WolfeNotes.com

Controversial Decision To Direct Staff to Draft MOA Prompts No Discussion By Commission

Let me repeat that: neither the Pinelands commission staff review or the applicant’s (South Jersey Gas Co.) presentation to the Commission even mentions air pollution, greenhouse gas emissions, or climate change impacts. ~~~ Bill Wolfe  10/7/13

[Important Updates below and in text below]

The Pinelands Commission met today – the South Jersey Gas (SJG) Pipeline project was not on the agenda.

After the Call to Order, Pledge of Allegiance, and adoption of the minutes, the various Committee Chairs reported to the Commission.

Planning and Implementation Committee Chairman Lohbauer gave a cursory brief of the prior meeting.

He informed the Commission that SJG presented their project; that 36 people spoke at the hearing; that SJG was preparing responses to questions posed by the Commission and the public; and then casually mentioned that he directed staff to draft a Memorandum of Agreement (MOA) for the Commission’s consideration.

Lohbauer mentioned the MOA issue in passing, as if it were a minor technical detail, instead of a huge policy step in further cementing the Commission into a controversial and questionably legal track in approving the pipeline.

There was no discussion on Lohbauer’s seemingly unilateral decision to direct staff to draft a MOA – or on the decision to even consider a MOA  – or whether a MOA was legally valid in this case.

Did the Commission authorize Lohbauer to direct the staff to draft a MOA? If so how? Straw vote? Formal vote? Abuse of Executive Session? Or by smoke signals?

Or did Lohbauer make this decision on his own?

[Update: Or did Director Wittenberg issue marching orders from the Gov. via DEP Commissioner Bob Martin- which is her role.]

Is anyone even concerned about all this?

There was no discussion of my prior recommendations that the Commission was on thin legal ice in negotiating a MOA for a private speculative investment or that the Commission lacked ANY science based criteria, standards, or review Guidance to evaluate a MOA and determine “equivalent” level of protection, the key finding that must be made by the Commission to waive CMP requirements via a MOA.

All of these issues were completely ignored by the Commission- at least in public discussion.

Several project opponents attended and spoke to urge the Commission to enforce the Comprehensive Management Plan, do the right thing, and reject the pipeline proposal.

“Don’t Gas the Pinelands Coalition”, the Pinelands Preservation Alliance, and Sierra Club opponents advised the Commission that there are 44 groups signed on to a letter opposing the project. Commission members, staff, and the public were invited to attend a presentation by Kevin Heatley, a restoration ecologist (details forthcoming – October 16th 7 pm, see this for details of that important meeting!)

I spoke and basically reiterated prior testimony.

I emphasized that it was premature to even consider a MOA at this time, and again urged the Commision to:

• direct Counselor Roth – in consultation with the Attorney General’s Office – to render a written legal opinion as to whether the Commission has jurisdiction and authority under the Pinelands Act, the CMP, or implementing regulations to review the pipeline with respect to climate change and air quality impacts and, if authorized, the parameters of that review;

• direct staff to consider the best available science on climate change impacts on forest ecosystems, including recent and ongoing US Forest Service science; and the nexus between those impacts and the direct, indirect, and secondary impacts from the proposed pipeline and the BL England power plant it is designed to serve; (as I wrote:

• direct staff to develop science based policies, criteria, standards, methodology, and technical review Guidance for determining “equivalent” level of protection for the purposes of structuring the review of a MOA; and

• procure independent consultant expertise to supplement staff expertise and fill gaps in staff expertise with respect to pipeline review.

I advised the Commission that Counselor Roth’s April 12, 2013 statements in support of a MOA and the subsequent BPU June 21, 2013 Order’s inclusion of a MOA with the Commission create a reasonable perception that this is a done deal and that the project will not be independently reviewed on the basis of science, law, and the public interest, in consideration of strongly negative public comments and public sentiments expressed at numerous hearings so far.

