Friday, December 23, 2016

GWPF Newsletter: Frack On! UK High Court Gives Fracking Green Light








At Last: UK Fracking Expected To Start Within Months

In this newsletter:

1) Frack On! UK High Court Gives Fracking Green Light

2) At Last: UK Fracking Expected To Start Within Months


3) Britain’s Green Energy Sector Shrinks After Government Subsidy Cuts

4) Using His Pen To Block Drilling, Obama Purports To Restrict Trump’s

5) Coal In Trump’s Stocking

6) Richard Epstein: Obsolete Climate Science On Co2

Full details:

1) Frack On! UK High Court Gives Fracking Green Light
Britain’s High Court ruled on Tuesday that a fracking permit awarded by a local council to developer Third Energy was legal, after it was challenged by environmental campaigners, opening the way to shale gas extraction in the UK.
 
Substantial amounts of shale gas are estimated to be trapped in underground rocks and the British government wants to exploit it to help offset declining North Sea oil and gas output, create some 64,000 jobs and help economic growth.

The contested permit in Yorkshire, in the north of England, was the first approval for shale gas fracking since a moratorium was lifted in 2012.

“The substantive claim for judicial review is dismissed,” Justice Lang said in her written verdict on the case, ruling that the permit remains valid.

Despite government support, progress has been slow due to regulatory hurdles and public protests, with environmental groups concerned fracking could contaminate groundwater and that it is incompatible with fighting climate change.

“We will continue to campaign on behalf of local communities for the sake of our children and their children’s health and well-being,” said Jackie Cray, a co-claimant in the case.

Third Energy, which is owned by former employees of the Barclays Natural Resource Investments private equity business, had been expected to produce Britain’s first shale gas this year before its permit award was appealed.

The company said it was pleased with the ruling.


2) At Last: UK Fracking Expected To Start Within Months
Ben Webster

Fracking is expected to start within months in North Yorkshire after the High Court rejected a legal challenge by residents and environmental campaigners.

Mrs Justice Lang ruled against Frack Free Ryedale and Friends of the Earth, who had argued that North Yorkshire county council failed to consider properly the contribution of fracking to climate change when granting permission to the fracking company Third Energy.

The judge also rejected a claim that inadequate provisions had been made to protect the community from future detrimental impacts of the industry. She said that the terms of the council’s approval in May gave a “considerable degree of protection to residents”.

The approval was the first for fracking since 2011, when it was temporarily banned after causing minor earthquakes in Lancashire. In October the government overruled Lancashire county council by giving Cuadrilla permission to drill and frack at Preston New Road near Blackpool. Residents are due to challenge that decision in the High Court next year.

Third Energy, which has already drilled a well near Kirby Misperton and is expected to start test fracking for shale gas within a few months, welcomed the ruling and said that it was “well on its way to satisfying” the 40 conditions set by the council.


3) Britain’s Green Energy Sector Shrinks After Government Subsidy Cuts
Jessica Shankleman

The U.K.’s renewable and low-carbon energy sector shrank by 8.7 percent last year, partly because of cuts to subsidies.

The sector, from wind farms to electric vehicles, turned over 42.2 billion pounds ($52.5 billion) in 2015, provisional figures by the Office for National Statistics showed on Friday. That’s lower than the 46.2 billion pound recorded in 2014.

Acquisitions of capital assets fell by 39 percent to 5.3 billion pounds in 2015, which ONS said was caused by fewer large scale purchases of solar panels and wind turbines. That’s likely caused by businesses anticipating a cut to renewable energy subsidies following the election of the Conservative government in May 2015, said Jennifer Webber, director of external affairs at the trade association RenewableUK.

“We’ve noticed there’s been a contraction in the market and unfortunately that’s had a knock-on effect in employment,” she said in a phone interview.


4) Using His Pen To Block Drilling, Obama Purports To Restrict Trump’s
Paul Mirengoff

President Obama today used his pen to withdraw hundreds of millions of acres of federally owned land in the Arctic and Atlantic Ocean from new offshore oil and gas drilling. Obama acted pursuant pursuant to something called the Outer Continental Shelf Lands Act. It includes a sentence saying the president may “from time to time, withdraw” from consideration any currently unleased lands in federal offshore waters.

