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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice. U.S. Treasury Regulations require us to notify you that any tax-related material in this blog (including links and attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties, and may not be referred to in any marketing or promotional materials.  While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you.

Friday
Apr242015

Energy Infrastructure Gets Regional, National and Global Attention

Energy infrastructure is all the rage these days. 

Earlier this week the White House released its inaugural Quadrennial Energy Review, which “examines how to modernize our nation’s energy infrastructure to promote economic competitiveness, energy security and environmental responsibility.”  Not surprisingly, the report calls for major investments to upgrade and modernize transmission lines, pipelines and other infrastructure to increase security and reliability.  The report also states that the U.S. grid needs to change to accomodate the changing energy generation landscape, namely the growth of renewables and distributed generation.

Yesterday, the governors of the the New England states met for an “energy summit” to discuss upgrades to the region’s transmission infrastructure, and how to pay for them.  Although the states have differing priorities in many areas, the governors agreed on the need to invest in greater natural gas pipeline capacity.     

At a more global level, a thought-provoking essay in the economy section of the New York Times highlighted the vast gulf between energy use in the developed and developing parts of the world, and argued that greater economic development in poorer countries would actually reduce consumption of natural resources.  The argument is based on the recently released EcoModernist Manifesto, which states that “Intensifying many human activities — particularly farming, energy extraction, forestry, and settlement — so that they use less land and interfere less with the natural world is the key to decoupling human development from environmental impacts.”  It is a counterintuitive strategy calling for dense, centralized human activity (cities, industrial agrigulture, power plants) that makes efficient, if destructive, use of natural resources so that the rest of the planet can be kept in its natural state - away from humans.  

So, basically the opposite of the back to the land and locavore movements.    

Wednesday
Apr152015

Halleluja: The Clean, Green Renewable Future Is Upon Us!!!

The American Wind Energy Association released its annual market report for 2014 today.  As expected, most of the report’s findings are quite positive, with “more wind power capacity under construction at the end of 2014 than at the end of any other year.”  Over 100 U.S. wind power projects totalling 12,700 MW were built last year.  There are now over 65,000 MW of installed wind energy capacity in the United States.

The AWEA report was not all sunshine and daisies however, noting that development-chilling uncertainty about the production tax credit continues: “The lapse of the PTC at the end of 2012 drove a 92% drop in installations in 2013” and “PTC uncertainty continues with an extension through the end of 2014 that came only two weeks before the end of the year.”    

Among the report’s other optimistic findings were that the cost of onshore wind energy has dropped by over 50 percent between 2009 and 2013, and that wind energy was the largest source of new electricity generation in the United States in 2014.

The AWEA report is grounded in graphic analysis based on concrete wind energy development figures, which sets it apart from predictive renewable energy studies that are sometimes promoted under strikingly upbeat headlines.  In general though, the renewable news is good.  Here is just a sampling of rosy headlines from the renewable energy news media that came out in the past few days:

 Take that Pat Sajak!

Monday
Apr062015

New Misguided Opponent of Renewables: Famous Novelist Jonathan Franzen

In a lapse of fact checking and logic, the normally rigorous New Yorker magazine published a lengthy essay by noted novelist and bird watcher Jonathan Franzen that, among other things, called wind and solar power “blights on the landscape” that should be abandoned in favor of bird sanctuaries because “drastic planetary overheating is a done deal.”

The crux of Franzen’s argument is summed up about halfway through his piece: “The Earth as we now know it resembles a patient whose terminal cancer we can choose to treat either with disfiguring aggression or with palliation and sympathy. We can dam every river and blight every landscape with biofuel agriculture, solar farms, and wind turbines, to buy some extra years of moderated warming. Or we can settle for a shorter life of higher quality, protecting the areas where wild animals and plants are hanging on, at the cost of slightly hastening the human catastrophe.”

As was immediately pointed out in several incredulous critiques of Franzen’s article, he mistakenly thinks that renewable energy and other strategies for fighting climate change preclude conservation of current animals and ecosystems

In particular, Franzen lashed out at Audubon based on his belief that the organization has lost its way by preferencing the the fight against climate change over protecting birds.  Audubon CEO David Yarnold’s excellent response is nicely encapsulated by his line that “our members can walk and chew gum at the same time.” 

Franzen also wants to give up on climate change because the problem is too big for any one person’s actions to have any effect: “The scale of greenhouse-gas emissions is so vast, the mechanisms by which these emissions affect the climate so nonlinear, and the effects so widely dispersed in time and space that no specific instance of harm could ever be traced back to my 0.0000001-per-cent contribution to emissions.”

He probably thinks voting is a waste of time too.

For more thoughtful and hilarious takedowns of Franzen’s “thinkpiece,” read Climate Progress and Get Energy Smart Now

 

Wednesday
Apr012015

USFWS Lists Northern Long Eared Bat as Threatened Species

The U.S. Fish and Wildlife Service announced today that it will publish a final rule in the April 2, 2015 Federal Register designating the northern long eared bat as threatened under the Endangered Species Act.  The listing will become effective May 4, 2015, at which time an interim 4(d) incidental take rule will also take effect.

