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Thursday, September 17, 2020

Energy Policy Act of 2005

From Wikipedia, the free encyclopedia
George W. Bush signing the Energy Policy Act of 2005, which was designed to promote US nuclear reactor construction, through incentives and subsidies, including cost-overrun support up to a total of $2 billion for six new nuclear plants.

The Energy Policy Act of 2005 (Pub.L. 109–58) is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types. The law also exempted hydraulic fracturing fluids from regulation under several environmental laws, and it repealed the Public Utility Holding Company Act of 1935, effective February 2006.

Provisions

General provisions

  • The law exempted fluids used in the natural gas extraction process of hydraulic fracturing (fracking) from protections under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and CERCLA ("Superfund").
  • Under an amendment in the American Recovery and Reinvestment Act of 2009, Section 406, the Energy Policy Act of 2005 authorizes loan guarantees for innovative technologies that avoid greenhouse gases, which might include advanced nuclear reactor designs, such as pebble bed modular reactors (PBMRs) as well as carbon capture and storage and renewable energy;
  • the Act increases the amount of biofuel (usually ethanol) that must be mixed with gasoline sold in the United States to 4 billion US gallons (15,000,000 m3) by 2006, 6.1 billion US gallons (23,000,000 m3) by 2009 and 7.5 billion US gallons (28,000,000 m3) by 2012; two years later, the Energy Independence and Security Act of 2007 extended the target to 36 billion US gallons (140,000,000 m3) by 2022.
  • it seeks to increase coal as an energy source while also reducing air pollution, through authorizing $200 million annually for clean coal initiatives, repealing the current 160-acre (0.65 km2) cap on coal leases, allowing the advanced payment of royalties from coal mines and requiring an assessment of coal resources on federal lands that are not national parks;
  • it authorizes tax credits for wind and other alternative energy producers;
  • it adds ocean energy sources, including wave and tidal power for the first time as separately identified, renewable technologies;
  • it authorizes $50 million annually over the life of the law for biomass grants;
  • it includes provisions aimed at making geothermal energy more competitive with fossil fuels in generating electricity;
  • it requires the Department of Energy to:
  • it authorizes the Department of the Interior to grant leases for activity that involves the production, transportation or transmission of energy on the Outer Continental Shelf lands from sources other than gas and oil (Section 388);
  • it requires all public electric utilities to offer net metering on request to their customers;
  • it prohibits the manufacture and importation of mercury-vapor lamp ballasts after January 1, 2008;
  • it provides tax breaks for those making energy conservation improvements to their homes;
  • it provides incentives to companies to drill for oil in the Gulf of Mexico;
  • it exempts oil and gas producers from certain requirements of the Safe Drinking Water Act;
  • it extends the daylight saving time by four to five weeks, depending upon the year (see below);
  • it requires that no drilling for gas or oil may be done in or underneath the Great Lakes;
  • it requires that the Federal Fleet vehicles capable of operating on alternative fuels be operated on these fuels exclusively (Section 701);
  • it sets federal reliability standards regulating the electrical grid (done in response to the 2003 North America blackout);
  • it includes nuclear-specific provisions;
    • it extends the Price-Anderson Nuclear Industries Indemnity Act through 2025;
    • it authorizes cost-overrun support of up to $2 billion total for up to six new nuclear power plants;
    • it authorizes production tax credit of up to $125 million total a year, estimated at 1.8 US¢/kWh during the first eight years of operation for the first 6.000 MW of capacity, consistent with renewables;
    • it authorizes loan guarantees of up to 80% of project cost to be repaid within 30 years or 90% of the project's life;
    • it authorizes $2.95 billion for R&D and the building of an advanced hydrogen cogeneration reactor at Idaho National Laboratory;
    • it authorizes 'standby support' for new reactor delays that offset the financial impact of delays beyond the industry's control for the first six reactors, including 100% coverage of the first two plants with up to $500 million each and 50% of the cost of delays for plants three through six with up to $350 million each for;
    • it allows nuclear plant employees and certain contractors to carry firearms;
    • it prohibits the sale, export or transfer of nuclear materials and "sensitive nuclear technology" to any state sponsor of terrorist activities;
    • it updates tax treatment of decommissioning funds;
  • it directs the Secretary of the Interior to complete a programmatic environmental impact statement for a commercial leasing program for oil shale and tar sands resources on public lands with an emphasis on the most geologically prospective lands within each of the states of Colorado, Utah, and Wyoming.

Tax reductions by subject area

Change to daylight saving time

The law amended the Uniform Time Act of 1966 by changing the start and end dates of daylight saving time, beginning in 2007. Clocks were set ahead one hour on the second Sunday of March (March 11, 2007) instead of on the first Sunday of April (April 1, 2007). Clocks were set back one hour on the first Sunday in November (November 4, 2007), rather than on the last Sunday of October (October 28, 2007). This had the net effect of slightly lengthening the duration of daylight saving time.

Lobbyists for this provision included the Sporting Goods Manufacturers Association, the National Association of Convenience Stores, and the National Retinitis Pigmentosa Foundation Fighting Blindness.

Lobbyists against this provision included the U.S. Conference of Catholic Bishops, the United Synagogue of Conservative Judaism, the National Parent-Teacher Association, the Calendaring and Scheduling Consortium, the Edison Electric Institute, and the Air Transport Association. This section of the act is controversial; some have questioned whether daylight saving results in net energy savings.

Commercial building deduction

The Act created the Energy Efficient Commercial Buildings Tax Deduction, a special financial incentive designed to reduce the initial cost of investing in energy-efficient building systems via an accelerated tax deduction under section §179D of the Internal Revenue Code (IRC) Many building owners are unaware that the [Policy Act of 2005] includes a tax deduction (§179D) for investments in "energy efficient commercial building property" designed to significantly reduce the heating, cooling, water heating and interior lighting cost of new or existing commercial buildings placed into service between January 1, 2006 and December 31, 2013. §179D includes full and partial tax deductions for investments in energy efficient commercial building that are designed to increase the efficiency of energy-consuming functions. Up to $.60 for lighting, $.60 for HVAC and $.60 for building envelope, creating a potential deduction of $1.80 per sq/ft. Interior lighting may also be improved using the Interim Lighting Rule, which provides a simplified process to earn the Deduction, capped at $0.30-$0.60/square foot. Improvements are compared to a baseline of ASHRAE 2001 standards.

