New Administration, New Focus - Executive Orders & Industry Impacts

Posted by Kelly Burke on Jan 28, 2021 5:59:19 PM

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The new Administration is off to a running start, as Wednesday saw a flurry of Executive Orders come out, many of which deal with climate change, and the oil & gas industry. There are a lot of items, and they are all pretty detailed with substantial backstory, but we are going to try and briefly touch on the three major items relevant to the industry and quickly go over the main points (or, try to at least!) 

So, here's the recap:

Keystone XL:  The Biden Administration cancelled the permitting for the Keystone XL pipeline, an $8 billion dollar project that would run over 800K barrels per day from Canada through the United States. Specifically, the pipeline runs from Alberta to Nebraska, where it would then hook with existing pipeline infrastructure running to the Gulf Coast refineries. There seems to be no recourse for TC Energy to fight the permit cancellation per se, the only major sway could theoretically be if Canada argues on behalf of the project continuing but according to analysts, that will be a non-starter, Trudeau is extremely unlikely to broach the subject with the Administration amid attempts to smooth a relationship between the two countries that was somewhat fractured during the prior administration's tenure. 

Moratorium on Federal Oil & Gas Leasing:  Another executive order has put a moratorium on the lease of any federal land or offshore waters for oil & gas development. The order also stipulates that current permits in effect be reviewed against the new standard, presumably to see if some additional will be cancelled. The Administration has a stated aim of "protecting at least 30% of federal land and offshore waters" as a general goal, and the moratorium appears to be a part of that aim. Currently, fossil fuel leasing on Federal land accounts for approximately 25% of carbon emission output, which is the impetus for the move. However, as others have pointed out, the leasing also provides around 8.1 billion dollars annually in tax revenue to tribal, state, and federal governments.  22% of oil production, and 12% of natural gas production takes place on federal lands and although this moratorium does not affect current operations (yet) there is some concern that a move toward stopping production on federal land, which is the possible end goal, would push the US back into becoming a net importer of petroleum as the economy continues to recover and demand begins to increase. However, its important to note that states have wildly disparate levels of reliance on federal land for production - New Mexico is largely federally based, whereas even a complete halt would not affect Texas very much, as production land is almost exclusively privately held. This is a watch-and-see item for sure, as no one is really clear on the end goal or next steps on this item yet. 

 

Paris Accords  The Biden Administration has additionally rejoined the Paris Climate Accord, which the prior Administration withdrew from last year. The US, under President Obama, played a major role in crafting the Paris Accord in 2015. The agreement overall aims to keep global temperatures from rising no more than 2 degrees Celsius (ideally 1.5... we are already up 1 degree) by way of reducing greenhouse gas emissions. The agreement is essentially an international treaty with almost 200 member countries who have pledged to take various steps to curb emissions in their respective countries. There are a million details within the Accord, but for the US the actions required include (among others) cutting emissions by 26% below 2005 levels by 2025, tightening fuel economy standards, and would also heavily rely on the "Clean Power Plan" to hit targets. Rejoining the Paris agreement is an important symbolic gesture for the Biden Administration, as one of the major focuses they will have is "putting climate at the center of domestic, national security, and policy" 

 

So those are the major points relating to the industry from Wednesday, and they are definitely items we will continue to follow and update on. It will certainly be interesting to watch how these unfold and shape the energy industry landscape over the coming four years. Stay tuned! 

 

 

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Topics: Keystone XL, climate change, clean power plan, Biden Administration, paris accord

MA refiles Vetoed Climate Change Bill, This Time with Potential Veto Proof Margin

Posted by Kelly Burke on Jan 22, 2021 1:58:54 PM

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Last week Massachusetts Governor Charlie Baker vetoed a bill that committed Massachusetts to reducing carbon emissions to 85% of 1990 levels over the next 3 decades, with the goal being a 100% reduction versus 1990 levels. Included as well are interim 5 year goals, one of which is a 50% reduction by 2030. The ultimate goal of the bill is requiring Massachusetts to become carbon neutral by 2050 - which is a goal Baker has publicly endorsed throughout his tenure.

