Climate and energy

(This post will be updated throughout the morning. Hit your refresh button occasionally to check for new info.)

Welcome to Day 4 of CEP live blogging from the Holcomb/ energy bill hearings in the House. Maril on keyboard, Eileen and Nancy close by, holding pencils. If you want to refer to the text of the bill as we go along, click here. If you want to refer to Gov. Sebelius’s response to the legislation, click here. If you want to see our record of Day 1 testimony, click here; for Day 2, click here. For Day 3, click here.

It should be noted – ours is obviously a rough transcript. If you want to find the real one at some point in time, look for it at the Kansas Legislature’s website. (BIG EDIT: no, apparently you won’t, there is no transcript. There also seems to be dispute over whether testimony is still posted on the committee website. Anyone who testified, from any position, who wants me to post the testimony on the CEP main website, just send it to me. I am happy to provide access to the public record. I do have some problems posting giant pdfs, though, with lots of slides, please bear that in mind).

Also, if you have comments on either the transcript or the fact checks, please of course feel free to email me at hazlett at climateandenergy dot org. If you have a good point, I am more than happy to go back and modify an original entry with an EDIT note.

And if you don’t want to put it in writing – for whatever reason – :) either try telepathy, or find someone who knows me to pass the message on. Or try the phone number on our main website, www.climateandenergy.org. That will probably get to me eventually.

9:05 a.m

Here we go! Chairman Holmes is not here, so someone else calls the hearing to order. There is a bonkers amount of testimony to get thru today. (For those interested in wind, there is also a legislative briefing here in the Old Supreme Court Room after the hearing concludes.) There will only be five minutes per opponent.

Ron Hammerschmidt, KDHE

They have problems with the bill. There are a number of regional agreements on greenhouse gases, including the Midwest Governors. They are all looking at cap and trade. This bill’s credit structure is not compatible. We want to follow the framework for a national approach.

Specifically, section 10 – terminology of “affected facilities” is too close to Clean Air Act language. Change it or there will be unintended consequences. Section 10 and 12 – there is implication of a permitting authority, but that is not specifically discussed who or how. Give it to a state permitting agency – not necessarily KDHE – but it needs to be specifically assigned.

We are uncertain if you want us to enforce Clean Air Act. We don’t enforce all of it right now, but we could – small vehicles, etc. Let us know, because your wording is vague.

Section 30 – there are more overlaps with Clean Air Act. You are requiring us to implement it, and we have some differing requirements for stack heights and analysis. Nor do we require an environmental impact statement for these facilities. You are asking us to be more stringent than we are, and you are taking away our flexibility as a state. We will just have to enforce the federal standards, if we don’t have state discretion. In another section – you allow us to take some extraordinary actions, but not others.

Grover Norquist, Americas for Tax Reform

I thought I’d seen it all… until this bill. This is a carbon tax. It will kick in down the road. Like the income tax originally did, now everyone is subject to it. This bill has the same potential. It will create a tax that will have massive impact on Americans. A sword of Damocles. It also puts a big regulatory burden on people. And then manufacturers will not be in Kansas anymore.

Rep Hawk – the intent of this $3 carbon tax as expressed by CEO of Sunflower – they don’t intend to pay it, it is an incentive for CO2 reductions. This is certainly a creative tax, but isn’t it different than the other taxes your testimony describes?

Norquist – if this company wants to do something about CO2 emissions, they can do it without a tax. A tax is like a gun, and it will go off. Just like in Chekov. KS already has an unreasonable tax regime, that scares off jobs and opportunities.

Rep. Light – this carbon tax – we keep getting told that eventually in Washington this tax will be passed. What do you think?

Norquist – Well, they rejected the Kyoto treaty because it was like a carbon tax. Senators thought that was a bad idea.

Rep. Moxley – the option is tax or regulation. There is no other option. If you put a regulatory burden on a business, that’s the same as the tax.

Norquist- well, regulatory burdens can keep politicians from doing too much damage. But the tax is dangerous.

Moxley – you assume the state benefits from a tax.

Norquist – cap and trade will cost four times more than the carbon tax – because it has such a huge regulatory burden that is hidden from the public. But it is less politically costly. Politicians will pass it.

Sarah Hill-Nelson, Bowersock Dam

her family has a long history of developing power in Kansas, with Bowersock Mills, a small hydroelectric power plant that has been generating since the 1800s. Bowersock has long worked to encourage KS to put together a comprehensive energy policy that supports renewable energy. This bill doesn’t get this done – it doesn’t recognize importance of renewables or KS.

