Michigan Oil Spill Increases Concern Over Tar Sands Pipelines
Up to a million gallons of oil spilled from a ruptured pipeline into the waterways of southwestern Michigan last week in what the federal government is calling the most destructive oil spill in Midwestern history. Owned by Enbridge, the pipeline was likely carrying controversial tar sands oil, industry analysts and environmental groups tell OnEarth . Enbridge’s CEO says that’s not the case. But there’s no doubt the damaged pipe was part of the company’s 1,900-mile network that transports oil mined from Alberta in northwestern Canada, where the tar sands deposits are located, to Midwestern refineries. As federal officials assess the extent of last week’s damage, the spill is raising new concerns about plans by Enbridge and other oil companies to build more pipelines and increase the U.S. reliance on a form of fuel whose extraction and refinement causes vast amounts of environmental damage. Heavy crude began gushing from a 30-inch pipeline buried in marshy ground near Battle Creek, Michigan, more than a week ago. By the morning of July 26, the stench of petroleum filled the air, and thick globs of oil covered the fast-moving Kalamazoo River. A week later, fears that the oil would flow 80 miles downstream to Lake Michigan, wiping out fish and fouling beaches during tourist season, have been allayed. More than 800 workers flown in from across the United States managed to corral the runaway oil on a 25-mile stretch of river. The damage likely exceeds $100 million, although no official estimates have been made, according to EPA officials. And state and federal officials say the spill will require months to clean up and years of monitoring for potential air and groundwater pollution. Enbridge will be charged the cost of the cleanup and has promised (as with BP on the Gulf Coast) to pay all legitimate damage claims from residents. But environmental experts say the impact of this spill is only a preview of greater potential problems to come if proposed new pipelines are built. What Was in the Pipe? Alberta’s tar sands hold the second-largest oil deposit on the planet, after Saudi Arabia’s oil fields. But while Middle Eastern oil is liquid and can be pumped out through conventional means, tar sands are essentially a gooey, gritty mixture of petroleum and sand known as bitumen. Extracting oil from them requires vast amounts of water and energy, emits copious greenhouse gases, and tears up extensive swaths of boreal forest — one of the world’s largest-remaining intact ecosystems. The Natural Resources Defense Council has called Alberta’s tar sands operations "the largest and most destructive project on Earth." (See OnEarth ’s Fall 2007 story " Canada’s Highway to Hell .") The tar sands oil is refined largely in the Midwest, and vast pipeline systems move it across the continent. Enbridge Energy Partners, a Houston-based subsidiary of the Canadian company Enbridge Inc., says the oil in Pipeline 6B, which ruptured last week, was moving from a transfer facility in northwestern Indiana to a refinery in Ontario. Enbridge CEO Patrick Daniel told OnEarth that the oil originally came from Cold Lake, Alberta. Daniel maintains that the leaked oil was not derived from tapping tar sands and said the area where it originated does not have "oil sands" (the industry’s preferred name). But Alberta’s Department of Energy says Cold Lake has at least 41 producing tar sands operations. A spokesman for the Canadian Association of Petroleum Producers said there is conventional oil production in the area, as well. Richard Girard, a researcher with the Polaris Institute who authored a recent in-depth profile of Enbridge’s operations, said that based on his research, Pipeline 6B would almost certainly have been carrying oil derived from tar sands. The Polaris Institute is a Canadian advocacy group that opposes expansion of the tar sands industry. There is no universally accepted definition of exactly what constitutes tar sands. But environmental leaders say that regardless of the exact composition of the heavy crude in the Michigan pipeline, the spill demonstrates the growing hazards of the tar sands industry. "It’s coming from the same monster," Girard said. "It’s oil attached to sand underground, regardless of how they get it out." Susan Casey-Lefkowitz, NRDC’s international programs director, says the mystery over the oil’s origin drives home the need for more transparency . "It’s important to know what is in the pipe when a spill happens," she said. "If this is tar sands oil, it likely needs to be dealt with in a