Despite Warming Climate, Still Many Hurdles to Drilling in the Arctic

One oft-cited benefit of rising global temperatures is that a warmer Arctic will open up vast, previously inaccessible tracts of the mineral rich Arctic Ocean for oil and gas exploration.  After years of litigation and protests dating back to the 1990s, Royal Dutch Shell was finally set to begin exploration this summer.  Even after delays related to barge certification and avoiding a 30-mile by 12-mile ice floe pushed back the expected start date, Shell remained optimistic.  

It turns out that the Arctic is even more unforgiving than the world's best engineers predicted.  Yesterday, the Chicago Tribune reported Shell's announcement that it will not drill into any oil reservoirs in the Chukchi Sea in 2012. (Article: http://trib.in/UhtXGd).  Apparently Shell's containment dome was damaged during tests and the required repairs could not be completed by the September 24th deadline set by the Department of the Interior and EPA.  Shell still plans to drill top holes in preparation for the 2013 drilling season before the October 31st deadline to halt all drilling operations for the winter.  Regardless, this is a setback in Shell's Arctic strategy as most engineers agree that actual production could begin in 2017 at the earliest, under ideal conditions.

While the Artic might be physically inhospitable, many energy companies are confident that drilling there can be profitable because of the relatively stable geopolitical climate in the region and enormous potential reserves.  Britain's Independent recently reported that geologists estimate there are 400 billion barrels of oil and gas underneath the frozen tundra of the Arctic Circle.  That is enough petroleum to power civilization as we know it for 125 years. 

With such large estimated reserves it should come as no surprise that the nations with coastlines on the Arctic have made a myriad of competing territorial claims.  For every country besides the United States (as the US has not ratified the treaty), territorial rights in the Arctic Ocean are governed by the United Nations' On the Law of the Sea Convention.  The convention provides that out to 200 nautical miles, within the exclusive economic zone, Arctic nations have absolute control over petroleum resources.  Out past 200 nm, Arctic nations retain their rights over seabed resources if they can demonstrate scientifically that the ocean floor is a 'natural prolongation' of the continental shelf closer to shore.  This is why Russia planted a flag on the sea floor at the North Pole in 2007; it claims the Lomonosov Ridge is an extension of its continental ocean floor territory.  These potential disputes are an issue to keep an eye on in the long term.

But well before those competing international claims can come to a head, energy companies must first drill exploratory wells to determine more exactly the location and size of the petroleum/natural gas deposits.  The large number of setbacks for virtually every company operating in the region combined with the global economic slowdown raises the question of whether crude oil prices will support the increased costs of extracting oil and gas from the artic.  Shell is making a significant bet that Arctic oil is indeed worth the price.  Since 2006 Shell's Arctic strategy has cost the company $4.5 Billion, one-sixth of its annual capital spending budget.  Though Shell will not discuss its production costs in the Arctic, some analysts put the costs at around $70-$80 per barrel while others put it closer to $30.  Going forward, those costs compared to the price of crude will dictate the pace of exploration in the Arctic.

Will EPA Waive The Renewable Fuels Standard Because of the Drought?

The RFS Mandate

The Energy Policy Act of 2005 established a renewable fuel standard (RFS), which was expanded by the Energy Independence and Security Act of 2007 (EISA).  The RFS requires that transportation fuels contain a blend of biofuels.  The amount increases each year.  The RFS mandates that 15.2 billion gallons of renewable fuel be blended into transportation fuel in 2012. 

The RFS mandate has been a major catalyst for the development of biofuels industries in the United States, especially the ethanol industry.  Currently, corn is the predominant source used to meet the RFS.  Corn is also the most expensive single item for animal agricultural producers. According to a Congressional Research Service Report,

In 2005, the United States produced 3.9 billion gallons of ethanol, requiring roughly 1.4 billion bushels of corn; in 2007, those numbers increased to 6.5 billion gallons and 2.3 billion bushels.  In 2007, roughly one-quarter of the U.S. corn crop was directed to ethanol production.  In 2009, production had increased to roughly 11 billion gallons.

While the RFS contains secondary mandates for the use of cellulosic biofuels, biomass-based diesel fuels, and other advanced biofuels, the Environmental Protection agency (EPA), citing a lack of current and expected production capacity, has waived and significantly reduced the cellulosic biofuel mandate.  Therefore, corn will likely continue to be the major source for renewable fuels for the foreseeable future.