Unintended consequences of this bill – it will take KS out of sync with what is happening nationally. The proposed cap and trade system in this bill has very little correlation with national markets. Especially the offsets. Nationally, carbon offset markets are based on scientifically based sequestration measurements. Section 12 is especially difficult.

Bowersock is involved in REC market. It helps us market our energy, helps our rate of return – and it would be the same for wind. A REC is a renewable energy certificate, or a green tag. 1 MW of electricity equals one REC. There is a compliance market. and a voluntary market – and the latter occurs in states without RPSs (MH: renewable portfolio standards). KS doesn’t have an RPS. Many regional transmission operators are developing these markets. KS needs access to these markets. Section 12 assigns offsets with no relation to current carbon values. If we do this, this will devalue our RECs here in Kansas. In the national market, I can get $14 per ton of carbon offset. Chicago market prices that Chairman Holmes quoted yesterday – I’m looking for the right word – those are not really stringent markets.

To make profit, my business needs to get the best price for offsets. This bill doesn’t do that. It would undermine us, and undermines the state’s efforts to develop renewable energy.

Karl Brooks, JD, PhD – University of KS, Environmental Law and Policy

Focusing on sections 30-33. This bill will only increase regulatory uncertainty in Kansas. It also threatens balance between Kansas Air Quality law and Clean Air Act. It also politicizes legal matters that belong to judiciary. It also raises problems with legislative coordinating with the executive and judiciary branches. He is former member of Idaho legislature. He is testifying as a private individual.

Kansas has developed over 40 years a model system of administrative law, executive, and judicial relationships. This bill threatens that balance. It contains a variety – 28 sections – of far-reaching changes to administrative law in KS. It will have broad impact. Proponents of power plant might not even benefit from these changes.

Sections 30, 32 – if you make KDHE enforce Clean Air Act consistent with EPA – KS will surrender its power to the EPA. And if you do this, this state will take large step away from principle that states should have primary responsibility for protecting citizens and environment.

Sections 30, 31 – these sections overrule KDHE’s decision. These decisions are also up before the Supreme Court of KS. If you make legislature responsible for making these decisions – that’s a dangerous precedent. Let the process work. This bill short-circuits that procedure. It makes the legislature the final stopping ground for anyone with an administrative gripe. I don’t think you want that to happen.

If KS tries to tell the EPA how to handle this case, and you run into problems with the Constitution.

Bruce Driver, Western Resource Advocates

We are an environmental law and policy nonprofit. I do not have a position on the bill. I just want to provide important information. (1) Colorado energy policy – and climate policy – is likely to raise obstacles to any application for new coal plants. It is not a safe assumption that Holcomb plants will create economic benefits, and that they will be built in CO anyway. That’s not likely. (2) KS is not alone in questioning new coal generation. In 2007, 14,000 MW of coal was canceled, and 32,000 MW aws deferred. Construction costs, imminent carbon regulation – all on the horizon. Wall St banks agree.

(3) Tri-State does not need this power. Many of us in CO think they don’t need power from Holcomb at all. Their resource program does not look at renewables or co-generation – they didn’t look at all the options. They just went to coal. Denial of Holcomb permits is in fact golden opportunity for Tri-State and Sunflower and other co-ops to reconsider energy efficiency, renewables, etc. Kansas, please don’t facilitate these units – CO doesn’t want the power.

(4) Federal climate change legislation is inevitable. It will probably be cap and trade. We will probably have to reduce emissions by 80% by 2050. Kansas, be careful in establishing your climate policies before federal law, because investments are happening now. Don’t pre-empt.

9:37 a.m.

Larry Flowers, NREL

talking about wind opportunity in KS. You have huge potential of wind capacity, but very limited installations right now. The US is behind is installation as well. There are many drivers for wind – big engine of economic development. Wind is getting much more cost-competitive. Carbon is getting more expensive, and so are fossil fuels. Wind has no emissions, which will make it even more economic in the future. Wind brings income streams to landowners ($2-$4,000 p/ megawatt), to counties, etc. Wind also has potential to bring development to rural areas that are now depopulating. Also, wind has no impact on water withdrawals from Ogallala. Western KS could get even drier with climate change. Pres. Bush says we need to get 20% of power from wind by 2030. This is possible.

KS benefits – jobs from wind. Using EERE’s JEDI model. If KS installed 7,000 MW wind, that would mean $8 billion jobs, and permanent jobs for operations and management of wind farms.

