WolfeNotes.com

Perverse Incentives to Climate Policy, High Capital Cost Death Spiral, Stranded Assets

I was just reading all the public comments on the Energy Master Plan Update that Christie BPU totally ignored in the Update, and came across an interesting point about how the fundamental economics of gas pipelines work at cross purposes with and undermine both sane economics and climate and energy policy.

(the huge climate footprint of gas is beyond the scope of this economic oriented note).

I call the dynamic an economic death spiral.

NJ dealt with exactly the same economic and environmental dynamics during the debate on garbage incinerators.

In a nutshell, to finance the high capital costs and risks of garbage incinerators and assure that they would operate cost effectively, a fixed large daily volumes of garbage had to be guaranteed to be delivered to the plant by “put or pay” contracts and DEP regulations known as “waste flow”.

These daily waste delivery guarantees resulted in perverse incentives that directly undermined more environmentally sound efforts to reduce and recycle waste. We called it the need to feed the beast.

Then the fatal blow was struck: after the project financing and contracts were executed, the US Supreme Court struck down “waste flow” laws, so cheaper disposal alternatives from nearby Pennsylvania landfills emerged.

At the same time, lower cost recycling increased.

The effect of cheaper alternatives created what was called “leakage”, where waste that was planned to go the incinerator found cheaper alternatives.

This diversion of waste flow increased the effective cost per ton at the incinerator, which provide additional economic incentive to divert even more waste to alternative disposal and recycling alternatives, resulting in uneconomic incinerators and stranded assets the public was forced to pay for.

The death spiral.

Turns out that gas pipelines have exactly the same death spiral economics – as EDF warned the BPU:

Tripping the Terror Surveillance Network?

Or Andy of Mayberry Just Looking Out For Me?

Preface

Behind Winston’s back, the voice from the telescreen was still babbling away about pig iron and the over-fulfillment of the Ninth Three Year Plan. The telescreen received and transmitted simultaneously. Any sound that Winston made, above the level of a very low whisper, would be picked up by it; moreover, so long as he remained within the field of vision which the metal plaque commanded, he could be seen as well as heard. There was of course no way of knowing whether you were being watched at any given moment. How often, or on what systems, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate, they could plug in your wire whenever they wanted to.  You had to live – did live, from habit that became instinct – in the assumption that every sound you made was overheard, and except in darkness, every movement scrutinized.

(1984 – George Orwell, p. 6-7)

Our Story

The story you are about to read is true – no names have been changed to protect the innocent.

It is unlikely that the true events in this story are random and unrelated. And even if they are, my point is made.

It all begins on Wednesday night, when I was reading an essay Learning How Not To Rule the World, and noted a reference to the classic movie The Battle of Algiers. (the website on which I was reading that essay runs a proud banner: “The only news organization in the US to be labeled a threat by the Department of Homeland Security”).

Given that I had never seen the movie, I Googled it and watched and enjoyed it.

One of the next videos in the Google que caught my eye, a CIA history of the Cuban Revolution – so I watched that too and learned about some Cuban history and CIA propaganda.

No big deal – or was it?

Fast forward to this morning (Friday).

I had a 9:30 am meeting at DEP in Trenton and was running late, so, to save time, I took the dog for a walk by driving to the park we usually walk to.

When I got back home to drop the dog off before getting the train to Trenton, he wouldn’t get out of the car. Curiously, for the last few weeks, I’ve noticed that he likes to stay in the car as his “den”.

So, I let him stay put and drove to the train station. It was in the high 40’s but just in case it warmed up, I found a parking space in the shade and cracked the windows and opened the sunroof so the car wouldn’t get too warm and hopped the 8:39 to Trenton.

I got back home a few hours later and the phone was ringing.

It was the Bordentown Police. Uh oh. What did I do now? Is it that Mount Holly parking ticket I haven’t  paid yet? Did someone complain about the dog crapping in the woods?

The police said they had gotten a call from the NJ Transit Police, who noted my car with the dog in it and wondered where I was. The cop said the police had come to my house this morning to check up on me and see if I was all right, but no one was home. Cop asked if I was OK.

