EPA Issues First National Standards for Mercury Pollution from Power Plants/ ‘mercury and air toxics standards’ meet 20-year old requirement to cut smokestack emissions

http://tinyurl.com/cpo5nkr
The U.S. Environmental Protection Agency (EPA) has issued the Mercury and Air Toxics Standards, the first national standards to protect American families from power plant emissions of mercury and toxic air pollution like arsenic, acid gas, nickel, selenium, and cyanide. The standards will slash emissions of these dangerous pollutants by relying on widely available, proven pollution controls that are already in use at more than half of the nation’s coal-fired power plants.

EPA estimates that the new safeguards will prevent as many as 11,000 premature deaths and 4,700 heart attacks a year. The standards will also help America’s children grow up healthier – preventing 130,000 cases of childhood asthma symptoms and about 6,300 fewer cases of acute bronchitis among children each year. 
 
"By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health– and especially for the health of our children. With these standards that were two decades in the making, EPA is rounding out a year of incredible progress on clean air in America with another action that will benefit the American people for years to come," said EPA Administrator Lisa P. Jackson. "The Mercury and Air Toxics Standards will protect millions of families and children from harmful and costly air pollution and provide the American people with health benefits that far outweigh the costs of compliance."

“Since toxic air pollution from power plants can make people sick and cut lives short, the new Mercury and Air Toxics Standards are a huge victory for public health,” said Albert A. Rizzo, MD, national volunteer chair of the American Lung Association, and pulmonary and critical care physician in Newark, Delaware. “The Lung Association expects all oil and coal-fired power plants to act now to protect all Americans, especially our children, from the health risks imposed by these dangerous air pollutants.”

More than 20 years ago, a bipartisan Congress passed the 1990 Clean Air Act Amendments and mandated that EPA require control of toxic air pollutants including mercury. To meet this requirement, EPA worked extensively with stakeholders, including industry, to minimize cost and maximize flexibilities in these final standards. There were more than 900,000 public comments that helped inform the final standards being announced today. Part of this feedback encouraged EPA to ensure the standards focused on readily available and widely deployed pollution control technologies, that are not only manufactured by companies in the United States, but also support short-term and long-term jobs. EPA estimates that manufacturing, engineering, installing and maintaining the pollution controls to meet these standards will provide employment for thousands, potentially including 46,000 short-term construction jobs and 8,000 long-term utility jobs.

Power plants are the largest remaining source of several toxic air pollutants, including mercury, arsenic, cyanide, and a range of other dangerous pollutants, and are responsible for half of the mercury and over 75 percent of the acid gas emissions in the United States. Today, more than half of all coal-fired power plants already deploy pollution control technologies that will help them meet these achievable standards. Once final, these standards will level the playing field by ensuring the remaining plants – about 40 percent of all coal fired power plants - take similar steps to decrease dangerous pollutants.

As part of the commitment to maximize flexibilities under the law, the standards are accompanied by a Presidential Memorandum that directs EPA to use tools provided in the Clean Air Act to implement the Mercury and Air Toxics Standards in a cost-effective manner that ensures electric reliability. For example, under these standards, EPA is not only providing the standard three years for compliance, but also encouraging permitting authorities to make a fourth year broadly available for technology installations, and if still more time is needed, providing a well-defined pathway to address any localized reliability problems should they arise.

Mercury has been shown to harm the nervous systems of children exposed in the womb, impairing thinking, learning and early development, and other pollutants that will be reduced by these standards can cause cancer, premature death, heart disease, and asthma.

The Mercury and Air Toxics Standards, which are being issued in response to a court deadline, are in keeping with President Obama’s Executive Order on regulatory reform. They are based on the latest data and provide industry significant flexibility in implementation through a phased-in approach and use of already existing technologies.

The standards also ensure that public health and economic benefits far outweigh costs of implementation. EPA estimates that for every dollar spent to reduce pollution from power plants, the American public will see up to $9 in health benefits. The total health and economic benefits of this standard are estimated to be as much as $90 billion annually. 
 
The Mercury and Air Toxics Standards and the final Cross-State Air Pollution Rule, which was issued earlier this year, are the most significant steps to clean up pollution from power plant smokestacks since the Acid Rain Program of the 1990s.

