Climate Compass Blog

Delivering More Than Promises

  
This post first appeared in  POLITICO: The Arena - Expert Insights, Live from Copenhagen

Amid the distracting dramas of purloined emails and secret texts, it’s easy to lose sight that Copenhagen has already proven a catalytic event.  Every major power arrives here with its own explicit pledge to curb emissions.  That these promises will be delivered in most cases by heads of state reflects an absolutely unprecedented level of political will.

It’s also easy to lose sight of precisely what more we need from this conference. 

A year ago in Poznan (the site of last year’s climate summit), my colleagues and I got beat up pretty badly for suggesting out loud that Copenhagen was unlikely to produce a final deal, and the aim instead should be an interim political agreement.  Here we are in Copenhagen, working on an interim political agreement. 

What’s that mean?  There’s a lot of emphasis from the United States and others on this being an “operational” agreement delivering “immediate” results.  Let’s hope so.  But an equally important test for Copenhagen is whether it charts a clear path toward the next agreement – one that turns political pledges into binding legal commitments.

EPA Advances the Regulatory Option

The recent announcement by EPA, declaring that greenhouse gases are a danger to public health and welfare, should not come as a surprise to anyone.  EPA has made it clear that it would respond to what the science demanded and to what the Supreme Court (Mass v. EPA) mandated.

The endangerment finding, by itself, does not regulate any sources, but it lays the necessary foundation for future EPA regulations.  The likely first one will be the recently proposed light duty vehicle and engine rule which is scheduled to be finalized in March 2010. 

But EPA’s future actions are best viewed in the broader context of other activities also aimed at reducing greenhouse gas emissions.  State and regional partnerships have stepped up to the plate over the past several years and now 23 states either have or are developing programs to regulate greenhouse gas emissions.  In addition, several recent court decisions (see for example, Conn. v. AEP) have opened the door for common law nuisance claims against firms emitting greenhouse gas emissions. 

Both the judicial and executive branches of our government have answered the call and have begun to actively address concerns about climate change.  Now is the time for Congress to take control and pass comprehensive clean energy and climate legislation.  A broad consensus exists that comprehensive legislation would be far more cost effective than leaving the field to individual states, EPA or the judiciary. The path forward in the Senate won’t be easy, but it certainly is necessary.

Despite the recent hue and cry over hacked e-mails, the overwhelming scientific evidence supports the link between greenhouse gas emissions and climate change.  Yes, there are certainly aspects of some of the recently exposed e-mails that suggest scientists themselves can act peevishly toward one another and more substantively, that better guidelines for making data available and transparent might be useful.  But let there be no mistake, the compelling evidence from multiple data sets and from multiple lines of research hasn’t changed.  The words of a recent report by the US Global Change Research Program resound loud and clear, “global warming is unequivocal and primarily human induced.”

The case for Senate action is also unequivocal.

Steve Seidel is Vice President, Policy Analysis

Using Climate Revenues and Allowances for the Right Purpose

The series of hearings on climate change before the Senate Energy and Natural Resources Committee continued on Wednesday, with a panel examining climate policy options.  Panelists spoke about cap-and-trade regimes, carbon taxes, performance standards, sectoral approaches, and research and development as potential ways to reduce emissions.  While Chairman Bingaman noted that emission-reduction policies are not necessarily mutually exclusive, a lot of attention was paid to the differences between carbon taxes and cap-and-trade programs during the hearing.

The panelists agreed that revenues are raised in both cap-and-trade and carbon tax regimes.  But not all uses of revenues are equal.  While Dr. Ted Gayer suggested that tax revenues raised be used to offset payroll taxes or for deficit reduction, such a plan ignores the real world consequences of implementing climate policy.  A comprehensive climate policy will need to transform our economy, support development and deployment of clean energy technologies, modernize infrastructure, assist consumers, help the nation adapt to the impacts of climate change, and support international climate efforts – and all of these things will require significant resources.  Using a carbon tax to send revenues to the Treasury for general use or to Congress for unrelated earmarking is not the way to ensure resources are dedicated to these purposes.

A responsible cap-and-trade program has the ability to direct a portion of allowance value (either directly by allocating allowances or indirectly by use of auction revenue) to a variety of economic, infrastructure, consumer, and adaptation needs.   The legislative process has the ability to tailor assistance sectorally or geographically in a way that would be far more difficult to accomplish in tax policy.  This redirection of revenues eases the transition to a clean energy economy and makes climate legislation more practically feasible and politically viable.

As Senator Byrd stated this week, the transition to a clean energy economy will not necessarily be easy, but it is one that is unavoidable.  Congress needs to pass cap-and-trade legislation that makes the transition as smooth as possible.

Dorgan Delves Deeper into CCS

Not surprisingly, Senator Byron Dorgan (D-ND) is interested in carbon capture and storage (CCS) and its application to coal-fueled electricity generation. North Dakota gets almost 90 percent of its electricity from coal, and the state is the 10th largest producer of coal in the United States.

