Combined Renewable Energy Powerplant

AEP Settles With Government

AEP Settles Long-Running U.S. Acid Rain Suit
October 9, 2007 -- Reuters via ENN

U.S. power generator American Electric Power has settled an eight-year legal battle over acid rain with the U.S. government and other plaintiffs, but the agreement will not change the company's 2007 earnings, a spokesman said on Monday.

It agreed to pay $15 million in civil penalties and $60 million in pollution cleanup costs to end the long-running dispute about whether AEP illegally modified power plants and spewed acid rain producing chemicals across the northeastern United States.

AEP's biggest expense as a result of the suit will not start until 2017, spokesman Pat Hemlepp told Reuters by telephone. The company will spend $1.6 billion, in current dollars, primarily to upgrade a major coal-fired power plant in southern Indiana...

"This ends all litigation on this," Hemlepp said, adding that the deal would be formally announced on Tuesday morning.

AEP admits no wrong in the settlement. Hemlepp said that the company decided it was best to settle the suit rather than to drag it out any further.

The suit, brought in 1999, accused AEP of expanding or modifying its older plants without installing pollution-control equipment that would have curbed emissions that cause acid rain.

The suit involved nine of the oldest coal-fired plants of the Columbus, Ohio-based power generator. Those plants are in Indiana, Ohio, Kentucky, Virginia and West Virginia.

AEP, with 38,000 megawatts of power generating capacity, is one of the largest power producers in the United States. About two-thirds of AEP's power is made by burning coal, which creates emissions that cause acid rain, including nitrogen oxide and sulfur dioxide.

The eight states mainly from the U.S. Northeast involved in the suit are the ones that claim they are affected by the acid rain caused by the coal-fired AEP plants in other states. The states that joined the suit are New York, New Jersey, Maryland, Connecticut, Massachusetts, New Hampshire, Vermont and Rhode Island.

There are 14 environmental groups involved in the suit. Attempts to reach the Environmental Protection Agency and other plaintiffs were not successful.

AEP is among the utilities that have long fought the Environmental Protection Agency and so-called "new source review." Set up in the 1970s by various provisions of the Clean Air Act, new source review requires new plants or substantial expansion to existing plants -- the sources of emission -- have preconstruction environmental reviews.

Environmentalists have long charged that utilities, including AEP which has one of the largest fleets of older coal-fired plants, went ahead with expansions without seeking new source reviews.

The utilities and the EPA have fought over what type of expansions are to be included in the new source reviews for three decades. The Clinton administration settled many of the battles between utilities and the EPA but President George W. Bush's administration threw out those agreements.

Hemlepp said AEP has not violated the process and is cleaning up its fleet already, without pressure from the lawsuit it has now settled.

He said that AEP would stick to its forecast of $2.90 to $3.00 ongoing earnings per share in 2007, and the agreement would not affect the 2008-2010 capital spending plan, he added.

"We still strongly feel we did not violate the new source review regulations," Hemlepp said.

PG&E Gives Away 1 Million CFLs

PG&E Gives Away 1 Million Energy Efficient Light Bulbs
October 3, 2007 -- By Todd Woody, Green Wombat

In the U.S.' biggest compact fluorescent light bulb giveaway, California utility PG&E began handing out 1 million energy-efficient CFLs today. The bulbs use 75 percent less electricity than conventional incandescent lighting and they've become something of an icon in the fight against global warming given that lighting accounts for a big chunk of greenhouse gas emissions. Wal-Mart (WMT) in particular has jumped on the CFL bandwagon, announcing Tuesday it had already exceeded its goal of selling 100 million bulbs by the end of 2007.

The PG&E (PCG) giveaway is part of its efforts to push 20 million CFLs into customers' homes by the end of the year. PG&E spokesperson Keely Wachs told Green Wombat that the utility will spend $1.25 million on the freebies. Or more accurately, PG&E customers will spend that as the giveaway comes under the utility's state-mandated energy efficiency efforts whose costs regulators permit to be recouped through electricity rates. "The benefits of handing these out and the energy efficiency that will be realized far outweigh our costs to customers," Wachs says.

