SREC Values in Pennsylvania

The decline in Pennsylvania solar REC prices over the past year can be explained very simply by supply and demand. The demand for SRECs is dictated by Pennsylvania’s Alternative Energy Portfolio Standards Act which requires 44 MW of solar capacity in order to meet the solar-carve out for 2012 Compliance Year. (The Pennsylvania Compliance Year is between June 1, 2011 and May 31, 2012). However, there are estimated to be 105 megawatts of solar photovoltaic systems currently registered and certified in Pennsylvania of which only about 36 are actually located in Pennsylvania, which is one of the last states within the PMJ to allow “foreign” SRECS to fulfill their Solar renewable energy portfolio standard.

Solar Renewable Energy Certificates, SRECs, are not real, but merely a credit for having made one megawatt hour of solar electricity that was used elsewhere. SRECS have no intrinsic value. In other words, if there is no buyer for the solar REC, it is worthless. Like most consumer solar arrays I use all the power produced by the panels in my own home, nonetheless, my system generates 10 SRECs a year. Because SRECs are not physical items their value depends entirely on regulation which can change over time and that is the inherent risk in making financial decisions based on regulations. There was always a risk that some (or all) SRECs could become worthless at any time if regulations change.

Solar projects are sold based on state rebates, tax credits and SRECs to make financial sense. Electricity costs would have to be much higher to make solar photovoltaic panels a rational choice without incentives. Many solar projects built within the PMJ service area were sold based on selling the SRECs for the power they produce to make the cost versus return of the projects work as well as the state and federal tax incentives/rebates. The costs of the SREC are ultimately paid by electricity consumers rather than taxpayers. There are estimated to be about 105 megawatts of solar capacity now in place in Pennsylvania, while the 2004 law requiring utilities to buy a steadily increasing portion of renewable power envisions a demand of only 44 megawatts for the current year. The result: SREC prices have crashed within Pennsylvania. The solar industry says the market may remain oversupplied for several years unless the legislature steps in. The solar industry lobbied Harrisburg to accelerate the annual increases for solar-power mandates for the next three years.

Legislation amending the 2004 law has been introduced annually for the past few years. Two bills were introduced this year one in the state senate this past spring and one in the house this month. The senate bill would have increased the solar requirement and banned out-of-state projects from selling their credits to Pennsylvania utilities. This would effectively raise the price and value of in-state SRECs and make the out of state SRECs worthless in Pennsylvania. The legislation was introduced in the State Senate on June 14, 2011 and referred to the Environmental Resource and Energy Committee on that day. It has not emerged from committee and in the current legislative session appears to have no traction. The house bill, HB 1580, introduced in October of this year modifies the solar carve-out requirements for energy years 2013, 2014, and 2015 increasing them from approximately 71 MW, 118 MW and 205 MW to 207 MW, 238 MW, and 290 MW, respectively. This bill also proposes to close the Pennsylvania market so that only in-state systems registered after January 1, 2012 would be able to sell SRECs in the PA market. It appears under this amendment that out of state systems registered before January 1 2012 would be grandfathered. This bill is currently with the Consumer Affairs Committee of the house and has wide sponsorship and support.

The future of SRECs as always is dependent on political and economic environment. For three years Pennsylvania’s lawmakers have debated legislation to increase the state’s Alternative Energy Portfolio Standard (AEPS). Each effort ultimately sank under the weight of amendments- too many, too complicated, too confusing, and too messy. In the 2010 legislative session Pennsylvania lawmakers introduced HB 1128 to increase the solar requirements under PA’s Alternative Energy Portfolio Standards (AEPS). In addition to increasing the solar requirements, HB 1128 was written to amend the program by introducing a fixed alternative compliance payment (ACP) for the Solar PV portion of the AEPS as was done in the Massachusetts program. That bill failed on a roll call vote. It remains to be seen if the current simpler amendment can move forward and what regulatory interpretation of the amendment is if it passes both houses.

The regulatory interpretation of the 2004 legislation ACP was surprising to the solar industry. The regulators assumed that since Pennsylvania accepted SRECs from throughout the PJM region, it was a fair indication of the average price in the region. Therefore, Pennsylvania uses an ACP of 200% of the average price paid for SRECs in Pennsylvania. This was a different interpretation than the SREC market participants expected; that the utilities would be fined based on neighboring state closed market SREC values as well as the reciprocal Ohio market. So as long as there are some market participants willing to accept a low price and the market remains well supplied by allowing out of state participants, there is no price support for SRECs.

However, ACP mandates for 2011-2012 are increasing in other states some of which still have reciprocity with Pennsylvania. So if there are no legislative changes to offer relief the Utilities, and the state rebate monies are all spent there might be an improvement in the Pennsylvania market in the 2013 compliance year without the current bill passing. SRECs are valid for RPS compliance for the year generated and the following 2 years. Remember, though, that DOE recently approved a $1.4 billion loan guarantee to Bank of America Merrill Lynch to support Project Amp; the installation of 752 MW of photovoltaic solar panels on 750 existing rooftop owned by Prologis. This represents more than 80% of the total amount of PV installed in the U.S. last year when the renewable energy solar photovoltaic rebates were widely available. Depending on where these solar photovoltaic panels are installed they could significantly impact pricing and economics in the solar market and the cost of electricity across the nation and could change the SREC economics in all states.

California Implements Cap and Trade Program

On Thursday, October 20, 2011 after a long public hearing and meeting the California Air Resources Board unanimously voted to adopt the nation's first state-administered cap-and-trade regulations for greenhouse gases. Cap-and-trade is the centerpiece of AB 32, the Global Warming Solutions Act of 2006 a California law that establishes a wide reaching program of regulatory and market mechanisms to achieve quantifiable, reductions of greenhouse gases (GHG) that are intended to be cost effective. This law establishes a statewide GHG emissions cap for 2020, based on 1990 emissions. Though Cap and Trade was not part of the actual law, it was added by the California Air Resource Board in their Regulations. California sees itself as leading the way in cap and trade legislation and an example to the nation of the potential benefits and concerns and problems with this particular approach to attempt to prevent climate change by controlling CO2 emissions. A second phase of compliance begins in 2015 and is expected to include 85% of California's emissions sources.

