Wednesday, March 13, 2013
By Guest Author, Bessie Schwarz, Yale School of Forestry and Environmental Studies '14
On Thursday, March 7, the Yale Center for Environmental Law and Policy invited Tom Hunt from the Colorado Energy Office (CEO) to present a webinar on “The Future of Oil and Gas Production in Colorado” as part of the Center’s ongoing Policy Workshop Webinar Series on Emerging Issues in Shale Gas Development. CEO, a department within the Governor’s office, oversees energy investments and facilitates the growth of the state’s energy market and industry.
In his presentation, Mr. Hunt discussed the history of oil and gas production in Colorado and the unique political and environmental considerations required for regulating recent growth in the state’s natural gas production, driven primarily by shale gas. Natural gas is a fast moving issue for Colorado, as the state looks to balance the large shale gas reserves now accessible through horizontal drilling and hydraulic fracturing with conventional fossil fuel sources and renewable energy, such as wind. As this energy landscape shifts, CEO faces difficult challenges from private citizens, advocates, local governments, and energy companies. Mr. Hunt touched on these many complexities in his presentation.
You can watch Mr. Hunt’s full presentation below, in which he discusses the role of shale gas in Colorado’s energy portfolio and how the state has approached regulation of the natural gas industry. You can also download his presentation slides separately here.
The Future of Oil and Gas Production in Colorado 3-7-13 1.00 PM from YCELP on Vimeo.
Colorado’s Changing Oil and Gas Landscape
Oil and natural gas exploration is relatively “ancient history” in Colorado. First discovered and tapped in the late 19th century, oil and gas production has followed a boom-bust cycle, but the economies of several of the state’s counties, as well as the broader state economy to a certain degree, depend on these energy resources. Traditionally, oil and gas production and drilling has been concentrated in only a few counties. Mr. Hunt highlighted two of these, Weld and Garfield counties, during his presentation.
But while Colorado has been an oil and gas producing state for many decades, the dynamics of natural gas production in the state are rapidly changing. Since 1999, production of both fuels in Colorado has been on the rise with oil growing 125% and gas 83%. In 2009, a hydraulic fracturing operation also first unlocked a large previously inaccessible reserve of natural gas. In the subsequent years, a hydraulic fracturing boom has increased both the intensity of gas production in Colorado and expanded this industry into new areas of the state. These new areas include some of Colorado’s most populated towns, including parts of the Denver metropolitan area. As oil and gas production has entered new communities, it has sparked debates and spurred staunch opposition from some citizens and towns dotting the state’s new gas regions.
Regulating Natural Gas Development
The changing field of oil and gas in Colorado has forced new considerations of benefits and concerns, regulatory options, and legal issues. Mr. Hunt explained that in its energy-planning role, his office must weigh the interests of all of the state’s 5 million residents and the long-term protection of the state’s economy and environment. A major factor in this debate is the fact that the oil and gas industry currently employs 40,000 workers in Colorado and is a major economic driver. For example, the state exports (sells) three quarters of the gas that it produces.
Responding to concerns about air quality, health, noise, water scarcity, threats to the state’s world-renowned open spaces, and other issues, Colorado has striven to become a national leader in the regulation of natural gas. For example, Mr. Hunt noted that almost half of the policy recommendations contained in the International Energy Agency (IEA)’s 2012 report “Golden Rules for a Golden Age of Gas” are taken from Colorado state rules. You can find the details of the IEA’s report here. Among the policies that Mr. Hunt highlighted are new rules for impact mitigation, safety buffers around residential areas, and transparent communication for operations. These rules require drilling buffers of 500 feet around residential areas and disclosure of hydraulic fracturing fluids, although with exemptions for companies wishing to protect fluid components as “trade secrets.” Future steps will include a new interstate partnership coordinating natural gas vehicle programs and investments as well as several air emissions studies.
Colorado’s current hydraulic fracturing regulations are largely the result of two hotly debated rulemakings in 2011 and 2012, which involved companies, stakeholder groups, and legislators.
Ongoing Questions for Natural Gas in Colorado
In the complicated future of natural gas production in Colorado, renewable energy and questions about local versus state jurisdiction over gas regulation are likely to take center stage.
Wind and solar energy are among Colorado’s rich natural resources, and while these clean energies have traditionally represented a small fraction of the state’s energy portfolio, wind in particular is a promising source of current and future revenue and energy. Colorado is ranked 10th in the country for wind production and is home to the North American offices of Vestas Wind Systems, the world’s largest wind company. To encourage growth in this industry, Colorado has some of the country’s strongest renewable energy policies including a Renewable Energy Portfolio, which diversifies the state’s energy and helps build toward a clean energy future. CEO is responsible for balancing renewable energy with natural gas, coal, and other energy resources.
As new communities in Colorado react to new gas production within their boundaries, local legal fights have begun to dominate the debate in Colorado as they have in many other states that are looking to regulate and develop their shale gas resources. Some of Colorado’s most politically conservative towns have enacted moratoriums to gas, including two bans in the last few months, but it remains unclear if towns and cities have the legal authority to adopt such protections under Colorado law. In recent years, some states including Pennsylvania have explicitly prohibited such actions by local authorities. In Colorado, the City of Longmont and more recently the City of Fort Collins have adopted hydraulic fracturing bans, and these measures are now battlegrounds in the state debate. Longmont is currently being sued by the Governor to overturn its moratorium.
Next Time in Emerging Issues in Shale Gas Development
The Emerging Issues in Shale Gas Development webinar series will pick up next with a presentation by reporters Scott Detrow and Susan Phillips on “The Community Impacts of Marcellus Shale Gas Development,” which will draw on their award-winning coverage of hydraulic fracturing in Pennsylvania as part of National Public Radio (NPR)’s StateImpact Pennsylvania series. Mr. Detrow and Ms. Phillips’s webinar will take place on Friday, March 29, from 12-1:30pm EDT.
To register for this webinar, please click here. As always, the webinar will be free and open to the public, but registration is required to participate.
