U.S. EPA today finalized new air standards for backup generators that are typically used during emergency situations to keep power flowing and avoid blackouts.

The amendments to the National Emissions Standards for Hazardous Air Pollutants for reciprocating internal combustion engine, or RICE, generators will affect a broad swath of generators that may be used to power equipment in industrial and agricultural settings, including oil and gas production.

EPA's final amendments will reduce the 2010 rule's burden on industry. The capital investment required, EPA said, will be cut by $287 million and annual costs will be trimmed by $139 million.

Those cuts largely come from allowing dirty generators to operate for longer periods of time without installing pollution controls, a bone of contention for public health advocates. The standards will allow emergency generators to be used to prevent outages for 100 hours per year, significantly more than the current cap of 15 hours.

Demand response companies had asked EPA to raise the limit, saying they need more flexibility to ensure grid reliability and that the 15-hour cap was arbitrary.

EPA emphasized, however, that there will still be significant emissions reductions due to the standards. Particulate matter emissions will be cut by 2,800 tons per year, EPA said, as well as a 9,600-ton-per-year reduction in nitrogen oxide emissions. Emissions of carbon monoxide and volatile organic compounds will also be significantly trimmed, EPA said.

The agency also removed a provision from its proposal that allowed generators to operate for up to 50 hours per year during high demand periods, or "peak shaving," and other nonemergency situations through August 2017. That provision had been highly criticized by public health advocates, Democrats on Capitol Hill and even some trade groups (E&E Daily, Nov. 29, 2012).

Electric Power Supply Association (EPSA) President John Shelk called the revision a "big positive."

Frank O'Donnell of Clean Air Watch agreed that the final amendments are an improvement over the proposal because EPA is now requiring the generators to use low-sulfur diesel fuel, which burns cleaner.

"But it is still a loophole that will permit diesel generators to run without pollution controls," O'Donnell said. "Using pollution controls would mean lower emissions."

Shelk added that his group is still evaluating the final amendments and remains concerned that the 100-hour limit allows utilities to bid into markets using dirty generation.

"Dirty generation, therefore, is displacing cleaner, largely gas-fired power plants," he said. "This is going to make it harder for gas plants to compete in markets like PJM [Interconnection]."

The EPSA may consider litigation to address those issues, Shelk said.

Demand response companies, such as Boston's EnerNOC Inc., had pressed EPA to change the rules, arguing that the 15-hour limit was arbitrary. They also argued that the generators are only used as a "last line of defense," and groups like EPSA were overstating their use (Greenwire, May 29, 2012).

In guidance provided to agencies yesterday on the continuing budgetary uncertainty caused by the "fiscal cliff" deal, the White House Office of Management and Budget said federal employee representatives should be involved in any potential furlough decisions "to the fullest extent practicable."

But the acting president of U.S. EPA's chapter of the American Federation of Government Employees today said the agency has not provided union officials with any details about how it's preparing for what could be deep cuts.

"The agency is not responding at all," acting AFGE 238 President Tom Link said today. "We have submitted a formal information request: 'Please provide us with what is being done to plan for sequestration furloughs.' We've gotten nothing back."

Link, whose group represents about 10,000 EPA employees, said that the union has asked agency brass to conduct conference calls once a week with union officials to provide updates on how EPA is preparing for the cuts, but that agency officials continue to say that discussions on sequester issues are under way and that no decisions have been made.

"AFGE Council 238 wants to be an asset to the Agency for sharing information with our [bargaining unit employees] and transparency in communication, in these most difficult of times," Link said in a letter to EPA Administrator Lisa Jackson today reiterating his complaints.

If his requests continue to go unanswered, Link said in an interview, the next step could be to file a federal unfair labor practice complaint on the grounds that the agency is withholding information.

In the meantime, Link said, the union will continue to reach out to employees to urge them to take the threat of sequestration seriously and plan ahead for a potential loss of paycheck.

An EPA spokeswoman today referred questions on the union complaints to OMB.

OMB Deputy Director Jeff Zients said in his letter to agency heads yesterday that they should be actively working to identify "the most appropriate means to reduce civilian workforce costs where necessary" because sequestration is still a real possibility.

