This past year marked significant political tension on energy and environmental issues along with ongoing court battles on a variety of matters that will likely define both the boundaries between federal and state government authority to regulate energy and the limits of the Environmental Protection Agency to reduce greenhouse gas emissions from existing power plants.
But 2015 also evidenced a continued expansion of a variety of initiatives by state and local governments to promote sustainability and address climate change. Most noteworthy was the increased use of public private partnerships to build green infrastructure and promote renewable energy.
During the year, the Republican congressional majority and some oil-state Democrats favored energy supply measures while President Obama pressed for actions to reduce greenhouse gases. President Obama continued prior year’s efforts to address climate change through Executive Order and agency rulemaking.
The political tension nationally was visible as the year began with the Republican controlled Congress passing and President Obama vetoing a bill to approve the Keystone XL crude oil pipeline. Then, in November, the U.S. Department of State denied Keystone’s application for a key permit to build the necessary import facilities at the U.S.-Canadian border.
In December 2015, Congress passed omnibus spending and tax bills that evidenced the opposing political views on energy production and climate change. The bills lifted a ban on U.S. crude oil exports, and extended the investment and production tax credits for solar and wind power developers (Climate Wire/Dec. 21, 2015).
Tension between energy supply, energy cost and environmental considerations played out at the federal administrative level as the agencies responsible for overseeing the wholesale interstate natural gas and electric markets, and the agency responsible for environmental protection dealt with an array of matters, including consideration of the impacts on energy markets of the Environmental Protection Agency’s Clean Power Plan.
The Federal Energy Regulatory Commission, the federal agency charged with reviewing new natural gas pipeline construction projects, continued to process numerous applications for new pipeline capacity. The abundance of domestic natural gas supplies from hydraulic fracturing of shale formations also continued to lead to new liquefied natural gas export projects.
However, mindful of new and anticipated environmental and other rules, FERC announced a new policy to provide interstate natural gas pipelines with a process to make it easier for them to recover the costs of new or improved infrastructure that enhances system reliability, safety or environmental regulatory compliance.
At the same time, FERC rejected arguments advanced by environmental groups in a number of cases during the year that FERC’s environmental review of proposed LNG export projects should consider higher levels of carbon emissions resulting from increased natural gas production caused by the projects.
Against the political backdrop of a Republican controlled Congress and in anticipation of the international climate change conference in Paris during early December, in October 2015, the Environmental Protection Agency published its final Clean Power Plan to reduce greenhouse gas emissions from existing fossil-fueled electric power plants and a companion rule to limit greenhouse gas emissions from new, modified and reconstructed power plants.
As people and businesses staked out sides in the battle over EPA’s new power plant rules, the market revealed a continued decrease in the price of gas relative to coal. As a result, during 2015, natural gas made further inroads to replace coal as an energy source for electric power generation.
A number of states filed court challenges to the EPA’s final Clean Power Plan, which requires states to come up with plans to reduce carbon emissions from coal and oil-fired electric generators to 32 percent below 2005 levels by the year 2030. Other ongoing court battles ensued.
The Supreme Court invalidated the EPA’s rule setting limits on mercury, arsenic and acid gas emissions from coal-fired power plants. The Supreme Court heard argument on the legality of a federal rule to price an electric product known as demand response. Demand response represents the reduction in a customer’s electricity usage during extreme peak periods and serves as a substitute for additional electricity generation. The Supreme Court received briefs on separate Maryland and New Jersey laws to promote local electric generation in their respective jurisdictions, which lower courts had found unconstitutional.
Even as federal court challenges on energy and environmental matters revealed the continuing evolution of federalism, states and cities continued to take a leading role to promote greater reliance on renewable energy and reduction of greenhouse gas emissions.
Based on 2015 data, 37 states, including Maryland and Virginia, plus D.C. and four U.S. territories have requirements or goals in place regarding the portion of electricity their local utilities must purchase from renewable energy, according to a data base maintained by North Carolina State University and funded by the U.S. Department of Energy. Forty four states plus D.C. have rules that allow homeowners and businesses with rooftop solar panels and other local generation to sell excess power back into the electric grid.
States and cities have assumed a critical role in adopting energy and environmental policies to reduce greenhouse gases and promote sustainability. During 2015, states and cities increasingly relied on joint government and private sector partnerships to build green infrastructure, such as rain gardens and bioswales in urban areas, to reduce stormwater runoff. States and cities also continued to support renewable energy through joint government private sector partnerships, such as waste-to-energy projects that use trash and other refuse to produce electricity.
Illustrative of these new partnerships is one that Prince George’s County, Maryland commenced during 2015 with Corvias Solutions to design, build and maintain green stormwater infrastructure. Corvias Solutions is a private business specializing in helping the public sector finance energy, environment and infrastructure.
The Prince George’s County-Corvias partnership also reflects two other trends, greater use of community-based projects, and a movement to use green rather than gray infrastructure to address stormwater runoff. Community-based projects involve multiple local stakeholders beginning with the early design phases of a project. Green infrastructure uses natural processes to retain, clean and absorb stormwater. The bioswales D.C. has constructed throughout the city represent a type of green infrastructure.
The tone of the national political discourse and the complexity of the issues made a meaningful and broad public debate about energy and environmental policies difficult during 2015. Yet, state and local governments, together with private industry and, in many instances, the federal government, worked in partnership to build green infrastructure, expand purchases of renewable energy, and promote development of new carbon-reducing technologies.