At this point, the MOA issues, in light of the SJG presentation and the extensive 18 months review history between SJG and staff, compounded by the failure by the Commission to openly discuss any of the above recommendations in public, are deeply troubling.

I closed with a warning that the Commission lacks a defensible scientific and legal basis to approve or reject a MOA.

I told the Commission that in light of this vulnerability, it was premature to proceed with a MOA and that the Commission should shelve the MOA process until the above recommendations are implemented and the various issues clarified in writing.

I got no indication whatsoever that my advise was being considered.

More to follow.

[Update  – I left out one important point I made to the Commission. I told them that BL England was under a “go – no go” decision and notice by December 2013 under the DEP ACO. I warned the Commission that it appeared as if this deadline was driving the review process. In fact, prior minutes and a prior presentation by Counselor Roth specifically highlighted the DEP ACO deadlines and spoke about a tight schedule (see this briefing by Ms. Roth on June 28, 2013 minutes)

 There are rapidly approaching deadlines including RC Cape May Holdings determination by May 1, 2014 that it will indeed repower the plant or face complete cessation of operations of the coal fired units. Unless repowered, the Amended Administrative Consent Order (AACO) with the DEP requires the complete shut down of the 2 coal fired units by September 30, 2013 and May 1, 2014, respectively. 

I warned that if the SJG pipeline is approved before then and after the election, then it will be obvious that that deadline was the reason the project review was expedited and that the Commission did not get develop a nexus between law and science on climate change; procure independent expert consulting assistance; and develop the necessary standards regarding “equivalent level of protection” under a MOA, as I have repeatedly recommended.

As I was saying this, Director Wittenberg repeatedly shook her head “no” and even spoke the words “no” – at which point I clarified that on the record that Wittenberg specifically disputed and rejected my concern about this deadline and timing of approval.  – end update]

[Important Update below]

The Assembly Telecommunications and Utilities Committee will hold a hearing today on the Christie Administration’s efforts to implement the greenhouse gas emission reduction goals of the Global Warming Response Act (see NJ Spotlight set up story:  ASSEMBLY PANEL TO TAKE CLOSER LOOK AT GREENHOUSE GAS EMISSIONS.

We were highly critical at the outset of the Administration, see:

• CHRISTIE SHREDS NEW JERSEY CLIMATE CHANGE PROGRAMS – Kills Emission Reporting, Diverts Green Energy Fund & Defunds Climate Office

• GOVERNOR CHRISTIE’S GLOBAL WARMING HONEY POT – Eco-Fund Raided for Anti-Eco Projects; Recycling $ Recycled to General Fund

• CHRISTIE ABRUPT ABOUT-FACE ON GREEN POWER – Nuclear and Natural Gas Touted; Conservation Incentives to be Zeroed Out.

It’s only gotten worse since then.

The Obama Administration’s recently proposed rule for GHG emissions from new power plants will have no impact on NJ (see:

•  Don’t Get Spun On EPA’s Proposed Greenhouse Gas Emission Rule
• Obama Weakens EPA Proposed Rule In Order To Promote New Coal Plants – Gets Praise From Enviro’s and Favorable Press

However in making that announcement on that proposed rule, the EPA stated the the upcoming proposed rule for existing power plants would rely on State primacy in setting emission reduction standards and regulatory requirements through the SIP process under the CAA.

Given EPA’s deference to State’s in regulating GHG emissions, it is critical that NJ get ahead of the curve and pursue strong and enforceable standards that can meet GWRA goals. A phase out of fossil fuel plants would be the way to do that.

The Christie Administration has shown no willingness or interest in such a policy. They remain in denial.

That means the Legislature will need to lead and do so aggressively.

I had planned to testify, but am under the weather, so I wrote a quick note this morning to the Chairman (see below).

We’ll listen to the hearing  and let readers know what went on in a future post.

I really hope the environmental community turns out and testifies about the Christie Administration’s across the board failures in making climate change and greenhouse gas emission reductions a priority.

And that the NJ media covers the hearing.