The White House described its prohibition on future oil and gas exploration and drilling as indefinite, and it claimed that the ban cannot be undone by an incoming president. “There is a precedent of more than half a century of this authority being utilized by presidents of both parties,” a White House aide said. “There is no authority for subsequent presidents to un-withdraw.”

I have no view on the merits of Obama’s withdrawal of the offshore waters from consideration for drilling. However, the claim that Trump can’t reverse this strikes me as questionable. David Rivkin argues, plausibly, that the power to withdraw entails the power to un-withdraw, especially if circumstances change.

Rivkin says it’s not clear why Congress would give a president tremendous authority operating only in one direction. Unless the legislative history supplies an explanation, we should perhaps conclude that Congress didn’t.

If the withdrawal can’t be reversed by Trump, Congress could pass legislation reversing it. But this would probably require 60 votes in the Senate.
Right now, there seems to be little impetus for drilling in the waters in question. According to the Wall Street Journal:

The announcement carries symbolic significance but little immediate impact, since no commercial drilling is currently taking place in U.S. federal waters of either the Atlantic off the East Coast or the Arctic north of Alaska.

Persistently low oil prices have depressed the oil industry’s appetite to make big investments in new offshore projects, and any production would take the better part of a decade to come online.

5) Coal In Trump’s Stocking

A last-minute Obama regulation sets Donald up for a big win.

The Obama Administration has given Donald Trump an early Christmas gift, in the form of a punitive 11th-hour regulation on coal. Issued by the Interior Department’s Office of Surface Mining Reclamation and Enforcement (OSM), the rule takes effect Jan. 19 as a classic example of the job-killing rules that Mr. Trump has vowed to overturn.

Though issued Monday, the Obama Administration has been working on the Stream Protection Rule for six years. Ostensibly it’s about keeping American waterways clean. In reality it’s a power grab aimed at giving federal regulators more authority to make coal too expensive for anyone to mine or use.

No one should be surprised. In 2008 candidate Barack Obama told the San Francisco Chronicle that while people would still be free to build a coal-powered electricity plant under his energy policies, it would “bankrupt them” because of the costs his regulations would impose.

This is what Hillary Clinton meant in March when she said “we’re going to put a lot of coal miners and coal companies out of work.” It’s also what Environmental Protection Agency chief Gina McCarthy meant last month when she said that a Trump Administration would fail in its promise to revive the coal industry because her agency had helped destroy the market for coal.

Under the Stream Protection Rule, federal regulators will have expanded power to draw up new standards that make it harder to get a coal-mining permit. OSM’s federal water standards would suddenly take precedence over the state standards that have long governed the industry under the Clean Water Act. The Fish and Wildlife Service would also gain the power to veto coal permits.

The aim is to take permitting power from states and impose a one-size-fits all standard. When this process started, 10 states signed onto Interior’s rule-making process as state cooperating agencies. But eight of the 10 later withdrew because Interior wasn’t interested in what they had to say.

All of this is legally dubious, given that the new rule conflicts with the 1977 Surface Mining Control and Reclamation Act—which specifically prohibits initiatives that duplicate other federal environmental rules.

Interior’s projections about the economic impact are laughable. OSM reckons the rule would cost a mere 124 coal-mining jobs a year. But instead of visiting operating mines, the wizards at OSM built their estimates on computer models.

They even reported a net gain in jobs as miners are replaced by workers implementing the rule. Less mining but more workers: genius.

By contrast, a study commissioned by the National Mining Association says that at least a third of all coal-related jobs are at risk from this rule, and it would effectively leave almost two-thirds of total coal reserves in the ground. Which is the rule’s real purpose.

The good news is that the change of power in Washington makes this regulation not long for this world. The opposition includes Mr. Trump’s pick to run the Interior Department, Montana Rep. Ryan Zinke, Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan, as well as most affected states.

