The Great Ethanol Caper – A Seemingly Good Idea Gone Wrong

It is a rare event indeed when oil industry, environmental groups, poverty advocates, taxpayer groups and livestock growers all unanimously agree that a federal program has gone horribly wrong. But that is exactly what happened with respect to the federal ethanol in gasoline mandate. How did this come to be?

While the concept of adding ethyl alcohol, commonly referred to as “ethanol,” to gasoline dates all the way back to the early 1900s, a real push for such a result began in the 1970s by corn growers. It finally gained some traction in the 1990 amendments to the Clean Air Act, which mandated that oxygenates be added to gasoline to make it burn more cleanly in areas with poor air quality. While methyl tertiary butyl ether (MTBE) became the oxygenate of choice based primarily on its price, leakage of the chemical from underground storage tanks (and because it migrates faster and farther in soil and groundwater than other gasoline components) resulted in the product being banned and a switch by fuel manufacturers to corn-based ethanol. The Energy Policy Act of 2005 cemented the role of corn-based ethanol by including a Renewable Fuel Standard that required all gasoline sold in the nation to be comprised of 5 percent oxygenate. In 2007, that requirement was revised to require increasing amounts of oxygenate in every year up until 2022. However, starting in 2012, the amount of corn-based ethanol that could be added to gasoline was capped, and the remaining oxygenate requirement had to be filled by so-called advanced biofuels — oxygenates made from cellulosic biomass such as switch grass. If transportation fuel manufacturers failed to achieve the required levels, the law required that they purchase “waiver credits” instead. Unfortunately, while cellulosic biomass and other biofuels may someday become readily available, no such fuels for commercial use were produced in either 2011 or 2012.

This series of events, caused by federal policy, has produced a number of negative consequences that have given birth to the strange coalition of forces mentioned above, who are now lobbying Congress and the EPA to make drastic changes in the mandate. Among those consequences are the following: With respect to corn-ethanol, a huge percentage of all corn grown in the United States (at least 40 percent), which produces about 40 percent of the world’s total corn supply, has been diverted from food and animal feed production for use in fuel, resulting in an increase in the cost of corn-based products that has been estimated to be as high as 68 percent, which in turn has increased world hunger and caused rapid deforestation in order to plant more crops. Because that deforestation increases the amount of greenhouse gases trapped in the atmosphere, many experts have now concluded that ethanol causes greater harm to the environment than the gasoline it is intended to replace. With respect to advanced biofuels, fuel manufacturers have been forced to obtain waiver credits, costing millions of dollars for biofuels they did not purchase because the products do not exist, driving up the cost of providing another essential consumer commodity — motor fuel.

It will be interesting to see how this well-intentioned fiasco finally gets sorted out.

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New Revisions to Federal Total Coliform Rule Unlikely to Have An Immediate Impact on Public Water Systems

The Total Coliform Rule is a national primary drinking water regulation that was published in 1989 and became effective in 1990. The rule set both health goals and maximum contaminant levels for total coliform in drinking water. The rule also provided baseline requirements for testing that water systems must undertake. Coliforms are a large class of micro-organisms found in human and animal fecal matter, used to determine whether the drinking water may have other disease-causing organisms in it. A high total coliform level in water indicates a high probability of contamination by protazoa, viruses and bacteria that may be pathogenic.

On December 20, 2012, the Environmental Protection Agency signed off on final revisions to the rule to be submitted for publication in the federal register. Based on advisory committee recommendations, the revisions will require public water systems that are vulnerable to microbial contamination to identify and fix those problems. More specifically, public water systems that are vulnerable to microbial contamination in the distribution system (as indicated by monitoring results for total coliforms and E. coli) will be required to assess the problem and take corrective action that may reduce cases of illnesses and deaths due to potential fecal contamination and waterborne pathogen exposure. The revisions will also establish criteria for public water systems to implement reduced monitoring, thereby incentivizing improved water system operations.

