Sen. Murkowski, Energy Leaders Point to Natural Gas as Large Piece of the Climate Change Puzzle

March 11, 2010 by Lauren Blosse · Leave a Comment
Filed under: Natural Gas

Today, Senator Lisa Murkowski (R-Alaska) and several energy industry leaders spoke to a group of key stakeholders in DC about the potential for natural gas in America’s low-carbon future.

During the forum, which was sponsored by AGA, the American Gas Foundation and the Congressional Quarterly- Roll Call group, Sen. Murkowski said that any bill that fails to rely on natural gas to help lower emissions is “unacceptable.” She went on to tout the record of residential and commercial natural gas users in lowering total emissions over the last four decades.

The senator also pointed to natural gas as a backup for renewables, stating, “renewables need base load supply, and natural gas can be that supply.”

Others on the panel, including Kevin Book of ClearView Energy Partners, Sharon Buccino of the Natural Resources Defense Council (NRDC), Bill Cantrell of the Council for Responsible Energy, Vello Kuuskraa of Advanced Resources International and Dr. Robert Simon of the Senate Energy and Natural Resources Committee addressed such issues as access to domestic natural gas, hydraulic fracturing and natural gas vehicles.

Quoting the journalist Robert Bryce, Senator Murkowski concluded, “Wood was the dominant fuel source in the 19th century, and oil in the 20th century. Natural gas should be the dominant fuel source in the 21st century.”

Visit this link to view a video of the forum.

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Tags: legislation

Offsets – one of the least exciting (and potentially most important) parts of climate legislation

October 27, 2009 by Mike Pomorski · Leave a Comment
Filed under: Natural Gas, energy

EPA released its analysis of S. 1733 (Kerry-Boxer) last Friday. Much media coverage (for example, this article in the New York Times) has focused on EPA’s finding that the legislation would have a small ($100 per year) financial impact on families.

The $100 impact, from page 19 of the analysis, is all well and good, but policymakers would do well to read page 20 also, specifically the section titled “Sensitivities to Offset Availability.”

One big reason why costs are contained is EPA’s belief that offsets will be widely available at reasonable prices. EPA writes that “all analyses that have looked at the issue have shown that the availability of offsets is one of the most important factors influencing allowance prices.”

Offset availability requires their processing and verification. Regarding the United States’ ability to process and verify these offsets, EPA writes that “there are many institutional design issues, including the measurement, monitoring, reporting and verification requirements, surrounding estimates of offset availability.”

That is quite an understatement. In Kerry-Boxer, these “institutional design issues” occupy almost 70 pages in Sections 731-744, and include (but are not limited to) the creation of an offset registry, quantitative modeling of additionality, leakage, reversals, a petition and approval process (including an appeals process), third party verification requirements, and a significant amount of inter-agency cooperation. These 70 pages do not determine which offset projects themselves are viable; they only describe the process to determine whether they are viable.

The offset process is an essentially brand new government function, for which EPA simply “assumes that the institutions are put in place to process the domestic and international offsets needed to realize reductions on the magnitude shown in the analysis.” All of the political, bureaucratic, and quantitative complexity of offset verification is assumed away.

If offsets are not available or are significantly delayed we can expect much higher costs. EPA cites an MIT study and writes that “the allowance price in the medium offsets case was 193% higher than the allowance price in the full offsets case.” These types of quantifications do not lend themselves to newspaper (or blog!) headlines, but there they are.

So remember, when you hear a low-cost estimate for Kerry-Boxer (or any other climate bill), ask yourself what is required for costs to be contained and whether those assumptions are realistic.

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