Thought there were many other voices the prevailing view at the meeting was California is leading the way to the future. California intends to show by example to other states and the federal government that it is possible to regulate greenhouse gas emissions while protecting its economy and fostering a new green economy and industry. According to others, California is taking a very big risk with their economy for uncertain results. There is the strong feeling amongst journalists, regulators and NGOs that the vote was closely watched by other states and, if the program is deemed successful, it will serve as a model for future markets. If you recall the "American Clean Energy and Security Act” is HR 2454, also known as the Waxman-Markley energy bill, or simply as "ACES" was passed by the US House of Representatives in 2009 and died in the senate. The bill included a cap-and-trade global warming reduction plan designed to reduce carbon dioxide emissions in the U.S and also required “polluters” to buy permits to emit a certain amount of carbon dioxide.

Within California there is the strong belief that people watch what California does and emulate it. The California regulators believe that cap-and-trade programs are going to spread to other states and regions and the design features developed for the California program will be adopted in other states and regions with the federal government finally adopting the program. The California Air Resource Board sees their work in creating 262 pages of regulation as ground breaking and likely to change the country. These regulations imply a shift away from carbon based fuels. It is envisioned that this will support the creation of new green-tech jobs and financial certainty for the renewable energy industry even as there is a strong national push to further develop shale source natural gas to move power generation away from the coal fired utilities built in the mid 1900’s and for a reduction in the size of government. At least 15 states now produce shale gas and others may join them. The largest shale area, the still-emerging Marcellus, covers much of the Northeast and already supports 140,000 jobs in Pennsylvania alone. Many of the jobs created recently in Texas are related to the expansion of shale gas exploration and development.

United Nations Climate summit will be held November 28-December 9th 2011 in Durban South Africa. The Kyoto Protocol, which commits developed countries to cut their emissions, is set to expire in 2012. After both the Copenhagen (2009) and Cancun (2010) Climate summits failed to produce a legally binding climate treaty, delegates to the Durban talks are under immense pressure to produce some kind of deal that will be acceptable to both rich and developing nations. However, it is reported that cap-and-trade concept is losing support among the pervious signers of the Kyoto treaty and China and India who are now major producers of greenhouse gas because of concern about jobs, costs and bureaucratic complexity.

The “emerging nations,” including China and India want an extension of Kyoto, which required the industrialized nations to cut greenhouse gas emissions by 5.2% below 1990 levels from 2008-12. The world's two largest greenhouse gas emitters are China and the United States. The U.S. never ratified Kyoto, arguing it should contain 2012 goals for emerging economies and would cost U.S. jobs. China was exempted as an emerging economy, and though it is now the largest greenhouse gas emitter on earth, it wants to remain exempted from reducing or even stabilizing greenhouse gas emissions under any new agreement. In September India announced that it would not accept any legally binding limits on greenhouse gas emission, and Japan announced that they are reconsidering plans to cut carbon-dioxide emissions by 25% by 2020 due to closing of a significant portion of its nuclear power generation, and the costs of the carbon-credit programs that required the spending of almost $11 billion on carbon abatement programs in other countries. Overall, expectations for the future of the Kyoto Protocol are low and some doubt whether if a second commitment period is feasible with only support from EU which accounts only around 11% of the world’s greenhouse gas emissions and is itself reconsidering its nuclear power generation after the Fukushima Daiichi nuclear reactors were damaged after the quake. If nuclear reactors are going to be phased out as low greenhouse gas emission power generation there is no way to achieve carbon reductions without reducing the size of the economy, the standard of living or the size of the population.

The California Cap and Trade program requirements will help the current crop of California solar projects. If you will recall, the Department of Energy recently issued its final round of loan guarantees before the program ended and these final four loans included three generation project in California.
California Valley Solar Ranch Project a $1.237 billion loan guarantee to allow SunPower Corp to borrow the money to build a 250-megawatt photovoltaic electricity generating array in San Luis Obispo County, California using sun tracking technology to increase electricity output. The power will be sold to Pacific Gas and Electric Co. and will generate enough (very expensive) electricity to power 64,000 homes and will allow SunPower to increase demand for their panels and maintain or increase production. Construction employment will be significant, but permanent jobs will be few. The panels do not need much operation.

Low Impact Termite Management

In the United States there are four groups of termites of concern: subterranean (including the Formosan termite), drywood, dampwood and powderpost. Subterranean termites and drywood termites are the two general types. Subterranean termites "nest" in the soil and from there they can attack structures by building shelter tubes from the soil to the wood in structures. Subterranean termites cause more of the damage to homes and structures than drywood termites so will be my primary focus here. Termites will attack any material with cellulose, including wood, paper coated wall board, and paper (as in that treasured book collection that occupies the lower level of my home). Wood that is at least 30% water saturated provides enough moisture. Additionally, termites will find free-standing water such as condensation, rain or plumbing leaks and use this moisture as their main source for survival. Termites have been a part of the ecosystem for thousands of years and aid in the decomposition of wood, freeing the nutrients in the decaying material for reuse by other organisms. Termites rely on eating the cellulose found in wooden structures, furniture, stored food and paper. It is virtually impossible to reside anywhere in the United States without confronting termites at one point or another.

Subterranean termites are the common termite in most states, and live below ground in colonies. Mature termite colonies tend to be decentralized with numerous nesting and feeding locations, interconnected by underground tunnels. The size of a colony can vary from less than 10,000 termites occupying 100-200 square feet to millions of termites covering an area as large as a half an acre. In higher density residential areas, the colony or colonies responsible for damage may actually be located in a neighbor's yard, rather than beneath the house that is infested. This requires that termite treatment involve both in house treatment and creating an external perimeter control to push back the colony. One of the oldest and least toxic treatment of in house termites and other pests is boric acid which will shut down the termite's nervous system. The termite will go into "shock" and the boric acid will simultaneously dehydrate the termite.

The treatment options for termites are bating for control of the perimeter with spot treatment both inside and out and traditional chemical barriers. Physical barriers installed during construction are also possible. As a practical matter physical barriers cannot be effectively retrofitted. Prevention of termites should be part of the construction process. Building codes require in most locations require that a construction site be pretreated for termites. Proper construction techniques, such as isolating wood from the soil, elimination and prevention of moisture and the use of physical barriers such as crushed glass, basalt, granite, quartz or silica sand can prevent termite attack. Certainly, adoption of vigilant construction methods and the use of inert physical barriers can prevent termite penetration into the structure and can provide more permanent termite control than is possible with insecticide applications to the soil alone. Very few of us build our own homes and the inclusion of permanent physical termite barriers often does not make the list of desirable features.

