Environmental regulation, energy, and market entry

Duke Environmental Law and Policy Forum

Volumn 15, Issue 2, 2005, Pages 167-186

  Pierce Jr , Richard J ^a  

^a GEORGE WASHINGTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ENERGY MARKET; ENERGY POLICY; ENVIRONMENTAL POLICY;

EID: 27944509207     PISSN: 10643958     EISSN: 10643958     Source Type: Journal    
DOI: None     Document Type: Review

References (125)

1. Letter from Allison H. Ridder, Special Projects Editor, Duke Environmental Law and Polciy Forum, to Richard J. Pierce, Jr. (June 17, 2004) (on file with Duke Environmental Law and Policy Forum).
2. Alfred E. Kahn, The Economics of Regulation 65 (1970).
3. Id. at 193-195;
4. Richard L. Revesz & Robert N. Stavins, Environmental Law and Policy, at 4-6 (Harvard University, John F. Kennedy School of Government Faculty Research Working Paper RWP 04-023, May 2004).
5. Zygmunt Plater et al., Environmental Law and Policy: Nature, Law, and Society 744-753 (3d ed. 2004).
6. Id.
7. See, e.g., Robert N. Stavins, & Bradley W. Whitehead, The Greening of America's Taxes: Pollution Charges and Environmental Protection (Progressive Pol'y Inst. Rept. No. 13, Oct. 17, 1991).
8. Energy Information Administration, Gasoline Type Proliferation and Price Volatility 4-7 (Sep. 2002).
9. Id. at 5;
10. Federal Trade Commission, Midwest Gasoline Price Investigation 5-6 (Mar. 29, 2001).
11. Federal Trade Commission, supra note 8, at 13-22;
12. Energy Information Administration, supra note 7, at 4;
13. Statement of John Cook, Director Petroleum Division, Energy Information Administration, Before the Subcommittee on Energy and Air Quality, Committee on Energy and Commerce, U.S. House of Representatives 3-5 (March 30, 2001).
14. Energy Information Administration, supra note 7, at 2.
15. Id. at 3.
16. Id. at 5-6.
17. Id. at 6.
18. Id. at 6.
19. Energy Information Administration, Gasoline Type Proliferation and Price Volatility 2-4 (Sep. 2002).
20. Id. at 14-15.
21. Id. at 4-6.
22. Id. at 5;
23. John Cook, supre note 9, at 3-5.
24. Prepared Statement of the Federal Trade Commission, Market Forces, Anticompetitive Activity, and Gasoline Prics: FTC Initiatives to Protect Competitive Markets, Presented by William C. Kovacic, General Counsel, Before the Subcommittee of Energy Policy, Natural Resources and Regulatory Affairs, Committee on Government Reform, United States House of Representatives (July 7, 2004).
25. Federal Trade Commission, supra note 8, at 21.
26. Opinion of the Commission, In the Matter of Union Oil Co. of California, File No. 011 0214, Docket No. 9305, at 1 (Fed. Trade Comm'n July 7, 2004).
27. Initial Decision, In the Matter of Union Oil Co. of California, File No. 011 0214, Docket No. 9305 (Fed. Trade Comm'n, Nov. 25 2003).
28. Order Reversing and Vacating the Initial Decision and Order and Remanding for Further Proceedings, In the Matter of Union Oil Co. of California, File No. 011 0214, Docket No. 9305 (Federal Trade Comm'n July 6, 2004).
29. Energy Information Administration, supra note 7.
30. Federal Trade Commission, supra note 8, at 7-8.
31. Energy Information Administration, supra note 7, at 7-11.
32. Federal Trade Commission, supra note 8, at p. 22;
33. John Cook, supra note 9, at 3;
34. Prepared Statement of the Federal Trade Commission, supra note 19, at 26-27.
35. National Energy Policy Development Group, National Energy Policy 7-14 (May 2001).
36. Id. at 7-13.
37. Federal courts sometimes contribute to the problem as well. Thus, for instance, the Ninth Circuit held that the Corps of Engineers could not issue a permit authorizing a refinery capacity expansion first proposed in 1969 without engaging in further study of the environmental effects of the expansion. Ocean Advocates v. Army Corps of Eng'rs, 361 F. 3d 1108, 1124 (9th Cir. 2004), amended and superceded by Nos. 01-36133, 01-36144, 2005 WL 525269 (9th Cir. 2005).
