My Comments on the New York Value of Carbon Guidance Document

The Climate Leadership and Community Protection Act (CLCPA) mandates that the state establish a value of carbon for use in the implementation of the law.  This post describes my comments  on the draft guidance document “Establishing a Value of Carbon, Guidelines for Use by State Agencies” document released on October 29, 2020.  I submitted comments because this law will affect the affordability and reliability of New York’s energy.

I am a retired electric generation utility meteorologist with nearly 40-years of experience analyzing the effects of environmental regulations on electric and gas operations.  I have written a series of posts on the feasibility, implications and consequences of this aspect of the law and another series of posts on carbon pricing initiatives.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

On July 18, 2019 New York Governor Andrew Cuomo signed CLCPA, which establishes targets for decreasing greenhouse gas emissions, increasing renewable electricity production, and improving energy efficiency.  It was described as the most ambitious and comprehensive climate and clean energy legislation in the country when Cuomo signed the legislation.  I have summarized the schedule, implementation components, and provide links to the legislation itself at CLCPA Summary Implementation Requirements.

The CLCPA requires the New York State Department of Environmental Conservation (DEC), in consultation with the New York State Energy Research and Development Authority (NYSERDA), to establish a value of carbon for use by State agencies. The Draft Value of Carbon Guidance provides values for carbon dioxide, methane, and nitrous oxide for use by State agencies along with recommended guidelines for the use of these and other values by State entities.  Three documents were made available:

In section §75-0113, Value of Carbon the CLCPA states that the “social cost of carbon shall serve as a monetary estimate of the value of not emitting a ton of greenhouse gas emissions” and that “As determined by the department, the social cost of carbon may be based on marginal greenhouse gas abatement costs or on the global economic, environmental, and social impacts of emitting a marginal ton of greenhouse gas emissions into the atmosphere, utilizing a range of appropriate discount rates, including a rate of zero.”  The law states that DEC “shall consider prior or existing estimates of the social cost of carbon issued or adopted by the federal government, appropriate international bodies, or other appropriate and reputable scientific organizations.”

My comments explain why I think the focus of the guidance is wrong.  The guidance does not recognize that when the CLCPA chose specific targets that the proper way to address social costs is through a cost efficiency approach.  The damages approach recommended in the guidance is an efficiency concept.  DEC emphasized use of their proposed values “that can be used by State entities to aid decision- making and used as a tool for the State to demonstrate the global societal value of actions to reduce greenhouse gas emissions.”  The emphasis was clearly on state agency use and not for meeting the CLCPA targets and less on providing guidelines for state agencies.

Guidance Comments

An overview of the Value of Carbon Guidance was presented Maureen Leddy at the 24 November 2020 Climate Action Council Meeting. I will annotate the Value of Carbon Guidance slides  below with excerpts from the comments I submitted.

The first slide is titled “Value of Carbon Reduction” and notes that the “CLCPA requires DEC, in coordination with NYSERDA, to establish a Value of Carbon as an evaluation tool for agency decision making”.  The lists the following requirements:

        • Describe damages and marginal abatement cost approaches
        • Consider a range of discount rates, including zero
        • Consider the social cost of carbon in other jurisdictions
        • Provide values for non-C02 greenhouse gases

I think the guidance ultimately provides cost effectiveness justification for the CLCPA.  As a result, I believe that the document should explain the concept of the social cost approach targeted for the general public.  Blastland et al. (2020) describe an approach for evidence communication that I suggested would be an appropriate template for the public primer.  The authors suggest that communications should offer “balance, not false balance”.  I argued that this is a major short-coming in the guidance and supporting memo documents because the full range of opinions on social cost methodologies was not included.

My comments addressed technical aspects of the damages and marginal abatement cost approaches.  The biggest problem with their description and the recommendation to use the damages approach is that they ignored the concept that once a cap is set, you should not use the damages approach exemplified by the social cost of carbon. The social cost of carbon is an efficiency concept. Establishing a price incentivizes society to develop the most efficient response to that price but does not guarantee specific emission levels. Once a specific target is established in a cap that violates the efficiency principle inherent in the social cost of carbon.  I pointed out that in its recent review of the federal IWG social cost of carbon, the U.S. Government Accountability Office referred to the marginal abatement cost approach as a type of “target-consistent approach” to valuing emissions, which reflects the fact that this approach establishes a value that depends in part on the relevant emission reduction target.

Also included in the first slide was the target timeline of milestones to meet CLCPA deadline

Milestone Date
Stakeholder conference July 2020
Public comment period ends November 27, 2020
Final released (CLCPA requirement) January 1,2021

I pointed out that the time between the end of the public comment period and the final release date was very short given the importance of the document.  Importantly the implication that the document was required by the CLCPA is based on a mis-reading of the law that states it was supposed to be released “No later than one year after the effective date of this article”.  The law was signed in July 2019 so this should have been released back in July 2020.  Because the date has been missed delaying release long enough for full evaluation and response is appropriate.

 

The second slide, “Draft Value of Carbon Guidance” stated that the proposed guidance:

      • Provides background on different ways to value greenhouse gas emissions reductions
        • Damages approach and marginal abatement cost
      • Recommends the U.S. Interagency Working Group’s (IWG) damages-based value of carbon, also referred to as the social cost of carbon, as appropriate for most agency decision making
      • Considers a range of discount rates, including zero
        • Recommends 1%-3% ($421-$53per ton of C02 in 2020 dollars)
        • Seeking comment on central value of 2% or 2.5% ($125 or $79 per ton of CO2 in 2020 dollars)
      • Discusses how to value non-CO2 greenhouse gases
        • Values are provided for CO2, N02 and CH4, as per IWG
        • Values for other gases will be added as the research evolves
        • CLCPA20-yr GWP does not change these values
      • Details specific considerations for State agencies on how to use a damages-based approach

I think part of the rationale is that the IWG damages-based value of carbon is a more established concept and that more information would have to be developed to use the marginal abatement approach.  The guidance touts the IWG as the best approach but then goes on to ignore the recommendations of the IWG when it comes to the choice of the discount value.  I argued that they did not provide sufficient justification to recommend the changes proposed.

The guidance document recommends that the non-CO2 greenhouse gases be valued individually.  I agree with that approach but I pointed out that there are ramifications to that relative to methane.  Carbon dioxide is long-lived and accumulates over time because it stays in the atmosphere.  Methane is a short-lived (10 to 12 years) pollutant that lasts in the atmosphere less.  Because the CLCPA targets set a hard cap on methane emissions twelve years after the cap limit is reached the impact of methane on warming is done.  It stands to reason that the economic impact on aspects of the economy, such as energy use, health, and agriculture, projected from these climatic changes is also done.  I suggested that the social cost impacts needed to be revised to reflect that reality.

There is a basic problem with the way the guidance document is framed.  While it is valuable that State agencies have guidance on how to use a damages approach, it is even more important to provide support for the CLCPA implementation process.  The use of the damages approach over the marginal abatement cost approach handicaps CLCPA implementation of the most cost-effective strategies.

The second slide also stated that “This guidance is not a regulation and does not set a carbon price nor impose any fees.”  This caveat has been included in every DEC document on the value of carbon but the reality is that the guidance will be used to set a carbon price for the imposition of fees if the New York Independent System Operator Carbon Price proposal is implemented.  I would expect that it would be also used if New York joins the Transportation Climate Initiative.

The third slide, DEC Draft Value of Carbon Guidance, basically repeated all the points made in previous slides.  Two points do need to be addressed:

      • State agencies may utilize the Value of Carbon to aid many forms of decision-making related to permitting, environmental review, rulemakings, funding, procurement, etc.
      • Guidance does not create a price, fee, or compliance obligation.

It is not clear that if the value of carbon is used in decision-making related to permitting how that cannot be considered a compliance obligation.  Maybe it is just intended to “prove” that the actions can be justified because the costs may be less than the social costs calculated using the recommended values.  That may also explain why the IWG recommended values which yield lower social costs are not recommended.

I specifically suggested that the guidance document incorporate the Blastland et al., (2020) simple tip to display information in a table rather than stating them in the text to address the implications of the assumptions used to develop the recommended values of carbon.  I suggested that a table be included that lists the effects of assumptions on the social cost values.  My comments addressed the effects of location of benefits (guidance benefits are primarily global and not New York specific), time horizon (the benefits extend out to 2300), the sensitivity of the climate to greenhouse gases (IWG estimates do not use the most recent modeled estimates of the sensitivity), and the discount rate.  Of those parameters only the differences in discount rates were discussed.  However, the underlying ramifications of the discount rate choice were not explained.

Finally, I recommended that the evaluation of carbon pricing policies in Canada by McKitrick (2016) be considered.  He explains that “there may be many reasons to recommend carbon pricing as climate policy, but if it is implemented without diligently abiding by the principles that make it work, it will not work as planned, and the harm to the Canadian economy could well outweigh the benefits created by reducing our country’s already negligible level of global CO2 emissions”.  Clearly this is entirely relevant to New York.  Importantly he notes:

“However, a beneficial outcome is not guaranteed: certain rules must be observed in order for carbon pricing to have its intended effect of achieving the optimal balance between emission reduction and economic growth. First and foremost, carbon pricing only works in the absence of any other emission regulations. If pricing is layered on top of an emission-regulating regime already in place (such as emission caps or feed-in-tariff programs), it will not only fail to produce the desired effects in terms of emission rationing, it will have distortionary effects that cause disproportionate damage in the economy. Carbon taxes are meant to replace all other climate-related regulation, while the revenue from the taxes should not be funnelled into substitute goods, like renewable power (pricing lets the market decide which of those substitutes are worth funding) but returned directly to taxpayers.”

Conclusion

Because it appears that a primary goal of this process is to memorialize a value of carbon to justify agency actions, the public deserves to know how the real costs are balanced against the theorized cost benefits.  When CLCPA strategies are announced and cost savings are claimed the public deserves to know that the savings are based on global not New York benefits, savings out to 2300, and do not represent the latest climate sensitivity science.  If the total costs are close to the purported benefits this may be acceptable but I have no doubt that the total costs per ton will far exceed even these conjured values.

Furthermore, there are fundamental technical considerations overlooked or ignored by the guidance. New York State CLCPA implementation is trying to choose between many expensive policy options while at the same time attempting to understand which one (or what mix) will be the least expensive and have the fewest negative impacts on the existing system. If good picks are made then state ratepayers will spend the least amount of a lot of money, but if they are wrong, we will be left with lots of negative outcomes and even higher costs for a long time.  Picking the correct value of carbon metric and values is critical to doing this right.  A comprehensive response to comments justifying the choices made is an integral part of doing this right.

My comments on the FERC Carbon Pricing Policy

Earlier I described the Federal Energy Regulatory Commission (FERC) technical conference regarding Carbon Pricing in Organized Wholesale Electricity Markets held on September 30, 2020.  On October 15, 2020 FERC proposed a policy statement to “clarify that it has jurisdiction over organized wholesale electric market rules that incorporate a state-determined carbon price in those markets. I also described the proposed policy statement that seeks to encourage regional electric market operators to explore and consider the benefits of establishing such rules.”

The post on the policy statement mentioned that I intended to personally comment on the concerns I raised in my personal blog post on the FERC technical conference.   I submitted comments as a private citizen.  The technical conference convinced FERC commissioners that carbon-pricing was an “efficient” market-based tool but nobody asked and no one proved that they work.  In my opinion the first rule of efficient policy is that it works.  I believe that those who support carbon pricing on theoretical economic grounds are overlooking or are unaware of practical issues I have raised.  Cynic that I am, I think the primary value to FERC and the RTO/ISO operators is that the carbon price makes their lives easier.  That it will have significant impacts on consumers and not do anything for the climate is somebody else’s problem.

In order to determine whether any carbon pricing proposal will affect the justness and reasonableness of rates I argued that the Commission must consider whether the proposal will reduce carbon dioxide emissions at a cost below some standard of reasonableness.  There is a cost where the abatement costs exceed any estimates of the cost impacts of CO2 on the climate.  Despite its flaws the Social Cost of Carbon (SCC), the present-day value of projected future net damages from emitting a ton of CO2 today, is a widely used metric to establish a reasonable value.  Because my primary concern is New York’s Climate Leadership and Community Protection Act (CLCPA) I proposed using New York’s proposal to use the Interagency Working Group 2016 estimates that translate into a 2020 value of carbon dioxide of $53-421 per ton, with a central value of $79-125 per ton”.

The FERC notice of the proposed policy statement on Carbon Pricing in Organized Wholesale Electric Markets states that “We agree that proposals to incorporate a state-determined carbon price in RTO/ISO markets could, if properly designed and implemented, significantly improve the efficiency of those markets”.  I argued that there are practical reasons why it is impossible to properly design and implement a carbon pricing scheme that will affect efficiency of those markets in the best interests of the public.

Carbon pricing is a climate policy approach that charges sources for the tons of carbon dioxide that they emit.  A Resources for the Future (RFF) summary lists several attributes that they claim makes carbon pricing more attractive than other potential policies to reduce carbon dioxide emissions:

      • Carbon pricing allows emitters to choose the most efficient method to reduce emissions.
      • An economy-wide carbon price applies a uniform price on CO₂ emissions regardless of the source.
      • A carbon price encourages individuals and businesses to reduce their carbon emissions more than conventional regulations.
      • A carbon price creates a new revenue stream that can be used in a number of ways.

I compared those attributes to the real-world of carbon pricing.

RFF states that “carbon pricing allows emitters to choose the most efficient method to reduce emissions”.  In the context of power plants under FERC jurisdiction this is mostly irrelevant.  In the first place, there are no cost-effective add-on controls for CO2 reductions, so fossil-fired electrical generators only have limited options.  For an individual power plant operator, the only effective approach is to switch to a lower emitting fuel.  Power plants can also be replaced in whole or part by alternative generation, but the business model of most de-regulated generating companies precludes the option to develop replacement generation. I have shown that in RGGI the market participants don’t behave as expected by economic market theory so the markets don’t necessarily behave as the economists think they should.  As a result, all the modeling and laboratory testing economic results “proving” market efficiency should be viewed cynically.  I believe that even though carbon pricing advocates have convinced themselves that somehow carbon pricing is different than a tax, the reality is that because of the limited options for compliance any carbon price is treated just like a tax by electric generating operators.  Because energy taxes are inherently regressive, the carbon price result is not in the best interest of low-income ratepayers.

