The American West is Diversifying its Energy Portfolio

Image: ACORE

The American Council on Renewable Energy's 2015 report on western energy markets makes a convincing case that states in the American West are increasingly reliant on renewable energy sources.  Per the graphic shown above, the 13 western states accounted for half of the nation's installed renewable energy capacity, and half of the nation's private sector investments in renewable energy.  One factor driving the growth is the West's sheer size and renewable energy potential - the 13 western states encompass half the land area of the United States, including major river systems like the Colorado, Columbia, and Missouri, mountain ranges like the Rockies and Sierra Nevada, rainforests, volcanoes, deserts, and the Pacific coast.  The region is undeniably blessed with natural resources.

But the ACORE report also cites connectivity and inter-dependence as a major driving force behind energy diversification in the American West:

It is increasingly evident that the electric grids of western states are interdependent and complementary. To take fullest advantage of renewable supplies, fully utilize existing transmission infrastructure and manage costs to ratepayers, grid operators and regulators are looking to move towards an integrated western grid. 

Energy generation is only one side of the 'energy holy grail.'  The other is energy storage and delivery, where the energy industry would like to see more integration:

“We don’t want to do this necessarily the same way we did solar policy, where every single state in the nation has a different framework,” said Madeleine Klein of SoCore, a solar developer owned by Edison International [...]  For solar developers to operate in 50 states, Klein said, they have to navigate 50 different markets, with 50 different sets of regulations.  “We want to try to avoid that for storage, so that you’re looking at effectively the same market structure regardless of whether you’re looking at a northeast project or a southwest project.

It looks like the western states are moving towards an integrated energy framework.  The Energy Imbalance Market (EIM) aims to share renewable energy across state lines to accommodate for fluctuations in renewable energy generation and demand.  Several major utilities in California, Oregon, Washington, and Utah are already participating in the EIM, and others in Idaho and Nevada are thinking about joining up as well.  This integration might even prompt the western states to develop a regional compliance plan under the Environmental Protection Agency's Clean Power Plan requirements:

There are strong incentives for states throughout the western interconnection to cooperate on resource planning, transmission infrastructure, and development of a common emissions trading infrastructure. A regional plan would likely be more cost effective and enable states to access higher-impact and lower-cost carbon reductions in other states.

There's no question that a transition to renewable energies will be challenging (Bill Gates recently said it would take a miracle), and it will be interesting to see how the American West, with its vast natural resources and great distances between population centers, addresses the demands of energy generation, storage, and delivery.  

Keystone XL and the COP 21 Deadline

A pumping station on the (existing) Keystone Pipeline System, Nebraska.  Photo: Shannon Ramos.

The proposed Keystone XL pipeline is in the news again this week, after the pipeline company (TransCanada) requested that the US State Department delay its decision to approve or reject the project.  Ostensibly TransCanada made the request on the grounds that there are outstanding siting issues to work out in Nebraska, but the more likely reason is that the company fears the Obama administration will soon issue its rejection, possibly in the run-up to the COP 21 climate negotiations in Paris.  The administration will be trying to obtain as many concrete climate commitments from other nations as possible, and a rejection of the Keystone XL pipeline would send a strong message that the US is committed to the COP 21 process.  A delay, on the other hand, would likely push the decision onto the next president (many of whom have declared support for the project).  Today the State Department announced it would not grant TransCanada's request, and suggested that a decision will be made before the president leaves office.

If the pipeline were rejected before the COP 21 negotiations, it would further cement the feeling (shared by myself and others) that the Keystone XL fight is largely a symbolic one.  Supporters trump up the job-making potential of the pipeline, but those hopes are overblown ("between 35 and millions," according to Jon Stewart), and most jobs would be short-term construction positions.  On the other hand, approving the pipeline isn't likely to be the apocalyptic death to the climate system some project, largely because the oil can find its way to global markets by other means (one pipeline being proposed would take tar sands oil from Alberta to the Pacific Ocean, across sensitive wilderness areas and First Nations lands).  

That's not to say the symbolic fight doesn't matter.  Landmark victories have been hard to come by for the environmental movement in recent years, especially when it comes to climate change.  Demonstrating the ability to defeat a large energy project supported by the oil and gas industry and many Congressional politicians would be a monumental achievement and might catalyze other organized campaigns.  And doing so at the moment when the US is trying to show leadership during COP 21 climate negotiations would amplify the impacts of that achievement.  So while rejecting the pipeline project itself may not have a significant impact on GHG emissions directly, it may have a very significant impact indirectly. 

Ultimately that may be the most relevant long-term outcome of the Keystone XL fight.  Even if the pipeline is rejected, TransCanada can resubmit its application when the next administration takes office (the costs of going through the permitting process and NEPA review are significant but not insurmountable, and there are few legal obstacles that would prevent the company from resubmitting some variation of the initial proposal).  And while many are focused on the political influences on the pipeline's destiny, the global price for oil may be just as, if not more, influential.  If oil prices stay low, new investments in oil and gas are unlikely even if Keystone XL is approved.  If prices rise TransCanada can try its luck again with the next president.  Admittedly it's hard to quantify the extent to which a rejection of Keystone XL would bolster the US position on climate change during COP 21 negotiations, but if the administration is looking to maximize its leverage with other countries, a decision on the pipeline would be a bold move.