It’s About Time

That I posted something, yes.  The blog has been pretty dormant for a year or so now, but I’m going to try to pick things up again now and get the word out about what’s news in the American West when it comes to climate change.  And by the way, if you don’t already, follow me on Twitter @ClimateWest.

So what’s inspired this renewed commitment to the ClimateWest blog?  It was the news yesterday that the U.S. Environmental Protection Agency finally proposed to issue a long-overdue air pollution permit for the Bonanza coal-fired power plant in northeastern Utah.

This is big news.  The 500-megawatt Bonanza power plant, with its 600-foot tall smokestack, has for years avoided complying with basic clean air standards.  Located in the high desert of the Uinta Basin in northeastern Utah, the plant’s owner, Deseret Power Cooperative, upgraded the plant to burn more coal in the early 2000’s.  More coal meant more pollution and under the Clean Air Act, that meant new emission controls were required to be installed.

Unfortunately, Deseret refused to install legally required pollution controls.  Even more unfortunate, at the time, the EPA condoned this.

WildEarth Guardians detailed these violations in a notice of intent to file suit against Deseret under the Clean Air Act in 2012.

The permit proposed yesterday will finally set things straight.  As EPA acknowledges, it made a mistake:

In carrying out our Title V permitting obligations, EPA has preliminarily determined that the PSD permit EPA issued in 2001 omitted certain PSD permitting requirements and that EPA failed to analyze and apply the PSD regulations correctly when issuing that permit. Among the requirements omitted was a Best Available Control Technology (BACT) analysis for NOx.

PSD refers to “Prevention of Significant Deterioration.”  It’s a key requirement of the Clean Air Act that says if you’re a big source of air pollution and you modify your facility and you increase your pollution, you’ve got to install best available pollution controls.  What EPA’s proposal means is that, finally, Deseret will finally install legally required clean air controls.

So how overdue is this action?  Technically, EPA was required to issue this permit in the early 1990’s, more than 20 years ago.  It was only after WildEarth Guardians sued the agency to compel them to meet their legal deadline that we have the proposal today.

It’s great news for clean air in the region.  While other coal-fired power plants in the west have had to make significant clean air upgrades, Bonanza has been given a free pass to pollute.  At long last, that’s slated to change.

And with clean air comes opportunity.  Facing the prospect of having to spend millions to upgrade the Bonanza plan, one has to honestly question whether Deseret is better off shuttering the plant and investing in cleaner, more affordable energy.

In the meantime, the proposed permit is out for public comment and the EPA has proposed a hearing in Fort Duchesne, Utah on June 3.  Stay tuned for more from WildEarth Guardians.

Bonanza Power Plant

 

UPDATE:  Unfortunately, EPA changed course when issuing the final permit for the Bonanza plant, eliminating any requirement that Deseret comply with the Clean Air Act.  Instead, EPA embarked upon a separate process to issue a “corrected” PSD permit, with no deadline for final action and no promise of real accountability.  On January 7, 2015, WildEarth Guardians appealed the EPA’s latest permitting decision to the Environmental Appeals Board.

We Can’t Frack our Way to Clean Air

With mounting revelations that air pollution from fracking threatens public health, you’d think that the Obama Administration would be rushing to ensure these harmful emissions are kept in check.

After all, reducing this pollution actually makes the oil and gas industry money.  Companies including BP, Williams (now WPX), Anadarko, and more all report enormous paybacks.

The reason?

It’s simple.  Reducing pollution means capturing gas that is usually just vented into the air, wasted.  More gas means more money.  In other words, controlling harmful air pollution means being more productive.

And it doesn’t end with fracking.  A recent NRDC report confirms companies can make money by reducing air pollution at every step of the process of producing oil and gas.  From the wells downstream to the distribution system, the industry is blessed with an array of options to make money while at the same time keeping our air safe to breathe.

It’s no surprise that when the U.S. Environmental Protection Agency last year proposed updates to a suite of rules to limit air pollution from fracking, they found the proposal would actually yield millions for the oil and gas industry.

