Obama, EPA Announce First-Ever Federal Limits on Power Plant Emissions

Posted by Ed Burke on Aug 6, 2015 2:16:38 PM

Climate change definition in a dictionary

 

On Monday (August 3rd), President Obama unveiled his latest initiative to combat Climate Change, in the form of new proposed regulations on power plant emissions. The plan would reduce emissions from power plants to 32% below the 2005 benchmark levels by 2030 (by 870 megatons). This is the first time federal limits on this type of emissions would be enacted, and the EPA’s Clean Air Act is cited by the administration as allowing for said federal limits.

From the EPA press release on the new regulations:

“By 2030, the plan will cut carbon pollution from the power sector by nearly a third and additional reductions will come from pollutants that can create dangerous soot and smog, translating to significant health benefits for the American people. By 2030, emissions of sulfur dioxide from power plants will be 90 percent lower and emissions of nitrogen oxides will be 72 percent lower, compared to 2005 levels”

(You can read the full EPA Press Release here: EPA Newsroom )

The estimated cost of the program is $8.4 billion annually, according to an EPA spokesperson, and the benefits are projected to be between $34 and $54 billion per year, including health benefits.

Under the rule, individual states must draft and adopt compliance plans by 2018 and meet initial projected targets by 2022.

Industry groups and officials are obviously not thrilled with the new rule, citing potential billions in infrastructure costs associated with moving away from coal power generation. Additionally, the plan includes a target of the US generating 28% of its power via “renewable” sources versus the current 13% level – this does not include natural gas, and further complicates how exactly states and utilities can make changes to hit these targets.

The earlier draft in 2014 included more assumptions that the move would be from coal to natural gas (which generates around a 50% reduction in carbon emissions), this ruling in that regard is even more cumbersome, with the additional costs and difficulty of going from coal to wind, solar, or nuclear – when it's already expensive to go from coal to natural gas.

Critics are citing this as another example of the “War on Coal” and Legislators from coal heavy states cite job and revenue hits they believe the new rule will cause. Some Attorneys General have already signaled they are filing suit, arguing the rules go far beyond the Clean Air Acts provisions, and some states have declared they will refuse to follow the guidelines.  Of note however, is that recently the Supreme Court ruled in favor of the EPA re: the Clean Air Act and methane regulations, and it may very well do so again on this case.

We shall see - stay tuned!

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Topics: natural gas, President Obama Address, EPA, carbon emissions, clean air act, power plant emissions, coal

Harvard finds Boston is Leaking $90 Million of Natural Gas Annually

Posted by Ed Burke on Jan 29, 2015 12:44:52 PM

Yellow caution tape reading, caution gas line buried below

A Harvard University study has concluded that 15 billion cubic feet of natural gas escapes the aging pipelines in Boston - an amount that means we're losing $90 MILLION dollars worth of natural gas through leakage annually. 

The problem with leakage, outside of the obvious environmental and health concerns, as well as the fact that consumers bear the cost of the leakage, is that this leakage is responsible for almost all of the methane emissions given off by the city. As we've discussed previously, methane has a 25 times larger impact on the environment than carbon, and for that reason it's been the focus of new proposed regulations from the Administration and the EPA.

The suggested regulations however, are aimed at fracking companies, which over the past year have shown large declines in the amount of methane leaks, and leaks in general in four out of six of the major shale plays. The reason for that is at the production site, leakage costs the producer money in lost product.

The second sector that the regulations aim at (although they are "voluntary" in this case) is agriculture, which is responsible for the bulk of methane emissions. 

When you break down the numbers however, most emissions come from so called "super users", namely power plants etc., versus fracking sites or even intense agricultural production sites. And as studies like this point out, there is a lot of environmental impact happening passively through leaking in outdated pipeline systems, like those in Boston.

What this study points out on leakage, is that there may be a more efficient way to curb urban emissions of gas, and therefore methane, than imposing sweeping regulations on fracking sites, who already are self-motivated by profit to control product loss. That motivation is less present in urban areas, because the cost of pipe replacement and remediation is high, and the work is complicated to perform without disruptions in densely populated areas. Additionally, remediation of leaks in urban pipelines is a direct cost to the utility as well as the consumer, versus the cost-savings measure it is for upstream producers.

To their credit, both Massachusetts and National Grid have already been working on an accelerated pipeline replacement project. This program categorizes how risky leaks are and addresses them in an urgent to non-urgent priority order. This allows them to address the most critical leaks first, and move forward on remediation without undue and immediate cost burdens on the utility or the consumer.