The new technologies for termite control can be safer to use and potentially less harmful to the environment than relying only on pesticides alone. Termite baits use small amounts of insecticide to knock out populations of termites foraging in and around the structure. Some baits may even eradicate entire termite colonies. Various methods of termite baiting are used in various products. The Sentricon Colony Elimination System is a termite control system from Dow AgroSciences it is the oldest and most widely tested of the commercially available baiting systems. It is comprised of several slotted, sub-ground level cylinders containing wooden monitoring devices. When termite activity is detected in a particular unit, the monitoring insert is replaced with a special bait tube. The bait used is a chitin inhibiting chemical which prevents the termites from molting. The idea behind this baiting method is that foraging termites consume the bait and pass it along to others within the colony, eventually working its way up to the queen, thereby eliminating the colony.

Sentricon has been commercially available since 1996. Several university etymology departments have conducted field tests over the years in the termite hot spots of Hawaii and the southeast. Beginning in fall 1993, field studies were conducted with a prototype Sentricon system around three representative structures in Hawaii, each of which had a history of subterranean termite infestation and recurring problems. Application of the hexaflumuron baits which is the active ingredient in the Sentricon system eliminated all termite activity at these sites. Continued monitoring is very important, though. Several years later, termites were again found to be reinvading two of the locations, but using baits again eliminated the infestation. The University of Kentucky also performed independent research studies. They, too, found that the Sentricon® is an effective termite control option. Some of these studies involved structural that could not be controlled using conventional liquid methods, which require the application of hundreds of gallons of chemicals into the ground to create an unbroken wall of soil soaked with chemical.

The Sentricon Termite Colony Elimination System was developed by Dow AgroSciences (Indianapolis, IN), and is sold only through authorized pest control firms. Termite control is not a DIY project. The bait contains a slow-acting ingredient, hexaflumuron that works by stopping the insect’s growth. It interferes with chitin synthesis, which termites need to form a new exoskeleton. Hexaflumuron has low toxicity and low mobility in the soil. It binds strongly to soil particles and is not highly soluble in water. It is not likely to contaminate surface or groundwater and is used in bating systems in very small quantities so is not likely to come in contact with residents. Termite control with the Sentricon System ® entails a 3-step process: (1) initial monitoring to pinpoint termite activity, (2) delivery of the bait, and (3) subsequent monitoring to provide ongoing protection of the structure.

The Sentricon baiting systems is the most extensively tested baiting system. (For other systems see University of Kentucky review of baiting systems.) It can be used as a preventive method for subterranean termites and a remedial control tool for existing infestations in structures. However, it could take from one month to more than a year to control an ongoing infestation and is in my opinion best used to prevent infestation. One of the biggest challenges in baiting is getting termites to find the baits in the first place. The timetable for discovery will vary from property to property, depending on such factors as termite foraging intensity, time of year, moisture, and food availability. On one infested property in Kentucky, more than a dozen monitoring devices were "hit" (attacked) by termites within two weeks of installation; on another home in the same neighborhood, no below-ground stations were attacked during a full year of intensive monitoring despite two concurrent termite swarms inside the home. Similar variances in bait detection by termites (and thus effectiveness of the baiting system to treat and eliminate an ongoing infestation) have been reported elsewhere in the country.

Thus, baiting can take more than a year to push back an infestation and baiting is expensive. While the initial cost of baiting is much less than the initial treatment with a chemical barrier. A typical "barrier" treatment may involve hundreds of gallons of pesticide injected into the ground alongside the foundation, beneath concrete slabs, and within foundation walls and may require the drilling of concrete floors, walkways and driveways. The total cost for this initial treatment can be up to $2,500 for a suburban home, but the maintenance contact is $100-$200.

Termite control with baiting entails a 3-step process: (1) initial monitoring to pinpoint termite activity, (2) delivery of the bait, and (3) subsequent monitoring to provide ongoing protection of the structure. Monitoring stations are installed around the perimeter of the house 10- to 20- feet apart. Stations are typically installed one to two feet from the foundation, to avoid soil that may have been treated earlier with a liquid termiticide. Patios, driveways, and other paved surfaces are not stations can be installed farther out from the foundation, in adjoining plant beds, etc. Additional stations are installed in suspected termite foraging areas, such as near pre-existing termite damage, stumps, woodpiles, or moist areas on the property.

Bimonthly thereafter the bait stations are inspected for termite presence. When termites are found in a monitoring station, the untreated wood is replaced with a perforated plastic tube containing bait laced with a slow-acting termite growth inhibitor (hexaflumuron) and the termites feeding on the wood pieces are carefully dislodged and placed within the bait tube. Eventually, these termites tunnel through and out of the perforated tube, carrying the bait back to the colony. After termites are no longer found in the bait tubes, the baits are once again replaced with untreated wood pieces and monitoring continues. Even if the termite colony threatening the structure has been eliminated, reinfestation can occur and homes protected with bait systems will need to be continually inspected, monitored and maintained to guard against reinvasion from new colonies or previously suppressed ones. Once the termite population has been eliminated, the pest control firm will continue to monitor at three- to four-month intervals for an indefinite period so that the annual contract cost is substantial and may be up to $350-$800 per year, though the initial cost would typically be in the same range.

Look for Termites

There are many species of termites. In the United States there are four groups of termites of concern: subterranean (including the Formosan termite), drywood, dampwood and powderpost. Subterranean termites and drywood termites are the two general types. Combined these termites cause $1.5 billion in damage annually in the United States. These termites perform the important task of breaking down the large quantities of dead and fallen trees and other sources of cellulose that continuously accumulate in the forests. Unfortunately they also attack wooden structures and other wood products like paper, books, insulation, and if left uncontrolled, will cause extensive damage to structures and paper materials. When termite damage becomes evident it is usually the result of years of infestation. In nature, termites are usually the secondary invader of woody plants already in decline. While buildings may become infested at any time, termites are often only discovered when a spring swarming is observed or a home is sold since a Wood Destroying Organism (WDO) inspection and a written report indicating any termite activity or damage is required to obtain a mortgage.

Subterranean termites are the most common termite in the United States. The Formosan subterranean termite is the most destructive of the subterranean termites because of the size of their colonies and the rate at which these huge colonies can consume wood. The Formosan subterranean termite is believed to have been imported to the United States from China via Japan and Hawaii. They have been reported in eleven southern states: Alabama, California, Florida, Georgia, Hawaii, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas. A single colony may contain several million individuals ten times the size of other subterranean species, they can forage up to 300 feet in soil and can consume as much as three quarters of a pound of wood a day and severely damage a structure in months rather than years. Once established, Formosan subterranean termites have never been successfully eradicated from an area, and pose a threat to nearby structures.