The issue with the particular bill seems to have been a lack of time for amendments, and concern that by allowing cities and towns to declare their own goals (i.e. similar to the "no new carbon based power/heat" rule in Brookline previously -  this rule was ultimately struck down) it could delay some of the housing access goals set previously by both the Administration and the legislature. 

The other major sticking point is the bill would require more off shore wind production to meet stated goals... and as we know, contention about offshore wind farms is a standing headline in MA, particularly along the Cape & Islands. 

This Monday, the MA legislature refiled the bill and it appears as though this time around, they may have a veto-proof majority. It's unclear whether amendments suggested will be considered prior to voting, and no vote has been scheduled as of this morning - so this is definitely one to watch. 

For more specifics on the bill, and its refiling this week in the MA legislature you can follow the developing story on WBUR here: State Legislature Files Climate Bill, Again 

 

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Topics: Massachusetts, carbon emissions

Climate Change Controversy Heats Up on Wood Pellets

Posted by Kelly Burke on Dec 22, 2020 10:48:08 AM

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Controversy is brewing on the issue, of all things, of wood pellets. 

Here in New England, wood pellet stoves have been around forever, and we saw a noticeable uptick in usage when energy prices were high several years ago, as wood stoves offered an additional, lower cost way to keep the thermostat a little lower than you otherwise could. A 40lb bag of pellets runs you about 5 bucks at a home improvement store and will heat for approximately 24 hours, give or take. Plus you get that nice old timey fireplace smell, good stuff. 

So what's the issue with them anyway? The issue is less with residential use and more with biomass generated electricity. Wood pellets are designated biomass by US and International policy - they are designated as a renewable resource because (obviously) trees are regrown. A focus of the growth of wood pellets has been the designation that they are a carbon-neutral heating source. But are they really? 

Scientists in both Europe and the US are arguing that the actual burning of the pellets is more carbon intensive than coal, and that the length of the cycle to replace and regrow the source trees for the pellets ought to be considered - after all, it can take decades for full regrowth, which slows the ability of replanted trees to absorb the carbon. They also argue that the carbon neutrality fails to take into account the transportation impact of Europe's usage. Europe is a major user of pellets, and because of the lack of suitable forestry, they import them, largely from the Southeastern US.  

Why are they such heavy users when they lack the natural resources? Because ten years ago, the European Commission issued a Renewable Energy Directive to its member countries that 20 percent of their energy should come from renewable sources by 2020. The burning of biomass such as wood pellets was one way to meet that goal. Indeed, carbon emissions from burning wood are not counted toward a nation’s emissions output, due to a controversial provision of the Kyoto Protocol.

This faulty logic has led to massive renewable energy subsidies for biomass under the EU Renewable Energy Directive program. With that said, a number of countries have embraced biomass electricity, which scientists argue is actually speeding up climate change, pollution and forest destruction. Currently, biomass represents nearly 60 percent of the EU’s renewable energy total.

Because of the subsidies, it's beneficial for EU nations to import the pellets, and the demand on producers in the US has resulted in deforestration, which scientists warn could make the impact of extreme weather conditions far more severe since forests play a critical role in slowing flooding and erosion, in addition to their obvious role in absorbing atmospheric carbon.

Biomass plants have come under criticism because of all these factors by both scientists and environmentalists, and both legislators and the community seem to be coming to agreement that biomass electricity plants may not be the best way to renewable energy. This year we are seeing permits for new facilities being turned down everywhere from the Netherlands to Virginia. 

I wrote an article for Oil & Energy Magazine that goes into the specifics of the objections to wood pellets & biomass produced electricity. You can read that article in its entirety here: Are Wood Pellets Speeding Up Climate Change?