Some states, like California, have requirements that were already stricter than the federal requirements, and compliance with this new revision to the federal Total Coliform Rule is not required until April 2016. As a result, the publication of these changes to the rule is unlikely to have any immediate impact on many public water systems, but it may encourage states to respond with their own regulatory changes to either mirror or strengthen the new federal requirements. Many utilities already rigorously test for both total coliform and E. coli; or, they test for E. coli if there is any total coliform positive result. Because utilities must strictly adhere to regulatory sampling and notification requirements to protect the public health, and to prevent liability suits, there is also unlikely to be any immediate changes in utility sampling conduct based on this revision to the federal rule — absent specific changes in the state regulations, which govern testing. But time will tell.

California Pushes Forward in the Carbon Frontier, Overcoming Legal Challenge

January was quite a month for California’s cap-and-trade program. For one thing, the program went live. For the first wave of approximately 350 regulated entities, January 1, 2013 marked the beginning of mandatory compliance with the program. Those “covered entities” will need to come up with emissions allowances or approved offsets (for up to 8 percent of the entity’s total emissions) to meet their compliance obligations, which are based on a gradual reduction of historical emissions.

On January 25, proponents of the program also defeated a lawsuit that challenged the very validity of the offset program. Namely, the Superior Court for the County of San Francisco determined that the California Air Resources Board (“CARB”) was within its authority to use a standards-based approach (as opposed to a project-specific evaluation) to determine whether an offset project would result in “additionality,” or additional emission reductions that would otherwise not have occurred. You can find a copy of the decision here.

The offset program victory follows on the heels of the launch of the first auction. Despite a last-minute lawsuit challenging CARB’s authority to raise revenue by auctioning off emission “allowances,” the first ever auction went forward. Although the $290 million generated by the auction was less than was estimated (some predicted as much as $1 billion would be raised), the auction was an important milestone.

Since the framework for a cap-and-trade system was first adopted, there has been a number of lawsuits challenging either the legality of the program as a whole or its components. But, despite a year’s delay, the program has now commenced. The government faces a new domain and continuing objection as it implements the regulatory framework, but California’s program could serve as a model for other government programs, resulting in a possible expansion of the market. Already there has been a proposal to link California’s market with Quebec’s, and there has been chatter of linkage to Australia’s carbon economy as well.

Players in the market are looking forward to the prospect of numerous opportunities, from investments relating to the trading of allowances to the development, accreditation and verification of offset projects. As California pushes forward with the cap-and trade program, we are reminded that the State’s pioneering mindset is alive and well.

California’s First Carbon Auction: Without a Hitch or Full of Glitch?

For those interested in California’s cap-and-trade program, all eyes are on the first-ever auction of greenhouse gas emission credits (or “allowances”) scheduled for Wed., Nov. 14. Although the first wave of regulated entities were allocated free allowances to meet up to 90 percent of their recent emissions, such entities will have to cut their emissions in coming years or buy allowances or offsets to make up for any emissions over and above the allocated allowances.

Although buying and selling of offsets and allowances has been going on for some time via spot and exchange trades, the auction puts a spotlight on the burgeoning market as the program’s Jan. 1 compliance commencement date looms.

More than 23 million allowances for use in 2013 are being auctioned, with an additional nearly 40 million being auctioned for use in 2015. Bids are being sold in multiples of 1,000, and the floor price has been set at $10 per allowance. Both the state and private entities holding allowances will be selling at the auction. It is anticipated that the auction could raise more than $600 million for the state, and that future auctions could raise billions more.

The auction will be conducted electronically. To participate, eligible participants must have already registered and been approved as users in CARB’s market tracking system. Various market players have planned to participate in the auction, including regulated entities and investors.

A test run of the auction took place last month and was reported by CARB and others as a success. Whether next week’s actual auction, if it occurs as scheduled, will be perceived as a success will depend not only on the auction’s mechanics, but also, of course, on the trade price established for the allowances.

There has been some speculation that state officials might yet decide to postpone the auction due to threatened litigation that, if filed, could chill potential buyers’ willingness to bid. However, with the re-election of President Obama, the Democratic dominance in state government and the national discussion regarding a possible link between climate change and Hurricane Sandy, a decision could be made to go forward with the auction despite potential auction participation impacts.

