Two bills are scheduled for hearings today (May 21, 2009). The first you have heard much about in previous blog postings, Rep. Patrick Rose's HB 4299 Rainwater Harvesting incentives. The second I only learned about the day before its hearing; and given my initial investigation (and follow up, post sine die) reading the bill and the legislative service analysis, I am opposed to HB 1796, though this is sponsored in the Senate by my Senator, Kirk Watson.
My written comments to the committee which were the basis for my verbal testimony follow.
Verbal testimony can be found at:
http://www.senate.state.tx.us/avarchive/?mo=05&yr=2009&lim=50 and scan down to May 21 Senate Committee Natural Resources.
Or, if that direct link does not work you can start at the home page:
http://www.legis.state.tx.us/ and find Legislative Activity, video broadcasts = click on Senate. Next page is Audio/Video Archives, click on 2009, and scan down to May 21 Senate Committee Natural Resources
The video footage for my testimony for HB 4299 starts at 13:00.
The video footage for HB 1796 starts at 50:26, and my testimony is at 59:40.
Members of the Senate Natural Resources Committee hearing,
I am opposed to House Bill 1796 for several reasons. Yes, the ocean is a huge carbon sink - but it is not an unlimited resource and scientific studies show that it too has a limit. The acidification of the oceans has been identified as a major problem to the continued health and survival of coral reefs.
Hard Corals whose chemical make up is of Calcium Carbonate, CaCO3, is a substance of basic pH and coral reefs are dissolving because of ocean acidification caused by Carbon Dioxide or CO2 being absorbed from the atmosphere:
http://royalsociety.org/document.asp?id=3249 June 30, 2005
Ocean acidification due to increasing atmospheric carbon dioxide
These coral reef ecosystems are vital as nurseries for commercial and noncommercial fishing stocks. Very little is known about them, but an example of one research study has shown that new neurological compounds discovered show great promise for pharmaceuticals and new drugs for neurological diseases.
I could agree to the Bureau of Economic Geology (BEG) doing a study, similar to what has been done in West Texas in the Permian Basin: Land based, until the science of carbon sequestration is sound, peer reviewed and safety tested.
But I do not agree in the immediate allowance, as this bill provides, to begin pumping CO2 directly into the rock formations in the Gulf of Mexico without having any idea as to what effect large concentrated doses of carbon dioxide from unregulated sources could have on ocean ecosystems. Beyond the lack of available sound science as to the impact of a CO2 spill or leak of large volume, the bill provides for any and all liability to be removed from the CO2 industrial originator once it has been transferred to the subsurface repository, which would then be owned by the School Land Board (this designation of responsibility is unclear and not explained), and monitored by the TNRCC (the legislation refers in the bill to the old name for what is now known as the Texas Commission for Environmental Quality or TCEQ). Historically, monitoring programs are poorly funded and under staffed; in essence, an out of sight - out of mind industrial solution.
The Gulf is already suffering from coastal pollution from chemical and agricultural runoff. One example originates from the mouth of the Mississippi River, an 8,500 square mile DEAD Zone made up of a toxic mix of pesticides, herbicides and nutrients with no oxygen, an anoxic environment. A dead zone was discovered off the Texas coast from the Brazos River in July 2007. These areas have negative affects to important shrimp and other fishing grounds, let alone the wildlife that freely roam the oceans of the world like whales, manta rays and whale sharks.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a4Tb2AFv6CRk&refer=home
Nancy Rabalais, chief scientist for a study team at the Louisiana Universities Marine Consortium
The fiscal note attached to this legislation charges the cost for implementing this study at $ 6.5 million over the time period 2010 - 2014 from the General Revenue Fund. I don't think tax payers should be funding a repository for the air-borne wastes of the coal-fired power plant industry to solve a solution to their pollution problems so that they can continue to burn dirty coal; not at the additional cost of continuing to damage, degrade and eventually destroy coral reef ecosystems. I would rather see this money go toward alternative energy venture capital initiatives.
There is not enough information from peer reviewed research studies to know what effect this unproven technology of carbon sequestration, especially in the open ocean, could cause to the ecosystems that produce important protein sources, priceless wildlife and as yet undiscovered potential new medicines, for much of the population of the planet. Instead, be prudent and wait for the U.S. EPA to issue requirements for safe disposal of CO2 (and not before); and then send it to West Texas where the BEG has done their studies and know how it works and can be managed safely!