 

 

 

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Topics: climate change, carbon emissions, renewable energy

Debates Raise Net-Zero & Climate Action Questions  - Here's what the Industry has been doing in the Northeast

Posted by Ed Burke on Oct 23, 2020 12:20:03 PM

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With the Oil Industry, Climate Change, and emissions top of mind after last night's Presidential Debates, we thought it was a good time to review what Massachusetts, New England, and specifically, the Oil Industry in the Northeast have been doing on emissions and climate change recently. 

The Local Industry: In September 2019, the Northeast's heating oil sector voted unanimously at the NEFI energy conference to establish a goal of Net Zero GHG emissions by 2050 (drooping 15% by 2023, 40% by 2030, Net Zero by 2050). You can read the details of the the unanimous motion here: The Road to Net Zero Starts Here 

Beyond specific carbon level moves, the New England & Northeast region has been ahead of the game for decades on promoting biofuels and renewable energy projects. This is a great snapshot of regional Biofuel and renewable energy standards by state in the region: Biofuel & Electrification at a Glance

Massachusetts & the City of Boston were some of the earliest and most ardent adopters of biodiesel and other clean energy options, including sulfur limits in diesel fuel & heating oil. New York moved first to ultra low sulfur diesel regionally, and New York City adopted biofuels very early on.

Regionally though, all of the Northeast states have been working diligently on doing what they can to adopt more renewable and environmentally friendly options from regional food waste to fuel recycling, to major solar projects, to geothermal microzones, to making Crude from wood in Maine.

 

Massachusetts: In April 2020, the Baker-Polito Administration issued a formal determination letter that officially set the legal limit for emissions at net zero for 2050. The Executive Office of Energy and Environmental Affairs (EEA) official statement is:

"A level of statewide greenhouse gas emissions that is equal in quantity to the amount of carbon dioxide or its equivalent that is removed from the atmosphere and stored annually by, or attributable to, the Commonwealth; provided, however, that in no event shall the level of emissions be greater than a level that is 85 percent below the 1990 level". 

In other words, not only net-zero on emissions but emissions overall (captured or not) need to stay below previously established levels. 

The net zero target was initially announced in January 2018 at Baker's State of the Commonwealth address. The way the State achieves the goal for 2050 will be laid out in the "2050 Roadmap", and the roadmap will also be used to set interim emission limits for 2030, and those limits will be officially laid out in the "Massachusetts Clean Energy and Climate Plan for 2030". You can follow updates to the plan at mass.gov here: MA Decarbonization Roadmap

In addition to the newer net zero goals, Massachusetts has been on the leading edge of climate and emissions reduction goals for decades - for a refresher:

Massachusetts Green Communities -  Communities can compete for grants to support energy efficiency & renewable projects in the Commonwealth. This includes ventilation system upgrades, heating system conversions, electric vehicles, insulation projects, etc. 

Regional Greenhouse Gas Initiative & Transportation Climate Inititatives - regional incentivized emission reduction

Heres an overall recap on what the state accomplished for 2018 on Clean Energy: Massachusetts Pushes Clean Energy Forward in 2018

Overall: There is much work to be done on climate, and serious questions need to develop into serious policy based answers going forward.

One can only hope that we see some movement on climate initiatives in some form in the next 4 years that moves the needle while balancing the serious economic concerns of businesses and consumers, regardless of what the winning Administration looks like. 

We're glad to work in a region that is putting the work in to make changes while attempting to maintain that balance.

 

 

 

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Topics: Massachusetts, climate change, renewable energy, maine

Ferry Cool Changes on the Water in Maine

Posted by Ed Burke on Sep 21, 2020 9:19:44 AM

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The newest passenger boat for Maine's Casco Bay Lines will be running a diesel-electric hybrid propulsion engine. The hybrid will be handling the Portland to Peaks Island run, fully on electricity. The diesel engine will function as a backup, or be engaged for trips longer than the normal run. This assigned route is approximately 2.5 miles, which should allow the ferry to travel one way, charge at docking (~10-15 minutes) and run the return trip on electricity as well. 