PG&E estimates over the lifetime of the 1 million bulbs - if they're installed in California homes - will save more 400,000 megawatts of electricity and eliminate 200,000 tons of greenhouse gases. Tomorrow PG&E will announce a deal with Safeway (SWY) grocery stores to sell CFLs at a discount.

Climate Change Agreement by 2009?

Avoiding Collapse in Modern Civilization

THE NATURE OF THE NEW WORLD
October 2, 2007 -- By Lester R. Brown, Earth Policy Institute

Plan B 2.0 Book Byte:

We recently entered a new century, but we are also entering a new world, one where the collisions between our demands and the earth’s capacity to satisfy them are becoming daily events. It may be another crop-withering heat wave, another village abandoned because of invading sand dunes, or another aquifer pumped dry. If we do not act quickly to reverse the trends, these seemingly isolated events will occur more and more frequently, accumulating and combining to determine our future.

Resources that accumulated over eons of geological time are being consumed in a single human lifespan. We are crossing natural thresholds that we cannot see and violating deadlines that we do not recognize. These deadlines, determined by nature, are not politically negotiable.

Nature has many thresholds that we discover only when it is too late. In our fast-forward world, we learn that we have crossed them only after the fact, leaving little time to adjust. For example, when we exceed the sustainable catch of a fishery, the stocks begin to shrink. Once this threshold is crossed, we have a limited time in which to back off and lighten the catch. If we fail to meet this deadline, breeding populations shrink to where the fishery is no longer viable, and it collapses.

We know from earlier civilizations that the lead indicators of economic decline were environmental, not economic. The trees went first, then the soil, and finally the civilization itself. To archeologists, the sequence is all too familiar.

Our situation today is far more challenging because in addition to shrinking forests and eroding soils, we must deal with falling water tables, more frequent crop-withering heat waves, collapsing fisheries, expanding deserts, deteriorating rangelands, dying coral reefs, melting glaciers, rising seas, more-powerful storms, disappearing species, and, soon, shrinking oil supplies. Although these ecologically destructive trends have been evident for some time, and some have been reversed at the national level, not one has been reversed at the global level.

The bottom line is that the world is in what ecologists call an “overshoot-and-collapse” mode. Demand has exceeded the sustainable yield of natural systems at the local level countless times in the past. Now, for the first time, it is doing so at the global level. Forests are shrinking for the world as a whole. Fishery collapses are widespread. Grasslands are deteriorating on every continent. Water tables are falling in many countries. Carbon dioxide (CO2) emissions exceed CO2 sequestration.

In 2002, a team of scientists led by Mathis Wackernagel, who now heads the Global Footprint Network, concluded that humanity’s collective demands first surpassed the earth’s regenerative capacity around 1980. Their study, published by the U.S. National Academy of Sciences, estimated that global demands in 1999 exceeded that capacity by 20 percent. The gap, growing by 1 percent or so a year, is now much wider. We are meeting current demands by consuming the earth’s natural assets, setting the stage for decline and collapse.

In a rather ingenious approach to calculating the human physical presence on the planet, Paul MacCready, the founder and Chairman of AeroVironment and designer of the first solar-powered aircraft, has calculated the weight of all vertebrates on the land and in the air. He notes that when agriculture began, humans, their livestock, and pets together accounted for less than 0.1 percent of the total. Today, he estimates, this group accounts for 98 percent of the earth’s total vertebrate biomass, leaving only 2 percent for the wild portion, the latter including all the deer, wildebeests, elephants, great cats, birds, small mammals, and so forth.

