The U.S. Energy Information Administration issued a report last week detailing the 13,500 megawatts (MW) of electric utility capacity added in 2013.  According to the report, the total capacity added is down roughly 50% from 2012.  Natural gas and solar were the top industries generating additional capacity at just over 50% and 22% respectively. 

State and federal policymakers in the past could be confident that America’s energy demands would increase every year. Now the future isn’t as clear.  Barbara Tyran, director of Washington, D.C., and state relations with the Electric Power Research Institute (EPRI), said the Great Recession, a greater use of locally produced power, a growing interest in energy efficiency and the unprecedented increase in the natural gas supply have turned once staid assumptions about the future of energy on their head. Tyran was one of the featured speakers at a CSG policy academy about natural gas development last week and noted that all three branches of the federal government are currently engaged in shaping energy and environmental outcomes that will impact the future electricity and natural gas sectors. 

CSG Director of Energy and Environmental Policy Brydon Ross outlines the top five issues for 2013, including the future of coal, Clean Water Act legal actions, energy infrastructure hardening, managing the energy wave, and EPA air regulations. 

 

State leaders should expect energy and environmental issues to largely stay in the regulatory and legal arena in 2013 as fiscal issues will most dominate the attention of Congress. Market forces will also likely put upward pressure on the development of the country’s oil and natural gas resources, but could pose potentially complex oversight and budget issues for states. The substantial increase in natural gas supply and the current cheap price it enjoys could have long-lasting implications for the nation’s electricity mix as the use of coal-fired power declines and more stringent EPA air regulations are enforced. Lastly, as many states will continue to recover from the ravages caused by Hurricane Sandy opportunities will be presented to apply lessons learned to improve the resiliency of their energy infrastructure. 

States have been reclaiming and restoring thousands of abandoned mine sites that pre-existed federal environmental laws. To cope with the environmental and public safety threats they pose, Congress passed legislation in the late 1970s charging fees for coal production that were disbursed back to states for remediation efforts. Recent changes made by the Transportation Reauthorization bill have altered and cut the payment structure for many states still dealing with the long-term ramifications of abandoned mines.

The Environmental Protection Agency in December 2011 issued new stringent regulations called the Mercury and Air Toxics Standards, or MATS, Rule to limit mercury emissions and other hazardous substances from fossil fuel power plants. The standards have been controversial because of industry concerns with costs and grid reliability. The EPA, however, contends the standards are reasonable, provide billions of dollars in public health benefits and will prevent thousands of premature deaths.

According to recent figures by the Energy Information Administration (EIA), the percentage of electric power generation from coal  fell by 19% in the first quarter of 2012 compared to the same time period in 2011. Overall, coal-fired power made up 36% of US electricity generation in the first quarter of 2012 and in the first quarter of 2011 that figure was 44%. EIA went on to estimate in its short-term energy outlook that coal consumption will fall by 14% in 2012.

CSG’s Energy & Environment Task Force met on October 22 to discuss pressing policy issues, to hear from staff on the progress of specific programs and to review both policy resolutions and select Suggested State Legislation.

Several states in the Midwest are now involved in carbon-capture-and-storage projects. 

Enhanced oil recovery is a decades-old, proven commercial activity already widely practiced in the Permian Basin of Texas, the U.S. Gulf Coast and elsewhere. But could EOR be more widely employed in the Midwest, and ultimately become a central part of this region’s energy policy?

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