Tag Archives: Cap and trade

Air Quality, Bakken Crude, Bridge safety, Cap-and-trade, Crude By Rail, Earthquake, Massive increase in crude-by-rail, Rail accidents, Risk Assessment, Tar sands crude

Green coalition sues Kern County over DEIR failures

Repost from Courthouse News
[Editor: Significant quote: “They claim that the EIR’s analysis of greenhouse gas emissions is ‘riddled with flaws’ because instead of discussing mitigation measures to curb emissions, it assumed that the refinery’s emissions will be ‘reduced to zero’ by participating in the state’s cap-and-trade program, and thus concluded that ‘these emissions are not significant.'”    – RS]

Greens Fight SoCal Tar Sands Oil Project

By Rebekah Kearn, October 13, 2014

BAKERSFIELD, Calif. (CN) – Kern County illegally approved expansion of a local refinery that will let it transport and process 70,000 barrels of crude oil a day, environmentalists claim in court.

The Association of Irritated Residents, the Center for Biological Diversity and the Sierra Club sued the Kern County Board of Supervisors and the Kern County Planning and Community Development Department, on Oct. 9 in Superior Court.

Alon U.S.A. Energy, of Texas, and its subsidiary Paramount Petroleum Corp. are named as real parties in interest.

“The lawsuit challenges Kern County’s unlawful approval of a massive oil refinery and rail project that will further harm air quality in the San Joaquin Valley and subject residents in several states to the catastrophic risks of a derailment involving scores of tanker cars filled with explosive Bakken crude oil,” plaintiffs’ attorney Elizabeth Forsyth, with Earthjustice, told Courthouse News.

Bakken crude is from northern Montana and North Dakota, Manitoba and Saskatchewan. Much of it is extracted by fracking, or hydraulic fracturing.

“The San Joaquin Valley is already overburdened by industrial pollution,” Forsyth said. “Kern County officials should put the health of their residents over the profits of oil companies.”

The groups claim the county’s approval of the Alon Bakersfield Refinery Crude Oil Flexibility Project and its allegedly inadequate environmental impact report violated the California Environmental Quality Act.

The project quintuples the Alon Bakersfield Refinery’s capacity to import crude oil, “from 40 tank cars per day to 200 tank cars per day, or up to 63.1 million barrels of crude per year,” the 27-page complaint states.

“This influx of cheap, mid-continent crudes, including Canadian tar sands crude and Bakken crude from North Dakota, would allow the shuttered refinery to reopen and run at full capacity, processing 70,000 barrels of crude oil per day,” according to the complaint.

“The project’s massive ramp-up in oil transport and processing poses alarming health and safety threats to the residents of Bakersfield and to those who live along the crude-by-rail route. Restarting the refinery will significantly increase harmful air pollution that will only exacerbate the poor air quality and respiratory illnesses that plague San Joaquin Valley communities already unfairly burdened with industrial pollution.”

Bakken crude oil is “highly volatile,” and shipping it across several states “over treacherous and poorly maintained mountain passages” without adequate safety regulations will expose everyone who lives along the shipping route to the risks of derailment, the environmentalists say.

Trains carrying Bakken crude have derailed and exploded, including the July 2013 disaster in Lac-Mégantic, Canada, which killed 47 people and leveled half of downtown Lec-Mégantic, according to the complaint.

Bakersfield, pop. 464,000, between Los Angeles and Fresno, is the ninth-largest city in California. Kern County produces more oil than any other county in the state, and boasts the fourth largest agricultural output in the country.

Its air quality is abysmal. “Bakersfield has the country’s third most polluted air, according to the American Lung Association, and one in six children in the Valley will be diagnosed with asthma before age 18,” Forsyth told Courthouse News.

Kern County’s notoriously poor air quality causes approximately 1,500 premature deaths each year, and exposure to toxic air pollution racks up “$3 billion to $6 billion in health costs and lost productivity annually,” according to the complaint.

Several schools, residential neighborhoods and a hospital are only a few miles away from the Alon Bakersfield refinery. It is 1,000 feet from the Kern River Parkway, where people hike, walk, and ride bikes along trails and through parks, according to the complaint.