When wind is blowing, you back off highest cost resources for electrical generation – ie, natural gas. Some of these fossil fuels are also feedstock for fertilizer. If you don’t use them you keep the prices down.
9:45 a.m.

Eileen Smith, KS Solar Electric Co-op

Photovoltaics do not get enough attention. Solar energy is viable, affordable technology.

Bremby decision: how we came to this point. Sections 30-33 are very harsh on him, and try to ram thru destructive legislation for this state. This decision has a long history of legislation behind it, especially in making siting decisions. Who regulates, KDHE or KCC.

Photovoltaics are mainstream, urban technology that can help out cities, can give back-up power during times of electric crisis on the grid. Renewables and coal can actually coexist.

Please rewrite this bill and take time to make it work.

Chairman Holmes comes. He was on conference call with DOE.

9:50 a.m.

Todd Bruse, American Legislative Exchange Council

We send out issue alerts, and we did one on the House and Senate version of this bill. We are an association of trade associations. ALEC was formed in 1973 in Chicago, we have 2400 state legislative members, and an international arm in UK and Poland.

This bill is a carbon tax. We think that is not good. We agree with Grover Norquist. Taxes are not the way to go. They burden consumers.

(MH – he made a great comparison about a rubber chicken, but I am afraid I missed it.)

This energy bill is moving too fast. This carbon tax was not on the radar of many organizations, and this is not fair to them. It will have a small business impact.

Alan Cobb, Americans for Prosperity

We oppose the bill because of the carbon tax. Hard to overstate its negative consequences. KS should not serve as test case. Leave that for Vermont or somewhere.

Trudy Aaron, American Institite of Architects

We design facilities to leave lighter carbon footprint on environment. We will reduce fossil fuel use for all new facilities by 60% in 2010, and will be carbon-neutral by 2030. We can do this thru design, and thru purchase of credits. These coal plants are counter to what we can accomplish thru sustainable design principles. We support minimization of fossil fuels, and do not support building of additional coal plants. Do not give carte blanche to utilities. Carbon regulations are coming sooner rather than later. National banks are worried about financing coal plants.

Our concerns: Even carbon efficient coal plants produce too much carbon. If these plants do use carbon sequestration, that will require a lot of water. Where will it come from? A depleting aquifer? The jobs in Holcomb – 110 – are not enough to compromise our health and environment.

We would like to help the committee draft new legislation that is more constructive.

Hudson Lewis…? PhD in physical organic chemistry

Worried about removal of authority of KDHE to stop harms to KS citizens and environment. Waiting for actual harms to occur is a bad thing. You have to be able to foresee and protect. There are lots of dangers with coal emissions – childhood asthma, etc. Particulates are a problem. Not just greenhouse gas emissions. The ash pit concept f plant is also a problem – the ash will go into the aquifer. The aquifer is also depleting, and has problems with salinization, that the plant will make worse.

Bill Wentz, Aerospace Engineer from Valley Center KS

Here as a private citizen. I am a KS native. Have been involved in wind turbine research for 30 years. I beleievee in energy conversion. My concerns about Holcomb: (1) we have a population explosion, and it is straining the planet. (2) global warming is real, greenhouse gases are partially repsonsible, (3) coal produces these emissions.

Energy and economic future of KS will not be jeopardized by not building coal plants in western KS. This is simply not true.

WHy KS, chosen as site for these plants? The builders don’t want these plants in their home area. They want the burdens placed on us. Tri-State supposedly thought construction in CO would take too long – but I haven’t heard that answer yet. Why KS, why not CO? I don’t think it’s true that they will build the plant across the border. I don’t think CO wants it.

Clean coal is misleading. Carbon capture is not functional yet. They are unproved research projects.

Wind power is coming to KS. Solar is coming to KS. We need to be ready. We don’t have the policies right now. We need a good net metering policy. We don’t have that now, and what we do have is not economically sound. Fix the net metering problem, and give your citizens a chance to invest in renewable energy.

Don Teske, KS Farmers Union

In opposition to bill. (1) We are very concerned with mining of water for export in western Kansas, and (2) we want to get carbon soil sequestration – better than this bill offers.

National Farmers Union current biggest carbon aggregator in US, and I promote that policy.

(From his written testimony) “I hear that the proposed Sunflower Project at Holcomb would emit 11 million tons of carbon per year. Farmers’ Union now has 1.6 million acres of land enrolled in the carbon sequestration program at rates that run from .2 tons of sequestration per acre to .6 tons. If one averages out to .4 tons per acre then the entire national program of Farmers’ Union to date is offsetting approximately 640,000 tons of carbon per years. This is a little under 6% of just this one proposed plants’ emission!!! Talk about an act of futility!”