All Politics is Local: Should State or Local Government Approve Renewable Energy Projects?

Who should have primary authority to approve solar photovoltaic (“PV”) and other renewable energy projects not within the California Energy’s Commission’s (“CEC”) exclusive jurisdiction?  Certain interests, such as the utility-scale solar industry and independent energy producers, are in favor of the CEC permitting or having the option to permit such projects.  Other interests, including local government agencies, the wind industry, and the Sierra Club, strongly believe that the decision to site and approve these projects should be made by counties and local government.

This issue has taken on a new level of prominence with the introduction of AB 2075, a bill that would expressly strip the CEC of jurisdiction over solar PV projects and would eliminate a  code section that gives an option to applicants proposing energy “facilities” otherwise exempt from CEC jurisdiction to submit to the CEC’s exclusive jurisdiction.  Currently, the CEC has clear jurisdiction over solar thermal projects, but it is unclear whether Public Resources Code Section 25502.3 in fact authorizes CEC to agree to take jurisdiction over non-thermal energy projects such as solar PV plants.  The CEC claims that Section 25502.3 in fact does allow renewable energy powerplant proponents, including solar PV applicants, to submit to CEC jurisdiction, thereby bypassing local control over such projects.

There is a common view that the environmental review process marshaled by the CEC is less onerous and more predictable than the environmental review conducted by local government.  Local agencies and certain environmental groups believe that the CEC is not adequately protective of local interests and the environment, and that project applicants should not be able to “cherry pick” the regulator.  Those in favor of CEC jurisdiction argue that local control over energy projects can result in unpredictable permitting issues and impediments to achieving California’s 33% renewable portfolio standard (“RPS”) requirement by 2020.  For example, it is claimed that Riverside County has stalled on all its solar applications in retaliation for a trade association (the Independent Energy Producers) lawsuit attempting to overturn a new property tax on project sites.

Although the arguments surrounding this issue do not always hold up (a number of California counties have, for example, emerged as leaders in the development of renewable energy), both sides in this debate have a point.  On the one hand, local governments should certainly have a say in the land use of their domain.  On the other hand, the CEC is our state’s energy expert and is perhaps better situated to help meet California’s hefty RPS mandate.

At the end of day, although AB 2075 could potentially bring greater clarity to renewable energy permitting processes, perhaps the status quo is not all that dysfunctional.  Most renewable energy applicants will likely still go to the local government for project approval, and the local government will likely conduct an appropriate review of the project.  However, if local government politics unduly interfere with the processing of a particular project, the CEC can be an appropriate escape valve.  Given the statewide 33% RPS, a permitting process that helps route around local political tit-for-tat is not necessarily a bad thing.

Adaptation: The Future of Climate Change

For those who believe in Climate Change, there is news: True to its word, the Union of Concerned Scientists  has published Cooler Smarter: Practical Steps for Low-Carbon Living, a guide examining which green actions make the most difference. How important is it to turn off the lights? According to these environmentalists, not very.  The vast majority of the green advice you’ll read? Nothing more than nice gestures; perhaps a little better than the alternatives.

According to their research, when it comes to climate change, there are four primary activities that dump carbon into the atmosphere:

  • traveling from place to place;
  • keeping buildings at pleasant temperatures;
  • creating electricity;
  • and raising animals for meat.

These conclusions raise some disturbing questions for those who believe in Climate Change. Cap and Trade?  Energy from solar and wind power? Nothing seems to be working. And indeed, with China, India and other underdeveloped countries yearning to have a standard of living commensurate with ours, it’s almost a moot point to consider what we should do if the largest populations in the world are not on board. Even in the United States, environmental groups were angered and frustrated by Obama’s decision in September to postpone indefinitely a regulation to tighten ozone standards.

Perhaps the answer is adaptation. This is not a new idea, but maybe a little more energy and money should be devoted to answering some very basic questions. How do we keep our water supply intact? How do we keep our coastal cities from flooding? What are going to be the biggest issues and how can they be fixed?

