by Bob Ciesielski
The Atlantic Chapter has been ambivalent about backing the Regional Greenhouse Gas Initiative (RGGI), which has been operating in New York since 2009. Upcoming discussions about amending RGGI give us an opportunity to promote our vision of an improved RGGI, capable of helping to deal with climate change.
New York is a member of RGGI together with Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island and Vermont. New Jersey withdrew from the program in 2011.
The RGGI is a cap-and-trade system for carbon dioxide (CO2) emissions which applies to all power plants with a generating capacity of 25 megawatt (MW) or more in the member states.
The initiative was first discussed in 2003 by former NYS Governor George Pataki, who sought a strategy that would “help the region lead the nation in the effort to fight global climate change.” The effort initially aimed to stabilize greenhouse gas emissions at 2002-2004 levels by 2015, with an additional 10% reduction by 2020. The proposal also allows participants to purchase offsets to meet 50% of their emission reductions. One-quarter of revenue from carbon credits are to be dedicated to energy efficiency and strategic energy schemes.
RGGI sold its first carbon credits in September of 2008 at $3.07 per ton or carbon dioxide (CO2). By 2012, same allowances were sold for $2.06 per ton. These lower prices have been the result of actual carbon emissions being substantially less than the current cap allows under RGGI.
The 2013 cap allowance of emissions from power plants was 165 million tons of CO2, but the actual 2012 emissions were only 91 million tons. In large part, emissions were lower than previously anticipated due to massive increases in the use of natural gas in recent years. Methane gas, at the point of combustion, gives off only approximately 50% of the carbon that is emitted by coal.
This brings us to two crucial points concerning usefulness of RGGI in fighting global climate change. First, while methane gas releases less carbon dioxide than coal or oil when burned, recent studies by Robert Howarth and Tony Ingraffea of Cornell University and others show that methane is a much more dangerous greenhouse gas than CO2. (For the science, see Ingraffea’s explanation.)
Based upon NASA studies, Howarth and Ingraffea discovered that methane from high-volume hydrofracking and horizontal drilling is 105 times more potent a greenhouse gas than carbon dioxide in the first 20 years of its release into the atmosphere. The study was based on an estimated moderate leakage of methane of approximately 3-4%, including the release of methane at well sites, through flaring, along pipelines, and at compressor stations and storage facilities.
While the fracking industry disputes the leakage claims, recent studies in the Western states show that the leakage rate is actually in the substantially greater range of 7-9% of drilled methane. This makes methane a much more dangerous and dirty greenhouse gas than CO2.
This issue has been raised by NYS Attorney General Schneiderman, who issued notice to the EPA several months ago of the state’s intent to challenge current methods of calculating the greenhouse effect of methane.
In this regard our question becomes, with both RGGI and a carbon tax, how is the actual greenhouse gas effect of methane derived from hydrofracking to be measured? We are asking that an accurate calculation of methane’s effect as a greenhouse gas be incorporated into any RGGI plan in the future. [See Professor Ingraffea’s primer on why federal agencies are vastly under estimating methane’s impact.]
Merely measuring the CO2 output of burned methane is an insufficient measure of its greenhouse gas effect. Without bringing the full greenhouse effect of methane drilling and burning into the RGGI formula, the RGGI becomes a tool for fracking companies to freely drill for methane in the Marcellus Shale while claiming that the industry produces “clean” fuel.
Secondly, the model rules which govern RGGI are being reviewed this year by the State of New York. One proposed change would be to reduce the CO2 cap to 91 million tons by 2014, to reflect the region’s actual usage of carbon burning fuels. This would make RGGI a more potent tool by increasing the bid prices for carbon credits. A further 2.5% reduction in the cap would be introduced annually thereafter until 2020. The rules also recommend recalculating the value of credits issued from 2009-2013 to help avoid the use of banked allowances as a predominant compliance strategy in the future.
The Chapter Energy Committee has asked our Albany representative, Roger Downs, to participate in negotiations with the state and other groups concerning these amendments. We are also seeking to bring into focus the true greenhouse gas impact of methane obtained from high-volume hydrofracking.
Bob Ciesielski, a member of the Niagara Group, chairs the Chapter Energy Committee.