Tuesday, March 12, 2013
By Guest Author, Laura Johnson and Omar Malik, FES '13
Among the traffic jams, food vendors and bustling streets, visitors from around the world are gathering in Bangkok, Thailand to discuss international wildlife policies and conservation issues. This year marks the 40th anniversary of the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES, recently reaching 178 member countries, is the oldest multilateral environmental agreement and is generally regarded as one of the most successful examples of international cooperation on the environment.
CITES is well known in the international community as a comparatively quick and effective decisionmaking framework. This is due in part to the requirements of a two-thirds majority for the adoption of a proposal. Others treaties are not as straightforward. For example, the United Nations Framework Convention on Climate Change (UNFCCC) requires a consensus among countries, often resulting in lengthy debates that may span several years before coming to a decision. This was evident at the 18th UNFCCC Conference of the Parties (COP18) in 2012, when countries finally agreed to a decision that was supposed to have been adopted at COP17 in 2011. Even then, this was only an agreement to reach consensus on the creation of a new treaty by 2015.
The two treaties also differ in terms of implementation. Depending on the threat to a species from international trade, member countries to CITES may propose a species listing on one of three appendices, ranging from voluntary precautionary management at the national level to mandatory international trade controls. By comparison, the outcomes of UNFCCC involve aspirations to change domestic economic energy and transportation structures, implement carbon control measures and work towards adaptation and mitigation targets.
As two researchers from the Yale Center for Environmental Law & Policy (YCELP), and students at the Yale School of Forestry and Environmental Studies (FES), we are witnessing the quick and effective environmental policymaking of CITES in action at this sixteenth meeting of the Conference of the Parties (CoP16). It’s a chance to see how important conservation messages, after building upon citizen support and scientific understanding, are moved through the system from stakeholders to policymakers to become a part of the global policy agenda. (Our colleagues who attended the 18th Conference of the Parties to the UNFCCC this past year in Doha, Qatar witnessed quite a different process.)
Several major topics are on the CoP16 agenda, including the protection of elephants and sharks and strategies for reaching global environmental sustainability goals.
The conference opened with strong support for elephant protection from the Prime Minister of Thailand, Yingluck Shinawatra, which she described as an integral part of Thai culture. Elephants have been a recurring theme in the CITES negotiations, as ivory trade continues to increase and populations become more threatened. Other distinguished visitors expressed their support, including UN Environment Programme Executive Director Achim Steiner and Prince William, who sent in a personal video message on the urgency of elephant conservation. They also mentioned the explicit need to guard against shark exploitation – which is where we come in.
Last month, we helped organize a symposium on shark conservation at FES with classmates Leah Meth and Onon Bayasgalan as part of a course on international organizations and conferences. Leah and Onon are also the driving forces behind the related Shark Stanley campaign – which is itself part of a broader effort to gain support for the protection of shark and manta ray species at CoP16.
The Shark Stanley campaign is an example of the behind-the-scenes efforts to achieve new legal standards in the international community. In conjunction with our work at YCELP, our involvement at CoP16 has taught us how important CITES is as a tool for successfully managing the Earth’s valuable species and ecosystems.
Sunday’s opening ceremony included several statements on the need for following through on the aspirations put forward at the 2012 Rio+20 conference relating to the Sustainable Development Goals. To this end, CITES has served as a promising platform for agendas on natural resource conservation, and it also has provided a collection of lessons learned that can be applied to other efforts towards global sustainability. The success of CITES is undoubtedly due to its ability to enable action on international commitment. As described by Secretary-General John E. Scanlon, CITES “stands out,” and the decisions made at CoP16 will “find their way into legislation, regulation, and operating practices across the globe.”
Friday, February 22, 2013
By Guest Author, Michael Northrop, Program Director, Rockefeller Brothers Fund
This post originally appeared February 20, 2013, on the Huffington Post and is reposted with the author's permission.
Forty thousand people marched around the White House Sunday. They want the president to reject the permit application for the Keystone pipeline.
They came from all 50 states. Some even drove from California.
I talked to many of them. Their passion and seriousness took my breath away.
Everyone said they had been deeply encouraged by the president's innaugural and State of the Union addresses. Thank god, most said, he has come around to taking action.
When the president asked Americans to be active on climate and other issues, these activists were energized and they gave up their long weekend to show their commitment.
It looks to me like people are fired up and prepared to go to bat for the president on climate.
It's his turn now to return the favor. I hate to think what would happen if the permit is now approved. I don't think the 40,000 people ringing the White House Sunday or the millions of others they represent will understand it if the president and the State Department don't support them.
If the president really wants support for his climate agenda, this political reality has to be front and center in the deliberation process. To take the air out of the balloon on this exciting, vibrant, growing climate movement would be supremely counter productive.
These folks are going to be essential to coming battles on standards for existing power plants and other necessary initiatives the president has signaled he wants to take using his executive authority.
There is an enormous opportunity to build cars that don't require gasoline, to expand clean energy generation and markets, and to bend the dangerous curve of both U.S. and global emissions downward these next four years. A no to Keystone would be a fantastic spark to national level public engagement and support for climate action.
Thank you, Mr. President, for lighting the fire with your words. It is very exciting to think you will be doing the same with your actions.
Michael Northrop directs the Sustainable Development grantmaking program at the Rockefeller Brothers Fund in New York City, where he focuses on climate change. He is also a lecturer at the Yale School of Forestry and Environmental Studies. The views in this article are those of the author and not necessarily his employers.
Tuesday, February 19, 2013
By Bruce Ho
On Tuesday, February 12, the Yale Center for Environmental Law and Policy invited Jeffrey Logan from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) to present a webinar on “Natural Gas and U.S. Electric Power Futures” as part of our ongoing Policy Workshop Webinar Series on Emerging Issues in Shale Gas Development.
