The Department of Energy finalized a "process" regulation on Jan. 15 it said would streamline rulemakings for energy-efficiency standards, but the rule is likely to face litigation from opponents.

Critics said the rule would hinder adoption of new energy-efficiency standards and tightening of current standards, leaving efficiency savings on the table.

Under the rule, projected energy savings for a standard would have to total 0.3 quad over 30 years or deliver a 10-percent improvement over existing standards. In its original proposal, issued in February 2019, DOE proposed a threshold of 0.5 quad.

DOE said over the last three decades, 60 percent of standards met the 0.3-quad threshold but delivered 96 percent of savings linked to standards. The other 40 percent of standards accounted for only 4 percent of the savings, DOE said.

"Clearer energy efficiency standards will provide certainty to manufacturers, allowing them to produce products that will save consumers money on a variety of appliances," Energy Secretary Dan Brouillette said in a statement.

Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, predicted the rule will "create market uncertainty for businesses due to likely legal challenges, add to harmful pollution, and undermine efforts to address the climate crisis."

In comments filed May 10, the Natural Resources Defense Council questioned the energy savings threshold requirement. "In a binding rule, it is difficult if not impossible to craft a threshold that is sufficiently responsive to the unique characteristics of each product, and that doesn't unnecessarily reject important savings," NRDC said, adding that the thresholds could bar adoption of standards that could be implemented cost-free.

Critics said that under the process rule, DOE would be too deferential to standards for commercial products set by the American Society of Heating, Refrigeration, and Air-Conditioning Engineers.

In its comments, filed May 6, ASHRAE defended its standards-setting process as "rigorous, balanced, transparent, open" and resulting in "robust standards that benefit the public." ASHRAE noted that its "consensus process ensures buy-in and reflects input from energy advocates, building owners, design professionals, utilities, manufacturers, representatives from DOE, and other materially affected and interested parties."

Tailpipe Rule at OMB for Review

A proposed rule revising tailpipe greenhouse gas emissions limits and motor vehicle fuel-economy standards on Jan. 14 landed at the White House Office of Management and Budget for review, bringing it a step closer to finalization.

The proposal, affecting vehicles for model years 2021 through 2026, was sent to the White House by the Environmental Protection Agency and the National Highway Traffic Safety Administration.

Details of the proposal are under wraps. In their 2018 proposal, EPA and NHTSA proposed freezing standards at 2020 levels through model year 2026. If the proposal is finalized, attorneys general for California and allied states are likely to challenge the rule in court.

The Trump administration's actions would undo the One National Program rule, a 2012 agreement between the federal and California governments to harmonize federal and state tailpipe GHG emissions standards and federal fuel-economy requirements.

EPA and NHTSA on Sept. 19 finalized rules blocking California from setting its own tailpipe GHG emissions limits. California, joined by 22 other states, the District of Columbia, and the cities of Los Angeles and New York, filed suit against NHTSA in U.S. District Court for the District of Columbia and against EPA in the U.S. Court of Appeals for the D.C. Circuit.

Trade Groups Drop Lighting Suit

Two lighting industry trade groups dropped their lawsuit challenging the California Energy Commission's adoption of lighting efficiency standards that DOE rejected last year.

The National Electrical Manufacturers Association and American Lighting Association withdrew their suit, filed in U.S. District Court for the Eastern District of California, after Judge Kimberly Mueller's Dec. 31 denial of their request for a temporary injunction to block enforcement of the standards, which took effect Jan. 1.

Dismissal of the suit took effect Jan. 14.

The groups sued Nov. 13 after the CEC adopted an expanded definition of general-service lamps subject to an efficiency standard of 45 lumens per watt. The practical effect of the measure will be to remove general-service incandescent lighting from California shelves.

"LED and CFL bulbs can still be sold in California, but incandescent and halogen bulbs, which waste up to 90 percent of their energy as heat, do not meet the minimum efficiency level of 45 lumens per watt," Noah Horowitz, director of NRDC's Center for Energy Efficiency Standards, said.