To obtain these benefits the facilities/energy division of a business, its tax department, and a firm specializing in EPAct 179D deductions needed to cooperate. IRS mandated software had to be used and an independent 3rd party had to certify the qualification. For municipal buildings, benefits were passed through to the primary designers/architects in an attempt to encourage innovative municipal design.

The Commercial Buildings Tax Deduction expiration date had been extended twice, last by the Energy Improvement and Extension Act of 2008. With this extension, the CBTD could be claimed for qualifying projects completed before January 1, 2014.

Energy management

The commercial building tax deductions could be used to improve the payback period of a prospective energy improvement investment. The deductions could be combined by participating in demand response programs where building owners agree to curtail usage at peak times for a premium. The most common qualifying projects were in the area of lighting.

Energy savings

Summary of Energy Savings Percentages Provided by IRS Guidance

Percentages permitted under Notice 2006-52 (Effective for property placed in service January 1, 2006 – December 31, 2008)

  • Interior Lighting Systems 16⅔%,
  • Heating, Cooling, Ventilation, and Hot Water Systems 16⅔%,
  • Building Envelope 16⅔%.

Percentages permitted under Notice 2008-40 (Effective for property placed in service January 1, 2006 – December 31, 2013)

  • Interior Lighting Systems 20%,
  • Heating, Cooling, Ventilation, and Hot Water Systems 20%,
  • Building Envelope 10%.

Percentages permitted under Notice 2012-22

  • Interior Lighting Systems 25%,
  • Heating, Cooling, Ventilation, and Hot Water Systems 15%,
  • Building Envelope 10%.

Effective date of Notice 2012-22 – December 31, 2013; if §179D is extended beyond December 31, 2013, is also effective (except as otherwise provided in an amendment of §179D or the guidance thereunder) during the period of the extension.

Cost estimate

The Congressional Budget Office (CBO) review of the conference version of the bill estimated the Act would increase direct spending by $2.2 billion over the 2006-2010 period, and by $1.6 billion over the 2006-2015 period. The CBO did not attempt to estimate additional effects on discretionary spending. The CBO and the Joint Committee on Taxation estimated that the legislation would reduce revenues by $7.9 billion over the 2005-2010 period and by $12.3 billion over the 2005-2015 period.

Support

The collective reduction in national consumption of energy (gas and electricity) is significant for home heating. The Act provided gible financial incentives (tax credits) for average homeowners to make environmentally positive changes to their homes. It made improvements to home energy use more affordable for walls, doors, windows, roofs, water heaters, etc. Consumer spending, and hence the national economy, was abetted. Industry grew for manufacture of these environmentally positive improvements. These positive improvements have been near and long-term in effect.

The collective reduction in national consumption of oil is significant for automotive vehicles. The Act provided tangible financial incentives (tax credits) for operators of hybrid vehicles. It helped fuel competition among auto makers to meet rising demands for fuel-efficient vehicles. Consumer spending, and hence the national economy, was abetted. Dependence on imported oil was reduced. The national trade deficit was improved. Industry grew for manufacture of these environmentally positive improvements. These positive improvements have been near and long-term in effect.

Criticism

  • The Washington Post contended that the spending bill was a broad collection of subsidies for United States energy companies; in particular, the nuclear and oil industries.
  • Speaking for the National Republicans for Environmental Protection Association, President Martha Marks said that the organization was disappointed in the law because it did not support conservation enough, and continued to subsidize the well-established oil and gas industries that didn't require subsidizing.
  • The law did not include provisions for drilling in the Arctic National Wildlife Refuge (ANWR); some Republicans claimed "access to the abundant oil reserves in ANWR would strengthen America's energy independence without harming the environment."
  • Senator Hillary Clinton criticized Senator Barack Obama's vote for the bill in the 2008 Democratic Primary.
  • The law exempted fluids used in the natural gas extraction process of hydraulic fracturing (fracking) from protections under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and CERCLA. It created a loophole that exempts companies drilling for natural gas from disclosing the chemicals involved in fracking operations that would normally be required under federal clean water laws. This exclusion has been called the "Halliburton Loophole". Halliburton is the world's largest provider of hydraulic fracturing services. The measure was a response to a recommendation from the Energy Task Force, chaired by Vice President Dick Cheney in 2001. (Cheney had been Chairman and CEO of Halliburton from 1995 to 2000.)

Legislative history

The Act was voted on and passed twice by the United States Senate, once prior to conference committee, and once after. In both cases, there were numerous senators who voted against the bill. John McCain, the Republican Party nominee for President of the United States in the 2008 election voted against the bill. Democrat Barack Obama, President of the United States from January 2009 to January 2017, voted in favor of the bill.

Provisions in the original bill that were not in the act

To remove from 18 CFR Part 366.1 the definitions of "electric utility company" and exempt wholesale generator (EWG), that an EWG is not an electric utility company.

Preliminary Senate vote

June 28, 2005, 10:00 a.m. Yeas - 85, Nays - 12

Conference committee

The bill's conference committee included 14 Senators and 51 House members. The senators on the committee were: Republicans Domenici, Craig, Thomas, Alexander, Murkowski, Burr, Grassley and Democrats Bingaman, Akaka, Dorgan, Wyden, Johnson, and Baucus.