38. Clean Air Act, 42 U.S.C. §§ 740la-7401c (2000).
39. See Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 462-64 (2001) (discussing this regulatory scheme).
40. Energy Information Administration, supra note 7.
41. See Am. Auto. Mfrs. Ass'n v. Massachusetts Dep't. of Envtl. Prot., 163 F. 3d 74, 77-78 (1st Cir. 1998) (discussing the operation and effect of these provisions).
42. Energy Information Administration, Annual Energy Outlook 9 (2004)
43. Id.
44. Id. at 9, 91;
45. National Energy Policy Development Group, supra note 28, at 1-7.
46. Energy Information Administration, The Global Liquefied Natural Gas Market: Status and Outlook 29 (Dec. 2003).
47. Id.
48. Energy Information Aministration, supra note 35, at 91.
49. Id. at 91, fig.89.
50. Id. at 90, fig.87.
51. National Energy Policy Development Group, supra note 28, at 5-7 to 5-10.
52. Energy Information Administration, supra note 35, at 91.
53. Energy Information Administration, supra note 38, at 4-16.
54. Id. at 32-41.
55. Id. at 42-46.
56. Pub. L. No. 107-295 § 106, 116 Stat. 2064 (2002).
57. Energy Information Administration, U.S. LNG Markets and Uses: June 2004 Update 9.
58. Id. at 1.
59. Id. at 7.
60. See, e.g., Christian Schmollinger, CPUC to Appeal FERC Denial of Say Over LNG Terminal Siting, Natural Gas Week, July 12, 2004, at 3;
61. Barbara Shook, Texas Asserts Rights on LNG Siting, Natural Gas Week, June 21, 2004, at 6;
62. Jeff Gosmano, Local Foes Biggest LNG Hurdle, Natural Gas Week, June 4, 2004, at 5;
63. John Sullivan, Politics, Not Safety Main Risks to Future of LNG Industry, Natural Gas Week, May 21, 2004, at 20;
64. Barbara Shook, Maine Rejects TransCanada LNG Terminal Plans a Second Time, Natural Gas Week, May 14, 2004, at 1.
65. A bill has been introduced in the House of Representatives to give federal agencies preemptive power to authorize LNG terminals, but states oppose it. See, e.g., Cal. Pub. Util. Comm'n, Mem. Opposing Enactment of H.R. 4413 (July 2,2004).
66. Department of Energy, National Transmission Grid Study 5-7 (2002).
67. Eric Hirst, U.S. Transmission Capacity: Present Status and Future Prospects v (August 2004).
68. Id. at 7, 9.
69. Id. at 11, fig.6.
70. Peter Navarro & Michael Shames, Aftershocks - And Essential Lessons - From the California Electricity Debacle, 16 The Electricity J. 24, 26 (No. 4, May 2003);
71. Eric Hirst, The California Electricity Crisis: Lessons for Other States 6 (July 2001);
72. Robert R. Nordhaus, Electric Power Deregulation: Making Partially Deregulated Markets Work, 54 Admin. L. Rev. 365, 372 (2002).
73. Edward N. Krapels, Goodbye Gridlock (2): How to End the Shortage in Transmission Investment that Led to the Northeast Blackout (2003).
74. Hirst, supra note 55, at 7-8.
75. Id. at 8.
76. Id.
77. Ashley C. Brown, Vision Without Site: Site Without Vision, 16 The Electricity J. 23, 23-34 (No.8, Oct. 2003).
78. Id. at 24.
79. Ashley C. Brown, Transmission and Generation Siting and Exercise of Eminent Domain Powers: Background Perspective, and the Case for a Federal Role 3, 13 (2002).
80. As Edward Krapels aptly describes the situation: "Transmission projects are as popular as root canals." Krapels, supra note 59, at 19.
81. Eric Hirst, Transmission Investment: All Talk and Little Action, Public Utilities Fortnightly 49-54 (July 2004).
82. Id. at 7-8.
83. FERC's liberalization of the wholesale electricity market has reduced the average wholesale price of electricity by approximately thirty-six per cent. Electric Power Supply Association, Assessing the " Good Old Days " of Cost-Plus Regulation 5 (2001);
84. see also Paul Joskow, The Difficult Transition to Competitive Electricity Markets in the U.S. (2003).