And if sequestration happens, "federal agencies will likely need to furlough hundreds of thousands of employees and reduce essential services such as food inspections, air travel safety, prison security, border patrols, and other mission-critical activities," he said.

AFGE's national union president issued a statement today noting that the memo advises agencies to consider hiring freezes and furloughs for employees, but tells agencies to be "mindful" of how contractors "advance the core mission of the agency."

"OMB needs to tell agencies to be mindful of how federal employees advance the core mission of agencies," AFGE National President J. David Cox Sr. said in a statement. "Contractors are more costly and numerous than federal employees, yet they are merely subjected to the possibility of cuts. Meanwhile, OMB suggests to agencies a whole panoply of actual cuts to the federal workforce."

Zients noted in his guidance that before passage of the American Taxpayer Relief Act (ATRA) of 2012 on Jan. 2, the requirements of the 2011 Budget Control Act mandated that President Obama issue a sequestration order on that day. And although the ATRA postponed the sequestration date by two months, he acknowledged that agencies had already engaged in "extensive planning for operations under post-sequestration funding levels."

OMB said in late December that federal agencies must give employees 60 days' notice before implementing prolonged furloughs (E&E Daily, Dec. 28, 2012).

Zients wrote yesterday that until Congress acts to prevent sequestration, agencies should "continue to prepare for the possibility that they will need to operate with reduced budgetary resources."

In his news conference at the White House yesterday, Obama also put the responsibility squarely on the shoulders of Congress when asked whether he was prepared to allow the government to shut down over the debt ceiling debate.

"Ultimately, Congress makes the decisions about whether or not we spend money and whether or not we keep this government open," Obama said. "And if the Republicans in Congress have made a decision that they want to shut down the government in order to get their way, then they have the votes at least in the House of Representatives, probably, to do that. "

Obama said he believes a shutdown would be a mistake and damage the U.S. economy.

"I think it's shortsighted. But they're elected representatives, and folks put them into those positions and they're going to have to make a decision about that," he said.

Despite passionate appeals for help on the House floor today, lawmakers from the Northeast are still not sure how much Superstorm Sandy aid their colleagues will approve later this evening.

Members are considering a supplemental measure that splits $50 billion for Sandy relief into two accounts. Debate is under way on the House floor.

A proposal consisting of $17 billion, offered by Appropriations Chairman Hal Rogers (R-Ky.), will become the base of the bill if it garners sufficient backing from lawmakers. That portion includes mostly emergency funds, and only if it is approved, the House will then consider an amendment that would add $33 billion in additional aid for New York, New Jersey, Connecticut and federal agencies.

The latter proposal, sponsored by Rep. Rodney Frelinghuysen (R-N.J.), has drawn significant opposition from fiscally conservative Republicans, fracturing already fragile support for the overall disaster measure.

The same group of fiscally minded Republicans are pushing to amend Rogers' $17 billion proposal to require it to be offset with money from other agencies. Other lawmakers and the White House remind them previous disasters were not offset by Congress.

In addition to the offset amendment, offered by Rep. Mick Mulvaney (R-S.C.), House leaders will allow votes on 11 other amendments, many of which would reduce specific funding allocations.

These include an amendment by Rep. Bill Flores (R-Texas) that would cut $150 million for Regional Ocean Partnership grants to coastal states; an amendment by Rep. Paul Broun (R-Ga.) that would remove $13 million to accelerate a National Weather Service readiness project; and an amendment by Rep. Jeff Duncan (R-S.C.) to remove from the bill a provision that would provide $1 million to the Legal Services Corp. to pay certain costs related to the superstorm.

House Minority Whip Steny Hoyer (D-Md.) and other proponents of the broader bill said the adoption of these amendments could make it harder to advance the emergency aid.

On the floor today, representatives from New York, New Jersey and other areas hit by the storm last fall urged colleagues to hurry up and back the $50 billion supplemental.

"Disaster means disaster, and emergency means emergency. We can say let's wait, let's do something differently, but we were there for you. We were there, Florida, when you had your hurricane. And God bless you if you think you're not going to have another hurricane," said Rep. Frank LoBiondo (R-N.J.). "We need this, and we need this now."

