Jan 24 2021: Deregulators seeing(seething) red

You can expect deregulatory advocates to see red over President Biden’s executive order to “modernize regulatory review, ” which could lead to major changes in the Office of Information and Regulatory Affairs (OIRA), inside the Office of Management and Budget (OMB).

This order asks OMB to develop recommendations that “should provide concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.  The recommendations should also include proposals that would ensure that regulatory review serves as a tool to affirmatively promote regulations that advance these values.  These recommendations should be informed by public engagement with relevant stakeholders. “

Decryng that the Biden Administration will put too much emphasis on benefits and not enough costs, expect these voices to get amplified by conservative media. However, the reversals and clamp-downs on benefits was uniquely vicious in the Trump era. If anything, the Biden Adminsitration is simply righting wrongs perpetrated over the past four years.

In the Trump era cost-benefit analyses (CBA), which have long been part of regulatory review, have narrowed and chiefly leaned into the cost side of the equation. We’ve written before about how things like “co-benefits”, e.g., health benefits, were to be ignored in analyzing the benefits side. Just consider what happened in the Mercury Rule. In installing equipment to cut down on mercury, particulate matter (soot) was also reduced with significant health benefits. These, would be excluded, as they were not the intent.

With some minor tuning with each Administration, the CBA process has worked pretty well. Here’s how American Progress describes it: “…whenever an agency has proposed a new federal regulation, it has needed to quantify the costs and benefits to the greatest extent possible, including those that are indirect or ancillary, known as co-costs and co-benefits; analyze the unquantifiable costs and benefits; and put forward a recommended agency action for OIRA to review and approve.”

Nobody likes excessively burdensome regulations but neither should we like forces that inflate costs while simultaneously restricting how reaped benefits can be included.

https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/modernizing-regulatory-review/

https://www.huffpost.com/entry/biden-order-progressive-regulation_n_6009dabec5b6efae63002e20

Jan 23 2021: Utilities—time is right to modernize

“We believe tighter environmental regulations are a net positive for most utilities.” —Charles Fishman, Morningstar

Mr. Fishman goes on to say “We believe tighter environmental regulations are a net positive for most utilities. Growth investments in renewable energy, grid modernization, and electric vehicles should outweigh higher regulatory, operational, and financial risk.”

No surprise to read that renewable energy sources continue to make up a bigger piece of utilities’ sources. Here’s a chart from the US Energy Information Administration showing relative growth patterns. True, renewables are still much smaller, but growth drives investment.

Grid modernization improves reliability and resilience, both of which have grown in concern in this century. In an industry survey 88% of responding utilities say that have a grid modernization strategy.

Despite a somewhat sluggish market for electric passenger cars (can you say “charging stations”?), the market for the transportation sector continues to be positively positioned for electric vehicles.

https://www.morningstar.com/articles/1018658/bidens-green-agenda-offers-utilities-growth-potential

https://www.eia.gov/todayinenergy/detail.php?id=42497

https://www.globenewswire.com/news-release/2019/05/21/1833258/0/en/2019-Utility-Survey-Finds-Strong-Vision-and-Broad-Adoption-of-Grid-Modernization-Strategy-Are-Propelling-Utilities-to-the-Future.html

https://www.iea.org/reports/global-ev-outlook-2020

Jan 9, 2021: 2020—new record of extreme weather events

The National Oceanic and Atmospheric Administration (NOAA) issued a report that surprise-surprise 2020, among its other worst-year-ever claims, was also the worst year for weather/climate disaster events. These are measured by dollars, as in billion-dollar events, and there were 22 of them, comprised of 13 severe storms 7 tropical cyclones, 1 wildfire and 1 drought. The average number of such events from 1980-2020 was 7 per year. The last four years more than doubled to 16.2 events per year. Geez. Think there’s something going on here?

