What will it take to reach the climate change goals set by Gov. Hickenlooper?
The governor’s order is big on aspiration, but short on details
Words of praise flowed from environmental groups last week after Gov. John Hickenlooper signed an executive order calling for Colorado to reduce greenhouse gas emissions by 26 percent. This reduction, as compared to 2005 levels, must be achieved by 2025.
The executive order aligns Colorado with 13 other states in the new Climate Alliance that have pledged to honor Paris climate agreement goals, bucking President Donald Trump’s announced exit.
Hickenlooper said many of the right things when announcing his order “supporting Colorado’s clean energy transition” at Red Rocks last week. He talked about past successes that have improved the environmental economy while accommodating and even enhancing economic growth. He said the state must switch more electrical generation from coal to renewables. He called for a plan by January to ramp up the charging infrastructure for electric vehicles, using at least a portion of Colorado’s $68 million share of the $15 billion Volkswagen must pay for cheating on its diesel emissions.
But the plan was also conspicuous for what it failed to say. Almost entirely absent were the concrete steps it will take to achieve these goals in the many sectors of the economy that produce greenhouse gas emissions. As Hickenlooper enters his last 17 months in office—possibly eyeing a run for president—his legacy will be built not just on what is promised, but also what is accomplished.
For all the praise, there are equal parts skepticism, much of which involves a question the governor’s executive order does not even attempt to answer. What exactly will it take to meet the goal the order spells out?
Cuts will have to come from more than one sector. The 2014 Colorado Climate Plan says that electrical production was responsible for 25 to 35 percent of Colorado’s greenhouse gases, and transportation, including passenger cars, freight trucks, commercial aircraft and rail, account for about 25 percent. Fuels used for residential, commercial and industrial purposes make up 21 percent. Natural gas production and transmission and agriculture came next, followed by methane emissions. Hickenlooper’s order made no mention of these smaller but still substantial contributions.
Environmental groups say Colorado will need what one describes as a “mix and match” variety of policy options that range from coal plant closings, higher standards that lessen use of fossil fuels in heating buildings, and steps to lower methane emissions from both existing and former coal mines as well as oil and gas drillings. Because Colorado’s greenhouse gas emissions come from so many sources, there is no single answer.
“We need both good goals and good actions to get there,” says Stephen Saunders, speaking for the year-old Colorado Communities for Climate Action, a consortium of 14 cities and counties. “Nothing has started yet in terms of concrete action.”
Whatever the policies needed to achieve the 26 percent reduction in eight years, they’re “not a path we are on” now, says Howard Geller, chief executive of the Southwest Energy Efficiency Project, a Boulder-based group. The governor’s order represents a ”significant change in direction. That’s an economy-wide goal, not just the electricity sector. We have to get big reductions in transportation. We have to get big reductions in buildings. …yeah, we’re getting big reductions from Xcel, but Xcel is not the whole state.”
But Clean Energy Action’s Leslie Glustrom was less charitable. Reading the executive order last Tuesday, she told The Colorado Independent, its goals are “so feeble as to be practically meaningless.”
If that’s a dark view, consider that an iceberg the size of Delaware recently calved from Antarctica.
The political landscape
One way to view Hickenlooper’s goals is through Colorado’s purplish political geography. It’s neither Boulder nor Colorado Springs. The Yale University poll from 2016 found that 71 percent of Coloradans believe global warming is happening, a hair above the national figure of 70 percent. Only 53 percent, however, agree that global warming is caused mostly by humans. (But asked if they support regulating C02 as a pollutant, 74 percent agreed).
Another way to measure his goals is to compare them to those articulated by former Gov. Bill Ritter in 2007. Ritter called for a 20 percent economy wide reduction by 2020 and an 80 percent by 2050. He also offered six bridge strategies, including creation of an agriculture offset market, in an effort to create a carbon market.
Hickenlooper’s order is less comprehensive and does not specifically reaffirm Ritter’s mid-century goal. It can instead best be seen as an argument for reducing the carbon footprint of Colorado’s electrical supply. In addition to the economy-wide reductions of 26 percent, the order describes a goal of 25 percent fewer carbon dioxide emissions from the electricity sector by 2025 and 30 percent five years later—both compared to 2012 levels. The governor’s order also seeks electricity savings of 2 percent of total electricity each year. In other words, deliver the same services with less electricity. Xcel has been at around 1.5 percent, but Fort Collins Utilities has been achieving 2 percent annually by switching out older, inefficient light bulbs and other, more complicated strategies.
“They’re demonstrating it can be done,” says Geller of the Southwest Energy Efficiency Project. “We need to do that around the state.”
And there’s also the intent to provide economic development strategies and other support to “communities impacted by our nation’s changing energy landscape.” Oak Creek, Hayden and Craig, all in northwestern Colorado, are especially dependent on coal taxes and jobs, as are several communities in Delta County and Nucla, Naturita and Norwood, in southwestern Colorado. Glustrom describes that goal as the “most important” in the executive order because “it’s a critical piece for moving our state forward.”