Oklahoma Republican Rep. Tom Cole and Rules Chairman Pete Sessions (R-Texas) repeatedly countered that the House did not delay on this issue.

"I think we're trying to do it right," Sessions said. "The speaker, John Boehner, cares deeply about this country."

A vote on the amendments and final passage is expected this evening. Senate leaders have indicated they will hold a vote early next week on the House version.

Climate change

Meanwhile, a few Democrats speaking on the floor today said the superstorm is more evidence that human behavior is affecting the Earth's climate. "Our inabilities to deal with it -- there will be more and more disasters," said New York's Rep. Louise Slaughter, the ranking Democrat on the Rules panel.

Although watchdog groups are criticizing funding proposals for myriad programs aimed at improving infrastructure and transit services, other groups note the superstorm revealed the country's neglect of its roads and transportation corridors.

"One of the harshest lessons of Hurricane Sandy was that it exposed the terrible deficits in our nation's infrastructure and the vulnerability of millions of people in the face of climate change," BlueGreen Alliance Executive Director David Foster said in a statement today.

National Wildlife Federation Vice President John Kostyack added the money would help coastal areas rebuild in "a smarter way."

"We have an opportunity to build more resilient buildings and transportation and energy systems," he said. "Using these natural defenses is oftentimes far more cost-effective than relying on hard structures and provide the additional benefit of serving as important fish and wildlife habitat."

The nuclear industry is attempting to push through a "rush job" on the Nuclear Regulatory Commission's redo of waste policies so pending license applications and renewals aren't delayed, watchdog groups charged today.

The Nuclear Energy Institute signaled its support earlier this month for NRC's proposed two-year timeline for revising its spent fuel storage policies, which a federal appeals court found lacking last year.

The court ruled that the commission failed to fully analyze the environmental effects of storing nuclear waste at sites across the country without a permanent repository under construction (Greenwire, Jan. 4).

The court faulted NRC for not taking a close enough look at spent fuel pool fires and for assuming a national repository would be built within the next 60 years, despite decades of political deadlock over the abandoned repository under Yucca Mountain in Nevada. The court then vacated both the agency's waste confidence decision and a separate storage rule.

In response, NRC began reviewing its policies and declared its intent to issue a final environmental impact statement and waste confidence rule by August 2014. The agency also decided to hold off on approving licenses for new nuclear plants or renewing the licenses of existing facilities, because the waste confidence rule underlies those decisions.

But Arjun Makhijani, a nuclear waste expert at the Institute for Energy and Environmental Research, said in comments filed with NRC today that the agency will need at least a decade to gather sufficient data to determine how long spent fuel can be stored at various sites across the country.

"Two years simply doesn't allow the data to be gathered because the data still doesn't exist on most of the essential points," he told reporters on a call today.

Makhijani also said NEI was "wrong on a number of accounts" in its comments to NRC, including its assumption that the effects of shuttering Yucca Mountain can be calculated.

Diane Curran, an attorney at Harmon, Curran, Spielberg & Eisenberg LLP, said another problem is that information about fires at spent fuel pools is classified after the terrorist attacks of Sept. 11, 2001, and the agency needs to find a way to make that data public. "There's no reason why this issue should continue to be secret," she said.

The groups reiterated their point that NRC staff members in the past have said it could take up to seven years to revise nuclear waste storage policies. NRC has since said that estimate was tied to a different project with two staffers assigned to it, whereas the waste confidence ruling has the attention of 20 full-time staffers.

"They could put 500 staffers on this and not do it in two years because they need a physical research program," Makhijani said.

Ellen Ginsberg, vice president and general counsel of NEI, said the industry supports the schedule established by the nuclear commission, which "allows both a full review of the issues identified by the United States Court of Appeals for the D.C. Circuit and a timely resolution of the rulemaking process."

"Maintaining this schedule is an essential objective, since the Commission will not make final licensing decisions on pending license applications dependent upon the WCD until the remanded issues are resolved," Ginsberg said.

COLORADO SPRINGS, Colo. -- Sen. Mark Udall (D-Colo.) toured an alternative energy research facility at the U.S. Air Force Academy here today and vowed that he will continue to champion the military's ongoing effort to develop biofuels in the name of national security.