Final Senate vote

July 29, 2005, 12:50 p.m. Yeas - 74, Nays - 26

Legislative history

Energy Policy Act of 2005
Great Seal of the United States
Other short titles
  • Coal Leasing Amendments Act of 2005
  • Electricity Modernization Act of 2005
  • Energy Policy Tax Incentives Act of 2005
  • Energy Research, Development, Demonstration, and Commercial Application Act of 2005
  • Energy Tax Incentives Act of 2005
  • Federal Reformulated Fuels Act of 2005
  • Indian Tribal Energy Development and Self-Determination Act of 2005
  • EPAct 2005
  • John Rishel Geothermal Steam Act Amendments of 2005
  • National Geological and Geophysical Data Preservation Program Act of 2005
  • No Oil Producing and Exporting Cartels Act of 2005
  • NOPEC
  • Oil Shale, Tar Sands, and Other Strategic Unconventional Fuels Act of 2005
  • Price-Anderson Amendments Act of 2005
  • Public Utility Holding Company Act of 2005
  • SAFE Act
  • Set America Free Act of 2005
  • Spark M. Matsunaga Hydrogen Act of 2005
  • Underground Storage Tank Compliance Act
Long titleAn Act to ensure jobs for our future with secure, affordable, and reliable energy.
Enacted bythe 109th United States Congress
EffectiveAugust 8, 2005
Citations
Public law109-58
Statutes at Large119 Stat. 594
Codification
Acts amendedEnergy Policy Act of 1992
Public Utility Regulatory Policies Act (PURPA) of 1978
Acts repealedPublic Utility Holding Company Act of 1935
Titles amended16 U.S.C.: Conservation
42 U.S.C.: Public Health and Social Welfare
U.S.C. sections created42 U.S.C. ch. 149 § 15801 et seq.
U.S.C. sections amended16 U.S.C. ch. 46 § 2601 et seq.
42 U.S.C. ch. 134 § 13201 et seq.
Legislative history
Major amendments
American Recovery and Reinvestment Act of 2009
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Stage House of Representatives Senate
Initial Debate
Introduction April 18, 2005 June 11
Committed April 18 June 14
Committee Name(s) Energy and Commerce
Education and the Workforce
Financial Services
Agriculture
Resources
Science
Ways and Means
Transportation and Infrastructure

Committee Stage April 18 to 19
Committee Report April 19
Floor Debate April 19 to 21 June 14 to 23

Cloture invoked June 23

Passage April 21 June 28
Conference Stage
Conference Demanded/Accepted July 13 July 1
Conference Meetings July 14 to 24
Report Filed July 27
Final Passage
Final Debate July 28 July 28 to 29
Budget Act waived, July 29
Concurrence and Passage July 28 July 29
Presented to President August 4
Signed August 8

Energy security

From Wikipedia, the free encyclopedia
 
A U.S. Navy F/A-18 Super Hornet displaying an "Energy Security" logo.

Energy security is the association between national security and the availability of natural resources for energy consumption. Access to (relatively) cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led to significant vulnerabilities. International energy relations have contributed to the globalization of the world leading to energy security and energy vulnerability at the same time.

In the context of energy security, security of energy supply is an issue of utmost importance. Moreover, it is time to define "a global energy policy model, which not only aims at ensuring an efficient environmental protection but also at ensuring security of energy supply".

Renewable resources and significant opportunities for energy efficiency and transitions exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. Rapid deployment of renewable energy and energy efficiency, and technological diversification of energy sources, would result in significant energy security and economic benefits.

Threats

The modern world relies on a vast energy supply to fuel everything from transportation to communication, to security and health delivery systems. Perhaps most alarmingly, peak oil expert Michael Ruppert has claimed that for every calorie of food produced in the industrial world, ten calories of oil and gas energy are invested in the forms of fertilizer, pesticide, packaging, transportation, and running farm equipment. Energy plays an important role in the national security of any given country as a fuel to power the economic engine. Some sectors rely on energy more heavily than others; for example, the Department of Defense relies on petroleum for approximately 77% of its energy needs. Threats to energy security include the political instability of several energy producing countries, the manipulation of energy supplies, the competition over energy sources, attacks on supply infrastructure, as well as accidents, natural disasters, terrorism, and reliance on foreign countries for oil.

Foreign oil supplies are vulnerable to unnatural disruptions from in-state conflict, exporters' interests, and non-state actors targeting the supply and transportation of oil resources. The political and economic instability caused by war or other factors such as strike action can also prevent the proper functioning of the energy industry in a supplier country. For example, the nationalization of oil in Venezuela has triggered strikes and protests in which Venezuela's oil production rates have yet to recover. Exporters may have political or economic incentive to limit their foreign sales or cause disruptions in the supply chain. Since Venezuela's nationalization of oil, anti-American Hugo Chávez threatened to cut off supplies to the United States more than once. The 1973 oil embargo against the United States is a historical example in which oil supplies were cut off to the United States due to U.S. support of Israel during the Yom Kippur War. This has been done to apply pressure during economic negotiations—such as during the 2007 Russia–Belarus energy dispute. Terrorist attacks targeting oil facilities, pipelines, tankers, refineries, and oil fields are so common they are referred to as "industry risks". Infrastructure for producing the resource is extremely vulnerable to sabotage. One of the worst risks to oil transportation is the exposure of the five ocean chokepoints, like the Iranian-controlled Strait of Hormuz. Anthony Cordesman, a scholar at the Center for Strategic and International Studies in Washington, D.C., warns, "It may take only one asymmetric or conventional attack on a Ghawar Saudi oil field or tankers in the Strait of Hormuz to throw the market into a spiral."

New threats to energy security have emerged in the form of the increased world competition for energy resources due to the increased pace of industrialization in countries such as India and China, as well as due to the increasing consequences of climate change. Although still a minority concern, the possibility of price rises resulting from the peaking of world oil production is also starting to attract the attention of at least the French government. Increased competition over energy resources may also lead to the formation of security compacts to enable an equitable distribution of oil and gas between major powers. However, this may happen at the expense of less developed economies. The Group of Five, precursors to the G8, first met in 1975 to coordinate economic and energy policies in the wake of the 1973 Arab oil embargo, a rise in inflation and a global economic slowdown. NATO leaders meeting in Bucharest Romania, in April 2008, may discuss the possibility of using the military alliance "as an instrument of energy security". One of the possibilities include placing troops in the Caucasus region to police oil and gas pipelines.

Long-term security

Long-term measures to increase energy security center on reducing dependence on any one source of imported energy, increasing the number of suppliers, exploiting native fossil fuel or renewable energy resources, and reducing overall demand through energy conservation measures. It can also involve entering into international agreements to underpin international energy trading relationships, such as the Energy Charter Treaty in Europe. All the concern coming from security threats on oil sources long term security measures will help reduce the future cost of importing and exporting fuel into and out of countries without having to worry about harm coming to the goods being transported.

The impact of the 1973 oil crisis and the emergence of the OPEC cartel was a particular milestone that prompted some countries to increase their energy security. Japan, almost totally dependent on imported oil, steadily introduced the use of natural gas, nuclear power, high-speed mass transit systems, and implemented energy conservation measures. The United Kingdom began exploiting North Sea oil and gas reserves, and became a net exporter of energy into the 2000s.