By November 188 people died in these events. The numbers of wildlife lost in the United States is not as well reported but one does need much of an imagination to conjure tragically high numbers. According to the newly released 2020 Living Planet Report, produced by the WWF, population sizes of mammals, fish, birds, reptiles, and amphibians declined globally by an average of 68 percent between 1970 and 2016.

https://www.ncdc.noaa.gov/billions/

https://www.downtoearth.org.in/news/climate-change/climate-related-weather-events-to-break-records-in-us-this-year-data-shows-74081

https://livingplanet.panda.org/en-US/what-is-the-living-planet-index

Jan 6, 2021 The quieting of “Drill Baby Drill”

Today the U.S. Bureau of Land Management plans to auction off leases for oil and gas development on more than one million acres of the Arctic National Wildlife Refuge (ANWR), in the northeast corner of Alaska. Funny thing is that the expected herd of interested parties has diminished due to market forces.

Drilling in ANWR has been a decades-old battle and the auction today would seemed to cap the fossil fuel industry’s ultimate victory. Not so fast.

There are ongoing lawsuits, naturally. One set back is that yesterday U.S. District Court Judge Sharon Gleason said that groups had not shown a level of harms necessary for her to grant an injunction.

But, what’s also happening is market forces are not encouraging the drillers to drill. There are good reasons for not pursuing:

—lower oil prices and the expense of drilling, exacerbated by climate changes, e.g., warming permafrost

—uncertainty about how much oil is recoverable. US Geologic Survey latest estimate is from 1998 and projects around 10 billion barrels but could be either much lower or higher than that.

—ongoing fuel economy is reducing the demand

—increases from other sources, notably fracking

—large financial institutions, including all five major US banks, have refused or are restricting financing

Ultimately, climate change has become so obvious that the call to be better global citizens encourages fossil fuel companies and their financial backers to have second thoughts and tone down the cry to “drill baby drill.”

https://www.nationalgeographic.com/environment/2021/01/wilderness-crown-jewel-opening-for-drilling-industry-interest-weak/#close

https://www.eia.gov/todayinenergy/detail.php?id=36472

Jan 3, 2021: The Future is Renewables

Renewable energies keep increasing, despite efforts to shore up fossil fuels. Retardation of the advance of renewables will not be the order of the day under a Biden Administration. Still the pace of change could be accelerated if markets operate logically and artificial brakes are not applied. “Leading U.S. utilities increasingly understand that renewable electricity can be a driver of rate base growth while legacy assets become a drag on cash flow.” (https://www.spglobal.com/marketintelligence/en/news-insights/research/the-2020-us-renewable-energy-outlook)

I was inspired to write about this by this article in Politico. https://www.politico.com/news/2020/12/29/trump-biden-clean-energy-451546

Pretty easy to find charts showing growth, such as this chart from a Forbes article. https://www.forbes.com/sites/rrapier/2020/08/02/renewable-energy-growth-continues-at-a-blistering-pace/?sh=ea515de76b60

https://www.forbes.com/sites/rrapier/2020/08/02/renewable-energy-growth-continues-at-a-blistering-pace/?sh=30f5c0da76b6

There’s a lot the Biden Administration can do: Allow states (e.g., CA) to impose vehicle emissions limitations, energy efficiency (starting by not complaining about shower flow), offshore wind permits (NIMBY concerns notwithstanding), policies and personnel that seriously take a look at carbon tax and more.

Here in Tennessee there’s a sense that it leads other Southeastern states, notably in hydroelectric power. But Tennessee does not have a renewables portfolio standard, so there’s a lot of variation and uncertainty. Groups exist to promote renewables here in TN, such as the Tennessee Renewable Energy & Economic Development Council (TREEDC), which is a statewide network of 101 city and county mayors and businesses working together to create a path to fast-track renewables in Tennessee. Projects listed on their website: statewide energy forums, project development/financing, legislative outreach, solar development for communities, municipal wastes to energy, biofuels for governmental fleets, compressed natural gas for fleets. Maryville is among the government partners. https://www.treedc.us/index.html

We’ll revisit this topic in 2021 because the pace of renewables adoption and standardization deserves our attention.

