Will ALEC block EPA coal pollution safeguards at Illinois' controversial Prairie State Energy Campus?
The U.S. Securities and Exchange Commission is investigating the Illinois-based Prairie State Energy Campus, a combined coal mine and power plant spearheaded by Peabody Energy, co-owned by eight public power companies based in the Midwest. Numerous cost overruns from construction delays and equipment problems at the Campus resulted in customers in several states having to pay for power well above market price.
While Peabody defends Prairie State Energy Campus (PSEC) from SEC scrutiny, a corporate front group has developed copycat legislation that could exempt dirty projects like PSEC from national clean air and water laws.
A model state bill developed by the American Legislative Exchange Council (ALEC) would block federal pollution regulations when coal is mined and then burned or altered within the borders of a single state. The "Intrastate Coal and Use Act," created within ALEC's Energy, Environment and Agriculture task force, is ideal for projects like Prairie State Energy Campus, which mines and burns coal on site.
By exempting the U.S. Environmental Protection Agency from overseeing permits for projects like Prairie State, ALEC's Intrastate Coal and Use Act leaves regulation to state agencies, which may have weaker pollution standards or simply lack enough staff to do their jobs, as the gas fracking boom has demonstrated.
Peabody itself is a member of ALEC's anti-environmental task force, which readied the Intrastate Coal and Use Act for national distribution, and a member of ALEC's Private Enterprise Board, which may explain ALEC's role in promoting the Prairie State Energy Campus.
Materials leaked to Greenpeace after ALEC's most recent conference in Washington DC show that the American Coalition for Clean Coal Electricity, a coal front backed by companies including Peabody, was showcasing Prairie State at ALEC's conference. Files in a USB drive branded with the ACCCE logo contained three promotional videos for PSEC while a paper folder with the ACCCE logo contained a promotional brochure for the Campus.
The ALEC model does not appear to have been introduced in Illinois, although ALEC has been busy pushing a wishlist of state laws for its dirty energy members companies like Peabody, Duke Energy and ExxonMobil.
One of ALEC's national priorities this year is to un-legislate state incentives for clean energy under the false premise that they have an adverse impact on electricity rates. While there appears to be no significant correlation between state clean energy standards and raised utility rates, the Prairie State Energy Campus is raising electricity prices, as reported last July in the St. Louis Post-Dispatch:
The St. Louis suburb [Kirkwood] needed a stable, long-term power source. The plant’s developers needed customers. The parties struck a deal — a 30-year contract that would supply more than half of Kirkwood’s electricity beginning in late 2011. The kicker: The energy produced at Prairie State would be cheap compared with market power prices at the time.
But now, as the first of two 800-megawatt generating units at Prairie State begin operations — six months late — the plant hardly seems the bargain it did five years ago.
The $5 billion price tag is 25 percent more than when the city signed on, driving up the price of electricity that Kirkwood and other cities are obligated to buy. And construction delays mean the city is getting nothing for the monthly $296,000 checks it began writing to Prairie State’s owners in February.
Because ALEC peddles copycat laws that benefit dirty and expensive coal projects while attacking clean energy incentives, renewable energy interests like the American Wind Energy Association and the Solar Energy Industries Association have abandoned ALEC.
History of ALEC's Adoption of the Intrastate Coal and Use Act:
An ALEC legislator in West Virginia named Gary Howell introduced a version of the Intrastate Coal and Use Act back in 2011; his bill inspired the current model bill that ALEC is distributing. Delegate Howell suggested that all of the top 20 coal producing states consider his legislation, indicating where watchdogs should keep their eyes peeled for ALEC's model legislation.
While the bills weren't passed in 2011, West Virginia is again considering the Intrastate Coal and Use Act in the 2013 session, renewing their attempts to keep the EPA from overseeing permits to burn coal from mountain top removal.
Another version of the Intrastate Coal and Use Act has surfaced in Kentucky.
In fact, it was the Kentucky-based Bluegrass Institute that sponsored ALEC's Intrastate Coal and Use Act within ALEC's anti-environmental task force, apparently based off of what WV Del. Howell has been introducing into his own legislature. Like ALEC, the Bluegrass Institute is a member of the State Policy Network, an umbrella organization for state and national think tanks and interest groups that are usually funded by the Koch brothers and company.