In other countries energy security has historically been a lower priority. The United States, for example, has continued to increase its dependency on imported oil although, following the oil price increases since 2003, the development of biofuels has been suggested as a means of addressing this.

Increasing energy security is also one of the reasons behind a block on the development of natural gas imports in Sweden. Greater investment in native renewable energy technologies and energy conservation is envisaged instead. India is carrying out a major hunt for domestic oil to decrease its dependency on OPEC, while Iceland is well advanced in its plans to become energy independent by 2050 through deploying 100% renewable energy.

Short-term security

Petroleum

A map of world oil reserves according to OPEC, 2013

Petroleum, otherwise known as "crude oil", has become the resource most used by countries all around the world including Russia, China (actually, China is mostly dependent on coal (70.5% in 2010)) and the United States of America. With all the oil wells located around the world energy security has become a main issue to ensure the safety of the petroleum that is being harvested. In the middle east oil fields become main targets for sabotage because of how heavily countries rely on oil. Many countries hold strategic petroleum reserves as a buffer against the economic and political impacts of an energy crisis. All 28 members of the International Energy Agency hold a minimum of 90 days of their oil imports, for example.

The value of such reserves was demonstrated by the relative lack of disruption caused by the 2007 Russia-Belarus energy dispute, when Russia indirectly cut exports to several countries in the European Union.

Due to the theories in peak oil and need to curb demand, the United States military and Department of Defense had made significant cuts, and have been making a number of attempts to come up with more efficient ways to use oil.

Natural gas

Countries by natural gas proven reserves, based on data from The World Factbook, 2014

Compared to petroleum, reliance on imported natural gas creates significant short-term vulnerabilities. The gas conflicts between Ukraine and Russia of 2006 and 2009 serve as vivid examples of this. Many European countries saw an immediate drop in supply when Russian gas supplies were halted during the Russia-Ukraine gas dispute in 2006.

Natural gas has been a viable source of energy in the world. Consisting of mostly methane, natural gas is produced using two methods: biogenic and thermogenic. Biogenic gas comes from methanogenic organisms located in marshes and landfills, whereas thermogenic gas comes from the anaerobic decay of organic matter deep under the Earth's surface. Russia is the current leading country in production of natural gas.

One of the biggest problems currently facing natural gas providers is the ability to store and transport it. With its low density, it is difficult to build enough pipelines in North America to transport sufficient natural gas to match demand. These pipelines are reaching near capacity and even at full capacity do not produce the amount of gas needed.

Nuclear power

Sources of uranium delivered to EU utilities in 2007, from the 2007 Annual report of the Euratom Supply Agency

Uranium for nuclear power is mined and enriched in diverse and "stable" countries. These include Canada (23% of the world's total in 2007), Australia (21%), Kazakhstan (16%) and more than 10 other countries. Uranium is mined and fuel is manufactured significantly in advance of need. Nuclear fuel is considered by some to be a relatively reliable power source, being more common in the Earth's crust than tin, mercury or silver, though a debate over the timing of peak uranium does exist.

Nuclear power reduces carbon emissions. Although a very viable resource, nuclear power can be a controversial solution because of the risks associated with it. Another factor in the debate with nuclear power is that many people or companies simply do not want any nuclear energy plant or radioactive waste near them.

Currently, nuclear power provides 13% of the world's total electricity. The most notable use of nuclear power within the United States is in U.S. Navy aircraft carriers and submarines, which have been exclusively nuclear-powered for several decades. These classes of ship provide the core of the Navy's power, and as such are the single most noteworthy application of nuclear power in that country.

Renewable energy

The deployment of renewable technologies usually increases the diversity of electricity sources and, through local generation, contributes to the flexibility of the system and its resistance to central shocks. For those countries where growing dependence on imported gas is a significant energy security issue, renewable technologies can provide alternative sources of electric power as well as displacing electricity demand through direct heat production. Renewable biofuels for transport represent a key source of diversification from petroleum products.

As the resources that have been so crucial to survival in the world to this day start declining in numbers, countries will begin to realize that the need for renewable fuel sources will be as vital as ever. With the production of new types of energy, including solar, geothermal, hydro-electric, biofuel, and wind power. With the amount of solar energy that hits the world in one hour there is enough energy to power the world for one year. With the addition of solar panels all around the world a little less pressure is taken off the need to produce more oil.

Geothermal can potentially lead to other sources of fuel, if companies would take the heat from the inner core of the earth to heat up water sources we could essentially use the steam creating from the heated water to power machines, this option is one of the cleanest and efficient options. Hydro-electric which has been incorporated into many of the dams around the world, produces a lot of energy, and is very easy to produce the energy as the dams control the water that is allowed through seams which power turbines located inside of the dam. Biofuels have been researched using many different sources including ethanol and algae, these options are substantially cleaner than the consumption of petroleum. "Most life cycle analysis results for perennial and ligno-cellulosic crops conclude that biofuels can supplement anthropogenic energy demands and mitigate green house gas emissions to the atmosphere". Using oil to fuel transportation is a major source of green house gases, any one of these developments could replace the energy we derive from oil. Traditional fossil fuel exporters (e.g. Russia) struggle to diversify away from oil and develop renewable energy.

Clear Skies Act of 2003

From Wikipedia, the free encyclopedia

The Clear Skies Act of 2003 was a proposed federal law of the United States. The official title as introduced is "a bill to amend the Clean Air Act to reduce air pollution through expansion of cap-and-trade programs, to provide an alternative regulatory classification for units subject to the cap and trade program, and for other purposes."

The bill's Senate version (S. 485) was sponsored by James Inhofe (R) of Oklahoma and George Voinovich (R) of Ohio; the House version (H.R. 999) was sponsored by Joe Barton (R) of Texas and Billy Tauzin (R) of Louisiana. Both versions were introduced on February 27, 2003.

Upon introduction of the bill, Inhofe said, "Moving beyond the confusing, command-and-control mandates of the past, Clear Skies cap-and-trade system harnesses the power of technology and innovation to bring about significant reductions in harmful pollutants." The Clear Skies Act came about as the result of President Bush's Clear Skies Initiative.

