When States Get Serious About Phasing Out Natural Gas

Posted on May 27, 2020 by Michael Gerrard

A decision issued on May 15 by the New York Department of Environmental Conservation (DEC) denying approvals for a new natural gas pipeline is sending shivers through the energy industry.  Though the decision was based primarily on water quality and wetlands impacts, it also demonstrated the force of New York’s new Climate Leadership and Community Protection Act (CLCPA), and New York’s resolve to phase out the use of natural gas.

Transco, a subsidiary of the Williams Companies, proposed to build a pipeline carrying natural gas (mostly from hydraulic fracturing in Pennsylvania) under wetlands and Raritan Bay in New Jersey, then under lower New York Bay, and connecting with an existing pipeline to serve National Grid customers in Brooklyn, Queens and Long Island.

In the bays the pipeline would have been built in a trench four feet under the water bottom in sediments that are contaminated with mercury, copper and other pollutants.   The construction would have stirred up the sediments and released the pollutants.

The Federal Energy Regulatory Commission approved this pipeline on May 3, 2019.  However, under Section 401 of the Clean Water Act the project needed a state certification that it would not  impair the state’s waters.

In its May 15 decision, DEC denied this certification, relying primarily on the impacts that the dispersed chemicals would have on a 1,000-foot wide corridor that included a critical resource area for hard clams..

DEC did not stop there, however.  It also looked at the pipeline’s impact on greenhouse gas emissions, which “cause climate change and thus indirectly impact water and coastal resources.”  DEC found, “GHG emissions associated with the Project include those from the full lifecycle of natural gas that will be transported through the Project. This includes upstream emissions, GHG emissions associated with the construction and operation of the Project, and downstream emissions.”  DEC explicitly stated that its analysis considered leakage of methane at the fracking sites in Pennsylvania, emissions where the gas is burned in power plants and buildings, and any emissions in between.  The look at out-of-state upstream emissions is especially interesting, as these are not usually considered in a state’s GHG emissions inventories.

DEC then stated, “In order to achieve the State’s critical and ambitious climate change and clean energy policies, the State needs to continue its ongoing transition away from natural gas and other fossil fuels. While the Department recognizes that many building assets in the State currently rely on natural gas for heating and other energy uses, the continued long-term use of fossil fuels is inconsistent with the State’s laws and objectives and with the actions necessary to prevent the most severe impacts from climate change. Therefore, the State must continue to support the ongoing transition to renewable and other clean sources of energy, as it works to ultimately eliminate all fossil fuel combustion sources that cannot be counterbalanced by guaranteed permanent carbon sequestration. Without appropriate alternatives or GHG mitigation measures, the Project could extend the amount of time that natural gas may be relied upon to produce energy, which could in turn delay, frustrate, or increase the cost of the necessary transition away from natural gas and other fossil fuels.”

In short, DEC said, “”[t]he use of natural gas … to produce electricity would be inconsistent with” the requirements of CLCPA, which “will ultimately require a transition away from natural gas and other fossil fuels to produce energy.”

The pipeline at issue here is a key part of a larger controversy.  In May 2019 National Grid imposed a moratorium on new natural gas connections.  Many observers felt this was a tactic to pressure New York to approve the pipeline. That led to an uproar, Governor Andrew Cuomo threatened to revoke the company’s franchise, and the Public Service Commission launched an enforcement action related to the moratorium. Pursuant to the resulting settlement agreement, National Grid issued a report on May 8, 2020 that identified energy efficiency, demand response and other measures as a way to meet the need for gas even without the pipeline.  DEC declared, “Critically, as compared to the project, National Grid concludes that this alternative is less environmentally impactful, in terms of water quality, GHG emissions and otherwise, and more consistent with the requirements” of CLCPA.

We will soon see if Transco challenges the New York decisions (and one issued the same day by New Jersey) in court.  Whatever happens, DEC has signaled that it is serious about phasing out most or all use of natural gas in the state, blocking the construction of new natural gas infrastructure, and reducing GHG emissions in accord with the mandates of the CLCPA.  

Turn On, Plug In, Peel Out

Posted on September 18, 2017 by Samuel I. Gutter

(With apologies to the late Timothy Leary [“Turn on, tune in, drop out”], who was referring to Electric Kool-Aid, not Electric Vehicles.)

Today, September 18th, is the second anniversary of the first public disclosure of the VW “Defeat Device” scandal.  It also marks the beginning of the end of sales of diesel-powered VW cars in the U.S.  And while other companies (Chevy, BMW, Jaguar and Land Rover, among them) still offer diesel cars and SUVs, the pickings are a lot slimmer. 

One unintended consequence of diesel’s fall from grace is the boost it has provided to electric vehicles.  Auto manufacturers must find ways to meet increasingly stringent fuel-economy standards, and for some the efficient diesel was a way to hike their “CAFE” (corporate average fuel economy) numbers.  Now, signs are that Tesla, even with the introduction of its less-expensive Model 3, will soon be sharing the EV market with a growing number of competitors.  GM and Nissan are expanding their pure EV offerings, and Volvo, Mercedes and Mini are planning to release their own “zero emission vehicles” (ZEVs) over the coming years.  Meantime, plug-in electric/gasoline hybrids are becoming common-place, with offerings from Toyota, Cadillac, Volvo, Ford, BMW, and others.  

