DEPARTMENT OF PUBLIC POLICY

POL 661: Environmental Law

Lecture 11: Energy Introduction
The Laws of Thermodynamics tell us that energy can neither be created nor destroyed, but rather what we know as energy is really a constant conversion of energy from one form to another. So we really are not speaking about creating energy here but rather about releasing energy from one source and getting that release to give us energy from another source. For example, most traditional electricity generation is accomplished through the movement of turbines that create electrical charges as a byproduct of their movement. Making the turbines move requires energy and large power plants need to find ways to get those turbines to move. Hydrocarbons (coal, natural gas, oil) are traditional sources of fuel to move the turbines; we burn the hydrocarbon as an input to create heat as an output. This heat output is then used as a secondary input to warm water and create steam, a secondary output. The steam then becomes the tertiary input by which the electric turbines are moved creating electricity as the tertiary output. Hydroelectric dams do this same thing but instead of creating steam as is done in the burning of hydrocarbons, the flow of the water (the input) moves the turbines directly (the output). We are essentially taking existing energy from one source and using some of that energy to create electricity through a series of energy transfers.1 In the burning of hydrocarbons, there are a number of energy transfers that must occur whereas there are less energy transfers in the use of dams or other methods such as wind or solar power. An example of the idea of energy conversion, transfer, and release is provided in the following figure:
1

Each stage of an energy transfer process tends to loose some energy along the way. For example, as noted above, burning hydrocarbons (like coal) to create electricity is a 3step process. During this process energy is lost at each stage; not all of the energy contained in the coal is converted (passed) to the boiling of water to create steam, and not all of the steam energy is converted to the moving of turbines. Thus, the most efficient forms of electricity generation are those where there are fewer steps (all things being equal) because there is less opportunity to loose energy. Thus, hydroelectricity generation may be more efficient than hydrocarbon electricity production from an energy transfer perspective.

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Understanding that energy is neither created nor destroyed, we might not be too concerned with the idea of energy loss through a multistep process of converting energy from one form to another; we just know that it takes more energy in a multistep process to convert the same amount of net energy. For example, it will take more energy stored in coal to produce the same amount of electricity as hydroelectric power because there are more steps in the process and thus more energy is lost during those steps. But we may begin to be concerned when there are other costs involved in the creation of energy by using different sources of energy production. For example, if you need to burn a lot of coal to produce electricity (because there is wasted energy in the process), then one likely needs to look at the burning of coal and determine if they are other costs incurred beyond the loss of energy at each stage in the process. If so, we likely need to pay close attention to those additional costs and particularly the impact they might have on our background environmental conditions because, under our premise of the importance of background conditions for human wellbeing, maintaining the current equilibrium state of the environment is a primary goal in achieving environmental objectives. The issue of other costs may also be referred to as externalities. The use of hydrocarbons results in the release of carbon from a stored state (we get the carbon from coal, gas, and oil stored in the ground) to a released state as the carbon moves into the atmosphere and other components of the natural system after it is burned. Most of the released carbon gets added to atmospheric concentrations. The increased concentration of carbon in the atmosphere results in a greenhouse effect, trapping heat energy from the Sun on the Earth. The end result is a pattern of warming that can have negative impacts on our overall wellbeing. This is a good example of a situation where the creation of electricity (and gasoline from oil for combustion engines) is having unintended consequences (a feedback loop) that include climate change. A way of visualizing this systematically is to consider the following box model application to the use of coal as a source of electricity production:

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Beyond issues related to climate change, the use of hydrocarbons has other costs. For example, coal often contains sulfur that is burned with the coal during the first phase of energy transition. The sulfur is released into the air and can combine with other elements to create chemicals that are harmful to humans and other living things. In addition, the particulates that are burned with the use of coal can cause respiratory illness and other air quality issues for those within the surrounding communities to these power generation plants.2 Finally, the production process of extracting coal for use in energy generation can have consequences on the local landscapes and ecosystems. Collectively these costs can be substantial and are part of the reason why energy policy might move in directions that attempt to mitigate these costs, for example by utilizing alternative sources of energy production (conversion). As we explore the materials on energy, consider that we are not necessarily considering energy from the production standpoint (literally the conversion of energy from a stored form to a different more usable form, like electricity). Rather we are attempting to understand the associated costs of energy production between different sources (inputs) so that we can better understand the feedback loops between energy choices as exampled in the figure above. Our goal is consider the different inflows (inputs) for energy production (hydrocarbons, wind, solar, geothermal, nuclear, hydro, tidal, etc.) and think about the interactions between the inflow and the system component. This will lead to consideration of the outflows and feedbacks. It may be that through this process certain sources of energy production are shown to be superior based on the criteria chosen to evaluate this measure. At least this will provide us with a conceptual framework for
2

It is due to such practices that the Clean Air Act (discussed under pollution controls) manages stationary sources of pollution, like power plants, utilizing best available technology methods to include scrubbers that attempt to filter out the worst of the soot and residue that emerges from burning coal before it is released in smoke stacks from the energy generation facility.

