Liveblog: Energy & Environment at The Texas Tribune Festival
We're liveblogging this weekend from The Texas Tribune Festival's Energy & Environment track, which includes panels on the future of water in Texas, the state's electricity woes and the upcoming legislative session.
We're liveblogging this weekend from The Texas Tribune Festival's Energy & Environment track, which includes panels on the future of water in Texas, the state's electricity problem, eminent domain and the upcoming legislative session.
Featured speakers include Al Armendariz, the former Environmental Protection Agency regional chief; Land Commissioner Jerry Patterson; former gubernatorial candidate Debra Medina; and Donna Nelson, chairwoman of the Public Utility Commission.
Follow us here for updates from the University of Texas at Austin campus.
Hardberger: "We're not alchemists. We can't invent water."
Motal: "For the future, I think we're going to find the solutions because we are Texas."
Hardberger: "Desal was the prettiest girl in town during the drought...the reality is it's going to be a little bit of everything....It really is a statewide issue."
Sansom: Issue is that today, people think that "as long as they can go into the kitchen or the bathroom and water comes out, they think everything's OK."
Larson: "We need to look from 30,000 feet." [and find solutions like those of the 1950s, after that drought...Let's look at what they're doing West of Texas. Nobody's building surface water."
Motal: "More water evaporated out of Lake Travis in 2011 than the city of Austin used."
Larson discusses possibility of a big pipeline connecting to Trinity Basin; also says about neighbors: "There’s a lot of water that’s contiguous to the state of Texas, in LA and OK. … We don’t have a dialogue [with those authorities]”
Hardberger rebuts notion that we can easily move water around, noting that where water exists, it's already serving a purpose.
Sansom: "Nobody wants their water to be exported from someplace else." Cites past challenges.
Hardberger says it's hard to persuade people to give up their water, or pay for a big desal plant, if it simply goes on turfgrass, rather than more critical uses.
Larson raises question of water for fracking, and compares it to the (far larger) amount of water for agriculture..."But you can't deprive the farmer of going in and irrigating that land."
Larson talks about potential savings, in water and money for new infrastructure, that could come from year-round water restrictions.
Motal: "I think people do not get the value of water yet." Too easy to turn on the tap and get it.
Larson talks about potential savings, in water and money for new infrastructure, that could come from year-round water restrictions.
Motal: "I think people do not get the value of water yet." Too easy to turn on the tap and get it..."Texas is a semi-arid state."
Larson on farmers: "They're probably the greatest conservationists in the Edwards region." They put in irrigation, etc.
Discussion is turning to water markets.
Motal cites old water-rights purchases at LCRA, says: "There has been this trading and selling of water for years, and I think it's going to continue."
Hardberger talks about the challenges of markets but says innovations are possible, "dry-year options where we pay people to have dry years."
Sansom on environmental flows: "The environment has a need for water," like industry and agriculture. Normally, the environment is considered last--gets the leftover water--but he argues there's a business and legal case for giving enough to the environment.
Motal cites the environmental benefits of water for rice farmers (whose fields attract birds)
Larson on some water technology [desal, it appears] -- it's already in place around the world, "but in Texas we're still doing pilots."
Discussion of flow patterns in aquifers, how recharge/depletion might affect them. Interesting question.
Motal raises issue of of water-hogging invasive species, cites need to study them and look at perhaps even regulating their spread, and measuring how much water they use.
Hardberger notes that some western states have prohibited rainwater capture; notes that rainwater collected = rainwater that doesn't go into rivers and streams. "It gets to be a somewhat complicated issue."
Motal agrees, saying "Highland Lakes are rainwater collection."
Sansom says one of the complicating issues is that someone always lives downstream from someone else.
Larson on what the legislature can/will don on water: "I think it's incumbent upon our leadership to hear the alarm that went off in 2011. If they don't, that will be their legacy...This is the largest economic impediment, if we're going to sustain growth—is water." Says states that are rich with water are beating us, notes the bad press that comes when towns like Groesbeck/Spicewood Beach come close to running out of water. "I think that if we don't react, shame on us. I think we do need to fund the state water plan, or some facimile of it....I'm openingly advocating taking $1b from rainy day fund, use that as seed capital" [for water]
Hardberger on patchwork of water restrictions: "It's hard to understand the situation when you see your neighborhood watering like crazy and you can't."
