Model T or Tesla: Reformers take on $3.9B NJ grid project Post-Sandy plan draws challenge to 20th Century ways

When Hurricane Sandy tore into the east coast last year, it left several million people without power – some for weeks -- and provided what is widely believed to be a preview of life with global warming.

Anticipating more extreme weather, PSE&G is pursuing Energy Strong -- a $3.9 billion plan to fortify its power grid. With funding from ratepayers, the project would raise and protect switching and substations, reinforce utility poles and overhead wires, and replace gas lines and other infrastructure in flood-prone areas. The intention, according to the plan, is to capitalize on low interest rates, cheap natural gas, and “a glut” of available labor to produce a stronger, more reliable power-delivery system that will withstand extreme weather and rising sea levels.

Energy Strong is a massive infrastructure project, but it represents something much more. It’s a critical test of how eager society is to prolong the life of a 20th Century grid designed around fossil fuels, or begin shifting to a new generation of technology that encourages power from multiple energy sources, including wind and solar.

According to an industry-generated release on PR Newswire, Energy Strong draws support from a number of municipalities, labor unions, businesses and health care providers eager for a grid that can withstand extreme weather and the promise of jobs associated with a multibillion infrastructure project.

It is also facing challenges from influential lobbies. The AARP is questioning the return on investment to rate-payers, and the Sierra Club challenges the wisdom of spending billions to shore up rather than modernize an archaic system of power-delivery. Tom Johnson, of NJ Spotlight, has been covering the proposal from the beginning. He summed up stakes of the AARP challenged in a May article.

The dispute underscores the tough choices facing state regulators and utilities, both of which are under pressure from the public to avert widespread outages, that can leave some customers without any power for more than a week. How to do so without increasing electric bills, already among the highest in the nation, is the dilemma facing state officials.

The problem became even more divisive last week, when the New Jersey Sierra Club and the New Jersey Environmental Federation filed a “motion for intervention”with the New Jersey Board of Public Utilities. The motion argued that the agency should focus on energy efficiency, renewable energy, and distributed generation – where energy is produced closer to where it is consumed from a decentralized network of power sources – including  renewable sources and hybrids -- in short, more of what a 21st Century, post-fossil fuel grid would look like.

Johnson reported in a follow-up article this week:

The entry of the two environmental groups in the BPU rate case is unusual, but it underscores the concerns harbored by some who fear the state’s aggressive clean energy goals may be undermined by huge investments in making the power grid more resilient.

This is really an argument about fossil fuels versus renewable energy sources. To some degree, it reflects a broader, national and global argument about justifying capital investments necessary to build the infrastructure for shale gas delivery. Knowing what we know now about climate change, does it make sense to channel money into expanding the life of a carbon-based energy grid for resources that at best will last a few more generations (or less) and at worst make the planet less suitable for human habitation?

According to the motion filed by the Sierra Club, the PSE&G plan misses a critical opportunity to begin adapting the grid to sustainable energy, in addition to reinforcing it. “A solution that focuses solely on the physical protection of infrastructure misses a huge opportunity to address or eliminate the underlying causes of the vulnerability,” the motion states. The environmental groups seek input to the plan “to ensure that cost effective investments going forward capitalize on opportunities to reduce energy demand through energy efficiency and other demand side efforts… Also techniques such as the use of a smart grid, distributed generation and renewable energy sources can provide critical support to the delivery of reliable and cost effective power to the public.”

In a phone conversation this week, Jeff Tittel, director of the New Jersey Chapter of the Sierra Club, told me the plan is based on an archaic model that is “like trying to make upgrades to the Model T automobile in the age of the Tesla… It’s more about reinforcing and elevating and not about being smart.” The intervening parties are not looking to stop the program, but to influence it, he said, adding that additional perspective and planning will ultimately help ratepayers.

Company officials, meanwhile, are pitching the plan as an urgent step to storm-proof the grid in the face of climate change that is no longer an abstraction projected for future generations. More than 1.9 million PSE&G customers (and millions more served by other utilities) lost power after Sandy -- some for as long as two weeks. In addition to Sandy, two other storms -- Hurricane Irene, the freak snowstorm in October 2011 – have in the last two years wrought damage unprecedented in the utility’s 100-year history. As spelled out in a company press kit for Energy Strong: “Keeping the lights on day-to-day is no longer enough. Future investments must be about increasing resiliency, which is the ability to withstand damage and quickly recover from extreme weather and events.”

