Maine Climate Council legislation enacted

Newly enacted Maine legislation establishes the Maine Climate Council to advise the Governor and state Legislature on ways to mitigate the causes of, prepare for and adapt to the consequences of climate change, and calls for significant reductions in the state's overall greenhouse gas emissions.

On June 26, 2019, Maine Governor Janet Mills signed into law An Act to Promote Clean Energy Jobs and To Establish the Maine Climate Council. One set of provisions in the new law establishes a requirement that Maine reduce gross annual greenhouse gas emissions -- to at least 45% below the 1990 gross annual greenhouse gas emissions level by 2030, at least 80% below the 1990 gross annual greenhouse gas emissions level by 2050, and on track to meet the 2050 target by 2040. The law requires the Department of Environmental Protection to adopt rules to ensure compliance with these levels, and authorizes the Department of Transportation to adopt similar rules.

Crucially, the rules must prioritize greenhouse gas emissions reductions by sectors that are the most significant sources of greenhouse gas emissions, as identified by the United States Energy Information Administration and in the department's biennial reports, taking into account gross greenhouse gas emissions reductions achieved by each sector since 1990 and the cost-effectiveness of future gross greenhouse gas emissions reductions by each sector. While the electricity sector has largely been decarbonized, transportation and heating lag significantly. Maine's transportation sector was responsible for 53 percent of the state's greenhouse gas emissions in 2017, with heating taking the next greatest share. Meanwhile, electricity generation in Maine accounted for just 9 percent of the state's greenhouse gas emissions.

The law also creates a 39-member Maine Climate Council, with a subcommittee for scientific and technical matters and various working groups. The Council must meet at least every three months, report annually to a legislative committee, and prepare an updated climate action plan by December 1, 2020 and every four years thereafter. The climate action plan must include a clean energy economy transition plan.

 

US EPA sets renewable fuel standard for 2019

U.S. environmental regulators have established renewable fuel standards for 2019, calling for a 3% increase in renewable fuel volumes over 2018, but have continued to waive statutory requirements targeting even larger volumes of renewable fuel.

Congress created the Renewable Fuel Standard or RFS program through the Energy Policy Act of 2005, and expanded the program through the Energy Independence and Security Act of 2007. Administered by the U.S. Environmental Protection Agency, the RFS requires a certain volume of renewable fuel to be used in transportation (motor vehicles and jets) and heating. Refiners and importers of gasoline or diesel, along with other market participants like fuel producers and exporters, track and trade renewable fuel credits called Renewable Identification Numbers or RINs.

The RFS includes four categories of renewable fuel: cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. By statute, Congress prescribed specific volumes of these four categories of renewable fuel for each year through 2022, and required the EPA to set RFS volume requirements annually based on these statutory targets. The statute also allows the EPA Administrator to waive these volumetric requirements, based on a determination that implementation of the program is causing severe economic or environmental harm, or based on inadequate domestic supply.

On November 30, 2018, the EPA issued its final rule for the 2019 RFS program. The 2019 final rule sets the total U.S. renewable fuel volume requirements for 2019 at 19.92 billion gallons, including 4.92 billion gallons of advanced biofuel, 2.1 billion gallons of biomass-based diesel, and just 418 million gallons of cellulosic biofuel. The rule also sets a 2020 volume requirement for biomass-based diesel of 2.43 billion gallons.

The EPA noted that "the market has fallen well short of the statutory volumes for cellulosic biofuel, resulting in shortfalls in the advanced biofuel and total renewable fuel volumes." Based on this observation, EPA exercised its waiver authority to finalize the cellulosic biofuel volume requirement at the level EPA projects to be available for 2019. This is consistent with EPA's past practice, through which it has set the cellulosic biofuel requirement lower than the statutory volume for each year since 2010.

NECA Fuels Conference 2018

Northeast Energy and Commerce Association holds its 2018 Fuels Conference on September 27, 2018, in Marlborough, Massachusetts.

NECA is New England's oldest and most broadly-based, non-profit trade association serving the competitive electric power industry.

The program for NECA's 2018 Fuels Conference features diverse perspectives on fuels including natural gas (pipeline and LNG), biogas, oil, and other fuels, and in their uses such as electric power generation, heating, and transportation. Speakers will share their outlook for U.S. and New England natural gas markets, address the trend towards electrification of sectors like heating and transportation, explain the portfolio of fuels used to heat and power the region, and discuss what consumers can expect from lawmakers, regulators, and energy providers.