Mr. McConnell has already announced that early next year Congress will use the Congressional Review Act to bury the new rule.


6) Richard Epstein: Obsolete Climate Science On Co2

The incoming Trump administration has promised dramatic transformations on many vital domestic issues. The best gauge of this development is the fierce level of opposition his policies have generated from Democratic stalwarts. One representative screed is a New York Times Op-Ed by Professors Michael Greenstone and Cass Sunstein, who lecture the incoming president on climate change: “Donald Trump Should Know: This is What Climate Change Costs Us.”


Greenstone and Sunstein have a large stake in the game: During their years in the first Obama administration, they convened an interagency working group (IWG) drawn from various federal agencies that determined that the social cost of carbon (SCC)—or the marginal cost of the release of a ton of carbon into the atmosphere—should be estimated at about $36 per ton (as of 2015). Choose that number and there is much justification for taking major policy steps to curb the emission of carbon dioxide. Greenstone and Sunstein hoped that the working group process would draw on the “latest research in science and economics,” and establish the claimed costs by “accounting for the destruction of property from storms and floods, declining agricultural and labor productivity, elevated mortality rates and more.”

Their effort should be dismissed as a rousing failure, and as an affront to the scientific method that they purport to adopt in their studies. The first error is one of approach. The worst way to get a full exchange of views on the complex matter of global warming is to pack the IWG entirely with members from the Obama administration, all surely preselected in part because they share the president’s exaggerated concerns with the problem of global warming. The only way to get a full and accurate picture of the situation is to listen to dissenters on global warming as well as advocates, which was never done. After all, who should listen to a “denier”?

This dismissive attitude is fatal to independent inquiry. No matter how many times the president claims the science is rock-solid, the wealth of recent evidence gives rise to a very different picture that undercuts the inordinate pessimism about climate change that was in vogue about 10 years ago. The group convened in the Obama administration never examined, let alone refuted, the accumulation of evidence on the other side. Indeed, virtually all of its reports are remarkable for the refusal to address any of the data at all. Instead, the common theme is to refer to models developed by others as the solid foundation for the group’s own work, without questioning a word of what those models say.

The second major mistake in the government studies is the way in which they frame the social costs of carbon. As all champions of cost/benefit analysis understand, it is a mistake to look at costs in isolation from benefits, or benefits apart from costs. Yet that appears to be the approach taken in these reports. In dealing with various objections to its reports, the IWG noted in its July 2015 response that “some commenters felt that the SCC estimates should include the value to society of the goods and services whose production is associated with CO2 emissions.” Their evasive response has to be quoted in full to be believed: “Rigorous evaluation of benefits and costs is a core tenet of the rulemaking process. The IWG agrees that these are important issues that may be relevant to assessing the impacts of policies that reduce CO2 emissions. However, these issues are not relevant to the SCC itself. The SCC is an estimate of the net economic damages resulting from CO2 emissions, and therefore is used to estimate the benefit of reducing those emissions.”

In essence, the benefits from present or future CO2 emissions are not part of the story. Yet a truly neutral account of the problem must be prepared to come to the conclusion that increased levels of CO2 emissions could be, as the Carbon Dioxide Coalition has argued, a net benefit to society when a more comprehensive investigation is made. The entire process of expanding EPA regulations and other Obama administration actions feeds off this incorrect base assumption. The most striking admission of the folly of the entire EPA project comes from EPA Chief Gina McCarthy, who has stated that she would regard a decrease of one one-hundredth of a degree as enormously beneficial, notwithstanding its major cost, because its symbolism would “trigger global action.” No cost/benefit analysis would justify wasted expenditures solely on symbolic grounds. After all, human progress on global warming will only suffer if other nations follow our false siren on CO2 emissions, while ignoring the huge pollution that envelops major population centers like Delhi and Beijing.

Unfortunately, support for regulating CO2 emissions relies unduly on a Regulatory Impact Analysis that is worth no more than the faulty assumptions built into the model. These include the EPA’s hugely complicated Clean Power Plan, temporarily enjoined by the United States Supreme Court, that relies once again on the flawed social costs of carbon estimates.

