Secretary Ernest Moniz (left), with his wife, Naomi, shortly after being
sworn into office by Deputy Energy Secretary Daniel Poneman (right).
sworn into office by Deputy Energy Secretary Daniel Poneman (right).
Tuesday, 21 May 2013
Sue and Settle: Regulating Behind Closed Doors
What Is Sue and Settle?
According to the U.S. Chamber of Commerce, sue and settle occurs when an agency intentionally relinquishes its statutory discretion by accepting lawsuits from outside groups that effectively dictate the priorities and duties of the agency through legally binding, court-approved settlements negotiated behind closed doors—with no participation by other affected parties or the public.
The Chamber says that as a result of the sue and settle process, the agency intentionally transforms itself from an independent actor that has discretion to perform its duties in a manner best serving the public interest into an actor subservient to the binding terms of settlement agreements, which includes using congressionally appropriated funds to achieve the demands of specific outside groups. The Chamber believes this process also allows agencies to avoid the normal protections built into the rulemaking process—review by the Office of Management and Budget and the public, and compliance with executive orders—at the critical moment when the agency’s new obligation is created.
What Is the Sue and Settle Process?
- Environmental advocacy group sues federal agency to issue regulations by a specific deadline.
- Environmental advocacy group and federal agency work out an agreement.*
*Conducted behind closed doors. - Draft consent decree or settlement agreement is lodged with the court.
- Under some laws the federal agency invites and receives public comments on the decree or agreement.*
*Too little, too late: the damage has been done. - Court finalizes the decree or agreement.*
*It generally does not matter to courts if the decree or agreement is not required or authorized by statute.
Which Advocacy Groups Use the Sue and Settle Process the Most?
Which Courts Handle the Most Sue and Settle Cases?
Comparing the Use of Sue and Settle Over the Past 15 Years
What are the Economic Implications of our Findings?
(U.S. Chamber of Commerce)
Saturday, 18 May 2013
Koch Carbon owns the small mountain of of waste petroleum coke in Detroit (see photo) from oil sands bitumen refining. The company is controlled by Charles and David Koch, wealthy industrialists who back a number of conservative and libertarian causes including activist groups that challenge the science behind climate change. The company sells the high-sulfur, high-carbon waste, usually overseas, where it is burned as fuel.
The coke comes from a refinery alongside the river owned by Marathon Petroleum, which has been there since 1930. But it began refining exports from the Canadian oil sands — and producing the waste that is sold to Koch — only in November. Marathon Petroleum’s plant in Detroit processes 28,000 barrels a day of the oil sands bitumen.
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| Petroleum coke, a waste byproduct of refining oil sands oil, is piling up along the Detroit River |
Almost 56 percent of Canada’s oil production is from the petroleum-soaked oil sands of northern Alberta, more than 2,000 miles north.
An initial refining process known as coking, which releases the oil from the tarlike bitumen in the oil sands, also leaves the petroleum coke, of which Canada has 79.8 million tons stockpiled. Some is dumped in open-pit oil sands mines and tailing ponds in Alberta. Much is just piled up there.
Coke, which is mainly carbon, is an essential ingredient in steelmaking as well as producing the electrical anodes used to make aluminum. While there is high demand from both those industries, the small grains and high sulfur content of this petroleum coke make it largely unusable for those purposes.
The Keystone XL pipeline will provide Gulf Coast refineries with a steady supply of diluted bitumen from the oil sands. The plants on the coast, like the coking refineries concentrated in California to deal with that state’s heavy crude oil, are positioned to ship the waste to China or Mexico, where it is burned as a fuel. California exports about 128,000 barrels of petroleum coke a day, mainly to China.
The Environmental Protection Agency will no longer allow any new licenses permitting the burning of petroleum coke in the United States. Overseas companies see it as a cheap alternative to low-grade coal. In China, it is used to generate electricity, adding to that country’s air-quality problems. There is also strong demand from India and Latin America for American petroleum coke, where it mainly fuels cement-making kilns. (NYT, 5/17/2013, Photo: Fabrizio Costantini for The New York Times)
The project is the second to get DOE approval to send natural gas to non-free trade nations. The developers will now take their plan to the Federal Energy Regulatory Commission (FERC).
