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Change is hard – with great technology comes great upheaval

23 Apr 2014


For the last 60 – 70 years, we have lived in an era of significant stability.  That seems to be over.  We’ve all seen how the internet has changed certain businesses (music, newspapers and bookstores).  Technology can be a huge boon but it can be quite disruptive.

The transition from gasoline to electric or hybrid vehicles has been somewhat bumpy as governing bodies struggle with whether dealerships are required and how to pay for roads when less (or no) gasoline will be used.  This is a growing issue as more electric and hybrid vehicles take to the road and as the condition of our Michigan roads continues to cry out for repairs.

As I’ve blogged about before, recent rhetoric suggests that Oakland and Macomb Counties may declare their independence from the DWSD.  With both counties now spending money to evaluate their options, what happens next is less clear. Given that DWSD has apparently not set its rates high enough to cover all the infrastructure improvements needed over the next 5 – 10 years, it is possible (although perhaps unlikely) that a Macomb-Oakland system might actually cost less to develop, construct and operate than the DWSD system.  Such a separation could lead the DWSD to owning over-sized water and waste treatment systems relative to their customer base and the oldest waste and water lines which are likely most in need of repair.  Given DWSD’s well publicized collection issues, this has to be making the investment community nervous as reflected in two investment firms’ recent subpoenas.  This much turmoil would seem to make the DWSD’s recent RFP less appealing than usual.

as with prior technical revolutions, change tends to be messy and the larger the change, the greater the mess

Finally (for the moment), we have seen many advances in the development of solar energy – some of which we’ve discussed on this blog – while those are exciting, they, like changes to gas driven cars and changes to 100+ years of centralized water and sewer systems, challenge the status quo.  For over 75 years, utilities have generated and supplied the electricity and natural gas that we consume in our homes and businesses from centralized points. As part of the deal, those same utilities have maintained the infrastructure needed to both generate and transmit gas and electricity.  So, what happens when people can start generating electricity on their own roofs?  Some hail it as a triple win (saving money, the environment and societal benefits) but most solar generators stay “on the grid” and as a result sometimes are contributing electricity to the grid and other times are drawing on the grid.  Under most systems, including Michigan’s, smaller generators can sell their electricity back to the grid at the utility’s retail price – so called “net metering.”

The ability to sell excess power back at the retail -not wholesale- price, raises the question of who pays for the infrastructure necessary to provide the electricity to those on the grid.  Utilities argue that those installing solar are not paying their “fair share” of such costs.  There are those who say that the price of electric service includes roughly 50% for non-generation expenses.  Some experts argue that there is no such “cost-shifting” occurring because there are savings on power plants, transmissions lines, lost energy as well as the ability to meet greenhouse gas reduction goals without utilities having to make the capital investment.  This is a tough debate and is not something easily reduced to 60 second soundbites and at present is being decided on a state by state basis.

Ultimately, the challenge of existing infrastructure combined with legacy costs makes the transition in technology and improving efficiency much harder and far more political than a “free market” would prefer.  But, as with prior technical revolutions, change tends to be messy and the larger the change, the greater the mess.

Earth Day at 44…. still crying?

22 Apr 2014

Earth Day brings me right back here

Earth Day brings me right back here

Happy Earth Day 44.  We have come a long way from the challenges and problems that led to the first Earth Day –  a 1969 oil spill in Santa Barbara, California; the dead zone in Lake Eriesmog in Los Angeles and burning rivers in the Midwest.

The first Earth Day led to the creation of the US Environmental Protection Agency and the passage of environmental laws like the Clean AirClean Water, and Endangered Species Acts.  As the EPA and its state counterparts have continued to regulate, there has been a backlash of business and media outcry which certainly impacts the public’s views.

The challenges we face today are more complex and likely more daunting than those of 44 years ago.  We still have oil spills, but they are from rail cars, pipelines, larger ships and deeper wells.  Lake Erie and many other bodies of water are still challenged by more diffuse and “below the radar” sources of contamination.  While reducing the impacts of asbestos, lead and NOx from our daily lives, and healing the ozone hole, we now face questions regarding greenhouse gasses, smog impacts from and in China unlike anything LA ever faced, and the challenges and benefits posed by fracking.

Once the “low hanging fruit” of easy cleanups were “picked,” what we were left with was less shocking or engaging than dead fish and burning rivers.  Consequently, there’s much more debate about the best way to address them or whether they need to be addressed at all.  The issues are just as important – maybe more so, but it’s unlikely that our polarized nation would agree on what changes would be best, if any.

“Free” Energy Efficiency Funds Available to Michigan Small Businesses

17 Apr 2014

 The Michigan Energy Office recently announced a grant program where they will match building owner (private and non-profit) funds of between $5,000 and $20,000 for energy efficiency projects.  Any small business or private nonprofit organization with fewer than 100 employees statewide that owns a commercial building in Michigan is eligible to apply.