All subterranean termites are social insects that live in colonies in the ground below the surface. The colonies have three primary castes: workers, soldiers and reproductive. The workers are creamy white, are seldom seen, and feed on the wood causing all the damage. Workers are about a quarter of an inch long and can live for up to five years. The workers feed the other termites. The soldiers have yellow heads with large jaws and are about the same size as the workers. The soldiers literally defend the perimeter and mud tubs of the colony. Neither the solider nor the worker willingly expose themselves to light to prevent moisture loss and are rarely seen. The reproductive termites (Kings, Queens) are dark brown or black and up to a half an inch long. They have two pair of translucent wings that appear light colored of equal length that fall off shortly after swarming as part of the mating process. The mated pairs attempt to locate moist wood in contact with soil to start a new colony. Most pairs do not succeed. The shed wings or the observed swarming are usually the only indication of termite infestation. Swarming occurs in late winter to early summer in most parts of the United States. There are also secondary reproductive females in mature large colonies.

There are other signs of infestation that are often missed or ignored. Earthen (mud) tubes that extend over foundation walls, support piers, sill plates, floor joists, etc. are the most easily identifiable sign. The mud tubes are typically about the diameter of a pencil. Termites construct these tubes for protection from natural enemies and prevention of moisture loss as they travel between their underground colonies and the structure. To help determine if an infestation is active, the tubes may be broken open and checked for the presence of small, creamy-white worker termites. Some tubes are abandoned even as an infestation remains active and tubes are not always present if direct access to wood components is available from the soil. Stucco, brick veneer or insulation below grade provides the termites with hidden access into the structure. The infestation will typically go undiscovered until damage becomes obvious.

Another common indication of subterranean termite infestation is the presence of dark areas or blisters in wood flooring. However, subterranean termite damage can go unnoticed because the termites only eat the interior spring wood leaving the grain and exterior surface intact. However, the termite galleries can be detected by tapping the wood every few inches with the handle of a screwdriver. The damaged wood sounds hollow and the screwdriver may even break through the wood into the galleries. In traditional construction with a basement most termite infestations occur in the basement and the structural timbers immediately above the basement walls such as mudsills, studs, joists, subflooring and floors. Wooden posts, steps, door frames, and any wood embedded in concrete or dirt floors are very susceptible to termite infestation. When a home is built on a concrete slab the flooring and framework for the walls can be damaged by termites. Termites favor the areas around furnaces, chimneys, hot water heaters and hat water pipes that provide warmth and moisture during cold months.

Most homes in United States were treated to prevent termites during the initial construction process. Termite treatments either barrier chemicals or poisons were sprayed into the soil under and around building before concrete was poured during construction. Most new construction in the United States is required to have pre-treatments for termites. Typically, large volumes of termiticide emulsion were sprayed into the excavation to fill the soil around the foundation walls before the concrete is poured. Competently treated structures are expected to resist termites for 5-10 years. The treatments are not permanent so it is necessary to develop a strategy to prevent termite infestation early. It is easier and less toxic to prevent infestation than to treat an infested home. However, it is not advised to use the barrier chemicals which involve pouring hundreds of gallons of toxic chemicals into the ground every 5 years. In addition, regulations prevent the application of most if not all termiticide within 50 feet of water well. There are steps a homeowner should take to make a house less ideal for termite invasions to minimize the use of chemicals. The US EPA has developed their Pesticide Environmental Stewardship Program (PESP) to encourage the least toxic methods of controlling pests. The integrated pest management approach for termite control involves the following steps: Inspection, detection and monitoring.

The thorough inspections and periodic regular monitoring will help determine the location of any termite damage and its extent, as well as identify signs of previous and current infestation. Research from the Entomology Department of University of Florida found that properly trained termite dog and their trained handler are the most effective termite inspectors. This is not a joke, but it is really funny to have your house inspected by a beagle. Termite Dogs can smell termites, through drywall, concrete, paneling and all other building materials and sit down to indicate a find. The paper “Ability of Canine Termite Detectors to Locate Live Termites and Discriminate Them from Non-Termite Material” was published in 2003 by the University of Florida. They tested dogs specifically trained to detect. In field trials the dogs were able to accurately locate termites in 95.93% of the time which was better than the trained human inspectors.

Determine treatment plan. There is a difference between finding termites and finding "conditions conducive to termite infestations". Both situations need to be addressed, but usually in different ways. Eliminating conditions favorable to wood-destroying pests, mostly moisture-related problems, usually means repairs or alterations to the crawlspace, elimination of water pooling locations and leaks in basements, crawlspaces or other parts of the house or the area around it. Wood that is at least 30% water saturated provides enough moisture. Termites will find free-standing water such as condensation, rain or plumbing leaks and use this moisture as their main source for survival. The treatment options are bating with spot treatment and traditional chemical barriers. Termite baits use small amounts of slow acting insecticide to knock out populations of termites foraging in and around the structure. Some bait systems may even eradicate entire termite colonies. A chemical barrier is the other option plan and involves using hundreds of gallons of termiticide to create an unbroken barrier of treated soil around and under the foundation. The chemicals are injected under pressure and may usually require the drilling of concrete slabs, porches and patios. Termite treatment is not a DIY project. Many of the consumer available products do not work and application technique is essential to success.

Finally, monitoring is an important element of termite control which is often difficult to achieve. Termite treatment is not a one-time event, but an ongoing struggle. When using barrier chemicals, termites may find their way through tiny, untreated gaps in the soil since it is practically impossible to establish a continuous, impenetrable chemical barrier. In the case of baits, it may take months for termites to find the bait installations and several months to achieve control of the colony. For this reason it is advised by various extension offices and the EPA to maintain a monitoring and service agreement.

Fracking, Burning Shale Gas and the Environment

Our modern society requires power and that is not going to change. The cost of power is a key factor in determining the cost of production, and the cost of living. In the 1990’s natural gas, sold for $2 per million BTUs after peaking in 2005 natural gas is now about $3.50-$4 per million BTUs, with this price and the advances in drilling the extraction of shale gas is viable and profitable. The techniques for fracking first developed in the Barnett shale in the Fort Worth Basin in Texas have been applied to a series of major shale gas deposits that could not have been viable without these advances in drilling and fracking. The Fayetteville shale, the Haynesville shale, the Marcellus shale reserves all in the United States and the Horn River shales in Canada are now accessible at current market costs. At the current rate of natural gas consumption North America is reported to have a 100-year supply of proven, producible reserves and even with expanded use of natural gas, there is more than a generation of currently accessible reserves.at that price we appear to have vast amounts of available natural gas.

