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New studies: Methane emissions from Canadian oil & gas industry are worse than reported

By Drew Nelson

Two studies released this week make it clear that Canada’s push toward methane regulations for the oil and gas industry is a smart move. And, while data of Canada’s oil and gas methane problem is still limited, these studies reinforce what research of the U.S. oil and gas industry found: oil and gas facilities are leaking far more than the industry reports — and more than it would like us to believe.

The first study, focused on Alberta and released by the Canadian environmental action organization Environmental Defence, concluded that industry is underreporting the amount of equipment located at their facilities, which means they emit more than official emission inventories report. Additionally, the study found that Alberta’s oil and gas facilities average about one large emission source per well.

The second, conducted by the David Suzuki Foundation and focused in British Columbia, measured methane emissions at existing oil and gas facilities and found that emissions are large and widespread. In fact, in just one development area of British Columbia, facilities could leak 111,800 tons of methane each year – the climate pollution equivalent of burning more than 4.5 million tons of coal or more than two million cars over the next two decades. Further, methane emissions from this area were shown to be at least 2.5 times higher than reported by the B.C. government but may be much higher.

This new research is troubling for several reasons.

First, methane’s not a usual pollutant. Because methane is the primary ingredient of natural gas, every ton of avoided emissions is a ton of natural gas that can be sold. In 2015, more than $320 million USD of methane (95 billion cubic feet) escaped from oil and gas operations in Canada. That amount of wasted fuel was enough to serve all the households in Edmonton and Calgary combined for the entire year.

In addition to being wasteful, these emissions are also exacerbating global warming. Methane is over 80 times more potent a heat trapper than carbon dioxide over the first 20 years in the atmosphere.

Finally, the oil and gas industry is the largest source of man-made methane emissions in Canada. If its methane emissions are dangerously under-reported, the country’s other attempts to reduce its climate emissions are severely undercut.

Together, these two studies underscore the importance of Canada’s effort and Alberta’s action to stem methane emissions from its oil and gas industry. They also expose the folly of industry’s seemingly contradictory claims that (1) there’s no problem, and (2) regulations aren’t necessary because they’ll fix the problem voluntarily. But if industry can’t even report accurate emission figures, how are we to believe it will reduce them?

Economic analyses have shown that methane reduction is extremely cost effective and one of the most powerful short-term climate strategies at our disposal. In the last few years, leaders in Canada and Alberta have demonstrated they agree by committing significant reductions of oil and gas methane emissions by 2025. For context, a 45% reduction worldwide would have the same 20-year climate impact as closing one-third of the world’s coal plants.

These new studies — and the research that must follow — show that policy makers in Ottawa and Edmonton must reduce these emissions, even in the face of growing pressure from industry to walk back their commitments. Methane emissions are a problem around the world, specifically in the oil and gas industry. These new Canadian studies add to the growing body of research that show the problem is worse than we once thought. Fortunately, there are many simple and affordable solutions available to reduce these emissions and, in turn, cut needless energy waste and climate pollution. The need for strong methane rules in Canada and Alberta has never been clearer, and neither has the opportunity for Canada and Alberta to make their oil and gas industry cleaner, more efficient and more responsible.

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American leaders support clean air and climate progress — regardless of Trump’s executive order

By EDF Blogs

A sample of the diverse groups that have come out against President Trump’s Executive Order on climate change.

By Charlie Jiang

President Trump’s executive order seeking to unravel critical public health and climate protections — including the Clean Power Plan — is being met with strong rebuttals and a clear demonstration of ongoing climate leadership from across the country.

An extraordinary diversity of American faith and justice leaders, businesses, health and security experts, and elected officials have spoken out against Trump’s actions or vowed to continue reducing carbon pollution and move towards a low-carbon future.

The overwhelming response to these recent attacks on our vital climate safeguards shows that Americans are coming together to protect our communities. Millions of Americans — a majority of adults in every congressional district — support limiting carbon emissions to guard against climate instability.

Here are some highlights from the many powerful statements made in the last week:

Leaders from at least 15 faith communities raised alarm at the dangerous impacts rolling back climate progress would have on America’s most vulnerable communities:

  • The United Church of Christ’s national leadership said: “Because climate change makes all other injustice worse, now is the time for us to step up.”
  • “The Clean Power Plan [gives] states a framework for progress in the sacred work of safeguarding our earth’s natural resources,” affirmed Rabbi Jonah Dov Pesner on behalf of Reform Judaism
  • “The absence of a strong climate policy means more dangerous pollution that harms the unborn and children,” warned Evangelical Environmental Network President and CEO Mitch Hescox.
  • “This is a challenge for us,” said Vatican leader Cardinal Peter Turkson, a chief architect of the Pope’s “Laudato Si” encyclical on climate change. “Fortunately, in the United States, there are dissenting voices, people who are against Trump’s positions.”