Combined, the two rules are estimated to prevent up to 46,000 premature deaths, 540,000 asthma attacks among children, 24,500 emergency room visits and hospital admissions. The two programs are an investment in public health that will provide a total of up to $380 billion in return to American families in the form of longer, healthier lives and reduced health care costs. 

More information: http://www.epa.gov/mats/

The U.S. Environmental Protection Agency (EPA) www.EPA.gov 
Press Release dated December 21, 2011

Learning Too Late of the Perils in Gas Well Leases

http://www.nytimes.com/2011/12/02/us/drilling-down-fighting-over-oil-and-gas-well-leases.html
After Scott Ely and his father talked with salesmen from an energy company about signing the lease allowing gas drilling on their land in northeastern Pennsylvania, he said he felt certain it required the company to leave the property as good as new. So Mr. Ely said he was surprised several years later when the drilling company, Cabot Oil and Gas, informed them that rather than draining and hauling away the toxic drilling sludge stored in large waste ponds on the property, it would leave the waste, cover it with dirt and seed the area with grass. He knew that waste pond liners can leak, seeping contaminated waste.

Americans have signed millions of leases allowing companies to drill for oil and natural gas on their land in recent years. But some of these landowners — often in rural areas, and eager for quick payouts — are finding out too late what is, and what is not, in the fine print.

Energy company officials say that standard leases include language that protects landowners. But a review of more than 111,000 leases, addenda and related documents by The New York Times suggests otherwise:
¶ Fewer than half the leases require companies to compensate landowners for water contamination after drilling begins. And only about half the documents have language that lawyers suggest should be included to require payment for damages to livestock or crops.
¶ Most leases grant gas companies broad rights to decide where they can cut down trees, store chemicals, build roads and drill. Companies are also permitted to operate generators and spotlights through the night near homes during drilling.
¶ In the leases, drilling companies rarely describe to landowners the potential environmental and other risks that federal laws require them to disclose in filings to investors.
¶ Most leases are for three or five years, but at least two-thirds of those reviewed by The Times allow extensions without additional approval from landowners. If landowners have second thoughts about drilling on their land or want to negotiate for more money, they may be out of luck.

The leases — obtained through open records requests — are mostly from gas-rich areas in Texas, but also in Maryland, New York, Ohio, Pennsylvania and West Virginia.

In Pennsylvania, Colorado and West Virginia, some landowners have had to spend hundreds of dollars a month to buy bottled water or maintain large tanks, known as water buffaloes, for drinking water in their front yards....
Thousands of landowners in Virginia, Pennsylvania and Texas have joined class action lawsuits claiming that they were paid less than they expected because gas companies deducted costs like hauling chemicals to the well site or transporting the gas to market.
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To be sure, many landowners have earned small fortunes from drilling leases. Last year, natural gas companies paid more than $1.6 billion in lease and bonus payments to Pennsylvania landowners, according to a report commissioned by the Marcellus Shale Coalition, an industry trade group. Chesapeake Energy, one of the largest natural gas companies, has paid more than $183.8 million in royalties in Texas this year, according to its Web site. Much of the money has gone to residents in rural areas where jobs are scarce and farmers and ranchers have struggled to stay afloat....
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At least eight states specifically require companies to compensate landowners for damage to their properties or to negotiate with them about where wells will be drilled, even if the lease does not provide those protections.
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Some landmen show up in poorer areas shortly before the holidays, offering cash on the spot for signing a lease. They might offer thousands of dollars per acre as a bonus to be paid shortly after the lease is signed. Royalties, which usually run between 12.5 percent and 20 percent of what the companies make for selling the gas, can mean tens of thousands of dollars per year for landowners.
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In 2005, [Dave] Beinlich and his wife, Karen, signed a lease for $2 an acre per year for five years on 117 acres in Sullivan County in north-central Pennsylvania. They soon realized they had gotten far less money than their neighbors, so they planned on negotiating a new lease when theirs expired in 2010. A day before their lease term ended, no well had been drilled on their land, but the gas company parked a bulldozer nearby and started to survey an access road. A company official informed them that by moving equipment to the site, Chief Oil and Gas was preparing to drill and was therefore allowed to extend the lease indefinitely.