Shale sourced natural gas could provide a reliable source of natural gas for our nation in this century. However we need to remember that the gas still is a limited resource and be cautious about what other impacts fracking might have on our other resources. Natural gas is the cleanest of the fossil fuels. Burning natural gas in the place of coal emits fewer harmful pollutants. Methane, the principle component of natural gas, is itself a potent greenhouse gas. Methane has an ability to trap heat almost 21 times more effectively than carbon dioxide. Concern for the potential impact of the release of greenhouse gases and other impacts from shale gas extraction have been raised by various groups. This year researchers at Carnegie Mellon University compared greenhouse gas emissions from the Marcellus Shale region with emissions from coal used for electricity generation. This study estimates the life cycle greenhouse gas (GHG) emissions from the production of Marcellus shale natural gas . The authors found that natural gas from the Marcellus shale had lower life cycle GHG emissions than coal for production of electricity by 20–50% depending upon plant efficiencies and natural gas emissions variability. The significant range in estimates is due to the variations in the ultimate production from a well (more lifetime production reduces GHG emissions) and differences in flaring, construction and transportation how carefully these steps are carried out.

At least in the medium term the environmental impact from power generation will be determined by the efficiency and care of how fuel is obtained, transported, generated and used. Improving efficiency is the low lying fruit that can have an immense impact and should not be ignored while we are busy dreaming of the someday world of renewable energy. Natural gas from shale rock is plentiful in North America. Despite billions of dollars in DOE solar generation loan guarantees the generating capacity of solar power in the nation will continue to be under 5% of power generation. Recent ambitious plans to convert the nation to renewable energy: build nuclear plants and solar and wind farms, were made under the assumption that natural gas prices would average $9 per million BTUs. At that level, electricity prices would have increased to costs of production and living significantly, but wind and nuclear power generation would have been competitive. Now, with natural gas at under $4 per million BTUs and more gas reserves announced each year, many of these projects suddenly look much too expensive and would never happen without mandated renewable portfolio standards and government incentives. The projects that get done will increase the cost of power when those costs are incorporated into the electric rate base.

Power plants can use several methods to convert gas to electricity. One method is to burn the gas in a boiler to produce steam, which is then used by a steam turbine to generate electricity. A more common approach is to burn the gas in a combustion turbine to generate electricity. Another technology that is growing in popularity is to burn the natural gas in a combustion turbine and use the hot combustion turbine exhaust to make steam to drive a steam turbine. This technology is called "combined cycle" or “natural gas combined turbine plants” and achieves a higher efficiency by using the same fuel source twice.

The CO2 emissions from all natural gas plants are less than to those produced by burning coal given the same power output because of the higher heat content of natural gas, and the higher overall efficiency of the gas generation plant relative to a coal-fired plant. Natural gas also allows for smaller ‘distributed generation’ plants, providing flexibility and local autonomy for generation. However, the gas well lifetime, care in obtaining and transporting the gas and the efficiency of the generation plant will determine overall environmental impact of gas power generation on our earth. Although power plants are regulated by federal and state laws to protect human health and the environment, there is a wide variation of environmental impacts associated with power generation technologies and as the Carnegie Mellon researchers found that natural gas from the Marcellus shale and probably all shale gas has lower life cycle GHG emissions than coal for production of electricity significantly better than the current standard.

Though there has been tremendous concern for the potential direct adverse impact that fracking may have on drinking water, geologists and engineers believe that there is little risk that the fracking “water,” a mix chemicals and water, will somehow infiltrate groundwater reserves though a fissure created by the fracking. It is believed though not documented and tested that the intervening layers of rock would prevent a fissure from extending thousands of feet to the water table. Data should be collected to test this belief as part of a careful monitoring and study of fracking and shale gas extraction. There are other risks in how we build wells and fracture the shale. Documented contamination to drinking water wells due to seepage of fracking water into drinking water wells through improperly sealed or abandoned drilling wells must be addressed.

The current regulatory framework concerning hydraulic fracturing, which is the core element in shale gas and tight oil extraction, has a number of gaps that need to be addressed before unlimited fracking takes place. There were several recommendations made in the report of the Shale Gas Subcommittee of the Secretary of Energy Advisory Board. The report had a rational approach to regulation recommending disclosure, testing, evaluation and modification of regulation and practices based on the information and data obtained. It assumes information and data will be gathered and analyzed. That is not being done. The data needs to be collected on a state and provided to the US Geological Survey and US EPA to consolidate on a national level.

Though the energy companies are beginning to gather baseline data for drinking water wells in the areas being fracked, the data collection is neither ongoing nor broad enough. Drilling requires large amounts of water to create a circulating mud that cools the bit and carries the rock cuttings out of the borehole. After drilling, the shale formation is then stimulated by hydraulic fracking, using up to 3 million gallons of water. Data needs to be gathered on the impact to water resources of supplying water for the construction of thousands of wells per year. For gas to flow out of the shale, nearly all of the water injected into the well during fracking must be recovered and disposed of. At under 0.5% by volume, the proprietary chemicals used in fracking total 15,000 gallons in the waste from the typical 3 million gallon hydro fracking job. The chemicals serve to increases the viscosity of the water to a gel-like consistency so that it can carry the propping agent (typically sand) into the fractures to hold them open so that the gas can flow. Determining the proper methods for the safe disposal of the large quantities of this fracking fluid that may also contain contaminants from the geological formation including brines, heavy metals, radionuclides and organic contaminants and monitoring the impact from this disposal must also be done. The deep well injection of the waste in Texas was associated with earthquakes and is believed by scientists to have triggered the earthquakes. The impact of so much waste water on our water resources must be measured and monitored. Finally, care must be taken to avoid degradation of watersheds and streams from the industry itself as large quantities of heavy equipment and supplies are moved on rural roads and placed on concrete pads. The watersheds must be monitored.

