EPA proposes methane rules for oil and gas

The U.S. Environmental Protection Agency has proposed a suite of new and modified rules affecting the oil and natural gas industry.  Collectively, the proposed rules released on August 18 are designed to reduce methane emissions from oil and natural-gas drilling activities.

As the world tackles climate change and greenhouse gas emissions, methane plays a dual role.  As the key constituent of natural gas, methane offers society an abundant and efficient fuel that can displace reliance on costlier and more carbon-polluting fuels like coal and oil.  At the same time, methane in the atmosphere can act as a greenhouse gas itself, with a global warming potential more than 25 times greater than that of carbon dioxide.  According to EPA, methane is the second most prevalent greenhouse gas emitted in the United States from human activities, and nearly 30 percent of those emissions come from oil production and the production, transmission and distribution of natural gas.  At the same time, U.S. production of oil and natural gas has increased, giving the sector important economic and domestic security impacts.

To address this dynamic, yesterday EPA proposed a series of rules affecting the oil and natural gas sector.  EPA has described the new rules as a "key component" of the Obama administration's Climate Action Plan.  They follow a January announcement of a new goal to cut methane emissions from the oil and gas sector by 40 to 45 percent of 2012 levels by 2025.  Under the administration's view, a key tool supporting that goal is the implementation of standards for methane and volatile organic compound (VOC) emissions from new and modified oil and gas production sources, and natural gas processing and transmission sources.

The rules EPA proposed yesterday include such standards, along with supporting materials.  EPA has described its collective proposal as "a suite of commonsense requirements that together will help combat climate change, reduce air pollution that harms public health, and provide greater certainty about Clean Air Act permitting requirements for the oil and natural gas industry."

EPA's proposed package of rules includes:

• Updates to New Source Performance Standards (NSPS) (PDF, 591 pages) setting methane and VOC requirements for additional new and modified sources in the oil and gas industry. 
• Draft Control Techniques Guidelines (PDF, 310 pages) for reducing VOC emissions from existing oil and gas sources in certain ozone nonattainment areas and states in the Ozone Transport Region.
• A Source Determination Rule (PDF, 54 pages) to clarify EPA’s air permitting rules as they apply to the oil and natural gas industry.

According to EPA, the proposed rule will reduce methane emissions by between 340,000 and 400,000 short tons in 2025,  on top of reductions of 170,000 to 180,000 tons of other VOCs and 1,900 to 2,500 tons of hazardous air pollutants.  But industry trade group American Petroleum Institute has called additional regulation "unnecessary for reducing emissions."  Debate over EPA's proposal is likely to be vigorous, before EPA as it considers its proposed rulemaking, as well as before Congress and possibly even federal courts, before the dust settles.

EPA will take public comment on the proposals for 60 days after they are published in the Federal Register.  According to the January announcement, the administration expects the final rule will follow in 2016.  This action on oil and natural gas production follows closely on the heels of EPA's adoption of the Clean Power Plan rules, regulating carbon emissions associated with the electric power industry.

Maine funds available for anaerobic digestion

The state of Maine has announced funds available to help farmers reduce their agricultural impacts to water quality. State agencies have made up to $3 million available to enable low-interest loans to support eligible projects. These projects may include developing anaerobic digesters, as well as improved roof runoff structures, water and sediment control basins, composting facilities, and irrigation system water conservation.

Anaerobic digesters enable the conversion of organic materials such as manure and other agricultural wastes into biogas. Biogas, largely composed of methane, can be used as a fuel source comparable to natural gas. For example, it can be used to power an electric generator and thus to produce renewable electricity – all while making efficient use of manure and agricultural wastes that could otherwise harm water quality.

Two anaerobic digesters at Stonyvale Farm in Exeter, Maine.

Under the program, farmers will be able to borrow up to $450,000 at a fixed interest rate of 2 percent for up to 20 years to develop qualifying projects. The opportunity represents a partnership between the Maine Departments of Environmental Protection and Agriculture, Conservation and Forestry, the Finance Authority of Maine and the Maine Municipal Bond Bank. The initial seed money comes from the DEP-administered Clean Water State Revolving Fund. Since 1989, that fund has provided over $650 million in low-interest loans for water quality projects, primarily hosted by publicly owned wastewater treatment facilities.  For the newly-announced program, the fund will transfer up to $3 million to FAME, which will finance the loans.

For more information on the opportunity, contact either participating department, or consult a professional experienced with anaerobic digestion and state-funded incentive programs. The Preti Flaherty team advises clients on both the development of anaerobic digestion facilities and participation in government-backed loan programs. For more information, please contact Todd Griset at 207-623-5300.