And it's over! Thanks to the panelists for a great discussion, and to moderator Danny Reible.
Next up: the future of Texas electricity.
We're a few minutes out from a discussion on the future of Texas electricity here at the Blanton.
And we're off! Our panel consists of Donna Nelson, chairwoman of the Public Utility Commission, David Campbell, CEO of Luminant, Michael Webber, associate director for International Energy and Environmental Policy at UT, and Pat Wood, former chairman of the Public Utility Commission of Texas.
Nelson: Unlike the rest of the continental United States, Texas is its own energy market. Provides its own opportunities, but also challenges. Market "tuned" about a year and a half ago, when projections showed that energy reserves would be short of goals.
Campbell: Texas electric prices are related to natural gas prices. Low natural gas prices have kept electricity prices low as well. Good for consumers, but does not incentivize building new power plants, even when demand for electricity is high.
Wood: Before the market was deregulated, everyone had to pay for "insurance"-- the generation of extra electricity. After Texas made the market competitive, it was easy to build new plants. The first ten years, all that building made power supply a non-issue.
Webber: Cheap power is good for consumers, but can be hard for suppliers, reliability, and sometimes for the environment. Texas standards high-- in some places in the world, "40 percent reliability is all you get." The struggle-- cheap enough to be affordable, but also reliable and clean.
Wood: Other energy sources are rising, but "hard to imagine the future without gas being dominant."
Campbell: Electricity is a business where you have to make very long-term decisions on short term demand information.
Webber: Four parameters for the future: Increased demand in Texas, environmental regulations, energy prices and capital markets, which determine the ability to build plants.
Moderator Kate Galbraith asks, "what's the future of solar?"
Wood: The economics of solar are looking better-- prices are making it more attractive to electricity generators. Real time pricing for residential customers-- if it happens-- would benefit solar by showing peaks in demand.
Solar will become important, but probably in the long term. "By the time my kids graduate from high school, you'll see more solar, probably throughout the world."
Webber: "I think we'll see exponential growth in solar." You tend to build solar where there's sunlight. We have a lot of cheap, flat land. We have growing demand as well. Good market fundamentals. "I think it's starting to happen." Solar is really expensive to build, but really cheap once you have it.
Campbell: Solar will take time, but will grow. The size of the Texas market-- 11th largest in the world-- makes it more complicated.
Webber: Would rather not have subsidies-- they distort the market-- but subsidies also include "free pollution." Energy sources should be priced by environmental impact. When this happens, the market can sort the rest out.
Wood: Cheap gas is here, but will probably not get cheaper.
Webber: Reasons prices will go up: suppliers will produce less so they don't "lose their shirts." Cheap prices also incentivize people to use more. Finally, exporting gas could increase.
Now we're going into the question and answer session.
Q: 2011 told the story of the interconnection of energy and water. Looking into the future, where do you see that interplay on water usage in producing energy? What happens to electricity supplies when water is scarce, as in 2011?
Nelson: Competitive market incentivizes plants to stay online. Producers factor things like water into their decisions. Also, generators only use account for about 4% of water usage in the United States-- not as high as some people think.
Webber: If you have a lot of water, you have a lot of energy. Mixed bag in Texas- water use in drilling is going down due to new technology. Biofuels, on the other hand, use a lot of water. The big fear is that 2011 is the "new normal." The trends look bad. What it comes down to is that new building of power plants will take water into consideration. Dry cooling is a possibility, but takes more money to build and has a performance debt. Problems with water will be tough to resolve, but will show up in new plants.
Campbell-- 2011 was a record demand year for electricity and also a record for water scarcity. We tested the system and it didn't fail. So we have some backup in the system. These factors just have to be part of the plan in the future-- takes time.
Q: How will residential energy self-sufficiency impact the grid?
