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Carbon Money Laundering The Golden State's GHG Emissions
The California Air Resources Board Ten Billion Dollar Carbon Market: The Western Climate Initiative (Inc.)
Oil and Gas Development Is Not Production Under CARB
How Green Is Brown? So far, cap and trade auction proceeds have netted California $1.37 billion for the state's Greenhouse Gas Reduction Fund, where it can be spent on projects to promote renewables and energy efficiency, clean vehicles, conservation, and waste reduction. A quarter of the projects thus funded must benefit the state's low-income communities, with 10 percent of the total required to be spent directly in those communities.
The program began with CARB giving away free carbon allowances “to the State’s largest industrial emitters as well as the State’s electric utilities in order to reduce the economic impact of the cap-and-trade program.”
Which Come First, Housing Or Transit? Is High-Speed Rail Considered Public Transit?
Lobbyists once supported the auctions in order to fund the building of new affordable, high-density housing that is close to transit and for low-income residents. The aim being to get people out of cars and onto public transit and out to work presumably, or to school.
Brown's budget for 2014-15 includes repaying $100 million of a $500 million loan made from cap-and-trade revenue to the state's general fund in 2012, when Brown redirected those funds. Administration officials initially said the $500 million would be paid back in one year.
High Speed Rail (HSR) Housing, Transit and Low-income Residential Opportunities
On January 7, 2014, Gov. Jerry Brown again proposed spending nearly a third of $850 million in cap-and-trade revenue California expects to collect in the next fiscal year on the embattled high-speed-rail project. Written into a separate budget bill is a stipulation that $500 million, or as much as 80 percent of the expected total CARB auction proceeds in year one, can be drawn for budget expenses.
But 100 Per Cent Leakage Risk Looms Over Fugitive Emissions
Under Cap and Trade, for the first two years, all of the industrial entities get 90 percent free allowances; so they only have to account for 10 percent of their emissions in terms of actually buying credits or reducing emissions. Allowances are freely allocated to covered industrial sources based on LEAKAGE. The higher the assistance factor, the more allowances are directly allocated to covered industrial facilities.
The partial table shows, industrial sectors classified according to 100% leakage risk (the risk that industry would locate somewhere other than California to avoid GHG regulations) and the assigned different assistance factors. To view full table: Petroleum and natural gas systems (delivery only) will be covered on January 1, 2015.
Oil and Gas Development Is Not Production Under CARB
The Cap-and-Trade Regulation defines a “Petroleum Refinery” or “Refinery” as any facility engaged in producing gasoline, gasoline blending stocks, naphtha, kerosene, distillate fuel oils, residual fuel oils, lubricants, or asphalt (bitumen) through distillation of petroleum or through re-distillation, cracking, or reforming of unfinished petroleum derivatives. The regulation further states that facilities that distill only pipeline transmix (off-spec material created when different specification products mix during pipeline transportation) are not petroleum refineries, regardless of the products produced.
There are 23 facilities in California that meet the definition in the Cap-and-Trade Regulation. These facilities are classified as follows in the North American Industry Classification System (NAICS), (NAICS, 2007):
- 20 petroleum refineries; these facilities are primarily engaged in refining petroleum from
crude petroleum (NAICS code: 32411)
- 1 facility categorized under “all other basic inorganic chemical manufacturing” (NAICS code:
- 1 petroleum lubricating oil and grease manufacturing facility; the products are lubricating
oils and greases made by blending or compounding refined petroleum and/or re-refining
used petroleum lubricating oils (NAICS code: 324191)
- 1 asphalt paving mixture and block manufacturing facility; the products are asphalt and tar
paving mixtures and blocks (NAICS code: 324121)
The utilities get all of their allowances free for the duration of the program, but the utilities operate under a different set of rules in that the investor-owned utilities and some of the public ones are required to sell all of their free allowances at auction and then put the proceeds into a process that will return some value to their customers.
It's Either Carbon Bubble Stranded Assets Or Your Ass et tu Brutus?
The value of fossil fuel corporations rests on their strategic reserves. Extracting and burning those reserves would devastate the climate. Recommendation: Leave It In The Ground.
Yet on March 24, 2014 CARB Chair Mary Nichols stated "achieving these new emission reduction goals will require that a number of important administrative, financial and technological changes are undertaken to guide energy investments and planning, calling out a goal of 'decarbonizing' the state's energy systems.” The updated plan calls out methane for renewed emphasis, saying that it is "a growing source of emissions..
Distributors of transportation fuel
Distributors of natural gas
Distributors of other fuel
Petroleum and natural gas distribution systems or petroleum and natural gas systems (delivery only) are minor components (relatively speaking) and leave out wellsites, gathering lines, and hubs that deliver to processing and distribution networks.
“With the energy sector and methane squarely in the sights of state regulators, California is on track to meet its greenhouse gas (GHG) emissions reduction targets by 2020, and it is revising plans to set more challenging reduction targets for 2030.”
CARB auctions CO2 allowances for CH4 (Methane) under an equivalency of 25 times the potency as that of CO2. But that is based on the 100 year model. Methane in the atmosphere on a 30 year model is 72-105 times as potent a GHG as CO2.
Learn about California's Cap and Trade ruling, what it covers, how, and what it doesn't. Easy navigable links, detailed specifics:
What do Fugitive Methane Emissions look like? Enormous amounts leak from every valve, pipe weld, flowback and produced storage tanks and/or evaporative ponds, the wellhead for it's entire production life cycle it's 24/7 – on multiple well pads, this problem is compounded. Almost all well pads today produce from 5 to 8 and even 16 horizontal, deviant, and slant drilled wells. The days of a single producing well on a pad is past.
The Intersection Between Methane Emissions And Climate Change
7 minutes with Dr Ingraffea, President of Physicians, Scientists, and Engineers For Healthy Energy. Detailed slides, with footage from onsite natural gas field inspections explaining Fugitive Methane Emissions and the Impact on Climate Change.
There are no land plants that use methane as part of respiration. Scientists have concluded that plants do emit methane during transpiration; the release of water from the leaves, but only the methane they have absorbed in water from soil. [BBC News]
No Drill No Spill