Udall, a member of the Senate Armed Forces Committee and a vocal supporter of the military's renewable energy research, led efforts in the Senate last fall to push through an amendment repealing a section of the National Defense Authorization Act that would have required the Department of Defense to forgo advanced biofuels if the cost were higher than that of conventional fossil fuels (E&ENews PM, Nov. 28, 2012).

Today, Udall toured the Air Force Academy's Life Sciences Research Center, which among other things is conducting research into the use of single-cell algae to fuel vehicles and, perhaps someday, military aircraft.

The Air Force has set a goal of fueling jets with a 50-50 blend of drop-in biofuel by 2016, and the Navy aims to do the same by 2020. The biofuels are believed to have a molecular structure similar to that of fossil fuels that could be used in existing engines (ClimateWire, Nov. 29, 2012).

"This is not science fiction, it's science fact that we can use algae as a feedstock to replace a significant portion in the long run of the oil that we import from overseas," Udall said during a brief interview outside the Academy's North Gate entrance. "As a proponent of an all-of-the-above energy strategy, I make no bones about the more homegrown American energy you can produce the better for national security, job creation."

The Defense Department is exploring ways to incorporate alternative energy sources in an effort to improve energy security and reduce the military's reliance on insecure sources of petroleum.

"In particular, algae holds long-term promise because the oil that's produced from algae is most like the fossil fuel oil that we produce here in our own country, and that we also import from places that don't particularly like us," Udall said.

He said the military spends as much as $80 billion a year to protect oil supply lines and has noted in the past that more than 3,000 U.S. service members have been killed or wounded on fuel convoys in Iraq and Afghanistan since 2001.

"If we can produce that same product here through other means, it's a bonus for our country in many, many ways," he added. "There are no downsides."

But not everyone agrees. The military's biofuel work has been a target of GOP leaders in Congress, including Oklahoma Sen. James Inhofe, who has argued that the effort is a waste of military money.

Still, the Navy last year conducted a "Great Green Fleet" demonstration off the coast of Hawaii that featured Navy fighter jets zooming off the USS Nimitz aircraft carrier on fuel made from a mix of cooking grease, algae oil and traditional petroleum. The Navy said the demonstration marked the first time a 50-50 blend of biofuels had been run through an entire operational system (Greenwire, July 19, 2012).

"It's the area in which the most opportunity presents itself" on the renewable energy front, Udall said. "By that, I mean wind energy is becoming more and more mature, we know a lot about the basic technology when it comes to photovoltaic solar energy, we've determined how to tap geothermal energy. But this area of biofuels, synthetic fuels, still has enormous promise. We think the breakthroughs are going to be very significant and very important economically, environmentally and national-security-wise.

"The military has always led the way in finding and applying new technologies," he added. "Whether in the medical sector, the information technology sector, in the satellite world and in energy. So this is in the long tradition of the military, pushing the technological envelope in the pursuit of greater national security."

Bill Tayler, who spent more than 40 years designing and implementing energy programs for the Navy and has played a top role in the service's aggressive renewable energy push, has joined the government relations firm SMI as a senior adviser.

Tayler most recently served as director of the Navy's shore energy office, overseeing the department's massive build-out of renewable energy on its bases, with the goal of getting half the department's energy from alternative sources by 2020. He has played a leading role in the department's development of programs for geothermal technology -- one of its greatest current sources of renewable power -- and ocean energy, which the Navy sees as one of its greatest potential sources (E&ENews PM, April 25, 2012).

Before that Pentagon post, Tayler served as director for energy development at the Naval Facilities Engineering Command, which develops energy policy for the service's activities around the world.

According to a news release from SMI, Tayler has had a hand in all shore energy and utilities policy out of the Navy over the past nine years and has helped advance legislation that allows the military to develop renewable energy resources, as well as oil, gas and coal methane projects on military land.

SMI's Helios Strategies unit focuses on bringing federal and private investment to energy technologies. According to its website, the firm's clients include Argonne National Laboratory and Ocean Power Technologies Inc., which last summer received approval from federal regulators for the country's first project to tap the Pacific Ocean's waves for electricity (Greenwire, Aug. 20, 2012).