Wood: A lot of that is happening here in Austin. By the time my kids are daddies and grand-daddies, you'll see a lot of that. The culture and the need will make it more dominant in this generation coming up.
Nelson: I think it's good for the grid. We're favorable to all technology, as long as customers want to make it work.
Webber: Will need to figure out the economics as energy self-sufficiency rises. Still need the grid as backup. How do we make the economics work so they aren't bankrupt as more people become self-reliant?
5 minutes until the start of Evan Smith talking one on one with former regional EPA chief Al Armendariz, who's now with the Sierra Club's Beyond Coal campaign. Stay tuned...
Armendariz, asked whether he knows EPA regional administrator Ron Curry [appointed last night], responds: "I do know Ron...Ron Curry is I think a fantastic selection by the [EPA] Administrator. ... Ron is pragmatic, he's very smart, he understands the need for conservation and the need for economic development."
Evan Smith: "Will he be Al the 2nd?"
Armendariz: "He'll be his own person."
Armendariz, asked about the 'crucify' comments that led to his resignation, notes he has apologized for them, and adds: "It certainly wasn't my intent to offend or insult anybody. But I do stand by the concept behind my comments," -- ie that deterrence is an important part of law enforcement. This is true, he says, whether it's about being a traffic cop or environmental enforcement. The reason, he says, is that it levels the playing field, because people trying to cut corners are deterred by others who tried it and got caught and penalized. "Those companies that are trying to do the right thing won't be disadvantaged." Over the long run, he says, it's what's best for industry.
Smith points out that Armendariz is a rare former EPA regional administrator celebrity; did Armendariz intend this from the beginning? Armendariz offers a humorous answer: "It was not my intention to be a celebrity."
Armendariz, at end of a discussion on regulation & flexible permits: "I didn’t come into this job with the agenda to shut anybody down…[or] to penalize any industry or industry group. …We certainly looked for every opportunity that was out there" [to work with companies to do the right thing]
Armendariz on climate change: "The science of climate change is really irrefutable…[those who deny the science & that humans are causing global warming are] really on the wrong side of history and eventually are going to be as irrelevant…as physicians who deny that smoking causes lung cancer." Applause from the audience.
Armendariz on one of the Obama administration's strengths: it's finally pursuing the implementation and enforcement of statutes that have been around for years.
Armendariz, asked by Smith about the notion that he was disliked as EPA regional administrator for using a bully pulpit against particular companies, says: "I did not take [the EPA] job with any preconceived notions of good companies, bad companies."
Armdnariz talks about growing up in El Paso near the Asarco shelters [there is a TT article on this http://www.texastribune.org/texas-environmental-news/environmental-problems-and-policies/el-paso-plants-old-smokestacks-have-avid-fans/], says he didn't know much about air pollution then but "I did know you could taste the air." Then he adds that in fact, had the plant not shut down a few years ago, he would have tried to do something about it from his EPA perch: "That is the one site in this state I would have worked night and day to shut down."
Armendariz on clean coal plants: "I do think they’re unnecessary." He cites their high costs, and notes that they do "nothing to mitigate" the mining-related costs of coal.
"If we solve the coal problem, we will largely have solved the climate issues in this country." Smith asks if he truly believes that; Armendariz affirms.
Armendariz: "I don’t think we can transition off coal tomorrow. I don’t think we can transition off of coal a year from now." But he wants a transition at some point soon. As for natural gas, he says that it's "incumbent for the gas industry to clean up its act," and notes that "half of the climate impacts of coal— that’s still a ... low bar to call yourself clean." He also says the gas industry is used to drilling in West Texas, but needs to know it can't use the same approach for drilling in cities. As for transitioning to clean energy, he notes that few people a decade ago thought wind would reach about 10% of the grid.
Asked about the working relationship with the TCEQ--he says they have "fantastic staff in TCEQ, [but they’ve] got poor leadership." He said TCEQ employees sometimes communicated to EPA staff outside the TCEQ chain of command because they felt the knowledge-sharing was important.