Lawyers say that drilling leases are not like other contracts. “You’re not buying a refrigerator or signing a car note,” said David McMahon, a lease lawyer in Charleston, W.Va., and co-founder of the West Virginia Surface Owners’ Rights Organization, adding that once a well is drilled, it can produce gas for decades, locking landowners into the lease terms. “With a gas lease, you’re permitting industrial activity in your backyard, and you’re starting a relationship that will affect the quality of living for you and your grandchildren for decades,” he said. Mr. McMahon and other lease lawyers say that unlike many contracts, oil and gas leases are covered by few consumer protection laws, in part because drilling has been most common in states with less regulation.
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“When it comes to negotiation skills and understanding of lease terms, there is a gaping inequality between the average landman and the average citizen sitting across the table,” said Chris Csikszentmihalyi, a researcher at the Massachusetts Institute of Technology who created a Web site last year called the Landman Report Card that allows landowners to review landmen’s professionalism and tactics.

Some lawyers also say that there are major differences between what drilling companies tell landowners and what they must disclose to investors.
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“It’s been one expense after another since our water went bad, and the company only has to cover part of it,” said Ronald Carter, 72, of Montrose, Pa. Mr. Carter and his wife, Jean, said they signed a lease in 2006 for a one-time fee of $25 per acre on their 75 acres and annual royalty payments of 12.5 percent. The Carters live on $3,500 a month, including the $1,500 per month they average in gas royalties. But they had to spend $7,000 to install a water purifier when their drinking supply became contaminated in 2009 after drilling near their property. The Carters joined a lawsuit with about a dozen neighbors ...
...
by Ian Urbina and Jo Craven McGinty
http://www.nytimes.com/2011/12/02/us/drilling-down-fighting-over-oil-and-gas-well-leases.html
The New York Times www.NYTimes.com
December 1, 2011

Regulation, Unemployment, and Cost-Benefit Analysis

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920441
Abstract: Regulatory agencies take account of the potential unemployment effects of proposed regulations in an ad hoc, theoretically incorrect way. Current practice is to conduct feasibility analysis, under which the agency predicts the unemployment effects of a proposed regulation, and then declines to regulate (or weakens the proposed regulation) if the unemployment effects exceed an unarticulated threshold, that is, seem “too high.” Agencies do not reveal the threshold, do not explain why certain unemployment effects are excessive, and do not explain how they compare unemployment effects and the net benefits of the regulation. Many agencies also predict unemployment effects incorrectly. The proper approach is for agencies to incorporate unemployment effects into cost-benefit analysis by predicting the amount of unemployment that a regulation will cause and monetizing that amount. Recent economic studies suggest that monetized cost of unemployment is significant, possibly more than $100,000 per worker. If agencies used this figure, there could be significant consequences for a wide variety of regulations.
...
[A] paper, by Morgenstern, Pizer, and Shih (MPS), uses a structural model to estimate the effects of environmental regulation on employment across “four highly polluting, regulated industries”: pulp and paper,  plastics, petroleum refining, and steel.43 MPS find that spending on environmental protection actually creates jobs in the net, at a (statistically insignificant) rate of 1.55 new jobs per $1 million in cost increases.

EPA applied the MPS study directly to its boiler regulation. EPA estimated that the regulation would create approximately $2.4 billion in compliance costs.44 MPS measured costs in 1987 dollars, while EPA’s boiler regulation was priced in 2009 dollars, so EPA applied a .6 multiplier in order to discount the regulatory costs to their 1987 value. Accordingly, EPA concluded that its boiler regulation would create approximately 2,200 new jobs.
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The most recent and comprehensive paper on what we will call “wage effects”—the lost earnings of workers who are laid off—is by von Wachter, Song, and Manchester (VSM). The authors focus on male, middle-aged workers who were stably employed in the late 1970s. The workers are divided into three groups: those who remained employed, those who lost their jobs in mass layoffs (where employment at a firm declined by at least 30 percent), and those who lost their jobs in non-mass layoffs....