Thank you for your conscientious consideration of this legislation, sincerely,
Bill Stout
Green Party of Texas
Legislative Liaison
billstout@txgreens.org
512-589-8048
UPDATE: June 5, 2009 - Observations concerning the final Engrossed legislation:
You can see on the videotape archive that the honorable Jerry Patterson of the GLO during testimony makes the convincing statement that the fiscal note for HB 1796 (dated on May 20, 2009, see http://www.legis.state.tx.us/tlodocs/81R/fiscalnotes/pdf/HB01796E.pdf) which in the bill is paid from General Revenue Funds (the Offshore CO2 repository study at roughly $1.5 Million per year from 2010 - 2014 for a total of $ 5.5 Million for 2.5 full-time employees, or FTE's) would be picked up from shuffling the current GLO budget:
The final bill passed by the legislature did not reflect his statement or make this change.
You can also witness Senator Kirk Watson, in his testimony describing the bill, robustly characterize the Offshore Sequestration of Carbon under the Gulf of Mexico ocean floor as a veritable cash cow for the permanent school fund, potentially collecting CO2 (and user fees) from several surrounding states! Ironically, the House Research Organization's report on the bill describe opponents to the bill stating that:
Carbon capture and storage technologies have not been proven and do not
represent the most environmentally friendly option for combating global
warming. CCS is still in its technological infancy and needs much more
research to advance to viability. Texas should focus on proven renewable
energy sources, like solar and wind, rather than search for ways to
continue to burn coal. Fossil fuels should be phased out entirely over time
because their net impact on global security in the environment will always
be negative.
Implementing CSHB 1796 could be prohibitively costly. The fiscal note
estimates an annual impact to general revenue of more than $1.3 million,
which accounts only for two FTEs and the study commissioned in the bill.
Infrastructure, including pipelines and a repository, likely would cost the
state many millions more. Researchers project that CCS will need $15-$30
billion dollars more in investments for it to begin to affect climate change.
And that's not all of the machinations and surprises of this legislation:
In fact, the new fiscal note produced after the the Senate amendments were added in the engrossed bill that has been sent to the Governor reflects the addition of a whole new program, the New Technology Implementation Grant (NTIG) program. In short and roughly described, the program will provide grants to pay the coal industry and other stationary energy sources producing CO2 to reduce their pollution - The grant program, funded by the General Revenue Fund, with some shuffling between existing emissions reduction grant programs currently at the TCEQ, and assuming whatever federal money passes from the Clean Air Act (text provided below).
The new total for the addition of the NTIG program along with the original Offshore Carbon Sequestration study in this legislation is now almost $2 Million per year from 2010 - 2014 or over $9 Million for the five year period.
As you can read below from the engrossed fiscal note there are MANY assumptions (I counted nine (9) times the word assume was used), including the implementation of parts of the project(s), the total project cost(s) and the costs to the state agencies to implement.
And, on top of that there will be an 10% additional fee added to truck-tractor registration fee and a $10 fee added to commercial vehicle inspections (undoubtedly this cost will be passed on to consumer goods transported)! These fees collected by the state, are expected to result in an additional $82.7 million per year in new revenues beginning in fiscal year 2014.
So not only is this program subsidizing the reduction of CO2 from the General Revenue Fund, but will pay for the additional costs for additional bureaucratic red tape (bigger government) which will be passed along to consumers via additional truck transportation fees!
(NOTE my end comments at bottom of the following reference)
Reference for the new (Engrossed) fiscal note: http://www.legis.state.tx.us/tlodocs/81R/fiscalnotes/pdf/HB01796F.pdf
The bill would establish the New Technology Implementation Grant (NTIG) program, and it would
require the Commission on Environmental Quality to establish and administer a new technology
implementation grant program to implement new technologies to reduce emissions from facilities and
other stationary sources located within the state. The bill provides guidelines and criteria for the
program as well as grant application review procedures. The section provides cost sharing
requirements that require applicants to provide at least 50 percent of the costs of implementing a
project under this chapter. TCEQ is required to coordinate an interagency application review process
with the Comptroller, Public Utility Commission, and the Railroad Commission. The TCEQ would be
required to incorporate the review results into the grant award decision process and include an annual
report justification for awards made to projects that were negatively reviewed by the other agencies.