The refinery shut its doors in 2008 when its owner filed for bankruptcy. After sitting inactive for two years, it was bought by Alon in 2010 and “refashioned to convert intermediate vacuum gas oil into finished products,” but stopped all refining operations in December 2012 when the price of local feedstock rose, the complaint states.

In August 2012, Paramount submitted proposed modifications to the county that would let the refinery use the Burlington Northern Santa Fe rail line to bring in 5.5 million gallons of oil per day.

“The five-fold expansion of the terminal’s unloading capacity, from 40 tank cars per day to over 200 tank cars per day, is the largest crude-by-rail project in California, twice the size of the next largest project,” the complaint states.

The Kern County Board of Supervisors approved the environmental impact report on Sept. 9 this year.

But the plaintiffs claim the environmental study “obfuscates and underestimates” the significant impacts posed by the project and ignores the effects that rail transport of Bakken crude will have on air pollution.

“The EIR severely underestimates the safety risks of this project through sloppy math and an incomplete analysis,” the complaint states. “Based on simple mathematical error, the EIR calculates the risk of a train accident involving an oil spill is unlikely to occur within the project’s 30-year lifetime. Correcting this error, however, results in a risk of accident involving an oil spill once every 30 years.”

California has a high risk for catastrophic accidents because many of its 5,000 to 7,000 railroad bridges are over 100 years old and are not routinely inspected by any state or federal agency, and the rail lines run through “hazard areas” such as earthquake faults and densely populated cities, the complaint states.

Kern County is especially vulnerable because “the freight rail track runs through the Tehachapi Mountain, an area identified by the California Interagency Rail Safety Working Group as a ‘high hazard area.’ The rail track includes steep grades, extreme track curvature, and a single track through the majority of the corridor. The elevation loss of this corridor is approximately 3,600 feet from Tehachapi to Bakersfield, and the grade is so steep that it includes the famous ‘Tehachapi loop’ where the railroad line must loop back under itself to make the grade,” the complaint adds.

The plaintiffs say the project also threatens to further pollute the air quality of a region “already plagued by the worst air quality in the nation.”

“Refining Bakken crude emits high levels of volatile organic compound emissions that lead to ozone pollution, which in turn causes respiratory illnesses such as asthma,” Forsyth told Courthouse News.

“The refining of tar sands crude, which is far dirtier than local crudes, will result in higher emissions of greenhouse gases, nitrogen, sulfur and toxic metals,” she added.

Moreover, restarting the refinery and processing 60 million barrels of fossil fuels a year will elevate greenhouse gas emissions in the region and interfere with California’s goal of reducing such emissions, the groups say.

They claim the EIR’s analysis of greenhouse gas emissions is “riddled with flaws” because instead of discussing mitigation measures to curb emissions, it assumed that the refinery’s emissions will be “reduced to zero” by participating in the state’s cap-and-trade program, and thus concluded that “these emissions are not significant.”

“The EIR also unlawfully underestimates greenhouse gas emissions, ignoring emissions from the combustion of end products produced from the imported crude,” the complaint states.

After Kern County released an initial study of the project in September 2013, the Air District commented that using 2007 as the baseline to analyze impacts to air quality was improper because the refinery had not refined crude since 2008, according to the complaint.

The groups say the draft environmental report released for public comment on May 22 this year did not correct this error.

“The draft EIR also omitted fundamental information necessary to evaluate the EIR’s conclusions, including underlying assumptions and calculations for the EIR’s emissions analysis, data concerning the properties of Bakken crude, and an objective description of the project’s crude slate,” the complaint states.

On June 13, the groups’ attorneys asked for the information not included in the draft report and an extension to the 45-day comment period, but the county denied both requests.

When the county issued its final EIR in August, the groups say, they objected to “new disclosures that the public had not had a chance to review,” including its flawed analysis of the probability of a train accident, and demanded that it be revised.

Several prominent environmental scientists submitted comments criticizing the report’s treatment of toxic air emissions and its failure to include “emergency flaring events” in emissions calculations, but the county ignored their input and approved the report 13 days after it was released, the complaint states.