 Essentially, studies like this point out there are emission control options downstream in addition to the ones happening upstream that can complete the picture and move the entire process forward in a more timely and efficient manner.

If you want to read a little more on the background of methane regulations proposed, or the prior study on leaks in Boston, you can do so here: "Methane and Consumers giving Nat Gas Headaches"

If you want more background on fracking and environmental impact, you can do so here: "US Carbon Emissions Still on the Decline - Guess Why?" 

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Topics: natural gas, EPA Mandate, Fracking, methane

AltWheels - Past, Present and Future

Posted by Ed Burke on Jan 7, 2015 12:32:35 PM

The most recent AltWheels Fleet Day in Norwood was once again a great success. We've been part of AltWheels from the beginning, back when biodiesel was a niche product and who had ever even heard of ethanol gasoline?

There have been a lot of advances and changes in the landscape of alternative fuels and vehicles. I wrote an article for Oil & Energy Magazine in December chronicling some of the major evolutions we've seen across the field of alternative energy. You can read that article here: "Fleets of the Present and Future: Ed Burke Reports on Alt Wheels Fleet Day"

And below, just for fun here's some awesome shots of the great times we've had at AltWheels past. Enjoy!

AltWheels recognizes green pioneers

E85 pickup truck

Two men standing in front of a flex fuel Chevy AvalancheMan in a suit standing at a podium giving a speech

Chevy VoltHonda Civic - Natural Gas

Police officers riding on horses pose infront of the Dennis K. Burke kiosk

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Topics: natural gas, Biodiesel, Ethanol, environment, altwheels,, electric vehicles

EIA Projects Lower Bills for Home Heating Oil and Propane Customers

Posted by Ed Burke on Oct 8, 2014 2:45:47 PM

Person adjusting their residential thermostat

The EIA is projecting lower heating bills for consumers this winter - especially if you use propane or oilheat versus Natural Gas. 

Demand is projected to be down across the board because the latest NOAA projections are looking like this winter will (thankfully) be nothing like the extreme arctic fiasco we had this past winter. 

Heres how the numbers break out:

Natural Gas

  • Demand is expected to be down 10%
  • Consumer price is expected to be up 6%
  • Net change - about $30 dollars off your bill per month

Heating Oil 

  • Demand is expected to be down 10%
  • Prices are projected to be down 15% (or around 25 cents per gallon) due to Crude oil prices dropping
  • The caveat here is that its unknown whether new Sulfur regulations will impact price due to supply/demand/logistics issues (you can read about the sulfur changes here: http://www.burkeoil.com/state-sulfur-content-changes )

Propane

  • Demand is expected to be down 13%
  • Prices are projected to be down 24%
  • In the Northeast the propane figures are a little different: 5% lower prices, 9% lower consumption.
  • Last year we saw an extreme propane shortage and logistical nightmares in the propane market. This year inventories are higher than last year in the Midwest and Gulf, but the agricultural yield can impact propane supply levels quickly and harshly, so stay tuned on propane projections after the harvest (corn) season 

So what about here in New England?

As we saw last year, New England Nat Gas prices vary wildly from the Henry Hub spot pricing for Nat Gas. Supply here is a HUGE issue, and we are fighting over any and all pipeline projects that could address that issue in the near term. 

Also, the EIA is projecting that the cost of electricity will be trending down for consumers roughly 2% - but we know that is not the case here in Mass, where we just saw 37% rate hikes approved, on the back of our limited nat gas infrastructure. 

Keep in mind that the majority of cost savings are due to a presumed weather-related demand drop.

The bottom line - if you project that this winter will be 10% colder than average (last year was 11%) Propane and Heating Oil customers still come out ahead and spend less than last year due to the drop in pricing. Natural Gas customers don't fare so well - if their usage mirrors their usage last winter, they can expect a 6% increase in their bill - at least - due to price increases.  Add that to your newly increased electric bill, and heating oil is looking pretty good right now!

 

(PS - if you want the nitty gritty on the Market impacts of todays EIA reports and projections, you can read about that on our Market Update blog here: Retail & Market Prices Drop on Crude Supply & Pricing )

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Topics: natural gas, EIA, national grid, propane, heating oil

Breaking: Rate Hikes Approved. Hold On to Your Wallets - or Hold Your Nose for Pipeline Approvals

Posted by Ed Burke on Sep 26, 2014 4:58:33 PM

Oil pipline in the snow

 National Grid announced Thursday that it is proposing to raise electricity rates by 37% starting November 1, with other utility companies to follow suit. The rate increases are not a profit but a response to the increased cost to the utility companies on the wholesale market. National Grid cites that the price increases are a result of New England moving to deriving more and more electricity from Natural Gas, without the region investing in any supply expansions. Today, the proposed rate hike was approved.