Whether the economics support an appreciable shift to renewable energy is a matter of public policy as much as technology, and it begins with plans such as the PSE&G proposal. Anti-frackers in New York, where a moratorium on fracking now in its fifth year has spurred a similar discussion about the role of renewables, have seized the opportunity to showcase a plan of their own, which I wrote about in May. It’s authored by Cornell University researchers and demonstrates how the state can be run entirely on non-fossil natural resources – sun, wind, and water. Some say this looks good on paper, but does not readily translate to the real world. But if not now, when will we overcome the inertial forces of a carbon-based infrastructure? At the very least, the New York state plan provides a starting point for much-needed discussions about the empirical framework for life after carbon, and the Sierra Club challenge to the PSE&G plan begins testing our willingness to move progressively in that direction.

Sustainable shale development… hype, hope or hoax? CSSD “standards” reflect chronic transparency problem

We learned last month from the Associated Press that “Energy firms, environmental groups agree on tough new fracking standards.” Specifically, the report by Kevin Begos characterized these standards as a breakthrough, a product of “an unlikely partnership between longtime adversaries” once at odds over assessing merits and risks of shale gas development. The reconciled parties include the Environmental Defense Fund, the Heinz Endowments, and a group called “Clean Air Task Force” representing environmental interests, and Shell, Chevron and others representing industry.

The group established 15 voluntary “performance standards” that operators can follow to attain certification -- and an implicit stamp of approval for consumers. The standards range from the best way to case a well to least harmful waste disposal practices. Compliance will be self-reported and subject to audits from the sanctioning body -- a recently formed agency called the Center for Sustainable Shale Development made up of representatives from industry, environmental groups and independent stakeholders.

This was a story worth checking into. My search for what exactly the standards said took me to the CSSD website. Those who don’t like a lot of packaging with their policy information, beware. If you go here, you will spend a few minutes navigating pages of vague preamble about “unprecedented collaboration”, “constructive engagement”, “rigorous performance standards” and “commitment of various strategic partners ensuring safe and environmentally responsible development of our abundant shale resources,” along with carousel billboards of fern-lined trout streams and primary-colored drilling rigs.  With some clicking and negotiation, I came upon an outline of the standards themselves, and learned quickly where the bar was set. Here are a few examples:

Performance Standard No. 7 states:

Operators will not use diesel fuel in their hydraulic fracturing fluids

Performance Standard No. 8 states:

In the event of spill or release, beyond the well pad, Operators shall immediately provide notification to the local governing body and any affected landowner.

Some standards were more sophisticated. Some were not. Performance Standard No. 2 stated that the industry should recycle waste water “to the maximum extent possible” until a standard is set next year. A theme throughout seemed to be a lack of critical definitions – such as what precisely “recycling” is.

Searching for a point of clarity, I turned to an issue that, in my mind, would be a decisive test of how sincere this whole effort was, and whether my feeling of creeping skepticism was justified. Would the CSSD’s “rigorous performance standards” require operators to fully disclose fracking compounds?

The answer, I found in Performance Standard No. 7, is yes.

Operators will publically disclose the chemical constituents intentionally used in well stimulation fluids.

Followed by a no.

If an operator, service company or vendor claims that the identity of a chemical
ingredient is entitled to trade secret protection, the operator will include in its disclosures a notation that trade secret protection has been asserted and will instead disclose the relevant chemical family name. 

Note: The difference between knowing a specific compound rather than a general family can be huge in assessing exposure impacts to health and ecology. And the company can invoke the “trade secret” clause for just about anything.

And then came another qualification:

Operators will implement measures consistent with state law to assist medical professionals in quickly obtaining trade secret information from the operator, service company or vendor holding the trade secret that may be needed for clinical diagnosis or treatment purposes.

There was no explanation in the rules or anywhere on the CSSD website for that matter that, Under a law enacted by the Corbett administration in Pennsylvania, doctors cannot get the name of a fracking compound in an exposure case, even in an emergency, without first signing a contract that forbids them to share the information with anybody.

These, then, are the kinds of standards the oil and gas industry are aspiring to. Something that takes the guise of transparency dressed up on a green-looking website, with broad loopholes and no practical enforcement mechanism.

And in our country, the industry is understood to be better regulated than anyplace else in the world – a claim that has some credibility. Yet I saw nothing in the CSSD template that spoke to the monumental weaknesses in industry oversight – lack of regional planning for waste disposal and water consumption and other impacts, and exemptions from federal hazardous waste disposal and disclosure laws that allow the industry to operate with one foot in the pre-regulatory era.

So why are the EDF and the Heinz Foundation on board? The answer seems to be, it’s a start, and that in itself is something of an achievement.

“This coalition is a step in the right direction to better protect the quality of life for people living among the gas fields,” Mark Brownstein wrote in defense of the program after it received anticipated backlash from environmental groups representing both mainstream organizations and grass roots activists. Brownstein, Vice President & Chief Counsel of the US Energy and Climate Program at Environmental Defense Fund, was instrumental in arranging the CSSD collaboration, and he felt obligated to defend the program under attack with some points not mentioned on the CSSD web site.  The organization’s voluntary standards are no substitute for the real thing, he stressed.