There is a silver lining. For those who believe there will be major problems, consider the new business opportunities arising due to climate change. In the next ten years, it is possible that one of the new approaches to climate change will be about adapting to it.  If so, we can expect significant business investment in that nascent arena as well.

The Great Carbon Shuffle

Government programs designed to reduce greenhouse gases in the atmosphere appear to be having the unintended consequence of actually increasing the amount of carbon dioxide being emitted.  Programs at both the federal and state level in California intended to reduce the amount of carbon dioxide (CO2), a greenhouse gas produced from among other activities, the combustion of fossil fuels in cars, trucks and other forms of transportation, are a particularly noteworthy example.  Unfortunately, the old adage that unintended consequences will frequently result from changes made with the best of intentions is truer than ever in the area of climate change-related policy and regulation.

When fossil fuels, which contain carbon, are burned in a vehicle’s engine, the carbon is converted to CO2 and, unless somehow trapped, this gas is emitted into the surrounding air.  The general objective of climate change-related policy and regulations is to reduce the overall amount of CO2 and other greenhouse gases that are being emitted into the earth’s atmosphere in order to slow global warming.

At the federal level, a regulation known as the “renewable fuel standard program” or “RFS2” requires that ethanol, which generally has a lower carbon content than the crude oil used in most petroleum-based transportation fuels, be added during the fuel manufacturing process to reduce the fuel’s overall carbon content.  An increasing amount of ethanol is required to be added during manufacturing over the multi-year life of the program.  To even further reduce the carbon content, the RFS2 regulation requires that a certain percentage of “advanced biofuel” be used in fuel manufacturing and, in essence, requires fuel manufacturers to select only those ethanols that contain the very lowest levels of carbon.

Almost all ethanol produced in the United States is made from corn and, unfortunately, corn-based ethanol tends to contain relatively high levels of carbon.  Brazilian ethanol, on the other hand, which is made from sugarcane, contains relatively low levels.  As a result, sugarcane-based ethanol produced in Brazil is being shipped by tank vessel to the refineries in the United States that manufacture transportation fuels and corn-based ethanol produced in the United States is being shipped back to Brazil, where it is refined into fuel to power that country’s large and growing vehicle population.

Because a molecule of CO2 emitted anywhere in the world has exactly the same impact on the earth’s atmosphere as a molecule emitted anywhere else, the actual effect of this cross-shipping program is a net increase in the amount of CO2 being emitted into the atmosphere, along with an increase in product costs, because of the not insubstantial CO2 emissions that result from the long tanker voyages that are required to make it work.  This “crude shuffling” and its adverse effect on overall CO2 emissions is an unintended consequence of a program that was designed to reduce CO2 emissions from the combustion of domestic transportation fuels.

Another example at the federal level is the debate over the XL Keystone Pipeline proposed to transport Canadian crude oil, much of it from that country’s vast stores of oil contained in tar sands, to refineries on the U.S Gulf Coast.  Opposition has been mounted to the project because Canadian crude oils tend to be higher in carbon content than most domestic crude oils.  One of the arguments made against approving the pipeline is that the United States should not be encouraging the use of higher carbon-containing crude oils in domestic fuel production.  As a result, the project has been delayed and the Canadians have advised that, if the delays continue or the project is ultimately disapproved, they will have no choice but to construct a pipeline to Canada’s west coast to allow shipments of their crude by tank vessel to refineries in Asia or Europe that would be happy to receive the product.  If this were to occur, the Canadian crudes containing higher levels of carbon would still be refined into transportation fuels which are combusted in vehicles, and the resultant CO2 would still be emitted into the atmosphere.  The emissions would simply occur in another part of the world.  There would again be an overall net increase in the amount of CO2 emitted because of the much greater level of crude transportation emissions associated with shipping the crude to the other side of the globe.