The Drought Is Decreasing Corn Production and Increasing Prices

During a July 18, 2012, press briefing, United States Department of Agriculture Secretary Tom Vilsack told reporters that drought conditions in the United States are “the most serious situation we’ve had in probably 25 years.”  “Sixty-one percent of the land mass of the United States is currently being characterized as being impacted by this drought.”  Seventy-eight percent of the nation’s corn crop is in drought -impacted areas.  The drought will result in significant price increases.  Corn prices already have jumped 38 percent since June 1st

RFS Waiver Petition Anticipated

The severe drought and its impact on corn production have led to speculation that several states may petition the EPA this week to waive the RFS requirements.  As amended by the EISA, section 211(o)(7) of the Clean Air Act grants the EPA Administrator, the authority--on the petition of a state or fuel provider, or at her own discretion--to waive the overall RFS requirement for a particular year.  Before granting a waiver, the Administrator, in consultation with the Secretaries of Agriculture and Energy, must determine either: 1) that there is inadequate domestic renewable fuel  supply; or 2) implementation of the requirement would severely harm the economy or environment of a state, region, or the United States.  

The EPA previously interpreted the waiver provision in 2008.  Then, increasing demand for corn for biofuels, the rise in energy prices, and other supply concerns in grain markets led to rapid increases in corn and other grain prices. Texas Governor Rick Perry petitioned the EPA for a 50 percent waiver from the RFS requirements on April 25, 2008.  As grounds for the waiver, Governor Perry cited the negative effects of the RFS requirements on the Texas economy and global food prices.  The EPA interpreted the waiver provision narrowly and denied the waiver request in August 2008, stating that “the levels of potential impacts from the RFS do not satisfy the high threshold of harm to the economy to be considered severe.” 

Recent statements by the Department of Agriculture Secretary suggest that he would not support a waiver. During his press briefing  he was asked about the use of corn for ethanol in light of the severe drought conditions.  He responded:

There’s no need to go to the EPA at this point in time.  Based on the quantity of ethanol that’s currently in storage, there’s no problem in that area at this point in time.

Secretary Vilsack’s position is consistent with the position taken by the American Coalition for Ethanol:

The evidence doesn’t support an RFS waiver.  Because corn ethanol production has exceeded the RFS schedule for several years. The excess ethanol stocks (approximately 850 million gallons in storage) and surplus RINs [renewable identification numbers](between 2.5 and 3 billion RINs in the bank) provide significant cushion for refiners to meet the 2012 and 2013 RFS obligations in drought conditions without it being the cause of a run up in corn prices.  The surplus storage and RINs enable ethanol producers to scale back production based on market cues without impacting obligated parties’ ability to meet the RFS requirements.

If one or more states petition for waiver of the RFS requirements, the EPA could determine that the drought and its impact on corn production do not meet the high threshold that the implementation of the RFS mandate will severely harm the economy.  As the EPA stated in its denial of Governor Perry’s waiver petition in 2008, “it is not sufficient to determine that the implementation of RFS would contribute to such harm.”  Further, "EPA would have to find that there is generally a high degree of confidence that the RFS is severely harming the economy.”

The EPA must act within 90 days of receipt to approve or disapprove a waiver petition, which must be put out for notice and comment.  If the EPA grants a waiver, the waiver expires within one year, but may be extended by the EPA Administrator in consultation with the Secretaries of Agriculture and Energy. 

Energy Intensity and Carbon Dioxide Emissions

Many people are concerned about climate change, as well as emissions of carbon dioxide, which are believed to drive climate change, and energy use, which is primary source of carbon dioxide emissions.  So, how is the U.S. doing on controlling carbon dioxide emissions and energy use, and how well are we likely to do in the future?

The Energy Information Administration ("EIA") reports that the per capita use of energy "was fairly constant" form 1990 to 2007, but began to decrease after 2007.  The EIA projects that the U.S. population will increase by 25 percent from 2010 to 2035, but that the nation's energy use will only increase by 10 percent over that period.  That translates into an annual decrease in per capita energy use of 0.5 percent per year during the period 2010 through 2035.