In his presentation, Mr. Logan discussed research that he recently completed through the Joint Institute for Strategic Energy Analysis (JISEA), a partnership between NREL and five universities, on “Natural Gas and the Transformation of the U.S. Energy Sector: Electricity.” The JISEA report helps answer some key policy questions about shale gas, including: (1) the lifecycle greenhouse gas (GHG) emissions from shale gas as compared to conventional natural gas and other fossil fuels; (2) the need for new regulations and best management practices; and (3) the role that shale gas could play in the U.S. power sector – including a transition to a clean energy future – over the next several decades.
You can watch Mr. Logan’s full presentation below, in which he discusses the potential role of shale gas in a variety of U.S. power futures (i.e., Chapter 4 of the JISEA report). You can also download his presentation slides here and the full JISEA report here.
The Role of Natural Gas in U.S. Electric Power Futures from YCELP on Vimeo.
While Mr. Logan covered a variety of potential shale gas futures, I will focus the rest of this post on the potential role of shale gas in meeting a clean energy future, which is a topic that I also addressed in a previous entry.
The Role of Shale Gas in a Clean Energy Future
If we look at clean energy within the context of climate pollution, the question of whether shale gas can play a role in a clean energy future has two parts: (1) What are the lifecycle GHG emissions associated with shale gas? (2) What effect will shale gas have on adoption of even cleaner, renewable energy, such as wind and solar? EDF’s Dr. Ramon Alvarez discussed the first issue, which is largely a question of methane leakage, with our webinar participants last fall. Because you can review his webinar and a summary of it here, I won’t re-hash methane leakage issues again in this post, but I will note that Chapter 1 of the JISEA report includes interesting new research on methane leakage, and is well worth the read.
In his presentation last Tuesday, Mr. Logan looked at the second question and presented some fascinating model results that can help answer whether shale gas is likely to coexist with, complement, or crowd out the development of renewable energy. To address this issue, JISEA modeled a power sector future subject to a Clean Energy Standard (CES), which is a policy that reduces power sector GHG emissions by requiring that a certain percentage of total power production comes from clean energy and then ratcheting up this percentage over time. A CES is similar to a renewable portfolio standard (RPS), but unlike an RPS, a CES also counts nuclear energy and natural gas toward its clean energy target.
The CES modeled by JISEA would require that 80% of all energy come from clean sources by 2035 and 95% from clean sources by 2050. Because natural gas is not carbon-free, a natural gas power plant would receive less credit toward meeting the CES targets than a wind or solar farm. The crediting system that JISEA modeled would work as follows:
Renewable energy and nuclear energy would receive full credit (i.e., 100%) toward meeting the CES targets.
Natural gas combined-cycle plants would receive 50% credit.
In the future, if carbon capture and sequestration (CCS) technology is developed, then natural gas with CCS installed would receive 95% credit while coal with CCS would receive 90% credit.
All other power plants (e.g., coal without CCS) would receive no credit (i.e., 0%).
Here’s an example: in a hypothetical year, if total power output is 100,000 MWh, of which 40,000 MWh is from renewable energy, 10,000 MWh is from nuclear, 30,000 MWh is from natural gas combined cycle, and 20,000 MWh is from coal, then the percentage of clean energy would be 65%: (40,000 * 1 + 10,000 * 1 + 30,000 * 0.5 + 20,000 * 0) / 100,000 * 100% = 65%. On the other hand, eliminating all of the coal and replacing half of it with renewable energy and half with natural gas combined cycle would raise the percentage of clean energy to 80% – i.e., the goal for 2035. The numbers here are examples only, but show that natural gas could play a role in a CES future.
In fact, JISEA’s model, which is more sophisticated than my hypothetical and, among other things, includes modeling and optimization of energy system costs, suggests that natural gas could play a key role in meeting the CES through about the year 2030. At that point, generation from natural gas would start to decline, though not disappear. As the CES targets rise, gas’ 50% credit would be too low to contribute meaningfully to the targets, and it would be necessary to replace some gas plants with even cleaner renewable or nuclear energy. (JISEA’s model suggests that renewable energy would fill in most of the gap here because it would be more economical than more expensive nuclear energy.) However, the model also suggests that CCS could become a technologically and economically viable option in later years, out past 2040, which would allow natural gas to make a resurgence later in combination with CCS, which would be credited at 95%.
Two additional modeling results are worth noting here. First, JISEA’s results suggest that meeting the hypothetical CES, including the highest clean energy targets in the later years, would increase electricity prices by only about 8-10% (to say nothing of the benefits that society would gain from cleaner energy, most notably the chance to avoid the worst potential impacts of climate change). Thus, a clean energy transition is not only environmentally necessary but also economically achievable. Second, in a separate model, JISEA looked at the potential impact of additional environmental and social protections (modeled as an increase in the price of natural gas) to reduce or eliminate many of shale gas production’s negative impacts, and found that these protections would not appreciably reduce future shale gas use. In other words, more environmentally and socially responsible shale gas production would not require an end to the shale gas boom. These results support efforts to develop shale gas in a more responsible manner, such as those discussed by Southwestern Energy’s Mark Boling in our webinar last month.
The Role of Shale Gas Today
JISEA’s modeling provides support for the idea that shale gas, if developed responsibly, could be a “bridge” to a clean energy future, but does so within the context of a yet-to-be-adopted CES. What about in the context of today’s power sector in which carbon remains a largely unregulated pollutant?
On this point, Mr. Logan provided both a pessimistic and an optimistic vision. The pessimistic vision is that without carbon policies, if natural gas prices remain low and renewable energy does not become cheaper, cheap natural gas could well stall the future development of renewable energy. Mr. Logan noted, for example, that high oil prices in the 1970s and early 1980s led to significant renewable energy growth, but when oil prices later crashed, renewable energy slowed substantially. The optimistic vision is that while natural gas prices have been low for the past few years, renewable energy – particularly wind, but also solar – continues to grow rapidly, suggesting that advancements in renewable energy technologies are simultaneously reducing the costs of renewables and allowing these clean energy sources to compete in the marketplace.