Health associations representing more than 500,000 doctors and medical experts emphasized the public health imperative of reducing air pollution and addressing climate change:

  • “Implementing the Clean Power Plan alone would prevent 90,000 asthma attacks and 3,600 premature deaths every year once fully in place, wrote the American Lung Association. “Our nation needs these lifesaving protections.”
  • The Medical Society Consortium on Climate and Health said “As medical professionals, many of our members know firsthand the harmful health effects of climate change on patients.”
  • “Clean air should not be a luxury, and it should not be determined by ZIP code,” said the American Academy of Pediatrics.

At least 75 mayors, state governors, and attorneys general who represent more than 149 million people — nearly half of the U.S. population — reiterated the need to combat climate change and protect the communities they serve:

  • Pennsylvania Gov. Tom Wolf said: “The science of climate change is settled and the President’s actions today turn the federal government’s back on Pennsylvania’s environment and our economy.”
  • Colorado Gov. John Hickenlooper said: “We will keep building a clean energy future that creates Colorado jobs, improves our health and addresses the harmful consequences of a changing climate.”
  • A coalition of 23 attorneys general and local legal counsels from states including California, Illinois, Iowa, Maryland, and Virginia wrote: “We won’t hesitate to protect those we serve—including by aggressively opposing in court President Trump’s actions that ignore both the law and the critical importance of confronting the very real threat of climate change.”
  • Mayors from 47 cities including Houston (TX), Knoxville (TN), Durham (NC), Fayetteville (AR), Los Angeles (CA), Chicago (IL), and New York City, released a letter reading, “Climate change is both the greatest single threat we face, and our greatest economic opportunity for our nation.”

 

Power companies owning generating capacity able to power roughly two-thirds of all homes in the U.S. spoke out to recommit to providing ever more clean energy in the wake of the executive order. Here is a sample:

  • “We intend to keep moving forward with a low-priced, clean energy strategy that provides the economical, clean energy our customers want,” said Ben Fowke, CEO of Xcel Energy.
  • “Going forward, we anticipate an increase in renewable generation capacity and declining utilization of coal,” said Southern Company spokesperson Terrell McCollum.
  • “We will continue our transition to more natural gas and renewables as we balance out our generation portfolio and provide cleaner energy,” said a spokesperson for American Electric Power.
  • “Because of the competitive price of natural gas and the declining price of renewables, continuing to drive carbon out makes sense for us,” said Duke Energy CEO Lynn Good.

 

Reducing carbon emissions and moving to cleaner sources of energy is good for business, say Fortune 500 companies including Apple, General Electric, and Walmart.

  • “We’re disappointed the administration has decided to roll back climate regulations such as the Clean Power Plan and others,” said Edward Hoover, a senior executive at Mars Inc.
  • Fighting climate change is “good for the business, our shareholders and customers,” said a Walmart
  • “We believe climate change should be addressed on a global basis,” wrote General Electric CEO Jeff Immelt. “We hope that the United States continues to play a constructive role in furthering solutions to these challenges.”
  • “We believe that strong clean energy and climate policies, like the Clean Power Plan, can make renewable energy supplies more robust and address the serious threat of climate change while also supporting American competitiveness, innovation, and job growth,” a group of tech companies including Google, Apple, Microsoft, and Amazon said in a statement.

Leading national security experts warned of the impact President Trump’s order will have on American security.

  • The non-partisan American Security Project said: “While energy independence is a credible goal, the actions suggested will not lead to real energy security. Rather, the order removes basic programs, such as the Clean Power Plan and climate resilient development, which bolster the security of our country.”
  • Alice Hill, a former resilience policy advisor to the National Security Council under President Obama said: “Deliberately ignoring the devastation brought by climate change will leave us anything but secure.”