different way" because of higher levels of heavy metals and other properties, she said. "But there’s no requirement that they need to publicly report or even privately report what they’re bringing in." Controversial Expansion Efforts Although environmental leaders say the Michigan oil spill could have significant implications for other proposed Enbridge projects, the company’s CEO says it will learn from the Michigan disaster and increase safety procedures. The company wants to begin shipping tar sands oil to China by building a pipeline from Alberta to the coast of British Columbia, where it will fill up tanker ships. The Canadian government is considering the proposal, which has faced opposition from First Nations communities in the pipeline’s path. Environmentalists are also concerned about spills from the pipeline and tanker ships in the rough waters off British Columbia’s coast. Residents, Native American tribes, and environmental groups are also worried about a proposed Enbridge pipeline that would cross Illinois, and another project called the Keystone XL. That’s a 2,000-mile pipeline proposed by Enbridge rival TransCanada that would transport oil across the American heartland to the Texas Gulf Coast. In June, 50 U.S. Congressmen signed a letter saying the Keystone XL pipeline should not be approved until its impact on global warming is considered. The proposed pipelines across the U.S. are driven in part by the fact that Canadian refineries are approaching maximum capacity, according to industry experts. Midwestern refineries are seeking to expand, and new refineries may be built on the Gulf Coast. Refining tar sands creates significantly more air, water, and greenhouse gas pollution than refining standard crude oil. NRDC is currently challenging an air permit for a BP refinery in Whiting, Indiana, where the company has proposed dumping more sludge into Lake Michigan as part of an expansion to process more tar sands oil. Critics say the Michigan spill shows that Enbridge and other companies cannot be trusted to transport oil across hundreds of miles of ecologically sensitive land, including the Oglala aquifer in Nebraska, which provides water to eight states and lies under TransCanada’s proposed Keystone XL pipeline. There have been at least five other pipeline spills that dumped hundreds of thousands of gallons of oil this year, including 126,000 gallons from an Enbridge pipeline in North Dakota in January, according to an analysis by the Sierra Club. Girard’s report logs 610 spills and leaks from Enbridge pipelines between 1999 and 2008, totaling 132,000 barrels — or almost half the volume of the 1989 Exxon Valdez spill in Alaska. In January, the federal Pipeline and Hazardous Materials Safety Administration warned Enbridge that the company was failing to comply with regulations regarding corrosion on Pipeline 6B. The agency, part of the U.S. Transportation Department, said Enbridge could be subject to fines of $100,000 per violation per day if it did not take action, but no enforcement was pursued at that time, according to the agency’s letter. "Tar sands supporters leaped on the Gulf spill to make the point that tar sands are safer because you don’t have to drill underwater," said Ann Alexander, a staff attorney in NRDC’s Midwest office. "But the Enbridge spill pops that balloon."
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Michigan Oil Spill Increases Concern Over Tar Sands Pipelines
Long Island Town Fights To Keep Energy Efficiency Program
Officials in a New York town say they’re prepared to sue the Federal Housing Finance Agency (FHFA) in order to keep a program going that helps residents make their homes more energy efficient — an effort that’s been backed by the Obama administration as a way to cut energy use, reduce global warming pollution, and create green jobs. The local project is part of a $150 million federal stimulus initiative thrown into limbo by the agency that guarantees most of the nation’s home mortgages. In early July, FHFA told mortgage lenders that it might no longer guarantee loans for homes in municipalities that take advantage of the special financing for energy efficiency. Places including Boulder, Colorado, and Berkeley, California, have already created those programs, and Los Angeles, Milwaukee, New Orleans, New York City, and San Francisco have been planning similar projects (see the Spring 2010 OnEarth story, " Home Energy Makeover "). They have all put their programs on hold because of FHFA’s actions. But Babylon, New York, with a population of about 200,000, is the first municipality that’s