Is any of this enough? C02 emissions are barreling toward 450 parts per million, the threshold for massive, irreversible climate destabilization long identified by many scientists. Former NASA scientist Jim Hansen, among others, has argued we must halt emissions and drive down concentrations to 350 ppm.
Activist and writer Bill McKibben has taken up that goal with his grassroots-driven organization, 350.org. McKibben has been in Colorado several times in recent years to make his fierce argument that we must keep the vast majority of fossil fuels in the ground if we hope to have a planet habitable for humans.
Hickenlooper calls himself “pro-business but with high standards.” He used that self-description at a forum in late June sponsored by the Aspen Ideas Festival. With the majestic Maroon Bells as his backdrop, he told the story of how Colorado in 2014 came to adopt regulations —widely considered the best in the nation—that reduce methane emissions associated with oil and gas drilling
During the four months of negotiations among drilling companies and scientists from the environmental community, the parties several times stalked out. “Our job was just to be the convener,” that got them back to the table, Hickenlooper said.
In Aspen, Hickenlooper also talked about the need for concreteness to accompany goals. He admitted that he and his team had much yet to figure out about its climate change strategy. “Hopefully, in the next couple of months, (we will) find a way we can actually close a couple of power plants,” he said.
A stampede toward renewables
Some goals will be easier than others. In specifying a goal of reducing carbon dioxide emissions from the electricity sector 35 percent by 2030 as compared to 2012 levels, Hickenlooper is swimming with a strong tide. In 2015, 78 percent of Colorado’s electricity was generated by burning fossil fuel. But utilities are rushing to embrace renewables.
Tumbling prices of wind and now solar and storage have been dramatically undercutting the price of coal generation. This is not just a story in California or New York. It’s a story of middle America. Nebraska’s Omaha Public Power District last year pulled the plug on a nuclear power plant called Fort Calhoun that was commissioned to run until 2033. In doing so, the utility is swallowing $1.5 billion in decommissioning costs. Even so, it’s cheaper than to continue operating the plant.
In Iowa, Warren Buffett’s MidAmerican Energy this year announced a $3.6 billion investment in wind power with the goal of leaping from 55 percent wind energy to nearly 90 percent in the next few years. In Arizona, it’s solar. Tucson Electric in May inked a 20-year solar-plus-storage deal at less than 3 cents a kilowatt-hour. That compares with the low end of electricity from unsubsidized fossil fuel at 4.8 cents a kilowatt-hour, according to Clean Technica, a website.
Xcel Energy, which provides 55 to 57 percent of Colorado’s electricity, is also rushing to embracing renewables. The same day that Hickenlooper announced his executive order, Xcel’s chief executive posted an op/ed that pointed out that electrical utilities nationally have reduced carbon emissions by 25 percent since 2005. “The Paris agreement would have required a 26 to 28 percent reduction by 2025” Ben Fowke wrote. Xcel, he said, is on track to reduce its carbon emissions 41 percent in its six-state operating area by 2021 as compared to 2005.
In recent years, Xcel has closed two smaller coal-fired power plants and, as a result of the Clean Energy, Clean Jobs Act passed during the Ritter administration, will have completely switched out plants in Boulder and north of downtown Denver to natural gas by the end of 2017. Other coal plants—one of the three units at Craig and a small plant at Nucla operated by Tri-State Generation and Transmission—are scheduled to close within the next few years to comply with federal laws governing ozone formation.
More coal plants will close, not because of environmental laws, but because of price, says Ron Lehr, a former PUC chairman. He also points out that Xcel has figured out how to integrate much higher levels of renewables while ensuring reliability. The arguments against renewables a decade ago can be discarded. The question is not whether the plants will close, but how soon.
Xcel has four aging units—two at Hayden and two in the Comanche station at Pueblo—that began operations between 1965 and 1976. They collectively can generate 1,244 megawatts. That’s more than 10 percent of Colorado’s total electrical generating capacity.
With Lehr and another former PUC chair, Ron Binz, hovering in the background, State Rep. Chris Hansen introduced a bill in the last legislative session that sought to make it easier for Xcel to close those plants through issuance of rate-payer backed bonds. The process, called securitization, works at the heart of utility financing. Hansen’s bill was premised on the idea that Xcel can get lower interest rates with ratepayer-based bonds for its debt equity than it can now. The lower-cost interest payments can leave both Xcel customers and shareholders unharmed or even benefit them, and everybody gets less carbon dioxide in the atmosphere. A key is that—as was noted by Hickenlooper’s executive order—federal tax credits that make renewable energy even cheaper are scheduled to be phased out by the end of 2019.