The EIA projects that the per capita level of energy-related emissions of carbon dioxide will decrease at an average rate of 1 percent per year from 2005 to 3035.  The EIA projects that the total energy-related emissions of carbon dioxide in the U.S. will increase by 3 percent over that period.

Per dollar of gross domestic product, energy use decreased at an average rate of 1.7 percent per year from 1990 to 2010, and the EIA projects that the decrease will continue in the future.  

The per capita decreases in energy use and carbon dioxide emissions, as well as the decrease in energy use per dollar of GDP, are illustrated in the first graph below.

The decreases are driven by several factors, including increased energy efficiency and increased use of energy sources other than fossil fuels.  Another factor has been the relative shift in the U.S. economy toward service industries and away from manufacturing.  This shift is illustrated in the second graph below, which shows a very small increase in GDP from industrial sectors of the economy and a substantial increase in GDP from service sectors.

 

 

 

 

  

Fracking News: Cornell Professors Respond to Critique by Fellow Cornell Professors in Dispute Over Relative Greenhouse Gas Footprints of Shale Gas and Coal

In April 2011, Robert W. Howarth and two other professors from Cornell published a study in which they concluded that shale gas has a higher greenhouse gas ("GHG") footprint than coal.  Earlier this month, a different group of Cornell professors that included Lawrence Cathles published a study in which they conclude that Howarth's analysis is "seriously flawed" and that shale gas has a GHG footprint that is only one-third to one-half that of coal.  Now, Howarth and his original collaborators have responded with a paper that defends their original study.  So, how do Howarth and his co-authors respond to the criticisms leveled by Cathles?

One of Cathles' primary criticisms is that Howarth "significantly overestimate[]" the emissions of natural gas that occur during shale gas extraction.  Cathles asserted that a large portion of Howarth's overestimation results from his assumption that companies always vent the natural gas that accompanies water to the surface during flowback (see the January 16, 2012 post in the Oil & Gas Law Blog for a detailed discussion of what this assumption is all about and for more details regarding the Cathles article). 

Cathles states that, despite Howarth's assumption that companies always vent, the reality is that often companies do not vent during flowback.  Howarth concedes in his new paper that companies do not always vent, but he cites an EPA estimate that companies vent 85% of the time.  Howarth states that he could reduce his estimate of emissions by 15% to account for the fact that companies do not always vent, but given other uncertainties in the available data, he sees no reason to make that correction.

There is, however, a more significant problem with Howarth's assumption that companies always vent during flowback.  The EPA has published regulations that generally would prohibit venting altogether, and those regulations are scheduled to become final on April 3, 2012, a mere ten weeks from now.  Howarth's new paper acknowledges those proposed regulations, and the fact that the EPA estimates those regulations will cut emissions of natural gas during flowback by 95%. 

Howarth then states, however, that the proposed regulations will only require recovery of the natural gas when a pipeline connection is available.  Howarth's statement is true, but potentially misleading, because even when a pipeline connection is not available the regulations generally will prohibit venting.  In those circumstances, companies will be required to flare the natural gas unless doing so would present a safety risk, and the products of such flaring have a substantially lower GHG footprint than the natural gas that is flared.  Observers expect that the EPA's proposed regulations will go into effect as planned.  If that happens, Howarth's assumption that companies always vent will be a serious flaw in his analysis.

Cathles also criticized Howarth for his assumption that natural gas flows to the surface throughout flowback at the same rate that it flows after flowback is complete.  Cathles states that this assumption leads to an overestimation of gas flow because water that is present during flowback depresses the flow rate of natural gas, particularly at the beginning of flowback.  Howarth concedes that water significantly restricts the flow of natural gas in the initial portion of flowback, and even that the fluid flowing to the surface is all water at the very beginning of flowback.  He suggests that his assumption is justified because natural gas flows freely by the end of the flowback period.    

In addition, Cathles and his colleagues state that Howarth's study overestimated the amount of natural gas that leaks during storage, transmission, and distribution of the gas to market.   Howarth acknowledges that the estimates of leakage rates he used in his study are much higher than the EPA's estimates of leakage rates, but he states that he thinks the EPA's estimates are too low.  He asserts that the EPA's estimate of leakage rates are too low because the estimates are based on studies conducted at "model" facilities that he implies were younger than the facilities that often are used for natural gas storage and distribution.  