If you aren't familiar, Casco Bay Line's ferry runs all year round and carries over a million passengers, 30,000 vehicles, and 5,300 tons of freight in a given year, so they are a critical part of transportation in Maine,. The ferry functions as a vital link between the islands & main lands that allows for commuting to school, work, and postage services. 

The project is being funded in part by a Federal Grant as part of the Federal Transit Administrations Ferry Grant Program. Vessels essentially hit a point where maintenance becomes cost prohibitive (after about 30 years of operation), and the grant for this particular ferry project will replace one such vessel. The replacement with a hybrid is projected to eliminate up to 800 metric tons of carbon emissions annually. The new vessel should be completed and in operation by the end of 2022. 

I wrote an article for Oil & Energy this month about the Casco Bay project, as well as the Federal Fund Grant generally. You can read that article in its entirety here: A Ferry Different Approach

 

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Topics: Oil & Energy Magazine, climate change, carbon emissions, maine, Hybrid

TCI Talks Move Forward

Posted by Ed Burke on Aug 6, 2020 4:27:20 PM

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Even as Coronavirus disrupts business as usual, talks regarding the TCI (Transportation Climate Initiative) continue via video conference and email amongst the involved 12 States & Washington DC. 

The TCI is a cap and invest system to curb emissions, with some estimates putting the reduction of carbon emissions at up to 3 times as much as we have achieved with the RGGI (Regional Greenhouse Gas Initialtive) enacted 10 years ago. (For a quick review of what the TCI entails and how it works, go here:  What's the TCI & How Does It Work?) 

The pandemic has caused adjusted timelines for the initiative. Current adjusted timelines for the TCI put the final Memorandum of Understanding (MOU) in the fall of this year, and it appears states planning on joining are looking at a launch date of January 2022.

As discussed prior, the impact of the TCI would be a tax of 5-17 cents per gallon, and as expected, its looking like 17 will be the number. At that level, transportation emissions, (which comprise 40% of greenhouse gas in the region) would drop by 25% by 2032. (As an aside - without the TCI being passed, emissions are expected to drop in that category by 19% based on efficiencies, etc - not including any pandemic induced curbing of emissions). 

While we are seeing lower fuel prices, which would generally make passing the TCI or similar plans involving gas taxes more viable politically, on the other side of the equation there is legitimate concern that the economic impacts of COVID-19 make the timing of any tax increases tone deaf (at best), especially in the face of the unemployment levels we are seeing. 

We wrote an article for the July issue of Oil & Energy detailing the progress being made on the TCI regional talks, as well as some of the details in contention. You can read that article here:  TCI Moves Forward  

 

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Topics: climate change, carbon emissions, renewable energy, TCI

FERC Dismisses NERA  Petition on Net Metering

Posted by Ed Burke on Jul 2, 2020 3:11:00 PM

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Back in April the NERA (New England Ratepayers Association) filed a petition that would have changed the way so called "net metering" works for solar energy generation, by essentially considering the excess "buyback" solar energy sold back to utilities as constituting a wholesale transaction, governed by the established rates. (We discussed that here: "Net Metering Under Threat" ).

In June, the FERC unanimously voted to dismiss the petition. That means for the time being, the net metering system as we know it will remain, but the question becomes how long that will be the case, as it's unlikely the proposal offered by NERA will be the last of its kind. For more on the dismissal and potential future of net metering, this article in Forbes has a quick overview:  "Unanimous FERC Decision Saves Net Metering, But Its Future Remains Uncertain"

 

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Topics: Solar Energy, net metering, ferc

Net Metering Under Threat

Posted by Ed Burke on May 28, 2020 1:22:00 PM

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This April, the New England Ratepayer's Association (NERA) filed a petition asking the Federal Energy Regulatory Commission (FERC) to "declare exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter (rooftop solar), and order that the rates for such sales be priced in accordance with public law.”