In early March 2005, the bill did not move out of committee when members were deadlocked 9-9. Seven Democrats, James Jeffords (I) of Vermont, and Lincoln Chafee (R) of Rhode Island voted against the bill; nine Republicans supported it. Within days, the Bush Administration moved to implement key measures, such as the NOx, SO2 and mercury trading provisions of the bill administratively through EPA. It remains to be seen how resistant these changes will be to court challenges.

Background: The Clear Skies Initiative

On February 14, 2002 President George W. Bush announced the Clear Skies Initiative. The policy was put together by Jim Connaughton, Chairman of the Council on Environmental Quality, and involved the work of Senators Bob Smith and George Voinovich and Congressmen Billy Tauzin and Joe Barton. The Initiative is based on a central idea: "that economic growth is key to environmental progress, because it is growth that provides the resources for investment in clean technologies." The resulting proposal was a market-based cap-and-trade approach which intends to legislate power plant emissions caps without specifying the specific methods used to reach those caps. The Initiative would reduce the cost and complexity of compliance and the need for litigation.

Current power plant emissions amounted to 67% of all sulfur dioxide (SO2) emissions (in the United States), 37% of mercury emissions, and 25% of all nitrogen oxide (NOx) emissions. Only SO2 has been administered under a cap-and-trade program.

The goals of the Initiative are threefold:

  • Cut SO2 emissions by 73%, from emissions of 11 million tons to a cap of 4.5 million tons in 2010, and 3 million tons in 2018.
  • Cut NOx emissions by 67%, from emissions of 5 million tons to a cap of 2.1 million tons in 2008, and to 1.7 million tons in 2018.
  • Cut mercury emissions by 69%, from emissions of 48 tons to a cap of 26 tons in 2010, and 15 tons in 2018.
  • Actual emissions caps would be set to account for different air quality needs in the East and West.

Through the use of a market-based cap-and-trade program, the intent of the Initiative was to reward innovation, reduce costs, and guarantee results. Each power plant facility would be required to have a permit for each ton of pollution emitted. Because the permits are tradeable, companies would have a financial incentive to cut back their emissions using newer technologies.

The Initiative was modeled on the successful SO2 emissions trading program in effect since 1995. According to the President, the program had reduced air pollution more than all other programs under the Clean Air Act of 1990 combined. Actual reductions were more than the law required and compliance was virtually 100% without the need for litigation. Also, he said that only a "handful" of employees were needed to administer the program. The total cost to achieve the reductions was about 80% less than had originally been expected.

Bush mentioned several benefits of the Initiative:

  • Reduces respiratory and cardiovascular diseases by dramatically reducing smog, fine particles, and regional haze.
  • Protects wildlife, habitats and ecosystem health from acid rain, nitrogen and mercury deposition.
  • Cuts pollution further, faster, cheaper, and with more certainty—replacing a cycle of endless litigation with rapid and certain improvements in air quality.
  • Saves as much as $1 billion annually in compliance costs that are passed along to consumers.
  • Protects the reliability and affordability of electricity.
  • Encourages use of new and cleaner pollution control technologies.

Competing proposals

In May 2004, the Energy Information Administration (EIA) released a study comparing the Clear Skies Act with the Clean Air Planning Act of 2003 (S. 843), introduced by Senator Thomas R. Carper, and the Clean Power Act of 2003 (S. 366), introduced by Senator James Jeffords.

The differences between the three bills are summarized as follows:

  • Carbon dioxide emissions: While all three bills implement emissions targets on power sector emissions of NOx, SO2, and mercury, the Clean Air Planning Act and the Clean Power Act also call for limits on carbon dioxide (CO2) emissions. Under the Clean Air Planning Act, greenhouse gas emission reductions outside of the power sector, referred to as offsets, can be used to meet the emission targets for CO2.
  • Size of generators covered: All three bills cover emissions from larger generators that generate power for sale, including central station generators and generators at customer sites that sell power they do not use for their own needs. The Clear Skies and Clean Air Planning Acts cover generating facilities 25 megawatts and larger, while the Clean Power Act covers facilities 15 megawatts and larger. The bills have differing provisions regarding the coverage of combined heat and power facilities that generate some power for sale.
  • Emissions caps: The bills generally rely on emissions cap and trade programs to achieve the required reductions. Under such programs, allowances will be allocated and covered generators will have to submit one allowance for each unit of emissions they produce. However, for mercury, the Clean Air Planning Act combines a minimum removal target for all plants with an emissions cap, and the Clean Power Act specifies a maximum emissions rate for all facilities and allows no trading of mercury allowances. The Clear Skies Act contains a "safety valve" feature that caps the price that power companies would have to pay for mercury ($2,187.50 per ounce or $35,000 per pound), SO2 ($4,000 per ton), and NOx ($4,000 per ton) allowances. Should one or more of these "safety valves" be triggered, the corresponding cap on emissions would effectively be relaxed.
  • Emissions allocation: Under the Clear Skies Act, emission allowances are to be allocated based on historical fuel consumption, what is often referred to as "grandfathering". Under the Clean Air Planning Act, a grandfathering approach is used to allocate emission allowances for SO2, but allowances for NOx, mercury, and CO2, are allocated using an output-based scheme. Under this approach, referred to as a generation performance standard (GPS), generators are given allowances for each unit of electricity they generate. The number of allowances allocated for each unit of generation changes each year as the total generation from covered sources changes. The use of a GPS dampens the electricity price impacts of the bill but raises overall compliance costs.
  • Control technology: In addition to the emission caps, the Clean Power Act also requires that all plants have the best available control technology (BACT) beginning in 2014 or when they reach 40 years of age, whichever comes later. This provision, often referred to as a "birthday" provision, requires older plants to add controls even if the total emissions of covered facilities are below the emission caps.

Criticisms in opposition

The law reduces air pollution controls, including those environmental protections of the Clean Air Act, including caps on toxins in the air and budget cuts for enforcement. The Act is opposed by conservationist groups such as the Sierra Club with Henry A. Waxman, a Democratic congressman of California, describing its title as "clear propaganda."

Among other things, the Clear Skies Act:

  • Allows 42 million more tons of pollution emitted than the EPA proposal.
  • Weakens the current cap on nitrogen oxide pollution levels from 1.25 million tons to 2.1 million tons, allowing 68% more NOx pollution.
  • Delays the improvement of sulfur dioxide (SO2) pollution levels compared to the Clean Air Act requirements.
  • Delays enforcement of smog-and-soot pollution standards until 2015.