Otherwise, this could become just another dog and pony show – weeks before an election – limited in scope to criticism of the Gov. exit from RGGI, with no real commitment by Democrats or ENGO’s to serious efforts to reduce GHG emissions.

This hearing could lay the groundwork for legislative initiatives in the next Administration, which must include far more than simply rejoining RGGI and reducing the RGGI cap.

Source: “U.S. Shale Gas: Less Abundance, Higher Cost” by Arthur E. Berman and Lynn F. Pittinger

 Lower the price, create the demand. Then raise the price.

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work”  ~~~ NY Times: Insiders Sound an Alarm Amid a Natural Gas Rush (6/25/11)

[Update #3 – 9/1/18 – Op-Ed in NY Times exposes fatal financial flaws and agrees with my initial analysis, see:

The Next Financial Crisis Lurks Underground – Fueled by debt and years of easy credit, America’s energy boom is on shaky footing.

~~~ end]

[Update #2: 3/9/18 – thus far, the projections and analyses I based my opinions on appear to have been wrong. But time will tell. Long run issues.

[Update #1: 12/6/14 -new study is consistent with my analysis, see:

• Natural gas: The fracking fallacy

“That’s when there’s going to be a rude awakening for the United States.” He expects that gas prices will rise steeply, and that the nation may end up building more gas-powered industrial plants and vehicles than it will be able to afford to run. “The bottom line is, no matter what happens and how it unfolds,” he says, “it cannot be good for the US economy.”  – end update]

NJ Spotlight reports that the US Energy Information Administration projects a 13% increase in home heating costs this winter nationally, but not in NJ, where – according to industry – gas prices will drop slightly, see:  FORECAST: NJ HEATING, ELECTRICITY COSTS WILL DROP THIS WINTER

I talked to Tom Johnson about the EIA forecast, and emphasized the exact opposite conclusion:

“The natural-gas driven industrial renaissance is over,’’ predicted Bill Wolfe, executive director of the New Jersey section of Public Employees for Environmental Responsibility, a public watchdog group. Wolfe argued the huge demand from new natural-gas plants could drive prices up sharply.

Unfortunately, there’s a ton of complexity compressed in that quote, so let me briefly expand upon what I was driving at. I was not just focused on increased demand.

Basically, there are 3 inter-related things going on – the first two on the supply side and the third on the demand side:

• recoverable gas reserves have been greatly exaggerated;
• data on individual fracking wells show steep depletion curves – up to 70% in first year. More wells, less production;
• demand for gas is booming, especially as coal power plants switch to natural gas;

That all boils down to far less gas supply and a hugely growing demand, and declining returns on drilling investments, a formula for price spikes and reliability concerns. Some call this a “drilling treadmill”, some a Ponzi scheme.[Exclusive of industry’s proposed plans for large exports of US gas.]

In fact, although made more complex by pipeline transmission capacity issues, there is already an event that suggests where gas markets are headed. There was a gas crises last winter in New England and in the Southwestern US, where prices increased tenfold and gas fired power plants were unable to operate due to lack of gas (see also: Energy experts offer solutions to prevent a New England natural gas crisis)

Here’s an example of how the industry lies: (see: What the Frack? Is there really 100 years worth of natural gas beneath the US? 

An example of how inflated initial resource claims can be, and how they can be sharply cut, presented itself in August with a new assessment of the Marcellus shale by the U.S. Geological Survey. It offered a range of estimates, from 43 tcf at 95 percent probability, to 84 tcf at 50 percent probability, to 114 tcf at 5 percent probability. (Not surprisingly, the 95 percent probable estimates have proven historically to be closest to the mark.) Only five months earlier, the EIA speculated in its Annual Energy Outlook 2011 that the Marcellus might have an “estimated technically recoverable resource base of about 400 trillion cubic feet.” The USGS reassessment had slashed the estimate for the Marcellus by 80 percent. Similar adjustments may be ahead for other shale plays.

In addition to USGS, many professional energy analysts suggest that the gas industry’s claims of an abundant, cheap, 100 year supply of fracking gas are grossly exaggerated. A key aspect of that argument is embedded in the graph above.

This exaggerated claim by the gas industry has led related petrochemical industries to talk about fracking as a “game changer” that will lead to a US “industrial renaissance” (see NY Times business page for an example of that cheerleading:  Natural Gas Signals a ‘Manufacturing Renaissance’)

Even the EIA presents data on short term production in a way that reinforces that exagerated claim, see this from today’s EIA release: – notice how there is no right hand side to that graph, which creates the impression that huge growth will continue into the future, and masks the declines in individual well productivity:

Source: US EIA (10/9/13)

But, other analysts disagree and raise disturbing questions:

Shale gas has become an important and permanent feature of U.S. energy supply. Daily production has increased from less than 1 billion cubic feet of gas per day (bcfd) in 2003, when the first modern horizontal drilling and fracture stimulation was used, to almost 20 bcfd by mid-2011.

There are, however, two major concerns at the center of the shale gas revolution:

• Despite impressive production growth, it is not yet clear that these plays are commercial at current prices because of the high capital costs of land and drilling and completion.

• Reserves and economics depend on estimated ultimate recoveries based on hyperbolic, or increasingly flattening, decline profiles that predict decades of commercial production. With only a few years of production history in most of these plays, this model has not been shown to be correct, and may be overly optimistic.

These are not purely technical topics for debate among petroleum professionals. The marketing of the shale gas phenomenon has been so effective that important policy and strategic decisions are being made based on as yet unproven assumptions about the abundance and low cost of these plays. The “Pickens Plan” seeks to get congressional approval for natural gas subsidies that might eventually lead to conversion of large parts of our vehicle fleet to run on natural gas. Similarly, companies have gotten permits from the government to transform liquefied natural gas import terminals into export facilities that would commit the U.S. to decades of large, fixed export volumes. This might commit the U.S. to decades of natural gas exports at fixed prices in the face of scarcity and increasing prices in the domestic market. If reserves are less and cost is more than many assume, these could be disastrous decisions.

Disastrous decsions – like using scarce resources to convert all our power plants to gas, instead of investing in efficiency and renewables. Or developing natural gas infrastructure for truck and cars, instead of mass transit and electric cars.

You can watch YouTube interview summary that explains it all here: The Economics of Fracking (extended version lecture: Shale Gas or Shell Game?)

So, there are credible indications that instead of a renaissance, the fracking bubble is about to burst and the Ponzi scheme will crash and burn.

While Gov. Christie & Conservatives Criticize Subsidies to Renewable Energy

Source: Rate Counsel (hit link below for document)

While many whine about the so called “high costs” of and consumer subsidies for renewable power, the above table shows how NJ residents and businesses paid over $1 BILLION in what are known as “capacity payments” last year and will likely pay $1.5 BILLION this year (2013). (Source: Rate Counsel).

In contrast, that so called “high tax, job killing, subsidy program”, known as RGGI – the program that Steve Lonegan, Americans For Prosperity, and Gov. Christie denounced as driving business out of NJ – would have cost about $50 million, just 1 thirtieth or 3.3% of the capacity payment – if Gov. Christie didn’t kill it.

Why do we hear so much about the 3% RGGI cost and virtually NOTHING about the 97% $1.5 BILLION?

Worse, that $1.5 billion in capacity payments purchases absolutely NOTHING! – No energy conservation, no energy efficiency, no renewable energy facilities. It’s a pure profit to the energy companies.

“Capacity  payments” are merely an energy charge dreamed up by a private corporation known as “PJM” that controls the energy grid. These “capacity charges” are theoretically supposed to provide economic incentives to develop in state energy capacity – but everybody agrees that they don’t work! (see BPU questions #5 & #6)

We pay $1.5 BILLION per year for NOTHING but IMAGINARY THEORETICAL ECONOMIC INCENTIVES THAT DON’T WORK. How absurd is that? WTF!

(even more bizarre is the fact that demand side capacity (energy effiiency, conservation, and local distributed power) is by far the cheapest and environmentally superior form of capacity – but  Gov. Christie and the energy industry are doing very little of that and are instead supporting generation and transmission forms of capacity, i.e. more new polluting power plants and transmission lines to import dirty power – but these are complex issues beyond the scope of this brief note. Again, Rate Counsel:

The total costs for procurement of demand side resources is on the order of hundreds of millions of dollars per year. In contrast, the total cost to procure BGS-FP energy and capacity alone is on the order of six billion dollars per year.

So, the next time some politician, businessman, or reporter complains about subsidies for solar and wind, ask them about those billion dollar capacity payments.

Tomorrow, we talk about the multi-billion costs the fossil fuel polluters impose on all of us so that they can make even higher profits while they destroy the future of our children and the ability of the planet to support our current civilization.

[Update: Ooops, I forgot to mention that while we are paying that $1.5 billion allegedly because we lack sufficient in state capacity, NJ EXPORTS huge amounts of power to New York! (see “Critical RTEP Issues”) 

Here is an illustration of that ripoff, but I think this PSEG deal was opposed by BPU & killed and never went through.]

$500 Million Fossil Fuel Infrastructure Project Would Promote Massive New Greenhouse Gas Emissions

Over the past decade an overwhelming body of scientific evidence has emerged linking anthropogenic emissions of CO2 to climate change and sea level rise. The projected climate impacts and related impacts on ecosystems and society related to increasing concentrations of CO2 in the atmosphere due to anthropogenic emissions supports the conclusion that CO2 should no longer be disregarded in the formation of environmental policy. […]

2.3 New Jersey-Specific Impacts

Climate change resulting from anthropogenic emissions of CO2 and other greenhouse gases is expected to have significant negative impacts on New Jersey ecosystems, coastal property, air quality, and human health. As a result, CO2 emissions can no longer be considered benign and would clearly meet the Department’s definition of air pollution at N.J.A.C. 7:27-5.1.   