Ecologists are intimately familiar with the overshoot-and-collapse phenomenon. One of their favorite examples began in 1944, when the Coast Guard introduced 29 reindeer on remote St. Matthew Island in the Bering Sea to serve as the backup food source for the 19 men operating a station there. After World War II ended a year later, the base was closed and the men left the island. When U.S. Fish and Wildlife Service biologist David Kline visited St. Matthew in 1957, he discovered a thriving population of 1,350 reindeer feeding on the thick mat of lichen that covered the 332-square-kilometer (128-square-mile) island. In the absence of any predators, the population was exploding. By 1963, it had reached 6,000. He returned to St. Matthew in 1966 and discovered an island strewn with reindeer skeletons and not much lichen. Only 42 of the reindeer survived: 41 females and 1 not entirely healthy male. There were no fawns. By 1980 or so, the remaining reindeer had died off.

Like the deer on St. Matthew Island, we too are overconsuming our natural resources. Overshoot leads sometimes to decline and sometimes to a complete collapse. It is not always clear which it will be. In the former, a remnant of the population or economic activity survives in a resource-depleted environment. For example, as the environmental resource base of Easter Island in the South Pacific deteriorated, its population declined from a peak of 20,000 several centuries ago to today’s population of fewer than 4,000. In contrast, the 500-year-old Norse settlement in Greenland collapsed during the 1400s, disappearing entirely in the face of environmental adversity.

Even as the global population is climbing and the economy’s environmental support systems are deteriorating, the world is pumping oil with reckless abandon. Leading geologists now think oil production may soon peak and turn downward. Although no one knows exactly when oil production will peak, supply is already lagging behind demand, driving prices upward.

Faced with a seemingly insatiable demand for automotive fuel, farmers will want to clear more and more of the remaining tropical forests to produce sugarcane, oil palms, and other high-yielding biofuel crops. Already, billions of dollars of private capital are moving into this effort. In effect, the rising price of oil is generating a massive new threat to the earth’s biological diversity.

As the demand for farm commodities climbs, it is shifting the focus of international trade concerns from the traditional goal of assured access to markets to one of assured access to supplies. Countries heavily dependent on imported grain for food are beginning to worry that buyers for fuel distilleries may outbid them for supplies. As oil security deteriorates, so, too, will food security.

As the role of oil recedes, the process of globalization will be reversed in fundamental ways. As the world turned to oil during the last century, the energy economy became increasingly globalized, with the world depending heavily on a handful of countries in the Middle East for energy supplies. Now as the world turns to wind, solar cells, and geothermal energy in this century, we are witnessing the localization of the world energy economy.

The world is facing the emergence of a geopolitics of scarcity, which is already highly visible in the efforts by China, India, and other developing countries to ensure their access to oil supplies. In the future, the issue will be who gets access to not only Middle Eastern oil but also Brazilian ethanol and North American grain. Pressures on land and water resources, already excessive in most of the world, will intensify further as the demand for biofuels climbs. This geopolitics of scarcity is an early manifestation of civilization in an overshoot-and-collapse mode, much like the one that emerged among the Mayan cities competing for food in that civilization’s waning years.

You do not need to be an ecologist to see that if recent environmental trends continue, the global economy eventually will come crashing down. It is not knowledge that we lack. At issue is whether national governments can stabilize population and restructure the economy before time runs out.

In addition, here is a synopsis of Jared Diamond's book entitled Collapse:

Diamond lists eight factors which have historically contributed to the collapse of past societies:

1. Deforestation and habitat destruction
2. Soil problems (erosion, salinization, and soil fertility losses)
3. Water management problems
4. Overhunting
5. Overfishing
6. Effects of introduced species on native species
7. Human population growth
8. Increased per-capita impact of people

Further he says four new factors may contribute to the weakening and collapse of present and future societies:

1. Human-caused climate change
2. Buildup of toxic chemicals in the environment
3. Energy shortages
4. Full human utilization of the Earth’s photosynthetic capacity

Biofuels May Raise GHG Emissions, says Nobel Laureate Paul Crutzen

Biofuels could boost global warming, finds study
September 21, 2007 -- By Zoe Corbyn, Chemistry World

Growing and burning many biofuels may actually raise rather than lower greenhouse gas emissions, a new study led by Nobel prize-winning chemist Paul Crutzen has shown. The findings come in the wake of a recent OECD report, which warned nations not to rush headlong into growing energy crops because they cause food shortages and damage biodiversity.