Officials who served administrations in both parties criticized moving backwards on climate:

  • “This is not just dangerous; it’s embarrassing to us and our businesses on a global scale to be dismissing opportunities for new technologies, economic growth, and U.S. leadership,” said Gina McCarthy, former EPA administrator under Barack Obama.
  • Asked about rumors the Trump Administration could abandon the Paris Agreement, Christine Todd Whitman, an EPA administrator under George W. Bush, said, “We lose any ability, any moral authority, to say to any other country, ‘You have to clean up your act.’”
  • Trump’s order “is reckless, arrogant policy that ignores the safety and well-being of our country and our children,” said former Special Envoy for Climate Change Todd Stern, who helped broker the Paris Agreement.

 

Community organizers working for environmental justice condemned President Trump’s attacks on America’s most vulnerable communities:

  • “The decision by President Donald Trump to roll back the hard fought progress made on clean air and clean energy is extremely disappointing and dangerous,” said NAACP President & CEO Cornell William Brooks. “We are now on a dangerous path that puts workers, communities and the planet in harm’s way.”
  • Former Kentuckians for the Commonwealth chairperson Dana Beasley Brown said: “As Kentuckians, we have to work for the kinds of solutions we know can provide good jobs, allow people to stay and live in their communities, take care of their families, and not have to make the choice between being healthy and having a good job.”
  • Tom Goldtooth, executive director of the Indigenous Environmental Network said “Indigenous peoples will not stand idle as we tell the world the Earth is the source of life to be protected, not merely a resource to be exploited and abused.”

President Trump’s executive order will only take us backwards to an era of more pollution and more disease.

But it is clear from the overwhelming pushback that community leaders, businesses, and health and security experts, as well as millions of Americans across the country, support maintaining strong climate and public health protections and moving forward on clean energy — not turning back the clock.

Read more responses to last week’s Executive Order here.

 

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Recent Methane Success in California Offers Blueprint for Mexico’s Energy Boom

By Drew Nelson

Following energy reform in 2013, oil and gas industry expansion in Mexico is moving full steam ahead. The first round of bidding for Mexico-owned deep-water oil leases wrapped last December, ushering in a slew of private companies like ExxonMobil and Chevron for the first time since the 1930s. Additional leases for land that will become hotbeds for oil and gas activity on and offshore are planned later this year.

All of this is happening while Mexico is demonstrating remarkable climate leadership, and while countries and energy companies around the world are beginning to act on controlling methane, a harmful pollutant that routinely escapes from the global oil and gas industry. In other words, the Mexico energy boom couldn’t come at more critical time. Mexico ranks as the world’s fifth largest oil and gas methane emitter. Absent strong rules for future development, these emissions could steadily rise as more oil and gas production comes on line as a result of the energy reform.

Conversely, getting the rules right in Mexico before the energy boom happens makes sense – it’s a lot smarter to require a clean industry from the start rather than trying to clean it up years after it arrives. Mexico taking the steps now to implement strong regulations that support responsible energy development would help ensure important protections for its citizens and growing economy.

The good news is that policies to reduce methane are incredibly cost-effective, and many jurisdictions have already begun to develop and implement regulations to address this powerful pollutant. Recent progress in California is an example of best-in-class oil and gas methane regulations and are an important reference as Mexico seeks to develop similar regulations of its own.

Prevention Underpins California’s Methane Rules

Last week, California finalized the strongest oil and gas regulations to rein in methane pollution anywhere in the U.S., joining other red and blue states that are continuing to act (see here, here and here). California’s new rules require oil and gas companies to curb emissions at both new and old facilities operated on and offshore, and will save millions worth of lost gas every year. This is the first major environmental regulation issued since the new U.S. Administration took office, and it sends a clear message that states are charting their own future as leaders in Washington dismantle vital energy and environmental policies that protect all Americans.

Central to California’s methane journey was Aliso Canyon, a mega gas-leak in Southern California that captured worldwide attention. Caused by a well blowout deep underground at a natural gas storage facility, the disaster became the poster child for how bad the oil and gas industry’s methane problem can get when requirements for routine leak inspections, equipment maintenance and operation is lacking.  Case in point: documents demonstrate the facility wasn’t required to inspect for well-casing thickness or for gas leaks at the surface even though it had experienced an increasing number of infrastructure integrity problems in recent years and was operated without secondary containment systems.

Aliso Canyon – and California’s lesson learned from it– stands as an example for Mexico. It is squarely in Mexico’s interest to ensure that all oil and gas companies operating within its borders meet the same environmental safety standards required elsewhere. Without consistent policies, companies can exploit differences in national and subnational safeguards and ultimately hurt Mexico’s economy and citizens.

