Monthly Archives: April 2015

McAuliffe touts gas and nuclear, says it’s not his job to worry about risks

by
And he'll have to, given the hash we adults are making of it. Photo courtesy of Glen Besa.

And he’ll have to, given the hash we adults are making of it. Photo courtesy of Glen Besa.

A forum on climate change held last Wednesday in Richmond was supposed to be about moving to clean energy, but it sometimes seemed to be more of a platform for Governor Terry McAuliffe to tout plans for more natural gas and nuclear energy in the Commonwealth. It wasn’t that he neglected energy efficiency, wind and solar—he had plenty of good things to say about these, and even a few initiatives to boast of. It was just that they paled against the backdrop of massive new natural gas and nuclear projects, to which he seems even more firmly committed.

The event was a conference called “The Next Frontier of Climate Change,” organized by The New Republic magazine and the College of William and Mary. Moderator Jeffrey Ball of Stanford University shaped the conference as a series of interviews, beginning with Governor McAuliffe. You can see video of the interview here.

Ball started out asking about the politics of climate change, which gave McAuliffe a chance to reiterate his convictions that climate change is real, that we can see it happening today in Hampton Roads, and that part of meeting the challenge involves supporting the kind of 21st century technologies that will also make Virginia an exciting and attractive place to live. That includes offshore wind and solar.

But McAuliffe also made it clear he sees everything through the lens of economic growth, and his top priority is attracting new business to fill the gap left by shrinking federal spending in the state. “When I ran for governor,” he explained, “I tried to put everything in an economic issue: what is good for the Commonwealth, how do you grow and diversify. I preside over a commonwealth that, we are the number one recipient of Department of Defense dollars, number one. Now, that’s great when they’re spending, but when they’re cutting like they’re cutting today, it has a dramatic impact.”

He is also persuaded that renewable energy, even with all its job benefits, won’t get him as much economic growth as cheaper fossil energy can, and his friends at Dominion Resources and its subsidiary, Dominion Virginia Power, have convinced him that means backing their plans for natural gas and nuclear.

McAuliffe said he supports EPA’s Clean Power Plan, and said in the course of the interview that he thought it would result in lower electricity rates for Virginians over the long run; but he’d still like it to demand less of our utilities. He echoed assertions from legislators and utilities that the draft plan’s treatment of existing nuclear plants makes it “unfair” to Virginia. Repeating a line that is now standard among Virginia politicians, he claimed the Clean Power Plan doesn’t give us “full credit” for reducing our carbon emissions by building nuclear reactors back in the 70’s. He has been raising the issue with the Obama Administration, and feels confident EPA will make the changes he requested.

Neither McAuliffe nor anyone else has explained why we should get credit for doing something 40 years ago for entirely different reasons, at a time when very few people had climate change on their radar screens. But never mind that; according to this theory, which he asserted again at the conference, the Clean Power Plan’s failure to credit us for our nukes puts us at a disadvantage compared to coal-heavy states like West Virginia and Kentucky that haven’t done diddley-squat.

(You know, I hope someone is passing all this along to the folks in West Virginia and Kentucky, who have been screaming bloody murder about how tough it will be for them to comply with the Clean Power Plan. I don’t get the sense they are aware they have this terrific advantage over Virginia and can expect shortly to begin luring away our businesses. Mitch McConnell, for one, seems entirely oblivious of the favor the EPA is doing his state. What a shame it would be if all of McConnell’s anti-EPA rhetoric were based on a simple misunderstanding!)

Maybe our governor needs to put a few items on his reading list, like the PJM analysis that shows the Clean Power Plan puts Virginia at an advantage over neighboring states, especially if it joins a regional compliance program. He should also check out a new report from Virginia Advanced Energy Industries Coalition and the Advanced Energy Economy Institute that describes the tremendous job growth in renewable energy and energy efficiency that will flow from compliance with the Clean Power Plan. Given the opportunities presented, the Governor should embrace more stringent goals, and should look to clean energy rather than nuclear as the money-saving, job-creating approach to compliance.

However, McAuliffe’s enthusiasm for nuclear goes beyond using it to wangle a softer carbon reduction target out of the EPA. He told Ball repeatedly that he is a “huge fan” of nuclear energy, thinks a new nuclear plant should be part of Virginia’s compliance with the Clean Power Plan, and expressed delight over Dominion’s plans for a third reactor at North Anna.