Page 4 of 8 understanding our overall energy policy in the United States and how environmental laws might impact those policy directions.

Overview of Energy
We live in a technologically advanced (and advancing) age that is driven by energy flows. As such, the ability to power our civilization is a key component to our social and economic wellbeing. But remember our presumption regarding the role of the environment in constraining our social and economic capacity, visually recreated here:

In order for our economy and social institutions to thrive in a technologically advanced civilization we need to consider the impacts of our energy choices on our environment; at least this is the premise by which some would define our goals towards a sustainable energy policy. Many suggest this policy needs to focus more on renewable sources of energy production that have little to no secondary impacts on environmental (and implicitly human) wellbeing.

The U.S. Energy Policy

The U.S. is the major consumer of energy, particularly per capita (energy used per individual). Our levels of energy consumption are unsurpassed globally (although China has exceeded our overall consumption level not consumption per individual). The text introduces a graph that maps our overall consumption habits, as well as where we source our energy. As you can easily see, the vast majority of our energy comes from nonrenewable resources (coal, oil, natural gas). This is changing, as we are moving to increase our use of renewable energies (which range from wind to solar, as well as nuclear). Another important trend to discern from the charts is the U.S. became energy

Page 5 of 8 dependant on other countries since about the mid-1950s. This is shown in how reliant we have become on imports for energy production since 1950.3 Our substantial energy needs are combined with a history of technological development and political insecurity that has helped to create our current mosaic of regulatory mechanisms related to energy development and use. As noted earlier, our expanding reliance on technology increases our need for energy to power that technology. This coevolution between energy needs and technological growth began with the industrial revolution and the mechanization of our world. First coal (via the steam engine and similar technologies) and then oil (for greater efficiency) became the primary sources of meeting this technology demand. Over time, technology itself has provided us with advancements in the ability to transmute energy from one form to another: whether that is harnessing the power of the wind or sun to create electricity, or the use of electricity to power more of our lifestyle (electric engines for example). Our energy policies have also been influenced by availability. Coal exists in abundance in the United States and is relatively cheap to extract (mine). Based on the direct costs of extraction and burning, coal provides an incredibly inexpensive form of electricity generation (even with its inefficiencies) as compared to other methods. However, if we include indirect costs into the price of coal, it may be that it is not as cheap of a source of electricity as once thought.4 Regardless, coal was (and is) readily available and cheap to access (because it is readily available), and it has been a major contributor to the economic expansion of the United States during the industrial revolution up until today, helping to shape the historical reasons for its use. Finally, our energy policies have been influenced by history. Geopolitical events such as the oil embargo of the 1970s and the creation of OPEC helped to create a sense of urgency in the United States. The idea that our economic prosperity can be tied to influences outside our direct control has impacted this countrys sense of selfdetermination. As such, energy independence in the Untied States has often become an overriding policy theme. The exact means by which this independence occurs is another question. For example, do we become extractive in our goal of independence by increasing domestic production through certain techniques (such as fracking) in
3

In recent years the United States has increased its domestic production of energy, particularly natural gas and oil extraction through methods that include fracking technologies. This has been combined with a downturn in economic activity in the latter half of the 2000s and early 2010s, which has resulted in a decrease in overall consumption. Lower consumption with higher production is creating a potential energy boom in the United States focused mainly on nonrenewable energy, particularly hydrocarbons such as oil and natural gas. This mostly terrestrial (on land) activity has bolstered some desires to increase offshore oil and gas development in U.S. waters.
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Those in the economist camp might focus on direct costs, while those in the ecologist camp might want to include indirect costs into an analysis on the overall value of coal as an energy source.