I asked about how it will impact things that Ron Curry, new EPA regional administrator, is a New Mexican (first non-Texan since the 1970s, Dallas Morning News has reported). Armendariz notes that he's coming from a state with water challenges similar to West Texas.
We're just a few minutes away from starting the 83rd Legislative Session Preview here in Blanton.
Our panelists are Craig Estes, State Senator, R from Wichita Falls, James Keffer, State Representative, R from Eastland, Mark Strama, State Representative, D from Austin, and Carlos Uresti, D from San Antonio. Texas Tribune reporter Kate Galbraith is moderating.
Here we go!
We're previewing what you can expect to see this upcoming legislative session in terms of energy and the environment.
Keffer: "I think education will be everyone's one-A topic, but water should be one-B." Says he's hopeful that the water issue will be "tackled once and for all."
Uresti: "The other parts of the state and the country could learn from what [San Antonio] is doing" in terms of water. Says water as an issue will rise to the top in the legislative session.
Strama: says the cost of water will start influencing the cost of electricity, and that's going to have a big impact on the state's economy. Also sees fracking as a big issue in the upcoming session.
Keffer: "Texas is blessed" by its oil and gas deposits. Says fracking is the reason new deposits are now viable. Thinks well integrity will become increasingly important-- thinks "the issue is moving positively. There are things that need to be looked at that are being looked at." Sees possible legislation in terms of well integrity.
Estes: "There oughta be a bumper sticker: have you hugged your oil and gas producer today?" Estes says they contribute a great deal to the Texas economy. But "one success and one exciting thing" leads to problems in other areas, he says-- road infrastructure and so forth.
Uresti: Says there are "challenging opportunities" in places like the Eagleford Shale area. "The shale is basically the golden goose. If we don't protect the golden goose, Texans will suffer." Suggests taking money from the rainy day fund to invest in resources like the shale-- infrastructure improvements, et cetera.
Strama: "Imagine if five years ago we were having this panel, and I said, 'five years from now, it will be impossible to raise the capital to build a coal-powered plant.' You'd say no way. But that's the reality today." He says there are no new coal powerplants being built due to fracking. "Fracking has done more to reduce CO2 emissions than anything else in the past fifty years." But is also a threat to the evolution of the alternative energy industry, he says.
Galbraith: Where do you see solar falling in the legislature this coming year? Is there anything the legislature wants to do in terms of solar?
Strama: "Put solar panels on every public school roof that is sturdy enough and not shaded by trees." Will save tax payers and is a good way to start subsidizing solar power. Why subsidize? "We want Texas to be a leader in this industry. There is a time horizon when renewables become as big a part of the energy economy as oil and gas... oil and gas didn't get where they are without subsidies." Points out fracking research and development was subsidized by the federal government.
Uresti: "I think it's something we as a state need to look at. You can't put all your eggs in one basket. In regard to the solar panels [on school buildings], I think it's a wonderful idea."
Keffer: "I think it will be a debate on what to do in terms of renewables this next session. I've always been open to opening up the bag as much as possible."
"Texas continues to step forward. We're trying to look at a wide spectrum but keep it financially viable."
Estes regarding strain on the grid: "We want to make sure the lights stay on. It worries me."
Says he sees "dark clouds on the horizon" for solar. Says Texas needs a diverse energy portfolio.
"I want to see us look at everything. But we shouldn't go all in on any one thing."
Strama: "I don't look at it as picking winners and losers when you make pre-commercial R&D contributions."
Estes: "I agree."
Strama says Texas can drive energy innovation through its universities. "It makes sense that you should study in Texas if you want to be in the energy industry, period."
Strama says energy unreliability is used against Texas when states recruit employers. Suggests Texas should not compromise on reliability.
Uresti on water: Says response to the issue is long-delayed. "We cannot afford to kick the can down the road." Hopes this session will produce some solutions.
Keffer: Due to length of time to complete water-related projects, starting on solutions "is something we need to do today. It's something we should have started ten years ago." Says the legislature must start finding solutions this session.
Strama: Says failure to invest in water supply will make the price of water "unsustainable." Future savings from these changes should drive investments in improving water supplies, he says.
