipe, 4.29-6.20 minutes

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Energy Future Holdings $1 Billion Bonding for Texas Mines Doesn’t Pass the Smell Test

An exclusive report from Public Citizen and Sierra Club reveals that Energy Future Holdings (EFH) and its subsidiaries have not set aside cash or real assets to cover the $1.01 billion cost of cleaning up its strip mines in Texas.  Click here to get a copy of the full report entitled “Energy Future Holdings and Mining Reclamation Bonds in Texas“.

As a result, taxpayers could end up with the bill if mines are abandoned by EFH, which is expected to file for bankruptcy by year’s end.

“The report shows that Energy Future Holdings has been playing fast and loose with its obligations to Texans,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office.  “The law is clear, and Texas regulators should take immediate action to demand a cash bond so taxpayers and the environment are protected.”

The Public Citizen and Sierra Club report, titled “Energy Future Holdings and Mining Reclamation Bonds in Texas,” was authored by Tom Sanzillo, Director of Finance for the Institute for Energy Economics and Financial Analysis. (Sanzillo previously served as first deputy comptroller of New York State and has thirty years of experience in public and private finance.)

Under federal law, mining companies are required to set aside money for clean-up of mines so resources will be available even if the mines are abandoned. The law was created because many mines were abandoned across the United States when companies went bankrupt, leading to contamination of surface water and groundwater.

In Texas, EFH’s subsidiary, Luminant Mining, is responsible for the operation and clean-up of its eleven active strip mines. The reclamation is estimated to cost as much as $1.01 billion.

In many states, Luminant Mining would be required to put up a $1.01 billion cash bond or other financial assets equal to that amount. But Texas’s Railroad Commission, which administers state mining law, has allowed Luminant to “self-bond,” which means it is relying on a “guarantee” without having real cash bonds set aside that the state can readily access.

Sanzillo’s analysis shows that the Luminant Generation assets that are used to pass the Railroad Commission’s financial tests for the $1.01 billion “self-bond” are already committed to secure other debt incurred by EFH.

“Luminant Generation’s revenue-generating assets, its power plants, are pledged as security for Energy Future Holdings debt,” said Sanzillo. “That means there may not be liquid assets available for the cost of reclamation. The fundamental problem is that there does not appear to be any unencumbered capital obligated to the state.”  Sanzillo added, “EFH has been playing a shell-game, and state regulators have allowed it, Sanzillo said. “If EFH is just now trying to come up with money for reclamation, that confirms it wasn’t there before. Any new financing mechanism that EFH comes up with must be reviewed rigorously. EFH has to segregate the money – set cash aside or post a third-party bond specifically for clean-up of the mines.”

Al Armendariz, senior representative in Texas for Sierra Club’s Beyond Coal Campaign, said, “This billion-dollar bonding should be a wake-up call for future buyers of EFH’s oldest coal plants. It may be that these old EFH coal plants are just too expensive to operate. They’re the subject of enforcement actions by the U.S. Justice Department, and EFH may be required to add  hundreds of millions of dollars in additional pollution controls to meet new ozone, mercury, and  carbon standards.”

Smith pointed out that how Texas handles the EFH financing for clean-up of mines could set national precedent.

“One hundred and fifty coal generating units in the United States have announced they plan to retire, and as a result many of the mines that supply them may end up in financial trouble,” Smith said. “This problem is bigger than Texas and regulators across the nation should take steps to protect consumers and the environment in their states.”

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SAN ANTONIO – The newly formed Re-Energize San Antonio Coalition called on CPS Energy to meet a set of conditions before following through with an October rate hike.

Describing the hike as an increase that will “unfairly burden residential taxpayers,” coalition members called on CPS to take steps to reduce pollution, waste and costs for consumers.

The coalition presented its demands in a petition handed off to the utility during the Monday, Sept. 9 CPS Rate Case Input Session held at the TriPoint Grantham Center.

“We oppose the rate hike because it promotes unsustainable growth, driven by dirty energy, on the shoulders of the poor and working class folks who already pay the most for energy costs relative to income and quality of housing stock,” said Dr. Marisol Cortez, scholar-in-residence at the Esperanza Peace & Justice Center.
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The newly formed Re-Energize San Antonio Coalition put its opposition to CPS’s proposed rate hike on the record during a Sept. 9 citizen’s input meeting. Coalition representatives presented the utility with a plan of action that they want addressed before an increase goes into effect. Here’s the petition.

PETITION FOR CPS ACTIONS PRIOR TO PROPOSED RATE INCREASE

Submitted to CPS Energy during the CPS Rate Case Input Session, Monday, Sept. 9, 2013.
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