Cathles asserted that another flaw in Howarth's analysis is that he fails to account for the fact that natural gas-fired power plants are more efficient at converting heat energy to electricity than coal-fired plants.  Howarth's reply is that most natural gas is used for generating heat, rather than in generating electricity, and therefore it is appropriate to ignore the difference in efficiency between gas-fired and coal-fired power plants.  Howarth's response may be valid to the extent someone wants an estimate of the life cycle GHG footprint of shale gas when it is used for generating heat.  But a major issue that has been raised in public discussions is how the GHG footprints of natural gas and coal compare when they are used as fuels for the generation of electrical power, and for that comparison, an accurate consideration of the differences in power plant efficiencies is essential.  

Finally, Cathles and his colleagues stated that Howarth erred by using a 20-year time horizon rather than a 100-year time horizon.  This issues arises because a comparison of the relative GHG footprints of coal and shale gas requires consideration of both carbon dioxide and methane.  This requires selection of a particular time horizon because methane has a stronger GHG footprint than carbon dioxide, but methane breaks down in the atmosphere over time, whereas carbon dioxide accumulates in the atmosphere.  Howarth chose a 20-year time horizon for the main comparisons he made in his study, but Cathles and his colleagues state that a 100-year time horizon is more appropriate. 

Howarth concedes that researchers "quite commonly us[e] only the 100-year time frame."  Nevertheless, Howarth defends his use of a shorter time frame.  He states that some studies have estimated that the earth is about 18 yeas away from a "tipping point" in which rising temperatures would cause significant methane release from the melting of permafrost, which could reinforce a trend toward global warming.  Howarth states that this makes a short time horizon critical, even though the GHG footprint of methane is considerably lower when looking at longer time horizons.

In their new paper, Howarth and his colleagues state that they "stand by" their prior "analysis and conclusions," and that they believe that "most" of Cahtles' criticisms "have little merit."  Howarth's reply provides some interesting information, though some of his rebuttals are unconvincing.

Federal Energy Subsidies -- Who is Getting Them? Who Should?

The federal government uses both expenditures and tax breaks to subsidize energy research and encourage investment.  A majority of the subsides are directed toward renewable sources of energy.  

The Energy Information Agency (EIA) reports that, during 2010, approximately 55.3% of all federal subsides relating to electricity generation and transmission were directed toward renewable sources of energy.  That year, 21.0% of those subsidies were directed to nuclear power, 10.0% to coal, 8.2% to electricity transmission and distribution, and 5.5% to natural gas.

When subsidies are compared based on the relative amount of electricity generated by particular sources of energy, the tilt toward renewables is even more pronounced.  Subsidies directed toward coal amounted to slightly more than $0.64 per 1,000 kw-hour of electricity generated by coal.  Subsidies to natural gas electricity generation were slightly less than $0.64 per 1,000 kw-hours.  Nuclear energy fared somewhat better, receiving subsidies totaling about $3.10 per 1,000 kw-hours.  But renewables received much more, about $15.43 per 1,000 kw-hours.

Renewables also received the largest share of subsidies for non-electrical power, such as fuel used in transportation.  Biomass and biofuels received 73.2% of all federal subsidies for non-electrical power in 2010, and other renewables received an additional 4.5%.  The portion of those subsidies that were directed to natural gas and petroleum liquids was 20.7%.  And again, renewable sources of energy do even better when the amount of  subsidies directed toward different sources of energy are compared based on the relative amount of non-electrical power the U.S. derives from those sources of energy.  Subsidies relating to natural gas and petroleum liquids were approximately $75.83 per million BTUs of power generation in 2010.  In contrast, subsidies for biomass and biofuels were about $1975.71 for million BTUs, and subsidies for other renewables were about $2,600.00 per million BTUs.

The tables below summarize data from the EIA report.

