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New West Daily Roundup for June 22, 2016

Today in New West news: federal judge strikes down federal fracking regulation, Montana Governor unveils plan for state’s “energy future,” and an update on the proposed Utah coal port.

According to Bloomberg, Wyoming-based District Court Judge Scott W. Skavdahl has blocked a rule proposed by the Interior Department and the Obama administration to regulate hydraulic fracturing on public lands. We previously reported that Skavdahl had put a temporary hold on the new fracking rules, on the grounds that the Bureau of Land Management and the Environmental Protection Agency had no authority to regulate fracking. Skavdahl added that the BLM’s proposed regulations were redundant, since states already regulated fracking.

What makes Skavdahl’s latest ruling so interesting is it represents, in essence, the Obama administration’s last attempt at passing sweeping environmental regulations before he leaves office. While Bloomberg notes the ruling will likely be appealed, these fracking regulations join the EPA’s Clean Power Plan in legal limbo. Predictably, the Interior Department was displeased with the outcome. From Bloomberg:

The Interior Department in a e-mailed statement called the ruling “unfortunate,” because “it prevents regulators from using 21st century standards to ensure that oil and gas operations are conducted safely and responsibly on public and tribal lands.”

The regulation has never gone into force, amid a legal challenge from oil industry groups and four states — Colorado, North Dakota, Utah and Wyoming — that argued the measure duplicated local drilling requirements and boosted the cost of extracting oil and gas from federal lands.

On Tuesday, Skavdahl said the fracking rule exceeded the Bureau of Land Management’s powers.

The legal question is “not whether hydraulic fracturing is good or bad for the environment,” Skavdahl said, but whether Congress gave the Interior Department the power to regulate it.

“Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing,” Skavdahl wrote. “The BLM’s effort to do so through the fracking rule is in excess of its statutory authority and contrary to law.”

[…]

The fracking rule would have forced companies to disclose the chemicals they pump underground and seal off waste water in storage tanks. Although it would apply only to acreage under the BLM’s control, supporters argued it set a model for states to follow as they regulate drilling on private land.

Up in Montana, ahead of his 2016 reelection bid, The Office of Governor Steve Bullock released a new blueprint detailing the Treasure State’s ambitions regarding energy generation in the future. The report, entitled “Montana Energy Future: The Future of Montana Electricity,” takes a look at the state as a whole, pinpointing needs and concern by region, and discussing how to get more wind and solar into the grid without cutting out coal cold turkey. From a Governor’s Office press release:

“Montanans should determine our energy future,” said Governor Bullock. “That’s why today I’m announcing a blueprint for a balanced and responsible plan that provides good-paying jobs for Montanans, strengthens our rural communities and supports local schools, while safeguarding our quality of life.”

Bullock in recent weeks met with wind energy developers, energy efficiency advocates, small businesses, coal workers and solar installers.

“Done right, we can drive economic growth and create and maintain good-paying jobs across Montana,” Governor Bullock continued. “We can improve our traditional base of energy generation while sparking a new generation of clean technology business, moving us toward more renewable energy, and encouraging innovation, savings, and energy efficiency for homes and for businesses.”

While you can read the report in full by clicking the link above, below is a quick breakdown of the plan’s proposals:

• Wind: open markets for Montana-generated energy, protect Montana’s Renewable Portfolio Standard.
• Solar: double solar development by 2025; develop solar on tribal lands with the cooperation of tribes, utilities, co-ops, and the U.S. Department of Energy; spur solar development by private industry, better finance solar development.
• Coal: explore carbon capture technologies, advocate for enhanced oil recovery, tax credits and loan guarantees for “low carbon technologies,” extend the future of plants like Colstrip.
• Energy Efficiency: reduce electric energy use by 10 percent by 2025 without hindering economic growth, make weatherization less difficult for low-income families.
• Water: upgrade existing dams, renegotiate Columbia River Treaty with Canada.

Finally, over in Utah, we’ve been following the back and forth between California and Utah over a proposed deep-water port offshore of Oakland, which would be dedicated to shipping Utah coal and likewise minerals. Environmental groups in both states have decried the measure, with Utah critics especially leery of the price tag, which would come from federal mineral royalties—royalties used to fund local public works projects. All told, if created, the port would cost $53 million. According to the Salt Lake Tribune, a coalition of environmental groups penned a letter to federal authorities, saying the Legislature’s actions warrant a federal probe into the proposal:

The groups allege Utah leaders are brazenly circumventing common-sense limits on how the Utah Permanent Community Impact Fund Board, or CIB, is to administer such revenue. This past legislative session, lawmakers passed a bill authorizing the CIB to trade its federally sourced dollars with state dollars that would be targeted to “throughput” projects geared toward moving Utah products to distant markets.

While the measure was billed as a way to boost the economic prospects of rural Utah, critics call it a “money-laundering scheme” to subsidize Bowie Resource Partners, Utah’s largest coal producer, at the expense of the environment.

“This appears to represent the worst kind of corporate cronyism that members of the Utah Legislature are usually so fond of rallying against,” Joshua Kanter, board chairman of the Alliance for a Better Utah, said in a news release. “Diverting these funds is not only improper, but will leave these communities without the money they really need to help them retool their economic base as the coal industry continues its decline. There has been no showing that there is a shortage of available port capacity for Utah coal or that exporting Utah coal to Asia makes economic sense, either of which is easily addressed by the free market without this shell game and abuse of the public trust.”

The alliance joined HEAL Utah, Grand Canyon Trust, Earthjustice, Sierra Club and other groups in petitioning the Justice and Interior departments to assess the legality of Utah’s plan, which is structured as a loan to four coal-producing counties. Sevier, Sanpete, Carbon and Emery counties would invest $50 million in the proposed Oakland Bulk and Oversized Terminal, proposed for an former Army base on Oakland’s Outer Harbor. The deal would secure half the terminal’s throughput capacity, equal to about 5 million tons a year, for Utah products that would be delivered by rail. The remaining $3 million would be steered to private consultants.

The project is intensely controversial in the Bay Area, where local activists and politicians are working to prevent coal from passing through the $250 million terminal, part of a larger port and logistics center under development on city-owned property. Next week, the Oakland City Council is scheduled to debate a potential ordinance regulating the movement of coal through the city or possibly banning it outright.

Such moves could trigger a lawsuit from port developers, but the environmental groups’ letter claims that coal shipments would harm West Oakland, “a neighborhood already heavily impacted by transportation pollution and burdened by some of the worst air quality in the region. … Thus, [the funds] would be used not only to fund a project outside the state of Utah, but would also contribute to the continued pollution of a vulnerable community.”

The 19-page letter is addressed to Attorney General Loretta Lynch; Gregory J. Gould, director of the Office of Natural Resources Revenue; and Mary Kendall, the Interior Department’s deputy inspector general.

The letter added that the aims of the port could contradict the federal Mineral Leasing Act (MLA), which mandates that money made from mining can only be directed toward “public facilities” and “public service.” There is no indication the port would be public in any way, shape, or form.

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