And yet, when confronted with a question from the audience about the wisdom of building another nuclear plant on an earthquake fault line, he said cheerfully that the Nuclear Regulatory Commission won’t approve a plant that isn’t safe. Worrying about it isn’t his job.

We’d better hope his confidence in the NRC is well placed—and hope too that the NRC successfully resists the political pressure to approve the plant that it will no doubt receive from Governor McAuliffe.

Ball suggested that what was behind the question on nuclear was a contention that if the state ramped up its investments in efficiency and renewable energy it would not need to build a new nuclear plant. McAuliffe assured Ball that wind, solar and efficiency couldn’t do that yet. He knew that because—ahem—he’d heard it from Dominion.

I guess no one has told the Governor that asking Dominion for its take on efficiency is like asking Exxon about electric cars.

McAuliffe’s enthusiasm for big projects that promise more business for Virginia (and Dominion) has also caused ongoing friction between the Governor and members of the public over natural gas pipelines. This led to the incident at the conference that grabbed headlines, with an angry protester trying to shout down the Governor.

At issue was McAuliffe’s support for Dominion’s controversial Atlantic Coast Pipeline. The proposed 550-mile natural gas transmission project will require the seizure and clear-cutting of a 125-foot wide right-of-way across Virginia from West Virginia to the coast in North Carolina, through national forests and private land. And of course, it will increase Virginia’s carbon footprint by enabling the burning of more fossil fuel here.

Pipeline opponents had brought into the New Republic event a banner reading “McAuliffe: Pipeline will be Climate Chaos.” During the Q&A period the protester reminded McAuliffe that he had once opposed natural gas fracking in Virginia.

But McAuliffe remained unruffled even as the protester hurled insults at him, until she was escorted from the room. “We’re not doing the fracking here,” he said, by way of explaining his support for the pipeline. “The fracking is done elsewhere. I’m not, as the governor of Virginia, going to stop fracking in America today.” Therefore, he concluded, we might as well take advantage of the fracking going on elsewhere to “bring cheap gas to parts of Virginia that can open up and build the economy.”

It seemed no one had alerted him to research indicating the gas boom will start to go bust just five years from now. If that happens, of course, higher gas prices will make the Governor’s manufacturing renaissance go bust, too, leaving Virginia worse off than before. Coupled with Dominion’s plans to bring online a staggering 4,300 MWs of new natural gas generating plants by 2019, Virginia is putting itself at the mercy of a natural gas market that is entirely outside our control.

But when I asked the Governor if he wasn’t worried about the risks of over-investing in natural gas, he shrugged off the concern. It’s not his job to review Dominion’s plans, he said.

Well, sure. But there’s a problem with cheerleading for every big energy project that comes along and taking no responsibility for their downsides. This is the “all of the above” strategy that brought us the climate crisis. From a governor who knows climate change is happening before our eyes in Virginia, we’re still hoping for better.

Virginia Attorney General weighs in on HOA efforts to ban solar

by
Photo courtesy of Solarize Blacksburg

Photo courtesy of Solarize Blacksburg

Virginia Attorney General Mark Herring has issued an opinion letter in response to concerns of some residents that their homeowner associations (HOAs) won’t let them install solar panels, in spite of recent state legislation nullifying most solar bans. Herring’s letter confirms the plain language of the 2014 law that HOA bans on solar installations are valid only if they appear in the association’s “recorded declaration.” Otherwise the association is prohibited from banning solar panels, although they can impose “reasonable restrictions” on their “size, place, and manner of placement.”

The letter, dated April 14, 2015, is in response to a request for an official advisory opinion from Delegate Joseph Yost, a Republican who had supported last year’s launch of Solarize Blacksburg. Some homeowners who sought to join the cooperative buying program ran into resistance from HOAs (more broadly called property owner associations, or POAs) unfamiliar with the new law.

Two parts of the AG’s opinion are worth quoting here:

What is noteworthy about the current language of this statute is that it permits only one procedure by which solar panels may be prohibited by community associations: by inclusion in the recorded declaration. The maxim ‘expressio unius est exclusio alterius’ “provides that mention of a specific item in a statute implies that omitted items were not intended to be included within the scope of the statute.” Applying this maxim, the current language of the statute must be viewed as meaning that any attempt by a POA to prohibit solar panels on private property by means other than a recorded declaration—such as rules, regulations, bylaws, policies, or other unrecorded instruments—is unenforceable.