fighting back. "We will not shut down the Long Island Green Homes program, and we will challenge this unwarranted and, in our view, unconstitutional intrusion," Babylon Town Supervisor Steve Bellone said yesterday on the steps of Babylon’s town hall. Long Island Green Homes offers energy audits and low-interest financing to residents for home energy retrofits. Babylon covers the cost of the work, such as improving insulation, upgrading boilers, and adding solar panels. The homeowner simply agrees to pay the cost back over time in monthly installments. The Babylon program and similar projects around the country are known by the acronym PACE, which stands for Property Assessed Clean Energy. (It’s also been called "cash for caulkers.") The PACE model topples the traditional barriers that make homeowners reluctant to undertake improvements — namely, the high up-front costs — and offers an enticing new way to curb greenhouse gas pollution. By 2020, implementing such retrofits nationwide could cut greenhouse emissions by up to 160 million tons annually — the equivalent of taking 30 million cars off the road — while saving homeowners $21 billion in utility bills each year. The efficiency improvement loan under PACE is tied to the property, not the person. So if the home is sold, the new owner takes over the payments while also benefiting from lower energy bills. If the home were to go into foreclosure, however, the energy-related loan would need to be paid off before any money could be put toward the mortgage. Babylon began issuing PACE loans in 2008. Many towns and cities fund the loans through bonds and recoup them through property tax bills, but Babylon linked them to the town’s reserve fund for solid waste improvement projects — appropriate for a project designed to reduce energy waste, according to Sammy Chu, the program director. Borrowers pay off the loan in the form of a solid-waste assessment on their homes. Homeowner Ria Muriello pays about $75 a month on her PACE loan but says her energy costs have dropped about $85 to $90 a month since the improvements. "My bills went down immediately," she says. "My house is more comfortable. The program works." About 500 homes in Babylon have received PACE loans, Chu says. None have defaulted on a mortgage in the two years of the program, but about 1,200 tons of carbon dioxide — the leading cause of global warming — have been kept out of the atmosphere. In the absence of a federal policy for cutting carbon, Chu says, PACE has allowed towns and cities to take action on climate change themselves. In Babylon, the program has also led to the creation of dozens of local jobs. One local contractor says that about 90 percent of his business involves energy audits and improvements financed by Long Island Green Homes, with each of his employees making $20 to $35 an hour. "If they had to shut it down, I would literally be out of business," says Rich Manning. "I’d be laying off everyone who works for me and looking for other work." There is evidence that homeowners who take advantage of energy efficiency improvements also have a lower risk of foreclosure. A 2009 analysis for a major financial institution (private but reported this week by Grist ) found that homes built to federal Energy Star standards for energy efficiency had default and delinquency rates that were 11 percent lower than other homes. FHFA isn’t so happy with the program, though. The agency oversees Fannie Mae and Freddie Mac, the two government-chartered agencies that buy and resell more than 50 percent of the country’s home mortgages. According to the agency, it considers the PACE loans unacceptably risky because, by being attached to the property, they are effectively liens that must be paid off first — before the mortgage — if a home goes into foreclosure. Chu says that Babylon has been trying to work something out with FHFA for a year, but the agency has not responded to its calls, letters, or e-mails. FHFA won’t comment on Babylon’s concerns, according to agency spokeswoman Corrine Russell. Before Babylon’s PACE program started in 2008, Manning, the building contractor, says he was doing about 20 energy efficiency projects a year. In the two years since, that number has grown to about 125. But he has put plans to expand from one to two crews on hold until the FHFA controversy is resolved. "These are skilled workers, they have a future in this business — they would have a future in this business," he says. "Now they’re a little scared, rightfully so." UPDATE : California’s attorney general has filed a lawsuit to keep PACE. Follow the story here .