I told him I was fine and thought nothing of it.

After I hung up, I noticed a message on my cell and listened: it was from the State Police – asking me to call them immediately.

Now I began to think something was not right: the NJ Transit police, local police, and State police all involved? They come to my house? Call me twice?

And all they are concerned about is if I’m OK?

I wondered just how they even noted a “problem” with my car in the NJ Transit parking lot at the Bordentown train station.

Do police typically track down, call, and visit the homes of owners of “suspicious” cars?

The dog sleeps in the back of my hatchback and is not visible from the street. There are maybe 75 or more cars in that parking lot.

What was so special or suspicious about my car that NJ Transit police noticed?

My mind raced.

So I called the State Police – the Sergeant who had called me wasn’t in, so I left my name and number. Never heard back from him.

Suddenly it occurred to me what might have happened –

Given the Paris attack and threats on NY, the NJ Transit cops could have been on heightened security. If so,  it could have been three possibilities:

1) I’ve been stopped by Homeland Security and local police when driving – several times – and not for traffic violations, but to ask me detailed questions about what I was doing and where I was going. Those stops virtually confirmed that I am on some kind of domestic watch list or database and likely was screened by digital license plate scan technology.

The NJ Transit police could have scanned my license plate and gotten a “hit” from whatever database I am in.

The origin of all this was way back in 2008, when I was photographing south jersey refineries and chemical plants just off Rt. 130.

Because those facilities are “critical infrastructure” – I triggered some kind of Homeland Security, FBI, Joint Terror Taskforce and regional Fusion Center episode.

As I was taking photos, the police arrived and I was detained at the scene and later brought to Paulsboro police station for questioning (police also took my photograph, but I was not fingerprinted).

A few days later, the FBI, Homeland Security and the Hunterdon County Prosecutor’s Office investigators came to my home to conduct an investigation.

2) In the alternate, my internet viewing of The Battle of Algiers and the Cuban Revolution could have triggered some kind of terrorist surveillance alerts.

Do the internet surveillance cops think only terrorists are interested in history?

3)  Or, it could have been both the prior watch list, license plate scan, AND internet monitoring.

The fact that I even imagine such things to be possible is perhaps the strongest evidence that we are living in a police state.

The world Orwell imagined is here.

And Big Brother has far more powerful tools than the telescreen.

[End Notes:

1. I bought my Riverline ticket with a credit card.

Did NJ Transit Police have access to my credit card records and note that I was riding their system?

2. Did the State Police call me so that they could GPS my location by use of my cell phone?

3. I left my cell phone home –

Did State Police find it suspicious that my cell phone was at home, my car was at the train station, and I had purchased a train ticket? Did they think it odd that someone would travel on a train without their cell phone?

4. NJ Transit trains and stations have video surveillance – Was I tracked by digital facial recognition?

5. I got a email on Thursday from a friend at Yale who wrote that she was too busy preparing for Paris Cop21.

Did the internet spies use key word monitoring for sensitive phrases like “Paris”?

6. Did this 48 hour pattern of behavior trigger some kind of terrorist profile?

This is the rabbit hole we’ve gone down.

This is the kind of thinking one does when one knows that Big Brother has total information awareness.

Or maybe Big Brother was concerned about this “scary” photo printed in the newspaper story on the Salem nuclear permit – I got that tee shirt from American Indian Movement folks – if you can’t see it, it reads: “Homeland Security – Fighting Terrorism Since 1492”

A Moratorium On Fossil Infrastructure Is Necessary

Local Resolutions, NEPA, & FERC Won’t Block Pipelines

“I’m not afraid to listen to Bill Wolfe when he has a good idea,”[Senate Environment  Committee Chairman] Smith said. Wolfe says he would like the Legislature to take a stronger stance with a bill to require action by the DEP. ~~~  Kirk Moore of the Asbury Park Press story on 9/27/10

[Intro Note: I understand that a State level moratorium is radical, complex, not a panacea that would solve all fossil infrastructure problems, and would NOT stop the Clean Water Act Section 401 water quality certification review clock for FERC pipelines. It is still a great idea. – 11/3//15 update, end]

NJ doesn’t have coal mines, oil wells, tar sands, or fracking wells to shut down – our challenge is infrastructure.