(Footnote omitted.) The letter then adds:

When read as a whole, the statute also means that, with the sole exception of recorded declarations, existing prohibitions against solar panels on private property are no longer enforceable.

The opinion goes on to consider the constitutionality of the law and finds that it “does not violate the constitutional prohibition against legislation impairing the obligations of contract.”

Notably, the AG did not address the question of what kinds of HOA restrictions short of a ban meet the law’s “reasonableness” criterion. To date, the only guidance I know about on that question is a guide put together by the Maryland, DC and Virginia Solar Energy Industries Association—or MDV-SEIA, as the trade association is known.

As for Solarize Blacksburg, it proved a huge success in spite of isolated HOA issues, with a total of 55 solar installations. Since then, 20 other communities across the state have followed its lead to launch their own solarize efforts. The Blacksburg team is now helping to launch Solarize Montgomery with a party to be held at 5:30 today, April 22, at the Montgomery County Government Center in Christiansburg.

Update: After I put up this post I learned about a nice little segment that WVTF Radio did yesterday on the HOA dispute and the AG’s opinion. You can check it out here.

 

Dominion’s natural gas gamble looks risky for ratepayers

by
Opposition to Dominon's planned Atlantic Coast Pipeline has spurred protests from landowners and environmental advocates and led to more than 5,000 comments to the McAuliffe Administration opposing the pipeline. Photo courtesy of Linda Muller.

Opposition to Dominon’s planned Atlantic Coast Pipeline has spurred protests from landowners and environmental advocates and led to more than 5,000 comments to the McAuliffe Administration opposing the pipeline. Photo courtesy of Linda Muller.

Dominion Resources and its regulated subsidiary, Dominion Virginia Power, are gambling big on natural gas. But while the utility giant will be a winner if gas prices stay low over the next 20 years, the risk of losing this bet is very real—and the risk is being borne disproportionately by Virginia consumers.

Ever since the shale gas boom sent natural gas prices into a tailspin beginning in 2008, Dominion has increasingly been putting its chips into gas. Its Virginia subsidiary just completed a 1,329 megawatt (MW) natural gas plant in Warren County, began construction last year on a 1,358 MW gas plant in Brunswick County, and last month announced plans for a 1,600 MW plant in Greenville County, to be operational in 2019. Virginia ratepayers will foot the bill for construction costs, plus the cost of operating and fueling these mammoth plants for decades to come.

But while Virginians tend to think of Dominion as an electricity provider, its bigger business line is in natural gas transmission and storage. According to the Dominion website, its subsidiary Dominion Transmission, Inc. maintains 7,800 miles of pipeline in six states and operates what it says is one of the largest underground natural gas storage facilities. Another subsidiary operates 1,500 miles of pipeline in South Carolina and Georgia. The company is moving aggressively to add and upgrade compressor stations and build additional pipeline capacity in West Virginia and Pennsylvania.

It is also angling to add a massive 42-inch diameter, 550-mile gas pipeline to run from West Virginia through Virginia to the coast in North Carolina. Promising a vast new supply of cheap fracked gas for industrial users, Dominion has won the support of lawmakers like Virginia Governor Terry McAuliffe while galvanizing opposition from landowners and environmentalists.

Meanwhile, Dominion has another game afoot, with plans to begin exporting liquefied natural gas from its Cove Point, Maryland facility. Upgrading the facility will cost the company $3.8 billion, and running the liquefaction facility will require 240 MW of power (using more natural gas). Natural gas is so much more expensive in foreign markets that Dominion considers the gamble worthwhile, even as it cites a U.S. Energy Information Administration study for the proposition that little or no natural gas would be exported if the U.S. price “increases much above current expectations.”

All of these ventures depend on one crucial assumption: that natural gas prices will remain low for as many years as it takes to fully recover the cost of these investments, and then some. For electric generation, moreover, gas has to be able to outcompete other fuel sources. That includes not just coal and nuclear, both of which are being abandoned in droves in the face of cheap gas, but also new sources like solar and wind, which have trended steadily downward in price over the past two decades. In some regions of the country (although not yet Virginia), wind and solar prices already outcompete natural gas.