Whether current trends will continue, however, is hard to know, and while JISEA’s models suggest that shale gas could possibly play a role in a clean energy future, getting there efficiently and in time to avoid the worst impacts of climate change will almost certainly require policies that account for the full climate impacts of our energy choices.
Next Time in Emerging Issues in Shale Gas Development
The Emerging Issues in Shale Gas Development webinar series will next consider shale gas issues from a state perspective with a presentation by Tom Hunt from the State of Colorado’s Energy Office on “The Future of Oil and Gas Production in Colorado.” Mr. Hunt’s webinar, which will take place on Thursday, March 7, from 1-2pm EST, will examine the history, economic impacts, policy responses, and future of oil and natural gas production in Colorado, and will focus on how Colorado is seeking to access the economic and energy security benefits of oil and gas production while honoring the environmental protection and diverse property uses that the state’s citizens value.
To register for this webinar, please click here. As always, the webinar will be free and open to the public, but registration is required to participate.
Friday, February 15, 2013
By Guest Author, Ainsley Lloyd, Research Associate, Yale Center for Environmental Law & Policy
The Environmental Performance Index (EPI) featured prominently in the recent debate between Peter Foster and David Boyd in Financial Post (The nature debate part 1 and The nature debate part 2, January 25, 2013).
Over the past ten years the EPI has used measureable environmental information to rank countries based on their environmental performance. The EPI team from Yale and Columbia universities pores over data on the environment, comparing it with wealth, governance, and trade, among many other aspects of well being. First and foremost, we have learned that these relationships are complex, and that a few lines of text often lose the larger message in the data. The debate between Messrs. Foster and Boyd is no exception, and in this case, losing the message of the EPI means losing perspective on the nature of Canada’s environment and economy.
Wealth and the environment
Both Foster and Boyd reference theories on the relationship between wealth and the environment, with Foster arguing the two variables are correlated and Boyd questioning the strength of that relationship. The EPI provides some real-world insight.
EPI data show that although there is a relationship, a nation’s wealth only marginally explains its final EPI ranking. This means that there are other important factors influencing environmental performance. Put differently, economic development matters, but other factors are more important. Although we have not identified every variable, we are confident that environmental performance is not an accident of history and factors such as pragmatic and enforceable environmental safeguards are key.
Foster notes that Canada scores poorly in the overall EPI and blames our devotion “to official climate alarmism,” arguing that we weigh the Climate Change and Energy category of the EPI too heavily. While Canada does rank 102 out of 132 countries in the Climate Change and Energy analysis, Brunei Darussalam, Czech Republic, Luxembourg, Netherlands, Poland, and Taiwan all manage a better overall EPI rank with a lower Climate score. Furthermore, the Climate Change and Energy category actually receives less weight in the 2012 EPI than it did in 2010—a decrease from 25 percent of the overall EPI score to just 17.5 percent.
In addition, we have anticipated much of Foster’s climate-related concern by choosing CO2 emissions measures that account for his critiques— specifically, differences in wealth and in country size. The EPI indicators that address these concerns are CO2 per GDP (to account for differences in wealth between nations) and CO2 per capita (to account for differences in population size between nations). In the future, perhaps we can cut countries like Canada slack on account of higher latitudes and greater needs for heating—though energy needs for cooling in lower latitudes might balance the equation.
Foster is also concerned that our Environmental Health objective is not weighted as heavily in the final EPI score as its counterpart objective of Ecosystem Vitality. His concern is valid. Throughout the development of each edition of the EPI we consult with science and policy experts to fine-tune our methodology, and a departure from equal weights within the EPI framework is a signal that we have picked up on something important. It turns out that equal weights do not necessarily mean equal influence (something we discuss briefly in the blog post “the Science and Art of Quantification” and in our upcoming manual “How to Build Green Indices: Learning from the Experience of the Environmental Performance Index”).
For the 2012 EPI, a 50-50 weighting for Environmental Health and Ecosystem Vitality meant that the overall EPI scores were too heavily influenced by performance in the Environmental Health objective alone because of its wider distribution. Countries that perform high in the Environmental Health objective were likely to perform better in the overall EPI, regardless of their scores in Ecosystem Vitality. Both Health and Ecosystems are important and we adjusted the EPI weightings to correct for this imbalance.
Finally, Mr. Foster brushes off the significance of the Environmental Performance Index because of its “murky metrics.” The response here does not require any complicated analysis. Our entire process, from data to methods to the final ranking, is entirely available online and is free and open to the public. Nothing could be less murky. Any journalist, researcher, or policymaker who wishes to dive in is more than welcome, and we are here to help.
On that note, to Messrs. Foster and Boyd: we would like to invite you both to serve on our expert panel for the 2014 EPI. You’ll find that it’s a dynamic group of scientists and practitioners, ready for debate, eager to prepare the best set of tools possible for policymakers.
Monday, February 11, 2013
By Guest Author, Omar Malik, Yale School of Forestry and Environmental Studies '13, Research Assistant, Yale Center for Environmental Law and Policy
An article in a recent issue of The Economist suggests that putting effort into domestic climate change legislation is more important than pushing international climate agreements right now. The piece describes the results of a new study that assesses whether the climate change policies of 33 countries have improved, gotten worse, or remained the same as of the end of 2012. The encouraging results indicate that domestic policy action is happening even in the absence of a mandated treaty structure.
This ought to bring hope to environmentalists who advocate for a more decentralized approach to climate change policies. It should also appeal to those who bemoan the apparent political impasses of the international U.N. climate negotiations.
The new study—the third in a series by GLOBE international—was extolled by Christiana Figueres, the Executive Secretary of the UNFCCC, the U.N. body that coordinates global climate change agreements. She attended the release party for the report in London this January and issued an official statement, in which she said, “[D]omestic legislation on climate is the absolutely critical, essential linchpin between action at the national level and international agreements.” At the same time, she remarked that the ultimate goal of the study should be that it paves the way for the next U.N. climate treaty that’s supposed to be agreed upon by 2015, to take effect by 2020.