Aim high friends, this is what is necessary: along with a pledge of resistance and direct action to “throw your body on the gears of the machine” (Savio).

Dear Senator Smith:

I am writing to suggest the need for legislation and present a modest proposal for your consideration.

I assume you are familiar with the various pipeline controversies underway throughout the state, as well as the most recent climate science that warns that we must keep at least 80% of known fossil fuel reserves in the ground if we are to avoid catastrophic warming.

The PennEast gas pipeline capacity alone (1 billion cubic feet per day) would create 21.5 million tons per year of CO2 emissions – that’s more than NJ’s entire instate power sector (using US Energy Information Administration emission factors) – and that does not include far more potent methane emissions from upstream fracking wells and transmission.

Obviously, NJ can’t honor or attain the Global Warming Response Act emission reduction goals if we continue to build fossil infrastructure. 

While the Governor’s power to veto off shore LNG is well known, relatively few people are aware that the DEP has power to kill a FERC regulated pipeline under Section 401 of the Clean Water Act by denying a “water quality certification”. There is a sound legal and scientific basis to do so, given the fact that the PennEast pipeline would cross many (some estimate 31) Category One streams protected by NJ’s EPA approved Clean Water Act anti degradation policy of “no measurable or calculable change in existing water quality”.

(DEP could use State law and regulation to deny permits for non-FERC regulated and intrastate pipelines that impact C1 waters – and all reservoirs are C1 waters. A regulatory roadmap outlined in this post).

Similarly, the Pinelands Commission blocked the proposed South Jersey Gas pipeline, but BPU revived it and is poised to approve it via unilateral and highly dubious regulatory determinations by the Pinelands Commission’s Executive Director.

So, here’s my idea for legislation – it is modeled on the Newark Watershed Moratorium and the Gibson bill Pinelands/Cape May moratorium on water withdrawals:

Introduce a bill to impose a moratorium on State agency approvals of pipelines pursuant to Clean Water Act and NJ Water Pollution Control Act until DEP conducts a study of water quality and climate impacts and develops adequate regulatory safeguards.

There have been many moratoria in NJ –

http://www.wolfenotes.com/2015/07/pinelands-commission-asked-to-impose-a-moratorium-on-pipeline-reviews/

Some have been declared by the Gov. via Executive Order and some by the Legislature via legislation and one by an administrative agency (DRBC fracking moratorium).

The Pinelands Act and the Freshwater Wertlands Act came about as the result of moratoria declared by Governors.

The common theme in all of them is the existence of an immediate and dire threat that requires some kind of time out until safeguards can be put in place.

The Pinelands Kirkwood-Cohansey aquifer study to determine ecologically safe amounts of withdrawals came about with a kind of a moratorium: as a response to salt water intrusion threats, a law was passed that funded the Pinelands Commission/USGS research and it prohibited additional water withdrawals in Cape May until science found a “safe” level”.

New York Times:

“Mr. Gibson’s bill, which was approved in 2001, called for a $2 million study of the projected population and water demands in Cape May County over the next 50 years. The bill also called for a moratorium on new permits to withdraw groundwater in Cape May County — unless the applicant could prove the withdrawal would not exacerbate the saltwater intrusion.

http://query.nytimes.com/gst/fullpage.html?res=950CE6D81531F937A35751C1A9639C8B63

Statement on Gibson bill:

As amended by the committee, this bill would require the Pinelands Commission, in cooperation with the Department of Environmental Protection (DEP), Rutgers, the State University, and the United States Geological Survey (USGS), to assess and prepare a report on the key hydrologic and ecological information necessary to determine how the current and future water supply needs within the pinelands area may be met while protecting the Kirkwood-Cohansey aquifer system and while avoiding any adverse ecological impact on the pinelands area. This bill as amended would appropriate $5.5 million to the Pinelands Commission for that purpose.