Federal Subsidies Relating to Electrical Power

Fuel

Power Generation

Billion kw-hrs

Subsidies

$ million

Percent of U.S. electrical      power     

Percent of subsidies

Subsidies

$ per 1,000 kw-hrs

Coal

1851

1189

44.9

10.0

0.64

Natural gas & petroleum liquids          

1030

654

25.0

5.5

0.64

Nuclear

807

2499

19.6

21.0

3.10

Renewables

425

6560

10.3

55.3

15.43

Transmission & distribution

971

8.2

 

Federal Subsidies for Fuel for Non-electrical Power

Fuel

Quadrillion BTUs

Subsidies

$ million

% of non-electrical energy

% of subsidies

Subsidies

$ per billion BTUs

Coal

2.94

169

8.3

1.6

57.48

Natural gas & petroleum liquids          

28.55

2165

80.3

20.7

75.83

Biomass & Biofuels        

3.87

7646

10.9

73.2

1975.71

Geothermal, solar, other renewables   

0.18

468

0.5

4.5

2600.00

 

I'd be interesting in hearing readers' views on federal subsidies.  Should the federal government: (1) distribute subsidies somewhat evenly between energy sources; (2) give the bulk of subsidies to well established and proven energy sources, such as petroleum, coal, and nuclear power; (3) give the bulk of subsidies to less established energy sources, such as renewables; or (4) eliminate all subsidies.  I can see arguments in favor of each alternative.

Hydraulic Fracturing News: Latest Cornell Study Concludes that Greenhouse Gas Footprint of Shale Gas is Much Lower than that of Coal

Several months ago, a group of Cornell University professors led by Robert Howarth published an article stating that shale gas has a higher greenhouse gas (GHG) footprint than coal.  But subsequent studies reached the opposite result, concluding that shale gas has not just a lower, but a much lower GHG footprint than coal.  Now, a new study from Cornell University concludes that the earlier Cornell study by Howarth was "seriously flawed," and that shale gas has a GHG footprint that is only one-third to one-half that of coal.

The new Cornell study was conducted by L.M. Cathles III and others, who published an article online in the journal Climatic Change Letters on January 3, 2012.  The authors begin by noting certain facts that no one disputes.  First, shale gas burns much more cleanly than coal.  Unlike the burning of coal, the combustion of shale gas (natural gas produced from shale) does not produce sulfur, mercury, ash, and particulates. Further, on an energy equivalent basis, the burning of shale gas produces much less carbon dioxide than coal.  After noting these undisputed facts, Cathles and his colleagues discuss several errors made by Howarth ─ errors that led to his erroneous conclusion that shale gas has a large GHG footprint even though it burns so cleanly. 

First, Howarth and his collaborators "significantly overestimate[d] the fugitive emissions associated with unconventional gas extraction."  In large part, Howarth's overestimation of emissions is the result of  unrealistic assumptions regarding flowback.  "Flowback" is a step that occurs after hydraulic fracturing is complete, when operators allow the shale formation's pressure to push the hydraulic fracturing water back to the surface, where it is recovered.  Significant quantities of natural gas accompany the flowback water.  Howarth assumed that companies always vent that natural gas to the air.  And, because the principal component of natural gas is methane (a greenhouse gas), Howarth concluded that such venting causes shale gas to have a large GHG footprint.

But natural gas is a valuable product and many companies recover and sell that natural gas, rather than venting it.  Sometimes it is not possible to recover and sell the gas because a pipeline connection is not yet available, but in those circumstances companies often flare the gas, rather than venting it, because it would be a safety hazard to vent such a large amount of natural gas at the well site.  Indeed, as previously noted in the Oil & Gas Brief, some states require companies to recover or flare that gas, rather than venting it (the combustion products have a much lower GHG effect than the natural gas itself).  Howarth's assumption that companies always vent natural gas during flowback is simply wrong.  Moreover, the U.S. Environmental Protection Agency is scheduled to finalize regulations to prohibit such venting altogether by April 3, 2012, just a few months from now.   

In addition, Howarth overestimated the amount of natural gas that comes to the surface during flowback.  He assumed that natural gas flows to the surface during flowback at the same rate at which it flows when the natural gas well is first put into production, after flowback is complete.  But during flowback, the well contains significant water, and that water holds the flow rate of natural gas below the rate at which gas will flow after flowback water is removed from the well.        

Cathles and his colleagues explained that Howarth also overestimated the amount of natural gas that leaks during storage, transmission, and distribution of the gas to market.   The EPA estimates that losses during those steps amount to 0.73% of the gas produced, but Howarth assumes losses during those steps will be 2 to 5 times higher than that, between 1.4 and 3.6%.

Another flaw in Howarth's analysis is that he fails to account for the fact that power plants that use natural gas are more efficient at converting heat energy to electricity than coal fired plants.  Howarth compared natural gas and coal on an equivalent heat energy basis, but a greater portion of the heat of combustion will be converted to electricity when using natural gas than when using coal. 