The CEC adopted lighting standards that DOE adopted Jan. 19, 2017, but then rolled back last year. California, along with 15 other states and New York City, sued DOE on Nov. 4 to challenge the rollback.

Four Efficiency Standards Take Effect

The Energy Department put into effect four energy-efficiency standards on Jan. 10, following a court order to publish the regulations in the Federal Register.

The standards, the first DOE has adopted since 2017, cover portable air conditioners, commercial boilers, uninterruptible power supplies and industrial air compressors. The standards will reduce energy costs by a net $8.4 billion over 30 years, according to DOE figures.

A federal appeals court on Oct. 10 ruled for 12 state attorneys general, efficiency advocates, consumer groups and environmental organizations that sued DOE, arguing that the department unlawfully dragged its feet in putting the standards into effect.

Upholding a lower-court decision ordering DOE to publish the standards, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit rejected DOE's argument that its "error-correction rule" does not mandate publication of regulations.

"It's a shame that the current administration chose to waste three years and who knows how much taxpayer money challenging the meaning of the word 'will,'" Andrew deLaski, executive director of the Appliance Standards Awareness Project, wrote in a blog post.

6-GHz Band Proposal Worries Utility Groups

A coalition of electric, gas and water utility trade groups on Jan. 13 said the Federal Communications Commission's proposal to open the 6-GHz band to unlicensed use could interfere with utilities' "mission-critical" communications.

The groups filed with the FCC findings of a report detailing projected impacts through a case study in the Houston area that they said was based on "actual, real-world user data and not theoretical or hypothetical assumptions." Houston was selected for the study because the Texas metro area's flat terrain "simplifies propagation path loss and provides a highly realistic indication of interference levels in a major market," the groups said.

Their filing said that "deployment of [radio local area networks] as currently proposed in the [proposed rule] would cause all the point-to-point links in the Houston [metropolitan area] to experience unacceptable levels of interference."

Filing the report were the Edison Electric Institute, National Rural Electric Cooperative Association, American Public Power Association, Nuclear Energy Institute, American Gas Association, American Water Works Association, and Utilities Technology Council.

HFC Phasedown Bill Draws Broad Support

A broad coalition of industry and environmental organizations urged passage of bipartisan legislation to phase down hydrofluorocarbons used as HVAC refrigerants and in other applications, but some Republican lawmakers raised concerns at a Jan. 14 House subcommittee hearing about consumer costs and safety of HFC alternatives.

The legislation, HR 5544, would phase down HFCs by 85 percent over 15 years using a system of production and consumption allowances. HFCs were introduced in the refrigerant market to replace ozone-depleting chlorofluorocarbons and hydrochlorofluorocarbons. HFCs, however, have powerful heat-trapping properties, up to 14,800 times the warming potential of carbon dioxide over 100 years, according to a 2018 Intergovernmental Panel on Climate Change report.

An amendment to the Montreal Protocol phasing down HFCs entered into force on Jan. 1, 2019. The "Kigali Amendment," named after the Rwandan capital where it was adopted, aims to reduce HFC use by 80 to 85 percent by the 2040s. The U.S. has not ratified the amendment, and industry officials are concerned U.S. products could be blocked from foreign markets as a result.

Industry officials testifying to the House Energy and Commerce Committee's Environment Subcommittee said replacing HFCs with substitutes is important for keeping the U.S. competitive in the global HVAC market.

"While all other developed economies have begun their transitions, the domestic U.S. HVAC industry is lagging and falling behind both the EU and Asia as a result of the lack of a uniform federal policy," Gary Bedard, CEO of Lennox International, testified on behalf of the Alliance for Responsible Atmospheric Policy, a group of HFC producers and manufacturers that use HFCs for air conditioning and refrigeration, as well as foam products, electronics, aerosols and inhalers.

Other witnesses testifying for the bill included representatives of the Air-Conditioning, Heating, and Refrigeration Institute and NRDC.