The U.S. National Climate Assessment report came out just as recently from the U.S. government. Also in its third iteration, the Assessment is open for public review until April 2013. Perhaps in a complementary way to the GLOBE study, the US Assessment focuses more on the science and evidence of climate change for one particular country and broadly touches upon the policy situation as well. Similarly, the conclusion of the report states that more U.S. policy action is necessary, but that concerted global actions would be the best way to go forward.
Both reports seem to suggest, then, that domestic policies are necessary, but not sufficient, to achieving the ultimate goals of climate action.
This is a familiar problem in the global climate policy debate: should governance move from the top down or the bottom up to reach desired outcomes? And, should success rely on individualistic actions or, rather, support from movements in concert? These tensions are the fuel for geopolitics and have led to both progress and paradox.
The need for harmonized policies in the face of trying times reminds me of a passage in The Federalist. John Jay, writing to newspapers in 1787 to argue for the adoption of the new Constitution, argued that it’s beneficial for a central government, when concerned about national defense, to “move on uniform principles of policy.” The case certainly has been made for treating climate change as an issue of national security; many politicians have already argued that climate change poses that kind of threat to the United States (both John Kerry and the US Navy have issued public statements). In this case, perhaps its management should be approached in terms of coordinated policies with the kind of logic articulated in The Federalist:
Who shall settle the terms of peace, and in case of disputes what umpire shall decide between them and compel acquiescence? Various difficulties and inconveniences would be inseparable from such a situation; whereas one government, watching over the general and common interests, and combining and directing the powers and resources of the whole, would be free from all these embarrassments, and conduce far more to the safety of the people.
--John Jay (Federalist No. 4, available online http://avalon.law.yale.edu/18th_century/fed04.asp)
As John Jay tells us, these debates are not new. The new climate reports show that the world’s countries do behave in the manner similar to Voltaire’s Candide, tending their own gardens; but, at the same, the reports remind countries to keep in mind that the end goal is to use those piecemeal gardens to make the wider world greener.
The Economist. “Climate-change laws: Beginning at home.” 19 January 2013.
BBC News. “Climate change measures: Report praises politicians.” 13 January 2013. http://www.bbc.co.uk/news/science-environment-20983931
The 3rd Climate Legislation Study from the Global Legislators Organisation (GLOBE International).
Available here: http://www.globeinternational.org/images/climate-study/3rd_GLOBE_Report.pdf
Homepage of GLOBE International: http://www.globeinternational.org/index.php/legislation-policy/studies/climate
UNFCCC statement from Christiana Figueres. 13 January 2013. http://unfccc.int/files/press/statements/application/pdf/201314011_globe_international.pdf
The U.S. National Climate Assessment, draft for public review. 2012.
Friday, February 01, 2013
By Josh Galperin, Associate Director
A conservation easement is a legally binding agreement that prevents most development on a parcel of land. For instance, a landowner might place a conservation easement on their undeveloped waterfront property, requiring that the property is never developed for commercial purposes. The easement is a tool that has long been an important part of environmental protection, but it does have its downside: typically a property is taxed based on its highest possible use, not on its actual use. A swath of land on the outskirts of a city center, for example, has enormous value as a commercial development. The land may be undeveloped and producing no income, but the owner must still pay taxes for the high commercial value. This tax liability incentivizes development because landowners need to pay taxes one way or another.
In 2008 the Santa Fe Conservation Trust in New Mexico was faced with this very problem. The Trust became the new owners of a pristine parcel of land in the Pecos River Canyon in San Miguel County and their ownership included a conservation easement requiring them to hold and maintain the property for conservation purposes. The tax department wanted to assess taxes on the land, but the Trust pointed out that New Mexico’s constitution has a unique provision which states that “all property used for… charitable purposes… shall be exempt from taxation.”
On January 11, 2013 a court in New Mexico agreed with the Santa Fe Conservation Trust that environmental conservation is a charitable use, which provides a substantial benefit to the public. As such, the Trust is not required to pay any property taxes on this property.
This particular rule—that land held for conservation purposes may be exempt from all property tax—is unique to New Mexico, but the way in which it incentivizes conservation should still be good news to environmentalists. The way in which it further reduces taxation should be good news to tax-averse conservatives.
Tuesday, January 29, 2013
By Bruce Ho
On Wednesday, January 23, Mark Boling, President of V+ Development Solutions, a division of Southwestern Energy Company, kicked off the spring line-up of our 2012-2013 Policy Workshop Webinar Series on Emerging Issues in Shale Gas Development with a presentation on “Balancing Environmental, Social and Economic Impacts of Shale Gas Development Activities.”
In his presentation, Mr. Boling provided both a defense for continued shale gas development and an acknowledgment that the gas industry needs to do a better job, on the whole, of acknowledging and addressing legitimate environmental concerns. Toward this end, he discussed Southwestern’s efforts to: (1) study the rate of methane leakage from shale gas wells in collaboration with the Environmental Defense Fund (EDF) and others (their final report is due out soon); (2) work with EDF to develop and promote a model regulatory framework for states to ensure proper well integrity; (3) develop improved well cementing technology with the University of Houston and CSI Technologies; (4) with help from The Nature Conservancy, train employees and contractors to reduce erosion and sedimentation impacts from project sites; and (5) develop new tracer technology with Rice University to help detect hydraulic fracturing fluids if they migrate into groundwater.
You can watch Mr. Boling’s full presentation below, in which he further discusses Southwestern’s views on the shale gas debate and the company’s vision of environmental responsibility and regulation.
Balancing Environmental, Social and Economic Impacts of Shale Gas Development Activities from YCELP on Vimeo.
In listening to Mr. Boling’s presentation and his responses during the subsequent Q&A, three things struck me as particularly important issues for regulatory discussions:
(1) “A Level Playing Field” – Mr. Boling noted that Southwestern strongly supports adoption of the model regulatory framework that it has developed with EDF. But he also stressed the need for a level playing field, suggesting that even companies interested in doing “the right thing” may hesitate to implement best environmental practices if doing so makes them less competitive. Companies may not always seek the lowest denominator – Mr. Boling noted that many implement best practices that go beyond regulatory minimums – but without effective regulatory safeguards, economic pressures will make it difficult if not impossible to address environmental concerns fully, even with good actors.