Win-win would be an understatement.  Even investors are calling on industry to control its pollution, noting the “financial risks” of wasting gas.  It’s the no-brainer of all no-brainers.  And given the enormous public health benefits we stand to reap, there’s absolutely no reason to delay.

Yet sadly, delay is exactly what the Obama Administration is doing.

As was reported earlier this week, the Environmental Protection Agency is putting off new clean air rules for fracking for another two weeks.  These rules were spurred after WildEarth Guardians and the San Juan Citizens Alliance filed suit against the Agency over its failure to meet deadlines under the Clean Air Act.

Now two weeks isn’t that much time, but it comes as the Administration is seemingly bent on appeasing the oil and gas industry in a cynical move to score political points with the electorate, even at the expense of our health and the environment.

Take for example, the Environmental Protection Agency recently backing down from efforts to protect clean water from fracking.  Or U.S. Interior Secretary Ken Salazar’s recent announcement that the Administration was “speeding up” federal drilling (nevermind that there’s a glut in natural gas right now that has pushed prices to record lows and tempered drilling plans across the country).

In fact, WildEarth Guardians has heard that the delay on the clean air rules may very well be due to a White House demand to scrap key provisions over concerns about how the safeguards would affect Obama’s re-election campaign.

More to the point, it seems that Obama’s re-election campaign has the perception that regulating fracking will somehow be viewed as being responsible for high gasoline prices.

Ergo, ditch the clean air rules.

If true, it would not only stand as an abhorrent attempt to let politics trump public health, but it would be one of the most monumental miscalculations by this Administration.  Nevermind that more drilling–and certainly environmental regulation–hasn’t had any effect on gasoline prices.  Ultimately, it would amount to the President turning a win-win opportunity into a loser for all.

Without a doubt, it would be an abandonment of any and all leadership.

For Americans dealing firsthand with air pollution from fracking, this outcome could be devastating.

Like for parents of Erie, Colorado, which is north of Denver, who are facing the prospect of wells being fracked near two elementary schools and a daycare center.

Sure, I suppose there’s a chance the President may score political points for rhetoric, speculation, sloganeering, fear, and hype.  But for those of us living in the real world where facts and reason rein, this does nothing to protect our clean air.

Delaying common sense protections for public health and the environment is bad enough, especially when those protections will make the oil and gas industry more productive and profitable.  The prospect of the Obama Administrating using delay to scuttle what are arguably some of the most reasonable fracking safeguards ever would be unconscionable.

Watch this great documentary on Hydrofracking and Air from Kyle Montgomery on Vimeo, which focuses on the Marcellus shale in the northeast.

Coalorado Plateau

Superlatives are an understatement on the Colorado Plateau.

Home to Grand Canyon, Zion, Arches, and more, the region is the American West’s defining collision of contrasts pushed to some of the most beautiful extremes.  The land, the water, the people, the air–they’re a mélange of unlikely proportions that over time (lots of time) have come together to create one of the most iconically paradoxical joinders of culture and geology, water and desert, even life and death.

(just check out this Flickr album of bryandkeith’s bike tour of the Colorado Plateau, wonderful point of view and awesome photography!)

Yet even in this landscape marked by stark contrasts, there’s some things that seem out of place.

Like coal.

Not the natural seams of coal that streak buttes with black stripes of a carboniferous past, but the mines and the power plants concentrated in the region that have turned this past into a present-day environmental disaster.

By our count, the Colorado Plateau, which spans five states and encompasses most of the Colorado River watershed, supports 12 coal-fired power plants that collectively account for 44% of all coal-fired electricity generated in the Western United States (check out our map below, as well as another one like it on our Flickr site).  Unlike many plants in the nation that get their coal from the Powder River Basin of Wyoming, these 12 are fueled entirely by mines on the Plateau.

Collectively, these plants take a huge toll on the region’s air, water, and land.  And this where another set of less appealing superlatives come in.

Like largest coal-fired power plant west of the Mississippi River, a distinction that belongs to the Navajo Generating Station in Arizona.  At 2,400 megawatts, the power plant is capable of providing energy to more than 1.5 million households annually.