In mid-2008, Senator Dorgan convened a group of stakeholders with interest in CCS under the banner of a “Clean Coal and Carbon Capture and Sequestration Technology Development Pathways Initiative” (CCS Initiative) and asked them to provide input related to a number of key questions regarding CCS. Participants included representatives from the electric power industry, coal industry, manufacturing, labor, academics, and NGOs. The questions posed by the Senator focused on such issues as how much funding for CCS is required to ensure the technology is ready for broad deployment and how the United States can expand its cooperation with other key coal-producing and coal-consuming nations to accelerate international deployment of CCS.

On December 1, Senator Dorgan released a report prepared by the National Energy Technology Laboratory (NETL) that summarized input provided by the CCS Initiative participants.

The Midwest is the Leading Edge on Oil Sands

Can we reconcile our climate change and energy security goals with respect to oil sands? The Midwest is on the leading edge of U.S. attempts to answer this question.  The region is especially dependent on oil sands imports and is seeking solutions to this resource’s climate change challenges. 79% of Midwest petroleum imports come from Canada (see figure 1), and 22% of those imports come from oil sands, which are naturally occurring mixtures of sand, water and a form of petroleum called bitumen. Canada has at least 85% of the world’s reserves of natural bitumen and is the largest foreign supplier of oil to the United States (ahead of Saudi Arabia, Mexico and Venezuela). More than 60% of oil from the Province of Alberta is exported to the U.S., and well over half of the province’s oil production comes from oil sands.  Albertan oil sands currently produce 1.3 million barrels per day (bbl/d) of crude oil equivalent, more than the state of Texas produces daily (1.09 million bbl/d). 

It is clear that Canadian oil, and specifically oil from the Albertan oil sands, will be a critical source of liquid fuel supply into the future.  How can the Midwestern states balance their competing goals of reducing greenhouse gas emissions with ensuring a secure, cost-effective source of fuel?

fig1

Source: EIA http://tonto.eia.doe.gov/dnav/pet/pet_move_impcp_a2_r20_ep00_ip0_mbbl_a.htm

The Midwest Governor’s Association (MGA) is beginning the process of answering that question.  MGA’s Low Carbon Fuel Standard (LCFS) Advisory Group is tasked with providing a set of recommendations on how to craft an LCFS policy.  An LCFS is a standard for the greenhouse gas (GHG) content of the transportation fuel mix that declines over time, and allows producers to determine how to go about meeting the standard in the most cost-effective way.  The Advisory Group’s first meeting included a tour of three oil sands facilities in the boreal forest northeast of Edmonton in northern Alberta.   The appointees and advisors (including this blogger) were able to see, firsthand, the technology used and the many issues associated with this massive resource.  Finding the right policy and technology tools to balance competing climate and energy security objectives in the Midwest is emerging as the most important challenge for the Advisory Group to tackle.  

There are two major technologies for extracting oil sands from the ground.  Most crude bitumen has historically been produced from surface mining and extraction.  This is the image most people associate with oil sands production (see photos below).  More than 80 percent of remaining established reserves are estimated to be recoverable from newer in situ techniques, whereby bitumen is extracted from the sand in the reservoir by injecting steam into the formation to heat the bitumen, which is then pumped to the surface.  Bitumen from either process is then upgraded into synthetic crude oil (SCO). These production and upgrading processes are energy (and carbon) intensive.

surface mine
tailings pond
Surface mine (above) and a tailings (waste) pond in Fort McMurray, Alberta.

Estimates of just how GHG-intensive oil sands production is vary due to different approaches to life-cycle emissions accounting.  The majority of lifecycle emissions (60-85%) come from combustion of the final product (liquid transportation fuels), which is the same no matter what the original source is.  However, when measured on a well-to-wheels basis (which includes the extraction, processing, distribution, and combustion of the refined products), total GHG emissions from oil sands are approximately 5 to 15 percent higher than the average crude oil consumed in the U.S.  This difference arises from the energy-intensive production and upgrading processes.  As a result, in a policy scenario that favors fuels with lower lifecycle carbon emissions, Albertan oil sands are likely to feel the pinch. 

There are several possible solutions to this emerging dilemma.  Opportunities exist to improve efficiency and reduce the total amount of fuel input required in both types of mining and in upgrading. It is also possible to switch to lower carbon fuel sources, such as biodiesel or bioethanol, for oil sands operations.  Generating the most interest, however, is the potential application of carbon capture and storage (CCS) technologies at various stages of the production process.  CCS, or a combination of these three options, has the potential to make oil sands no more carbon intensive than an average crude.  The LCFS Advisory Group is well positioned to encourage the adoption of these solutions at oil sands facilities and move us toward reconciliation of our energy security and climate goals.

Jessica Shipley is a Solutions Fellow