By 2018, the Clear Skies Act will supposedly allow 3 million tons more NOx through 2012 and 8 million more by 2020, for SO2, 18 million tons more through 2012 and 34 million tons more through 2020. 58 tons more mercury through 2012 and 163 tons more through 2020 would be released into the environment than what would be allowed by enforcement of the Clean Air Act.

In August 2001, the EPA proposed a version of the Clear Skies Act that contained short timetables and lower emissions caps. It is unknown why this proposal was withdrawn and replaced with the Bush Administration proposal. It is also unclear whether or not the original EPA proposal would have made it out of committee.

In addition, some opponents consider the term, "Clear Skies Initiative" (similarly to the Healthy Forests Initiative), to be an example of administration Orwellian Doublespeak, using environmentally friendly terminology as "cover" for a give-away to business interests.

Arguments in favor

Proponents for the CSA argue that the Clean Air Act sets unachievable goals, especially for ozone and nitrogen oxide pollution. Having a clearly defined cap will benefit both industry and the general population because the goals are visible to everyone and industry benefits from cost-certainty. For example, the claim that simply enforcing the Clean Air Act will result in less pollution than the Clear Skies Act assumes that strict measures will be taken in heavily polluting areas, such as Los Angeles and other municipalities. Measures such as transportation control were taken in the 1970s but were withdrawn amid widespread public protest. Proponents of reform argue that a more likely result of following the current Clean Air Act is the continued 'muddling along' approach to environmental legislation, with most important decisions made in courts on a case-by-case basis after many years of litigation.

Carbon-neutral fuel

From Wikipedia, the free encyclopedia

Carbon-neutral fuel is energy fuel or energy systems which have no net greenhouse gas emissions or carbon footprint. One class is synthetic fuel (including methane, gasoline, diesel fuel, jet fuel or ammonia) produced from renewable, sustainable or nuclear energy used to hydrogenate carbon dioxide directly captured from the air (DAC), recycled from power plant flue exhaust gas or derived from carbonic acid in seawater. Renewable energy sources include wind turbines, solar panels, and hydroelectric powerful power stations. Another type of renewable energy source is biofuel. Such fuels are potentially carbon-neutral because they do not result in a net increase in atmospheric greenhouse gases.

To the extent that carbon-neutral fuels displace fossil fuels, or if they are produced from waste carbon or seawater carbonic acid, and their combustion is subject to carbon capture at the flue or exhaust pipe, they result in negative carbon dioxide emission and net carbon dioxide removal from the atmosphere, and thus constitute a form of greenhouse gas remediation.

Such power to gas carbon-neutral and carbon-negative fuels can be produced by the electrolysis of water to make hydrogen. Through the Sabatier reaction methane can then be produced which may then be stored to be burned later in power plants (as a synthetic natural gas), transported by pipeline, truck, or tanker ship, or be used in gas to liquids processes such as the Fischer–Tropsch process to make traditional fuels for transportation or heating.

Other carbon-negative fuels include synthetic fuels made from CO2 extracted from the atmosphere. Some companies are working on this.

Similar to regular biofuels, carbon-negative fuels only remain carbon-negative as long as the fuel is not combusted. Upon combustion, the carbon they contain (i.e. taken from industrial sources) is released again into the atmosphere (thus leveling out the environmental benefit). The time between fuel production and combustion of the fuel (the carbon storage time) can thus be quite short (far shorter than the 100 year storage time set for afforestation/reforestation projects under the Kyoto Protocol. or even underground carbon storage.

Carbon-neutral fuels are used in Germany and Iceland for distributed storage of renewable energy, minimizing problems of wind and solar intermittency, and enabling transmission of wind, water, and solar power through existing natural gas pipelines. Such renewable fuels could alleviate the costs and dependency issues of imported fossil fuels without requiring either electrification of the vehicle fleet or conversion to hydrogen or other fuels, enabling continued compatible and affordable vehicles. A 250 kilowatt synthetic methane plant has been built in Germany and it is being scaled up to 10 megawatts.

Carbon credits can also play an important role for carbon-negative fuels.

Production

Carbon-neutral fuels are synthetic hydrocarbons. They can be produced in chemical reactions between carbon dioxide, which can be captured from power plants or the air, and hydrogen, which is created by the electrolysis of water using renewable energy. The fuel, often referred to as electrofuel, stores the energy that was used in the production of the hydrogen. Coal can also be used to produce the hydrogen, but that would not be a carbon-neutral source. Carbon dioxide can be captured and buried, making fossil fuels carbon-neutral, although not renewable. Carbon capture from exhaust gas can make carbon-neutral fuels carbon negative. Other hydrocarbons can be broken down to produce hydrogen and carbon dioxide which could then be stored while the hydrogen is used for energy or fuel, which would also be carbon-neutral.

The most energy-efficient fuel to produce is hydrogen gas, which can be used in hydrogen fuel cell vehicles, and which requires the fewest process steps to produce.

There are a few more fuels that can be created using hydrogen. Formic acid for example can be made by reacting the hydrogen with CO2. Formic acid combined with CO2 can form isobutanol.

Methanol can be made from a chemical reaction of a carbon-dioxide molecule with three hydrogen molecules to produce methanol and water. The stored energy can be recovered by burning the methanol in a combustion engine, releasing carbon dioxide, water, and heat. Methane can be produced in a similar reaction. Special precautions against methane leaks are important since methane is nearly 100 times as potent as CO2, in terms of Global warming potential. More energy can be used to combine methanol or methane into larger hydrocarbon fuel molecules.

Researchers have also suggested using methanol to produce dimethyl ether. This fuel could be used as a substitute for diesel fuel due to its ability to self ignite under high pressure and temperature. It is already being used in some areas for heating and energy generation. It is nontoxic, but must be stored under pressure. Larger hydrocarbons and ethanol can also be produced from carbon dioxide and hydrogen.

All synthetic hydrocarbons are generally produced at temperatures of 200–300 °C, and at pressures of 20 to 50 bar. Catalysts are usually used to improve the efficiency of the reaction and create the desired type of hydrocarbon fuel. Such reactions are exothermic and use about 3 mol of hydrogen per mole of carbon dioxide involved. They also produce large amounts of water as a byproduct.