Kern County Counsel Theresa Goldner defended the project.

“The Kern County Board of Supervisors carefully and thoughtfully considered the EIR and all public comments and approved the report after a full and complete public process,” Goldner told Courthouse News.

“We will vigorously oppose this action.”

Paramount did not immediately return requests for comment.

The environmentalists seek declaratory judgment that Kern County violated CEQA by authorizing the refinery expansion project without performing adequate environmental analysis.

They ask that the project approvals and the environmental impact report be vacated until the defendants prepare a new environmental study that complies with CEQA.

They also want an injunction preventing the defendants from carrying out any part of the project until they fulfill all of the CEQA requirements.

They are represented by Earthjustice attorneys Elizabeth Forsyth and co-counsel Wendy Park of San Francisco.

Big Oil, Climate Change, Coal industry, Fossil fuels, Green Industrial Revolution, Oil Industry

Grant Cooke: Big Oil’s endgame: While fossil fuel costs keep rising, renewable costs fall

Repost from The Benicia Herald
[Editor: Benicia’s own Grant Cooke has written a highly significant three-part series for The Benicia Herald, outlining the impending fall of the fossil fuel industry and concluding with good advice for the City of Benicia and other cities dependent on refineries for a major portion of their local revenue stream.  This is the second of three parts.  Read part one by CLICKING HERE and part three by CLICKING HERE.  – RS]

Grant Cooke: Big Oil’s endgame: While fossil fuel costs keep rising, renewable costs fall

October 4, 2014, by Grant Cooke

Grant Cooke, Benicia, California“The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.” — Sheikh Ahmed-Zaki Yamani

THREE KEY FACTORS WILL PUT TO REST the fossil fuel industry and make the good Sheikh Yamani’s prediction come true. Two of them are discussed here.

The first is that the carbon emitters will be held accountable and made to pay for using the atmosphere as a garbage can. While still struggling to price the cost of pollution, most nations, as well as California, have come to realize that the heavy carbon emitters need to pay for the damage they have done. A cap-and-trade process is the first method to hold the emitters accountable. While imperfect and not nearly as effective as a straight carbon tax, this system is growing throughout the world. The European Union’s program, which started several years ago and was described by the fossil fuel interests as failing, is now deemed a success. It has become an established part of European culture and corporate practice. Various nations such as Australia, New Zealand, Canada, Korea and China have developed cap-and-trade programs as well.

California’s own program continues to grow, and our carbon offsets are tradable in parts of Canada as well. As it gains momentum, other states are watching California’s program and thinking about adopting their own. Impoverished state governments see cap-and-trade programs as a boon to their environment and a way to garner vital tax revenues. Since increases in personal income tax are so unpopular, cap-and-trade is seen as a way to bring new money into state treasuries without risking voter rebellions.

The pressure to make the major carbon emitters pay for their pollution is coming from the agreements made at the 2012 UN Conference on Climate Change in Doha, Qatar. At this conference world governments consolidated the gains of the last three years of international climate change negotiations and opened a gateway to greater ambition and action. Among the decisions was to concentrate on a universal climate agreement by 2015, which would come into effect in 2020. The 2015 conference will be held in Paris, and world governments are expecting much greater cooperation and agreement on carbon-reduction policies from the U.S. and other major emitters.

The world is slowly accepting the reality that the mitigation of climate change is a massive problem. A 2012 report by Climate Vulnerable Forum estimated that more than 100 million people will die and the international economy will lose out on more than 3 percent of GDP ($1.2 trillion) by 2030 if the world fails to tackle climate change. But because governments don’t want to use their funds for environmental cleanup and climate change mitigation, it will be the heavy emitters like the oil, coal and utility companies that will pay.

This cost for carbon cleanup, added to the increasing costs of extracting hard-to-get fossil fuel resources, will hit the oil industry hard. A 2013 Harvard University report showed that the cost externalities from coal were about 18 cents per kilowatt hour. Most U.S. end-users who rely on coal-generated electricity pay about 10 cents per kWh. If the external costs were added, those users would pay closer to 30 cents per kWh — which would severely impact those users’ lifestyles.