~~~ NJ DEP – Oct. 18, 2004 –  basis for rule to define greenhouse gases as regulated  air pollutants.

Almost a decade ago, the NJ Department of Environmental Protection (DEP) defined greenhouse gases as “air pollutants” under State law, emphasizing that those emissions “should no longer be disregarded in the formation of environmental policy.”

A few years later, in 2007, the Legislature enacted the Global Warming Response Act establishing aggressive greenhouse gas emissions reductions – roughly 20% lower emissions by the year 2020, and 80% reduction below 2006 levels by 2050.

Yet almost a decade later, the environmental review and approvals for a proposed $500 million regional fossil fuel infrastructure project does not consider – at all – the air pollution and greenhouse gas emissions from the pipeline itself, or the power plant it is designed to serve.

The South Jersey Gas Co. (SJG) has proposed 22 mile 24 inch wide gas pipeline through the Pinelands National Reserve, designed to re-power the B.L. England power plant, would provide enough gas to power 267,000 homes.

Let me repeat that; neither the Pinelands commission staff review or the applicant (South Jersey Gas Co.)  presentation to the Commission even mentions air pollution, greenhouse gas emissions, or climate change impacts.

[The Clean Air Act permit issued to the B.L. England plant by DEP also did not regulate GHG emissions. Long story on why that is the case, beyond the scope of this post. Long story short: DEP failed to follow through and adopt permit regulations, while the Legislature backed a market based cap/trade scheme known as RGGI, instead of DEP regulatory controls.]

Despite extensive public testimony to the Pinelands Commission on the climate change issues and impacts of the project – including my specific recommendation that the Commission task staff with examining this issue – no member of the Commission has uttered one word on the topic.

How can that be possible?

This is a remarkable failure, in and of itself, given the significance of the climate change issue.

But it is bizarre and inexcusable given that Pinelands Forests are now being devastated by climate change impacts – the impacts on Pines forests are so severe and the link to climate change so clear, that the Pinelands have become a case study in the ecological effects of climate change on forests.