Other impacts from shale gas fracking and extraction is watershed impact and surface land damage due to construction of drilling pads, the transport and use of trucks, equipment, gas processing equipment and the creation of access roads in often remote areas. Other possible impacts are air emissions of pollutants and methane, groundwater contamination due to uncontrolled gas or fluid flows due to blowouts or spills, leaking fracturing fluid, and uncontrolled waste water discharge. Fracturing fluids contain hazardous substances, and flow-back in addition contains heavy metals and radioactive materials from the deposit. Experience shows that many accidents happen, which can be harmful to the environment and to human health. Many of these accidents are due to improper sealing of casings or leaking equipment. Furthermore, groundwater contamination by methane, in extreme cases leading to significant methane levels or even explosions from residential drinking water wells and potassium chloride leading to salinization of drinking water aquifer has been reported in the vicinity of some gas wells. The impacts can add up and make as shale formations are developed with a high well density of up to six well pads per square mile. Hydraulic fracturing means jobs and wealth, but the industry needs to develop adequate procedures, techniques and standards to minimize environmental impact and maximize gas recovery. Slow is fast.

EPA Air Rules and Power Generation in the United States

Our modern society requires power and that is not going to change. The cost of power is a key factor in determining the cost of production, and the cost of living. Although power plants are regulated by federal and state laws to protect human health and the environment, there is a wide variation of environmental impacts associated with power generation technologies. In the U.S. natural gas is used to produce 21 % of its electricity. Coal is used to product 48 % of electricity. With the existing power plants in place coal is still much cheaper than natural gas for generating electricity, but the tightening of regulations by the EPA under the Clean Air Act of coal powered generating plants for carbon emissions, mercury, arsenic, acid gases and the Cross-State Air Pollution Rule (even with recent modifications) will decrease that financial advantage because coal burns dirtier than natural gas.

The nation's coal-fired power plants were built as the nation grew and industrialized in the first half of the 20th century when coal was the most abundant and cheapest available fuel. The coal burning power plants emit 48 tons of mercury annually as well as particulates and other pollutants. According to the EPA, Mercury can cause neurological disorders in children and the mercury emissions from power plants pose "significant hazards to public health" and must be reduced. By forcing the plants to curb emissions of mercury, arsenic and acid gases, the EPA says it can prevent as many as 17,000 premature deaths a year caused by breathing air laced with coal-fueled pollution. These new regulations will require existing plants to meet emission standards that are at least as stringent as the top 12% best-performing coal facilities and may force some plants to convert to natural gas fuel or to shut down entirely. The generating capacity will have to be replaced with new plants that burn cleaner fuels and produce less pollution, but the cost of power will increase.

The mercury, arsenic, and acid gas regulations should not be confused with the Cross-State Air Pollution Rule which is a separate set of EPA regulations, aimed at slashing smokestack emissions that can travel into neighboring states, and were recently changed to allow 10 states (notably Texas who sued the EPA), to emit more smog-causing pollution than had initially been permitted. The change will allow the 10 states to emit 76,000 tons more pollution (70,000 tons will come from Texas) or about 2% of the total pollution the EPA will regulate under this new rule. The rule is designed to decrease smokestack emissions, mostly from coal-fired power plants, in 27 states, that contribute to unhealthy air downwind and is expected to prevent up to 34,000 untimely deaths and combined with the other rules will prevent 51,000 premature deaths, but the cost in terms of increased electrical rates, jobs and lives disrupted by unemployment and diminished economic opportunity. The recent changes give more leeway to the dirtiest facilities, but the EPA explains that the change was made because it became apparent that air stack scrubbers were not as efficient as initially assumed in the EPA’s first version of the Cross-State Air Pollution Rule. Nonetheless, the primary impact of the new rules will be on coal-fired plants more than 40 years old that have not yet installed state-of-the-art pollution controls. Many of these plants are inefficient and will be replaced by more efficient combined cycle natural gas plants. Edison Electric Institute, an industry trade group, claims the combined new rules will cost utilities up to $129 billion and eliminate one-fifth of America's coal capacity.

Natural gas is the cleanest of the fossil fuels. Burning natural gas in the place of coal emits fewer harmful pollutants. Methane, the principle component of natural gas, is itself a potent greenhouse gas. Methane has an ability to trap heat almost 21 times more effectively than carbon dioxide. This year researchers at Carnegie Mellon University compared greenhouse gas emissions from the Marcellus Shale region with emissions from coal used for electricity generation. The authors found that natural gas from the Marcellus shale had lower life cycle greenhouse gas emissions than coal for production of electricity by 20–50% depending upon plant efficiencies and natural gas emissions variability. Shale sourced natural gas could provide a reliable source of natural gas for our nation in this century and might make the conversion of some power generation worthwhile. However we need to remember that the gas still is a limited resource and be cautious about what other impacts fracking might have on our other resources especially water. At least in the medium term the environmental impact from power generation will be determined by the efficiency and care of how fuel is obtained, transported, generated and used. Improving efficiency is the low lying fruit that can have an immense impact and should not be ignored while we are busy dreaming of the someday world of renewable energy. Natural gas from shale rock is plentiful in North America. Despite billions of dollars in DOE solar generation loan guarantees the generating capacity of solar power in the nation will continue to be under 3% of power generation.

Expansion of Clean Water Act and Its Impact on You

On April 27th 2011 U.S. EPA and the U.S. Army Corps of Engineers released draft guidance on expanding the scope of the Clean Water Act. The guidance, now in effect, will be used for determining whether a waterway, water body, or wetland is protected by the Clean Water Act. The public comment period was open from May 2-July 1 2011. The proposal prompted 300,000 comments the majority of which were organized by environmental groups and are supportive; however wastewater compliance community also had many concerns. However, the comments were really immaterial because the EPA is not required to address public concerns to guidance documents and no changes contemplated or made to the draft and the guidelines are now final.

The Clean Water Act (CWA) of 1972 makes it a crime to discharge pollutants into the "navigable waters of the United States." However, what constitutes a "pollutant" or "navigable water" has been open to interpretation and a series of guidance documents over the years have expanded the definition of “navigable waters of the United States” until it is now defined by the US EPA and the Army Corps of Engineers as:

Traditional navigable waters
Interstate waters
Tributaries to navigable waters and interstate waters
Seasonal tributaries, steams or creeks
Wetlands adjacent to any of the above
And finally, the other category that seems to include everything but swimming pools, fountains, irrigation ditches and ponds or stock watering systems.

The Guidance broadened a recent Supreme Court decision that created a “significant nexus” standard for wetlands to include all tributaries and isolated water and allow functions of waters to demonstrate a “significant nexus” exists. The list of functions is extremely broad and the Guidance allows for decisions to be based on general scientific literature describing functions that generally apply to the types of waters in question, in lieu of actual case-specific analysis of the water itself. Essentially, this guidance creates federal jurisdiction over everything but swimming pools, fountains, irrigation and stock watering ditches and ponds that would revert to dry upland. Guidance places us all within the whim of regulators, and we all may find ourselves in the position of Chantell and Michael Sackett.