In California, one of the climate change-related programs being aggressively promoted by the state’s Air Resources Board is the Low Carbon Fuel Standard or “LCFS.”  Like the federal renewable fuel standard program, the LCFS seeks to reduce the level of carbon that exists in the components that make up petroleum-based transportation fuels, but do so by penalizing the use of higher carbon containing crude oils in gasoline and diesel fuel manufactured at California refineries.  The difference is that the LCFS focuses on the crude oils, rather than the ethanols, that are used to manufacture transportation fuels.  While the objective of the program is to encourage California refiners to lower the amount of CO2 that results from fuel production, it is questionable whether there are really any feasible or cost-effective ways of achieving that result.  Instead, the effect could be to force California crude oil producers to either ship their crude to out-of-state or out-of-country refiners that are not subject to the LCFS or to shut in existing production that tends to have higher carbon content and therefore lower profitability.  A likely result is that most California crudes that would be penalized if used by nearby California refiners will be used somewhere else in the world instead, with an attendant increase in overall CO2 emissions due to the transportation-related emissions required to ship to these more remote refining locations.

Whether the foregoing result will in fact occur is now in doubt because of a December ruling by a federal judge in consolidated cases brought by major trade groups for both the petroleum refining and ethanol production industries challenging the legality of the LCFS program.  The court enjoined enforcement of the program, which was scheduled to commence on January 1, 2012, on the ground that it violates the Dormant Commerce Clause of the United States Constitution.  The Air Resources Board, which promulgated the LCFS, has appealed that decision to the 9th Circuit Court of Appeals.  Whether the LCFS will ultimately be put in place is therefore currently unclear.

One may wonder why such programs, that result in unintended adverse consequences despite their good intentions, remain in place.  Unfortunately, policy makers and regulators often adopted a narrow and parochial focus on the issues they must deal with, while remaining oblivious to the more global consequences of their actions, or they incorrectly assume that the rest of the world will quickly follow their example.

Ways to Rev Up Your Metabolism

Diet With Friends

You may have experienced going on a new diet together with a friend. Some weeks later, you are disappointed to learn that your friend has lost a lot more weight than you did. All other things being equal, one likely reason for the disparity is metabolism. The metabolic rate varies from one individual to another.

The Food We Eat Fuels Out Body and Gives Us Energy

What is metabolism?  Metabolism is the sum total of the chemical reactions in our cells that

convert the fuel from food we eat into the energy required by the body to perform anything, be it walking or thinking or talking. Seen in this context, the better our metabolism works, the faster it can burn calories and convert them into energy. The key, therefore, is to increase your metabolic rate. How do you do this?

Minimize stress:  since you can’t get rid of it entirely, learn to control it with some relaxation techniques. Stress not only thwarts your efforts to lose weight; it can inflict damage on the physical, mental and emotional aspects of your health. Your body releases certain hormones when you are experiencing stress. This causes your body to retain the fact cells, thus keeping you from shedding your excess weight.

Eat More Ofter and Smaller Portions

Eat smaller portions but at more frequent intervals. This helps you lose weight faster because when you eat only a small amount of food, your body will be working more efficiently and burning the calories better. Think of your body as a food processor. If you want to chop up something really fine, you don’t put all of it in the processor at one time. The same principle works here.

Exercise Everyday

Incorporate exercise into your daily routine. It could be just walking around the block, or a bit more intense, like jogging or cycling. If you’re on an exercise regimen, you can raise the level of intensity or add more exercise. Vary your exercise routine to keep from getting bored. You can also try resistance training. This type of exercise will help you burn more calories as you build up your muscles.

These are proven ways of helping your body burn calories faster. It’s important to monitor your calorie intake. If you want to keep eating the usual amount of food, then you have to exercise more. Of course, you will lose more weight if you eat less than what you’re used to and still do your exercise routine.

The best way to lose weight is follow a proven weight loss program as well as including exercise

 

What Constitutes A Good Healthy Diet?

Foods Gives The Body A Strong Protection Against Infection

We are living at a time when botox treatment, liposuction, skin stretching and skin tucking, face-lift, among other synthetic treatments are the order of the day. People do these things that cost thousands of dollars, and which are life-threatening with the hope of achieving a good-looking body, and perhaps healthy figure. Be advised though that nothing in the world today can beat a good diet. The right combination of food gives the body a strong protection against infections and illnesses, and gives the body energy and strength to undertake day to day activities.