Gas does have the advantage of dispatchability—the ability to provide power according to the peaks and valleys of demand, allowing it to fill in around variable energy sources like wind and solar. That makes gas vital for backup generation, at least until power storage technologies become cheaper. But it wouldn’t justify the large-scale shift to gas for baseload generation, as Dominion’s plans envision, unless the company is right that gas prices will stay low.

If Dominion’s assessment of the market is wrong, its shareholders will take a hit. Higher natural gas prices could make the export business fizzle, and there might not be enough customers to justify the pipeline buildout. That’s why the company is moving so quickly to build the three massive new natural gas generating plants in Virginia under the ownership of its regulated subsidiary. Dominion is protecting its bet by locking Virginia electricity customers into gas for the long term, guaranteeing itself a market not just for its natural gas generating plants but also for its pipeline business. If the shale boom becomes a bust, or if prices rise to pre-boom levels, it will be Virginia ratepayers who pay through the nose or get stuck with stranded assets.

How big the risk is depends on whom you ask. The gas industry claims supplies will be sufficient to meet demand for decades to come. The U.S. Energy Information Agency, that voracious consumer of yesterday’s news, largely agrees (though it has more recently begun tempering its enthusiasm). If the optimists are right, production from the major shale gas plays will increase 40% by 2030 over today’s production levels, enough to support the mad rush to gas by Dominion and other utilities like it, without upward pressure on prices.

But a more pessimistic view is gaining adherents. As described in the December 2014 issue of the journal Nature, a team of a dozen geoscientists, petroleum engineers and economists at the University of Texas at Austin (UTA) has been analyzing assumptions behind the industry’s rosy outlook, and concludes it is wrong. Instead, the UTA study indicates production of natural gas from the “big four” shale plays will slow significantly after 2016, peak by about 2020, and then decline, dropping 20% from current levels by 2030. If so, the amount of natural gas coming to market in the U.S. will be less than half of what the optimists expect. The upward pressure on prices will be enormous.

The UTA team joins a growing chorus of doubters, whose studies suggest that the shale juggernaut can’t be maintained profitably. If these pessimists are correct, we should begin seeing evidence of it well before 2020. For now, there is at the least a very serious risk that cheap gas won’t last, and anyone who can’t afford to lose big would be well advised to wait it out.

IMG_0634There are other reasons Virginians should be wary of over-investment in natural gas infrastructure, both generating plants and pipelines. The need to fill pipelines will put pressure on the state to welcome fracking companies, both in the Marcellus shale in the western part of the state, and in the Taylorsville Basin in the east. Until 2010, Dominion itself owned gas drilling leases, and according to the Center for Media and Democracy, “Dominion is a member of several special interest groups that push for expanded drilling rights and limited or no regulation of fracking.”

With pollution of air and water a serious concern, and given the state’s tradition of lax regulation on industry, some localities are already looking for ways to exclude drilling companies from their borders. If we are going to have this fight, it shouldn’t be because one powerful corporation made a bad bet.

Finally, of course, there is the climate cost of natural gas. As we congratulate ourselves for leaving coal in the rear-view mirror, we need to recall that we have a long way to go to reach the carbon-free grid, and stalling out at the halfway point isn’t grounds for celebration.

Natural gas has a role to play in the transition period before wind, solar, and other carbon-free sources take over permanently, and it will remain useful as a back-up source when wind and solar aren’t producing power. But a wise energy policy today focuses on developing those renewable sources as fast as possible, reducing demand through investments in energy efficiency, and using natural gas as a backstop rather than as a primary source of power.

This approach reduces risk to the national economy if shale gas production declines, and it reduces risk to ratepayers stuck paying whatever the price of natural gas may be when demand outstrips supply.

Dominion Resources is an investor-owned corporation. As such, it is entitled to place risky bets in the hopes of making a killing for its shareholders. What it is not entitled to do is to shift the risk of losing the bet onto its captive ratepayers in Virginia.

With the odds so stacked against consumers, Virginia should refuse to play.

Thanks go to Richard Ball, PhD., Energy Chair of the Virginia Sierra Club, for his research and analysis of shale gas supplies.

As sea level rise accelerates, buying shorefront property becomes a game of musical chairs

by

Sea level rise graphThank God for climate change deniers. They may eventually be the only buyers for shorefront real estate.

Sea level rise may not cause widespread flooding until later in this century or into the next one, but real estate deals involve long timelines: the useful life of a new house or a commercial building can be at least fifty years, while an infrastructure project might last a hundred years or more.