Or largest source of nitrogen oxide emissions, a byproduct of coal combustion that forms smog and haze, a distinction that belongs to the Four Corners Power Plant in New Mexico.  In 2011, the plant released more than 37,500 tons, as much as 1.96 million cars.

Or three of the top 25 largest sources of carbon dioxide in the United States–the Navajo Generating Station, Four Corners Power Plant, and Jim Bridger Station in Wyoming (13th, 24th, and 14th, respectively).

To that end, the largest source of carbon dioxide in every state in the region (with the exception of Utah) is located on the Plateau:  Arizona’s Navajo Generating Station, New Mexico’s Four Corners Power Plant, Colorado’s Craig Generating Station, and Wyoming’s Jim Bridger Station (the Hunter Power Plant in Utah is the second largest in the State).

But even more distressing is the fact that these plants collectively report more than 20.5 million pounds of toxic chemicals released annually into the air and water, and on the land.  To put that into perspective, that’s almost as much as was released in the entire State of Colorado in 2010 (23 million tons reported to EPA).

In other words, these 12 power plants spew almost as much toxic pollution as an entire state.  These toxic releases include more than 1,800 pounds of mercury emitted into the air from the plant’s smokestacks.

Perhaps it’s no wonder the Colorado Plateau has some of the highest concentrations of mercury in the West.  Studies in Mesa Verde National Park, an icon of the region’s rich pre-Puebloan history, have even confirmed the link between the region’s power plants and mercury contamination.

Check out our detailed chart of toxic releases for every one of these coal-fired power plants.

Not surprisingly, haze and smog are becoming major concerns.  Air monitors throughout the region have reported dozens of exceedances of federal limits on ground-level ozone, the key ingredient of urban smog.  In an area defined and treasured because of its remoteness, it’s clear vistas, and it’s lack of urbanity, that’s a big problem.

And while power plants aren’t the only source of pollution in the region, it’s becoming all too clear that the key to solving these problems is to tackle coal on the Colorado Plateau.

This imperative is especially urgent given there are still looming plans to expand the region’s coal footprint.  The proposed Desert Rock power plant in New Mexico is still on the table and there’s been a recent surge in Obama Administration support for expanding coal development on Navajo lands.  And Colorado has at least three new coal mine proposals developing, Oak Mesa, Red Cliff, and Sage Creek.

The list, unfortunately, is expanding.

Certainly, the Colorado Plateau is defined by its contrasts, but there’s been a certain harmony in all this.  The irony with coal is that is stands to overshadow even this region’s rich contradictions, especially as global warming makes this land ever drier, hotter, even dustier.

For anyone who loves the American West, there should be no question that there needs to be a move away from coal on the Colorado Plateau.

That may be the biggest understatement of them all.

Colorado Plateau Coal Map-March 2012

Wasted Opportunity

I wrote previously on Xcel Energy’s plans to lock into long-term coal contracts for coal that, well, didn’t seem to exist.

Well, the hype continues.  Most recently, Peabody Energy announced plans to invest $200 million to move its Twentymile coal mining operations in northwestern Colorado to the new Sage Creek coal, which boosters claim will produce 12 million tons of new coal a year. Of course, this would make it the biggest coal mine ever in Colorado, which is surprising given that according to U.S. Energy Information Administration coal production reports, no mine in the State has ever produced more than 10 million tons annually.

According to both Peabody and Xcel, the new coal investment will fuel long-term contracts for 40 million tons of coal from the Sage Creek mine to keep the Hayden coal-fired power plant in northwestern Colorado burning for 16 years.

Putting aside the hyperbole, though, including the fact that Peabody still doesn’t have its crucial federal coal lease to ensure its long-term supply, all I can say is, really?

Both Xcel and Peabody are digging in, literally, in what has to be one of the most backward investments in the U.S. right now.  Just in terms of air impacts, economists are saying that coal-fired electricity costs us up to more than 5 times the value that it provides.  And the trend for coal right now?  To paraphrase The Economist, it’s not good.