There is another aspect to carbon emissions reductions that is relevant to FERC.  In order to replace firm, dispatchable fossil-fired capacity the total costs to make in-kind replacement with renewable wind and solar have to be included.  No one at the technical conference addressed how a carbon price signal for generators would lead to the development of the transmission and ancillary grid support services necessary to support intermittent and diffuse wind and solar generation.  An electric system carbon price requires any generator that emits CO2 to include a carbon price in their bid which serves to provide the non-emitting generators with more revenue.  However, solar and wind generators are not paying the full cost to get the power from the generator to consumers when and where it is needed.  Because solar and wind are intermittent, as renewables become a larger share of electric production energy storage or energy now provided by traditional generating sources will be needed but there is no carbon price revenue stream for energy storage.  Because solar and wind are diffuse, transmission resources are needed but solar and wind do not directly provide grid services like traditional electric generating stations.  Energy storage systems could provide that support but they are not subsidized by the increased cost to emitting generators.  When the carbon pricing proposal simply increases the cost of the energy generated, I think that approach will lead to cost shifting where the total costs of fossil fuel alternatives have to be directly or indirectly subsidized by the public.

RFF and the economists at the FERC Technical Conference all agree that an economy-wide carbon price that applies a uniform price on CO₂ emissions, regardless of the source, is the ideal solution.  On the other hand, speakers at the conference admitted that this ideal implementation was unlikely.  Pollution leakage refers to the situation where a pollution reduction policy simply moves the pollution around the globe rather than actually reducing it. Economic leakage is a problem where the increased costs inside the control area leads to business leaving for non-affected areas.  There also is an economic leakage effect in electric systems where a carbon policy in one jurisdiction may affect the dispatch order and increase costs to consumers in another jurisdiction.  As a result, work arounds are necessary to address leakage which complicates the implementation and may lead to unintended consequences.

RFF’s third attribute stated that ‘A carbon price encourages individuals and businesses to reduce their carbon emissions more than conventional regulations”.   There are several problems with this ideal.  In a situation where there is a specific target like New York’s CLCPA 2040 target for zero emissions from the electric sector, it is necessary to consider the total costs and then the necessary carbon price. In order for a carbon price to effectuate this change the carbon price has to equal the cost of the conversion divided by the total tons emitted over the implementation period.  I conservatively estimated the cost for New York to meet the state’s goal of a zero-emissions electric sector by 2040 as $620 per ton.  The cost for converting the country by 2035 as has been proposed would be much higher because the number of years in the implementation period is shorter and the reduction costs themselves would be higher because New York’s starting point for emissions is relatively lower.  Recall that the highest social cost of carbon value that New York is considering is no more than $421 per ton.

The second problem is that individuals and businesses also have limited opportunities to reduce carbon emissions.  One commentator points out that “The only logical reason for a carbon tax is to reduce emissions. Such a tax might help to reduce energy consumption, but only at punitive levels, because energy demand is so inelastic. Therefore, the real intention is to make fossil fuels so expensive that renewables can eventually become competitive, along with carbon capture and sequestration, hydrogen heating etc.”

In order for a carbon price to be more effective than conventional regulation the funds received will have to be spent effectively.   I have evaluated the results of the investments made by regulatory agencies to date in RGGI measured as the cost per ton reduced.  The RGGI states have been investing investments of RGGI proceeds since 2008 but their investments to date are only directly responsible for less than 5% of the total observed reductions.  Furthermore, from the start of the program in 2009 through 2017, RGGI has invested $2,527,635,414 and reduced annual CO2 emissions 2,818,775 tons.  The resulting cost efficiency, $897 per ton reduced, far exceeds the range of SCC values representing the value of reducing CO2 today to prevent damages in the future.

Theory says that the carbon price alone can incentivize lower emitting energy production and that the market choices will be more efficient than government-mandated choices. Ultimately the market signal question is whether the SCC value is sufficient to incentivize the market to invest in zero GHG emitting generation resources.  There is no sign that RGGI motivated the market to act and it is not clear that the carbon pricing schemes proposed under the purview of FERC will provide enough incentive either.

The final RFF attribute stated that “A carbon price creates a new revenue stream that can be used in a number of ways.”  This attribute is more of a concern on the value of the approach than a direct impact on the electric generation sector.  The revenue stream from a carbon pricing stream could be very large.  In the classical theory of carbon pricing those revenues are re-distributed to offset other taxes so that the consumers come out whole.  In practice all or part of the revenues have usually been diverted away from direct consumer rebates to fund carbon reduction programs. If carbon reduction programs are dependent upon a continuing revenue stream there is a fundamental problem.  As CO2 is reduced revenues decrease and eventually either the carbon price has to increase to a very high level or the revenues used to fund mitigation programs will be insufficient to make further reductions.

Conclusion

In order to convince me that carbon pricing has a hope of working in the US electricity market I would need to see an estimate of the cost to convert the nation’s electric system to zero emissions and combine that with recent emissions to develop a cost per ton for the transition.   I believe that the cost for converting the country by 2035 would be much higher than any estimate of the social cost of carbon.

If the estimated emissions reduction cost per ton is higher than the social cost of carbon, then the costs to mitigate climate change effects are greater than the alleged impacts.  A rational alternative response would be to invest in research and development to produce cheaper zero emissions electric generating resources and finance adaptation measures until such time that cost-effective zero-emission resources are available.  I asked if FERC does not hold the States to this just and reasonable standard then who will?

I concluded that RTO/ISO market rules that incorporate a state-determined carbon price in RTO/ISO markets cannot be just and reasonable for the rate payers whatever the value to the RTO/ISO market operators.  I note that among the advocates for carbon pricing at the Technical Conference were RTO/ISO operators who apparently believe that carbon pricing will make their regulatory responsibilities easier.  However, a carbon price will have significant impacts on consumers and not cost effectively reduce CO2 emissions.

My Climate Leadership and Community Protection Act Part 496 Comments

On July 18, 2019 New York Governor Andrew Cuomo signed the Climate Leadership and Community Protection Act (CLCPA), which establishes targets for decreasing greenhouse gas emissions, increasing renewable electricity production, and improving energy efficiency.  I have summarized the schedule, implementation components, and provide links to the legislation itself at CLCPA Summary Implementation Requirements.  On August 14, 2020 New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos released proposed part 496 regulations that defined the 1990 baseline emissions inventory for the CLCPA.   This post summarizes the comments I submitted on October 26, 2020.

I am following the implementation of the CLCPA closely because it affects my future as a New Yorker.  If they get it wrong it will be all the more difficult to get to the aggressive CLCPA targets.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

This 1990 emissions inventory is important because many of the targets of the CLCPA are based on reductions from this baseline.  For example, there is a target to reduce GHG emissions to 60 percent of 1990 emissions levels by 2030.  The CLCPA includes specific requirements for the 1990 emission inventory that I am positive no legislator who voted for the law understood.

The law mandates an aggressive schedule for developing this inventory.  The CLCPA 1990 baseline is supposed to be set in 2020 but the first statewide greenhouse gas emissions report isn’t due until 2021.  The statewide emissions report is defined as a “comprehensive evaluation of the inventory best available science and methods of analysis, including the comparison and reconciliation of emission estimates from all sources, fuel consumption, field data, and peer-reviewed research”.  It “shall clearly explain the methodology and analysis used in the department’s determination of greenhouse gas emissions and shall include a detailed explanation of any changes in methodology or analysis, adjustments made to prior estimates, as needed, and any other information necessary to establish a scientifically credible account of change”.  The 1990 baseline for the statewide GHG emission limits has similar quality requirements: “In order to ensure the most accurate determination feasible, the department shall utilize the best available scientific, technological, and economic information on greenhouse gas emissions and consult with the council, stakeholders, and the public in order to ensure that all emissions are accurately reflected in its determination of 1990 emissions levels”.

I compared the proposed Part 496 1990 emission inventory with the previous “official” New York greenhouse gas emission inventory that was prepared by the New York State Energy Research and Development Authority (NYSERDA) in two earlier posts.  The Part 496 Regulatory Impact Statement (RIS) includes a section titled Key Requirements of the 1990 Emission Baseline section that explains the CLCPA mandates that required DEC to develop a new official inventory.   These requirements significantly affect the greenhouse gas (GHG) emission total for the State.  According to the latest edition of the NYSERDA GHG emission inventory (July 2019) Table S-2 New York State GHG Emissions 1990–2016 the New York State 1990 GHG emissions were 236.18 MMtCO2e The proposed Part 496 regulation 1990 emissions inventory total is 401.38 MMtCO2e for an increase of 165.2 MMtCO2e.

Summary of 1990 Emission Inventories
Regulatory Impact Statement Table 1 Inventory in GWP20.
Sector CO2 CH4 N2O PFCs HFCs SF6 Total
Energy 254.43 70.12 1.31 4.00 329.87
IPPU 1.67 0.00 0.00 0.90 0.02 0.01 2.60
AFOLU 0.05 13.07 4.01 17.13
Waste 3.03 48.25 0.50 51.78
Total 259.18 131.45 5.83 0.90 0.02 4.01 401.38
NYSERDA July 2019 Table S-2 Emission Inventory in GWP100
Sector CO2 CH4 N2O PFCs HFCs SF6 Total
Energy 208.96
IPPU 3.99
AFOLU 8.37
Waste 14.86
Total 236.18

Comments

In my first comment I addressed the contradiction in the emission inventory requirements in two sections of the CLCPA.  How can § 75-0107, Statewide greenhouse gas emissions limits, establish a limit estimated pursuant to § 75-0105 which is due later than this requirement?  Both sections mandate the use of the “best available” information and consultation with the public, but the timing requirements preclude that from happening.

As shown above there are significant differences in the Part 496 proposed inventory and the July 2019 NYSERDA inventory.  The July 2019 emission inventory relied primarily on Intergovernmental Panel on Climate Change (IPCC) methods but because of CLCPA mandates, GHG emissions that occur outside of the boundaries of New York State have to be included if they are associated with the use of energy within the State and the carbon equivalent emissions have to use a global warming potential time horizon of 20 years instead of 100 years.  One basic flaw in the Part 496 regulation’s supporting documentation is that in order to be complete the emission factor, activity factors or throughput and the reference for those choices made for each value listed in the inventory has to be provided.  That information is not available.

The RIS is the only documentation provided for the proposed Part 496 inventory and it only provides less than ten applicable references justifying the values chosen.  Given the significant departure from IPCC protocols, the documentation is inadequate.  Reading the RIS gives the impression that methane inventorying is without controversy.  However, as shown in the references I provided, Methane Reference Summary, this clearly is not the case. The overview paper  M. Saunois et al.2020: The Global Methane Budget 2000–2017 notes in the abstract: “The relative importance of CH4 compared to CO2 depends on its shorter atmospheric lifetime, stronger warming potential, and variations in atmospheric growth rate over the past decade, the causes of which are still debated. Two major challenges in reducing uncertainties in the atmospheric growth rate arise from the variety of geographically overlapping CH4 sources and from the destruction of CH4 by short-lived hydroxyl radicals (OH)”.  In order to justify the values used in the inventory these issues should be addressed in the documentation.

The major difference in this inventory compared to previous NYS inventories is due to changes in the methane inventory.  I believe that the changes in the inventory due to methane can be traced to Dr. Robert Howarth.  He not only helped draft the Climate Act but also now is a vocal member of the Climate Action Council.  While this accounts for his outsized impact on the inventory that does not necessarily mean that his views justify the changes.  In the Howarth 2020 paper he claims “Some evidence indicates that shale-gas development in North America may have contributed one-third of the total global increase in methane emissions from all sources over the past decade (Howarth 2019).”  This paper and other similar papers claim that “methane emissions can contribute significantly to the GHG footprint of natural gas, including shale gas”.  There is a problem however, because much other evidence contradicts those claims.

In my comments I provided references with other evidence that I think should be included in the documentation.  While it may be that the State will choose to ignore those results, there is a CLCPA mandate to provide a “detailed explanation of any changes in methodology or analysis, adjustments made to prior estimates, as needed, and any other information necessary to establish a scientifically credible account of change”.  Clearly the existing documentation fails to meet that standard.

Based on my experience I believe there is a huge hurdle for Howarth’s methane inventory.  Although I have been involved with emissions inventories for over 45 years, I do not have specific experience with natural gas production emissions.  However, over that time I learned early on that the gold standard check on any emissions inventory is comparison of the inventory estimate with observed ambient monitoring.  If there is a high quality, long-term monitoring network that measures the pollutant in the inventory and those measurements do not reflect the trend in the inventory then the inventory is wrong.  Lan et al., 2019 evaluated data from the National Oceanic and Atmospheric Administration Global Greenhouse Gas Reference Network and determined trends for 2006–2015.  This covers the period when Pennsylvania shale-gas production increased tremendously.  According to the plain language summary for the report:

“In the past decade, natural gas production in the United States has increased by ~46%. Methane emissions associated with oil and natural gas productions have raised concerns since methane is a potent greenhouse gas with the second largest influence on global warming. Recent studies show conflicting results regarding whether methane emissions from oil and gas operations have been increased in the United States. Based on long‐term and well‐calibrated measurements, we find that (i) there is no large increase of total methane emissions in the United States in the past decade; (ii) there is a modest increase in oil and gas methane emissions, but this increase is much lower than some previous studies suggest; and (iii) the assumption of a time‐constant relationship between methane and ethane emissions has resulted in major overestimation of an oil and gas emissions trend in some previous studies.”

As a result of the fact that the relevant high quality, long-term monitoring network does not show a trend consistent with the work of Howarth I believe that unequivocally supports Dr Lewan’s conclusion that his ideas, perspectives, and calculations on methane emissions from shale gas are invalid.  If the State cannot explain this inconsistency then their inventory is wrong.

Conclusion

In order to meet the “best available science and methods of analysis” criteria of the CLCPA, the DEC documentation should address the current methane debate by summarizing articles on both sides of methodology differences, explain how those differences affect the Part 496 1990 emission inventory relative to previous inventories, and then provide the rationale for picking one approach over the other.  Because this level of detail is not provided, I recommended that the Part 496 inventory should be re-proposed with that information.

There is a big issue lurking in these numbers.  Part 496 lists the baseline GHG emissions inventory for 1990 but the State has not provided their estimated inventory for a recent year.  The GHG inventory with the most recent data covers the period 1990 to 2016 and was published in July 2019.  That inventory is not consistent with the requirements of the CLCPA, but in that inventory New York’s CO2 emissions went from 236.2 MMtCO2e to 205.6 MMtCO2e a 13% decrease.  I would not be surprised that the revised inventory’s emphasis on methane will show that there is a much smaller decrease over that time frame.  That will make attaining the 2030 CLCPA 40% reduction from 1990 emissions level harder to meet.