In 2005 the Sacketts purchased less than an acre of land to build a home near to but not adjoining a lake. After obtaining building permits from the county, they began the building process by spreading fill material over the lot. Two people from the U.S. EPA and one person from the Army Corps of Engineers appeared and issued the Sacketts an “Administrative Compliance Order” (ACO), alleging the land was a wetland subject to the Clean Water Act jurisdiction and ordered the Sacketts to restore the land to its original condition or face nearly $50,000 in fines per day. The Sackett family appealed for a hearing believing that their land was not a wetland, but was denied by EPA and the federal court.

In addition under an agreement between the U.S. EPA and the Army Corps of Engineers the Sacketts could not obtain a permit (even if they wanted to) until the open enforcement action was concluded. The site must be restored to its previous condition to apply to the Army Corps of Engineers for a permit to place fill material on a wetland. However, under the new guidance the EPA and Army Corps of Engineers can determine a site is a wetland subject to the Clean Water Act based on “general scientific literature,” in lieu of actual case-specific analysis of the water itself.

The case is scheduled to be heard by the U.S. Supreme Court in January 2012. The Supreme Court will consider whether the Sacketts may seek pre-enforcement judicial review of ACOs and whether petitioners’ current inability to seek pre-enforcement judicial review of the ACO violates their rights under the Due Process Clause of the U.S. Constitution. The regulations, procedures, and guidance on judicial review of Administrative Compliance Orders were created before the federal regulations and power were expanded by the 2011 Guidance to include any conceivable naturally occurring water.

The National Cattlemen’s Beef Association (NCBA) and the Public Lands Council (PLC) recently filed an amicus (friend of the court) brief to the U.S. Supreme Court in the Sackett case because according to NCBA Deputy Environmental Counsel Ashley Lyon, this case could have far-reaching impacts on farmers and ranchers and all private landowners. Few of us can afford the legal resources to address an EPA enforcement action, or afford to restore properties to apply for a Clean Water Act permit if our property is deemed to be subject to the Clean Water Act under the guidance. The guidance is open to inconsistent interpretation and could be used unfairly. There is no provision to obtain a decision that land is not subject to Clean Water Act before an ACO or enforcement action by the EPA. There are no objective standards to determine which waters fall under the act. There should be standards like distance, hydrologic connection, flow connection, size of watershed and storm impact that can be measured and considered in a consistent and quantified way so that a determination could be easily made and reviewed. The EPA Guidance has divorced the law from fact and this must be restored.

DOE Loan Guarantees and Potential Consequences

The US Department of Energy (DOE) Renewable Energy Loan Guarantee program ended on Friday, September 30th 2011 with the DOE closing four deals with government loan guarantees totaling around $4.7 billion. This end of program rush was disturbing after learning some details about the programs's first $535 million loan guarantee given to Solyndra, a would be manufacturer of unique solar photo voltaic modules that filed for bankruptcy earlier this month. With recent revelations about the company it appears that loan was ill conceived lacking the primary method of repayment (cash flow) and the secondary method of repayment (sale of the collateral) will not cover the loan. The San Francisco Chronicle described the Solyndra factory. “It wasn't just any factory… it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes spa-like showers with liquid - crystal displays of the water temperature, and glass-walled conference rooms.” The loan guarantee represents about $1,785 a square foot, though the actual cost of building and equipment was closer to $2,500 a square foot and DOE gave up first position in the loan restricting, so it is very likely that DOE with have to pay on the guarantee and the people of the United States will have a significant loss on this loan guarantee.

This project required venture capital not a government loan guarantee and has raised a myriad of questions about the decision process to award renewable energy loan guarantees. In a widely quoted email sent last year Larry Summers, former economic advisor to the President stated that the U.S. was not well equipped to make venture capital decisions relating to Solyandra. Venture capital investments require oversight and management, not an open checkbook. Citizens Against Government Waste, CAGW, believes the federal government should not operate loan programs. According to the CAGW the government typically funds risky ventures losing significant portions of taxpayer money or funding companies and industries which are mature and profitable and don’t need the money and creating windfall profits for the chosen. The difference between loan guarantee programs and venture capital is apparently not clear to the DOE.

One government loan programs I have had experience with and operates as a loan guarantee program is the SBA Loan programs and though considerably more modest in their goals, had a cumulative combine loss rate of 6.04% in 2008 the last year for which statistics are available. With that kind of loss rate a bank would fail and be shut down by the regulators. Unlike some of the DOE loan guarantees, SBA loans have a 75%-85% guarantee for most of their guarantee programs so that the banks operating the program would also experience a loss on a failed loan. The guarantee loan program has a loss rate of 5.04% still over twice the target small loan loss rate of commercial banks. Surprise, banks do plan to lose money on some loans and price risk groups of loans to cover the anticipated loss. The loans made directly from the SBA have been reduced in recent years because of high loss rates. At this time only micro loans (loans under $35,000) are made directly from the SBA and the cumulative loss rate is 11.12%.

In the final hours of the Energy Department’s loan guarantee program, the agency managed to approve renewable energy loan guarantees for, SunPower, First Solar and Prologis to build solar power projects. These are much less risky than manufacturing plants, as long as the solar modules operate at specified levels, and as long as the sun shines at historical rates, the project will generate electricity, and will have revenues as determined by regulation and state policies. The projects approved on Friday were:

California Valley Solar Ranch Project a $1.237 billion loan guarantee to allow SunPower Corp to borrow the money to build a 250-megawatt photovoltaic electricity generating array in San Luis Obispo County, California using sun tracking technology to increase electricity output. The power will be sold to Pacific Gas and Electric Co. and will generate enough (very expensive electricity to power 64,000 homes and will allow SunPower to increase demand for their panels and maintain or increase production.

Desert Sunlight Solar Farm a $1.46 billion loan guarantee for 80% of a Goldman Sachs Lending Partners and Citigroup loan to First Solar to build one of the world’s largest photovoltaic solar power projects, a 550-megawatt generating project near Desert Center, California. This project will be built by First Solar using their cadmium telluride thin film solar PV modules and sold to NexEra Energy Resources. This combined with the project below will assure sales of 780 megawatts of solar photovoltaic panels for First Solar.