Maine considers renewable feed-in tariff

The Maine legislature is set to consider a bill that would create a feed-in tariff for renewable energy.  Maine already has a renewable portfolio standard and other incentives for investment in renewable power production.  Will Maine add a feed-in tariff to the mix?

The Maine State House, home to a consideration of feed-in tariffs.

 A feed-in tariff is a policy tool intended to encourage investment in renewable energy technologies.  Feed-in tariffs typically offer long-term contracts under which utilities purchase power fromrenewable energy producers at predictable prices, often based on the cost of generation of each technology.  Where feed-in tariffs exist, developers of renewable energy projects gain certainty about the revenues their projects will create.  This certainty helps developers secure the financing they need to build projects.

A bill proposed by Maine state senator Christopher Johnson would require the state Public Utilities Commission to establish a renewable energy resources feed-in tariff program.  An Act To Establish the Renewable Energy Feed-in Tariff, also known as LD 1085, has the stated purpose of encouraging the rapid and sustainable development of renewable energy resources and technology for environmentally healthy generation of electricity.  Like feed-in tariffs in other jurisdictions, it would require that utilities purchase renewably produced electricity from all qualified suppliers.  It would have the Public Utilities Commission set the rate that electric utilities must pay for such power at a level sufficient to provide revenues to operate and to attract necessary capital and investment for small renewable electric generators.

Qualified suppliers would be limited to certain small renewable electric generators.  As defined in the bill, such generators would be limited to systems up to 500 kilowatts in size, that are majority owned by a person or entity that owns less than 500 kilowatts of electricity generating capacity in Maine, and that use solar photovoltaic panels or solar thermal or concentrating solar systems, generators fueled by methane from sewage treatment facilities, landfills or agricultural waste, generators fueled by combustion of biomass, tidal power projects, or wind energy.

Existing Maine law provides incentives for the generation of electricity from renewable resources.  Like most states, Maine has a renewable portfolio standard which requires electricity suppliers to source a specified portion of their power from renewable generators.  Maine also has a community-based renewable energy pilot program which functions like a feed-in tariff for eligible projects.  A feed-in tariff would add another incentive to build relatively small (non-utility-scale) projects.

LD 1085 has not yet been scheduled for a public hearing.  It will likely come before the Joint Standing Committee on Energy, Utilities and Technology later this spring.

August 25, 2010 - tidal energy; sewage anaerobic digestion

What is the first federal facility anywhere to use tidal power as an energy source?  A Coast Guard station in Eastport, Maine is claiming the title with its project to install Ocean Renewable Power Company's tidal energy turbine and generator.  ORPC installed a 60 kW tidal turbine and generator in March 2010.  Last week, ORPC announced that the unit had commenced powering the Coast Guard's 41' utility boat with electricity of a quality compatible with being grid-tied.  Yesterday, in Eastport, there was a celebration of the project's successes and promises.

Lewiston and Auburn, two of Maine's largest sister cities on either side of the Androscoggin River, share sewer treatment services through the Lewiston-Auburn Water Pollution Control Authority.  Currently, the plant treats 12.7 million gallons of sewage per day.  This process results in two major products: clean water, and the solids that (in technical ways, if not semantically) make up the difference between sewage and water.  The authority mixes about half of the solids with wood to make a marketable compost, but has to pay to dispose the remaining solids.  Now, the authority is considering installing an anaerobic digestion plant.  This plant would have two major effects.  First, it would significantly reduce the mass of solids requiring disposal -- up to a 40% reduction.  Where that mass would go produces the second major effect of the plant: through anaerobic digestion, combustible gas (primarily methane) is produced from the solids.  This gas can be burned in a gas turbine, which can be tied to a generator.  For Lewiston-Auburn, gas production is estimated at 170,000 cubic feet of methane per day; the authority estimates that it can produce 2/3 of its own electricity requirements from this fuel stream. The cost?  $16.6 million.  On September 8, the board of the authority will vote on the project.

The public debate over wind energy's merits continues with this letter to the Lewiston Sun Journal critical of developing wind near small towns and mountains in Maine.  Claims made include "they will not produce enough energy to make a dent in our needs, but it will make some investors very rich" and "the energy will be sold out of state".

Copper theft is an issue in Maine.  Copper is valuable for its scrap value.  Thieves strike utility infrastructure as well as homes.  Here's a news report of a thief busted for stealing the copper piping from a house listed for sale.