Climate Leadership and Community Protection Act White Paper Comment

In the summer of 2019 Governor Cuomo and the New York State Legislature passed the Climate Leadership and Community Protection Act (Climate Act) and this summer the implementation process is in full swing.  I have written a series of posts on the feasibility, implications and consequences of this aspect of the law based on evaluation of data.  This post documents comments  I submitted to the New York Department of Public Service (DPS) on the White Paper on Clean Energy Standard Procurements to Implement New York’s Climate Leadership and Community Protection Act (White Paper).

I am a retired electric utility meteorologist with nearly 40-years experience analyzing the effects of meteorology on electric operations. I believe that gives me a relatively unique background to consider the potential effects of energy policies related to doing “something” about climate change.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

I am following the implementation of the Climate Act because I believe it will affect the affordability and reliability of New York’s energy.  The White Paper outlines how the DPS proposes to provide subsidies to get sufficient renewable resources built to meet the Climate Act targets.  I submitted comments because the definition of “renewable energy systems” as amended in the public service law with the addition of section 66-p is inconsistent with the reliability of the future electric system.

Renewable Energy System Definition

The Climate Act states:

      • 66-p. Establishment of a renewable energy program.
        1. As used in this section:

(b) “renewable energy systems” means systems that generate electricity or thermal energy through use of the following technologies: solar thermal, photovoltaics, on land and offshore wind, hydroelectric, geothermal electric, geothermal ground source heat, tidal energy, wave energy, ocean thermal, and fuel cells which do not utilize a fossil fuel resource in the process of generating electricity.

Problem

At the second Climate Action Council meeting on June 24, 2020 Energy and Environmental Economics (E3) presented results from their report “Pathways to Deep Carbonization in New York State”.  I have analyzed options for the future Climate Act electric system and agree with their concern about multiple-day periods when wind and solar resources could provide negligible power to the grid.  The report notes that “This long-duration (interday) challenge can be solved through a combination of large-scale hydro resources, renewable natural gas (RNG) or synthetic fuels such as hydrogen, Carbon Capture Storage (CCS), and nuclear power”.  During the question and answer period following the presentation, Climate Action Council members argued that RNG was not acceptable because it was not included in the definition of renewable energy systems.  In my opinion, there are two problems with the definition in that light: firm capacity and air source heat pumps.

E3 explains in their report that “Firm capacity is the amount of energy available for power production which can be guaranteed to be available at a given time. As the share of variable resources like wind and solar grows substantially, firm capacity resources will be needed to ensure year-round reliability, especially during periods of low renewables output.”  The options that they included in their deep carbonization pathway included two that are unlikely sources of much additional capacity in New York, large-scale hydro and nuclear, because of development concerns while two others, synthetic fuels and carbon capture storage, are only at the demonstration technical readiness level according to the International Energy Agency.  That leaves RNG as the most likely source of firm capacity.  Based on my work I believe that the alternative approach of using energy storage for this application will be a major technological challenge and surely will be extraordinarily expensive so excluding RNG would make providing firm capacity more difficult.  Therefore, I recommend that this technology not be rejected due to the magnitude of the firm capacity problem.

The argument that RNG is not a “renewable energy system” is based entirely on the fact that it is not explicitly included in the definition.  Note, however, that “geothermal ground source heat” is included but air source heat pumps are not.  As a result, then does that also mean the air source heat pumps are not an acceptable technology to meet the requirements of the Climate Act?  In order to meet the GHG emission reduction targets electrification of heating will be necessary.  Because air source heat pumps are cheaper and easier to install than ground source heat pumps, they are the preferred alternative.  Because this resource is necessary for the Climate Act it should be considered a renewable energy system even though it is not explicitly included in the definition.

Conclusion

It will be interesting to see whether RNG is accepted as a renewable energy system.  I have no doubt that it was deliberately excluded from the Climate Act definition because some well-connected but naïve lobbyist successfully argued to exclude that technology.  I don’t know why this technology is unacceptable but the fact is that in order to provide sufficient electric power during the long-duration low renewable resource periods New York needs as many sources of firm capacity as possible.  I believe that E3 knows this and had to propose the technology in order to reduce the need for energy storage.  They have not provided cost estimates yet but they know the numbers will be staggering if the necessary firm capacity has to be provided by battery energy storage.  The naïve opponents of RNG must not understand this inconvenient truth.

One final note, while I believe that RNG is needed, I do not believe it will solve the problem.  There simply are not enough sources of RNG that can provide enough stored gas to make much of a difference for the critical long-duration low renewable resource period peak load when that load includes electrification of heating and vehicles.

Reply Comments to New York Resource Adequacy Proceeding

The New York State Public Service Commission (PSC) issued an order commencing a proceeding to examine how to reconcile resource adequacy programs and the State’s renewable energy and environmental emission reduction goals. This post summarizes the reply comments I submitted in this proceeding on resource adequacy primarily as an accessible reference.  If this topic interests you then I suggest you read  my initial comments  and my reply comments .  I previously summarized my initial comments here.

Materials and information are available in the Department of Public Services (DPS) resource adequacy matters docket Case 19-E-0530.   According to the Order Instituting Proceeding and Soliciting Comments, the inquiry is “necessitated by the Commission’s statutory obligations to ensure the provision of safe and adequate service at just and reasonable rates. Costs to consumers are a primary and ultimate consideration, recognizing that the necessary investments in resources must have sound economics.”

Summary

A primary point of emphasis in my comments is that I believe that the Commission’s statutory obligations to ensure the provision of safe and adequate service at just and reasonable rates is not being addressed with respect to the Climate Leadership and Community Protection Act (CLCPA). The fact of the matter is that absent a comprehensive evaluation that assesses historical renewable energy resource availability coupled with historical and projected load, no one knows if a 100% fossil-free electric sector is possible in New York.  The legislation that mandated that target naively assumed it was feasible and affordable but those assumptions may violate the laws of physics. It would be far better to determine the consequences of the CLCPA now than to try to muddle through trying to implement something that would have far worse consequences to the citizens of New York than the purported problem.

My reply comments cover several aspects of the comments submitted by others and information that has become available since the initial comment period ended.  I address the lack of representation for the residential consumer in the parties commenting on the proceeding.  My reply comments do not address specifics of any of the initial comments but I do offer cautionary observations on the comments describing the purported success of the de-regulated market and support for the NYISO carbon pricing initiative.

Since the time the initial comments were submitted other feasibility issues came up.  The NYISO had the Analysis Group evaluate winter peak resources for the short-term.  In response to a NYISO press release on a record for wind generation I took another look at the historical wind data.  The Citizen’s Budget Commission did an analysis of the CLCPA that included an estimate of the future load.  I show that all these studies are relevant and underscore the need for the feasibility study.

Finally, I made some recommendations.  I re-iterated my plea for a comprehensive feasibility study and cumulative environmental impact study.  I suggest that the State provide solar energy facility applicants with a site-specific design year database based on the feasibility study meteorological data to improve their applications.   I recommend full payment for renewable resources only if they are dispatchable, i.e., they include energy storage.  I also have a suggestion for the future stakeholder process and recommend that this proceeding endorse energy storage R&D.

 

 

Part 242 Comments on the Regulatory Impact Statement

For the past month or so I have been preparing comments on the New York State Department of Environmental Conservation (DEC)  proposed revisions to their Part 242 CO2 Budget Trading Program rule. I submitted the comments on June 26, 2020. In a companion post I addressed the background for the rule revisions and rationale used for the significant rule changes. This post summarizes my comments on the Regulatory Impact State that justifies the proposed revisions.

I submitted comments because I want my family to be able to afford to continue to live in New York State.  The proposed rule is consistent with the Climate Leadership and Community Protection Act (“Climate Act”) that will necessarily affect the price of energy in New York and based on results elsewhere I believe those costs will ultimately be unacceptable.  I have written a series of posts on the feasibility, implications and consequences of the law.  I am a retired electric utility meteorologist with nearly 40 years of experience analyzing the effects of emissions on the environment.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Introduction

I describe the specifics of the proposed revisions and my concerns in the companion post.  One of the purported benefits of this regulation is that New York’s climate leadership will entice other jurisdictions to emulate New York by setting an example.  However, the justification provided for these revisions provides New York citizens insufficient evidence to support the proposed changes and sets a poor example for others to follow.  I analyzed the claims in the Regulatory Impact Statement (RIS) that were used to justify the proposed actions and I will discuss those comments here.  The RIS has mandatory discussion items and I will not address my comments on items not related to justification of the proposed actions.

Regulatory Impact Statement

The Regulatory Impact Statement (RIS) is a mandated component of DEC rule-making.  It describes the statutory authority and legislative objectives, lists the needs and benefits, estimates costs, changes to paperwork, local government mandates, notes if there is any duplication with other Federal and State regulations, lists alternative, determines if the regulation is consistent with Federal standards and provides a compliance schedule.  I wish I could say that the RIS makes a compelling case for the proposed action but I can’t. This is important because one of the purported benefits of this regulation and New York’s climate leadership is that New York will lead the way for others setting an example that they will emulate.  However, absent compelling arguments, that benefit will not be realized. 

The general approach for current New York energy and environmental rule-making associated with climate change is to unequivocally associate Greenhouse Gas Emissions (GHG) with a litany of climate change impacts that are happening now and will get much worse in the future.  I have been planning to spend time addressing this simplistic argument for a long time and this regulation gave me the opportunity to comment.  In the following sections using the titles from the RIS, I quote text from sections in the RIS and provide my comments in the following italicized, indented sections. 

Introduction

The burning of fossil fuels to generate electricity is a major contributor to climate change because fossil-fuel generators emit large amounts of CO2, the principal greenhouse gas (GHG). Overwhelming scientific evidence confirms that a warming climate poses a serious threat to the environmental resources and public health of New York State – the very same resources and public health the Legislature has charged the Department to preserve and protect. The warming climate threatens the health and well-being of the State’s residents and citizens, the State’s property, and the natural resources held in trust by the State, including, but not limited to, the State’s air quality, water quality, marine and freshwater fisheries, salt and freshwater wetlands, surface and subsurface drinking water supplies, river and stream impoundment infrastructure, and forest species and wildlife habitats. Not only will the proposed Program revisions help to further counter the threat of a warming climate, they will also produce significant environmental co-benefits in the form of improved local air quality, and a more robust, diverse and clean energy supply in the State.

The biggest flaw in the RIS is the failure to quantify the impact of the proposed action on the alleged impacts of a warming climate.  Instead there are vague allusions that the proposed revisions will “help to further counter the threat of a warming climate”.  In order to properly evaluate the benefits and costs of the proposed revisions the RIS should estimate the global warming potential impacts of the proposed action. 

 In the absence of such an evaluation I calculated the effect  of total elimination of New York’s 1990 218.1[1] million metric ton greenhouse gas emissions on projected global temperature rise.  I found there would be a reduction, or a “savings,” of approximately 0.0032°C by the year 2050 and 0.0067°C by the year 2100.  To give you an idea of how small this temperature change is  consider changes with elevation and latitude.  Generally, temperature decreases three (3) degrees Fahrenheit for every 1,000-foot increase in elevation above sea level.  The projected temperature difference is the same as going down 27 inches.  The general rule is that temperature changes three (3) degrees Fahrenheit for every 300-mile change in latitude at an elevation of sea level.  The projected temperature change is the same as going south two thirds of a mile. 

 Of course, the RIS should project what this particular action will do for global temperature.  The RIS Model Rule Policy Case Program Design Assumption description states that CO2 emissions in New York are projected to be 3.41 million tons lower in the Model Rule Policy Case than in the Reference Case in 2031.  Using the same methodology as before I found there would be a reduction, or a “savings,” of approximately 0.00005°C by the year 2050 and 0.00009°C by the year 2100.  The projected temperature difference is the same as going down 3/8 of an inch and the projected temperature change is the same as going south 50 feet. 

 New York’s actions should also be considered relative to the rest of the world.  According to the China Electricity Council, about 29.9 gigawatts of new coal power capacity was added in 2019 and a further 46 GW of coal-fired power plants are under construction.  If you assume that the new coal plants are super-critical units with an efficiency of 44% and have a capacity factor of 80%, the reductions provided by this program will be replaced by the added 2019 Chinese capacity in 16 days or 6 days if the 2019 capacity and the units under construction are combined.  Clearly, in the absence of worldwide commitments this proposal has no tangible value to the citizens of New York.

 The RIS also claims that the emission reductions will also produce significant environmental co-benefits in the form of improved local air quality, and a more robust, diverse and clean energy supply in the State.  I take issue with the environmental co-benefits arguments simply because I have never seen documentation that confirms those benefits relative to the observed air quality improvements in my lifetime (see for example my evaluation of PM 2.5 in New York City).  Combining claimed benefits for robust and diverse energy supply with a clean energy supply is unsubstantiated rhetoric.  In order for the power supply to be robust it has to be dispatchable whereas wind and solar clean energy is not.  In order for the power supply to be diverse it cannot be shut down by a singular event and wind and solar can be shut down by a relatively common singular set of weather conditions at night.

The Greenhouse Effect and the Warming Climate

A naturally occurring greenhouse effect has regulated the earth’s climate system for millions of years. Solar radiation that reaches the surface of the earth is radiated back out into the atmosphere as long wave or infrared radiation. CO2 and other naturally occurring GHG emissions trap heat in our atmosphere, maintaining the average temperature of the planet approximately 60°F above what it would be otherwise. An enhanced greenhouse effect and associated climate change results as large quantities of anthropogenic GHGs, especially CO2 from the burning of fossil fuels, are added to the atmosphere.

There is no question that the greenhouse effect regulates global temperatures, that additional greenhouse gases will enhance that effect, that anthropogenic GHG emissions have added to the observed trend in GHG atmospheric concentrations, that the climate is warming and that the anthropogenic GHG emissions likely contributed to the observed warming.  However, given that there are many factors affecting climate change and that an enhanced greenhouse effect impacts not only temperature but also moisture which could have a negative feedback, it is naïve to assume that all the observed warming is caused solely by the greenhouse gas effect.