10:10 a.m.

Written testimony – lots of it. Just mentioned.

QUESTIONS:

Rep. Light for Karl Brooks – thank you for testimony today. You said that Sunflower has not been able to get what it wants thru regular channels, so it is changing those channels. Would this bill really upset administrative law-making? and i want to make a statement and have you respond – if Sunflower as they work thru regular channels, that if they were told by Secretary that he would look at CO2 emissions, Sunflower would have built that in. But since Secretary made this ruling in the dark, they couldn’t meet these requirements. So how is that not going thru channels properly?

Brooks – regular channels for admin law – if a permit applicant feels aggrieved by KDHE decision, applicant has option. Primarily to obtain judicial review of the statute. Sunflower has availed itself of that opportunity. There is also an opportunity within KDHE channels. An aggrieved party under KS law does have opportunity to get binding interpretation of statute. But Sunflower tried to come to legislative body and get the law rewritten.

Rep. Light – but this wasn’t an perfect administrative system – couldn’t the secretary have informed Sunflower of his intention to rule on CO2?

Brooks- The secretary was proceeding according to Clean Air Act. If Sunflower didn’t like his decision re greenhouse gases, they can go to the courts. Courts may still agree with sunflower, those petitions are pending. Let the procedure go ahead, figure out whether secretary did have power, then make the legislation.

Chairman Holmes – asks for those who have written testimony, if they want to speak.

Doug Lawrence – Chesapeake (gets a special indulgence from Chairman to speak, list was so full earlier)

Re legislative intent. Discussion of 1993 authorization of Secretary’s authority.(?) You have to interpret the law straight, and not interpret it creatively. Teh legislature never meant to limit the Secretary’s authority.

Unintended consequences of bill – HB 2711 leaves decisions about new power siting to independent power companies, not state or local authorities. Sunflower has good intentions, but what about big out of state utility coming in? We will create a scary environment, where just anyone can come in. Air permitting process protects us. No longer are all state utilities regulated by KCC. Someone could come in and put 10 new coal plants in western KS, not two.

And the carbon tax in bill is not good. Net result will be higher emissions, not lower. Imagine if this tax were a cigarette tax of 50 cents per tax, that was used to educate people not to smoke – but it didn’t matter if the cigarette makers actually did it.

Rep. Kuether for Trudy, Architects – what do you support in bill?

Trudy – we do support energy savings for schools and state buildings, and we do support net metering.

Chairman Holmes, for Hammerschmidt, KDHE – (an untranscribed ceremonial exchange of we know and respect each other, but here we go, and we both know it)

Holmes – KDHE staff never made recommendations on CO2.

Hammerschmidt -they deferred that to the Secretary.

Holmes – It was in accordance with all federal, state laws.

Hamm – yes.

Holmes – did you review that? (also – secretary made this decision all by himself – Hamm. – yes)

Hamm. – yes. And we did research on IGCC, etc. we researched mercury controls, etc. we looked at reductions… hard to give you a breakdown off the top of my head.

Holmes – mercury

Hamm. – all power plants in state under mercury regs right now.

Holmes – permit required best available technology – explain how it works

Hamm – this is peculiar to air quality legislation. Not like water quality. Best available control technology different – a sliding scale – you have to look all over the country for the standards, as plants improve their performance, all other new plants have to meet that bar.

Holmes – how many people have retired from KDHE recently? I want names and a list.

Hamm. – I will get that for you. Permit writers and others.

Tom Moxley for Hamm – what state environmental laws have primacy over federal law? What would we lose?

Hamm. – most programs under KDHE we do under umbrella of federal law. We also get to set some of the standards, with air. There is always the concern that if we don’t do something that the feds want us to do, they can yank our authority. Like the EPA has currently objected to a permit we made, and we are having to work it out. These are on the basis of primacy agreements. Did that answer your question?

Moxley – it probably did (laughter)

Hamm. – well, the EPA hasn’t taken any of our powers back, so we’re probably doing a good job.

Moxley – did the secretary have the right to cut off the building of this plant.

Hamm. – that case is being worked thru the courts, so I can’t comment.

Moxley, for Brooks – do you have an ae to grind re where we get our power? Do you think coal is acceptable source of power?

Brooks – i tell my students that vast majority of electricity is US comes from burning coal. I’m not an engineer, can’t speak to the rest.

Moxley – do you beleive Secretary had the authority?