Also, as amended by the committee, the bill would require the DEP, in cooperation with the USGS, to assess and prepare a report on sustainable water supply alternatives within Cape May county, but outside of the pinelands area, necessary to meet the current and future water supply needs of Cape May county while avoiding any adverse ground water or ecological impact on Cape May county.

During the assessment and preparation of the report, the bill allows DEP to issue approvals or allocations for increased ground water withdrawals in Cape May County only upon a finding that they will not accelerate salt water intrusion, lower existing stream base flow or harm ecological functions or wildlife. 

http://www.njleg.state.nj.us/2000/Bills/A1000/658_S2.PDF

Here’s another example from North Jersey – the Newark Watershed development moratorium – which was linked to passage of legislation authorizing DEP to regulate buffers – that bill never passed and the moratorium remains almost 30 years later. The Appellate Division explained:

“The vehicle chosen was a moratorium on the transfer of watershed lands, to permit time for the DEP to study and report on the need for and means to secure watershed protection. Included in the proposed study was an evaluation of the effectiveness of establishing buffer zones around public water supply reservoirs for the purpose of protecting drinking water quality.

DEP was further directed to transmit its study, upon completion, to the Governor, the BPU and the Legislature. The Act provided for exemptions from the moratorium, but only upon a showing “that there is a compelling public need for the conveyance of the property, that the denial of the exemption would result in extraordinary hardship, or that the sale or development of the watershed property is otherwise consistent with the purposes of this act.” Applications for exemptions under the Moratorium Act were made subject to consideration by the Review Board, which was created by the Act, consisting of the Commissioner of DEP, the Commissioner of the Department of Community Affairs and the President of the BPU.”

http://law.justia.com/cases/new-jersey/appellate-division-published/1995/a672-94-opn.html

We now are faced with a far more significant – in fact existential –  imminent and substantial threat of climate catastrophe that warrants a moratorium.

No more carbon fuel infrastructure until we know what the impacts of more greenhouses gases are going to be.

No need to be timid or reluctant in making this bold demand – similar moratoria have been enacted – This is politically feasible – and we are on firm scientific and historical grounds.

Wolfe

 

It Was A Great Day for the Pinelands

Climate and Anti-pipeline activists gaining momentum

We had a minor but significant victory today in the Pinelands.

In response to many months of repeated public demands that the Pinelands Commission consider climate change impacts on the Pinelands and amend the Comprehensive Management Plan (CMP) to address climate and energy policies, today Commission Chairman Lohbauer announced that the Planning and Implementation Committee (P&I) would begin to consider the issue during their December meeting.

Lohbauer noted that Commissioner Lloyd also expressed support for that initiative and he asked staff to prepare briefing materials to begin that discussion for the December P&I meeting.

Lohbauer’s remarks today mark a significant change by the Commission.

The move follows intense discussion at last month’s meeting, when the Commission went into executive session to discuss whether they had legal authority to address climate change in the CMP. Presumably, given Lohbauer’s announcement, the answer to that legal question was yes, the Commission does have the authority.

Previously, Executive Director Wittenberg stressed that the CMP lacked standards to consider climate and legal Counsel Roth stated that the Commission lacked jurisdiction to address climate change.

In prior testimony and correspondence, we have urged the Commission to address a comprehensive set of climate and energy policies as amendments to the CMP, including:

• reduction of greenhouse gas emissions, or mitigation. The NJ Global Warming Response Act already sets a deep 80% reduction goal that could serve as a starting point;
• the science of impacts of climate change on the Pinelands, including a monitoring program;
• adaptation strategies to current and projected climate change impacts;
• promotion of energy efficiency and renewable energy;
• infrastructure policies that strongly discourage fossil infrastructure and require lifecycle carbon emissions analysis;
• land use review policies and practices that include net zero carbon building standards and offset requirements.
• Administrative moratorium on review of major fossil infrastructure or greenhouse gas emitting projects pending adoption of CMP safeguards.