While diesels dominate the line-haul truck market, Cummins and Tesla are both planning to introduce short-haul electric heavy trucks in the near future.  And what could be more telling than the announcement by the quintessential American company, Harley-Davidson, that it will start selling its “Livewire” electric motorcycle in five years?  Will “Rolling Thunder” become an anachronism?

International pressure to reduce GHGs and urban air pollution is also at play.  China, India, England, France and Norway are all considering an outright ban on the sale of fossil-fueled vehicles.  And back to VW, as part of its Defeat Device settlement, the company agreed to spend $2 billion over the next 10 years on U.S. infrastructure to support electric vehicles.

Battery prices are coming down and charge stations are going up.  And sure, diesels have great torque, but as anyone who has experienced the head-banging g-force of mashing the pedal in an EV will tell you, diesels are best viewed in the rear-view mirror. 

Still, many institutional and social barriers remain – proprietary charging technologies, reliance on government subsidies, high costs of electricity with (in some areas) no reduction in nighttime rates, and consumers who are wary of the emerging technology and fear being stranded on the highway with a depleted battery.  But while ZEVs and plug-in hybrids are still a fraction of total vehicles sales, they are increasing in numbers and market share.  As prices drop and driving range increases, electric vehicles will become more affordable and practical.

Fasten your seatbelt, there might be an EV in your future!

LEAKS And PUMPS And TANKS, Oh My!!!

Posted on July 8, 2016 by Karen Crawford

In May 2016, EPA finalized updates to its New Source Performance Standards (NSPS) for the oil and gas industry which amended 40 CFR Part 60, Subpart OOOO and added new requirements (Subpart OOOOa) to those established for Volatile Organic Compounds (VOCs) and sulfur dioxide (SO2) established for this industry sector in 2012.  Importantly, the new requirements address reductions of greenhouse gas (GHGs) emissions, specifically methane.  In its Executive Summary, EPA discussed the efforts by the agency to “complement” and “improve” the existing rules issued in 2012, stressing the agency’s efforts to engage states and stakeholders and solicit comments prior to its 2015 proposal or the rule.  EPA also stressed it worked closely with the Bureau of Land Management to avoid conflicts and evaluated existing state and local programs to attempt to limit conflicts, where possible.

After promulgation of both the 2012 rule and 2013 amendments, the agency received petitions for reconsideration raising numerous issues, including the regulation of GHGs.  EPA has addressed some of petitioners’ issues in 2015 amendments addressing storage vessels as well as in this rule, adding standards for methane and addressing storage vessel control device monitoring and testing; initial compliance requirements for bypass devices that divert emissions from control devices; recordkeeping requirements for repair logs for control devices which fail a visible emissions test, clarification of the due date for the initial annual report; emergency flare exemptions from routine compliance tests; leak detection and reporting for open-ended valves or lines; compliance period for leak detection and repair (LDAR) for newly affected process units; exemption to notification requirement for reconstruction of most types of facilities; and disposal of carbon from control devices.   However, in a footnote, EPA makes clear it intends to complete its reconsideration process in a subsequent notice.

One interesting aspect of the 2016 rule publication is the extensive discussion of how the 1979 source category listing, “crude oil and natural gas production” is defined.  The agency takes great pains to justify its broad authority over the industry to include not only production, but also processing, transmission and storage equipment.  The EPA concludes that its category listing need not be revised to support the additions and amendments of this rule (even though it does clarify some wording), and sets out its justification for including the entire sector in its 2009 endangerment finding relating to GHGs.

EPA concluded that the Best System for Emissions Reduction (BSER) is the same for GHGs as it is for VOCs, so there are no changes required for equipment that was covered by the 2012 rule.  Newly regulated sources covered by the 2016 rule include: heretofore unregulated hydraulically fractured oil well completions, pneumatic pumps, fugitive emissions from well sites and compressor stations; sources regulated under the 2012 regulation for VOCs for which GHGs are now also regulated (hydraulically fractured gas well completions and equipment leaks at natural gas processing plants); and certain equipment that is used across the source category for which subpart OOOO regulates emissions of VOCs from only a subset (pneumatic controllers, centrifugal compressors and reciprocating compressors), with the exception of compressors located at well sites.

In addition to emission reductions, LDAR utilizing optical gas imaging semi-annually is required for well sites and compressor stations. (Method 21 at a repair threshold of 500 ppm may be used.)  Initial monitoring surveys must take place by June 3, 2017 or within 60 days of the startup of production, whichever is later.  Repairs must be made within 30 days and a resurvey is required within 30 days of repair. Also, a monitoring plan that covers collection of fugitive emissions components is required to be developed and implemented for well sites and compressor stations. At natural gas processing plants, equipment leaks of methane (GHGs) are subject to the same requirements as those for VOCs.  The compliance period begins on November 30, 2016.

And, the rule embraces “next generation” electronic reporting via EPA’s CDX, for enhanced accessibility and transparency to the public, as soon as the forms and systems are available.  Professional engineers are required to provide certifications of technical infeasibility of connecting a pneumatic pump to an existing control device and to design closed vent systems.

Finally, there is a complicated discussion of EPA’s interpretation of UARG v. EPA, which merely results in EPA concluding that the rule should not affect applicability of Title V permit or PSD/NSR applicability determinations for “anyway” sources, even though, if not otherwise required to obtain and comply with a Title V permit, emissions of GHGs (methane) alone will not subject a source to Title V permit requirements.