85. Krapels, supra note 59, at 25.
86. Id. at 7-8.
87. Id. at 25-26.
88. Brown, supra note 63, at 26-34.
89. Point of Pines Beach Ass'n, Inc. v. Energy Facilities Siting Bd., 644 N.E. 2d 221, 222 (Mass. 1995).
90. Id. at 224.
91. Id.
92. See Brown, supra note 63, at 26-34 (listing cases discussing mandated parochialism).
93. Electricity flows across an integrated grid in inverse proportion to the impedance on each line in accordance with Kirchoff's law. Thus, since the continental United States consists of three integrated grids - one that covers part of Texas, one that covers the rest of the country east of the rockies, and one that covers the part of the country that is west of the Rockies - any change in transmission capacity at any location in the east effects the availability of electricity throughout the east and any change in transmission capacity at any location in the west affects the availability of electricity throughout the west. See Paul L. Joskow, Transmission Policy in the United States 6 (AEI-Brookings Joint Center for Regulatory Policy, Related Publication 04-26, October 2004).
94. Id. Any rational state will refuse to approve a project with in-state costs that exceed its in-state benefits.
95. Hirst, supra note 55, at 20-21.
96. See also Krapels, supra note 59, at 23-24.
97. Linda L. Randell & Bruce L. McDermott, Chronicles of a Transmission Line Siting, Pub. Util. Fort. 1-2 (Jan. 1, 2003).
98. Alan G. Schwartz & Bruce L. McDermott, Lessons from the Trenches: Burying the Lines Is Tough, Infrastructure 2 (Spring 2002).
99. Linda Randell & Bruce McDermott, Cross-Sound Blues, Pub. Util. Fort. 20 (Feb. 2004).
100. Brown, supra note 63, at 29.
101. Schwartz & McDermott, supra note 82, at 2;
102. Brown, supra note 63, at 28-29.
103. Schwartz & McDermott, supra note 82, at 3.
104. Randell & McDermott, supra note 83, at 22.
105. Id. at 20.
106. Id. at 20-22.
107. Id.
108. Id.
109. Department of Energy Order No. 202-03-4 (May 7, 2004).
110. FERC News Release, Statement of FERC Chairman Pat Wood, III on Long Island Sound Electric Cable Settlement (June 24, 2004) available at http://www.ferc.gov/press-room/prarchives/2004/2004-2/06-24-04.pdf (last visited Apr. 15th, 2005).
111. Id.
112. See also David Udoff, NY, Conn. Reach Settlement to Re-Activate Cross-Sound Cable, Natural Gas Week, June 28, 2004, at 1-3.
113. Connecticut Attorney General's Office, Press Release, Attorney General's Statement on FERC Decision on Cross-Sound Cable (June 24, 2004).
114. Krapels, supra note 59, at p. 19.
115. For a good description of the "no third car" rule, see American Automobile Manufacturers Ass'n v. Massachusetts Department of Environmental Protection, 163 F. 3d 74 (1st Cir. 1998).
116. 15 U.S.C. § 717 (2000).
117. Pub. L. 104-104, 110 Stat. 5b (1996).
118. See Richard J. Pierce, Jr., 2005 Cumulative Supplement to Administrative Law Treatise § 18.7 (2004).
119. Thus, for instance, both President Bush's proposed legislation and each of the Bills that has been enacted by the House or Senate to date include provisions that would increase the authority of the federal government to authorize implementation of electricity transmission expansion projects. National Energy Policy Development Group, National Energy Policy 7-17 (May 2001);
120. Michael Burr, A study in States' Rights, Pub. Util. Fort. 21 (Feb. 2004).
121. See House Again Passes GOP Energy Measure, The Washington Post, June 16, 2004, at A4;
122. Energy Follies, The Washington Post, Apr. 29, 2004, at A24;
123. Energy Voodoo, The Washington Post, Feb. 8, 2004, at B6;
124. The GOP Congress: High on the Hog, The Washington Post, Jan. 18, 2004, at B1;
125. Better Energy Legislation, The Washington Post, Nov. 29, 2003, at A22.