 So what does the rate hike mean for you? The average residential customer in MA is looking at a bill around 40 dollars higher monthly (assuming similar usage year-on-year)

 So whats going on, why is electricity spiking like this?

It’s all about Natural Gas supply.

 The supply crunch we saw with Nat Gas in the region last winter forced many power generation stations to run alternatively on oil or liquid gas for generation, which costs more. Given the polar vortex dominated winter we had this past season, and the lack of any forward progress on infrastructure improvements, it makes sense that rates are skyrocketing in anticipation of another cold season.

 Then why isn’t my natural gas heating bill going up? Basically, long term contracts versus spot pricing – natural gas often gets locked in over longer periods, so it doesn’t necessarily hit you in the wallet right away when prices bounce.

 There are supply solutions potentially on the horizon, but even if approved it would be a couple years before they were fully operational. Two vying pipeline options are being proposed to relieve the Nat Gas supply pinch in New England. The first is Kinder Morgan's Proposal, the Tennessee Gas Pipeline Northeast Energy Direct Project. T he Tennessee pipeline would be through Pennsylvania and Upstate NY, then run through Massachusetts from Richmond on the NY border to Dracut on the NH side. It would run 177 miles, with a 3 foot diameter.

On the other side, Spectra Energy & Northeast Utilities are planning to expand pipeline access to New England on the existing Algonquin pipeline, which will terminate in Everett (right outside of Boston). The project would replace the existing 26 inch pipeline with a new 42 inch one, essentially along the same route it already takes, but the expanded diameter and system upgrades would result in higher yields.

Senators Markey and Warren are both appearing to oppose the pipelines, and many activist groups are also protesting any pipeline expansion ala "not in my back yard"……. but the question becomes - if we dont upgrade the infrastructure to allow more nat gas to flow, aren't we condemning ourselves to continually increasing rates and supply problems? Probably.

One irony of the pipeline protests is that as a region, we’e moved to Nat Gas over environmental concerns (ie replacing coal fired plants). And although there may be some environmental concerns with pipelines, the lack of supply during cold snaps means that power plants etc have to burn other fuels for electricity generation which both drives up cost, and has its own environmental impact. Essentially, the spike in reliance on natural gas for power generation (versus heating) is a result of closing power plants in the region based on their environmental impact - notably the Somerset Station (coal burning)  a few years ago, the Salem Harbor Station (coal burning) closed this year, and the planned shut down of Vermont Yankee (nuclear).

The bottom line is the power has to come from somewhere, and with New England counting on  over 60% of our electricity generation coming from Nat Gas sources, we’ve really painted ourselves into a corner.

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Topics: natural gas, Utility Rates, algonquin pipeline, tennessee pipeline, national grid, electricity rates

Methane & Consumers Giving Nat Gas Headaches

Posted by Ed Burke on May 20, 2014 12:32:56 PM

methane scientific element

 We talked before about the White House's proposed new regulations on Methane emissions, which came on the heels of the Administration supporting increased natural gas exports in response to the Russia/Ukraine debacle. Well the EPA whitepapers have come out now outlining proposed changes on each of the industries involved - you can check those out here: EPA Methane Whitepapers 

The Admin proposed changes cite the Agricultural sector as the largest methane producer, followed by Nat Gas. The difference however, is changes proposed for Agriculture are "voluntary" versus regulatory changes for the Nat Gas sector. As usual, environmental groups cheered and said too little too late, while the industry said given it's in their financial best interest to control leakage (their main source of environmental methane), new regulations are an uneccessary burden. 

As we said before, it's hard not to infer from the timing that increasing regulations on methane is at least in part due to environmental and consumer backlash on exports over environmental and supply/pricing concerns. However, given that exporting should increase revenue greatly for the industry it's a pretty savvy time to introduce regulations that may be costly. 

On the consumer side, news has been breaking recently on the number of gas leaks in communities. In the wake of several explosions,  there has been some digging into just how big a problem neighborhood leaks may be, and the news is not good. Some estimates (including a Boston University Study) peg the number of neighborhood leaks in the City of Boston alone at over 3400, and over 20,000 statewide. (You can read the Boston Globe article on the BU Study here: "Boston Riddled with Mostly Small Natural Gas Leaks" )

The issue with these leaks goes beyond the obvious safety and environmental concerns as well. Gas that escapes en route to the consumer is paid for by the consumer. Its estimated that Massachusetts ratepayers are paying an average of $39 million dollars a year for leaked gas ($640 million-1.5 Billion from 2000-2011 according to a study by Senator Ed Markey's Office)

I wrote a piece on methane regulations and the prevalence of natural gas leaks, and what is being (or should be) done about them for the May issue of Oil & Energy Magazine. You can read the full piece here: Natural Gas Needs to Clean Up Its Act

 

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Topics: natural gas, EPA, methane, gas leaks

How is Switching to Nat Gas Hurting the Environment? - It's NOT What You Think

Posted by Ed Burke on Apr 17, 2014 9:30:00 AM

Oil drill in a field

A study published by researchers and scientists with MIT, Stanford, and the National Renewable Energy Library was recently published that is essentially the first in depth look at US Methane emissions. 