(2) “Straight Talk” About Regulations – In discussing what he sees as a need to “refocus the debate,” Mr. Boling recommended that his industry spend less time trying to minimize public concerns and more time communicating about the real risks involved in shale gas development and what the industry is doing to mitigate these risks. For example, during the Q&A, Mr. Boling noted that he has split with those in his industry who argue that “green completions,” which help reduce or eliminate air pollutant emissions from new shale gas wells, are too costly. New regulations adopted by the U.S. Environmental Protection Agency (EPA) last year will require green completions of all new hydraulically fractured wells by the year 2015, though Southwestern has begun this process early by participating in EPA’s Natural Gas STAR Program. Mr. Boling noted that a few years ago, green completions cost his company $20,000 more per well than simply venting pollutants to the air, but these costs have since fallen significantly, and now green completions are often profitable investments because they capture natural gas that can be sold rather than wasted. Notably, these economic benefits are purely private and do not take into account the additional public benefits that arise from reduced air and climate pollution.
Companies such as Southwestern deserve credit for leading environmentally through the Natural Gas STAR Program and other such initiatives. Southwestern’s experience also reinforces the observation that the costs of regulatory compliance are often much less than originally anticipated as new technologies and solutions develop or become cheaper to implement over time (see, e.g., here, here, and here).
(3) Politics and Science – Mr. Boling lamented what he sees as too much politics in shale gas regulation and not enough regulation based on sound science and risk assessments. The goal of science-based (or scientifically informed) regulation is a good one, and it is true that some parties on both sides of the shale gas debate have stretched the science too far in support of their agendas. As more research is published – including studies involving Southwestern – these data will hopefully contribute to an improved public understanding of shale gas’ environmental risks and impacts as well as its potential benefits.
But it is also true that science cannot, on its own, determine the best regulatory approach when faced with uncertainty or questions of socially acceptable levels of risk. Decisions about whether to move forward with resource development or to wait for science (and policy) to catch up to practice are inherently political, and thus politics will continue to play a role in determining how shale gas fits into the future energy mix.
In the context of climate change, for example, it is indisputable, scientifically, that burning fossil fuels, including shale gas, contributes to a warming planet. Yet there is a debate as to whether shale gas will exacerbate this warming in the long run or instead help reduce the total warming by helping transition us away from coal and, eventually, to carbon-free energy. Ultimately, the outcome of political decisions about energy investments and environmental risks will determine whether the former or the latter is true. Sound science, including climate science, must be a key component of these decisions, but resource outcomes and policies are rarely pure questions of scientific fact. Politics will play a role.
Next Time in Emerging Issues in Shale Gas Development
The Emerging Issues in Shale Gas Development webinar series will continue on Tuesday, February 12, from 2-3pm EST with a presentation by Jeffrey Logan from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) on “The Role of Natural Gas in U.S. Electric Power Futures.” Mr. Logan will present research from a report he recently co-authored through the Joint Institute for Strategic Energy Analysis, an initiative between NREL, the University of Colorado-Boulder, the Colorado School of Mines, Colorado State, M.I.T., and Stanford.
To register for this webinar, please click here. As always, the webinar will be free and open to the public, but registration is required to participate.
By Guest Author, William Miao, Yale School of Forestry & Environmental Studies '14
The tiny island nation of New Zealand once again received a disproportionally large amount of media attention when the prominent and widely respected economist, Gareth Morgan, revealed his solution for saving the country's dwindling diversity and abundance of native birds: banning all cats, household or feral, in the entire country. His reason is simple. Cats are natural-born serial-killers of native birds – they have contributed to the extinction of nine birds species -- so eliminating these furry mammals would save the avian population from ruthless paws and jaws. The controversial campaign – “Cats to Go” – has been widely reported in global media outlets such as New York Times and Huffington Post.
Proponents of the proposal underscore the necessity of protecting native species at all costs, and the naysayers ridicule this idea as radical and “over-the-top.” As the New Zealander-in-residence at the Yale Center for Environmental Law and Policy (YCELP), I have been asked on numerous occasions for my position on this issue. This blog is my response (and everybody can stop bothering me now).
While I agree with Morgan on the potential benefits of his proposal, I have my reservations. My reason is also simple: it is not because I hate the native birds. In fact, I have supported their conservation efforts for a long time through volunteering on an offshore bird sanctuary island. Rather, I am simply unsure about the practicality of a non-differentiating, nationwide feline ban, especially given the potential scale of the policy instruments required to implement the ban, as well as the constraints on the current political resources.
For those not familiar with New Zealand, the country has one of the highest cat ownership rates on the planet, with 28 percent of households owning one cat, and a further 20 percent owning two or more. This means cats form an integral part of nearly half of the families in New Zealand. The fact that cats as pets can provide intimate and tangible comforts and joy is deeply ingrained in this country’s culture. In contrast, the native birds are generally more elusive, and the more intangible ecosystem services they provide are very poorly appreciated by everyday New Zealanders. So I suspect that many more people would value the companionship of their cats over the existence of some native bird species that they probably will never see, as sad and cruel as this may sound. And, unfortunately, this conflict of personal and societal interests likely would make the ban very unpopular among the mainstream, at least in the short-term. As a matter of fact, despite the international publicity, a week into its launch Morgan’s campaign has only managed to attract around 2,000 signatures, equivalent to 0.04 percent of NZ’s already small population.
From the government’s perspective, it is wise not to invest limited resources in policies unlikely to attract supports. Furthermore, alternative bird-saving options are available and are far less controversial: elimination of other predators such as possums and weasels, implementation of breeding programs, construction of pest-free sanctuaries, just to name a few. If these bird species remain endangered, the government could even consider striking a middle ground and impose some type of cat controls, such as restricting household cats to indoors while eliminating feral cats, for example. Conversely, a single-minded pursuit of a “home-run” is, in my mind, counterproductive, and will likely end in a lose-lose situation for both the campaigners and the birds they are trying to protect.