And as I wrote before, even Xcel admits that so far to date, coal costs for the Hayden plant have climbed by 70%.  This is on top of the $170 million the company and the other owners of the plant intend to spend on clean air retrofits at Hayden.  Even then, the company plans to shutter half of Hayden by 2025 and the other half by 2036.

It’s an admirable goal of retrofitting the plant with up-to-date pollution controls.  But with costs and uncertainty mounting, the only thing that seems certain is that this investment is fast becoming a toxic asset.

Even Peabody seems to be hedging its bets, claiming that coal from Sage Creek will also fuel exports to Europe.  So much for homegrown energy.

Xcel claims that retrofitting Hayden, in other words making its coal plant cleaner, is the lowest cost alternative for meeting Clean Air Act.  Yet at the same time, the company is distancing itself from renewable energy development.  This is the epitome of a self-fulfilling prophecy.

Despite all the hype, the signs aren’t good for Sage Creek and the Hayden power plant.  Peabody and Xcel can justify millions in short-term coal investments all they want, but in the end, it seems like wasted money and wasted opportunity.

The Sage Creek coal mine area near Hayden, Colorado (photo by John F. Russell).

Shutting ’em Down

Yes, it’s no surprise that WildEarth Guardians would like to see a coal-fired power plant that can’t comply with the Clean Air Act shut down rather than see it continue to pollute.

After all, we yank licenses from people who repeatedly violate traffic laws.  Why wouldn’t we do the same with polluters that put our air at risk?

But what of a coal-fired power plant that can comply with the Clean Air Act?  Should they all be shut down?

Well, from a practical standpoint, yes.

The evidence showing that coal plants cost more than the benefits they provide is mounting.  Not only have more and more economic studies confirmed this, but as The Economist reports in its latest edition, coal is certainly on the decline.  And news of more coal-fired power plant retirements just keep coming.

The question then becomes, should we spend more money on making coal clean, or invest that money in energy that’s clean from the start?

Case in point is here in the West, where dozens of aging coal-fired power plants are facing multi-million dollar clean air upgrades.  Take the San Juan Generation Station in New Mexico where Public Service Company of New Mexico, or PNM, is facing the prospect of spending hundreds of millions of dollars to make their coal-fired power plant cleaner than it is now.

Or take the Navajo Generating Station in Arizona, which the U.S. Interior Department says retrofitting with up-to-date clean air controls could “significantly increase water rates” for indigenous communities in the Four Corners region and Arizonans dependent upon the water pumped by this coal-fired power plant.

Sure, we need clean air, and we certainly need water, there’s no doubt about that.  But with the mounting liability of coal, the smarter choice seems to be to change course and start investing in energy that’s clean from the start.  And with the President himself calling for a national clean energy standard that will lead to a sharp reduction in coal use, the writing seems to be on the wall (true, there’s devils in them clean energy details, but the bottomline is it would mean less coal).

For the San Juan and Navajo Generating Stations, this means charting a path away from coal as soon as possible, rather than saddling New Mexico and Arizona citizens, as well as indigenous communities in the Four Corners region, with the cost of clean air upgrades that ultimately the debt of more coal.

This isn’t radical environmentalism, folks.  This is the plain and simple truth that coal carries liabilities that in this day of age, just aren’t acceptable.  As recent Colorado College polling data confirms, westerners overwhelmingly support clean energy over coal.

It’s one thing to violate the Clean Air Act.  That’s reprehensible.  It’s another to violate the laws of common sense.

As the liability of coal continues to mount, then yes, it makes sense to shut down coal-fired power plants and invest in a better way to generate electricity.  For those of us in the American West that cherish clean air and water, the shift can’t come soon enough.

Coal can do that?

The reality of coal.

Greed Trumps Clean Energy at PNM

At last, the truth is coming out.

PNM is fighting the U.S. Environmental Protection Agency’s plan to clean up the company’s coal-fired San Juan Generating Station not because they want to protect ratepayers and not because they have a better plan.

It’s because they don’t have any money.