Why methane? The environmental issues with Natural Gas mainly come from the presence of methane - which is another green house gas, but 30 times more potent than the carbon dioxide we usually hear about. Approximately 1.5% of natural gas leaks during extraction, processing, transport, etc on its way to the consumer, so methane levels give us a bigger picture of the environmental impact of Nat Gas beyond carbon emissions. 

Surprisingly- Hydraulic Fracturing or "Fracking" is not the problem. You read that correctly - the often hotly debated "fracking" process is not what's causing methane emissions to rise. So what is?

The study found that so called "super users" were responsible for the vast majority of the leaks (some processing plants, factories, etc). The good news is that in theory these repairs arent cost prohibitive, and are generally profitable for the site - at least in the long term -  as they stand to lose less product in transmission. 

The question then becomes - is this an issue that should be legislated on or not? Industry folks say they are already voluntarily correcting issues, and since they have a financial incentive in at least certain cases to do so, they don't need regulatory pressure to move the process forward.  Environmental groups predictably say given the level of leaks still existant, volunteerism is not keeping pace with the level of repairs and upgrades required to address emission levels. 

I wrote an article for Oil & Energy magazine's April issue on this topic, and the related discussion of whether its environmentally "friendly" to switch your fleet to Nat Gas in the long term. You can read that article here: Oil & Energy Online 

 

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Topics: natural gas, Fracking, methane

Is Propane Autogas the Alternative Fuel of the Future?

Posted by Ed Burke on Jun 11, 2013 2:23:00 PM

Folks looking at different options for alternatively fueled vehicles are apparently increasingly considering moving to propane Autogas. Propane is currently the third most popular engine fuel (after diesel and gasoline) and given the changes in our domestic energy production, namely increases in Natural Gas and Crude Oil production/refining, propane is looking like an increasingly good choice.

Why?

Because Propane is produced as a byproduct of both crude oil refining and natural gas processing.  It stands to reason that as domestic production of the products we produce propane from goes up (nat gas and crude oil), propane will likely be an increasingly economical choice on top of the environmentally sound reasons already present.

Propane is actually one of the cleanest burning fossil fuels, and is considered an alternative fuel. Propane autogas vehicles are efficient, low emission vehicles. Additionally, propane has a higher octane rating than gasoline, and burns cleaner which leads to lower maintenance costs over time. There is also decent public access to propane fueling as opposed to other alternatively fueled vehicles like CNG/LNG vehicles.

I wrote an article for the June Issue of Oil & Energy Magazine regarding what I think is the positive outlook for the future of Propane Autogas. You can read the article by clicking here: http://www.nefi.com/oilandenergy/archive/OE_0613_web/#36 

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Topics: Environmentally Friendly Products, natural gas, Energy Independence, Propane Autogas

Gov't Picking Winners & Losers on Energy? - Deja Vu All Over Again

Posted by Ed Burke on Apr 16, 2013 9:12:00 AM

Even in the wake of the collapse of several government "fast tracked" (ie subsidized) projected winners in the energy industry (think Solyndra, Evergreen Solar, et al) and the imminent declaration of bankruptcy by taxpayer supported Fisker Automotive on the horizon, several Northeastern States are proposing "fast tracks" to expand natual gas pipelines courtesy of the taxpayer.

Many of those in the heating oil and/or propane industries are upset by the proposals as they perceieve them to be benefiting one segment of the industry on the backs of another. Additionally, since heating oil has been progressively moving towards cleaner, lower sulfur fuels and even embracing BioHeat - the enviornmental impact of heating oil versus natural gas in terms of emissions is not the same equation it may have been 10-15 years ago. That's important because when you factor in the continual reduction of the environmental impact of heating oil, the high cost of these sponsored Nat Gas infrastructure projects, and the potential impact on employment facing heating oil dealers (mostly small to mid size businesses) - the economics on subsidized Natural Gas pipeline expansion make less and less sense.