The weakness of the EPA approach is shown by the data that Greenstone and Sunstein cite to support the contention that global warming has reached dangerous levels. They refer, for example, to a Geophysical Research Letter of 2014 that notes the retreat of ice in the West Antarctic between 1992 and 2011. But that one finding has to be set in context, as is done in the 2016 State of the Climate Report prepared by the Committee for a Constructive Tomorrow (CFACT) and sent to the U.N. Climate Conference in Morocco. This more complete account notes that the mass gain in East Antarctica has been at 200 billion tons per year on average, compared to the 65 billion tons, which was offset by substantial gains in ice in West Antarctica, generating a net gain of roughly 82 billion tons per year in Antarctic ice between 2003 and 2008. The upshot: “The good news is that Antarctica is not currently contributing to sea level rise, but is taking 0.23 millimeters per year away.” Overall, the temperature over the Antarctic has been constant for the past 35 years.

No analysis that looks at the minuses can afford to ignore the larger pluses and maintain its credibility. Indeed, for what it is worth, the CFACT report notes that the ice mass in the Arctic is now about 22 percent greater than it was at its low point in 2012. This fact helps explain why there has been no recent change in the rise of sea levels, and certainly none that can be attributed to the relatively modest level of temperature increases in the past 100 years. Recent trends suggest the rate of increase in ocean levels has been decelerating over the last 18 years, during which time there has been a substantial increase in carbon dioxide levels.

Yet the 102 different models used by the Intergovernmental Panel on Climate Change (IPCC) are all high in their estimates, by roughly four-fold. As documented in the 2016 CFACT report, there has been substantially no change in overall global temperature over the past 18 years, and the record highs reported are by tiny fractions of degrees that are smaller than the margin of measurement error. Yet the government’s methodology is to look at the models and ignore the data.
 
Just that was done by the now anachronistic 2009 EPA Endangerment Findings for Greenhouse Gases, which reported on the overall shrinkage of Arctic ice and claimed that the “elevated CO2 levels” were expected to result “in small beneficial effect[s] on crop yields.” The good news on this point seems to be that the increase in CO2 has led to about a 14 percent increase in green vegetation on earth over the past 30 years, as Matt Ridley reported in a 2016 lecture. It is the best of all possible CO2 worlds if the level of arable land increases with minor temperature changes and there are no appreciable changes in ocean levels. Put these numbers together and a revision of the SCC must be made, as it now appears that the net costs of carbon are negative. Further, the revised projections have only strengthened the lower estimates of global warming from elevated CO2 levels.

This basic conclusion is reinforced by other data, easily accessible, that addresses other concerns raised in the Greenstone and Sunstein article. For starters, there has been no recent increase in the level of storms and floods, or the damage that is said to result from them. To the contrary, the trend line has been unambiguously favorable, as the number of extreme events like floods and storms has declined steadily over the past 100 years. Indeed, the last major event in the United States was Hurricane Katrina in 2005, followed by eleven years of relative tranquility in the United States and around the world. This point is critical because one of the constant claims on global climate change is that the system-wide instability has increased these extreme events, even if overall temperature levels have remained constant.

The overall picture with respect to the SCC, then, is the exact opposite of that described by Greenstone and Sunstein, and that change in direction has a serious effect on the success of various legal challenges. Greenstone and Sunstein note that a legal decision in 2008 held that ignoring the SCC makes an administrative rule “arbitrary and capricious” and thus requires its reformulation by the applicable agency. They also reference another 2016 decision that upheld an administrative decision of the Department of Energy that explicitly took into account the SCC. But these judicial decisions have a surreal aura about them. The key statute for these cases was the Energy Policy and Conservation Act of 1975 (EPCA), which was passed in the aftermath of the 1973 Mideast Oil Embargo that followed in the wake of the 1973 Yom Kippur War. The EPCA’s chief finding was that “the fundamental reality is that this nation has entered a new era in which energy resources previously abundant will remain in short supply, retarding our economic growth and necessitating an alteration in our life’s habits and expectations.”


The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.

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