In a nutshell, this would change how the market works for residential solar panels completely. Currently, with net metering, panels generate energy that offsets use by the residence/building and the excess energy produced is "bought back" by the utility - usually via credits to a home/business owner's utility bill at a retail rate. 

The NERA petition basically objects to the "buyback" being a retail transaction and believes any utility transaction is a wholesale energy sale and should be regulated and governed in the same manner, including being processed at the same prices. The argument against this of course being that net metering is advantageous to the residential customer, and that has been a large factor in the increase in consumer level proliferation of solar panels. The flip side of that argument, which is the NERA petition's point, is that the transactions being equivalent in terms of energy transfer, but priced such that they are distinctly advantageous to residential customers means they are fundamentally disadvantageous to other players in the field. 

It's a little complicated as an issue, if you want more info, I wrote an article for Oil & Energy magazine that delves a little more into the specifics- you can read that article here: "Net Metering Under Threat"

 

 

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Topics: Solar Energy, Clean Energy, net metering

Mass Dairy Farmers Use Food Waste & Manure to Generate Renewable Energy

Posted by Ed Burke on Apr 17, 2020 4:01:00 PM

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Local farms in Massachusetts are producing their own renewable energy, and they're doing it while diverting food waste and dropping their carbon footprint at the same time. How? By utliizing anaerobic digesters, produced by Vanguard Renewables.

The simplified version is that the process takes the potential energy in both food waste and organic waste (like cow manure) and converts it into biogas that is used to reduce energy costs, reduce methane emissions,eliminate food waste, generate heat, and offset carbon emissions. 

Massachusetts implemented a ban in 2014 on disposal of commercial organic wastes by businesses that dispose of more than a ton of organic waste per week. Prior to the ban, this type of waste was the second highest contributor to landfills, so the State mandated that instead of being disposed of, they had to be recycled.

The solution that arose in the form of waste to power anaerobic digesters is pretty ideal - it allows not just farms to upcycle their waste, but also helps food processors, supermarkets, and even fast food restaurants by opening up an avenue for food related industries to dispose of waste economically and in a way that is hugely beneficial from an environmental standpoint. 

I wrote an article for Oil & Energy online that goes more in depth into how the process works and the benefits - you can read that article in its entirety here: Farm to Grid 

For more in depth info on how waste-to-power works, and to view some of the currently operating facilites, check out Vanguard Renewables site. 

 

 

 

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Topics: Oil & Energy Magazine, methane, carbon emissions, renewable energy

What's the TCI & how does it work?

Posted by Ed Burke on Mar 4, 2020 3:06:31 PM

Carbon

You may have been hearing about the Transportation & Climate Initiative (TCI) on the news recently - in particular, you have probably been hearing about the implications the TCI would have on the gas tax. (That goes double for those of you in Massachusetts, where gas taxes were a major point of contention in the prior few election cycles)

The TCI is a cap-and-trade system for incentivizing development of fuel efficient technologies, while simultaneously putting a "cap" on emissions and a price on carbon offsets to reach those caps, where needed. 

So if it goes into effect, what happens? What you have probably mostly heard about is that depending on which option the TCI takes officially (25%, 22.5%, or 20% reduction in emissions by 2032) the gas tax you pay at the pump would go up 5, 9, or 17 cents per gallon (estimated). 

But there is a lot more to the program and it's goals than just an at the pump tax, in fact, that's not even the main part of the program. The main portion of the Initiative is the emissions cap and the corollary carbon allowances that would be required for transportation companies to offset their fuel's carbon dioxide production. Carbon allowances can be both auctioned and traded, and money from their sales would go to member states for further transportation emission reduction measures. 

There is a lot involved in the program, some of which is relatively complex. I wrote an article for Oil & Energy Magazine this past month that runs through the basic framework of the program, what the estimated goals are for both emission reductions and revenue generation, and what impacts are projected for consumers.

You can read that article here: TCI: What's Under the Hood?

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Topics: Massachusetts, climate change, carbon emissions, TCI

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