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Aggregating Energy Since 2006

Global Warming Testimony

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The Senate Energy Committee started with testimony on the governor's bill, 145. They then moved to bill 192. While we did not have anyone as exciting as Don Dane from the House Energy Committee, we did get two coal front groups with innocuous names testifying against anything that would take action.

Ed Garvey, Deputy Commissioner of Commerce, kicked off the hearing with a discussion of Governor Pawlenty's proposal - S.F. 145. I discussed that bill here

He noted that climate change is real, but does have uncertainties both in terms of the science (how much will it change) and how it will affect Minnesota. He used the Governor's language that Minnesota did not cause this problem but can help to solve it. I imagine that the Governor is worried about being attacked from the right by flat-earth climate change deniers.

First question - Senator Koch wanted to know more about carbon capture and sequestration (CCS) and its costs. Garvey seemed to suggest that it was the most effective way to prevent the emission of greenhouse gases (GHGs) but I think he actually meant it was the best way to continue using coal and cutting emissions. Throughout the day, no one suggested that CCS is anywhere close to being cost effective currently.

Senator Dibble was concerned with offsets (continuing to emit at the plants, but paying others to reduce or remove GHG emissions) and whether all offsets are created equal. He wondered if they can tighten the offset language to make it more effective. Later, he noted that the PUC prefers clear language from the Legislature on issues such as this.

In response to Senator Anderson's question about whether the offsets would need to be permanent (to avoid trees being planted as an offset and later chopped down), Garvey said they would not need to be permanent. Garvey foresees a future with better options and noted that what is important is that we get started today. He believes we will have better options in the future, that is why they want to have flexibility in the language.

Looking back on his testimony after having seen the whole hearing, I'm glad to be reminded that Pawlenty supports action rather than the inaction proposed by the coal front groups and Senator Tomassoni's soon-to-be-introduced bill. More on that below.

Big Stone II (proposed big, dirty coal plant in South Dakota for Minnesota electricity demand) will be effected by this legislation. Garvey has been in "communication" with the proposers of Big Stone II and has been discussing different approaches to dealing with Big Stone II.

The committee then took up Anderson's bill, S.F. 192. She started by noting that it has a delete-all amendment and moved it in order to update the bill's language. I will look closer at this bill once I get the new text.

As she talked about her bill, she noted that the Climate Strategies group that Governor Pawlenty wants to bring in does not have a problem with Anderson moving foward on her bill. They have apparently worked under similar circumstances with other states.

The bill does not allow back-sliding. She is fearful that coal plants will be built during the period between now and when the plans for controlling GHGs are enacted (at a minimum of 1 year, but possibly more years away). Power plants can offset by reducing GHG emissions from an existing plant or by purchasing allowances from a different state with a cap-and-trade system.

She explained the logic of cap-and-trade because it seizes on the power of the marketplace. Forcing all utilities to freeze or reduce their emissions is inefficient because some firms may be able to reduce more cheaply than others. Cap and trade encourages the companies that can most efficiently lower their emissions to do so. This means that emissions targets are met by making the reductions where they are cheapest and most cost effective.

Interestingly, the cap-and-trade will likely auction off the permits (as do NY and MA) rather than giving them out for free. While this intuitively makes the most sense and raises revenue for clean energy projects, it tends to solidify utility opposition which is why many states do not auction all permits. Apparently, the allocation of permits is not yet written in stone. More on this after I read the new bill.

She emphasized several times that her bill is a stopgap. The emissions goals for the future are non-binding and are there to send a message to the long term planners of utility companies that they should not invest in GHG-intense generation units that will last a long time.

Anderson noted that the new Renewable Energy Standard and upcoming efficiency standard (to be dealt with later) will help utilities keep emissions stable or even decreasing. Minnesota needs to move on this in anticipation of federal law in order to be benefit when the country acts. If we are more efficient, we can sell credits to others when they are forced into a national program.

Senator Jungbauer asked about carbon sink farming. If someone takes land and plants trees or prairie grasses, can they sell emissions credits to the system? This would be up to the Minnesota Pollution Control Agency (PCA) because they will be working out such details and administering the program.

Senator Tomassoni will be introducing a bill relating to all this. He is concerned that MN is moving too fast and needs to more fully develop the cap-and-trade ideas. He thinks cap-and-trade is too big to let administrative agencies to develop so the legislature should study the issue for awhile before acting on it.

Apparently, he finds cap-and-trade too confusing because it is a new-fangled idea. Despite its decades of use in controlling pollution, he finds it all too new and complex and scary. As if to prove he does not understand cap-and-trade, he argued that such programs would force the development of new technologies or shrink the economy. He might be forgiven these concerns had the committee not just spent weeks discussing alternatives to fossil-fuel derived electricity and if there not obvious offset language included in both the bills he criticized.

His bill will require all large emitters (10,000+ tons per year) to report their emissions. Chair Prettner Solon was devastatingly underwhelmed by Tomassoni's bill (causing me to chuckle aloud). He presented it as an alternative to Anderson's bill but it is really a do-nothing approach. There was talk about closing coal plants but Tomassoni did not discuss it at all and I cannot comment on it without having read it.

Given Tomassoni's RES bill, I remain confused as to whether he actually represents humans or just utility companies.

Following Tomassoni's time, we started a small parade of coal front groups to give testimony. While half listening, I googled them to see what they have been up to.

First was Scott Wiseman from Center for Energy/Economic Development (CEED). Great name. You would never know that CEED is a pro coal group that has long fought climate change legislation. Well, once he started talking, it was pretty obvious.

He began by fear-mongering on spikes in energy prices and noting that the poor would be hardest hit following increases in energy prices. As he worked up a crocodile tear, I thought it stunning that so many energy companies care so much about the poor when it suits them and yet when it comes time for winter, states actually have to pass legislation to prohibit them from turning off the lights and heat in the winter when those same poor people cannot afford it. I realize the irony here in that the higher prices sometimes also come from legislation, but we need to be reminded what motivates coal companies - and it has more to do with short term profits than social benefits.

Next came Tom Hewson from Energy Venture Analysis. He seemed too slick to be a coal man, I would have guess oil if I didn't know better.

I started zoning out after he talked about planting trees as the best offset for carbon dioxide. Anderson asked him how many trees needed to be planted for the 153 currently proposed coal plants in the U.S. He evaded the question by noting that not all those plants would be built and some that are built would replace older, less efficient coal plants.

I think the whole planting trees to offset coal is nonsense anyway. Yeah, planting trees is nice and pulls some carbon temporarily out of the air, but eventually the tree dies and something happens to the carbon unless we can ship in into space on a solar operated space elevator. Planting trees to justify more coal plants is not a good idea.

Some other coal guy from "Americans for Affordable Energy" or similarly innocuous name got up and prattled on about the same stuff. To hear these people tell it, we shouldn't try to reduce emissions from the power sector because there are emissions from other sectors too. We need to start somewhere!

The last person offering testimony was Rick Lancaster from Great River Energy - a massive cooperative electrical utility. He was vehement about section 6 of Anderson's bill which he claimed would prevent them from being able to build any power plants until the cap-and-trade system were active.

Dibble pointed out that he read it wrong and that power plants could be built but would need to be offset. My take home message from this hearing is that the whole business of offsets really needs to be examined and the language tightened up.

He defended Big Stone II, saying it will be the most efficient power plant in the U.S. and that it could eventually be retrofitted with CCS. This strikes me as being overly optimistic. Pulverized coal plants are not suited to CCS, regardless of how efficient they are.

It was a long hearing.