The director of American Electric Power Co. Inc.'s media relations team is planning to retire at the end of the month.

In an email to journalists, Pat Hemlepp said he plans to leave the utility after 18 years working in media relations. Hemlepp worked at chemical company Ashland Inc. for seven years before coming to AEP, one of the largest U.S. electric utilities.

Hemlepp told Greenwire he is proud of the relationships he and his department have cultivated with reporters through the years.

"That is something that's always been a goal of ours: to be the first call" on issues that affect the industry, he said.

In his retirement, Hemlepp said he plans to do some "heavy-duty loafing" and spend more time taking pictures and traveling with his wife. Hemlepp said he may do public relations work in his retirement -- but not until he has a few months to get settled.

Taking his place at AEP will be a current member of Hemlepp's staff, Melissa McHenry.

"Melissa is already measuring the office for curtains," Hemlepp joked, adding he has worked with McHenry for several years.

In a recent open letter to President Obama, the Clean Air Task Force highlighted a series of climate policy recommendations that could help the United States achieve its 2020 emissions reduction goals without the need for congressional intervention. During today's OnPoint, Conrad Schneider, advocacy director at the Clean Air Task Force, discusses the letter and explains what he believes should be done in the transportation sector, on innovation and in the exploration of natural gas to further the United States' climate goals.

Click here to watch today's OnPoint.

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Conrad Schneider, advocacy director at the Clean Air Task Force. Conrad, thanks for coming back on the show.

Conrad Schneider: Thank you very much for having me.

Monica Trauzzi: Conrad, the Clean Air Task Force has just released an open letter to President Obama highlighting how you believe the administration should proceed on climate during its second term. You're releasing this ahead of the president's inauguration speech, ahead of the State of the Union speech. Is your sense that he will discuss climate in these two speeches and that this is actually something that could be taken up during his second term?

Conrad Schneider: Well, we're very hopeful that he will mention it, but the test on this issue is not whether he mentions it in a speech, but whether there's follow-through with some of the recommendations that we're making here. And we think it should be a priority for his second term. And we were heartened when at the first press conference that he held postelection, he was asked a question about Hurricane Sandy and climate, and he laid out what we thought was a very sensible approach, two-tracked approach, to thinking about this. And he said, "First of all, I want to find out what we can do immediately to start mitigating the worst consequences of this, but then I want to spark a national conversation about over the long term what we really need to do to ultimately solve this problem." And he put two important caveats on there that I think all have to take into account: one, that it has to be consistent with economic growth and job creation. So that really in a way sort of bounds the discussion about what we need to have. But it's - he's thinking about it the right way, an immediate time horizon, and he's already on the record saying he wants to cut 17 percent from 2005 levels by 2020, but ultimately, the goal here, and that's the administration's stated position to the international community, is 80 percent by 2050, so ...

Monica Trauzzi: And aren't we on track to meet that 17 percent goal by 2020, with the fuel economy standards and efficiency measures?

Conrad Schneider: We're within reaching distance, but in our letter, we point to two things that we think are absolutely going to be crucial to be able to meet that goal. We're not going to do it on our own, and in part one of the reasons we're closer than we were is because of the recession. One of the reasons is because of cheap gas as a result of the shale boom. Those are things that we can't count on going forward, so we need to lock in those gains and make more. And so the two things that we've proposed to meet his concerns about immediate action that can be taken is No. 1, addressing carbon pollution from existing coal plants. That's No. 1. And No. 2 is to address methane from the oil and gas industry directly. Those two rules together would put us a long way on the road to meeting that target.

Monica Trauzzi: All right. Let's talk about that first point, the new source performance standards. Lisa Jackson is slated to leave EPA. She's been a champion of these Clean Air Act regulations. How do you think her leaving changes the game and the likelihood of someone coming in and really pushing forward on these air regs?

Conrad Schneider: Well, firstly, rightly you say that, you know, part of her legacy is being able to set the stage for these regulations, because she was there when the endangerment finding was made, and so forth. But ultimately, there's a legal obligation here, a duty under the Clean Air Act, for EPA to move forward, regardless of who the administrator is, and there's an opportunity here, and this - and what we're saying, and the reason that our letter is targeted to President Obama, is because we need presidential leadership on this issue. EPA will follow his direction in implementing the Clean Air Act. So we're hopeful that we'll see a strong replacement for Lisa Jackson, and we honor her service now that she's decided to leave, but regardless of who's in that position, we need to move forward to clean up the biggest source of carbon dioxide: existing coal plants.