Methane: An Urgent Climate Pollutant

To appreciate the significance of Mexico’s situation, you have to consider what’s happening around the world regarding climate science and policy. In March, the World Meteorological Organisation released its State of the Climate Report, and the news was alarming. Global temperature broke records again in 2016, while sea-level rise accelerates. WIRED Magazine concluded, “we have surpassed our understanding of our changing climate and have stepped into truly ‘uncharted territory’”.

There is also growing understanding of the powerful role methane plays in global warming. Methane is a potent greenhouse gas over 80 times more damaging than carbon dioxide over the first 20 years it sits in the atmosphere. Scientists say methane accounts for about 25 percent of current warming and that emission levels are spiking worldwide. Globally, the oil and gas industry is among the largest emitters of methane through accidental or intentional releases.

A climate scientist at Simon Frazer University put it simply: “We need to mitigate both [methane and carbon dioxide] as soon as possible. There are no trade-offs.”

This urgency has a silver lining. Because methane is so potent, reducing it will have quick and powerful climate impact. For example, cutting global oil and gas methane emissions 45 percent by 2025 would have the same short-term climate benefit as closing one-third of the world’s coal plants. In addition, analyses have shown that reducing methane emissions from the oil and gas sector can be achieved affordably with existing technology.

Mexico’s Energy Boom is Methane’s Next Big Venue

Mexico has been a reliable and visible climate leader – even before its methane pledge last year. And it has a long history of working with leaders in California on a variety of environmental and climate related initiatives.

Now, with new and strong methane model from California, Mexico has a great chance to leverage its pending energy boom to help, rather than hinder, its efforts to meet its international methane pledge. By establishing fair and sensible rules for its growing energy industry, it can not only bolster the boom’s economic impact, but further demonstrate the international climate bone fides it earned in recent years.

Image source: Wokandapix, Pixabay

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The hidden – and potentially dangerous – chemicals in your diet

By Tom Neltner

Tom Neltner, J.D.is Chemicals Policy Director

While picking up groceries for the week, a shopper may compare brands, prices, and nutritional information to ensure they make economical and healthy choices for their family. Unfortunately, there’s much more to our food than meets the eye – or makes the label.

Approximately 10,000 food additives are allowed in our food. Food additives are substances used to flavor, color, preserve, package, process, and store our food. While some of the chemicals added to food or used in packaging are harmless, others are downright dangerous and linked to health concerns. Certain additives are linked to reproductive problems, developmental issues, and even cancer.

Perchlorate was approved in 2005 as a component of plastic packaging for dry food despite the fact that it is a known endocrine disruptor that impairs infant brain development. Benzophenone – an artificial flavor added to baked goods, dessert, beverages, and candy – is classified as a possible human carcinogen. The list goes on. No matter where you shop, your family’s health may be at risk.

Check out the cupboard below to see what else could be lurking in your food.

How did we get here?

The Food Additives Amendment of 1958 was intended to better protect the public by giving the Food and Drug Administration (FDA) the authority to regulate food additives. Unfortunately, the flawed, 59-year old law, coupled with weak enforcement, has allowed thousands of chemicals to be added to food with little oversight and limited safety information.

Moreover, the law exempts ingredients “Generally Recognized As Safe” (GRAS) from formal FDA review and approval. Originally intended for common ingredients like vinegar and olive oil, industry now abuses the loophole by bypassing FDA review and making safety determinations without oversight.  FDA has never reviewed an estimated 1,000 GRAS substances for safety. And many of the 10,000 additives allowed in our food today were authorized by the FDA or industry decades ago.

This broken system leaves both FDA and consumers in the dark. Under the 1958 law, FDA has no way to know what chemicals are actually being used in which food or in what quantities—even in baby food.

How can we make food safer?

The food regulatory system does not ensure the safety of our food. To fix our broken food system, we must:

  • End secrecy: Companies should no longer be permitted to decide the safety of their own ingredients without FDA’s review or the public’s knowledge. Congress needs to create a more streamlined, public process for FDA to make decisions and encourage safer innovation.
  • Update the science: When FDA reviews chemicals in our food, it makes our food supply safer. But the agency needs to update its guidance to industry to use modern scientific methods to better protect us.
  • Ensure existing chemicals are safe: Thousands of chemicals were approved by FDA decades ago, when we had far less understanding about their impacts on human health. FDA needs to reassess their safety. Congress needs to provide FDA with the tools so the agency can get the information it needs to set priorities and make decisions about the 10,000 chemicals in our food.