 From 1983 until his retirement in 2013, Dr. Richard Lindzen was Alfred P. Sloan Professor of Meteorology at the Massachusetts Institute of Technology.  He published over 200 papers and books and his research is still cited about 600 times per year.  He recently published another scientific paper (Lindzen, 2020) that raises some important points relative to the greenhouse effect as it pertains to New York’s energy policies:

 Doubling the atmospheric CO2 concentration from 280 ppm to 560 ppm results in just a 1-2% perturbation to the Earth’s 240 W/m² energy budget. This doubled-CO2 effect has less than 1/5th of the impact that the net cloud effect has. And yet we are asked to accept the “implausible” claim that change in one variable, CO2, is predominantly responsible for altering global temperatures.

 A causal role for CO2 “cannot be claimed” for the glacial-to-interglacial warming events because CO2 variations follow rather than lead the temperature changes in paleoclimate records and the 100 ppm total increase over thousands of years produce “about 1 W/m²” of total radiative impact.

Since the mid-1700’s, atmospheric concentrations of GHGs have increased substantially due to human activities such as fossil fuel use and land-use change. CO2 has a very long residence time in the atmosphere and, thus, has a lasting effect on the climate. Average atmospheric CO2 concentrations exceeded 407 parts per million in 2018, which according to ice core data, is higher than at any point in the past 800,000 years and the rate of increase is 100 times faster than previous natural increases at the end of the last ice age.

There are two aspects of these claims.  If you look at the CO2 data going further back in geologic time, as shown in the following grapch, there is nothing particularly unusual about the record breaking CO2 levels of the past 800,000 years  The thing that does stand out however is that we are cooler than in the past.

 The second aspect is the rate of increase claim.  The problem is that measurement resolution of proxy measurements of CO2 and temperature are not as finely resolved as today’s instrumental data.  The only way to directly compare the instrumental data to the pre-industrial proxy data is to filter the instrumental data down to the resolution of the proxy data.  This leads to climate reconstructions with “enhanced variability during pre-industrial times” and “result in a redistribution of weight towards the role of natural factors in forcing temperature changes, thereby relatively devaluing the impact of anthropogenic emissions and affecting future predicted scenarios.”[2]

There is clear scientific consensus that anthropogenic emissions of CO2 are contributing to the observed warming of the planet as presented in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. The large and persuasive body of research demonstrates through unequivocal evidence that the Earth’s lower atmosphere, oceans, and land surfaces are warming; sea level is rising; and snow cover, mountain glaciers, and Greenland and Antarctic ice sheets are shrinking. The Earth’s climate is changing, with adverse consequences already well documented across the globe, in our nation and in the State. Extreme heat events are increasing and intense storms are occurring with greater frequency. Many of the observed climate changes are beyond what can be explained by natural variability of the climate.

This description of the relationship between CO2 emissions and observed warming does not acknowledge that there is any scientific uncertainty about the greenhouse effect and climate change.  The reality is that there is debate and New York State ignores the potential ramifications.  Dr. Richard S. Lindzen, has summarized the scientific debate as follows:

I will simply try to clarify what the debate over climate change is really about. It most certainly is not about whether climate is changing: it always is. It is not about whether CO2 is increasing: it clearly is. It is not about whether the increase in CO2, by itself, will lead to some warming: it should. The debate is simply over the matter of how much warming the increase in CO2 can lead to, and the connection of such warming to the innumerable claimed catastrophes. The evidence is that the increase in CO2 will lead to very little warming, and that the connection of this minimal warming (or even significant warming) to the purported catastrophes is also minimal. The arguments on which the catastrophic claims are made are extremely weak –and commonly acknowledged as such.

In response to scientific projections of likely severe climate impacts of global average temperatures rise, the U.S. signed the1992 United Nations Convention on Climate Change. In 2016 the United States once again joined 197 countries in ratifying the Paris Climate Agreement, an enhancement to help the implementation of that Convention.

The claim that the United States ratified the Paris Climate Agreement is incorrect.  The United States never properly joined the accord.  It is a treaty that requires the advice and consent of the Senate. Instead, President Barack Obama chose to “adopt” it with an executive order.  The Senate never voted on the treaty.

Impacts from Emissions Already Observed in New York’s Climate

New York’s climate has already begun to change, gradually taking on the characteristics of the climate formerly found in locations south of New York. The need for the reduction of CO2 emissions, including through the reduced emissions cap, budget adjustment, and establishment of the ECR, is clearly supported by numerous direct impacts that have been observed in New York State and presented in the 2011 New York State ClimAID assessment and the 2014 update to ClimAID.

The title of this section exposes a significant error in the understanding of the ClimAID assessments.  In particular, those assessments described observed climate trends but did not attempt to attribute how much of the observed trends were linked to GHG emissions, how much were caused by other anthropogenic effects such as land-use changes and the urban heat-island effect, and how much was caused by natural variability.  For example, the observed monthly data source for average temperature and precipitation was the United State Historical Climatology Network and page 21 of the 2011 ClimAID document states that “this data product is not specifically adjusted for urbanization”.  One of the sites used to describe climate trends was at New York City’s Central Park.  Clearly the urban heat-island has a significant effect on temperature at that location.  Therefore, the RIS presumption that the only cause of all the observed trends was GHG emissions over-estimates their role in observed climate change trends.

These include:

  • Temperatures in New York State have risen during the twentieth century, with the greatest warming coming in recent decades – temperatures have risen on average 0.25°F per decade over the past century. This warming includes an increase in the number of extreme hot days (days at or above 90ºF) and a decrease in the number of cold days (days at or below 32ºF).

Because the effect of the urban heat-island is not considered these trends do not represent the trend due solely to the greenhouse effect.

  • Sea level rise. Sea level in the coastal waters of New York State and up the Hudson River has been steadily rising over the twentieth century, chiefly as a result of thermal expansion of ocean waters, melting of land ice and local changes in the height of land relative to the height of the continental land mass. Tide-gauge observations in New York indicate that rates of relative sea level rise were significantly greater than the global mean, ranging from 0.9 to 1.5 inches per decade.

The fact that New York tidal gauge rates of relative sea level rise are greater than the global mean shows that local changes in the height of land relative to the height of the continental land mass are a significant factor of sea-level rise that no amount of change to the greenhouse effect will affect.

 Although the RIS purports to provide current information, consider an alternative assessment of current climate state based on data and not model speculation.  Ole Humlum a former Professor of Physical Geography at the University Centre in Svalbard, Norway, and Emeritus Professor of Physical Geography, University of Oslo, reported “The State of the Climate 2019,” that presents ten key facts in the Executive summary:

“1. According to the [surface] instrumental temperature record (since about 1850), 2019 was a very warm year, but cooler than 2016.

      1. In 2019, the average global air temperature was affected by a moderate El Niño episode, interrupting a gradual global air temperature decrease following the strong 2015–16 El Niño.
      2. Since 1979, lower troposphere temperatures have increased over both land and oceans, but more so over land areas. The possible explanations include insolation, cloud cover and land use. {Caiazza note: if the greenhouse effect were the only cause of the temperature increase then there should be no difference over land vs over water.}
      3. The temperature variations recorded in the lowermost troposphere are generally reflected at higher altitudes too. In the stratosphere, however, a temperature ‘pause’ commenced in around 1995, 5–7 years before a similar temperature ‘pause’ began in the lower troposphere near the planet’s surface. The stratospheric temperature ‘pause’ has now persisted for about 25 years.
      4. The 2015–16 oceanographic El Niño was among the strongest since the beginning of the record in 1950. Considering the entire record, however, recent variations between El Niño and La Niña are not unusual.
      5. Since 2004, when detailed recording of ocean temperatures began, the global oceans above 1900 m depth have, on average, warmed somewhat. The strongest warming (between the surface and 200 m depth) mainly affects the oceans near the Equator, where the incoming solar radiation is at its maximum. In contrast, for the North Atlantic, net cooling at the surface has been pronounced since 2004.
      6. Data from tide gauges all over the world suggest an average global sea-level rise of 1–1.5 mm/year, while the satellite record suggests a rise of about 3.2 mm/year, or more. The noticeable difference in rate (a ratio of at least 1:2) between the two data sets still has no broadly accepted explanation.
      7. Since 1979, Arctic and Antarctic sea-ice extents have had opposite trends, decreasing and increasing, respectively. Superimposed on these overall trends, however, variations of shorter duration are also important in understanding year-to-year variations. In the Arctic, a 5.3-year periodic variation is important, while for the Antarctic a variation of about 4.5-years’ duration is seen. Both these variations reached their minima simultaneously in 2016, which explains the simultaneous minimum in global sea-ice extent. This particularly affected Antarctic sea-ice extent in 2016.
      8. Northern Hemisphere snow cover extent undergoes important local and regional variations from year to year. Since 1972, however, snow extent has been largely stable.
      9. Tropical storms and hurricanes have displayed large annual variations in accumulated cyclone energy (ACE) since 1970, but there has been no overall trend towards either lower or higher activity. The same applies for the number of continental hurricane landfalls in the USA, in a record going back to 1851.”

Future Impacts from Emissions Predicted for New York’s Climate

Predictions of future impacts associated with emissions in New York further support the need for a substantial reduction in the CO2 emissions cap as well as the budget adjustment and ECR, as outlined in the proposed revisions to the Program. The 2011 New York State ClimAid assessment and 2014 update also examined how sea level rise, changes in precipitation patterns, and more frequent severe weather conditions will affect New York’s economy, environment, community life and human health. ClimAID used regionalized climate projections to develop adaptation recommendations and is a climate change preparedness resource for planners, policymakers, and the public. 

The future impacts assessment in the RIS relies on the 2011 New York State ClimAid assessment and 2014 update that examined how sea level rise, changes in precipitation patterns, and more frequent severe weather conditions will affect New York’s economy, environment, community life and human health.  There are three problems with those assessments: reliance on global climate model simulations, the use of Representative Concentration Pathway 8.5, and the use of a regional climate model.

 Climate sensitivity

Predictions of substantial global warming assume that the climate is very sensitive to an increase in GHG concentrations.  The RIS does not recognize that this is an active debate because of climate feedback in various models and that estimates in peer reviewed studies range from 0.8°C warming to almost 6.0°C warming by 2100.  Clearly such a wide range

of uncertainty means climate model temperature projections remain dubious, at best. In my opinion climate sensitivity estimates based on measured data are more likely to be correct than GCM projected estimates and those estimates are invariably on the lower end of the range.  The problem with the GCM estimates is cloud formationFor example, “Given current uncertainties in representing convective precipitation microphysics and the current inability to find a clear observational constraint that favors one version of the authors’ model over the others, the implications of this ability to engineer climate sensitivity need to be considered when estimating the uncertainty in climate projections.”  To be clear, that means that modelers can conjure up whatever warming amount you want simply by tweaking how clouds form in response to the greenhouse effect.

 Emissions RCP 8.5

In order to make a projection for the future it is necessary to not only project the effect of changing GHG concentrations but also project how emissions will change.  The ClimAID assessment presents a range of possible projections but the worst-case impacts rely on a future emissions scenario that was not intended to be plausible. In short, the likelihood of the projected impacts that “make the case” for the proposed revisions are based on an unrealistic emissions scenario.  While it does make for the scary story needed to justify the proposed action, the fact is that it is inappropriate for use as justification for it.

 Regional Climate Model

One problem with a GCM is that in order to calculate the global climate a coarse horizontal grid is needed simply because of computational requirements.  In order to account for New York-specific impacts using a finer grid resolution ClimAID developed a regional climate model.  I believe they used a statistical technique to estimate regional climate impacts.  If that assumption is correct then their results are flawed.  In particular, the GCM gird resolution is so coarse that effects of the Great Lakes are not included.  However, “These techniques assume that the relationship between large scale climate variables (e.g. grid box rainfall and pressure) and the actual rainfall measured at one particular rain gauge will always be the same.”  Given that precipitation downwind of the Great Lakes is strongly influenced by lake-effect snow and rain, the large-scale precipitation estimates that do not include the Great Lakes means that this is clearly not the case.

Future Impacts from Emissions for New York State’s Resource Sectors

I did respond to all the problematic statements in this section.  As shown above there are serious concerns with the primary projections of temperature change.  The secondary projections of impacts to resource sectors is even more speculative especially because the alleged impacts require specific uncertain climatic outcomes.  I highlighted several issues that demonstrate a lack of nuanced understanding of potential climate change impacts.

In the section on Coastal Zones, the RIS states “Superstorm Sandy gained additional strength from unusually warm upper ocean temperatures in the North Atlantic”.  The RIS correctly does not attribute Superstorm Sandy to climate change.  I do not disagree with the claim that the storm could have gained additional strength from unusually warm temperatures.  I do want to point out that these claims point to the most likely long-term impact of anthropogenic climate change, i.e., impacts will be tweaks to the environment and not primary drivers of environmental change. 

In the same section the RIS claims that New York’s shoreline will be adversely affected by climate change: “The major contributor to sea level rise is thermal expansion and melting of glaciers and ice sheets.”  This section concerns Future Impacts from Emissions and therefore it is incompatible with the Impacts from Emissions Already Observed in New York’s Climate discussion of sea level.  As correctly noted in that section “Sea level in the coastal waters of New York State and up the Hudson River has been steadily rising over the twentieth century, chiefly as a result of thermal expansion of ocean waters, melting of land ice and local changes in the height of land relative to the height of the continental land mass. Tide-gauge observations in New York indicate that rates of relative sea level rise were significantly greater than the global mean, ranging from 0.9 to 1.5 inches per decade”.  Because New York tidal gauge rates of relative sea level rise are greater than the global mean shows that local changes in the height of land relative to the height of the continental land mass are a significant factor of sea-level rise that no amount of change to emissions will affect.

In the section on agriculture the RIS notes that “increased summer heat stress will negatively affect cool-season crops and livestock unless farmers take adaptive measures such as shifting to more heat-tolerant crop varieties and improving cooling capacity of livestock facilities”.  Misleadingly, the section then goes on to say “A loss of milk production efficiency from heat effects could result in the loss of hundreds of millions of dollars annually for New York’s dairy industry” based on the following:

“Dairy farmers will also be impacted since milk production is maximized under cooler conditions ranging from 41°F to 68°F. New York is the third largest producer of milk in the United States, behind California and Wisconsin, with 14.9 billion pounds of milk produced in 2017. During the unusually hot summer in 2005, many New York dairy herds reported declines in milk production of five to 15 pounds of milk per cow per day (an eight to 20 percent decrease).”