Monica Trauzzi: The president has also indicated that becoming an exporter of energy is an important goal for him, and that would certainly require greater exploration of our natural gas resources. And one of the things that you point out is that you don't believe that natural gas is a long-run climate solution. So how does the president square those two goals of addressing the climate, but then also exporting energy and exploring natural gas?

Conrad Schneider: Well, you know, these can be - first of all, these are mutually consistent, not mutually inconsistent goals. Natural gas can provide cleaner energy immediately in regards to just dealing with the existing power fleet. A heavier reliance on natural gas now could lower carbon dioxide emissions from that fleet even more than is already happening as a result of low gas prices, so that's No. 1. But even natural gas is going to have to meet certain environmental performance standards in order to fit within the goal of a 17 percent reduction or an 80 percent reduction by 2050. Natural gas is responsible for sort of two different types of climate changers - climate forcing agents. One is the methane, right? So it is in fact methane, and it leaks from everything in that system, from the well pad all the way down to the burner tip. And so we're calling for EPA to pursue regulations that would start to close those leaks, stop the venting of that methane, which is much more potent as a climate forcing gas than is CO2. But the other thing is when it's combusted, when it's burned, that creates CO2 as well, and ultimately, fossil units in this country, certainly by 2050, fossil units in this country are going to have to capture and store their carbon, or we're not going to have a chance of meeting that target.

Monica Trauzzi: How close are we to the technology on that?

Conrad Schneider: Well, the technology is there. In fact, that's one of the things that underpins EPA's proposal on new source standards, right, the new fossil power plants, is that carbon capture and storage technology is available today. And they recognize and have a phase-in of that, that it can be phased in over time. What we need to do is deploy more of it and bring the cost down so that it is more widely deployed.

Monica Trauzzi: You also call on the administration to reorganize DOE's innovation programs. What's happening there right now that you don't think is quite right, and is that a suggestion that maybe things have been mismanaged under Steve Chu?

Conrad Schneider: No, I think what they need to do is build on the success that they've had and recognize where they can make improvements. You know, right now, the Department of Energy rightly has a mission to help us produce energy in this country that's affordable, to keep the lights on, to keep the transportation system moving. It has a goal of domestic energy security, and those are all correct. But if the administration has set this target, this ultimate target of 80 percent reduction in carbon dioxide by 2050, then the Department of Energy has to align its activities to meet that goal, and right now, the department is not necessarily arrayed to do that. And so we're calling for the administration to take this opportunity at the beginning of a new term to take a look at what can be done, particularly on innovation policy, to improve in that area.

Monica Trauzzi: What's the attention span right now for climate discussions in Washington?

Conrad Schneider: Well, I think as a result of Hurricane Sandy and the re-election, it's come back to the fore in a way that it probably hasn't been in the last two years. And we really welcome that. And so as you started the show by saying, we're looking for president leadership and a statement about this, but what is really going to be the test is whether the administration has the fortitude to stick it through, to follow through on these rules, and take the necessary actions to do the reforms in the agencies to get us there.

Monica Trauzzi: So you don't call on the president to push any legislative solutions. There's been talk about a carbon tax and how that might play into fiscal discussions. Any likelihood to that, and would that be a good path forward?

Conrad Schneider: Well, all those types of things, cap and trade, carbon taxes, would be helpful, particularly if some of the proceeds were used to help fund and deploy some of the zero-carbon energy we're going to need to meet the challenges of the next few decades. But our - I think our point is even if that doesn't happen, these innovation - changes in innovation policy need to happen anyway, to be able to create a better suite of options, of lower-cost carbon energy that we can use going forward. Carbon tax, cap and trade, or, irrespective of those things, innovation policy is going to have to change for us to get there.

Monica Trauzzi: All right. We'll end it right there. Thank you for coming on the show.

Conrad Schneider: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

Click here to watch today's OnPoint.