In a motion asking the federal 10th Circuit Court of Appeals in Denver to put the brakes on the EPA’s clean up plan, the company, which is New Mexico’s largest utility, stated that it “does not have sufficient internally generated cash flow to pay for the SCR project and will have to raise substantial funding for it in the capital markets.”

In other words, their pockets are empty.  And to pay to clean up the San Juan Generating Station’s air pollution would require fundraising in capital markets.

Now normally, that wouldn’t be a problem for a big utility, especially one that’s a regulated monopoly, like PNM.  Remember, under New Mexico law, the company is guaranteed to recover a reasonable rate of return from its customers, which makes it a “can’t lose” investment.

Except, somehow, investments in PNM are losing.

In testimony submitted to the 10th Circuit, PNM treasurer, Terry Horn, explained not only that “Standard and Poor’s currently rates PNM as below investment grade” but also that “PNM Resource, Inc. common stock trades well below its book value.”

Put another way, the company’s credit is in the pits, meaning the market has no faith that investments in PNM will pay off as expected.  As a result, the cost of acquiring new capital to pay for clean air retrofits promises to be enormous.

As if that wasn’t enough, PNM’s ability to recover the costs of financing the clean air retrofits would be questionable, at best.  Under New Mexico law, the company can only recover costs that are “reasonable and prudent.”  By any measure, it’s difficult to believe that exorbitant finance costs stemming from the company’s poor credit would be considered “reasonable and prudent.”

In the end, PNM’s shareholders will have to absorb the finance costs and possibly more.  It’s no wonder the company is freaked out.

Unfortunately, instead of coming clean with its financial predicament, PNM is resorting to greedy desperation.  Like attacking the EPA’s clean air plan.  And worse, they’re working to pass legislation that would impose a “non-bypassable surcharge” on New Mexico ratepayers, a scheme that would essentially force ratepayers to cover the costs of cleaning up the San Juan Generating Station, regardless of whether those costs are reasonable and prudent.

Worst of all, though, now they’re accusing the concerned public of being liars.

Case in point is a letter that PNM’s Executive Director for Environmental Services, Maureen Gannon, sent to WildEarth Guardians the day before Thanksgiving.

In the letter, PNM accuses WildEarth Guardians of being inaccurate.  What are these inaccuracies, you might ask?  Let’s take a look:

  • PNM claims that WildEarth Guardians is inaccurate in asserting that the “only alternative offered by PNM is to continue operating the plant as is with nominal pollution controls.”  Yet according to the numbers, this statement is not inaccurate.  PNM spurred the State of New Mexico to adopt a plan that would reduce nitrogen oxide emissions by only 17%, whereas the EPA’s plan would reduce emissions by 83% (the baseline nitrogen oxide emission rate for the power plant is 0.28 pounds per million Btus—the EPA’s plan would reduce that rate to 0.05 pounds per million Btus whereas PNM’s pla would reduce that rate to only 0.23 pounds per million Btus).

I suppose “nominal” is in the eyes of the beholder, but a 17% compared to an 83% reduction in harmful emissions seems to speak for itself.

  • PNM further claims that WildEarth Guardians is inaccurate in asserting that “PNM has proposed to force ratepayers to cover the full costs of air pollution controls without determining whether such costs are reasonable and prudent,” which is interesting because, as mentioned, the company has proposed a scheme to foist a a non-bypassable surcharge upon ratepayers to cover the costs of the clean up.
  • Most significantly, PNM also takes issue with modeling showing that the San Juan Generating Station contributes to 33 premature deaths at a cost of more than $250 million annually.  The company is referring to a Clean Air Task Force report that modeled the health risks of coal-fired power plants throughout the country using the same methodologies used by the EPA to estimate the health costs of benefits of major clean air regulations.

PNM may disagree with the methods used by health and environmental regulators to estimate costs and benefits, but that doesn’t mean the modeling is flawed.  And it certainly does not mean there are no health risks from the San Juan Generating Station, as the company asserts.

Sadly, rather than face the truth, it’s just more hot air from PNM.