The average July temperature in Syracuse is 71, Madison WI is 75, and Sacramento, CA is 77, so two states that produce more milk than New York have higher average temperatures.  Additionally, the RIS mistakenly quotes a milk decrease from a weather event to support an alleged climate impact.

In the section on Air Quality and Public Health Benefits the RIS states:

“In addition to contributing to a 50% reduction in CO2 from affected power plants in New York, it is estimated that the RGGI program provided $1.7 billion in avoided public health costs in New York by reducing associated air pollutants. Across the RGGI region, it is estimated that the RGGI program helped avoid 16,000 respiratory illnesses, up to 390 heart attacks, and 300 to 830 deaths.  At a more local level, according to a 2002 study, the expected health benefits of urban air pollution reductions from climate change mitigation strategies in the New York City area (assuming that they produce an approximately 10 percent reduction in PM10 and ozone concentrations), would be to avoid approximately 9,400 premature deaths (including infant deaths), 680,000 asthma attacks, and 12 million restricted activity days.”

I showed in my companion post that the primary reason for the emission reductions was fuel switching from coal and residual oil to natural gas.  That means that the RGGI contribution to those reductions was on the order of 5% and not 50%.  That also means that the avoided health impacts were mostly due to fuel switching and not RGGI. 

A couple of points about health impacts in general and the referenced 2002 study and the potential impacts of a 10% reduction in PM10 and ozone concentrations in particular.  Between 2000 and 2019 Northeast air quality trends show more improvement than a 10% reduction: PM10  is down 39%, PM2.5 is down 47%, ozone is down 24%, and SO2 is down 86%.  Until such time that DEC can reference a study that shows the actual health benefits associated with the observed air quality improvements, I am not confident that their air quality health claim is accurate.  Also note that future air quality impacts will be much smaller because the higher polluting coal and residual oil sources have already been reduced.  CO2 reductions from natural gas firing will not produce as many reductions in PM and Ozone levels and no change in SO2.

Components of the Proposed Program Revisions

One of the problems with New York’s energy policy is demonstrated by this statement: “The reduction in the CO2 emissions cap to approximately align with current levels represents a critical step to combat the significant challenges presented by climate change and to advance sound energy policies that foster energy efficiency, a reduction in reliance on fossil fuels, and energy independence”.   In particular, New York State has not done a holistic analysis of the energy and environmental alternatives proposed to replace fossil fuels.  For example, this proposal is supposed to foster energy independence but in 2019 the United States was energy independent.  New York’s energy plan proposes to rely on renewable energy which will require battery energy storage.  Both technologies rely on rare elements which are not produced in sufficient quantities domestically to cover the requirements of the New York energy transition so we will become less energy independent.  Furthermore, the production of these rare elements is environmentally destructive so the State is merely leaking environmental impacts elsewhere.

Benefits from the Proposed Program Revisions

This section notes: “The most recent version of the New York State Regional Greenhouse Gas Initiative-Funded Programs Status Report for the quarter ending December 31, 2018 estimates cumulative annual customer bill savings of $293 million.”

Unfortunately, in my companion post I showed that as a GHG emission reduction mechanism, New York’s RGGI investments fail to make investments that are less than the purported cost of the negative externalities for a ton of CO2 emitted today (the Social Cost of Carbon (SCC)).  In fact, the cost per ton removed is an order of magnitude larger than the Obama-era SCC value.  Therefore, New York’s investments are woefully cost ineffective which suggests that our resources should be invested in adaptation because we will not be able to afford the costs of mitigation.

There is a paragraph in this section that describes the Climate Act:

Most notably, as described above, the recently-enacted Climate Act establishes Statewide GHG emission reduction requirements and renewable and clean energy generation targets. In particular, ECL Section 75-0107, which was added by the Climate Act, requires a 40 percent reduction in Statewide GHG emissions from 1990 levels by 2030, and an 85 percent reduction from 1990 levels by 2050. Moreover, Public Service Law Section 66-p, which was also added by the Climate Act, establishes a target to generate 70 percent of the State’s electricity from renewable energy sources by 2030, and to generate 100 percent of the State’s electricity from carbon-free sources by 2040. The proposed revisions to the Program, including the additional reduction in the RGGI CO2 emissions cap and the establishment of the ECR, further the objectives of the Climate Act. Finally, the Climate Act also includes multiple provisions that recognize that historically disadvantaged communities often suffer disproportionate and inequitable impacts from climate change. The proposed revisions to the Program to expand its applicability to include certain smaller sources, many of which are located in such communities, are consistent with these provisions of the Climate Act.

This section concludes with claimed benefits of implementing the proposed revisions:

Climate change is a global problem and effective action at the national and international level is necessary in order to stabilize atmospheric GHG concentrations at acceptable levels. Notwithstanding this, particularly given the current federal Administration’s recent actions to slow or rescind various regulatory and other efforts to reduce GHGs nationally, action now at the State and regional level to reduce GHG emissions and to implement the revisions to the Program will benefit and reduce the risk of injury to New York and its citizens and residents from climate change. The risks of injury from a warming climate increase with the rate and magnitude of the warming, and in turn, the rate and magnitude of warming is primarily dependent upon the level of CO2 emissions. In addition, by implementing the proposed revisions to the Program now, New York and the Participating States can:

        • Reduce the long-term costs of addressing climate change. By acting now, states can avoid the need for more disruptive measures later.
            • As noted previously there is no quantitative estimate of the potential reduction of climate change costs that will accrue due to the proposed action.
        • Position the region ahead of competitors. Taking continued action to reduce the region’s carbon-intensity will create a competitive advantage relative to other parts of the country when additional action is taken at the national and international level.
            • The German attempt to implement a similar but much less ambitious GHG emissions program led to massive price increases: “A German online site Stromreportwrites that since the year 2000 the average electricity price for private households has risen from 13.94 to 30.43 euro cents per kilowatt hour (2019)”.  If the cost of electricity is so much higher than elsewhere it will be a competitive dis-advantage.
        • Capture environmental co-benefits. Reducing power sector carbon emissions provides numerous environmental co-benefits, including reduced emissions of other pollutants associated with fossil-based electricity generation. Additionally, co-benefits will continue to be realized by allocating almost 100 percent of the CO2allowances to the EE&CET account to be auctioned by NYSERDA and have the resulting proceeds utilized for the account’s purposes of furthering the GHG emission reduction objectives of the Program.
            • Future environmental co-benefits will be much smaller than in the past simply because future reductions will be displacing natural gas rather than coal and oil. As shown above, NYSERDA’s investments are not cost-effective relative to the Social Cost of Carbon.
        • Drive new technology. By attaching tangible financial value to avoided carbon emissions, the proposed Program revisions provide additional market incentive for developing and deploying new technologies that can increase fuel efficiency, utilize non-carbon resources (including renewable technologies such as wind and solar power), and reduce or eliminate carbon emissions from combustion sources. In addition, to the extent that the auctioning of allowances will spur additional investments in clean energy technologies, the auctions drive the deployment of new technologies in the State.
          • I believe the cost of avoiding carbon emissions is far greater than the cost of RGGI on operations so this will have little effect on new technology.
        • Promote improved supply-side and demand-side efficiency. The proposed Program revisions create a direct incentive to reduce the fossil fuel inputs required to produce electricity through more efficient generating technologies. This is consistent with the Climate Act’s target to obtain 100 percent of the State’s electricity from carbon-free sources by 2040.
            • The NYSERDA investments in demand-side efficiency have provided tangible benefits. If DEC wants to claim supply-side efficiency gains then they should provide examples.
        • Improve the region’s energy security and reduce its exposure to higher energy prices. By creating a market incentive for low-carbon and non-carbon electricity technologies and by promoting increased supply-side and demand-side efficiency, the proposed Program revisions reduce the Northeast’s long-term exposure to high fossil fuel energy prices. Efficiency improvements and advances in new energy technology fostered by the proposed Program revisions can help buffer the region from the considerable economic risks associated with continued dependence on these fuels.
            • If New York truly wants to reduce exposure to higher energy prices then they should embrace natural gas development which has proven to be the leading cause in decreased prices. In spite of New York’s irrational war on natural gas fracking, that technology has been primarily responsible for the observed emission reductions and associated health benefits in the past decade.
        • Stimulate economic development. The proposed Program revisions provide a positive stimulus for economic growth in the region by creating incentives for new technologies that could be developed in-region, promoting a more efficient and cleaner electricity generating sector, prompting other activities through its offsets program and improving efficiency. NYSERDA’s investment of proceeds from the auctioning of allowances provides further economic benefits.
            • The broken window fallacy negates this claim. In the broken window fallacy – money spent on RGGI allowances, for example, is “money that cannot be spent on food, clothing, health care, or other industries. The stimulus felt in one sector of the economy comes at a direct – but hidden – cost to other sectors”.

Conclusion

I recently listened to the June 24 meeting of the New York Climate Action Council Policy in which New York’s climate leaders repeatedly expounded on the importance of science driving New York policy.  However, as the implementation of this regulation shows, it is more about rhetoric than science.  Science-driven policy should consider all possibilities, make a case for the preferred alternative, and not neglect inconvenient aspects of the proposal.  In this instance the RIS claims over-whelming evidence and dismisses legitimate issues.  I showed in the companion post that no case was made for the proposed revision to the regulation to include smaller sources.  The most egregious problem is that New York has never quantified the potential effect of any of their GHG emission reduction regulations.  The suggestion that changing New York’s contributions to global warming due to GHG emissions, even if you accept the consensus science, will have any measurable effect on the list of alleged problems is clearly not likely.  At this time of unprecedented budgetary crisis, the RIS does not make a case to support these revisions and it is entirely appropriate to ask why this regulation is necessary.

[2] Esper, J., R.J.S. Wilson,  D.C. Frank, A. Moberg, H. Wanner, & J. Luterbacher.  2005.  “Climate: past ranges and future changes”.  Quaternary Science Reviews 24: 2164-2166.

[1] This was the total for 2015 NYS emissions in NYSERDA Greenhouse Gas Inventory 1990-2015. Subsequent editions have lowered the most recent total so this is a conservative value for impacts.

 

Part 242 Comments – Background and Rationale for Revisions

For the past month or so I have been preparing comments on the New York State Department of Environmental Conservation (DEC)  proposed revisions to their Part 242 CO2 Budget Trading Program rule.  This post summarizes my Part 242 Comments addressing the background for the rule revisions and rationale used for significant rule changes.  There is a second post that addresses the Regulatory Impact Statement for the proposed rule changes.

I submitted comments because I want my family to be able to afford to continue to live in New York State.  The proposed rule is consistent with the Climate Leadership and Community Protection Act (“Climate Act”) that will necessarily affect the price of energy in New York and based on results elsewhere I believe those costs will ultimately be unacceptable.  I have written a series of posts on the feasibility, implications and consequences of the law.  I am a retired electric utility meteorologist with nearly 40 years of experience analyzing the effects of emissions on the environment.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Introduction

The proposed revisions to Part 242 primarily implement Regional Greenhouse Gas Initiative (RGGI) program changes set forth in the updated RGGI Model Rule.  There are several substantive changes.

The proposed Program revisions will cap regional CO2 emissions at approximately 75 million tons annually beginning in 2021 and decrease the cap by 2.275 million tons annually. There are changes to the Cost Containment Reserve (CCR) that modify the CCR trigger price and the maximum amount of CCR allowances available at auction each year. This feature puts a limit on the upper bound of costs and the proposed program revisions create an Emissions Containment Reserve (ECR), that will put a lower bound on costs.  Simply put if the price gets too high allowances are added and if the price gets too low allowances are subtracted.

The rule also includes a provision for a Third Adjustment for Banked Allowances that will adjust the budget for 100 percent of the pre-2021 vintage allowances held by market participants as of the end of 2020, that are in excess of the total quantity of 2018, 2019, and 2020 emissions. This provision is included to prevent a large allowance bank.  If the allowance bank is larger than the fourth control period emissions then they will adjust the size of the cap.

Comment Overview

For the most part the DEC proposed revisions simply implement the RGGI Model Rule and as such there is little chance for meaningful change based on comments received.  Nonetheless, because there are issues with a couple of the proposed revisions and the Regulatory Impact Statement that provides justification of the changes, I spent quite a bit of time developing comments.  The revised rule proposes to expand applicability under Part 242 to capture certain units that serve an electricity generator with a nameplate capacity equal to or greater than 15 MW and I show that the rationale used to justify this change is incorrect. RGGI recently released a guidance document that includes a schedule for the calculation of the third adjustment for banked allowances that I believe inappropriately ensures an adjustment of the allowance bank.  Finally, one of the purported benefits of this regulation is that New York’s climate leadership will entice other jurisdictions to emulate New York by setting an example.  However, the justification for these revisions provides New York citizens insufficient evidence to support the proposed changes and sets a poor example for others to follow.

 There were three components to the comments I submitted and I will discuss one in this post.  I addressed three underlying suppositions driving the proposed revisions: that RGGI has been a success and deserves to be revised, that expanding the applicability of the program to generating units greater than 15 MW but less than 25 MW is warranted, and that a binding cap is an appropriate goal.  There was a section with specific comments on the text of the regulation but I will not discuss those comments in a blog post.  A second post discusses the claims in the Regulatory Impact Statement (RIS) that were used to justify the proposed actions.

RGGI Success

The underlying premise of the proposed actions is that the Regional Greenhouse Gas Initiative has been an unqualified success and deserves to be expanded and revised.  Sprinkled throughout the RIS are statements such as: “contributing to a 50% reduction in CO2 from affected power plants in New York, it is estimated that the RGGI program provided $1.7 billion in avoided public health costs in New York by reducing associated air pollutants”.   My comments on this topic were based primarily on the many posts that I have done on RGGI.  Rather than re-hash all the background information available in my previous posts I will simply summarize the key points.

The “RGGI is a success” statements are based on a naïve comparison of emissions before and after RGGI program implementation.  I compared CO2 emissions in the nine-state RGGI region for a baseline period (2006-2008) before the start of RGGI to annual emissions since.  The total emissions have decreased from an annual average baseline of over 127 million tons prior to the program to just under 75 million tons in 2018.  This represents a 40% decrease for the RGGI region as a whole as compared to a 50% reduction in New York State CO2 emissions.  However, it is important to evaluate why the emissions decreased.  When you compare emissions by the primary fuel type burned it is obvious that emissions reductions from coal and oil generating are the primary reason why the emissions decreased.  Note that both coal and oil emissions have dropped over 80% since the baseline.  Natural gas increased but not nearly as much.