USFWS will be accepting comments on the interim rule for 90 days, until July 1, 2015.  The interim 4(d) rule permits incidental take for all activities taking place outside of areas affected by white nose syndrome.  In areas affected by white nose syndrome, the interim rule permits incidental take for forest management (i.e. logging) and maintenance and limited expansion of utility rights-of-way, as long as those activities are conducted according to certain habitat conservation measures such as avoiding hibernacula and avoiding certain types of cutting during summer months.    

Yet to be seen is what other activities, if any, USFWS will include in the final 4(d) rule.  In earlier comments on the 4(d) rule, USFWS stated that wind energy generation is a factor causing harm and mortality to the northern long eared bat.  Wind power developers will no doubt be submitting comments to USFWS prior to enactment of the final 4(d) rule in an attempt to gain incidental take exemption by rule.  

Tuesday
Mar242015

BOEM Reviews Lease Request for Floating Wind Turbines off Hawaii

The U.S. Bureau of Ocean Energy Management is in the process of reviewing a lease request submitted by AW Hawaii Wind, LLC for two proposed 408 MW offshore wind power facilities, each consisting of 51 floating 8 MW turbines.  AW Hawaii Wind is a subsidiary of Denmark-based Alpha Wind Energy.

Last month BOEM determined that AW Hawaii Wind is legally, technically and financially qualified to hold a lease on the outer continental shelf.  BOEM’s next step is to determine whether there are competitive interests in the proposed lease area.  

The Oahu South Project is proposed to be located approximately 17 miles off the coast of Oahu in water depths of 300‐700 meters.  The Oahu Northwest Project is proposed to be located approximately 12 miles offshore in water depths of 700‐1,000 meters.  The floating turbines proposed for the project are based on Principle Power’s WindFloat design.   

One potential advantage these projects have over other offshore proposals is that Hawaiian electricity rates are already about twice as much as those of the next highest state (New York).  That means the incremental cost increase associated with offshore wind power would be relatively lower for Hawaii than for other markets, a fact that could make these projects more attractive to ratepayers and investors.

Friday
Mar202015

D.C. District Court Sides with USFWS on Indiana Bat ITP Issued to Ohio Everpower Project

The U.S. District Court in Washington, D.C. granted summary judgment on Wednesday to the U.S. Fish and Wildlife Service in a suit challenging the issuance of an incidental take permit to an Ohio wind power project for impacts to the endangered Indiana bat. 

USFWS had issued the ITP to Everpower’s proposed 100-turbine Buckeye Wind Power Project pursuant to Section 10 of the Endangered Species Act.  The ITP approves 26 Indiana bat takes over five years and 130 takes over 25 years.  The permit requires the project to curtail operations at cut-in speeds ranging from 3 to 6 meters per second and to mitigate impacts through the acquisition of 217 acres of habitat near Indiana bat hibernacula.

USFWS concluded that the combination of curtailment and habitat protection would be “fully commensurate with the level of impacts” and therefore met the ESA statutory requirement that the project “will, to the maximum extent practicable, minimize and mitigate the impacts” of the expected take.  Project opponents argued that USFWS should have interpreted the ESA’s “maximum extent practicable” standard to require adoption of the alternative with the lowest possible take limit without consideration of mitigation measures. 

The court disagreed, noting that the Service’s 1996 Habitat Conservation Planning and Incidental Take Permit Handbook allows “an agency to place less emphasis on whether a program is the ‘maximum that can practically be implemented by an applicant’ if an applicant can first demonstrate that the minimization and mitigation measures provide substantial benefits to the species.”  In this case, USFWS concluded that the curtailment and habitat conservation included in the ITP would “fully offset” the projected take cause by operation of the wind power project.

In short, the court noted that under the ESA, “Once the impact was fully mitigated, it was not necessary for FWS to determine whether more mitigation was possible, or whether the impact could possibly be minimized further.” 

Thursday
Mar122015

DOE Says 35% of U.S. Electricity Can Be Generated by Wind Power by 2050

The U.S. Department of Energy released an in-depth analysis today entitled Wind Vision: A New Era for Wind Power in the United States The report models various scenarios of wind power penetration into the U.S. energy market and concludes that under “an ambitious but credible scenario” 35 percent of the nation’s electricity could be generated by wind power by 2050.  Of that projected 35 percent, seven percent would consist of offshore wind power. 

The report also models a “baseline” scenario in which wind power development halts at the currently installed 61 gigawatts of domestic capacity and a “business as usual” scenario in which wind power development continues based on current market conditions and policies.  Under the business as usual scenario, the report projects that wind power will meet 25 percent of U.S. electricity demand by 2050. 

The report uses these various projections to estimate the economic, environmental and social costs and benefits of such development.       

The report also sets forth “a detailed roadmap of technical and institutional actions necessary to overcome the challenges to wind power making a significant contribution to a cleaner, low-carbon, domestic energy economy.”  The roadmap is organized around three main themes: reducing wind power costs, expanding developable areas and increasing wind power’s economic value to the nation.