“Perhaps the constructive working relationship we’ve developed with the companies participating in CSSD will lead to a broader consensus on the full range of challenges confronting communities in the middle of the shale gale. We hope so, but we know we are not there yet…

Some of our environmental colleagues see the voluntary nature of the new standards as a way for the natural gas industry to avoid real oversight, and I understand their skepticism. But, like I said, CSSD’s standards aren’t being put forward in place of regulation and enforcement. To the contrary, by demonstrating that industry leaders have what it takes to produce shale gas safer, CSSD can help build a broad industry-environmentalist coalition in favor of getting the rules right.

The agency is “committed to setting clear guidelines for a rigorous certification and auditing process,” he said.  (The CSSD is yet to release any specifics about how that will work.) “The operative word is ‘can,’ Brownstein concluded. “Time will tell how effective this effort is, and whether it can or should to be replicated elsewhere.”

There are other factors at work. Last year the EDF received a three-year, $6-million grant from Bloomberg Philanthropies to “minimize the environmental impacts of natural gas operations through hydraulic fracturing,” according to an agency press release at the time. The funding is to “support EDF’s strategy of securing strong rules and developing industry best practices in the 14 states with 85 percent of the country’s unconventional gas reserves.” The charity is tied to its name sake, billionaire philanthropist Michael Bloomberg, who also happens to be the mayor of New York City, one of the largest energy consumers in the world.

Representatives from mainstream environmental groups were quick to distance themselves from the EDF’s involvement with the CSSD. Deb Nardone, Director of the Sierra Club’s Beyond Natural Gas Campaign, felt it necessary to reiterate that the Sierra Club “had no involvement” with the project:

Voluntary certification is in no way a substitute for rigorous safeguards, monitoring, and enforcement. Voluntary safety certification is akin to slapping a band aid on a gaping wound. We know the oil and gas industry cannot be trusted to police itself and we cannot afford to give a free pass to bad actors in the industry.

Sandy Buchanan, Executive Director of a group called Ohio Citizen Action, brought another perspective:

This is not a conflict between oil and gas companies and “environmentalists.” The drillers are up against landowners, neighbors, and taxpayers; people who drink municipal water, people who drink well-water; doctors, nurses, firefighters, EMS technicians, and so on. To portray this as just “environmentalists” makes it seem as though it is just two special interest groups at odds. It sets up a situation where one or more groups with the word “Environment” in their name think they can cut a deal with the drillers.

Criticism, ranging from harsh to caustic, focused on the title of the program as evidence of a sham. Is there really such a thing as sustainable shale gas development? Certainly not in the way the word sustainable is understood (and revered) in the environmental community. Dory Hippauf, a blogger on Shaleshockmedia.org, wrote “Fracking Center and Fluffy Kittens.”

WHOOO-HOOO, Frackers and Environmentalists collaborate!  At least that’s the headlines and spin from the natural gas PR people and the media echo chamber. 

What does this new collaboration have to do with fluffy kittens?  Not much. 

What does this new collaboration have to do with addressing the real issue of fracking?  Not much. 

This new collaboration is called the Center for Sustainable Shale Development (CSSD).  NOTE:  SUSTAINABLE SHALE DEVELOPMENT.

Many in environmental academic and policy circles, both grass roots and institutional, were buzzing. But not everybody was displeased and some influential voices supported the plan. Among them John Hanger, former Secretary for Pennsylvania’s Department of Environmental Conservation and now an early candidate for the 2014 Pennsylvania gubernatorial race. Hanger characterized the CSSD standards as a “game changing event” that will do for shale gas operators what sustainable certification program did for loggers:

Consumer preferences and this powerful market demand means that smart gas producers will join Consol, Equitable, Shell, and Consol in improving their gas production operations so that they can earn CSSD certification.  Whether gas producers like CSSD or not, CSSD just changed fundamentally their business world by empowering consumers to decide what gas they will buy and what gas they will not.

Maybe so, but Hanger did not explain that, unlike natural gas, forest products are genuinely a sustainable resource.

I will end here with my two cents. Performance standards are well and good. “Best practices” are something every industry should and often does strive for. But the very fact that a vague plan by the gas and oil industry to establish baseline standards becomes big news tells us something about the gas and oil industry. Beyond that, the Madison Avenue packaging and presentation of the new CSSD standards reflects a chronic problem with the industry: It’s short on policy and long on pitch.

Anti-fracking movement gains ground in New York state Both politics, demand for gas will influence drilling outcome

The drilling industry’s efforts to open New York state to shale gas development, stymied from the get go, is meeting even more resistance over time.