Antelope Valley Solar Ranch a $646 million loan guarantee to the Federal Financing Bank, which is run by the U.S. Treasury. Apparently, they could not find a committed lender and had to get a loan from the federal government. AV Solar Ranch will be a 230-megawatt project in North Los Angeles County, California built and operated by First Solar once more using their cadmium telluride thin film solar PV modules. I guess that the DOE likes these PV modules. The project was recently bought by Exelon Corporation and all the power will be sold to Pacific Gas & Electric Co.

Project Amp a $1.4 billion loan guarantee to Bank of America Merrill Lynch to support Project Amp; the installation of 752 megawatts of photovoltaic solar panels on 750 existing rooftop owned by Prologis. This represents more than 80 percent of the total amount of PV installed in the U.S. last year when the renewable energy solar photovoltaic rebates were widely available. Depending on where these solar photovoltaic panels are installed and whose panels they install they could significantly impact pricing and economics in the solar market and the cost of electricity across the nation.

Solar Renewable Energy Certificates, SRECs, are not real, they are environmental “commodities” created by regulation that was born in New Jersey in 2004-2005 as a way to encourage and support the growth of solar energy within the states that utilize them. SRECs are not physical entities, but merely a credit for having made power. Because SRECs are not physical items their value depends entirely on regulation which can change over time and that is the inherent risk in making financial decisions based on regulations. In order for SRECs to have any value, the states must have a mandated Renewable Portfolio Standard, RPS, the SRECs must be tradable and there must be a punitive financial penalty for not meeting a solar carve out portion of the RPS. A renewable portfolio standard (RPS) is a state legislative requirement for utilities to generate or sell a certain percentage of their electricity from renewable energy sources. The percentage requirements under RPS programs vary widely from state to state. California regulations (if not ammended during the coming years) require that by 2020 utilities get 33% of power from renewable sources.

In some states with solar grant or rebate programs the utility company owns the SRECs so that the homeowner cannot sell them. This has worked in states like California where electricity rates are high and tiered and the solar installation market has become is more competitive and utility payments effectively fund solar rebates. The three California (only) generating projects will in all likelihood ultimately be paid for by California electricity rate payers as an increase in rates under their mandated RPS or by the US taxpayer if the revenue from selling the solar generated electricity does not cover the loan repayment.

As of September 20, 2010, 36 states plus the District of Columbia and Puerto Rico have enacted an RPS or a renewable portfolio goal (RPG). Of these states, only New Jersey, Maryland, Washington DC, Delaware, Ohio, Pennsylvania, and Massachusetts have assigned a multiplier to Solar RECs and created a separate SREC market where the homeowner or facility owner maintains ownership of the SRECs. Prologis operates the world’s largest and most diverse portfolio of industrial distribution facilities with properties in many of these locations as well as others. Depending on the location of the projects and regulations, these DOE guaranteed loans could finance the collapse of SREC value and an increase in electric rates. Though there will be a short term increase in construction jobs, long term employment for these projects will be minuscule. However, these projects will for a short period of time increase the demand for US made solar panels which has fallen in the past six month as worldwide demand falters and serve to protect those manufacturing jobs in the short term. (Chinese solar panel maker Suntech Power, opened a manufacturing plant in Goodyear, Arizona in 2010.)

EPA Inspector General Questions Process Not Conclusions

Last Wednesday the Office of Inspector General (OIG) of the US EPA issued a report on the procedure EPA used to make the Carbon Dioxide Endangerment Finding. The review by the OIG was requested by Senator James Inhofe of Oklahoma, a republican member of the Senate Environment and Public Works committee. The OIG has found that the EPA had not followed their established policy and procedures in the development of the endangerment finding for carbon dioxide, including the processes for ensuring information quality. EPA has disagreed with the conclusions and did not agree to take any corrective actions in response to the OIG report. The strength of our system of government is the checks and balances built into the system. The procedures must be followed to maintain the integrity of our system of government, even if the conclusions seem obvious.

Back in April 2007, in a suit filed by Massachusetts against the US EPA the Supreme Court found that greenhouse gases are air pollutants under the Clean Air Act. The case was brought to force the US EPA to determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which endangers public health or welfare, or whether the science is too uncertain to make a reasoned decision.

Two years later in April 2009, the EPA Administrator signed a proposed endangerment and a cause or contribute findings for greenhouse gases under the Clean Air Act. EPA held a 60-day public comment period, which ended June 23, 2009. If you will recall at the end of the comment period Alan Carlin and John Davidson of the US EPA’s National Center for Environmental Economics detailed their concerns about the science underpinning the agency's "endangerment finding" for carbon dioxide. The two said the US EPA accepted findings reached by outside groups, including the Intergovernmental Panel on Climate Change and the U.S. Climate Change Science Program, "without a careful and critical examination of their own conclusions and documentation." The EPA dismissed these concerns and barred the two from working in this area in the future. More importantly, the US EPA is required to make its own evaluation of the underlying science not depend on the findings of others for its Endangerment Determination and must that greenhouse gases are harmful to human health. Now the OIG has supported their claims with its finding and the EPA once more has chosen to disagree.

On December 7, 2009, EPA Administrator Jackson signed two distinct findings regarding greenhouse gases under section 202(a) of the Clean Air Act:
Endangerment Finding:
The Administrator finds that the current and projected concentrations of the six key well-mixed greenhouse gases--carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydro fluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--in the atmosphere threaten the public health and welfare of current and future generations.
Cause or Contribute Finding:
The Administrator finds that the combined emissions of these well-mixedgreenhouse gases from new motor vehicles and new motor vehicle enginescontribute to the greenhouse gas pollution which threatens public health andwelfare.

Although the EPA could have delayed until March 2010 the announcement of findings, in picking that time the administration chose to signal the US’s dismissal of any questions raised by the disclosure of emails hack from the University of East Anglia's Climate Research Unit (CRU) a collaborator with the U.N.'s Intergovernmental Panel on Climate Change. The Administration chose the first day of the United Nations global warming conference in Copenhagen as a way to signal full US acceptance of the U.N.'s Intergovernmental Panel on Climate Change determinations and as a demonstration that the U.S. is committed to cut its greenhouse gas emissions either through legislation or regulation.

I close with the press release from the Office of Inspector General (OIG) of the US EPA “We concluded that the technical support document that accompanied EPA’s endangerment finding is a highly influential scientific assessment and thus required a more rigorous EPA peer review than occurred. EPA did not certify whether it complied with OMB’s or its own peer review policies in either the proposed or final endangerment findings as required. While it may be debatable what impact, if any, this had on EPA’s finding, it is clear that EPA did not follow all required steps for a highly influential scientific assessment. We also noted that documentation of events and analyses could be improved.”