Ultimately, to solve the problems in the food system and protect public health, industry should not wait for action by FDA or Congress. Companies should lead on removing the worst chemicals of concern and ensure that FDA reviews all chemicals used for safety.

Consumers are increasingly concerned about chemicals in food. It is long past time for the food regulatory system to do its job and ensure the safety of all the food we give to our families.

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More Subsidies than You Think Influence the Cost of Electricity

By Lenae Shirley

The Texas electricity market is evolving. Low prices have helped natural gas become the dominant electricity generation resource, surpassing coal for the first time. The state’s unique competitive wholesale market, along with recently built transmission lines, have led to exciting opportunities for the rapid development of wind and solar generation. But in looking at the cost of various fuel sources and Texas’ energy future, confusion about electricity subsidies needs to be addressed.

Yes, wind and solar power have recently benefitted from the federal Production Tax Credit and Investment Tax Credit. That said, it’s important to recognize that natural gas and coal generation have enjoyed state and federal incentives for a century, and continue to do so.

The tax benefits for wind and solar generation are not the same as those for fossil fuel generation, but each plays a similar role: Tax benefits affect the final cost of electricity.

Indirect subsidies

As defined by Black’s Law Dictionary, a subsidy is:

A grant of money made by government in aid of the promoters of any enterprise, work or improvement in which the government desires to participate, or which is considered a proper subject for government aid, because such purpose is likely to be of benefit to the public.”

Therefore, a reduction in state or federal taxes owed is a subsidy. And if one or more production costs receives a tax break, the end product has been subsidized as well. For example, if natural gas-fired and coal-fired electricity receives a tax break on production and delivery (inputs that affect their cost), the fuel used to create power and the resulting electricity have been subsidized. That represents an indirect subsidy.

Unlike natural gas and coal, wind and solar generation convert free resources – wind and sunlight – into electricity. Here, the “fuel” input to a generation facility to make electricity is free and constantly renewable. Thus, any subsidy for wind or solar generation is direct; rather than focusing on the fuel, cost is reduced on the generation infrastructure.

Thus, renewable power is supported by direct subsidies, and fossil-fuel generation is supported by indirect subsidies. In fact, in the 2015 report “United States – Progress Report on Fossil Fuel Subsidies,” the federal government identified 11 federal fossil fuel tax provisions, or subsidies, including: Expensing of intangible drilling costs; Percentage depletion for oil and natural gas wells; Domestic manufacturing deduction for fossil fuels; Two-year amortization period for geological and geophysical expenditures; Exception to the passive loss limitation for working interests in oil and natural gas properties.

Natural gas tax exemptions

Because natural gas and coal are finite resources, the federal and state governments administer a “severance tax” for extracting them from the ground. But there are several exemptions – or ways to alleviate that tax – on both the state and federal levels. By significantly lowering the cost of natural gas production, these exemptions reduce the cost of – subsidize – natural gas-fired electricity.

In Texas alone, there are three different exemptions to the severance tax on natural gas, on top of federal tax breaks. Texas also has numerous other tax exemptions for natural gas (unrelated to the severance tax), all of which represent indirect subsidies, including a Low-Producing Well Exemption and Certified Exemptions for Natural Gas Production taxes, like the Two-Year Inactive Well Exemption, the High-Cost Gas Reduced Tax Rate, and the Flared Gas Exemption.

Coal is subsidized

During the 1970’s energy crises, the federal government prohibited building new gas-fired generation. As a result, coal-powered plants around the nation received a big boost. And since electric utilities were government-granted monopolies, the cost of constructing new coal plants was paid for by captive ratepayers. 

Wind and solar power continue to advance in efficiency and cost-effectiveness, so the continued investments are bearing fruit, as they did for the coal and natural gas generation industry.

The coal industry currently receives federal tax breaks from numerous provisions, including those provided by the Tax Reform Act of 1969 and the Energy Policy Act of 2005, as well as Amortization of Certain Pollution Control Facilities, Capital Gains Treatment of Royalties on Coal, and an Energy Production Credit (for refined coal and Indian Coal).

At the state level, coal plants also financially benefited when Texas transitioned to a competitive electric wholesale market in 2002. When the utilities originally purchased or built these coal plants, the utilities had a monopoly on generation service, assuring them full cost recovery. To make the transition to the competitive market more palatable, owners of coal-fired generation (and other generators) received compensation – above market value – for the cost of their existing power plants. The utilities were given 10 years to recover these legacy costs through mandatory charges that all customers had to pay. Compensation for legacy costs are another form of financial aid for Texas coal that subsidized the cost of electricity.