Finally, Cathles and his colleagues described an additional problem with Howarth's analysis.  When comparing the life cycle GHG footprints of coal and shale gas, one must consider the GHG effects of both carbon dioxide and methane.  This is necessary because both shale gas and coal produce carbon dioxide when burned, and because fugitive emissions (leaks) from natural gas piping and equipment result in releases of methane. 

But the need to consider both carbon dioxide and methane complicates the analysis.  A molecule of methane has a stronger GHG effect than carbon dioxide, but when carbon dioxide is emitted to the atmosphere, it remains there for a long time.  In contrast, methane breaks down over time.  Thus, the relative sizes of the GHG footprints of carbon dioxide and methane depend upon the time horizon chosen. 

Climate change is a long term process, and Cathles stated that most researchers use a 100 year time horizon when comparing the relative GHG effects of methane and carbon dioxide.  But Howarth chose a 20 year time horizon.  The shorter time horizon does not adequately account for the breakdown of methane, and thus overestimates the GHG effect of that compound.  Because a portion of the GHG footprint of natural gas comes from methane, Howarth's inappropriate use of a 20 year time horizon caused him to overestimate the GHG footprint of a given quantity of shale gas.

Other studies have reached conclusions similar to those of Cathles, who states that the GHG footprint of shale gas is one-third to one-half that of coal.  A study performed by researchers at Carnegie Mellon, whose work was funded by the Sierra Club, concluded that life cycle GHG footprint for shale gas is 20 to 50% lower than that for coal.  A study done in collaboration between Worldwatch Institute and Deutsche Bank concluded that the GHG footprint for shale gas is 47% lower than for coal.  A study by IHS Global Energy Research Associates did not calculate relative GHG footprints, but it noted some of the same problems with the Howarth study as Cathles identified.    

The Cathles team consisted of Lawrence M. Cathles III, Larry Brown, Milton Taam, and Andrew Hunter.  Howarth's co-authors included R. Santoro and Anthony Ingraffea.  The authors of the Worldwatch article were Mark Fulton, Nils Mellquist, Saya Kitasei, and Joel Bluestein.  The IHS paper was written by Mary L. Barcella, Samantha Gross, and Surya Rajan.

Supreme Court decides climate change case

Today, the United States Supreme Court issued its decision in a highly-watched climate change case,  American Electric Power Co., Inc. v. Connecticut, holding that the Clean Air Act and EPA actions authorized by the Act preempt any federal common law claims. 

In this case, a group of eight States and New York City brought suit against the Tennessee Valley Authority and four privately-owned power companies in the United States District Court for the Southern District of New York.  A group of three nonprofit land trusts brought a separate action against the same defendants in the same court.

The plaintiffs primarily based their suits on federal common law nuisance claims.  Common law claims are claims that are not based on a statute, but instead are based on general legal principles recognized by courts.  The plaintiffs asserted state law tort claims as an alternative legal theory.  The governmental plaintiffs alleged that that the defendants are emitting greenhouse gases that will contribute to climate change and thereby put public lands, infrastructure, and health at risk.  The land trusts alleged that the defendants are contributing to climate change that will destroy habitats for animals and rare plant species on lands that the trusts own and conserve.  The plaintiffs in both actions sought court orders requiring the defendants to limit carbon dioxide emissions to particular levels that would be reduced by specified amounts each year.

The district court dismissed both cases, holding that the cases raise issues that are exclusively within the province of the legislative and executive branches of government.  The Second Circuit Court of Appeals reversed the district court, holding that the plaintiffs asserted claims that may be brought and decided in court. 

The United Supreme Court agreed to hear the case.  Eight of the nine justices participated in the case.  The eight participating justices unanimously agreed that the Clean Air Act preempts any federal common law claims.  The court explained that, "The test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute 'speak[s] directly to [the] question at issue.'"  Here, the Clean Air Act speaks directly to the issue of pollutants, and the Court previously has held that greenhouse gases qualify as "pollutants" for purposes of the Clean Air Act.  The Court further noted that the EPA already has enacted some greenhouse gas regulations and is in the process of developing additional regulations. 