Registration is available through NECA's website.

Maine Gov. LePage's 2018 State of the State and energy policy

Maine Governor Paul R. LePage delivered his final State of the State address this evening. Here's a recap of some of his remarks on energy policy in previous speeches of that sort.

• In 2012, Governor LePage described Maine’s high energy costs as "one of the largest inhibitors, if not the biggest obstacle to job creation." He advocated an energy policy encompassing "all forms of energy."
• Energy did not appear in his 2013 speech, according to a transcript provided by the Portland Press Herald.
• In 2014, Governor LePage noted that "heating and electricity costs remain a major obstacle," with homeowners spending nearly double the national average on heating, and high electricity costs posting challenges to attracting business. He described efforts to expand natural gas pipeline capacity from Pennsylvania, and to connect to clean energy resources in Quebec.
• In 2015, Governor LePage used his speech to argue for lower electricity rates and home heating costs, as well as changes to Maine’s renewable energy policies.
• In 2016, Governor LePage released his speech in the form of a letter to the state legislature. As in previous speeches, his 2016 letter mentioned energy issues as a focus for -- or obstacle to -- economic development. Arguing that Maine's electricity prices are not competitive, he criticized legislative mandates supporting "long-term contracts for above-market rates." He also called for expansion of linear infrastructure like natural gas pipelines into New England and electric transmission lines to hydropower resources in Canada.
• Last year, he returned to delivering the speech to the legislature orally. His 2017 address included a section on energy matters, in which he criticized the Public Utilities Commission's decision to amend its rules governing net energy billing. He called upon lawmakers to agree to lower energy costs, to lower carbon dioxide levels in the most cost-effective manner, and to reduce our demand for oil.

Addendum as of 9 PM: WMTW has posted a transcript of Governor LePage's 2018 State of the State speech on its website, as prepared. That draft covers topics including "skyrocketing property taxes," Medicaid expansion, and fiscal responsibility. It calls for increased investment in Maine and workforce development. It proposes bonds focused on commercializing technologies, as well as on research and development, saying, "We must invest in commercialization as we do in research." However the prepared remarks did not mention energy, nor does it directly reference energy policy.

Nevertheless, the Bangor Daily News reports that his remarks as delivered did address energy, calling for lower energy prices.

Declining demand for residual fuel oil?

Global demand for residual fuel oil is expected to decline, according to the U.S. Energy Information Administration.

A Maine State Ferry Service boat near Vinalhaven, Maine.

Residual fuel oil is basically what's left after gasoline and other lighter hydrocarbons are distilled from crude oil.  Industry recognizes several grades of residual fuel oil, including No. 5 (used in steam-powered vessels in government service and inshore powerplants) and No. 6 (used for the production of electric power, space heating, vessel bunkering, and various industrial purposes.) 

Because residual fuel oil is composed of the residue left after distillation, it can contain large amounts of contaminants such as sulfur, nitrogen, or heavy metals.  As environmental regulations limit emissions of pollution, residual fuel oil can become less attractive (or more expensive) as a fuel source for electric power generation or marine transportation.

The EIA notes declining global demand for residual fuel oil since the mid-1980s.  In a brief report, EIA projects that the electric power and heating sectors will likely be responsible for continuedlarge reductions in residual fuel oil demand.

EIA also points to tighter international emissions regulations for the marine transport sector.  Rules under Annex VI of the International Maritime Organization through the International Convention of Pollution from Ships (MARPOL, or Marine Pollution) require global controls on emissions of sulfur and nitrogen oxides.  While residual fuel oil with a sulfur level no more than 3.5% can be used to meet the MARPOL requirements throughout most of the oceans, stricter limits apply to designated emission control areas like the North Sea, the Baltic Sea, and coastal areas in North America and the Caribbean Sea.  These strict limits effectively require 0.1% sulfur content residual fuel oil or lower in the covered emission control areas.  EIA suggests that strategies for MARPOL compliance will likely include low-sulfur fuels (marine gasoil or intermediate fuel oil, or even liquefied natural gas or LNG), or using scrubbers or other technology to remove sulfur post-combustion from the exhaust.

At the same time, EIA notes that some developing countries' power sectors may rely on residual fuel oil as a "transitional fuel" if they are "more sensitive to price and less sensitive to environmental and health implications."