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Chicago Plants the World’s Largest Urban Solar Farm
Chicago’s sprawling south side, once thrumming with steel mills and factories, is now covered by large swaths of weedy land strewn with the rubble of faded industries. But last year, a 40-acre patch not far from what was once home to the famous Pullman rail car factory sprouted a crop of 32,000 solar panels. The photovoltaic arrays move automatically to follow the sun, a glistening aberration in an otherwise drab and decrepit landscape. This is the country’s — and perhaps the world’s — largest "urban solar farm," and since December it has been generating up to 10 megawatts of clean electricity to help power a metropolis better known for its archaic dirty coal plants. Industry executives, environmentalists, and city officials — who don’t always find themselves on the same side of an issue — hope it will inspire other solar plants throughout polluted Rust Belt cities. Today Chicago Mayor Richard Daley and Exelon CEO John Rowe will lead an official unveiling of the plant. Daley has touted it as part of the city’s plan to take action on climate change and hailed it as a job creator in tough economic times. The Chicago plant hired a handful of permanent employees and about 200 union construction jobs, 44 percent of which were awarded to minorities. Large solar plants of 5 megawatts or more are common in Europe and the southwestern United States but usually aren’t built in highly populated areas. Denis Lenardic, the Slovenia-based editor of widely respected annual reports on the solar industry, said the Chicago project is likely the largest of its kind in the world. Advocates hope the Chicago project shows that solar plants don’t have to be massive and remote — they can be built on abandoned industrial sites or unused land owned by water treatment plants. Putting solar plants close to transmission lines and power users is highly efficient and improves the availability of power for local users in case of downed lines or other problems on the grid. Though not as sunny as the American southwest, the Chicago area’s solar resources are roughly equivalent to or even better than those of Germany and Spain, the world leaders in solar generation. The swiveling panels at the Chicago plant, built by SunPower Corp. and billed as "the most powerful on the planet," generate 30 percent more energy than typical fixed-base panels. The Chicago plant’s maximum capacity of 10 megawatts isn’t much in the larger scheme of things — enough for just 1,500 homes in a city of three million. And during the winter, generation is usually below capacity. But proponents would like to see a host of similar solar farms peppering pockets of empty land in metropolitan areas, providing 5 megawatts here, 10 megawatts there, adding up to a significant energy output. SunPower vice president of public policy Julie Blunden describes them as potential "urban infill." Neighbors of the south side plant say they are thrilled with the investment and symbol of green energy in their back yard. "You hear so much about NIMBYism, here we actually got YIMBYism. We were very welcomed by the community," Blunden said. "We came in and provided clean energy and some jobs, using local labor and local steel." As clean energy has become more desirable and cost-competitive, solar panels have sprouted on the rooftops of houses, government buildings, and big box stores in major cities. This type of solar power is called "distributed generation," with panels providing electricity for a given building or complex and often sending energy back to the grid if the panels generate more than the building uses. Solar plants, by contrast, generate electricity that goes directly to the grid and is sold by a local utility. In northern Illinois, the electricity from Exelon plants is distributed by ComEd. Illinois previously got just 3.3 megawatts of electricity from solar, meaning the Exelon project increased state solar capacity four-fold. Solar generation is driven in part by state renewable energy portfolio standards. Illinois’s standard mandates that 25 percent of the state’s electricity must be generated from renewable sources such as wind and solar by 2025. Six percent of that must come from solar by 2015. That would mean about 750 megawatts of solar power, or more than 70 plants like the south side one in the next five years. The Illinois Power Agency, a government body, is responsible for buying power from different generation companies to make sure that the state complies with the RPS. But larger-scale projects like the one on Chicago’s south side will only become commonplace if they end up being cost-effective, experts say. Exelon was counting on three types of government incentives to make the Chicago solar plant viable. A federal loan guarantee fell through, but company officials say they are still committed to the plant as an experimental "demonstration project." Whether they would build more in the future remains to be seen. "The economics are such that we need the federal incentives," said Exelon senior vice president Tom O‘Neill. "Without these incentives, the cost structure exceeds the revenue." Henry Henderson, director of the Natural Resources Defense Council’s Midwest program, said it’s only logical that the government back clean energy. Coal-fired power plants might seem cheaper, but actually, fossil fuels such as coal come with all kinds of hidden costs in the form of air pollution, human health problems, and global warming, he said. Henderson appreciates the symbolism of cutting- edge energy generation on the city’s now-ragged far south side, which once produced luxury rail cars for the nation. "Pullman was very innovative in its time," he said. "This is a way of doing something innovative now within a place that drove the transformation of our transportation system in the 19th century. How do we take that legacy and turn it into a point of productivity again? It’s recycling at the most important scale."
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Chicago Plants the World’s Largest Urban Solar Farm