Interested in invasive species management? Attend the YCELP’s panel discussion, “Eating Invaders: A Panel Discussion on Invasive Species”, which will be held at Yale Law School at 6:10 pm on February 13.
William Miao is a first-year Master of Environmental Management (MEM' 14) candidate at the Yale School of Forestry and Environmental Studies. His research focus is on the application of integrated environmental tools and frameworks at corporate, industrial, and national levels. Originally a chemical engineer from Auckland, New Zealand, his previous work involved risk management for oil and gas production, waste to energy research, and life-cycle assessment for the steel industry.
Thursday, January 24, 2013
By Josh Galperin, Associate Director
20 years ago, along State Road 50 in Orange County, Florida, land developer Coy Koontz proposed to fill 3.7 acres of wetlands in order to build a commercial center. At the time, the local water management district agreed to permit the project if Mr. Koontz would agree to preserve the remaining 11 acres of wetlands on his property and, in order to further mitigate the wetlands he would fill, to contribute approximately $10,000 to improve a separate wetland preserve several miles away. Mr. Koontz refused this arrangement, as well as several others proposed by the district, and instead sued, claiming that the district’s refusal to issue him an unconditional permit constituted an impermissible government taking of his property without just compensation, in violation of the Fifth Amendment to the U.S. Constitution.
Over the last two decades, despite Mr. Koontz’ death, this case found its way from the wetlands of central Florida to the United States Supreme Court, with Mr. Koontz’s son, Coy Koontz, Jr., taking over for his father.
The environmental implications of this particular case are clear: Wetlands, which are sometimes called the “kidneys” of watersheds for their water purification functions and which also provide important wildlife habitats, are an essential environmental resource and this case involves the question of when and how Mr. Koontz can destroy wetlands on his property. However, the really interesting aspects of this case are in the details of the legal theory.
I. The Takings Clause of the Fifth Amendment
Mr. Koontz claimed that by failing to issue him a development permit, the government had “taken” his property. Among other things, the Fifth Amendment to the United States Constitution says “nor shall private property be taken for public use, without just compensation.” This means that the government may take private property from individuals on two conditions. First, the government may take the property only for a public use, such as a road, a school, or environmental protection. Second, when the government does take private property for public use, it must offer the property owner compensation for the land taken.
A. Taking by Eminent Domain
Over the years this constitutional clause has given rise to several distinct types of takings. Eminent domain is the most traditional means of taking private property for public use. With eminent domain, the government will go to a court and tell the court that it wants to take ownership of private land. As long as the purpose of the eminent domain is public and the compensation is fair, the court will transfer ownership from the private owner to the government.
B. Taking by Regulation
A regulatory taking is an alternative method of taking private property. This occurs when the government does not plan or intend to take ownership of private property, as it does with eminent domain, but instead regulates the property owners’ use of his or her property to such an extent that the government is essentially forcing the property into public use. For example, where a state regulation prohibited a mining company from extracting any coal that was under a residential building because mining would cause the building to collapse, the Supreme Court ruled that there had been a regulatory taking. The Court found that the regulation prohibited the company from using part of its property and that the state, in an effort to protect private homes from coal mining, had gone “too far”. 
A later Supreme Court case helped explain, but did not completely resolve, how to determine when a regulation goes too far. In this later case, the Court developed what is now called the Penn Central test, which says that whether there is a regulatory taking depends on: (1) the economic impact of the regulation; (2) the extent to which the regulation interferes with distinct, investment-backed expectations of the property owner; and (3) the character of the government action.  Unfortunately, in the nearly 40 years since the Court laid out the Penn Central test, it is still unclear exactly how to interpret and apply the details.
Some regulatory takings, however, are easy to identify because they are categorical. That is, they involve much less balancing and judgment. When a government regulation forces a permanent invasion of property, no matter how small that invasion, it is a taking, as was the case when a regulation forced building owners to allow cable companies to run wire across their roofs.  Likewise, when a regulation completely removes any private economic benefit of property, that is a “total taking” and the Constitution requires compensation. For example, a South Carolina law required a special permit to develop in a critical coastal area. When the government would not issue a permit to a beachfront property owner, the Supreme Court said that stopping development is permissible, but as long as the government requires the landowner to preserve his property for public environmental purposes, it must pay him just compensation. The court explained that by denying the permit, the government denied the landowner any economically beneficial use of his land. In other words, where a regulation causes property to have only a public benefit, and no benefit to the private landowner, there has been total taking. 
C. Taking by Exaction
Finally, there is a category of taking called an exaction. An exaction occurs when the government conditions issuance of a development permit on the developer giving up some smaller piece of property. Where a homeowner wants to build a new beachfront house, but the government will only issue a permit if the homeowner allows pedestrians to cross his property; that is an exaction. It is a taking of the small piece of property across which the pedestrians will walk.  And if a hardware store wants to expand its parking lot but the government will only issue a permit if the storeowner gives up a portion of her property for a bike path, that too is an exaction. It is a taking of the land that will become a bike path. 
Not all permit conditions, however, are exactions. First, to be an exaction, such a condition must require the dedication of property to public use. Second, a permit condition is permissible and is not a taking if the condition is closely related to the harm that that the permitted action will cause. The condition must be related in both its nature and its size. For example, when the beachfront homeowner builds a new home, that development has nothing to do with pedestrian beach access, so the pedestrian crossing does not have what the Supreme Court calls an “essential nexus” with the new development.  In contrast, a storeowner expanding her parking lot, does have a connection with traffic and commuting, so a bike path across the property does have an essential nexus. However, according to the Court, the traffic impact of a few additional parking spots is insignificant and is not weighty enough to warrant the dedication of private property for a bike path. The Court calls this test one of “rough proportionality”; the impact of requiring the landowner to establish a bike path is not roughly proportional to the impacts of the parking lot.