Jan 1 2021: Looking forward on climate assessment

The Fifth National Climate Assessment is underway and will be delivered in 2023. That is not news. What is news is that the Trump Administration failed to stop it or even apparently seriously diminish it.

According to globalchange. gov
“The U.S. Global Change Research Program (USGCRP) was established by Presidential initiative in 1989 and mandated by Congress in the Global Change Research Act (GCRA) of 1990. Its mandate is to develop and coordinate ‘a comprehensive and integrated United States research program which will assist the Nation and the world to understand, assess, predict, and respond to human-induced and natural processes of global change.’ ”

This report uses scientists from across the Federal Government and a new one is mandated every four years. It is serious work. Note that the Trump Administration’s delays have lead to a 2023 instead of 2022 release.

Before looking at that, let’s consider some of the things we learned in the Fourth Assessment from 2018, notably greater attribution of human influence for individual climate and extreme weather events; both oxygen loss and acidification may be magnified in some U.S. coastal waters relative to the global average, raising the risk of serious ecological and economic consequences; ice loss is continuing and even accelerating in some places; and extreme events are increasing (wildfires, floods, storms). There also a number of new and expanding reporting tools that improved the understanding of climate science.

As reported in the New York Times, the assessment has been able to continue partially due to incompetence. The Trump Administration has used its usual method of replacing authors with loyalists and delaying actions. All said, it looks like the Biden Administration will be able to keep this important scientific program on track. https://www.nytimes.com/2021/01/01/climate/trump-national-climate-assessment.html

Dec 26, 2020: Billions of Birds Benefit

It will come as no surprise that improving air pollution, notably reduction in ozone, benefits migratory birds. What is perhaps suprising is that there wasn’t proof. Now there is a study that makes the connection and makes the bold claim that billions of birds have been saved for the past several decades that have seen seen declines in air pollution/ozone.

The lead author is quoted saying benefits of environmental regulation have likely been underestimated. WE know that. We see so many things that still need to be done, that are aided by the added boost of appropriate regulation, and are grateful for studies like this that show benefits in big terms.

First, though, we need to protect the legislation we have, like the Clean Air Act.

https://www.pnas.org/content/117/49/30900

https://phys.org/news/2020-11-air-billion-birds.html#:~:text=Study%20authors%20found%20that%20improved,in%20the%20United%20States%20today.

Dec 18, 2020: Trees & Carbon legislation

Lots to like in this proposed legislation, which opens with these words “To establish forestry policies that facilitate reforestation, conservation, inter- national cooperation, and other ecologically sound management practices that reduce atmospheric carbon, to support United States efforts in partnership with the One Trillion Trees Initiative, to encourage the sustainable management, restoration, and conservation of global forests, grasslands, wetlands, and coastal habitats, and for other purposes.”

Consider just a few things: -increasing the net carbon stock of American forests, grasslands, wetlands, and coastal blue carbon habitats, -carbon credit market demonstration (alas, only voluntary but still good!) – carbon sequestration, – authorizes $10 million for USDA Forest Nursery Revival programs to ensure that the supply of seeds and saplings allows for increased planting (better if were explicitly more focused on natives), encourages international and multi-agency cooperation.

https://www.coons.senate.gov/imo/media/doc/Trillion%20Trees%20and%20Natural%20Carbon%20Storage%20Act%20.pdf

Dec 12: Redlining for ANWR?

In the latest rule being shoved through before this Administration gets the hook, a “fair access for financial services” rule would make it harder for big banks to deny funding for drillers of ANWR. Characterizing opposition to this new rule as “redlining for the left,” it does raise the question of what financial institutions can do towards reducing fossil fuels exploration. The rule purports that whole industries cannot be discriminated against. On the other hand, banks are justifiably concerned about cost and risk due to the volatility of oil prices and difficulty of getting pipelines approved. The assertion that the banks are doing this for political reasons alone just doesn’t seem valid.

Comments are being accepted. Read where here:

https://www.federalregister.gov/documents/2020/11/25/2020-26067/fair-access-to-financial-services