Propane inventory in US sets new record

As the U.S. prepares for another winter, government records show stockpiles of propane have reached record levels.  What's in store for propane markets?

Propane is a hydrocarbon gas liquid used mostly for space heating and as a feedstock for other chemicals like ethylene and propylene, as well as for drying agricultural crops.   Natural gas processing plants and petroleum refineries are the two largest sources of propane. 

The U.S. Energy Information Administration has collected weekly propane inventory data for 22 years.  According to its most recent report, U.S. inventories of propane and propylene reached 97.7 million barrels as of September 11.  EIA describes this as the highest level of propane inventory on record.

What explains the buildup of propane in storage?  Record high propane inventories are partly due to seasonal dynamics in supply and demand.  Demand for propane for heating and agricultural uses is highly seasonal, while demand for propane as a chemical feedstock lacks strong seasonality.  Over recent years, propane and propylene stocks are typically drawn down during the winter heating and agricultural drying season (October to March), and then rebuild from early April through September. 

This year, EIA data shows inventories began increasing in mid-February.  EIA notes that domestic consumption is relatively flat, but found increases in propane production.  In particular, EIA's latest data shows that natural gas processing plants are producing a greater share of propane than in previous years (rising from 62% in 2008 to 76% in 2014), while propane production at refineries has remained relatively constant.

Energy Dept 2015 Quadrennial Technology Review

The U.S. Department of Energy has released its second Quadrennial Technology Review, a 505-page report describing the nation’s energy landscape and the dramatic changes that have taken place over the last four years.

The 2015 Quadrennial Technology Review examines the current status of energy technologies and research opportunities to advance them in addition to key enabling science and energy capabilities.  The updated report comes four years after the Energy Department's original Quadrennial Technology Review, issued in 2011.

The 2015 report notes, "The last four years have been defined by dramatic change in the nation’s energy landscape." Huge growth in domestic production of oil and natural gas has made the U.S. the world leader in combined oil and natural gas production for the last three consecutive years. Wind energy capacity has increased by 65 percent and wind energy generation has nearly doubled; solar capacity has increased 9 fold and solar photovoltaic generation over tenfold; old, inefficient power plants are being replaced by cleaner, more efficient ones; transportation efficiencies continue to improve.

It also highlights the Energy Department's view of "the most promising research, development, demonstration, and deployment (RDD&D) opportunities across energy technologies to effectively address the nation's energy needs. Specifically, this analysis identifies the important technology RDD&D opportunities across energy supply and end use in working toward a clean energy economy in the United States."  Individual chapters focus on specific technology types, including grid modernization, clean power, buildings, manufacturing, fuels, and transportation. 

The report also draws some overarching conclusions:

• Energy systems are increasingly interconnected through the internet and other technologies, which could enable new paradigms for cost and emissions reduction. 
• Increasingly diverse options are available to meet the nation’s energy needs is increasing, creating a more dependable and flexible energy system for consumers.
• Substantial energy efficiency opportunities remain untapped.
• More research and development could lead to innovation and breakthroughs in how to deliver clean energy cheaper and faster.

U.S. renewable energy share highest since 1930s

In 2014, about 9.8% of the total energy consumed in the U.S. came from renewable energy sources, according to the U.S. Energy Information Administration.  This represents the highest share of total domestic energy supply coming from renewable resources since the 1930s.

Prior to the growth of production and distribution networks for petroleum and other fossil fuels in the early 20th century, many homes used wood for heating as did industry.  This reliance on renewable biomass historically satisfied a significant portion of the total domestic energy demand.  But technological advances and the birth of the electric power industry led to greater use of other fuels.  As a result, the EIA reports that renewable resources' share of total domestic energy supply peaked in the 1930s, then declined.

But recent growth in U.S. renewable energy use has brought the country's energy mix back to nearly 10% renewable.  Indeed, from 2001 to 2014, renewable energy use grew an average of 5% per year, largely through increased use of wind, solar, and biofuels:

• Wind energy grew from 70 trillion Btu in 2001 to more than 1,700 trillion Btu in 2014.
• Solar energy (solar thermal and photovoltaic) grew from 64 trillion Btu to 427 trillion Btu.
• The use of biomass for the production of biofuels grew from 253 trillion Btu to 2,068 trillion Btu.

According to EIA, inn 2014, slightly more than half of all renewable energy was used to generate electricity.  Renewable energy accounted for 13% of energy consumed within the electric power sector, the highest renewable use attributable to any sector.