At first, because the case of Coy Koontz is about permit conditions, it appears to concern only this last category of takings: exactions. But in fact, the case raises questions about the broad spectrum of takings law.
II. Takings in the Context of Koontz
A. Has There Been an Exaction?
For the sake of argument, the Supreme Court might take the facts of Mr. Koontz’s case and decide that there is an exaction. They would of course look at the requirement that Mr. Koontz dedicate his undeveloped wetlands for preservation and that he contribute money to the preservation of additional wetlands and the Court would have to agree that there is an essential nexus between wetland destruction and wetlands preservation. However, they might decide that the harm done by filling a few acres of wetlands is not roughly proportional to the requirement of preserving and paying for so many additional acres. Under this reasoning the Court could decide that there has been an exaction and that compensation is due
In the exaction cases described above, the owners sued the government after the government issued permits requiring dedication of the walking path beside the beachfront home and the bike path next to the hardware store. But in this case Koontz sued the government for denying his permit. Because the government never issued a permit, there was no requirement forcing Koontz to do anything with his money or wetlands. The government never forced Koontz to dedicate his property to the public good. Thus, as Mr. Koontz sues, seeking compensation for the exactions, the Court cannot ignore the fact that there never was an exaction, the government cannot compensate for something it has not taken, or for a requirement that does not exist.
When the Supreme Court listened to arguments in this case Justice Sotomayor listened to Koontz’s explanation of this case and found herself wondering, “Why are we even in this case? Why are we here?” Justice Scalia, often the greatest champion of strict property rights, expressed the same concern, pointing out that the government never took anything in this case. Given the skepticism of the Court, it seems that Koontz’s exaction theory may fail.
But perhaps other takings theories could rescue this case. Realistically, Mr. Koontz’s presented his case to the Supreme Court only on the exaction argument, so it is doubtful that the Court would address other theories. However, in the past decades and already this term, the Court has been inclined to rule in favor of complaining landowners, so an exploration of Koontz’s other constitutional and policy options is worthwhile.
B. Other Takings Theories
Mr. Koontz might argue that there has been a regulatory taking insofar as the government has denied Mr. Koontz all use of his land for commercial development. This argument has previously prevailed before the Court, as was the case, mentioned above, of the South Carolina landowner who was denied a permit to build on his beachfront property. However, in that case the Supreme Court considered the permit denial to be a regulatory taking because it left the landowner without any reasonably beneficial economic use of his land. That simply is not the case for Mr. Koontz. Coy Koontz can still build an economically significant commercial development on his property. Admittedly, Mr. Koontz can only build this development if he is also willing to preserve and improve various wetlands at what may be a non-negligible cost to him. But the economic opportunity to develop the parcel even with the proposed restrictions is also very real, and an argument that there has been a complete loss of value rather than only a partial reduction in value is unsound.
Mr. Koontz might then argue that there has been a regulatory taking under the three-part Penn Central test. This argument also faces an uphill battle. The Court might find, for example, that when the government denies a permit because the landowner is not willing to accept conditions, that the “character of the government action”, specifically, the possibly extortionate conditions, should lead to a regulatory taking and compensation. On the other hand, the conditions probably do not have a major economic impact compared to the value of the proposed development, nor do the conditions interfere with Koontz’s investment-backed expectations because he still stands to make a significant profit on the development, regardless of the conditions. More importantly, the Supreme Court has never found a regulatory taking under the Penn Central test.
Koontz’s final argument might then fall from a constitutional argument to a policy argument. It is unfair, he might argue, that he must choose between what he sees as the lesser of two evils. He can refuse, as he did, to accept the permit conditions and the government will deny the permit, but then he cannot win on the constitutional merits. If he wants to succeed on a constitutional exactions argument he will have to concede to a permit with conditions he does not like and then sue the government as the beachfront homeowner or the hardware store owner did. Koontz’s policy argument would be that he should not have to wait for an unconstitutional act in order to get his justice. But this argument should also fail because it sets up a false dichotomy.
Mr. Koontz would want the court to sympathize with his untenable situation. Either he accepts an unconstitutional permit or he stands up for his principal but is then prohibited from getting justice. The flaw in this argument is that even if there were an exaction in this case, an exaction is not unconstitutional. Takings in general are not unconstitutional; they merely require compensation. This is the very purpose of the Takings Clause of the Fifth Amendment. The government may take property, whether by eminent domain, regulatory takings or exactions, as long as the government pays compensation. If Mr. Koontz were faced with a permit that denied his freedom of speech or religion, then his choice would raise constitutional sympathies. When his choice is between making a lot of money or making a lot of money and spending a little to protect the environment, the Constitution does not prohibit permit conditions.
III. Takings and Environmental Protection
Through the Takings Clause, the United States Constitution strikes a balance between a severe and inflexible purity of private property and the logical inevitability that in democratic society property owners must, to some degree, consent to limited governmental interference. Although this is the consensus embodied in the Fifth Amendment it is not welcome to strict property rights advocates.
The alternative is not a welcome to environmental protection advocates. Whether it is wetlands or coalmines, flood protection or toxic remediation, environmental safeguards frequently bear on the private use of land. If the Court is to further expand the scope of the Takings Clause, the requirement of compensation could make environmental protection impractically expensive. Koontz v. St. Johns River Water Management District presents the Court with an opportunity to reject a further broadening of the scope of takings law and to avoid putting environmental safeguards—already in political jeopardy—in greater legal and economic jeopardy.
 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).
 Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).
 Loretto v. Teleprompter Manhattan CATV Corp., 548 U.S. 419 (1982).
 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).
 Nollan v. California Coastal Commission, 482 U.S. 825 (1987).
 Dolan v. City of Tigard, 512 U.S. 374 (1994).
 Nollan v. California Coastal Commission, 482 U.S. 825 (1987).
 Dolan v. City of Tigard, 512 U.S. 374 (1994).