Projects eligible for grants in the NTIG program could include: advanced clean energy project; new
technology projects that reduce emissions of regulated pollutants from point sources that involve
capital expenditures that exceed $500 million; and electricity storage projects related to renewable
energy.
The bill would provide that funds collected under Section 185 of the Federal Clean Air Act be
deposited to the General Revenue-Dedicated Clean Air Account No. 151.
The bill would extend a 2.5 percent surcharge on vehicles over 14,000 pounds, a surcharge on the
registration of a truck-tractor or commercial vehicle in an amount equal to 10 percent of total fees due
for the registration; and a $10 fee on every commercial motor vehicle required to be inspected, all of
which would expire under current law on August 31, 2013, to August 31, 2019. Article IV also adds
stationary engines to the list of items the TCEQ can fund through the TERP grant program. It would
also exempt mobile generators used for natural gas recovery purposes from the requirement that at
least 75 percent of the annual use of a TERP-funded project occur in nonattainment areas and affected
counties for at least five years.
The bill would reduce the allocation of funding for the New Technology Research and Development
(NTRD) program from 9.5 percent of TERP funds to 9 percent. The bill would remove an allocation
of $250,000 to the TCEQ for administering the NTRD program and it would remove an allocation of
$216,000 of the NTRD funds to be used by the Texas Engineering Experiment Station (TEES) for the
calculation of the statewide emissions reduction for the State Implementation Plan (SIP). The bill also
would remove an allocation of at least 20 percent of the NTRD funds for research related to air quality
at a nonprofit based in Houston, and it would reallocate these NTRD funds to contract with a nonprofit
organization or institution of higher education to establish and administer a program to support
research related to air quality. The bill would allow the TCEQ to fund air quality research with the
remaining NTRD funds and provide a $216,000 contract with the TEES for the development and
annual computation of creditable statewide emissions reductions obtained through wind and other
renewable energy resources for the SIP. Finally, Article V of the bill would provide that 3.5 percent of
TERP funding, instead of 3 percent, can be used for administration of the TERP program, and it would
specify that the TCEQ receive 2 percent, and that the TEES receive 1.5 percent.
The bill would require the TCEQ, the Railroad Commission, and the PUC to establish a greenhouse
gas registry in which they would participate in the development of federal greenhouse gas reporting
requirements. The TCEQ would also be directed to establish a registry of voluntary actions taken by
businesses in the state and state agencies since September 1, 2001 to reduce carbon dioxide emissions
and to work with the U.S. Environmental Protection Agency to give credit for early action under any
federal rules that may be adopted for federal greenhouse gas regulation.
Methodology
The bill's provisions relating to the offshore sequestration program would result in the need for 2.5
FTEs by the GLO to develop the program, oversee the study conducted by the BEG, evaluate
recommendations of the pilot study, and maintain a carbon dioxide storage database. In addition, the
GLO would need to develop and manage construction contracts for off-shore platforms, injection
wells, and connecting pipelines to generators of carbon dioxide throughout the state. A data system
would be needed for a fee collection program and for tracking and monitoring the carbon dioxide
accepted for storage. This estimate assumes that carbon dioxide would not be designated as a pollutant
by the U.S. EPA. Total costs to the GLO are estimated at $216,385 in fiscal year 2010 and $198,385
in 2011. This estimate assumes these costs would be paid out of the General Revenue Fund.
Although the bill authorizes a fee for the storage of carbon dioxide in the carbon dioxide repository,
this estimate does not assume that the study would be complete, the repository constructed, nor a
significant amount of carbon stored in the first five years after enactment of the bill. Thus, no
significant revenue from the carbon storage fee is included in this estimate.
The BEG estimates the costs to perform the pilot study for potential locations for a carbon dioxide
repository, conduct on-going measurement, monitoring and verification of the permanent storage
status of the carbon dioxide in the repository, and serve as a scientific advisor to the SLB at
$5,500,000 between fiscal years 2010 and 2014. For purposes of this analysis, this cost is estimated to
be $1.1 million per year for the five year period, and assumed to be paid out of the General Revenue
Fund. This estimate assumes that costs to the TCEQ associated with the carbon repository would not
be significant and could be absorbed using existing agency resources.