 There is a process with written and oral presentations and the goals are to improve energy efficiency by 20% or more through each funded project and to cause funds to be reinvested based on savings.  This may make some smaller private projects that have been sitting on the shelf awaiting funding viable.

You will need an itemized budget and budget narrative and be able to justify the expense and the savings you expect as well as jump through a number of other “hoops.”  Please let me know if you’d like more information about the program.

New river protection regulations on the way?

14 Feb 2014

After the non-stop coverage of the spill into the Elk River in West Virginia, we are seeing reports of a spill of 82,000 tons of coal ash into a North Carolina river. The subject of coal ash has lain dormant for a while but this Duke Energy spill is like opening an old wound.  As our regular readers know, EPA has proposed new rules for coal ash storage in the wake of a  Tennessee spill in 2008.  There was another spill in Wisconsin in 2011 and the rules languished. Given this week’s coal slurry spill in West Virginia, rivers in the southeast might be feeling like endangered species.

This fall, a citizens suit was filed in West Virginia federal court (unrelated to the Elk River case) and at the end of January, the EPA agreed to issue coal ash rules by December 19th of this year. Whether the rules treat coal ash as a hazardous waste, a non-hazardous waste or some combination of the two, remains to be seen but it appears that some regulation of this reportedly second largest waste stream in the country will be implemented.  As I have blogged before, Michigan already has more river-protective regulations than many other states and it is about time that these other states are brought up to a higher standard to prevent these major spills.

We have started to realize just how important our rivers are and whether it’s bad luck or bad stewardship, we appear to be on a path to get the regulations needed to protect them.

WV Spill – could it happen here?

15 Jan 2014

Water trucks traveling into WV

Water trucks traveling into WV – Photo by Marc Goldman

The national press is now focusing (after spending hours and hours on a NJ traffic jam) on a chemical release from an above ground tank into 300,000 people’s drinking water.  When 1/6 of a State loses the use of its water supply – that tends to be a big deal (if a similar proportion of Michigan residents lost their water it would be over 1.5 Million!).

One or more tanks owned or used by Freedom Industries that stored a coal washing chemical, leaked a reported 7,500 gallons (or more) into the river which was the source of local residents’ tap water.

Federal law requires facilities that store oil and meet 3 criteria (non-transportation related facility, have more than a certain storage capacity, and could reasonably discharge to navigable waters or adjoining shorelines) must comply with spill prevention, control and countermeasure (SPCC) regulations. The SPCC regulations require the facility owner/operator to prepare and implement an SPCC plan for their facility. This plan must be well thought out and prepared in accordance with good engineering practices.

The Federal Emergency Planning and Community Right to Know Act (EPCRA) helps communities plan for hazardous substance emergencies by requiring facilities holding chemicals to provide local and state governments  information on chemicals stored so that the local communities can plan for chemical safety in the event of a fire or spill. Reportedly, Freedom Industries did comply with this law.

There are also OSHA, Transportation and Homeland Security regulations which may conflict regarding hazardous chemical storage. In August, 2013, President Obama issued an Executive Order focused on improving chemical facility safety and improving coordination with owners and operators as well as state and local regulators.  The working group is nowhere near complete and I expect the West Virginia experience will play a part in their deliberations.

In Michigan, we have a broader set of rules which require a pollution incident prevention plan (PIPP) for polluting materials which include salt, oil, any chemical from a lengthy list, and any compound or product that contains 1% or more, by weight, of the listed materials.  The rules:

  • Identify threshold management quantities (TMQs) for both indoor and outdoor use, storage, and other management areas. Exceeding these TMQs will determine if a PIPP has to be prepared, if containment is required, and if other Part 5 rules must be met. The PIPP is to include inspection and maintenance procedures but no minimums are specified.
  • Describe conditions and threshold reporting quantities (TRQs) for polluting materials which, if exceeded, or occur, require spills or releases to be reported.
  • Provide exemptions from some requirements if certain conditions are met or other regulations apply.
  • Within 30 days of completing its PIPP, the facility must send a notice that it is in compliance to the relevant MDEQ district office. It also must notify the Local Emergency Planning Committee (LEPC) and local health department that the plan has been completed and is available upon request.
  • Requires each PIPP to be evaluated every three years or after any release that triggers the plan. The plan must be updated when there are changes to personnel, processes, or procedures identified in the plan. The facility must re-notify the MDEQ and local agencies and recertify compliance when the plan is updated.

For above-ground tanks that hold at least 1,100 gallons of flammable or combustible liquids, there are further Michigan requirements (recodified at the end of 2013) for design, installation and site inspections both after installation and every three years.

Despite Michigan’s 20 page list of regulated chemicals – the chemical in this instance, 4-methylcyclohexylmethanol, is not on the list and so a Michigan company would not be obligated to have a PIPP if it stored only that compound.  Could it happen here? Of course it could; tank spills happen all the time – there are reportedly 2,000 a year across the US. Is Michigan better positioned to deal with such a release – it appears yes, but there are gaps in the system that the West Virginia spill may lead Michigan legislators and regulators to conduct a further review.