Coal's Broken Promises: Not Cheap, Not Clean
A 2005 Peabody company newsletter shows that PSEC was supposed to cost $2 billion, less than half its actual price. The cost estimate was later doubled to $4 billion before reaching its actual $5 billion price tag. According to a 2012 report by the Institute for Energy Economics and Financial Analysis:
Instead of being a source of low cost electricity, the first year cost of power from Prairie State is 40 to 100 percent higher than the current cost of power in the Midwest wholesale markets and is expected to remain higher than market prices for the next ten to thirteen years, if not longer.
The Campus proposal was supported by former Illinois Governor Rod Blagojevich (currently serving a 14-year prison sentence for corruption charges), who publicly supported construction of the plant and ate up Peabody's false promises of cheap energy. In Big Coal, author and journalist Jeff Goodell notes that Peabody's desire to build its own coal plant was to help burn its own reserves of high-sulfur coal from Illinois, which the market did not have much of an appetite for. A representative of the Illinois Office of Coal Development told Goodell, "Most power plants are built in order to generate electricity. Prairie State was really conceived more as a platform to burn Peabody coal." While Peabody sold all but 5% of its stake in PSEC to eight nonprofit power companies, it has been the driving force behind the Campus since 2001.
Goodell noted that even with its highly-touted pollution control equipment, PSEC is still a dirty coal plant. It still emits hazardous particulates, acidic gasses and heavy metals. It still dumps immense amounts of carbon dioxide into our atmosphere, the key greenhouse gas that is contributing to global climate change:
"Prairie State will emit more than 11 million tons [of carbon dioxide] a year, marginally less than a similar size coal plant built thirty years ago, but more than twice as much as every vehicle sold by the Ford Motor Company in a single year."
Illinois' bind demonstrates the lose-lose situation promoted by the coal industry: drink and breathe our pollution now, and pay more...now and later.
As clean energy becomes increasingly viable, even without considering the costs of fossil fuel pollution and climate change, some cities are taking matters into their own hands, including [the ironically-named] Carbondale Illinois, which recently established that 100% of its power will come from clean energy. Cincinnati, Ohio dumped Duke Energy and made a similar commitment, as have all municipal facilities in Austin, Texas.
But clean energy advocates be warned: the more the American public recognizes that 19th Century energy like coal is a thing of the past, the more the dirty energy industries are going to spend big to desperately defend their bottom lines.
Today, President Obama received the coveted endorsement of New York City’s Mayor, Michael Bloomberg, and the Mayor highlighted climate change as a big reason why Mitt Romney should not get his endorsement.
Let’s be clear though. It took a Superstorm Sandy to force an endorsement of Obama for another term. As Mayor Bloomberg noted, both candidates have run administrations implementing policies to reduce pollution. What damns a Romney endorsement is not Obama’s fantastic record but the fossil industry-crazed climate denialism that has come to rule the Republic platform and Romney’s overt positions.
The climate policy record of Obama’s first term is dismal if you consider the scale of the problem. In the context of international negotiations, other governments have asked the Obama government to describe emissions reduction policies as a percentage of the country’s pollution, but the Obama negotiators have no number to provide. The only policies implemented in the last four years to make a significant dent economy-wide are the new car standards, which, optimistically, reduce pollution by a few percent.
If we are going to have any hope of avoiding runaway climate change, developed countries must cut about a third of greenhouse gas emissions in less than a decade.
The US federal government should be leading at home, and advocating strongly that other countries do the same. Far from being a climate leader, the Obama administration has dragged its feet on all fronts. We have no limits yet on current stationary sources of pollution, such as coal-fired power plants. We have no limits on climate pollution from aviation, which Obama has been fighting internationally. We have no limits on climate pollution from agriculture. And Obama’s team in the international climate talks has continuously attempted to stall and confuse the negotiations. The President has ceded political debate on climate to Fox News and friends, which has made climate politics in America even more backward.
There is little doubt that President Obama wants to deal with climate change, but so far that has not translated into him making it a priority for the country. Quite the contrary, the President has gone out of his way to please the fossil fuel industry. This pandering has been painfully obvious in the recent presidential campaigns, but the Obama administration has also been a fossil friend of substance.