Century-old, permanent tax breaks

Another factor to consider is the amount of time these tax provisions have been in effect in the U.S. Although tax credits for renewable generation first became available 25 years ago with the Energy Policy Act of 1992, the natural gas industry has received tax breaks for over a century, starting with deductions for Intangible Drilling Costs in 1913.

Because renewable projects have been in existence for only one fourth the time as fossil fuel activities, wind and solar subsidies are part of R&D for new energy advancements. In other words, the tax benefits currently available to renewable energy projects should be compared to the subsidies given to fossil fuel projects at the early R&D stage, not the established fossil fuel industry as it is now.

Wind and solar power continue to advance in efficiency and cost-effectiveness, so the continued investments are bearing fruit, as they did for the coal and natural gas generation industry. Additionally, fossil fuel subsidies remain permanent in the federal tax code. Renewable tax credits are scheduled to be phased down and out in just a few years, and they have had to contend with repeated changes to their federal support mechanisms. While tax breaks for the fossil fuel industry have remained consistent, renewable subsidies have experienced seven changes in merely a decade.

Impact on electricity cost

Clearly, there are tax subsidies that benefit the electric generation industry in a variety of ways. Although natural gas and coal subsidies are given at the time of exploration or production, the effect they have on lowering fuel costs for a gas or coal generator is valuable. They reduce the total cost of making electricity from those resources, just as an investment tax credit does for renewable generation.

Some tax benefits may be easier to calculate than others, but all subsidies – whether for natural gas, coal, or renewable power – reduce the final cost of the electricity used by customers. There should be no confusion about that.

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Trump Undermining Jobs That Conserve Natural Gas, But States Should Create Them

By Ben Ratner

The biggest irony of the Trump Administration’s attack on environmental safeguards is that it will undermine a central promise of his candidacy: supporting boots on the ground, American jobs in growth sectors. One prime example? The emerging service industry that puts people to work finding and fixing harmful natural gas leaks.

American workers in the methane mitigation industry keep the product, methane (the main ingredient in natural gas), in the pipes and out of the sky. That’s a win for workers, who receive technology training, competitive wages, and opportunities for upward mobility. It’s a win for surrounding communities, as methane emission reductions also help keep smog-forming pollutants out of the air they breathe. It’s a win for oil and gas operators, which make operations more efficient and improve safety. And it’s a win for the climate, since methane is 84 times more potent in the near term than carbon dioxide.

In other words, if winning were more than a campaign slogan, supporting America’s methane mitigation industry would be an obvious opportunity to seize. Unfortunately, President Trump’s anti-jobs approach to undermining methane safeguards does just the opposite.

In attempting to justify rollbacks, the Trump Administration trotted out the familiar argument that environmental safeguards cost jobs. But in reality, the opposite is often true.

Datu Research, in a new report commissioned by Environmental Defense Fund, studied the leak detection and repair service industry by speaking with employers and workers in states like Pennsylvania, New Mexico, and Texas. Importantly, Datu found that “rules cutting methane emissions create jobs cutting methane emissions”.

Safeguards requiring methane leak detection and repair increase market demand for those services, thus supporting opportunities for workers including high school graduates to get trained in infrared camera inspection technology.

In fact, mitigation firms reported as much as 30% growth in states with methane regulations. And, companies interviewed by Datu reported plans to grow their workforce by as much as 15% annually.

In other words: More methane safeguards = More leak detection jobs. Fewer methane safeguards = Fewer leak detection jobs.

For an Administration allegedly committed to job creation, it’s baffling why President Trump would move to put such valuable American jobs at risk. All the more so when you consider that 55% of leak detection service companies are small businesses – the growth engine of the America.

Yet, where the Trump Administration falls down, state leaders can stand up for good jobs and a healthy environment.

One immediate opportunity arises in Pennsylvania, where Governor Tom Wolf has committed to cut methane emissions from new and existing sources. With four methane mitigation businesses already headquartered in Pennsylvania, and 11 companies operating in the state, Pennsylvania is poised for significant growth.