The bill would amend the definition of an advanced clean energy project to require that a project
meeting this definition must also capture at least 50 percent of the carbon dioxide in the fuel being
combusted and sequester that carbon dioxide through methods that include geologic storage. The bill
also includes a definition of "geologic storage." The bill's provisions creating the NTIG program is
expected to result in the need for an additional 9.0 FTEs at the TCEQ and associated costs. These
additional resources would be used mainly to review grant applications. Costs for the NTIG program
are assumed to be paid out of the TERP Account No. 5071. Additional costs to the PUC and Railroad
Commission for coordinating with the TCEQ on grant application selection are not expected to be
significant.
The bill's provisions requiring the Comptroller to assess the financial stability of applicants and to
conduct an annual review for the new technology implementation grant program would result in the
need for 5.0 additional FTEs and $371,113 in related costs to the Comptroller of Public Accounts.
This includes 1.0 FTE to assess financial stability of applicants under the grant application review
procedures, and 4.0 FTEs to conduct grant audits. This estimate assumes these costs would be paid out
of the General Revenue Fund.
The bill's provisions providing for the deposit of fees collected through Section 185 of the Federal
Clean Air Act to the Clean Air Account No. 151 would not result in a net fiscal impact to the state
because this estimate assumes that any such funds that would otherwise have been collected would
have been deposited to the General Revenue Fund. The amount of funds that would be deposited to
the Clean Air Account No. 151 would be dependent on baseline emission information in the Houston-
Galveston-Brazoria nonattainment area, which the TCEQ reports is not yet available.
The bill's provisions which extend the 2.5 percent of consideration surcharge on vehicles over 14,000
pounds, the surcharge on the registration of a truck-tractor or commercial vehicle in an amount equal
to 10 percent of total fees due for the registration, and the $10 fee on every commercial motor vehicle
required to be inspected, are expected to result in an additional $82.7 million per year in new revenues
beginning in fiscal year 2014.
The bill's provisions removing the allocation of $250,000 to the TCEQ for administering the NTRD
program and the removal of the allocation of $216,000 of the NTRD funds to be used by the TEES are
not expected to result in a fiscal impact to either agency because this estimate assumes that the
overall amount the TCEQ receives from the TERP Account No. 5071 would actually increase because
the amount TCEQ would be eligible for administration of the program would increase from 1.5 to 2.0
percent of TERP Account No. 5071 funds, while the amount TEES receives would remain the same
since the agency would receive $216,000 through an Interagency Contract with the TCEQ.
The bill's provisions requiring the creation of a greenhouse gas registry and coordination with the US
EPA would result in costs to the PUC of $220,000 in fiscal years 2010 - 2013, with no significant
costs in future years. These costs would include consulting fees because it is assumed the agency
would need outside expertise, and travel costs because it is assumed that agency staff would be
required to travel to Washington, D.C. These costs are assumed to be paid out of the General Revenue
Fund. TCEQ expects to incur costs of $250,000 in fiscal years 2010 and 2011 to modify the agency's
Emissions Inventory Data System to create the greenhouse gas registry. It is assumed these costs
would be paid out of the Clean Air Account No. 151.
?How is legislation passed without public scrutiny or final input?
Clearly, the fact that half-way through the 81st legislative session very few bills had been passed which created a log-jam at the end of the session, which was exacerbated by the Voter I.D. political battle (the "Chubbing" strategy slowdown), which resulted in many good bills dying, and the real need for a special session to be called by the Governor given TxDOT and TDI sunset legislation was not passed among other sunset agencies:
The stage was set for the inevitability of many bad bills (in the form of amendments) being rushed through to passage without the time to properly review the contents and potential impact (comment: At least with "chubbing" there was an opportunity to ask questions about the background and expected result of legislation!) - in short, public scrutiny of "the people's business" once again gets minimal public input or opportunity for review.
The process makes it easy for corporate special interests to have a major impact on legislation that will be paid by the public in subsidy to benefit industry. "Clean coal" indeed.
Guaranteed I will be following up on this legislation, and additionally the final details on several important bills the Green Party has supported and testified against. Look for a complete list of the results of all the bills the Green Party witnessed for or against in the next blog posting!
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