The plaintiffs had noted that it was possible that numerous cases would be brought against "thousands or hundreds or tens" of other defendants who are emitting greenhouse gases.  The Court stated that regulation of such emissions is best left to an agency that can call on experts, propose rules, collect comments and hold public hearings regarding the proposed rules, and develop a set of consistent regulations.  The Court explained that such a regulatory process would be superior to dozens of different judges setting unique emissions standards for particular defendants in a multitude of individual cases.

The issue of whether the plaintiffs' state law tort claims are viable was not before the Court, so the Court did not decide that issue.  The Court remanded the case for the parties to litigate whether the plaintiffs' state law tort claims are viable. 

The Court's opinion was written by Justice Ginsburg, who wrote for six justices, including herself.  Justice Alito wrote an opinion in which Justice Thomas joined, concurring in the judgment and largely agreeing with the majority.  Justice Sotomayor did not participate.  She was on the three-judge panel from the Second Circuit that heard the case, though she was elevated to the Supreme Court before the Second Circuit issued its decision.  The fact that she previously had heard the case probably is the reason that she did not take part in the Supreme Court decision.

Although none of the defendants in this litigation were oil and gas companies, the litigation has implications for the oil and gas industry because some of its members have been defendants in other climate change litigation, and because such companies may be defendants in such litigation in the future. 

Renewable energy is not always eco-friendly

Last Saturday was a beautiful day in New Orleans, but I spent part of it inside, at the annual Tulane Environmental Law Summit.  This year, the theme was energy.

We are all accustomed to hearing environmentalists criticize our country's reliance on fossil fuels, but it was interesting on Saturday to hear environmentalists criticizing certain efforts to produce renewable energy.  One of the panel discussions concerned the threat that wind turbines pose to birds and bats.  Bill Eubanks of the environmentalist-oriented law firm Meyer Glitzenstein & Crystal cited statistics estimating that 440,000 birds are killed annually in this country by collisions with wind turbines, and that in ten eastern states alone about 73,700 bats are killed annually. 

Eubanks discussed litigation in which his firm challenged the operations of a major utility on the basis that its wind turbines would endanger a species of bat.  Eubanks did not argue for abandoning wind power, but he did argue that decisions regarding where turbines are located and how they operate should be made with environmental concerns in mind.

Hydroelectric power is another renewable form of energy, but it often is attacked by environmentalists because it can have adverse effects on fish if a dam blocks the upstream migration of the fish.  Also, the area that is flooded by a dam can suffer adverse environmental effects.  Further, if water flows are diverted for irrigation and other uses, the decrease in downstream flows can harm species that depend on the river habitat.

And, when solar power is attempted on a commerical scale, it can present problems.  Environmentalists have expressed concerns that large solar arrays proposed for the Mojave Desert could harm certain species, including an endangered desert tortoise, by destroying habitat.

I do not expect environmentalists to become big fans of the oil and gas industry, but perhaps more and more of them will realize that there are no simple solutions to satisfying our society's need for energy.  And with that realization, perhaps more of them will see that even oil and gas are important parts of the energy equation.  Indeed, to the extent that the combustion of natural gas produces much less carbon dioxide that burning coal, a switch of power plants from using coal to using natural gas should be encouraged by those who fear climate change.  

Carbon sequestration

The public and government have grown increasingly concerned that emissions of carbon dioxide from the burning of fossil fuels will lead to changes in climate, including global warming.  Because it is unrealistic to expect this nation or the world to quit burning fossil fuels anytime soon, people have begun working on programs to capture carbon dioxide from power plants, inject it underground, and store it there.  And government has begun enacting the rules that will govern this process, which sometimes is called carbon sequestration. 

The Environmental Protection Agency, for example, has drafted rules relating to underground injection of carbon dioxide.  And, in 2009, Louisiana enacted the Louisiana Geologic Sequestration of Carbon Dioxide Act to provide for state rules and regulations relating to carbon sequestration.  As for technological research and development, much of the work done so far has related to carbon capture, but Matthew Wald has written an interesting article that appeared in the New York Times about a promising pilot-scale program that actually has begun the underground injection of carbon dioxide for purposes of sequestration.  

This subject is of significant interest to the oil and gas industry, both because oil and gas are fossil fuels whose use sometimes is attacked by those who fear climate change, and also because depleted oil and gas reservoirs may be an ideal locations for carbon sequestration.  Wald's article is well worth reading if you are interested in the subject.