Brooks – that’s before the courts. I would analyze it between the federal and state regs, yes, he did. I do recognize that there are different opinions. I think there was adequate regulatory authority.

Moxley – where would this bill affect state authority v. federal?

Brooks – section 110 of clean air act encourages states to take primary responsibility to protect citizens and environment. States get to make a lot of their decisions. If legislature makes state clean air act consistent with all of federal clean air act, state will surrender its sovereignty in this area. And it might indicate to the EPA that KS can’t take care of its responsibilities to take care of the air here.

Rep. Johnson for Hamm., KDHE – if 2711 passed, would it encourage other coal companies to come to Kansas?

Hamm. – I don’t know. haven’t thought that through. They might not be able to get financing now.

Johnson – could they apply? Hamm – yes. Johnson – In Flint Hills? Hamm. – I don’t know. Johnson – me either.

Flora – (MH missed it, people were walking over her legs and she was protecting her computer)

Flora – would you say Kansas is open to coal?

Hamm. KDHE has tried to be friendly to business as it regulates environment.

Rep. Sloan – I am struggling with the fact that there are no federal or state level regs on CO2 emissions. The secretary ruled that 11 million tons was too much, but hasn’t come up with regs. But they also allowed an ethanol plant, which is a CO2 emitter.

Hamm – ethanol plant emits 400,000 tons – v. 11 million for Sunflower.

Sloan – what is too much? How do we decide. I am asking for guidance.

Hamm. – Governor and Legislature will decide that.

Rep. Svaty – I have heard that sections 30-33 would decrease certainty, not increase it. Is there a way to get at getting the Sunflower plants without doing it this way in the bill?

Hamm. – wait for the court case. That will tell us more.

Rep. Light – impact of regulatory certainty on businesses. Over last years, how many permits does KDHE deal with for various businesses, and how many are approved?

Hamm. – we disapprove very few. If we know a permit is a non-starter, it doesn’t get to the public process. especially for wastewater. We do run into permits that are highly charged locally, like swine farm in Flint Hills – we approved it, and the locals challenged it, and the facility was withdrawn. We disapprove less than 5%, probably.

Light – so KDHE is very cooperative with businesses. Do you agree?

Hamm. – we tell applicants to talk to us early and often. We also bring federal authorities to table. But we also have to take public comment and input, and that can change things.

Rep. ??? for Trudy, Architecture – can facilities really reduce footprint 60% by 2010?

Trudy – yes. More and more technology is energy-efficient, and water reductions. It’s becoming standard in how we design – we do it automatically. And clients are demanding it. Everyone wants their utility costs to go down. It’s market-driven. And we believe in this goal. By 2030, I really believe we can become carbon neutral.

Rep. Mast for Brooks – Fedema said that CO2 doesn’t matter if plant is built in China or Kansas. So how can our KDHE state that this plant is an imminent danger to Kansas?

Brooks – under KS air quality act, that secretary thinks within the boundaries of the state, and considers the health and environment of KS. He can’t reach into China. Carbon is all throughout our biosphere, but we can only control what we do in KS.

Rep. Miers – good point about the ethanol plant – it is a CO2 emitter. The big problem is we have no regulation for CO2 emissions. 20 permits for an ethanol plant is equal to emissions of Holcomb. Don’t we need standard, before any businesses can apply for permit? We have allowed permitting of lesser CO2.

Hamm. – I understand your point, but not your question.

Miers – lots of CO2 emitters are going to come to Kansas. At what point do they not come?

Hamm. – Fossil fuel is a concern. I don’t really have an answer.

Rep. Knox for Brooks – KDHE generally works well with industry. Staff recommended the permit. Secretary denied. What is your personal opinion of the Bremby decision – when it wasn’t the law or the statutes. We have heard both sides of the global warming issue, there is not a consensus on the science, so what do you think.

Brooks – with regard to climate change, respectfully, lawyers do not dispute climate change. It is happening, and human actions are involved. I also respectfully disagree that Sunflower pursued its options all thru process. I am certain their attorney’s knew they could appeal the process. They still are. Teh secretary’s decision – he obviously believed he had the authority.

Rep. Knox – what is beyond dispute is the public perception of CO2.

Holmes – committee, we will be taking the bill on the floor at 9:00. we will work thru noon hour to 3:00, then break for lunch. Bring a snack.

Rep. Light – for Chairman Holmes – based on Brooks testimony, where is Secretary Bremby?

Holmes – we do not have subpoena power.

Rep. Keuther – since he is involved a court case, I doubt he could answer your questions.

we are adjourned.

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