The average worker earned approximately $50,000 (in year 2000 dollars) in 1979. Not surprisingly, the average wage declines dramatically for workers who are laid off. Those who lose their jobs suffer an immediate wage loss of up to 33 percent (that is, some are rehired and obtain comparable or lower wages, while others are not). What is surprising is that although these losses decline, they may remain as high as 21 to 27 percent twenty years after the job loss. VSM calculate that over 20 years the average loss for a worker in their dataset ranges from $110,000 to $140,000. This range must be considered a lower bound for the cost of unemployment for an individual worker because losses most likely persist beyond 20 years.

Other scholars have found similar results, although no other study we are aware of examines earnings losses over twenty years.108 Most studies go no farther than six years. The studies find first-year earnings losses from 17 to 66 percent, with most studies clustering around 30 to 40 percent. The six-year studies find  last-year earning losses ranging from 0 to 47 percent, with most around 10 to 20 percent.
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These numbers are high, but it is possible that the actual harm is somewhat less. First, to the extent that workers lose rents (the portion of the wage that is above market), the loss is simply a transfer—those rents will be captured by consumers or shareholders—and not a social cost....
...
The full paper is available free of charge at : http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920441  

by Jonathan Masur and Eric Posner both of University of Chicago Law School 
University of Chicago Law School http://www.law.uchicago.edu via SSRN Social Science Research Network www.SSRN.com 
Olin Working Paper No. 571, Public Law Working Paper No. 359; August 4, 2011

Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists

http://reep.oxfordjournals.org/cgi/content/short/rer009v1
Abstract: Until recently, most attention to U.S. climate policy has focused on legislative efforts to introduce a price on carbon through cap and trade. In the absence of such legislation, the Clean Air Act is a potentially effective vehicle for achieving reductions in greenhouse gas (GHG) emissions. Decisions regarding existing stationary sources will have the greatest effect on emissions reductions. Although the magnitude of reductions is uncertain, it is plausible that a 10 percent reduction in GHG emissions from 2005 levels could be achieved at moderate costs by 2020. This is comparable to domestic emissions reductions that would have been achieved under the Waxman–Markey legislation. These measures do not include the switching of fuels, which could yield further reductions. The ultimate cost of regulation under the Act hinges on the stringency of standards and the flexibility allowed. A broad-based tradable performance standard is legally plausible and would provide incentives comparable to the proposed legislation, at least in the near term."

by Dallas Burtraw 1, Art Fraas 2 and Nathan Richardson 3
^1. Senior Fellow and Darius Gaskins Chair, Resources for the Future, 1616 P Street NW, Washington DC 20036; e-mail: burtraw@rff.org 
^2. Visiting Scholar, Resources for the Future; e-mail: fraas@rff.org 
³ Resident Scholar, Resources for the Future; e-mail: richardson@rff.org
Journal of Environmental Economics and Policy via Oxford University Press on behalf of the Association of Environmental and Resource Economists 
First published online: August 12, 2011

Pennsylvania Department of Environmental Protection (DEP) Fines Chesapeake Energy More Than $1 Million - Penalties Address Violations in Bradford, Was

http://www.portal.state.pa.us/portal/server.pt/community/newsroom/14287?id=17405&typeid=1
The Pennsyvania Department of Environmental Protection on May 17, 2011 fined Chesapeake Energy $1,088,000 for violations related to natural gas drilling activities.

Under a Consent Order and Agreement, or COA, Chesapeake will pay DEP $900,000 for contaminating private water supplies in Bradford County, of which $200,000 must be dedicated to DEP’s well-plugging fund. Under a second COA, Chesapeake will pay $188,000 for a Feb. 23 tank fire at its drilling site in Avella, Washington County.

“It is important to me and to this administration that natural gas drillers are stewards of the environment, take very seriously their responsibilities to comply with our regulations, and that their actions do not risk public health and safety or the environment,” DEP Secretary Mike Krancer said. “The water well contamination fine is the largest single penalty DEP has ever assessed against an oil and gas operator, and the Avella tank fire penalty is the highest we could assess under the Oil and Gas Act. Our message to drillers and to the public is clear.”

At various times throughout 2010, DEP investigated private water well complaints from residents of Bradford County’s Tuscarora, Terry, Monroe, Towanda and Wilmot townships near Chesapeake’s shale drilling operations. DEP determined that because of improper well casing and cementing in shallow zones, natural gas from non-shale shallow gas formations had experienced localized migration into groundwater and contaminated 16 families’ drinking water supplies.