Contrary to public statements earlier this year by New York state governor Andrew Cuomo that suggested permitting for shale gas wells is imminent, there are compelling reasons to believe that it will continue to be on hold for the foreseeable future. Most visible among these is an anti-fracking movement that is growing louder and more organized each year. New York, which sits over one of the richest sections of the Marcellus Shale, has become a national showcase for activists trying to stop an on-shore drilling boom targeting shale gas formations in the northeast.

A current example involves a coordinated effort by a group of high profile artists and performers from the Empire State organizing a rally and concert in Albany on May 15. The event – New Yorkers Against Fracking – features Natalie Merchant, Joan Osborne, Mark Ruffalo, Melissa Leo, and others sure to have inspirational appeal to large, mainstream audiences. Merchant, a fracking critic who performed in Binghamton in March, is a primary organizer of the event. She and a coalition of artists who live throughout the state are collaborating “to raise awareness about the potential environmental and health impacts of fracking,” she said. “We are working to create a concert that will inform as well as inspire.” The group has recruited acts from a mix of genres, ranging from Dan Zane, a popular children’s folk artist, to the jazz trio Medeski, Martin and Wood. The rally will also feature speeches and performances by authors, actors, scholars and politicians.

Activists cite unacceptable risks to health and ecology from high volume hydraulic fracturing, used to stimulate gas well production, which is exempt from the federal Safe Drinking Water Act and hazardous waste regulations. The process, known as fracking, injects large volumes of fresh water mixed with chemicals into well bores to fracture bedrock and release gas. Permitting for shale gas development in New York has been on hold since the Marcellus Shale boom began in 2008 as the state revises its policy to account for the environmental impacts of hydraulic fracturing through a document called the Supplemental Generic Environmental Impact Statement (SGEIS). Finalizing that document has been an uncertain and contentious process, and the activists have essentially used the state’s public review of the issue as a vehicle to highlight the extent of fracking opposition.

“The bottom line is that until the DEC fulfills the onerous requirements … Governor Cuomo will have an extremely hard time adopting a Final SGEIS that permits shale gas fracking in New York,” said Walter Hang, an activist and protest organizer from Ithaca, New York. Hang sent the assessment today as part of a renewed call to action for activists in an email titled “Hallelujah: No Final Fracking Decision Yet.”

Politicians are a sound gauge of public sentiment, especially during an election year. A true test of the anti-fracking movement will be pending legislation in Albany that could derail any attempt by the DEC to begin permitting shale wells anytime soon. Bills in both houses would extend a moratorium to allow the state Department of Health to conduct its own extensive review of the impact of fracking. The bills are supported, among others, by downstate politicians answering to votes of people who get their water from the Delaware River watershed – which happens to extend over a lucrative pay zone of the Marcellus Shale. The Assembly bill was introduced by Robert Sweeney, of Suffolk County, who is chair of the Assembly’s Environmental Conservation Committee. Supporters in the Senate include Republican Greg Ball, whose district includes parts of Dutchess, Putnam, and Westchester counties, and Toney Avella, a Democrat from Queens.

Shale gas supporters in Albany, meanwhile, have been keeping a relatively low public profile on the issue since prospecting has eased in their districts with the falling price of natural gas. Senator Tom Libous, who represents farmers living over a prospective drilling fairway in Broome County, was once an outspoken champion for the drill-here-drill-now contingent during Gov. David Paterson’s administration. Perhaps owing to the low natural gas prices (coupled with the give-and-take of doing business in Albany under Cuomo) Libous now defers to the DEC’s judgment to determine “if and when” drilling should start.

As Gannett’s Albany reporter Jon Campbell reported today, the regular persistence of protesters active in legislative halls and the executive mansion is hard to miss. The pressure has slowed the state’s review or permitting guidelines “to a crawl” Avella told Campbell. “I absolutely think we are winning this battle.” Brad Gill, executive director of the Independent Oil and Gas Association of New York, agreed that protests have had an impact on the process, which he characterized as “unfortunate for the state of New York and the people.”

The grass roots anti-fracking movement, which in four years has matured into a political force to be reckoned with, is certainly a factor in the outcome for the foreseeable future. Thanks to strong push back from the grass roots activists, the Sierra Club – one of the world’s largest mainstream environmental organizations -- recently switched its position on natural gas. The group that once supported natural gas development as a clean-burning alternative to coal now opposes it as another carbon polluter. (Sierra Club’s announcement today of its “Beyond Natural Gas” campaign was a clear signal from the agency, which has been historically very unclear on its position on fracking.)

Perhaps the biggest influence of all on the future of shale gas development, however, is the low price of natural gas caused by a market glut. Natural gas prices move in cycles. If and when demand again pushes prices up, you can bet you will see renewed political urgency from those representing the industry and people with landholdings who can gain financially from lease agreements. Big money has a way of motivating both politicians and the people who vote for them. When this happens, anti-fracking activists would be well advised to have a feasible plan to push for an energy policy that can economically displace the demand for fossil fuel.