President Obama has also signaled in recent weeks that he plans to move on some of the 20 applications in the DOE’s queue.
Several Democrats and some chemical manufacturers have warned against an unfettered expansion of exports. They worry shipping too much natural gas abroad would cause domestic prices to spike.
Republicans and business groups say exports figure to be restrained. They argue only a handful of the applications on file would get DOE approval, and that many would not follow through with the costly FERC process that follows. Export proponents also contend that the economic benefits — such as new jobs and reducing the federal trade deficit — would outweigh likely modest price increases. (The Hill, 5/17/2013)
Friday, 17 May 2013
Most environmentalists contend that the new draft provided weaker water protections than a version the Interior Department proposed a year ago. Environmental groups are disappointment that the regulations do not include a ban on the storage of waste fluids in open, lined pits. They also want complete disclosure of chemicals used in fracking, which the regulations would not require.
Oil industry groups want the regulation left in the hands of states and are opposed to any federal rules. Companies could also use affidavits to assert trade-secret protection of certain chemicals, although the BLM would keep the authority to require disclosure “if necessary,” the department said.
The proposed regulations were also revised to allow companies to test the integrity of cement barriers in one well and then use the results to guide the development of similar wells. The American Petroleum Institute criticized the department for not simply leaving regulation to state agencies.
The reegulations would allow companies to disclose the chemicals to FracFocus, an Oklahoma-based Web site that has been criticized for its ties to industry. A Harvard Law School study concluded that FracFocus was not effective and “does not serve the interests of the public.”
Interior Secretary Sally Jewell, who as a petroleum engineer used hydraulic fracturing while drilling
The department said that about 90 percent of the oil and gas wells drilled on federal and Indian lands used hydraulic fracturing, a technique that unlocks oil and gas from shale rock by creating small fissures for oil and gas to flow.
The BLM estimated that the total annual cost of the regulations would range from $12 million to $20 million, down from $37 million to $44 million for the original proposal. When spread over all hydraulically fractured wells on federal and Indian lands, the annual costs would average no more than $5,100 a well, according to the BLM.
The public still has 30 days to comment on the second draft of the rules, and officials said they were particularly interested in comments about whether to require storage of waste fluids in closed tanks instead of open pits. The first draft of the regulations, issued a year ago, drew about 177,000 comments. (Wash Post, 5/16/2013)
Thursday, 16 May 2013
The governor presented a $96.4 billion revised spending plan for the coming fiscal year that included the loan from the carbon trading program, a move that triggered outrage from environmental and community groups. The Legislature will have to approve the revised budget
By law, the Golden State must spend the funds on efforts that reduce carbon emissions or otherwise meet the purposes of California's climate measure, A.B. 32. Shifting the money from the Greenhouse Gas Reduction Fund -- where emissions trading money lands -- is very controversial because this is the first full year that California is selling carbon allowances and there isn't a good estimate of how much revenue to expect.
The first two sales of greenhouse gas permits generated about $140 million for the state. The $500 million loan includes money from the first auctions plus allowances still to be sold this coming fiscal year. Brown and other state officials said that the loan was a one-time option and that they expected the monies beginning next year to go toward programs that shrink carbon.
Communities and environmental groups have questioned whether the delay in spending the money on climate causes would undermine public support for the program. The loan will delay opportunities to use those funds to actually get reductions in global warming pollution.
Low-income communities are accusing Brown of subverting the intent of S.B 535, legislation passed last year that requires part of the auction money go toward helping economically disadvantaged areas. Voters of color turned out in force to protect A.B. 32, the clean energy law, when it was under attack by Prop. 23, and they did it based on the promise that it would bring clean energy investments to polluted and struggling communities.
State officials did not commit to any repayment plan for the cap-and-trade revenues, but state EPA Secretary Rodriguez said that the loan "is short term and the money will be repaid with interest."
Karen Finn, program budget manager for the California Department of Finance, said that the money would be refunded as it became needed, once the Legislature approved specific programs. (E& E Publishing, LLC, 5/15/2013)
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