Today, I reminded the Commission that they had previously acknowledged jurisdiction and the importance of climate change and promoting renewable energy in the April 2011 CMP amendment regarding solar: 

We look forward to the December P&I meeting and encourage readers to send supporting ideas, science and policy proposals to the Commission for consideration between now and then.

Today’s Hearing

The Commission’s hearing room today was packed, and 20 people provided almost 2 hours of testimony, most of which opposed the South Jersey Gas and NJ Natural Gas pipelines current pending approvals.

The testimony included calls to address climate change, to consider President Obama’s rejection of the Keystone XL pipeline and Gov. Cuomo’s veto of the Port Ambrose offshore LNG project, and to declare a moratorium on pipeline reviews.

“Times are changing” was the constant refrain and appeal to the Commission to change with the times and respond to public demands.

There was more excellent testimony on the fabricated military need for the NJ Natural Gas pipeline. That pipeline would not serve the Joint Base, but would provide enough gas to double the current number of NJNG residential and commercial consumers.

I reiterated my call for a halt to review of the NJNG application pending a referral and investigation by the NJ Attorney General’s office of potential fraud or misconduct, particularly in submitting and certifying a false application to the Commission.

There was an in depth interrogation of the question of exactly how we have arrived at the current “bizarre” situation with the South Jersey Gas pipeline by attorney Arnold Fishman, who called BPU a “shill” for SJG (a “bizarre” situation I have called “legally absurd”).

In an almost courtroom like interrogation, Fishman asked detailed questions on exactly what the basis for the Certificate of Filing was and how the prior findings of inconsistency with the CMP were reversed. Fishhman pinned down regulatory officer Chuck Horner, who repeatedly evaded and obfuscated the “primarily serve only the Pinelands” standard, at one point causing Chairman Lohbauer to intercede on his behalf and in the process make an embarrassing mistake by saying that that standard did not apply (which he later apologized for).

Former California utility power engineer George Hay noted multiple large energy projects in the region. He objected to what appear to be anti-competitive market manipulation practices, opposed how SJG subsidizes investor risks with ratepayer money, and connected many dots, from the Philadelphia “energy hub” concept to the Wolff & Samson law firm’s involvement, suggesting potential corruption on a scale of Bridgegate, United Airlines “Chairman’s flights”, and Atlantic City airport investigations. He called for a two year time out to sort these issues out.

In an  unusual move, a reporter from the Press of Atlantic City even stood up during the public comment period to ask the commission why it was going into executive session to discuss broad issues about the SJG pipeline review process (previously, Chairman Lohbauer stated that the Commissioner would go into executive session to discuss a letter from Carleton Montgomery of PPA regarding the Commission’s role and the review procedure for the SJG pipeline).

All in all, it was quite a day – we need to keep up and expand the pressure.

It clearly is working – the Commission seemed on it heels today.

No Rate or Revenue Caps on Private Corporate Entities

Austerity Driven Financial Crisis In Public Sector An Excuse To Privatize

Another Threat to Clean Water & Power Grab by Governor Christie

It has become increasingly obvious that, for many years, NJ has failed to invest in our antiquated water infrastructure and that those failures to invest have created multi-billion dollar financial deficits that will force significant rate increases across the State to generate funds to maintain and upgrade infrastructure to meet clean water standards.

Infrastructure deficits and likely significant water and sewer rate increases served as justification for passage of recent legislation to promote privatization of NJ’s water and sewer systems.

In the wake of passage of that law promoting privatization of public water and sewer systems, the Christie Administration now is quietly pushing a legislative initiative that would starve local sewer authorities of adequate revenues to provide clean water, creating financial crisis and making them ripe for privatization.

Yesterday, the Senate Budget and Appropriations Committee heard a bill (S72 [1R]) that would impose the Christie Administration’s 2% revenue cap on regional sewer authorities, and subject their budgets to oversight by the Governor’s Office: (Statement)