Ultimately, the only reductions from RGGI that can be directly traced to the program are the reductions that result from direct investments of the RGGI auction proceeds. Information necessary to evaluate the performance of the RGGI investments is provided in the RGGI annual Investments of Proceeds update.  In order to determine reduction efficiency, I had to sum the values in the previous reports because the most recent report only reported lifetime benefits.  In order to account for future emission reductions against historical levels the annual reduction parameter must be used.  The Accumulated Annual Regional Greenhouse Gas Initiative Benefits table lists the sum of the annual avoided CO2 emissions generated by the RGGI investments from three previous reports.  The total of the annual reductions is 2,818,775 tons while the difference between the baseline of 2006 to 2008 compared to 2017 emissions is 59,508,436 tons.  The RGGI investments are only directly responsible for less than 5% of the total observed reductions!

Expanded Applicability

The proposed revisions expand applicability under Part 242 to capture certain units that serve an electricity generator with a nameplate capacity equal to or greater than 15 megawatts (MW).  The only rationale provided is that “New York stakeholders raised concerns during the extensive outreach efforts that the cost of complying with RGGI might result in increased operation at units not subject to the regulatory provisions of Part 242, particularly at smaller units below the existing 25 megawatt (MW) applicability threshold”.

Sadly, New York State energy and environmental policy is more about optics than scientific facts.  In order to describe this proposal based on facts I believe that, at a minimum, there would be a list of affected units, an estimate of their emissions, and an evaluation of the stakeholder concern that they might run more in the future.  There is no listing of affected units and obviously no estimate of emissions.  My best guess is that there will be 69 affected units.  I estimated that emissions averaged 126,843 tons over a five-year period and that in the highest year the CO2 emissions were 163,042 tons.  That represents about a half a percent of the total NYS emissions. The rationale is not based on a quantified estimate just a “feeling” that it might happen.  In fact, elsewhere the document itself in the RIS Model Rule Policy Case Program Design Assumption description suggests that these units will run less.  The modeling results compare two cases and in the Reference Case New York is a net importer of 2,709 GWh in 2031 but New York imports more in the Model Rule Policy Case due to lower in-state generation from gas units backing off”, my emphasis added in bold.  Furthermore, the DEC promulgated rules late last year that will result in the retirement of most of these units anyway.

Binding Cap

The RIS mentions a binding cap with respect to two aspects of the proposed rule.  During the last program review the RGGI states decided to set the regional emissions cap in 2021 to 75,147,784 tons and then reduce it by 2.275 million tons per year thereafter, resulting in a total 30 percent reduction in the regional cap from 2020 to 2030.  In addition, the RGGI states included a budget adjustment for banked allowances if the allowance bank exceeded the total quantity of 2018, 2019, and 2020 emissions at the end of the fourth control period. The RIS claims this will “help create a binding cap”.

My interpretation of a cap and trade “binding cap” is that it requires emission reductions from affected sources as a result of the control program itself and not because of other factors.  During the program review process, environmental stakeholders insisted that a “binding cap” was necessary despite significant reductions.  In this instance I think there are considerations that make that a poor choice.  This topic is important enough to warrant its own post but I will briefly address my concerns here.

There is an important difference between cap and trade programs for SO2 and nitrogen oxides (NOx) emissions and cap and invest programs for GHG emissions.  In particular, there are add-on control options for SO2 and NOx whereas there isn’t any cost-effective option for CO2.  As a result, affected sources could directly control their SO2 and NOx compliance and, more importantly, the cap limit can be set based on technologically available control performance.  In RGGI and other GHG emissions programs, there are limited direct options for the affected sources and, going forward especially, compliance is  going to have to rely on indirect reductions, i.e., someone will have to build a zero-emitting plant that displaces enough output from a fossil plant so that enough allowances are available to cover the affected source requirements.  As a result, the ultimate control strategy for an emissions marketing CO2 control program is to run less and hope power is available from somebody else.

Future emission limits are based on past RGGI success but I have shown that most of the success was the result of fuel switching to a lower priced fuel.  A recent report from the Department of Energy’s Lawrence Berkeley National Laboratory, “The Impact of Wind, Solar, and Other Factors on Wholesale Power Prices: An Historical Analysis—2008 through 2017,” confirms  that emission prices have been a minor factor in wholesale electric price changes in the NYISO.  The factors that affect wholesale electric prices determine the change in costs of production which in turn govern how much a particular unit operates.  During the ten-year period of the study “falling natural gas prices were the dominant driver of overall market-wide average price drops, reducing average annual wholesale prices by $7–$53 per megawatt-hour (MWh) over the last decade”.   Note that in Figure ES-1 Impact of Wind, Solar, and Other Factors on Wholesale Power Prices from that document that the $53 per MWh reduction was for the NYISO.

There is a limit to fuel switching, New York has closed all its coal-fired power plants and I believe the fuel-oil fired power plants cannot reduce emissions any more without shutting down.  While there are still opportunities elsewhere in RGGI the fact is that there is a limit to this option.  Combine this with the fact that past RGGI investments have not been particularly effective (only responsible for 5% of the observed reductions) that means that a binding cap will be inevitable.  While there are mechanisms that are supposed to address the risk that affected sources will be unable to obtain allowances to run and have to shut down, the concern that this is uncharted territory and has risks to reliability remains.

Third Adjustment to the Allowance Bank

The RGGI model rule includes a Third Adjustment for Banked Allowances that will adjust the budget for 100 percent of the pre-2021 vintage allowances held by market participants as of the end of 2020, that are in excess of the total quantity of 2018, 2019, and 2020 emissions. That translates to: if the allowance bank is larger than the fourth control period emissions then they will adjust the size of the cap.  This provision is included to prevent a large allowance bank going forward and is directly related to the binding cap arguments.

The clear intent of the adjustment was that there should be a limit on the size of the allowance bank going forward in 2021 based on the status after the emissions through the end of 2020 were surrendered.   On April 20, 2020 RGGI quietly posted  a guidance document, RGGI Compliance: CO2 Budget Source Fact Sheet (“Fact Sheet”), that sets a schedule  in the “dates to remember” section that states the final true-up of allowance surrender for fourth control period emissions will occur on April 2, 2021.  Using that schedule, the comparison of fourth control period emissions and the allowance bank occurs before reconciliation thus ensuring the third allowance bank adjustment.

The rationale for the timeline necessary to compare the fourth control period emissions to the allowance bank on April 2, 2021 ignores reality.  According to the Fact Sheet, the states need 31 days to ensure compliance for each CO2 budget source.  The compliance test compares the certified number of allowances submitted by each affected source against the certified number of tons emitted for each CO2 budget source.  Given that the Potomac Economics Report on the Secondary Market for RGGI CO2 Allowances for Q1 2020 released on March 13, 2020 included the allowances that were deducted for 2019 interim compliance based on the March 1, 2020 compliance certification submittals there is every reason to expect that there is a report that lists the emissions and allowances so that this comparison is a trivial effort.  This mismatch in dates will artificially reduce the allowances available for auction in 2021 (and beyond) and is not consistent with the discussions surrounding banked allowance adjustments during the public review of the Model Rule.

Conclusion

I recently listened to the June 24 meeting of the New York Climate Action Council Policy in which New York’s climate leaders repeatedly expounded on the importance of science driving New York policy.  However, as the implementation of this regulation shows, it is more about rhetoric than science.  In this regulation, smaller combustion sources are to be regulated.  The hypothesis is that they will be regulated because they will run more but there is no evidence provided why that might be the case.  In fact, they don’t even describe which units will be affected and how much they emit.  If science was the driving factor the hypothesis for each rule change would be tested to prove the case for the proposed action.

My Additional Comments on NESE Pipeline Alternatives

The Northeast Supply Enhancement (NESE) pipeline is a proposed pipeline to bring natural gas to New York City and Long Island.  This post documents additional comments I have submitted in a New York Department of Public Service proceeding related to denial of service requests by National Grid in New York City and Long Island which is associated with the project.

In NESE Pipeline Alternatives for National Grid I included an overview of the proceeding and described my comments.  Since then I submitted three additional comments addressing particular aspects of comments submitted by others.  Opponents of the pipeline alternative that claim that additional energy efficiency efforts can eliminate the need for a pipeline. The Eastern Environmental Law Center submitted a report to the docket by Synapse Energy Economics entitled “Assessment of National Grid’s Long-Term Capacity Report: Natural gas capacity needs and alternatives” on April 14, 2020.  Several commenters suggested that “climate realities” mean that the current criteria for the coldest day can be revised.

Energy Efficiency Performance Comments

I do not dispute that the theory that investments in energy efficiency will reduce the need for additional generating resources is a good idea because there is no benign way to generate electricity.  Nor do I dispute that New York has a good energy efficiency record.  However, I don’t think that past performance is necessarily an indicator of future results simply because the easiest and most effective, aka low hanging fruit, energy efficiency projects have already been implemented.  Any future reductions will not be as cheap or effective.

The comments I submitted attempted to determine how well the existing energy efficiency programs have been doing.  Supporters of increased energy efficiency claim that energy growth is decreasing and increased investments will reduce growth even more.  There is a fundamental problem when evaluating energy efficiency, namely it is difficult to compare different time periods because energy use is not just a function of how efficiently it is used but also varies because of weather, the economy. and number of customers.  In order to address that I used the average natural gas use per customer averaged over the latest five-year period of data compared to the previous five years of data.  I found that residential, commercial, and industrial use per customer all went up over the ten-year period for the state as a whole and residential and commercial use per customer went up in New York City and Long Island.

I concluded that in order to justify National Grid’s high-demand (80% of future efficiency targets) and a low-demand scenario (100% of future efficiency targets) bounds to their analysis and the feasibility of the no-infrastructure project option for incremental energy efficiency that the fact that energy use per customer has been going up has to be reconciled.  If the Public Service Commission ultimately requires National Grid to include the incremental energy efficiency project as part of the solution, then it is up to them to show why the future results will differ from the recent past.

Synapse Report Comments

The Eastern Environmental Law Center submitted a report to the docket by Synapse Energy Economics entitled “Assessment of National Grid’s Long-Term Capacity Report: Natural gas capacity needs and alternatives” on April 14, 2020.  The report concludes: the supply gap most likely does not exist, National Grid has multiple cost-effective demand-side options to meet any foreseeable need, and National Grid’s analysis of long-term capacity options is not compatible with New York’s climate change policies.

The comments on the supply gap primarily addressed purported problems with the worst case (design day) which I address below.  They also complained that National Grid should try to maintain the number of customers who are willing and able to shift from natural gas to other sources of energy.  This disregards the fact that the most used alternative source is fuel oil which New York City is in the middle of prohibiting so they cannot keep those customers.

The Synapse report claims that National Grid has multiple cost-effective demand-side options to meet any foreseeable need including energy efficiency, demand response, and alternative energy systems such as heat pumps. As described previously there are issues with energy efficiency that Synapse ignores.  Demand response advocates assume that the load shifting opportunities available in the summer will also be available in the winter.  I argued that when 85% of your load is heating and the diurnal heating load cycle does not vary as much as the summer cooling cycle, how can you shift the load?  As a result, I believe that a demand response should not be considered a viable alternative to a proven technology for winter heating.  Alternative heating systems are electrified systems.  Air source heat pumps are touted as a viable alternative to natural gas furnace but when the temperature drops below 20° Fahrenheit there simply is not enough energy available for this technology to work.  Ground source heat pumps don’t have that problem but are difficult to retrofit anywhere and have siting demands that are likely not achievable in New York City.

The Synapse report concludes that National Grid’s analysis of long-term capacity options is not compatible with New York’s climate change policies.  In a rational world New York’s plan to implement the Climate Leadership and Community Protection Act would be available to determine compatibility but there is no plan now and one will not be available for several years.  Because the timing for the state plan is incompatible with the needs of this project and the State has yet to show that an electric system that relies only on non-fossil fueled sources can meet that peak load condition I concluded that National Grid cannot afford to wait to integrate their plan with the CLCPA plan.

Design Day Criteria Comments

I submitted this comment because other comments submitted recommend changing the design day criteria and downplay future energy needs during the worst-case cold weather periods based on “climate realities”.  I showed that when you look beyond the superficial and mis-represented IPCC science it becomes clear that climate model results and even the current observed trend of local temperatures are no reason to conclude that warmer temperatures are inevitable.  Poorly understood natural variation is as likely to be the primary driver of temperature as GHG concentrations.  Unfortunately, natural variation and climate modeling estimates of the future are very uncertain.  Therefore, I argued that it is inappropriate to change the design day criteria and that using the entire period of record for temperatures to determine the design day is the most appropriate approach.

Conclusion

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong”, Thomas Sowell.

Unfortunately, New York State energy policy appears to be driven by the mis-informed and innumerate squeaky wheels who respond to the request for comments with a veritable flood of responses.  Moreover, the bullying tactics of the Governor coupled with his micro-management of all decisions to cater to the aforementioned squeaky wheels that represent a political base he apparently counts on means that professional opinions of all companies in the state and agency staff are not considered.  Sowell’s comment portends bad things happening for New York energy policy in general and this proceeding in particular.

In my comments I showed that the fact that cold snaps are dangerous to health requires a plan that ensures adequate energy is available is necessary.  The theory that energy efficiency, demand response and electrification can actually provide the energy necessary should be considered relative to the real world.  Coupling those aspirational efforts with a lack of understanding about climate and climate change projections are a recipe for unanticipated problems and unintended consequences.

I urged the Public Service Commission to choose the Northeast Supply Enhancement pipeline and the other pipeline distribute infrastructure projects based on my evaluation of the alternatives. The other proposed solutions are based on theory and not proven results.  I believe it is in the best interests of New York to implement a proven technology solution for current and future heating requirements as soon as possible. 

NESE Pipeline Alternatives for National Grid

The Northeast Supply Enhancement (NESE) pipeline is a proposed pipeline to bring natural gas to New York City and Long Island.   I sent Comments submitted 27 March 2020 in a New York Department of Public Service proceeding related to denial of service requests by National Grid in New York City and Long Island which is associated with this project.  This post describes what is going on, the proposal to resolve the issue and my comments on the proceeding.  Be forewarned there is a lot of material to cover so this is a long one.