Or take New Mexico, a state that unfortunately leads the nation in unemployment rate, but where small businesses like Dexter – who employs a majority Native American leak detection and repair crew to cut methane waste – offer needed job growth. As oil and gas production continues to heat up in the resource-rich Permian Basin, New Mexico’s leaders will have the opportunity and obligation to establish the policy environment in which industry operates responsibly and more methane mitigation jobs are created.

As governors and state legislatures square their energy mix with the dual needs of job creation and environmental protection, supporting an industry that makes oil and gas cleaner should be an easy answer.

American workers don’t want potential jobs to slip through their fingers like lost methane into the atmosphere. After all, that’s not what winning looks like.

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Who Pays for the Hidden Costs of Coal?

By John Finnigan

The Public Utilities Commission of Ohio is still deciding whether to approve bailouts for FirstEnergy’s and Dayton Power & Light’s (DP&L) old, inefficient coal plants. The Ohio-based utilities want their customers to shoulder the costs of keeping these unprofitable coal plants running.

Coal plants aren’t cheap to operate. And as natural gas, wind energy, and solar energy have become increasingly affordable in recent years, coal can’t compete anymore. Moreover, subsidizing coal plants is not just a matter of higher electricity bills. We need to take into account the hidden costs of coal, which we all have to pay.

Health costs

Coal pollution harms human health and the environment. The American Lung Association reports that people’s breathing difficulties, including asthma, chronic obstructive pulmonary disease, bronchitis, and lung diseases, are worse when forced to breathe dirty air from coal plants. Coal plant emissions also cause heart attacks, strokes, cancer and birth defects. Lowering pollution from coal plants, on the other hand, can save lives.


Who Pays for the Hidden Costs of Coal?
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Climate costs

Coal pollution also contributes to climate change, which economists report will result in global costs of $1.2 trillion annually. This includes the costs for health care, premature deaths, harm to our food and water supply, and damage to our economy. We all pay for these costs in the form of higher taxes, higher health insurance premiums, higher food and water costs, repair costs for catastrophic weather events, and higher costs for goods and services.

Clean-up costs

Another area of hidden costs is the clean-up costs. The residue from burning coal is known as coal ash. Utilities bury millions of tons of coal ash in the ground at their power plants, which are often located on rivers to receive coal supplies on barges. The coal ash is stored in underground dams that can break and infiltrate the water supply.

Clean energy resources like wind, solar, and energy efficiency do not spew pollution into the air, meaning they do not lead to the high health or economic costs imposed by dirty coal power.

In 2014, a Duke Energy coal dam collapsed, spewing thousands of tons of coal ash into the Dan River. Duke Energy spent $15 million in direct cleanup costs and paid $102 million in fines and additional cleanup costs. Fortunately, Duke Energy is the largest utility in the country and is well capitalized, so Duke Energy’s shareholders – rather than its customers – had to pay these costs. But that’s not always the case with coal ash spills – some utilities leave customers with the bill.

Coal mining also produces toxic waste, including heavy metal residue from mining and deadly chemicals used for processing the coal. Another disaster occurred in 2014, when a pipe broke at a coal treatment plant, leaking 10,000 gallons of a deadly chemical into the Elk River in West Virginia. For days, the water supply was toxic for the 300,000 residents of Charleston, and the companies responsible paid a $151 million settlement for clean-up costs. Area residents and businesses also incurred $61 million in economic losses.

Bankruptcy costs

Coal plants keep losing money, causing financial stress for the industry. Large companies like Duke Energy are not always available to pay for clean-up costs. Many coal mining companies have filed for bankruptcy in recent years, including Arch Coal, Alpha Natural Resources, and Peabody. When these bankruptcies occur, taxpayers are left to pay for the clean-up costs.

For example, when Peabody filed for bankruptcy, the company filed claims for $2.7 billion worth of clean-up costs in the states where it operated mines. Peabody was allowed to emerge from bankruptcy by agreeing to pay $1 billion in clean-up costs. Taxpayers will pick up the tab for the remaining $1.7 billion.

Water costs

As part of the energy-water nexus, different power sources require different amounts of water, and coal plants use a lot of water. Meanwhile, climate change stresses the U.S. water system and enhances the likelihood and severity of drought.

Coal plants also discharge millions of gallons of extremely hot water into our lakes and rivers, killing fish and destroying their habitats.

The upside of clean energy

Clean energy resources like wind, solar, and energy efficiency do not spew pollution into the air, meaning they do not lead to the high health or economic costs imposed by dirty coal power. There is no toxic ash or residue left to clean up at a wind turbine. If a solar company files for bankruptcy, customers won’t be saddled with millions in clean-up costs. Finally, wind, solar, and energy efficiency require virtually no water to make power.