Here is what the US Forest Service research says about climate change impacts on forest resources: USFS stresses that “sufficient scientific information is available to begin taking action now.”

This report is a scientific assessment of the current condition and likely future condition of forest resources in the United States relative to climatic variability and change. It serves as the U.S. Forest Service forest sector technical report for the National Climate Assessment and includes descriptions of key regional issues and examples of a risk-based framework for assessing climate-change effects.

By the end of the 21st century, forest ecosystems in the United States will differ from those of today as a result of changing climate. Although increases in temperature, changes in precipitation, higher atmospheric concentrations of carbon dioxide (CO2), and higher nitrogen (N) deposition may change ecosystem structure and function, the most rapidly visible and most significant short-term effects on forest ecosystems will be caused by altered disturbance regimes. For example, wildfires, insect infestations, pulses of erosion and flooding, and drought-induced tree mortality are all expected to increase during the 21st century.  […]

Significant progress has been made in developing scientific principles and tools for adapting to climate change through science-management partnerships focused on education, assessment of vulnerability of natural resources, and development of adaptation strategies and tactics. In addition, climate change has motivated increased use of bioenergy and carbon (C) sequestration policy options as mitigation strategies, emphasizing the effects of climate change-human interactions on forests, as well as the role of forests in mitigating climate change. Forest growth and afforestation in the United States currently account for a net gain in C storage and offset approximately 13 percent of the Nation’s fossil fuel CO2 production. Climate change mitigation through forest C management focuses on (1) land use change to increase forest area (afforestation) and avoid deforestation, (2) C management in existing forests, and (3) use of wood as biomass energy, in place of fossil fuel or in wood products for C storage and in place of other building materials. Although climate change is an important issue for management and policy, the interaction of changes in biophysical environments (e.g., climate, disturbance, and invasive species) and human responses to those changes (management and policy) will ultimately determine outcomes for ecosystem services and people.

Although uncertainty exists about the magnitude and timing of climate-change effects on forest ecosystems, sufficient scientific information is available to begin taking action now. Building on practices compatible with adapting to climate change provides a good starting point for land managers who may want to begin the adaptation process. Establishing a foundation for managing forest ecosystems in the context of climate change as soon as possible will ensure that a broad range of options will be available for managing forest resources sustainably.

The Pinelands have become a case study on forest ecosystem impacts of climate change, see: Effects of Climatic Variability and Change on Forest Ecosystems: A Comprehensive Science Synthesis for the U.S. Forest Sector –

In that assessment, the Pinelands impacts are presented as a case study, see: The Southern Pine Beetle Reaches New Jersey Pinelands – Box 2.3 – p.19).

The US Forest Service is working on and will soon release more research on climate change impacts on pines forests.   US Forest Service is about to release this research report:

Title:  Climate Change and Carbon and Nitrogen Dynamics in the NJ Pine Barrens

We are assessing the interactive effects of fire management and insect defoliation on tree species composition, carbon, and nitrogen dynamics in the New Jersey Pine Barrens. We are determininghow interactions among these disturbances affect management goals. Our goal is to create a framework for understanding landscape to regional management scenarios in areas with multiple, interacting management priorities that can be applied across the US.  We use then use this framework to project future changes and may be caused by climate change or changes in fire management policy.

Given prior and ongoing research, it is simply inexcusable for the Pinelands Commission to stick its head in the sand and ignore all these climate change driven ecological impact issues during the review of a fossil pipeline.

In a subsequent post, we will connect the dots between scientific research and the Commission’s jurisdiction and legal authority to regulate the proposed pipeline with respect to greenhouse gas emissions and impacts of climate change on Pinelands forest, ecological, and water resources.

[Update: Thought I’d provide a table to show that DEP regulators don’t even look at carbon/greenhouse gas emissions – see this side by side comparison of emissions from a coal versus new gas plant in Vineland:

Source: NJ DEP (hit link above for document)