The Department of Interior has energetically scaled up fire sales of publicly-owned coal. This coal is sold under the auspices of satisfying domestic demand, although it is often to foreign buyers who fully intend to export. The climate doesn’t know the difference. Despite one of the worst human-caused environmental disasters ever, the BP blowout in the Gulf of Mexico, the Obama administration opened up new areas to dangerous ultra-deepwater drilling on the outercontinental shelf and signed an historic agreement with Mexico to drill the deepest wells ever even further offshore. The administration hasn’t ruled out the Keystone XL tar sands pipeline, and continues to move forward with drilling in the fragile Arctic Ocean. Leaving unanswered a letter from 68 organizations calling on Obama to stop fracking in the absence of regulations and adequate knowledge of impacts, the administration seems intent to both allow fracking on public lands and to possibly approve exports of high carbon-footprint fracked gas.
In effect, the Obama administration is actively increasing supply of carbon polluting sources of energy, while dillydallying on policies and advocacy to reduce carbon pollution.
Mayor Bloomberg also criticized both candidates for failing to cite the “hard decisions” they would take to get the economy back on track. We should be asking the same regarding runaway climate disruption. The problem with endorsing Obama for his overt position on climate is that just as many, if not more, of his hard decisions have benefited climate polluters.
Wake up and smell the frack fluid! But don't ask what's in it, at least not in Ohio, cause it's still not your right to know.
Ohio is in the final stages of making an Exxon trojan horse on hydrofracking into state law, and it appears that the American Legislative Exchange Council (ALEC) connected Exxon's lawyers with co-sponsors of Ohio Senate Bill 315: at least 33 of the 45 Ohio legislators who co-sponsored SB 315 are ALEC members, and language from portions of the state Senate bill is similar to ALEC's "Disclosure of Hydraulic Fracturing Fluid Composition Act."
...disclosure of fracking fluids? On behalf of ExxonMobil?!
Frack fluids include unknown chemicals that gas drillers mix with sand and large amounts of water. The mixture is pumped underground at high pressure in order to retrieve gas and oil by fracturing shale formations. These are the chemicals that have caused widespread concern among residents near gas fracking operations, concerns echoed by doctors who don't know how to treat patients harmed by exposure to chemicals that oil companies keep secret. Oil companies like XTO Energy, a subsidiary of ExxonMobil, the first company lined up to drill in Ohio's Utica shale.
Concern over unconventional energy like gas fracking may be the reason by Ohio SB 315 also addresses clean energy standards and drilling regulations. While the new law will allow doctors to obtain disclosure of fracking chemicals, it places a gag order on them...meaning some chemicals aren't disclosed to the public at all (Cleveland Plain Dealer). Instead, chemicals that subsidiaries of Big Oil use during fracking can remain exempt from public disclosure as "trade secrets," mirroring language of ALEC's model law.
What's most suspicious is that seven of the ten Ohio Senators co-sponsoring SB 315 are ALEC members, as are 26 of the 35 co-sponsoring Representatives.*
Among the co-sponsors are Ohio Senate President Tom Niehaus and state Senator Troy Balderson. Senators Niehaus and Balderson are members of ALEC's Energy, Environment and Agriculture task force, which approved the fracking "disclosure" bill internally sponsored by ExxonMobil, modeled after a Texas bill (see New York Times and ProPublica).**
Four of the co-sponsors of SB 315 attended ALEC's meeting in Scottsdale, AZ, although it is unclear which (if any) of them may have been inside the EEA task force meeting the day that the fracking chemical loophole bill was discussed and approved:***
- Rep. Cheryl Grossman
- Rep. Casey Kozlowski
- Rep. Louis Terhar
- Rep. Andrew Thompson
Some co-sponsors became ALEC members in the lead up to ALEC's late 2011 meeting in Scottsdale, AZ, where the fracking disclosure loophole model bill was finalized by ALEC's Energy, Environmental and Agriculture task force. Emails between representatives of ALEC, the Ohio state government and Time Warner Cable's Ed Kozelek show that last-minute recruitment of new ALEC members before the Scottsdale meeting brought in three state legislators who ended out co-sponsoring SB 315 (PDF pp. 71-76): Rep. Lou Terhar, Rep. Brian Hill and Sen. Bob Peterson (who was appointed to the Ohio Senate in 2012).
Head spinning yet? Let's summarize:
- Exxon pushed the fracking loophole bill through ALEC's [anti]environment task force,
- A couple of key Ohio legislators directly involved in that task force brought the bill back home...