By subsidizing utilities to keep running their old coal plants, we all pay today in the form of higher energy bills. And we will all pay again tomorrow, when we pay for the hidden health, economic, clean-up, and water costs. With all these costs, and all the benefits of clean energy, why in the world should Ohio customers subsidize FirstEnergy and DP&L to keep operating their old coal plants?

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As Oil and Gas Industry Goes Big in the Permian, Efforts to Tackle Emissions Will Be Telling

By Jon Goldstein and Ben Ratner

Much ink has been spilled recently about big new oil and gas investments in the Permian Basin across West Texas and Southeastern New Mexico. What some are dubbing “Permania” includes a more than $6 billion investment by ExxonMobil in New Mexico acreage and an almost $3 billion one by Noble Energy across the border in Texas, among others. But a large question remains: will these types of big bets also come with the needed investments to limit methane emissions?

It’s not just an academic question. The answer will go a long way toward revealing if industry actors plan to operate in a way that serves the best interest of local communities and taxpayers. Unfortunately, New Mexico is currently the worst in the nation for waste of natural gas resources from federal lands (such as those that are found in large parts of the state’s Permian Basin). Largely avoidable venting, flaring and leaks of natural gas from these sites also puts a big hole in taxpayers’ wallets, robbing New Mexico taxpayers of $100 million worth of their natural gas resources every year and depriving the state budget of millions more in royalty revenue that could be invested in urgent state needs like education.


Meanwhile, at least one estimate shows a doubling of methane emissions in recent years on 2.1 million acres of Texas’ Permian Basin lands managed by the University of Texas, and students and faculty are calling for needed reductions. There’s good reason to believe that the rest of the Texas Permian has seen similar increases in methane emissions.

The answer to this million dollar waste question will also reveal if these large oil and gas companies plan to “walk the talk” on their commitments to reduce emissions. Methane is the primary component of natural gas and a potent greenhouse gas, more than 80 times more potent pound for pound than carbon dioxide in the short term.

For instance, Darren Woods the new Chairman and CEO of oil giant ExxonMobil recently stated in his first blog as CEO: “I believe, and my company believes, that climate risks warrant action and it’s going to take all of us – business, governments and consumers – to make meaningful progress.” If Exxon invests $6.6 billion in New Mexico drilling sites (more than the entire U.S. Environmental Protection Agency annual budget proposed by President Trump for comparison) but doesn’t make the necessary investments to capture fugitive methane emissions, these words will ring hollow. Conversely, by choosing to set a positive example through implementing methane controls, increasing transparency, and engaging responsibly on methane policy development, Exxon could chart a positive path and set an example worth following.

This is because scientists estimate that methane emissions are already responsible for roughly one quarter of the warming we are experiencing today, and the oil and gas industry is the largest source of industrial methane emissions in the U.S. What’s more, addressing methane pollution will also help alleviate local air quality concerns such as in Eddy County, New Mexico’s number one oil producer and recipient of a failing grade for ozone smog pollution from the American Lung Association.

The “layer cake” of oil and gas resources beneath New Mexico and West Texas may be an energy bounty, but in order for the people of these states to reap the full benefit (and minimize the risks to their health and climate) these companies will have to invest in leading technologies to capture methane waste and pollution. Neighboring states like Colorado have put state methane rules in place for just this reason and their economies have benefited as taxpayer revenue goes up while new methane mitigation small businesses thrive and entrepreneurs invent the next generation of solutions. These states should do the same and oil and gas companies can help show leadership by standing up and advocating for sensible methane policies, just as Noble Energy did with success in Colorado.

As Exxon’s Mr. Woods wrote, “by taking advantage of human ingenuity, embracing free markets and enacting sound government policies, we can meet the world’s energy needs and meet all of our shared aspirations in an environmentally and socially responsible way.” We could not agree more. As all eyes shift to the Permian, there is an opportunity – and an obligation – to put the market to work reducing emissions and to support sound methane emission government policies to set a level playing field and provide an assurance to the public that all companies are operating responsibly.

That’s the only way Texans and New Mexicans will be able to have their cake and eat it too during the next anticipated development boom. And it’s the only way that companies from Exxon and Noble to smaller drillers can address the global concern that methane emissions leaks away the credibility of natural gas in the transition to a low carbon energy economy.

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