 For example, Maine is "fast tracking" natural gas pipeline expansion into rural areas. The issue seen here is two fold - arguably, the reason the government is subsidizing the expansion into rural Maine is there isnt sufficient ROI incentive for the utility to do it itself. Rule number one of public funding - if there were sufficient business and profit to be gained, the private sector would have made the investment itself. Additionally, propane and heating oil dealers have been servicing these areas sans government funding without issue. These companies, many of whom are small businesses, employ thousands of Maine residents gainfully, on private capital and could now be forced to face laying off employees with the necessitated drop in revenue from a smaller customer base. It doesnt seem like a winner in terms of big picture economics/employment for the state.

Vermont has proposed a variety of "Heat Taxes" to encourage lower use of heating oil. The proposals suggest that customers pay either a Carbon Tax of .10/gal on Heating oil and.05/gal on propane, or a BTU based tax of .012/gal Heating Oil and .08/gal on Propane, or worst yet, a Heating Oil Sales Tax that would amount to about 20 cents per gallon. Given the state of the economy, and the price of heating your home these days, it's hard to imagine asking the average person in Vermont to pony up an extra 20 cents per gallon.

Connecticut is proposing converting hundreds of thousands of homes in the state to Natural Gas at the projected price tag of almost 7 billions dollars. With zero explanation of where said billions will come from, its fair to assume it will either come from the taxpayer, or be passed down to the consumer. Converting hundreds of thousands of homes to Natural Gas will impact Connecticut small to mid size petroluem businesses the same way the proposed expansion in Maine could affect businesses there - namely, negatively.

Natural Gas is definitely going to be a huge part of the picture in terms of where American Energy is headed in the future, especially given the obvious success of domestic fracking, and the huge positive impact fracking has had on city and state economies. I for one am all for the expansion of affordable energy - especially when its domestically produced and provides huge employment opportunities for Americans at all skill and education levels from laborers to engineers.

The issue at hand is not Natural Gas, but short sighted governmental policies that attempt to aid one sector of an industry at the cost of another. It seemed during the 2012 Presidential Debates, we are all pretty much in agreement that what America needs is an "all of the above" energy policy. The best way for that to happen in the most efficient and sustainable way, is for market demands to drive advancements in supply logistics and innovation. Case in point, fracking did not arise from governmental "fast tracking" and it's changing the way we look at energy production in the United States in a major way. Back to the thesis: if it makes sense, and it's profitable, it will progress on its own without government funding.     

Anyway, I wrote an article on fuel dealers and the proposed Energy topic for a recent issue of Oil & Energy Magazine, if you would like more info you can read the full article online here: Oil & Energy Magazine , or as a PDF Here

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Topics: Oil & Energy Magazine, natural gas, Fracking, Heat Tax

BioHeat Workshop Buzz

Posted by Ed Burke on Oct 27, 2011 8:22:00 PM

The industry buzz at the Northeast Bioheat Workshop this year in Pittsburg centered on the aggressive advertising campaign by the Natural Gas industry that promotes its product as the lower cost, domestically produced and more environmentally friendly solution to conventional oil heat.

NORA president John Huber took issue with the claims to environmental benefits, pointing out that “Methane is one of the world’s worst greenhouse gases, but the natural gas industry has ignored that.” (Methane is the primary component of natural gas and the largest source for greenhouse gas emissions. Methane is lost in all phases of natural gas production and distribution)

Massachusetts Oilheat Council President Michael Ferrante noted that the commercials were largely accurate, but struck a nerve. Ferrante said that the Oilheat market needs the environmental and efficiency benefits of biodiesel in order to compete with natural gas.

Bioheat blended with ULSD at the B20 level clearly outperforms domestic natural gas. However, heating systems are currently only approved at a B5 level. It is estimated that there are between 6 to 7 million Oilheat furnaces in residential homes. Expecting these homeowners to switch to new burners so they can run higher blends of Bioheat is not realistic, so it is critical that Bioheat’s impact on older equipment is assessed.

Michael Devine from the National Biodiesel Board spoke about the extensive marketing campaign underway in New York City to garner market acceptance for Bioheat, saying “Bioheat is the evolution of oil heat.”

Home heat dealers say that establishing legacy safe limits and bringing equipment approved for higher bioheat blends seems slow in coming. The industry is poised, waiting for state mandates to bring bioheat infrastructure forward. Although state mandates put fuel dealers all on a level playing field, it does not with other energy sources. How soon will we see equipment approvals and bioheat mandates to higher blends move forward?

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Topics: natural gas, Biodiesel Massachusetts, MOC, massachusetts biodiesel mandate, Bioheat, NORA

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