Grid parity

The second major factor hastening the end of today’s megalithic fossil fuel industries is “grid parity.” Grid parity is a technical term meaning that the cost to a consumer for electricity from a renewable source (without subsidies) is about equal to the cost from a traditional source — be it fossil fuel or nuclear. The Germans used grid parity to price their feed-in-tariff program, or FiT, that launched Energiewende.

Simply put, with PGE’s 2014 rate increase a Benicia resident or small commercial consumer pays about 20 (19.9) cents per kWh for electricity from traditional sources. If that same kWh came from a renewable source and cost the consumer an equal 20 cents, then the renewable source would be at “parity,” or equal to the cost of the traditional generation source.

However, the cost of traditional energy is rising, driven by higher extracting costs, increasing maintenance costs for natural gas pipelines and increases in operating cost at nuclear power plants. At the same time the costs for renewable energy — wind, solar photovoltaic and biowaste fuels — are declining.

The costs for wind generation have been and still are the lowest. However, the costs for solar are declining rapidly as its use spreads. Deutsche Bank reported in January 2014 that there were 19 regions around the world where unsubsidized PV solar power costs were competitive with other forms of generation. In fact, PV competes directly in price with oil, diesel and liquefied natural gas in much of Asia. This equality of costs with fossil fuel and natural gas is creating a worldwide solar boom in 2014-15.

In the U.S., almost 30 percent of last year’s added electricity capacity came from solar. In Vermont and Massachusetts, almost 100 percent added capacity came from solar. According to the U.S. Solar Energy Industries Association, more solar was installed in the U.S. in the past 18 months than in the last 30 years. Solar PV technology, which has been helped by the U.S. military, is improving so fast that it has achieved a virtuous circle.

As described by New York’s Sanford and Bernstein investment bank, we have entered an era of “global energy deflation.” This ratcheting down of energy costs may be slow to start, but as they argue, the fossil fuel-dominated energy market will experience a major decline in costs over the next decade. The market is entering a new order that will erode the viability of oil, gas and the fossil fuel continuum.

The report argues that the adoption of solar in developing markets will translate into less demand for kerosene and diesel oil. The adoption of solar in the Middle East means less oil demand, and the adoption of solar in China and developing Asia means less liquefied natural gas demand. Further, distributed solar in the U.S., Europe and Australia will likely reduce demand for natural gas.

They reason that while solar has a fractional share of the current market, within a decade solar PV and related battery storage may have such a large market share that it becomes a trigger for energy price deflation, with huge consequences for the massive fossil fuel industry that is dependent on continued growth.

Even the Saudis are betting on solar, investing more than $100 billion in 41 gigawatts of capacity, enough to cover 30 percent of their power needs by 2030. Most of the other Gulf states have similar plans.

Grant Cooke is a long-time Benicia resident and CEO of Sustainable Energy Associates. He is co-author, with Nobel Peace Prize winner Woodrow Clark, of “The Green Industrial Revolution: Energy, Engineering and Economics,” to be released in October by Elsevier.

Air Quality, Climate Change

UN summit: Businesses and investors pressing for green policy

Repost from The Associated Press

Businesses and investors pressing for green policy

By Johathan Fahey, AP Energy Writer, September 22, 2014
AP Photo
In this Saturday, Jan. 10, 2009, file photo, a flock of geese fly past a smokestack at the Jeffery Energy Center coal power plant near Emmitt, Kan. Hundreds of corporations, insurance companies and pension funds are calling on world leaders gathering for a U.N. summit on climate change this week to attack the problem by making it more costly for businesses to pollute. (AP Photo/Charlie Riedel, File)

NEW YORK (AP) — Hundreds of corporations, insurance companies and pension funds are calling on world leaders gathering for a U.N. summit on climate change this week to attack the problem by making it more costly for businesses and ordinary people to pollute.

The idea, long advocated by policymakers, economists and environmental activists, is that the world can’t hope to slow the heating of the planet until its cost is incorporated into the everyday activities that contribute to it, such as using gas- or coal-generated electricity, driving a car, shipping a package or flying around the globe.