Purpose

The request for comments is in regard to a requirement to come up with alternatives to provide additional natural gas supply to National Grid’s service territory on Long Island.  In this section I explain what happened to the original plan to fix the problem and events leading up to the current discussion.  On May 15, 2019 the New York State Department of Environmental Conservation (NYSDEC) denied a water-quality permit for the NESE natural gas pipeline that would bring more natural gas to New York City and Long Island.  On May 24, 2019 National Grid imposed a moratorium on new natural gas connections In New York City and Long Island because they could not guarantee enough supply for additional customers based in part because the pipeline was blocked.  In late November 2019 National Grid relented and started doing hookups for new customers following threats from Governor Cuomo to pull their license to operate.  The fact remains that the there is still a problem so National Grid has developed a collaboration for a “safe and reliable energy future”.  I submitted my comments in response to the public outreach program related to this effort.  Once that effort is complete all the feedback will be collected and reviewed, and the National Grid will issue a supplemental report that summarizes and includes public and customer input.  This is supposed to “enable an agreed long-term solution(s) with New York State by June 2020” so that the solution(s) can be in place and in operation by the winter of 2021/2022.

Water Quality Permit Denial

In order to ensure adequate supplies Transcontinental Gas Pipe Line Company (Transco) proposed the Northeast Supply Enhancement Project (NESE).  The permit application project description states:

The NESE Project is a 26-inch diameter pipeline proposed by Transcontinental Gas Pipe Line Company LLC (Transco) that would transport natural gas from Pennsylvania through New Jersey, traveling underwater in the Raritan Bay and Lower New York Bay to approximately three miles offshore of the Rockaway Peninsula in Queens Borough. Approximately 23.5 miles of underwater pipeline will be installed, of which approximately 17.4 miles would be in New York State waters.

The NESE Project would connect to the existing Rockaway Delivery Lateral in Queens and would provide 400,000 dekatherms per day of incremental capacity to National Grid to serve customers in Brooklyn, Queens, and Long Island. According to Transco, the project is intended to support reliability as well as help displace the use of oil.

The NESE Project would be installed a minimum of 4 feet below the sea floor through a combination of jet trenching, clamshell dredging and horizontal directional drilling (HDD). Construction would be phased to avoid potential impacts to marine species. If permits are ultimately issued, compensatory mitigation would be required to offset unavoidable impacts to benthic resources, including shellfish.

On May 15, 2019, the NYSDEC denied the application for the required Clean Water Act Section 401 Water Quality Certification based on their review of the permit and over 14,000 public comments received on behalf of 45,000 individuals. The full decision (PDF) is outlined in a letter by Daniel Whitehead, Director, Division of Environmental Permits, NYSDEC.  I summarize the rationale below.

Because this is an interstate pipeline project the Federal Energy Regulatory Commission (FERC) has to approve the application to build the pipeline.  On March 27, 2017, Transco submitted to FERC an application for a Certificate of Public Convenience and Necessity for construction and operation of the Project. FERC issued a Draft Environmental Impact Statement (DEIS) on March 23, 2018. The NYSDEC submitted comments to FERC regarding the DEIS on May 14, 2018 and FERC issued a Final Environmental Impact Statement (FEIS) for the Project on January 25, 2019. The FEIS outlined some of the numerous environmental impacts FERC anticipated from the construction and operation of the Project. On May 3, 2019, FERC issued Transco a Certificate for the Project subject to certain environmental conditions recommended in the FEIS. According to FERC, these conditions would mitigate many of the environmental impacts associated with the Project.

Even though FERC approved the project Transco still had to get a Water Quality Certificate from New York State.  After the usual iterations between the applicant and the NYSDEC, the application for the Certificate was deemed complete on January 30, 2019.  When the application went out for public comment well over 90 percent of the 14,000 public comments opposed the Department’s issuing a Certificate.  On the basis of their review of the application and public comments, NYSDEC determined that there would be significant water quality impacts.  This includes “significant water quality impacts from the resuspension of sediments and other contaminants, including mercury and copper. In addition, as proposed, the Project would cause impacts to habitats due to the disturbance of shellfish beds and other benthic resources.”

All environmental impacts involve tradeoffs.  If resuspension of sediments were the deciding criterion and prohibited in every instance then no project that disturbed an underwater surface could proceed – no bridges, no docks, nothing.  For that matter fisherman’s dredges that are towed along the bottom could be prohibited.  In a rational world, the fact that all those activities and the construction of a pipeline are short-term would be considered and if the overall long-term benefits to society out-weigh the transient impacts then the permit would be approved.  This instance is complicated by the fact that the sediments are contaminated, so mercury and copper limits could be exceeded.  Again, if this is the criterion, then no work that disturbs sediments in New York harbor should be permitted.  Another unavoidable impact is habitat disturbance and the same trade-offs apply.  However, the State could have required Transco to rehabilitate the disturbed shellfish beds after the pipeline was installed.

This is an example of hypocritical decision making by the Cuomo Administration.  NYSDEC rejected the National Fuel Gas Empire Pipeline application for a new 97-mile pipeline because it would have caused permanent impacts to 2.335 acres of wetlands within the 73.377 wetland acres impacted.  The poster child for Cuomo hypocrisy is the rejection of the Finger Lakes LPG application for an underground storage facility because of “significant adverse impacts on community character” when the only visible infrastructure was a small pond and a building. On the other hand agencies have approved the Cuomo-correct applications for off-shore wind farms which will permanently disturb much more of the seafloor than the NESE pipeline would have temporarily disturbed, approved projects that permanently disturbed wetlands but allowed the developer to create compensating wetlands, and approved wind and solar applications that have significant impacts on community character.  There is absolutely no question in my mind that the professional staff at NYSDEC and the other NYS regulatory agencies, if left to make permitting decisions based on their experience and the facts of the case, would have approved all of the rejected applications. The reason there were rejected was the Cuomo Administration.

National Grid Moratorium

National Grid’s problem is that they have determined that there is not enough current gas supply to serve future customers.  In their report they explained that 85% of the gas used on the coldest days is used for heating.   If they don’t have enough gas available then service to existing customers will be jeopardized and that means heating supplies will be at risk.  In my comments I provided references that conclusively show that cold weather is more impactful on health than hot weather and I have also shown that claims that hot weather is worse are based on a reporting artifact related to different lag times for hot and cold effects.  Therefore, National Grid has the moral responsibility to ensure heating supplies are available and the State should support those efforts.

Gas supply is regulated by the Public Service Commission (PSC) so the projection methodology is comprehensive and well-documented  When a utility company calculates how much supply they have, how much they are using and how much they will need in the future to argue that they need more supply  infrastructure, the first thing PSC staff does is generate their own analysis using the same methodology.  The two sides compare projections to determine if there are differences and reconcile the numbers.  My point is that the assumptions used in these calculations have been developed over the years to ensure adequate and reliable gas supply and they should not get changed at the whim of anyone.

Faced with their analyses that show they don’t have enough gas for future additions and with the rejection of the solution that they had planned to use to resolve the problem National Grid announced that they had to put a moratorium on new supply hookups.

Cuomo’s Response to the Moratorium

In the fantasy world of Cuomo’s New York, numbers, facts, and precedence don’t matter.  It is all about Andy.  Once people could not get the preferred alternative of a natural gas hookup they squawked and the politician saw an opportunity to cater to voters. His response was to have the Public Service Commission order National Grid to provide natural gas hookups.  According to the New York Post “The Public Service Commission said it has the authority based on a section in Public Service Law that says if a gas company is unable to meet the needs of reliable service to customers, the state has the power to step in”.   Following established State practice National Grid calculated how many customers they could handle and cut off any additional customers when the infrastructure proposed to resolve the problem was rejected by the State.  Obviously National Grid was unable to meet the needs of customers solely because the State would not let them,

Furthermore, Cuomo huffed and puffed a threat to revoke the operating license for National Grid if they did not comply.  Now here is where the precedence issue arises.  The Department of Public Service (DPS) and Public Service Commission are supposed to be independent.  In this instance an independent agency could have said “Sorry Governor but your politically driven appeasement of your voting base meant that there may not be enough gas supply available and in order to protect the citizens the prudent choice is to put a moratorium in place.”  The problem is that the DPS no longer independently serves the public interest.   In the summer of 2019 a group of retired Department of Public Service employees submitted a letter that stated “Until the current administration, Governors have generally respected the plain language of the Public Service Law (PSL), which … safeguards the mission of the DPS to serve not political interests but the public interest.” The letter signed by fifteen retired department workers states: “Governor Andrew Cuomo, however, has not done so.”

Like most bully threats there are questions whether Cuomo could have actually revoked National Grid charter to operate.  Nonetheless it was a thinly veiled threat to step in line or he would make doing business miserable.  National Grid is a business and in order to succeed financially they depend on a rate-making process that is entirely co-opted by the Cuomo Administration.  If National Grid steps out of line there is no question that his Administration will hurt them as often and as hard as possible.

National Grid Interim Solution

Not surprisingly National Grid caved and agreed to lift the moratorium for two years.  According to a Utility Dive report:

National Grid has identified new solutions to supply consumer gas needs in downstate New York since announcing the moratorium, company spokesperson Domenick Graziani told Utility Dive in an email. These include a “previously unavailable source of short-term peaking supplies,” which he declined to provide further details on.

The utility also anticipates reductions in demand due to energy efficiency and demand response programs, a new compression project that will provide additional long-term capacity to portions of Long Island and a greater-than-expected number of customers interested in shifting to “non-firm” service — that is, customers who switch to oil or other alternative fuels when asked to by National Grid. These customers are charged differently from residential and other “firm” customers and can be penalized if they don’t make the switch, according to Graziani.

As noted, before, environmental development issues involve tradeoffs and that is also true for energy development.  In this instance the “previously unavailable source of short-term peaking supplies” turned out to be trucked compressed natural gas.  This option requires a facility where the gas is compressed outside of Long Island and loaded into trucks that transport it to a vaporization facility on Long Island where it can be vaporized and added into a pipeline for delivery.  Natural gas can be transported from the production well to the user entirely by underground pipelines.  While there are safety and environmental issues related to that relatively simple approach there is no question that the CNG truck option through New York City is much riskier and that environmental impacts will be greater when additional handling components are added to the transport from well to user.  Elsewhere this “virtual pipeline” is widely condemned so it is not surprising that the National Grid spokesman declined to provide further details.

This is another instance of Cuomo administration hypocrisy: on one hand basking in the limelight as a leader against climate change by prohibiting new fossil fuel infrastructure but on the other hand needlessly risking safety and increasing environmental impacts with a solution only intended for use as a stop gap in emergencies.  Mark my word if there is CNG truck accident it will be anybody’s fault but Cuomo’s.

National Grid Collaboration

At this time National Grid is conducting an outreach program as described below:

For National Grid, serving our 1.9 million natural gas customers across Brooklyn, Queens, Staten Island, Nassau, and Suffolk is both a privilege and a responsibility. New York has seen dynamic economic growth in the Downstate region, expanding residential and non-residential building space, and thousands of oil-to-gas conversions over the last 10 years. These factors have resulted in a substantial increase in the demand for natural gas, placing stress on our existing gas network and threatening National Grid’s ability to meet our customers’ needs when demand is at its peak. This leaves little room for error in the face of unplanned supply interruptions or other contingencies.

As part of the settlement agreement with New York State that lifted the moratorium on new gas connections imposed in May 2019, we are taking numerous measures to ensure we have sufficient supply for the winters of 2019/2020 and 2020/2021, including increasing reliance on compressed natural gas (“CNG”) trucking when needed to meet peak demand.

Beyond the next two winters, however, continued growth in demand for natural gas creates a challenge that must be addressed. There are multiple potential solutions, each with its own considerations regarding safety, reliability, environmental and community impact, and cost. National Grid has prepared and provided to New York State an extensive Long-Term Capacity Report to facilitate constructive dialog in the quest to answer the challenges presented by increasing demand. The purpose of this Summary Report is to distill the content of that full report for the general public so that all may understand the issues involved and the potential solutions to be considered.

We wish this to be a collaborative process and encourage feedback, either through the public meetings hosted by National Grid in March 2020 or by sharing your thoughts via our online survey at www.ngrid.com/longtermsolutions.  This site also provides access to the full report and a link through which you can share feedback directly with the New York State Department of Public Service.

In other words, National Grid is desperately trying to appease the Governor who wants to play to the no fossil fuel infrastructure maniacs he actively courts.  To do that they have come up with this stakeholder process that lays out the problem and offers a number of alternative approaches to the problem.  All the while trying not to favor any of them.

My Submittal

National Grid has developed a slick website that provides information on the long-term solution options.  Also included are links to the reports, schedule of events, ways to submit comments, and transcripts from their meetings.  I will describe the summary report and reproduce some of the comments I submitted in italics.

In the first section of the summary National Grid describes the problem.  In order to define how much natural gas will be used they use the “Design Day” concept.  This is the plan for peak demand conditions as the level of gas delivery needed to serve all of our customers during an extreme cold weather event. In the Downstate NY region Design Day is defined as a 24-hour period that averages 0° Fahrenheit in Central Park. They note that approximately 85% of this Design Day capacity is used to heat homes and businesses—keeping people warm on the coldest of days.

I frankly could only stand listening to the comments made during the public meeting for a brief period but in that time two people complained about the use of 0° Fahrenheit as the design day because temperatures have been warming.  I am frustrated that they spout off numbers without any consideration that they have no responsibility in the event that they are wrong.  Moreover, I am sure that the choice of the design day temperature is proscribed by some PSC order somewhere to prevent gaming the system so it is unlikely that changing the number could be considered.  Nonetheless, I accessed Central Park data to see whether that value is representative to prepare the following comment:

I am a meteorologist so I checked the representativeness of the 0° Fahrenheit in Central Park criterion.  I used the Northeast Regional Climate Center CLIMOD 2 data portal to download Central Park daily minimum, maximum and average temperature data from 1869 to the present.  Over that period the lowest daily average temperature was -5.5° Fahrenheit and there were six other days with daily average temperatures less than or equal to the 0° Fahrenheit design day criteria.  Note also that on December 30 and 31, 1917 there were two days with average temperatures below 0° Fahrenheit in the midst of a seven-day period with daily average temperatures less than 10° Fahrenheit. 