Estes: "We're all Texans. We need to reach beyond our regional boundaries and realize-- we know where the water is, we know where it's dry-- we're going to band together and do the right thing. I'm very optimistic about that."
Moderator Mose Buchelle: "I don't know if issues of eminent domain have ever been so much at the forefront of public debate as they have this year." He says the highly-controversial Keystone Pipeline project passes through Texas, resulting in around 100 cases of eminent domain in the state. In addition, landmark ruling in state Supreme Court against another pipeline. Finally, a historic oil and gas boom is fueling questions around eminent domain.
Mann on eminent domain: "It seems to me the first question you should ask is why we have eminent domain in the first place." Says it is inherently "an offensive" idea-- private property taken for the public good. Yet "we've always considered some things important enough to use it to get things done." In Texas, that's infrastructure, he says. Availability of energy relies on infrastructure, some of which is tied to the use of eminent domain.
Oliveira: "It is very difficult because particularly we as Texans believe in this inalienable right to own our property." Legislature must address the conflicts, however, to mediate between land owners and the oil and gas industry, for instance, which brings in a great deal of revenue.
Stevens: Eminent domain a "necessary tool," but must be used fairly. "Let's make it as unoffensive as possible," he says. "We need to be able to do grand projects in our society" like the Keystone Pipeline.
Medina: "Where we have really gone astray is to give that governmental power to private entities?" She says that implying we can't get Keystone Pipeline built without "the club of eminent domain" is offensive.
Mann: "The rule of thumb in the pipeline industry is that no more than five percent of a pipeline" is built on land acquired by eminent domain. "After you've made all the agreements with people, there are gaps. You have to connect the pieces."
Stevens: Says Texas Constitution allows for private property rights to be "eclipsed only for the public use."
Buchele: "That's why we're here"-- recent legal decisions have thrown that into question, he says.
Oliveira: "I was shocked to find out all you have to do is fill out a form" and become a common carrier-- someone who carries natural gas, et cetera, for the general good. He says this can allow a company to build pipelines using eminent domain. "We are seeing landowners file suits all over trying to stop people from being a common carrier" due to their interpretations of recent legal decisions including the Denbury case. "There needs to be balance," he says.
Medina: "There's an interstate issue here," she says. According to her, the Texas Railroad Commission cannot regulate the Keystone Pipeline. She asks how this can be dealt with.
Oliveira: "I think the reality is going to call for us to come up with a very balanced piece of legislation, and the devil is in the details." Hasn't seen wide-ranging abuse of the common carrier process yet, but says "the creeping private sector gaining this power is what is giving people angst." The big debate is over who gets power of eminent domain and when, he says.
Oliveira: "I would want things to be much tighter and more limited, but I certainly would not want to obstruct the free flow of commerce."
Stevens: "I've not seen an opportunity in the past decade that has been better than now to start addressing this issue." Legislation should be concise and tightly defined-- should preclude the possibility of a lot of appeals and legal wrangling.
Medina: "There's a fundamental problem" with pipelines not proving their need to use eminent domain powers when landowners object.
Mann: "If a pipeline on your property is found to be there illegally, you can either make them pay what you want or make them take it off. I don't know if there can be a stronger remedy than that."
We're moving to the question and answer session now.
Q: "A very unfair playing field" legally. Also, private common carrier eminent domain doesn't use the same process as public land use-- environmental impact, et cetera. Shouldn't the processes be the same?
Mann: Says projects would take a year to get started. "Essential difference is timeliness. If we had to go through the same process, it would be bring Texas to a halt." Says a massive oil and gas boom is transforming the state-- should not be slowed down.
Oliveira: "It is a very uneven playing field" for landowners. "The politics of this is really unique," he says. Protecting landowners is important, but so is the economy. "Balancing all those things is very hard to do."
Session on <b>A Land Plan for Texas</b> is underway, with former Sen. Kip Averitt, Land Commissioner Jerry Patterson, The Nature Conservancy's Laura Huffman and TX Parks & Wildlife's Carter Smith.