And of course, it’s one thing to lose your house, and another to lose the ground beneath it. Sea level rise means low-lying real estate now comes with an expiration date.

So smart buyers—and landowners—have to consider not just today’s flood maps, but also ones that haven’t been drawn yet. If a rising sea will threaten property some decades from now, it will depreciate over time, like a car. At some point only chumps and climate deniers will buy.

Head-in-the-sand posturing still dominates the headlines, like Florida Governor Rick Scott’s alleged ban on the use of the term “climate change,” or the North Carolina legislature’s silly (and costly) attempt to legislate sea level rise out of existence. Now the Federal Emergency Management Agency (FEMA) hopes to force states to get serious about climate change by requiring states to do a better job planning for natural disasters caused in part by global warming. FEMA’s goal is to save money through better planning, but conservatives have attacked the requirement as politically motivated.

Meanwhile, however, many states and localities have already begun using sea level rise forecasting in their planning. The projections will help land use planners determine not just where to allow growth, but also where to defend existing development against the incursion of the sea, and where the wiser course is to retreat. And of course, the studies should inform the decisions of anyone thinking of buying property on the coast.

Two recent studies provide a picture of sea level rise in Virginia. The Virginia Institute of Marine Science (VIMS) issued its report in January 2013, titled Recurrent Flooding Study for Tidewater Virginia. Building on that study and others, on March 10 of this year the Sierra Club released Sea Level Rise: What Should Virginia Plan For?

Both studies agree on some pretty sobering numbers. By the end of this century, the sea level in Norfolk, Virginia, is projected to be 3.6-5 feet above the level in 1992. By that point, the sea will be rising more than half a foot per decade. The numbers are higher for Virginia than for many states, in part because the land around Hampton Roads is also sinking at a rate of about one foot per century.

Although Hampton Roads gets most of the media attention, sea level rise threatens the entire Virginia coastline and the tidal portions of rivers, including the Potomac River all the way up to Alexandria and Washington, D.C. A whole lot of people should be consulting topographic maps before they make their next real estate decision.

The Sierra Club report focuses in on specific timeframes that matter in real estate decisions: twenty-five years for short-term projects, fifty years for new homes, and a hundred years for infrastructure projects. With a one-foot margin of safety added in, the report recommends that anyone considering a new project or building today with a 50-year expected life should plan for as much as 3.7 feet of sea level rise over the 1992 baseline. That number becomes 5.5-7.2 feet when the planning horizon is extended out a hundred years, to 2115.

(The “good” news is that the sea rose half a foot between 1992 and today, so you get to subtract six inches from these projections if you are starting now.)

Results are stated as a range rather than a precise number because the actual level will depend on many factors. Researchers agree that a certain amount of sea level rise is “baked in” as a result of greenhouse gas emissions to date, but future emissions will play a big role in determining how much the seas rise in the long run. Providing a range allows users to decide how much risk they are willing to take. Even at the high end, there are caveats; new information about melting ice in Eastern Antarctica could make today’s projections too conservative.

Right now many shore communities are hosting a game of musical chairs. Developers continue to build and sell new housing, figuring they can earn a good return on their investment and get out before the market collapses. Buyers aren’t told about the risks. Sea level rise is bad for business, so business would rather not talk about it. And some local governments soft-peddle the news, afraid of setting off a panic that will make the collapse of the real estate market a self-fulfilling prophecy.

The Virginia General Assembly took action this year to require localities in the Hampton Roads Planning District Commission to include measures addressing sea level rise in their comprehensive plans. The District includes 16 local governments in southeast Virginia, but that’s only a fraction of the counties and cities vulnerable to sea level rise.

Another bill requires that the disclaimer form provided to home buyers across the state include language warning that the seller makes no representations about whether the property is located in a “special flood hazard area” or may require flood insurance, putting the onus on buyers to inquire. While prudent buyers will follow through (and mortgage lenders will make sure they do), today’s flood maps don’t reflect tomorrow’s reality.

So these bills are a good start, but Virginia needs to do more. Local governments outside of Hampton Roads need specific guidance for planning, and the public needs better education about the floods to come. By the time the sea claims low-lying neighborhoods from Virginia Beach up to Alexandria, there may not be enough climate deniers left to buy everyone out.