Sources of carbon for recycling

The most economical source of carbon for recycling into fuel is flue-gas emissions from fossil-fuel combustion where it can be obtained for about US$7.50 per ton. However, this is not carbon-neutral, since the carbon is of fossil origin, therefore moving carbon from the geosphere to the atmosphere. Automobile exhaust gas capture has also been seen as economical but would require extensive design changes or retrofitting. Since carbonic acid in seawater is in chemical equilibrium with atmospheric carbon dioxide, extraction of carbon from seawater has been studied. Researchers have estimated that carbon extraction from seawater would cost about $50 per ton. Carbon capture from ambient air is more costly, at between $94 and $232 per ton and is considered impractical for fuel synthesis or carbon sequestration. Direct air capture is less developed than other methods. Proposals for this method involve using a caustic chemical to react with carbon dioxide in the air to produce carbonates. These can then be broken down and hydrated to release pure CO2 gas and regenerate the caustic chemical. This process requires more energy than other methods because carbon dioxide is at much lower concentrations in the atmosphere than in other sources.

Researchers have also suggested using biomass as a carbon source for fuel production. Adding hydrogen to the biomass would reduce its carbon to produce fuel. This method has the advantage of using plant matter to cheaply capture carbon dioxide. The plants also add some chemical energy to the fuel from biological molecules. This may be a more efficient use of biomass than conventional biofuel because it uses most of the carbon and chemical energy from the biomass instead of releasing as much energy and carbon. Its main disadvantage is, as with conventional ethanol production, it competes with food production.

Renewable and nuclear energy costs

Nighttime wind power is considered the most economical form of electrical power with which to synthesize fuel, because the load curve for electricity peaks sharply during the warmest hours of the day, but wind tends to blow slightly more at night than during the day. Therefore, the price of nighttime wind power is often much less expensive than any alternative. Off-peak wind power prices in high wind penetration areas of the U.S. averaged 1.64 cents per kilowatt-hour in 2009, but only 0.71 cents/kWh during the least expensive six hours of the day. Typically, wholesale electricity costs 2 to 5 cents/kWh during the day. Commercial fuel synthesis companies suggest they can produce gasoline for less than petroleum fuels when oil costs more than $55 per barrel.

In 2010, a team of process chemists led by Heather Willauer of the U.S. Navy, estimates that 100 megawatts of electricity can produce 160 cubic metres (41,000 US gal) of jet fuel per day and shipboard production from nuclear power would cost about $1,600 per cubic metre ($6/US gal). While that was about twice the petroleum fuel cost in 2010, it is expected to be much less than the market price in less than five years if recent trends continue. Moreover, since the delivery of fuel to a carrier battle group costs about $2,100 per cubic metre ($8/US gal), shipboard production is already much less expensive.

Willauer said seawater is the "best option" for a source of synthetic jet fuel. By April 2014, Willauer's team had not yet made fuel to the standard required by military jets, but they were able in September 2013 to use the fuel to fly a radio-controlled model airplane powered by a common two-stroke internal combustion engine. Because the process requires a large input of electrical energy, a plausible first step of implementation would be for American nuclear-powered aircraft carriers (the Nimitz-class and the Gerald R. Ford-class) to manufacture their own jet fuel. The U.S. Navy is expected to deploy the technology some time in the 2020s.

Demonstration projects and commercial development

A 250 kilowatt methane synthesis plant was constructed by the Center for Solar Energy and Hydrogen Research (ZSW) at Baden-Württemberg and the Fraunhofer Society in Germany and began operating in 2010. It is being upgraded to 10 megawatts, scheduled for completion in autumn, 2012.

The George Olah carbon dioxide recycling plant operated by Carbon Recycling International in Grindavík, Iceland has been producing 2 million liters of methanol transportation fuel per year from flue exhaust of the Svartsengi Power Station since 2011. It has the capacity to produce 5 million liters per year.

Audi has constructed a carbon-neutral liquefied natural gas (LNG) plant in Werlte, Germany. The plant is intended to produce transportation fuel to offset LNG used in their A3 Sportback g-tron automobiles, and can keep 2,800 metric tons of CO2 out of the environment per year at its initial capacity.

Commercial developments are taking place in Columbia, South Carolina, Camarillo, California, and Darlington, England. A demonstration project in Berkeley, California proposes synthesizing both fuels and food oils from recovered flue gases.

Greenhouse gas remediation

Carbon-neutral fuels can lead to greenhouse gas remediation because carbon dioxide gas would be reused to produce fuel instead of being released into the atmosphere. Capturing the carbon dioxide in flue gas emissions from power plants would eliminate their greenhouse gas emissions, although burning the fuel in vehicles would release that carbon because there is no economical way to capture those emissions. This approach would reduce net carbon dioxide emission by about 50% if it were used on all fossil fuel power plants. Most coal and natural gas power plants have been predicted to be economically retrofittable with carbon dioxide scrubbers for carbon capture to recycle flue exhaust or for carbon sequestration. Such recycling is expected to not only cost less than the excess economic impacts of climate change if it were not done, but also to pay for itself as global fuel demand growth and peak oil shortages increase the price of petroleum and fungible natural gas.

Capturing CO2 directly from the air or extracting carbonic acid from seawater would also reduce the amount of carbon dioxide in the environment, and create a closed cycle of carbon to eliminate new carbon dioxide emissions. Use of these methods would eliminate the need for fossil fuels entirely, assuming that enough renewable energy could be generated to produce the fuel. Using synthetic hydrocarbons to produce synthetic materials such as plastics could result in permanent sequestration of carbon from the atmosphere.

Technologies

Traditional fuels, methanol or ethanol

Some authorities have recommended producing methanol instead of traditional transportation fuels. It is a liquid at normal temperatures and can be toxic if ingested. Methanol has a higher octane rating than gasoline but a lower energy density, and can be mixed with other fuels or used on its own. It may also be used in the production of more complex hydrocarbons and polymers. Direct methanol fuel cells have been developed by Caltech's Jet Propulsion Laboratory to convert methanol and oxygen into electricity. It is possible to convert methanol into gasoline, jet fuel or other hydrocarbons, but that requires additional energy and more complex production facilities. Methanol is slightly more corrosive than traditional fuels, requiring automobile modifications on the order of US$100 each to use it.