Hansen’s bill included a carve-out for proceeds to help coal-dependent communities of Colorado transition to new economies. The bill passed the Democrat-controlled House but failed to get out of committee in the Republican-controlled Senate. No reason was cited, but Lehr believes the coal mining industry retains lingering influence in Colorado and in right-leaning publications beyond its economic contributions.
Expect that bill, or something like it, to return to the Legislature next winter. There is also potential for changes strictly through the PUC. But again, the critical selling point is the ability to shift to renewables without increasing costs to consumers.
“That’s where the magic really happens and things change,” Hickenlooper said in Aspen as he emphasized the plummeting costs of renewables. “If you can say cheaper, that transforms the conversation.”
Other utilities—Black Hills Electric, which serves the Pueblo area; the 29 municipal utilities, and the 22 electrical co-operatives (most of which are supplied by Tri-State) —provide more than 40 percent of Colorado’s electricity. Lehr thinks they, too, can be persuaded to shift to renewables, again because it may save them — and their customers — money.
The transition, as the executive order and Hansen’s legislation acknowledge, has consequences for the tax bases of coal-dependent communities. In Aspen, Hickenlooper addressed that by saying that Colorado now has 1,100 coal-related jobs but 9,000 cybersecurity jobs available. “And two-thirds of them don’t require a degree” (beyond a high school diploma),” he said, which is true also for the coal jobs.
Colorado must expedite the transfer of “real jobs in real time,” he said, and he sees a state role for re-training of coal sector workers. “It would cost some money, but I don’t think it would cost as much money as everybody seems to think.”
What about buildings?
Electricity is only one part of this story. Transportation produces almost as much carbon dioxide. Hickenlooper’s key strategy here is to step up the charging infrastructure for electric cars. Last December, he joined with governors of Utah and Nevada in promising charging stations along major highways. When that is achieved, it will be possible to drive electrically from Kansas to the Pacific.
But absent from the order was mention of California’s clean-car standard, which has now been embraced by 13 states and Washington D.C. Nor were other transportation strategies identified. If Colorado’s goal is to be met, there will have to be more than charging stations —much more, according to Saunders and others.
The Colorado Department of Transportation will be a key agency to watch. So will the Colorado Department of Public Health and Environment and, in particular, the Air Quality Control Commission. In a previously scheduled hearing, that agency this week is scheduled to take up steps to further reduce ozone caused by oil-and-gas operations. Those efforts will presumably also advance efforts to achieve the greenhouse gas reduction goals.
Buildings are conspicuously absent from the executive order. Residential buildings alone were responsible for 23.2 percent of total energy use in Colorado, according to the 2014 Climate Plan. We heat them and we heat the water in them, plus we cool them—all requiring energy. But unlike coal plants, buildings are expected to last a century, maybe more. Retrofitting a badly designed building is enormously expensive.
In 2007, Colorado legislators agreed to raise the bar for buildings in Colorado. That bar remains laughably low if you consider what must be done to decarbonize our economy by mid-century. Unlike oil and gas operations, where the state insists in supremacy in rule making, building codes are left to local jurisdictions. Many towns, cities, and counties still use the 2006 international energy conservation code. By 2012, the energy savings associated with code implementation had increased 30 percent. Keep in mind that this building code does not represent what is possible. Like a group of hikers, the code adoption moves at a slower pace.
Analysts say that that the Hickenlooper administration can get some things done with existing authority, but other actions are best achieved with the broader mandate of legislation. Hansen, the state legislator, says he believes there are broad areas of agreement in energy and transportation for bipartisan support. “We have a divided Legislature, and we need to find ways to work together. I think there are number of ways that it is possible,” he said.
In this purplish state where voters send more Republicans to Congress than Democrats, leaders can only get so far in front of their constituencies. But neither can they lag. Every week, it seems news arrives for further evidence that climate scientists have been, if anything, conservative in their predictions .
At the base of Maroon Bells, Hickenlooper talked about the need for concrete images when communicating climate change risk to the public. Rising oceans and the increasing acidification now destroying coral reefs provide unmistakable evidence of global warming, he said. But he wouldn’t concede that droughts and extreme weather in our state offer the same irrefutable evidence that climate change is underway here. Natural variability can mask climatic shifts, he said.
But he did not deny future impacts. “Half of our storage is in the snow, in the snowpack.” he said. “That’s hard for people to get their arms around. But if we (warm) just a degree or two, and that precipitation doesn’t get stored in snow, we run into real trouble.”
Hickenlooper that morning also talked about political alignments. “This is a time when there are going to be some new ideas on how states can work together and how municipalities can work together,” he said. “Certainly in the next month we will come forward with some ideas.”
Whether those ideas are strong enough, or fresh enough, to put Colorado on a more clear path to taming greenhouse gases remains an open question. The answer will also say much about the governor’s political legacy—and, perhaps, his fitness for the White House.
Photo by Allen Best
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