Smith says most state parks acquired in 30s and 40s, and "We literally have hundreds of millions of dollars in deferred main that need to be addressed."
Averitt on the importance of funding parks: "This is our Texas culture we’re talking about…We like our wide outdoors. We’re real proud of that heritage." Says that population growth will increase encroachment issues.
Smith: "We've got to acquire land where the people are." Talks about the need for parks near cities.
Nate Blakeselee, moderator (from Texas Monthly), asks about pressure to sell public land. Patterson says: "No"—The Legislature can't tell him what to do with that land, because of its dedication to the school fund.
Huffman points out that TPWD issue is "not just making sure people have places to go on the weekends," though that's important -- but also, a less-recognized role, is "making sure that our set of natural resources...is well protected." Involves working with private landowners.
Smith talks about "public values on private lands" -- the importance of protecting aquifer recharge, endangered or game species, aesthetics and so on.
Uh-oh, the bad puns have begun: Patterson, talking hunting, mentions "bang for the buck." Averitt's response: "You quack me up."
Uh-oh, the bad puns have begun: Patterson, talking hunting, mentions "bang for the buck." Averitt's response: "You quack me up."
Patterson discusses how a recent Texas Supreme Court decision "gutted the Open Beaches Act," but "We might be able to fix that legislatively."
Huffman mentions "completely unprecedented" opportunity for Texas in the Gulf with mega-money from BP oil spill. (See <a href="http://www.texastribune.org/texas-environmental-news/water-supply/texas-haul-bp-spill-100-million-and-counting/"</a>
Patterson: "It's like mailbox money. It's free money," despite no impact on TX from BP oil spill -- "maybe 25 gallons." Smith says there was in fact an impact, on sea turtles and other creatures that swim in TX waters and/or use TX beaches.
Smith mentions the need for "mentorship opportunities," since many kids grow up in families that don't hunt, fish etc.
Huffman: problem for parks and many other public sector items is: "it's incredibly important, but not urgent." Time to make parks more urgent, she says.
Discussion turns to endangered species. Smith: There are "105-110 species that we have to provide as a state a biological review of the status. …It’s caused a lot of stress with the state and is threatening to compromise and fracture some really strong relationships w/private landowners." Part of broad discussion of federal listing process.
And it's over. Thanks to the panelists for a great discussion, and to Nate for leading the session.
Interesting observation on technology improvements from Nielsen-Gammon: "A weather forecast 5 days into the future today is about as accurate as one three days in advance during the 1990s."
Nielsen-Gammon: "The less rain we get, the hotter it tends to be in the summertime." ...It's a "self-reinforcing cycle."
Nielsen-Gammon says climate change impact on the temperature during the record drought was ½ a degree to a degree Celsius. But the temps broke the record by even more than that, so we would have had record heat anyway.
Nielsen-Gammon: "This next winter is our next good chance for a wet year." There is a 2/3 chance of a weak El Nino developing in the Pacific. He says South Texas has the best chance for a wet winter, because of its correlation to the Pacific oscillations. But if there is no drought relief this winter, we could reaching a situation as bad as the 1950s record drought.
Nielsen-Gammon says that the good news is that toward end of next week Texas may get some good rainfall -- especially West Texas. But as a general matter, "West Texas is more of a boom and bust water cycle. It takes heavy rainfall events" to fill up the reservoirs.
Nielsen-Gammon says that a weak El Nino, as predicted for this fall, means that for most of Texas, there's an above-40% chance that we'll get above-normal rainfall; a 1/3 chance of near-normal; and a 25% chance of below-normal rainfall. The odds are "better than nothing, but [they're] not going to lock us into a wet winter."
Nielsen-Gammon, talking about climate change, says that the media debate is about whether climate change is happening. But scientists are debating "is it going to be a small change or a large change." By the time we figure that out, "it will be too late to do anything about it if it turns out to be a large change." He notes that there are uncertainties in some elements of the forecast, which makes policy discussions/decisions difficult.
Nielsen-Gammon says that in Texas water planning, the big issue is not climate change but population growth. But climate is "too big to ignore" for long-term planning.
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