Page 6 of 8 undisturbed environments (such as the Alaska National Wildlife Refuge - ANWR), or by increasing offshore production and creating potential issues like the BP Oil Spill of 2010? Or, we may choose to invest in alternative technologies that help to limit our overall demand for energy (hybrid and electric vehicles, increase fuel efficiency standards) as well as seek alternative sources for generating electricity (wind and solar farms). All of these policy directions can lead to a goal of energy independence, but each of them have relative costs and benefits that can be compared between the choices, and by engaging in such an approach the tradeoffs between different policy directions become apparent. In addition to seeking independence, we may also prioritize other values for energy such as consistency (the capacity to provide a constant supply of energy based on alternating demand) and cost (we may look to provide energy at a competitive price to help spur economic growth and prosperity). In accomplishing these multiple criteria goals, the United States also has to consider the environmental impacts of its energy choices. This is often explicit, such as when the use of certain energy inputs (like coal) becomes the basis for public pollution control under the Clean Air Act, or when the development and funding of a new coal powered plant proposal must undergo NEPAs environmental review process. However, it can also be implicit, like the decision to increase domestic production of oil and gas and the impacts such a decision can have on the environment.5 In sum, energy policy is not defined by any single law, but rather it is based in policies that reflect political preferences, historical context, and social justice issues. We can look to the actual choices about energy undertaken by the United States and then try and understand how those choices impact the areas of law we have discussed previously (in addition to any specific laws identified in the readings).

Environmental Controls on Supply and Consumption

Do we control our energy consumption because of the environment, or because of global politics? Maybe an accurate answer is both, but the majority of our controls have been directly linked to supply issues, not because of environmental concerns. Historically, we became concerned with energy supplies following the oil embargos of the 1970s with the formation of the Organization of the Petroleum Exporting Countries (OPEC). Since that time, we have pitted environmental concerns against energy independence. An example has been the recurring attempts to develop oil reserves in the Alaska National Wildlife Refuge (ANWR). Do we achieve energy sufficiency (and independence) at the expense of environmental concerns? Or, do we work towards other methods of energy independence (including renewable energy production and conservation)? One main federal law that was aimed at energy conservation is the Corporate Average Fuel Economy (CAFE) standards. These standards were put in place after the OPEC oil embargo in an effort to decrease gasoline consumption (again, not for environmental
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For an example of how federal offshore oil and gas development policy can impact coastal state management plans regarding protection and mitigation of sea level rise, please see here: http://works.bepress.com/chad_mcguire/34/

Page 7 of 8 concerns, but to decrease foreign dependence plus we did not have enough supply during the embargo to meet demand). The CAFE standards increase average fleet fuel economy to around 30 miles per gallon. In fact, CAFE standards can be credited with brining to the U.S. The Toyota Corolla and Honda Civic. (Demand increased for smaller, more fuel-efficient cars, which Japan had been making for years). Recently (2012), CAFE standards have been increased to meet an average fuel economy of 54.5mpg by 2025 (although it is arguable the change was made in response to climate change as well as our continued foreign dependence on oil). The federal government has used its regulatory structure to create markets for alternative and renewable energy sources by requiring power distributors to purchase, at certain prices, the power generated by alternative sources. Also, the government, as a major purchaser of goods, has enacted policies to any purchase highly energy efficient products, thereby creating a market for such products. Finally, the federal government has aided the individual purchase of energy efficient products (hybrid vehicles) through a credit program on individual income tax obligation. Other federal programs have been more controversial, such as the opening of federal lands for the production of oil and gas resources (resources held in public trust). While such energy production arguably decreases our dependence on foreign oil, it does little to prevent the release of stored carbon dioxide, a molecule known to contribute to global warming. Recently, the U.S. Supreme Court has ruled carbon dioxide is a pollutant that must be regulated under the Clean Air Act (CAA). This ruling suggests federal statutes such as the CAA may be used as a means to regulate energy production, since any such emissions may be subject to pollution discharge permits under the CAA. (The ruling was limited to auto exhaust emissions, but may be applied to energy production facilities that release CO2). Besides these federal incentive programs, there is no direct uniform energy control mechanism under U.S. law. (The Federal Energy Regulatory Commission (FERC) is more of a permitting agency than a uniform agency dealing with energy policy).

Conclusion
The main point of this module is to introduce you to the issues surrounding energy production, and likely also point out the lack of a uniform federal law to deal with energy issues (at least from an environmental perspective). Recent calls in Congress to develop climate change legislation is one example of an attempt to create such a uniform environmental law regarding energy in the U.S. The fact that EPA, in 2012, has begun the process of regulating carbon as an emission from major electricity generators, as well as defining carbon dioxide as a pollutant under the Clean Air Act, is a sign that the impacts of how we generate our energy are beginning to take hold on policymakers in the United States. How we ultimately feel about our domestic energy policy depends largely on how we perceive energy needs (as a reflection of our societal and economic wellbeing) in relation to environmental needs. Those who place the environment at the forefront of

Page 8 of 8 human wellbeing and prosperity will tend to seek ways to promote energy policies that limit environmental impacts, even if the direct costs of energy increases as a result. Alternatively, those who prioritize economic concerns and the immediate needs of humans may place economic considerations over environmental concerns. Through this categorization process we can hopefully see how energy policy develops. We may also begin to see how other public environmental laws may be utilized to push energy policy in a particular direction. END OF SECTION.