- ...and then a pile of Ohio legislators used ALEC's model to mold Exxon's Ohio fracking disclosure loopholes into state law!
Beyond their involvement in these ALEC task force meetings, Exxon and API were involved in the creation of a similar fracking bill through the Council of State Governments before the ALEC model even existed. As if being a Private Empire isn't enough...
ALEC, CSG, OMG!
ALEC isn't the only group that peddles corporate-written state laws, as DeSmogBlog's Steve Horn pointed out in a blog on state fracking bills and the "Council of State Governments." With direct financial support from Exxon, API, TransCanada and others, the Council of State Governments (CSG) drafted a similar fracking chemical "disclosure" bill two months before ALEC's was internally approved, although they both appear to be modeled off of a Texas law.
While one of the co-sponsoring Senators of Ohio SB 315, Troy Balderson, is a member of CSG Midwest's Energy Committee, Ohio politicians aren't part of the Suggested State Legislature (SSL) committee that vetted the Council's version of the fracking bill. Because of that disconnect and the overwhelming influence of ALEC politicians sponsoring SB 315, ALEC appears to be the keeper of Exxon's fracking secrets in Ohio.
Regardless of the varying influence of groups like ALEC and CSG forging Big Business state laws, ExxonMobil is getting what it wants. According to Don't Frack Ohio!--a project of 350:
- Fracking companies can hide which chemicals they use in the fracking process by calling them ‘trade secrets’. That means they are exempt from telling you what they put in your water. What little they do disclose is 60 days after drilling takes place, too late for communities to test to show what was in their water before drilling, rendering the disclosure meaningless.
- The gas industry pays nothing for the mess they create. Gov. Kasich’s minor tax on individual wells is offset by new tax breaks on property taxes and other giveaways, which means the gas industry will pay less in Ohio taxes than they do in any other state in the country.
- No citizen notification or input will be allowed on any part of the fracking industry. There is no public notice, no public comment, and no right to appeal for drill sites, pipelines, or compressor stations.
Ohio Governor John Kasich has numerous ties to ALEC and was "involved with ALEC in its formative years," but he called for SB 315 to include full disclosure of chemicals used in hydraulic fracturing. Senators replaced true disclosure requirements with Exxon's loopholes and ALEC Representatives decided to leave them.
ALEC secrecy in Ohio
ALEC legislators have found ways to make their moves harder to track in light of repeated exposure of ALEC's pollution of democracy in the United States over the last year, and sometimes existing state laws don't help. Ohio's financial disclosure forms for legislators specifically mention that expenses or reimbursements from ALEC conferences do not need to be publicly disclosed. In Ohio and other states, ALEC dodges lobby laws through corporate-funded "scholarship" programs that are thoroughly documented by the Center for Media and Democracy through open records requests.
People for the American Way and Progress Ohio report that ALEC's scholarship fund in Ohio is financed donations from the American Petroleum Institute, Duke Energy, Reynolds Tobacco, and other major corporations interested in buying the loyalty of Ohio lawmakers.
I'm sure you'd understand if you were in the same position. Sometimes steak and cigars are more important than energy that doesn't poison us.
*Cross-referenced between a list of ALEC legislators listed in an Aug. 9, 2011 email from the legislative aid of ALEC's Ohio State Chairman, Rep. John Adams, obtained through a public records request (see PDF pp. 82-84 and PFAW p.12).
**ALEC documents published by Common Cause show that Sen. Balderson was a member of ALEC's EEA task force throughout 2011, although Sen. Balderson did not attend the ALEC task force meeting last December in Pheonix, AZ, according to a staffer at his office over the phone, nor is he listed in emails obtained through a public records request as attending the previous meetings in New Orleans (Aug. 2011) or Cincinnati (Apr. 2011). Ohio Senate President Tom Niehaus was a consistent member of ALEC's [anti]environment task force from August 2010-August 2011, the time period for which ALEC's EEA task force rosters are available. SB 315 co-sponsoring Representatives Carey, Damschroder and Derickson were all listed as members of ALEC's EEA task force as of August, 2011.
***Co-sponsors cross referenced with an email from ALEC Ohio State Chairman John Adams' legislative aid to Emily Petrovich of US Steel, dated 11/22/2011--eight days before the Scottsdale meeting (see PDF p. 138).