Republican lawmakers, however, raised concerns about potential impacts on consumers, including equipment replacement costs and safety of HFC substitutes.

"Maybe this legislation is a good starting point, but I think we have to look carefully to make sure it will provide benefits promised and work in the best interest of American consumers," Rep. Greg Walden (R-Ore.), ranking Republican on the full committee, said.

Rep. Cathy McMorris Rodgers (R-Wash.) raised concerns about what she called a "patchwork" of state HFC regulations.

California law requires reduction of HFC emissions 40 percent below 2013 levels by 2030. Legislation enacted last year in Washington state phases out HFCs. Starting on Jan. 1, HFCs were barred in new supermarket refrigeration systems. HFC prohibitions taking effect in 2021 in Washington will bar the substances in new refrigerated food processing equipment, and in 2022, HFCs will be prohibited in most new residential refrigerators, according to the state Department of Ecology.

HR 5544 was introduced by Rep. Paul Tonko (D-N.Y.), chairman of the subcommittee. Co-sponsors include Reps. Scott Peters (D-Calif.), Pete Olson (R-Texas) and Elise Stefanik (R-N.Y.).

China Agrees to Energy Purchases in Trade Deal

China agreed to increase purchases of U.S. fossil-energy products over two years as part of a Phase 1 trade agreement that President Donald Trump and Chinese Vice Premier Liu He signed Jan. 15.

Meanwhile, the Senate on Jan. 16 passed legislation to implement the U.S.-Mexico-Canada Agreement, a renegotiated trade pact between the three North American countries. The House passed the bill, HR 5430, on Dec. 19.

An annex to the U.S.-China agreement obligates China to increase purchases of U.S. liquefied natural gas, crude oil, refined products, and steam and metallurgical coal by $52.4 billion over the 2017 baseline. In addition, China agreed to step up purchases of U.S. manufactured goods, including solar-grade polysilicon, by $77.9 billion over two years.

The deal, however, keeps the Trump administration's 25-percent tariffs in place on $250 billion worth of Chinese products, including a broad range of energy goods and appliances. In connection with the agreement, the administration will roll back tariffs on more than $100 billion of other Chinese goods, including lithium-ion batteries, from 15 percent to 7.5 percent.

In a statement, the American Petroleum Institute urged the administration "to stay at the negotiating table until the U.S.-China marketplace for energy trade is fully restored and all remaining tariffs are lifted-including U.S. tariffs on imports of industrial components used in our industry and Chinese retaliatory tariffs on U.S. energy exports."

China last year boosted its retaliatory tariff on U.S. LNG to 25 percent. Chinese purchases of U.S. LNG fell to zero in May 2019, according to the Energy Information Administration.

Subcommittee Moves Nine Energy Bills

A House subcommittee on Jan. 9 waved through nine energy-related bills, including legislation authorizing grants to upgrade aging gas pipelines and the power grid and reauthorizing hydropower incentives.

The nine bills were reported out by the House Energy and Commerce Committee's Energy Subcommittee.

HR 5542 would direct the Energy Department to establish a grant program to fund upgrades of "cast and wrought iron and bare steel pipes and other leak-prone components of the natural gas distribution system."

The bill would authorize $250 million annually for the program from 2021 to 2030.

Rep. Frank Pallone (D-N.J.), chairman of the full committee, said replacing leaky pipelines would reduce methane emissions and increase public safety. "We have seen the tragic consequences of pipeline explosions across the country in recent years," Pallone said.

HR 5527 would require DOE to establish a grant program for grid-modernization projects through partnerships among utilities and power marketing administrations with universities, national laboratories, and state, local or tribal governments. The bill would authorize $200 million annually from 2021 to 2025.

HR 3361 would reauthorize the 2005 Energy Policy Act's production incentive payments for hydroelectric facilities installed or upgraded at nonfederal dams and conduits after 2005 and extend the eligibility period to 2036. Payments, subject to appropriations, total 1.8 cents/kWh, with annual inflation adjustments since 2005.