As part of the Bradford County COA, Chesapeake agrees to take multiple measures to prevent future shallow formation gas migration, including creating a plan to be approved by DEP that outlines corrective actions for the wells in question; remediating the contaminated water supplies; installing necessary equipment; and reporting water supply complaints to DEP. The well plugging fund supports DEP’s Oil and Gas program operations and can be used to mitigate historic and recent gas migration problems in cases where the source of the gas cannot be identified.

The Avella action was taken because on Feb. 23, while testing and collecting fluid from wells on a drill site in Avella, Washington County, three condensate separator tanks caught fire, injuring three subcontractors working on-site. DEP conducted an investigation and determined the cause was improper handling and management of condensate, a wet gas only found in certain geologic areas. Under the COA, Chesapeake must submit for approval to the department a Condensate Management Plan for each well site that may produce condensate.

“Natural gas drilling presents a valuable opportunity for Pennsylvania and the nation,” Krancer said. “But, with this opportunity comes responsibilities that we in Pennsylvania expect and insist are met; we have an obligation to enforce our regulations and protect our environment.”

For more information, visit www.depweb.state.pa.us.

Pennsylvania Department of Environmental Protection (DEP) www.depweb.state.pa.us
Press Release Dated May 17, 2011

Enercon’s India Venture Turns Sour German - Energy Company Hits Headwinds in Indiacom

http://www.nytimes.com/2011/03/24/business/global/24enercon.html 
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For Enercon of Germany, one of the world’s biggest makers of wind turbines, India is shaping up as a disaster.

The company says it has just lost its entire Indian subsidiary, a major operation with annual sales of more than $566 million, after a dispute with a local partner and a run-in with Mumbai law enforcement authorities.

Enercon also says it has lost control of its patents in India and fears its technology could be appropriated by competitors in a country where wind energy is a big and growing market.
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Lately, foreign companies and investors have started to grow weary of the country’s endemic corruption, weak infrastructure and government limits on foreign investment in industries like insurance and retailing. Foreign direct investment in India fell by more than 31 percent in 2010, compared with the previous year.

Enercon, based in Aurich, near Germany’s windswept North Sea coast, portrays its Indian debacle as a government-abetted theft of its joint venture with a local partner.

That account is strenuously disputed by a lawyer for the partner, a businessman named Yogesh Mehra, who is also an executive member of the Indian Wind Turbine Manufacturers Association.
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Around 2005, according to Enercon, the partners started to argue about company strategy. The Germans wanted to move cautiously and invest profits in the business. But Enercon says Mr. Mehra wanted fast growth with an eye toward a stock market listing.
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India is the world’s fifth largest user of wind power, and is adding capacity fast. The country’s biggest wind supplier by far is India’s Suzlon, but others, including General Electric, are also here.

As the partners debated strategy in September 2008, two Enercon executives were summoned to police headquarters in Mumbai and questioned for at least five hours, according to the executives. They say police officials told them that they were suspected of conspiring against their Indian partners.
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Enercon executives say that Mr. Mehra, though a minority shareholder, progressively cut the German executives off from information and shut them out of management decisions. They say they believe they have been effectively banished from India.

“We have completely written off our investment in Enercon India,” said Mr. Knottnerus-Meyer.
...
In late 2006, Aloys Wobben, the chairman and managing director of Enercon, offered 40 million euros ($56.9 million) to buy a 6 percent stake in the Indian company from Mr. Mehra. But a few weeks later he amended his proposal to 40 million euros for a 12 percent stake, according to Mr. Parthasarathy.
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To be sure, Enercon has a bit of a history of misadventure abroad. The company has never exported to the United States, after losing a court dispute there in the mid-1990s, in which a wind turbine maker, now defunct, accused Enercon of infringing on its patents.

The decision resulted in Enercon’s being banned from the United States for several years. The ban was later lifted, but the experience soured Mr. Wobben on the American market, Mr. Knottnerus-Meyer said.

by Jack Ewing and Vikas Bajaj
The New York Times www.NYTimes.com
March 23, 2011
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/03/24/business/global/24enercon.html