In 2016, a method using carbon spikes, copper nanoparticles and nitrogen that converts carbon dioxide to ethanol was developed.

Microalgae

Microalgae is a potential carbon neutral fuel, but efforts to turn it into one have been unsuccessful so far. Microalgae are aquatic organisms living in a large and diverse group. They are unicellular organisms that do not have complex cell structures like plants. However, they are still photo autotrophic, able to use solar energy to convert chemical forms via photosynthesis. They are typically found in freshwater and marine system and there are approximately 50,000 species that has been found.

Microalgae will be a huge substitute for the needs of fuel in the era of global warming. Growing microalgae is important in supporting the global movement of reducing global CO2 emissions. Microalgae has a better ability, compared to conventional biofuel crops, in acting as a CO2fixation source as they convert CO2 into biomass via photosynthesis at higher rates. Microalgae is a better CO2 converter than conventional biofuel crops.

With that being said, a considerable interest to cultivate microalgae has been increasing in the past several years. Microalgae is seen as a potential feedstock for biofuel production as their ability to produce polysaccharides and triglycerides (sugars and fats) which are both raw materials for bioethanol and biodiesel fuel. Microalgae also can be used as a livestock feed due to their proteins. Even more, some species of microalgae produce valuable compounds such as pigments and pharmaceuticals.

Production

Two main ways of cultivating microalgae are raceway pond systems and photo-bioreactors. Raceway pond systems are constructed by a closed loop oval channel that has a paddle wheel to circulate water and prevent sedimentation. The channel is open to the air and its depth is in the range of 0.25–0.4 m (0.82–1.31 ft). The pond needs to be kept shallow since self-shading and optical absorption can cause the limitation of light penetration through the solution of algae broth. PBRs's culture medium is constructed by closed transparent array of tubes. It has a central reservoir which circulated the microalgae broth. PBRs is an easier system to be controlled compare to the raceway pond system, yet it costs a larger overall production expenses.

The carbon emissions from microalgae biomass produced in raceway ponds could be compared to the emissions from conventional biodiesel by having inputs of energy and nutrients as carbon intensive. The corresponding emissions from microalgae biomass produced in PBRs could also be compared and might even exceed the emissions from conventional fossil diesel. The inefficiency is due to the amount of electricity used to pump the algae broth around the system. Using co-product to generate electricity is one strategy that might improve the overall carbon balance. Another thing that needs to be acknowledged is that environmental impacts can also come from water management, carbon dioxide handling, and nutrient supply, several aspects that could constrain system design and implementation options. But, in general, Raceway Pond systems demonstrate a more attractive energy balance than PBR systems.

Economy

Production cost of microalgae-biofuel through implementation of raceway pond systems is dominated by the operational cost which includes labour, raw materials, and utilities. In raceway pond system, during the cultivation process, electricity takes up the largest energy fraction of total operational energy requirements. It is used to circulate the microalgae cultures. It takes up an energy fraction ranging from 22% to 79%. In contrast, capital cost dominates the cost of production of microalgae-biofuel in PBRs. This system has a high installation cost though the operational cost is relatively lower than raceway pond systems.

Microalgae-biofuel production costs a larger amount of money compared to fossil fuel production. The cost estimation of producing microalgae-biofuel is around $3.1 per litre ($11.57/US gal). Meanwhile, data provided by California Energy Commission shows that fossil fuel production in California costs $0.48 per litre ($1.820/US gal) by October, 2018. This price ratio leads many to choose fossil fuel for economic reasons, even as this results in increased emissions of carbon dioxide and other greenhouse gases. Advancement in renewable energy is being developed to reduce this production cost.

Environmental impact

There are several known environmental impacts of cultivating microalgae:

Water resource

There could be an increasing demand of fresh water as microalgaes are aquatic organisms. Fresh water is used to compensate evaporation in raceway pond systems. It is used for cooling purpose. Using recirculating water might compensate for the needs of the water but it comes with a greater risk of infection and inhibition: bacteria, fungi, viruses. These inhibitors are found in greater concentrations in recycled waters along with non-living inhibitors such as organic and inorganic chemicals and remaining metabolites from destroyed microalgae cells.

Algae toxicity

Many microalgae species could produce some toxins (ranging from ammonia to physiologically active polypeptides and polysaccharides) in some point in their life cycle. These algae toxins may be important and valuable products in their applications in biomedical, toxicological and chemical research. However, they also come with negative effects. These toxins can be either acute or chronic. The acute example is the paralytic shellfish poisoning that may cause death. One of the chronic one is the carcinogenic and ulcerative tissue slow changes caused by carrageenan toxins produced in red tides. Since the high variability of toxins producing microalgae species, the presence or absence of toxins in a pond will not always be able to be predicted. It all depends on the environment and ecosystem condition.

Diesel from water and carbon dioxide

Audi has co-developed E-diesel, a carbon-neutral fuel with a high cetane number. It is also working on E-benzin, which is created using a similar process

Production

Water undergoes electrolysis at high temperatures to form Hydrogen gas and Oxygen gas. The energy to perform this is extracted from renewable sources such as wind power. Then, the hydrogen is reacted with compressed carbon dioxide captured by direct air capture. The reaction produces blue crude which consists of hydrocarbon. The blue crude is then refined to produce high efficiency E-diesel. This method is, however, still debatable because with the current production capability it can only produce 3,000 liters in a few months, 0.0002% of the daily production of fuel in the US. Furthermore, the thermodynamic and economic feasibility of this technology have been questioned. An article suggests that this technology does not create an alternative to fossil fuel but rather converting renewable energy into liquid fuel. The article also states that the energy return on energy invested using fossil diesel is 18 times higher than that for e-diesel.

History

Investigation of carbon-neutral fuels has been ongoing for decades. A 1965 report suggested synthesizing methanol from carbon dioxide in air using nuclear power for a mobile fuel depot. Shipboard production of synthetic fuel using nuclear power was studied in 1977 and 1995. A 1984 report studied the recovery of carbon dioxide from fossil fuel plants. A 1995 report compared converting vehicle fleets for the use of carbon-neutral methanol with the further synthesis of gasoline.

Parliament of England

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