Facilities that received incentive payments in 2018 included Unit 4 at Puget Sound Energy's Lower Baker River Hydroelectric Project; Tacoma Power's North Fork Skokomish River Power House; Boise-Kuna Irrigation District's Arrowrock hydro project; Delta-Montrose Electric Association South Canal Hydro Project, Drops 1 and 3; and the Northern Colorado Water Conservancy District's Carter Hydro Project, according to DOE.

Other bills the subcommittee reported out included:

  • HR 3079, requiring use of performance contracts for at least half of energy and water efficiency measures installed in federal buildings.
  • HR 1426, authorizing the FERC chairman to adjust employee salaries in order to keep them competitive and retain staff.
  • HR 5541, reauthorizing DOE's Office of Indian Energy.
  • HR 5545, directing DOE to set up a rebate program for state, local, tribal or territorial governments installing electric-vehicle charging equipment.
  • HR 5518, directing DOE to carry out a Clean Cities Coalition Program to give competitive awards to projects that reduce petroleum consumption and improve air quality.
  • HR 2906, reauthorizing an EPA grant program for retrofitting and replacing school buses to run on electricity as well as alternative fuels. Authorized appropriations would total $50 million per year from 2021 to 2025.

Repurposing of Spent Nuclear Fuel Urged

The Nuclear Regulatory Commission was urged Jan. 15 to focus efforts to speed licensing of advanced reactor technologies on designs that can make use of nuclear waste as a fuel source.

At a hearing of the Senate Environment and Public Works Committee, Sen. Sheldon Whitehouse (D-R.I.) said, "We very much want to see if we can focus on turning all that nuclear waste sitting around now as a health hazard and economic drag into something that can be a positive."

The hearing focused on implementation of the Nuclear Energy Modernization Act, legislation enacted last year that directs the NRC to develop a staged licensing process for advanced designs and to develop "technology-inclusive" regulations as an option for license applicants by the end of 2027.

Also at the hearing, Sen. Ben Cardin (D-Md.) said nuclear is at a competitive disadvantage as the only energy source that doesn't "get help from the tax code."

Cardin and Sen. Kevin Cramer (R-N.D.) have introduced legislation to make existing nuclear plants eligible for a 30-percent investment tax credit for refueling and qualifying capital expenditures.

EIA: Most New Capacity Wind, Solar

Wind and solar will make up 76 percent of generating capacity additions coming on line in 2020, the EIA reported Jan. 14.

Of the 42 GW due to come on line, 32 GW are wind and solar, EIA figures show. Wind capacity starting up is projected to total 18.5 GW, solar 13.5 GW, and new gas capacity is projected to total 9.3 GW, the agency said.

"Expiration of the production tax credit at the end of 2020 is driving the large capacity addition," the EIA reported.

EIA Projects Lower Gas Prices in 2020

Average gas prices are projected to be 9 percent below the 2019 level in 2020, the EIA reported Jan. 15.

The agency attributed the projected price decline to production growth driven by improved efficiency and cost reductions, increases in associated gas production from oil rigs, and greater pipeline capacity from the Permian Basin and Appalachian production regions.

The EIA projected average prices at Henry Hub would be $2.33/MMBtu, 24 cents below the 2019 average.

Production of dry natural gas this year is projected to total an estimated 94.7 Bcf daily, up from 2019's 92 Bcfd output.

"Most U.S. production will come from the Appalachian Basin in the Northeast, followed by the Permian Basin in western Texas and New Mexico, and the Haynesville shale formation in eastern Texas," the EIA said.

Meanwhile, the EIA reported Jan. 13 that U.S. gas production and proven reserves grew to record levels in 2018.

Proven gas reserves increased 9 percent from 2017 to 2018, to 504.5 Tcf, according to EIA figures. The increase, the agency added, was driven by higher prices.

Proven reserves of crude oil and lease condensate increased from 42 billion to 47.1 billion barrels from 2017 to 2018, the EIA said.

Proven reserves are resources that "geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions," the EIA explained.

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