Business leaders representing trillions of dollars in revenue and retirement savings say they worry that global warming threatens the long-term value of their investments, and they want world leaders to adopt policies that would provide a financial incentive to people to clean up their act.

That could include a tax on carbon emissions, a cap or some other mechanism.

“There’s a market failure that needs to be fixed,” said Anne Simpson, senior portfolio manager and director of global governance at the $300 billion California Public Employees’ Retirement System, the largest public pension fund in the U.S.

Despite a broad consensus that something needs to be done, it has been impossible so far for global leaders to agree on how to implement what amounts to a price on pollution, because energy is so important for economic growth.

“It may be easier to get large businesses to agree that something should be done than to get them to coalesce around specific policy measures,” said Michael Levi, senior fellow for energy and the environment at the Council on Foreign Relations.

At Tuesday’s U.N. summit, 120 world leaders will try to summon some of the considerable political will required if a new climate treaty is to be reached at international negotiations next year in Paris. The one-day summit is part of U.N. Secretary-General Ban Ki-moon’s push to help world leaders to reach a goal they set in 2009: prevent Earth’s temperature from rising more than 2 degrees Fahrenheit (1.1 degrees Celsius) from where it is now.

On Sunday, scientists announced that the world set another record last year for the amount of carbon pollution spewed into the atmosphere.

Ahead of the summit, business leaders such as Apple’s Tim Cook renewed or expanded pledges to help the planet by running their businesses more efficiently, investing in renewable energy or pulling their investments from fossil fuel companies.

Last week, CalPERS and other big asset-holders such as the insurance and financial firms Allianz, BlackRock and AXA Group called for a “meaningful” price on carbon emissions. The World Bank said Monday that 73 countries and more than 1,000 companies have expressed their support for a price on carbon.

Also on Monday, a parade of business and political leaders tried to rally support in a series of speeches in New York.

“It doesn’t cost more to deal with climate change; it costs more to ignore it,” said Secretary of State John Kerry.

Cook said customers care about the planet and will “vote with their dollars” for sustainably produced products. He outlined the steps Apple is taking to reduce the carbon emissions of its products and its supply chain, and called for broader action.

“The long-term consequences of not addressing climate change are huge,” he said. “I don’t think anyone can overstate that.”

While many insist a transition to a cleaner economy can boost economic growth or at least not harm it, many worry it would slow the global economy and make it more difficult for people in developing nations to get access to even basic electricity and transportation. Even those who agree that the transition must take place can’t agree on how to do it.

The International Energy Agency estimates that $1 trillion per year must be invested through 2050 in clean energy in order to keep global temperatures from rising past a level that scientists consider especially dangerous.

Charging a price for carbon emissions could prod polluters to change their ways by making it in their financial self-interest to do so. It would make fossil fuel investments less profitable and therefore less attractive. And it would make clean energy more lucrative.

A host of new investment vehicles are already making it easier for investors and others to sink their money into renewable projects. The market for so-called green bonds – tax-free bonds that fund clean energy, energy efficiency or other sustainable projects – is expected to at least double to $20 billion this year, for example.

Last week the $188 billion California Teachers’ Retirement System announced its intention to boost its investment in clean energy and technology to $3.7 billion from $1.4 billion over the next five years and said that could rise to $9.5 billion with changes in policy. Warren Buffet has said he is looking to double his $15 billion in investments in wind and solar projects.

On another front, a group of activists is calling on foundations and endowments to reduce or eliminate investments in fossil fuel-related companies and direct that money toward clean energy. The group, the Divest-Invest Coalition, said Monday that foundations representing $50 billion in assets have signed on, though the fossil-fuel investments in those portfolios are a very small percentage of the total.

Despite these signs, annual global investment in clean energy is only a quarter of what the IEA estimates is required.

“We’re moving tens or even hundreds of billions, but we’re looking at a $1 trillion every year, and if we’re looking at $1 trillion, we need policy,” said David Pitt-Watson, chairman of the U.N. Environment Program’s Finance Initiative.