Crutzen and colleagues have calculated that growing some of the most commonly used biofuel crops releases around twice the amount of the potent greenhouse gas nitrous oxide (N2O) than previously thought - wiping out any benefits from not using fossil fuels and, worse, probably contributing to global warming. The work appears in Atmospheric Chemistry and Physics and is currently subject to open review.

'The significance of it is that the supposed benefits of biofuel are even more disputable than had been thought hitherto,' Keith Smith, a co-author on the paper from the University of Edinburgh, told Chemistry World. 'What we are saying is that [growing many biofuels] is probably of no benefit and in fact is actually making the climate issue worse.'

Crutzen, famous for his work on nitrogen oxides and the ozone layer, declined to comment before the paper is officially published. But the paper suggests that microbes convert much more of the nitrogen in fertiliser to N2O than previously thought - 3 to 5 per cent or twice the widely accepted figure of 2 per cent used by the International Panel on Climate Change (IPCC).

For rapeseed biodiesel, which accounts for about 80 per cent of the biofuel production in Europe, the relative warming due to N2O emissions is estimated at 1 to 1.7 times larger than the quasi-cooling effect due to saved fossil CO2 emissions. For corn bioethanol, dominant in the US, the figure is 0.9 to 1.5. Only cane sugar bioethanol - with a relative warming of 0.5 to 0.9 - looks like a viable alternative to conventional fuels.

Some previous estimates had suggested that biofuels could cut greenhouse gas emissions by up to 40 per cent.

Global picture

The IPCC's N2O conversion factor is derived using data from plant experiments. But Crutzen takes a different approach, using atmospheric measurements and ice core data to calculate the total amount of N2O in the atmosphere. He then subtracts the level of N2O in pre-industrial times - before fertilizers were available - to take account of N2O from natural processes such as leguminous plants growing in forests, lightning, and burn offs.

Assuming the rest of the N2O is attributable to newly-fixed nitrogen from fertilizer use, and knowing the amount of fertilizer applied globally, he can calculate thecontribution of fertilizers to N2O levels.

The results may well trigger a rethink by the IPCC, says Smith. 'Should we go along the road of adding up the experimental evidence for each of the processes or are we better off using the global numbers?'

Critical reception

But other experts are critical of Crutzen's approach. Simon Donner, a nitrogen researcher based at Princeton University, US, says the method is elegant but there is little evidence to show the N2O yield from fertilized plants is really as high as 3-5 per cent. Crutzen's basic assumption, that pre-industrial N2O emissions are the same as natural N2O emissions, is 'probably wrong', says Donner.

One reason he gives is that farmers plant crops in places that have nitrogen rich soils anyway. 'It is possible we are indirectly increasing the "natural" source of N2O by drawing down the soil nitrogen in the world's agricultural regions,' he explains.

Others dispute the values chosen by Crutzen to calculate his budget. Stefan Rauh, an agricultural scientist at the Instituteof Agricultural Economics and Farm Management in Munich, Germany, says some of the rates for converting crops into biofuel should be higher. 'If you use the other factors you get a little net climate cooling,' he said.

Meanwhile, a report prepared by the OECD for a recent Round Table on Sustainable Development questions the benefits of first generation biofuels and concludes that governments should scrap mandatory targets.

Richard Doornbosch, the report's author, says both the report and Crutzen's work highlights the importance of establishing correct full life-cycle assessments for biofuels. 'Without them, government policies can't distinguish between one biofuel and another - risking making problems worse,' said Doornbosch.

Carbon Tax, CAFE Standards and Cap-and-Trade: An Economist's View

One Answer to Global Warming: A New Tax
September 16, 2007 -- By N. Gregory Mankiw, The New York Times

In the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal.

Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.)

More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation.

A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax.

But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero.

Agreement on a truly global cap-and-trade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem.

But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies.

A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best.

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.