Despite their claims of inaccuracies, their claims that they are looking out for ratepayers, and their claims that their plan is somehow better than the EPA’s, PNM can’t hide the fact that it cares more about making money than about protecting clean air, public health, and our environment from the coal burning San Juan Generating Station.

WildEarthGuardians_PNMActionNov2011_AnaJune_IMG_5146

Xcel Hedging Bets on Imaginary Coal

The cost of coal is going up, but rather than find a cleaner, more affordable path forward, Xcel Energy is hedging its bets that it can simply pass along these rising costs to ratepayers.

But at the company’s Hayden power plant in northwestern Colorado, betting on coal seems to be defying all odds.  In fact, they seem to be betting it all on a new coal mine that doesn’t exist.  All this just exposes just how tenuous the future of the Hayden power plant really is and how Xcel’s betting is likely to backfire big time.

In testimony filed yesterday before the Colorado Public Utilities Commission (PUC), Xcel Vice President Karen Hyde revealed that “coal supply is more expensive than what we are currently paying at Hayden…” (see Hyde testimony at page 18).  Boy was she right.  According to supporting testimony from Xcel employee Susan Arigoni, by 2018 the cost of coal will be nearly 70% higher than previously estimated (see Arigoni testimony at page 12).

This testimony is significant because it comes as Xcel is trying to convince the PUC that retrofitting the Hayden power plant with modern air pollution controls is cheaper than shutting down the power plant altogether.

In other words, if Xcel wins, they get their retrofits and ratepayers get stuck with the bill.  If Xcel loses, the Hayden plant goes down.

It’s a pivotal moment, and although the odds seem even, if not stacked in favor of Xcel, in reality, the odds are much worse for the company and its Hayden plant.  Here’s why.

To begin with, although Susan Arigoni claims that a growing coal export market is fueling price increases, the reality is prices are going up because Hayden’s supply is dwindling.

Here’s the pickle:  The coal mine that currently  fuels the Hayden plant, the Twentymile mine, is slated to play out by 2013.  And although there is another coal mine nearby, the ColoWyo mine, that could fuel the plant, that mine is not only slated to play out by 2017, but the remaining production is already under contract.

Put another way, the Hayden power plant will have no coal after 2013.

So how has Xcel proposed to get out of this pickle?  They’ve proposed to lock into a long-term coal supply contract from Peabody Energy’s Sage Creek coal mine.  As Susan Arigoni testified:

The Peabody interests of developing a structure for a long-term contract that would underpin Sage Creek development align with Public Service’s need for a long-term, reliable supply to support the long-term operation of the plant. Public Service was able to balance its lack of competitive options with Peabody’s interests to achieve a transaction that provides a long-term supply for Hayden.

Of course, there’s only one problem.  The Sage Creek coal mine doesn’t yet exist (check out the map of the “proposed” coal mine).  It hasn’t been constructed, hasn’t even permitted, and doesn’t even have the necessary federal coal lease.

So the long-term contract is, for all intents and purposes, make believe.  There is no coal.

And it’s truly questionable whether there will be coal.  Although the U.S. Bureau of Land Management (BLM) is proposing to issue a federal coal lease to Peabody for the Sage Creek mine, the proposal so far has been riddled with flaws.

As WildEarth Guardians commented last September, the BLM’s proposal makes a mockery of the environmental review process.  The agency went so far as to claim the environmental impacts associated with burning the coal would be speculative, yet it’s been clear from day one that Sage Creek was intended to fuel the Hayden power plant.

To say the least, the BLM’s proposed lease is vulnerable.  And that means the Sage Creek coal mine is far from a done deal.

Which also means the future Hayden power plant is far from certain.  And yet, as the latest filings show, Xcel seems committed to risking it all on coal.  In this case, imaginary coal.

It’s a dangerous dirty energy gamble that seems destined to leave Xcel, and in turn its ratepayers, broke.

Hayden Station
Every year, the Hayden coal-fired power plant contributes to 6 deaths, 10 heart attacks, 120 asthma attacks, and other adverse health impacts, all at a cost of $46 million.