What really is a good diet is a question that lacks a clear definition as yet. Debate is still rife among nutritionists and health and fitness experts on whether it is the carb or protein content in a meal that should be given top priority. Sadly, lay people rarely assess their intake’s nutritional value in terms of carbs or proteins as there is no gadget that helps determine just how much calories a pack of French fries contain, neither is there a counter or measure in the stomach that determines the fat content of a chicken leg.

Don’t Miss Breakfast It’s The Most Important Meal of the Day

Many people today confess to going without breakfast citing reasons such as lack of time to prepare and take breakfast, lack of resources, and sometimes even lack of knowledge, effort, and talent to cook breakfast. What they don’t know is that missing breakfast is more or less a suicidal matter as it happens to be the most important meal of the day.

Typically, breakfast should be dominated by carbohydrates from such things as rice, pastry, bread, or root crops, which should be complemented by proteins in form of milk, cheese, eggs, or meat, and minerals and vitamins in the form of veggies and fruits. This is because carbs provide energy for growth and to help sustain an individual all day long. As mentioned, breakfast is the most important meal of the day hence should be the heaviest as it acts as your fuel for the entire day ahead.

More Protein and Less Carbs

Nutritionists advice that lunch should be the reverse of your breakfast i.e. more proteins and less carbs. You should also ensure you take a side dish made up of vegetables and a fruit dessert to provide you with necessary fiber to aid in digestion of the carbs and proteins from the two meals.

If you really wish to be slim, you should go ahead and cut down on what you take for dinner. Just take a sufficient amount of carbs and proteins as well as veggies and fruits, which should then be complemented by a glass full of milk just before bedtime.

 Snack In Moderation

Snacking should be done in moderation and if possible, one should take fruits to avoid losing appetite for the upcoming meal. But if you cannot ‘survive’ on fruits alone, some bit of ice cream, chocolate or an occasional gulp of wine is acceptable, but only in moderation.

The best way to lose weight is follow a proven weight loss program as well as including exercise

Handy Healthy Tips to Help You Lose Weight

Enjoy Your Weight Loss Program

The world today is enthralled with weight loss, both for cosmetic and health reasons. In spite of the reason, majority of the people want the shortest way possible and end up trying all sorts of fad diets, very extreme workout regimens, and poor lifestyle choices that will only end up thwarting their weight loss goals. The major reason why a weight loss program will not work is because for you to stick to one, you have to be comfortable in it, enjoy it, and the program has to be safe and healthy.

Here are some weight loss tips to help you in your quest to shed off those extra pounds. With these tips, you don’t have to get rid of your favorite foods or use every minute of your waking time in the gym exercising. Rationally, a good weight loss program should take some time to record tangible success. If you come across someone telling you that you will lose weight in a very short span of time, be cautious because the person might be uninformed or worse still, not honest with you. For a start, you can stick to a single weight loss program for 30 or so days, and see how it takes you. If no changes, you can then go for something else.

Dedicate Some Time Everyday to Exercise

The first tip that will help you lose weight is to walk, walk, and walk some more. If you can dedicate some time everyday for walking, you will be sure of expending calories while in the process fortifying your muscles and heart. A mini cycle too will do. A mini cycle is a portable workout unit that resembles a bicycle pedal on a metal bar. With a mini cycle, you can be able to pedal and move your legs while at your desk in the office, on the couch or wherever else you can put and reach the pedals comfortably.

The third tip talks about taking the stairs in place of an escalator or elevator. Even though you might not notice the effort involved, it is a great weight loss exercise. Equally, you can decide to walk to the grocery store and park the car somewhere far away. Tip four talks about food. Losing weight doesn’t necessarily mean getting rid of all your favorite foods, it means eating the foods in moderation, and at times only when the craving is so strong.

 Adopt A Practical Exercise Routine

While at the moment there is no particular type of food that will interfere with your weight loss attempts, when you take any food thought to be ‘bad’ in excess can for sure interfere. The last tip talks about adopting a practical exercise routine and sticking to it by setting some time for it every day. People who set a routine are highly likely to stick to it and record success than someone without a plan.