I also evaluated hourly meteorological data for two NYS Mesonet stations (Rush and York sites from December 29, 2017 to January 8, 2018.  In that period the temperature did not get above freezing and on January 6, 2018 the average temperature was 0.8° Fahrenheit.  Based on my meteorology background and despite the fact that the most recent date with an average zero degree design day temperature in Central Park was 15 February 1943, I believe the weather conditions that caused a 0.8° Fahrenheit average day near Rochester in 2018 support the continued use of the 0° Fahrenheit in Central Park criterion.  Because 85% of the Design Day capacity is used for heating this design day criterion may not be stringent enough and certainly should not be adjusted upwards.

National Grid discussed historical demand growth and made two projections, a high-demand and a low-demand scenario, to bound their analysis. In the high demand scenario, they assume that 80% of the State energy efficiency targets are achieved and in the low demand scenario they assume that 100% of the targets are achieved.  Based on the projections and factoring in low-carbon solutions they predict that they will need to close a gap of 400 MDth/day between customer demand and available natural gas supply with the existing system.

In contrast to National Grid’s optimistic projection that they will reduce demand growth by over 50% I disagree.  In the first place, New York has already had extensive energy efficiency efforts in place during the time that demand growth increased 2.4%.  As a result, the easiest and most effective, aka low hanging fruit, energy efficiency projects have already been implemented.  Any future reductions will not be as cheap or effective.  Another problem is that natural gas works well for heating and cooking so it is the preferred alternative.  The “no new fossil-fuel infrastructure” argument is fine in theory but when faced with having to choose a poorer alternative I believe there will be plenty of pushback from the majority of the population that wants the advantages of natural gas and is not as motivated as the environmental advocacy folks so vocal in this proceeding. 

 This is particularly true with regards to home heating electrification because the preferred retrofit alternative is air source heat pumps.  My personal experience with this technology has been bad and I think that is a major problem for those who want to electrify heating. The word on the street is more often negative than positive.  In my case I did research to try to understand the problem.  In my 9/16/2019 filed comments on Resource Adequacy Matters, Case 19-E-0530, I included an analysis in an appendix entitled Air Source Heat Pumps that demonstrated the fundamental flaw with this technology.  In short, when the temperature drops below 20° Fahrenheit there simply is not enough energy to be transferred and converted to heat for the technology to work.  In the event of a seven-day cold snap like the one that occurred around New Year’s Day 1918 anyone without supplemental heat would freeze and the increased electrical load needed to provide supplemental electric resistance heating could lead to unprecedented peak loads.  Claims that improved air source heat pumps will solve this problem are unwarranted absent repealing the laws of physics.

 As a result, I do not think that the low demand case in which 80% of the State energy efficiency targets are achieved is likely.  More realistically the low demand will be 50% of the targets and the high demand 80%.  I am confident that 100% of the State energy efficiency targets will not be met.

Another aspect of the National Grid demand reduction plan is to use three low-carbon solutions: renewable natural gas, hydrogen blending and power-to-gas, and geothermal heat pumps.  National Grid claims that “with proper funding and support, we anticipate that these programs can cover 15–35 MDth of the Downstate NY gas supply gap”.

      • Renewable natural gas (RNG) facilities use biomass—such as landfills, wastewater treatment, food waste, and livestock manure— as feedstock for producing gas. National Grid currently has two RNG sites in their Downstate NY region: one on Staten Island and another at Newtown Creek expected to come online in the winter of 2020. They believe there is even more opportunity to expand RNG in their Downstate NY region.
      • Natural gas supplies can be augmented by blending in hydrogen gas produced by splitting water into hydrogen gas and oxygen gas through the process of electrolysis. Hydrogen blends, in the form of town gas, were used in heating for decades, both in the US and other countries. National Grid has proposed a two-year study to assess optimal parameters for incorporating hydrogen in the Downstate NY region.
      • By transferring heat to and from the ground, geothermal heat pumps offer an attractive, low-carbon alternative for providing central heating and cooling. Based on the success of a demonstration project that connected 10 homes with shared-loop ground-source heat pump (GSHP) systems, National Grid is seeking to expand this program to 900 homes over the coming four years.

As shown below I don’t think these projects have much, if any value.  At the Trust Yet Verify blog, the author notes that in Flanders, they have the expression “calculating oneself rich” which means presenting one’s case in a too optimistic way that doesn’t accord with reality.  Had I been aware of that expression when I wrote the comments, I would have used it because it describes these projects well.

Renewable natural gas is produced from anerobic digesters.  The New York State Energy and Research Development Authority (NYSERDA) has an integrated data system that provides operational data on DERs installed in New York including anerobic digesters.  At the current time there are 38 facilities with a rated electrical output of 22,263 kW.  The majority (29) of these digesters are located on dairy farms.  Eight are at waste water treatment plants and one is located at the Saranac brewery.  Only three of these have output greater than 3 MW and the majority are rated between 100 and 500 kW.  It is telling that NYSERDA rates these by electrical output because that indicates that the methane is primarily used to generate electricity. The National Grid report states that the Newtown Creek WWTP will be capable of producing 1.0 MDth/day and that they are “connected to a 1.6 MDth/day plant in Staten Island”.  Presumably during peak natural gas demand periods, the plan could be to divert the methane to the gas system rather than using it for generating electricity.   I believe that this option has limited potential simply because there are not many possible sites where it could be deployed.

 National Grid has proposed a two-year study to assess optimal parameters for incorporating hydrogen in the Downstate NY region.  In other words, this is more of a concept than a proven technology in today’s energy landscape.  Cynic that I am I consider this more wishful thinking than an actual plan.

 Ground source heat pumps work but the implementation logistics of trying to install meaningful amounts even, if the geology was favorable, in the service territory for this proceeding precludes this as a viable contributor to meaningful load reductions.

The meat of the report is the description of ten distinct options for closing the gap of up to 400 MDth/day between natural gas demand and supply over the next 15 years.  National Grid is careful to state that they do not propose a “best” or “most desirable” solution and pragmatically observe that the ultimate approach ultimately will likely be a portfolio including two or more of these options.  As noted earlier they have the responsibility to provide natural gas and the politicians who demand solutions that are driven by an agenda will disavow any culpability if they don’t work.

National Grid proposes ten projects in three categories.  They propose three large-scale infrastructure projects: an offshore liquified natural gas (LNG) deep water port, an LNG import terminal, and the Northeast Supply Enhancement pipeline project.  There are four distributed infrastructure projects: a peak LNG facility, LNG barges, the Clove Lakes Transmission Project, and the Iroquois enhancement compression project.  There are three no-infrastructure projects: incremental energy efficiency, demand response, and electrification.

The summary report concludes with an assessment of the relative attractiveness of the proposed options with respect to each of the evaluation criteria to “help our customers and the general public evaluate the options”.  I reviewed and commented on the scoring but will not include all my comments here.  In brief, I think that by necessity National Grid scored the NESE pipeline lower than they should have to be “Cuomo correct”.  For example, they gave all the large infrastructure projects the same safety score. I disagree because in most things related to safety simpler is better.  Both LNG alternatives are significantly more complicated because they involve storage and regasification components.  Moreover, they both require marine transport which compared to a pipeline has to be less safe.  I suggested that the scores for those projects be dropped relative to the pipeline.

I did include a comment on the environmental scoring because I have a lot of experience with environmental impact analyses and I disagree with the environmental scoring.  Frankly the evaluation criteria in the report in Table 19 don’t help much.  Greenhouse gas (GHG) emissions is one criterion used.  I don’t see how the compression, regasification, and transportation components of the LNG options would not mean higher GHG emissions. All the other GHG emissions intensity values are the same for all three options.  As a long-time air quality meteorologist, I struggle to find air substantive air quality problems with natural gas use as compared to other dispatchable sources of energy but I believe that air pollution emissions from LNG ship transportation are larger than pipeline compressor stations.  I can accept that the potential impact from construction is higher for pipelines but once in place the operation impacts are likely lower.   I assume that environmental risk relates to the ecological impact.  The fact is that there have to be pipelines from the well pads to the ports for the LNG options.  Expanding pipeline capacity to bring the needed natural gas directly to the City is simpler, safer and less prone to problems.  I cannot comment on the potential of any option to support New York’s decarbonization goals because there is no plan to implement those goals, only targets.  The politicians that enacted legislation with the goals made a major mistake putting the cart (the aggressive targets) before the horse (figuring out what was feasible).  In conclusion I would add another cell to the environment scoring bar to the pipeline option because it is significantly better than the other two.

 Two of the distributed infrastructure projects, Clove Lakes Transmission Project and the Iroquois enhancement compression project, are simple upgrades that will provide more capacity.  I see no reason why they should not be included.

The no-infrastructure projects all qualify as “Cuomo correct” virtue signals.  Because I don’t believe that the existing energy efficiency targets will be met, I reject out of hand the idea that even more substantive energy efficiency could be implemented.  Demand response is a favored component of “smart grid” advocates for shaving summer peak demand.  However, that is not a solution here because the expectation is that the load peak will shift to the winter.  I believe that there are significant differences between cooling peak loads and heating peak loads.  Most importantly, there is a hot period diurnal cycle that means that shifting between uses (A/C is not as large a component of total load as heating is to the total load) and times (when the sun is down there is no direct solar heating and cooling load needs drop significantly) is possible.  The question boils down to this: when 85% of your load is heating and the heating load does not vary much how can you shift the load?  I for one would not accept a thermostat that someone else controls for heating my home.  I do not think I would be an exception.

The third no infrastructure project was heating electrification using cold-climate, electric heat pumps.   I think that widespread implementation of cold-climate heat pumps will be a mistake as I noted in my resource adequacy comments. Bottom line is when you it is really cold and you really need heat they don’t work simply because there isn’t enough energy available. In addition, you are just shifting the problem onto the electric side.  Given that electric transmission is more susceptible to interruption than pipelines I think electrification is a less resilient option.

 The only positive that can be said about these no-infrastructure projects is that they are consistent with the Climate Leadership and Community Protection Act (CLCPA) expected infrastructure.  Unfortunately, we are guessing at what the state plans to do because they set targets without figuring out if they could be met much less how they would be met.  Moreover, I don’t think that the implementation timing for these kinds of projects will be consistent with timing for when the gap between demand and supply needs to be reduced.

National Grid points out that “Creating a comprehensive solution requires looking at how different options can work together to solve the gap between demand and supply”. Then they listed three possible approaches.  I was disappointed that they did not include the NESE pipeline large-scale infrastructure and the two distributed infrastructure pipeline projects as an option. I commented:

It did not get much attention in the documentation but the solution to the fact that current pipeline capacity cannot support today’s peak load demand is to truck compressed natural gas from somewhere on the other side of the supply constraint to somewhere on the inside of the supply constraint.  In my evaluation of the difference between pipeline and LNG infrastructure options I argued that the added safety and environmental effects of marine transport relative to pipelines made pipelines a superior choice.  However, the safety and environmental effects of trucks are greater than those of marine transport.  All three solutions rely on incremental Energy Efficiency, Demand Response, and Electrification to reduce demand and remove the need for CNG trucking. As a result, I could never support any of these solutions simply because it is likely that the need for CNG trucking will remain longer.

The first combined option, build out Large-Scale Infrastructure, capable of almost fully meeting projected needs claims that if construction is not completed before 2021/22, incremental Energy Efficiency (EE), Demand Response (DR) and Electrification would be required to reduce demand and meet customer needs. CNG trucking would be discontinued once the infrastructure is completed. Any shortfall in meeting demand reduction targets would lead to restrictions on new customer connections until the infrastructure is completed.  Incremental EE, DR and electrification won’t be implemented in this time frame – no way no how.

The second combined option, combine distributed infrastructure solutions with incremental No-Infrastructure solutions fails because all of them need to be implemented to meet projected gap so it will be necessary to combine one or two of these options with additional demand reductions achieved through EE, DR, and Electrification to fully meet needs. National Grid admits CNG trucking would remain in place unless demand reduction targets are exceeded, and any shortfall in meeting those targets would lead to restrictions on new customer connections.  Given that I think there is no way the demand reductions will be met CNG trucking remains in use for longer.

The final combined option, fully rely on a portfolio of incremental no- Infrastructure solutions, will undoubtedly be the preferred alternative of the energy innumerate and, thus the king of innumeracy Governor Cuomo.  Because it is unlikely that demand reduction targets will be exceeded, CNG trucking will remain in place, and any shortfall in meeting such demand reduction targets will lead to restrictions on new customer connections.  Somehow, someway when this fails to meet the needs, Cuomo will be the first to blame National Grid.

 Conclusion

National Grid states: “Our hope is that by helping our customers understand the possible approaches for addressing these concerns, they will provide feedback to help guide future decision making.”  Let me translate that for anyone unversed on current New York State energy policy.  National Grid is a business and in order to succeed financially they depend on a rate-making process that is entirely co-opted by the Cuomo Administration.  This report and the extensive outreach program, is a necessary part of doing business but it is just window dressing.  The ultimate decision will not be made to balance costs and risks against benefits to customers.  Whatever the facts say about energy reliability, effects on health, safety risks and costs, the final plan will be a politically driven decision made at the highest level of the Administration based on whatever is determined to best garner support from Cuomo’s political base.

This is another instance of Cuomo administration hypocrisy: on one hand basking in the limelight as a leader against climate change by prohibiting new fossil fuel infrastructure but on the other hand needlessly risking safety and increasing environmental impacts with an interim solution only intended for use as a stop gap in emergencies.  There are three pipeline alternatives that should be the clear choice as less risky, safer and minimal environmental impacts.  The other long-term infrastructure alternative solutions include several options that would continue to use more complicated and thus more risky approaches.  The obligatory no-fossil fuel infrastructure options could, in theory, provide enough energy needed to meet the design day criteria but two of the options (electrification and demand response) have never been implemented on the scale necessary and expecting to get even more energy efficiency reductions runs counter to observed results.  The question is whether the Cuomo administration will risk safety and reliability by requiring the use of those risky approaches to cater to people who will pay no price for being wrong.

Of course, the underlying argument that forms the basis of this entire charade is that climate change is an existential threat.  I believe that is a flawed argument.  New York’s politicians constantly claim that their energy policies have scientific support and they typically lean on the popular conception of an overwhelming consensus that the observed warming is necessarily bad.  In reality, most qualified scientists believe humans are causing some warming, but only a minority are very concerned about it.  The catastrophic impacts touted as proof that something needs to be done invariably rely on a future emission projection scenario that is so unlikely that it is inappropriate to use for policy decisions.  Finally, if the problem is global warming then it logically requires a global solution.  The reality is that New York’s possible impact on global warming reduction is too small to measure and would have effects that could not conceivably alter any of the purported catastrophic impacts.