Category Archives: Energy

April Is The Cruelest Month

deepwaterBy Peter Galuszka

April is the cruelest month, especially for brutal energy disasters.

This Sunday is the fourth anniversary of the Deepwater Horizon offshore drilling blowout that killed 11 and caused one of the country’s worst environmental disasters. April 5 was the fourth anniversary of the Upper Big Branch coal mine explosion in West Virginia that killed 29.

What lessons have been learned from both? Not a hell of a lot. In both cases, badly needed, tougher regulations to prevent such messes from happening again go languishing while politicians – including Virginia’s Democratic Governor Terry McAuliffe – say move on fast for more exploitation of energy resources including in Virginia’s sensitive offshore waters.

Take Deepwater Horizon. The rig linked to British Petroleum in the Gulf of Mexico was tapping reserves 5,000 feet down. When the rig hit a rough patch, the blowback exploded upwards, racking the surface part with explosion and fires. Down below, a blowout protector was supposed to swing into action, chop into the pipe and shut down any flow. That didn’t happen and oil flowed freely at the bottom until July 15 generating one of the biggest oil spills ever.

Four years later, what has been done? According to experts S. Elizabeth Birnbaum, and Jacqueline Savitz, not enough. In December 2011, the National Academy of Engineering reported that Deepwater’s blowout preventer had never been designed or tested for the conditions that occurred and that other rigs may have the same problem.

Sixteen months later, nothing has been done in terms of new regulations – not even proposed one. It sounds as if that socialist-minded, regulation maniac Barack Obama is actually off the job. Meanwhile, McAuliffe changed his mind about the risks of offshore drilling and has jumped on board the Republican bandwagon led by former Gov. Robert F. McDonnell to expose Virginians to similar dangers.

McAuliffe’s turnaround came last year during the gubernatorial campaign. According to the Washington Post: “Terry has learned more about offshore drilling from experts in Virginia,” said McAuliffe spokesman Josh Schwerin. “He thinks that because of technological progress we can now do it in a responsible fashion.”

Say what? Maybe he should take a trip to Brazil and Norway that have more advanced blow-out preventers and policies. By the way, Democrat Mark Warner, running for re-election for U.S. Senate, is for offshore drilling as well.

If you really want to see evidence of the lack of regulation, check out Upper Big Branch owned by the former, Richmond-based Massey Energy.

The firm was notorious for its anti-regulation, anti-labor union policies led by its in-your-face chief executive Don Blankenship. Four reports say that Massey’s lax safety standards allowed the disaster to happen, including letting badly maintained equipment be used and not taking measures to keep highly explosive coal dust from building up. A flame caused by a ball of flaming methane touched off the dust leading to an underground blast that covered seven miles underground. In the process, 29 miners were either blown apart of asphyxiated in the worst coal mine disaster in 40 years.

Every mine event has led to some kind of regulatory reform such as the one at Farmington, W.Va. that killed 78 in 1968 and the Buffalo Creek W.Va. coal sludge pond breach and flood that killed 125 in 1972.

Post-Upper Big Branch reforms have been proposed, notably the Robert C. Byrd bill that would protect whistleblowers, hold boards of directors responsible for knowing and doing nothing about safety threats and giving the feds subpoena power which, incredibly, they do not now have in the case of mine safety. The Department of Agriculture can subpoena records in the case of possible milk or meat price-fixing, but the Mine Safety and Health Administration cannot in the case of human miners.

The Byrd bill is all but dead mostly because of the Republican controlled House of Representatives where the majority leader is none-other than business toady Eric Cantor of Henrico County.

And if you want to understand just how little miners’ lives are regarded, compare the media coverage of Deepwater Horizon versus Upper Big Branch. I guess you could say that in the media’s eyes, the life of an offshore rig worker is worth 2.6 times that of a coal miner.  Six months after Deepwater, there were at least six books about the disaster. Four years after Upper Big Branch there is one book about it and it happens to be mine.

So, this Sunday, I propose a toast to the dead oil rig workers and coal miners. Let’s not allow their souls to stay on our consciences. Let’s have anti-regulation reign in the name of free market economic policies and profits! It doesn’t matter if you are a Republican or a Democrat. Salute!

Fracking the Mother of Presidents

fracking rigBy Peter Galuszka

Controversial hydraulic fracking appears to becoming a distinct possibility in areas south and east of Fredericksburg on land that is famed for its bucolic and watery splendors along with being the birthplaces of such historical figures as George Washington, James Monroe and Robert E. Lee.

After several years of exploring and buying up 84,000 acres worth of leases from Carolina to Westmoreland Counties, a Dallas-based company that uses a post office box as its headquarters address participated in the first-ever public discussion of what its plans may be.

According to the Free-Lance Star, the meeting was put together by King George County Supervisor Rudy Brabo to air concerns and hear plans of Shore Exploration and Production Co., which is based in Dallas and has offices in Bowling Green. Its headquarters address is registered with the State Corporation Commission as P.O. Box 38101 in Dallas.

About 100 people attended the meeting April 14, but judging from the newspaper’s account, not many questions were answered. Participants repeatedly asked Shore CEO Ed DeJarnette what his plans were regarding fracking and who would be responsible for damages if something went wrong.

DeJarnette responded that his firm is merely buying up leases and is looking to sell them to other gas drillers and operators. The state’s Department of Mines, Minerals and Energy issues permits one at a time and is responsible for enforcing them, he said.

Hydraulic fracking and horizontal drilling have touched off a revolution in the American energy industry in recent years, particularly in the Marcellus Shale gas formations that stretch in the Appalachians from New York State to southwest Virginia. The methods have also been used to reach rich shale oil deposits in North Dakota and other western states.

Fracking has been used as a drilling process for years according to media accounts and authors such as Gregory Zuckerman whose recent book “The Frackers” covers the process’s increasingly widespread use in the past several years.

Among concerns are that the toxic chemicals mixed with water and then pumped hundreds of feet underground could eventually ruin groundwater serving streams and wells. Other concerns are that the inevitable “flowback” in drilling will require surface ponds to handle toxic waste. In places such as Pennsylvania and West Virginia where fracking is permitted, quiet country areas are badly disturbed by the roar of diesel generators at drilling sites and from trucks that are constantly delivering drilling supplies. Methane can leak from drilling rigs, further complicating global warming issues, and flash fires can be problems. Fracking can also consume great amounts of water which often has to be trucked in.

On the plus side, holders of mineral leases can receive great sums in royalties and various taxes and other payments can boost local tax coffers. Natural gas is cleaner and less deadly source of energy than coal, plays a big role in electricity power generation in the Mid-Atlantic.

At the King George meeting, DeJarnette told the audience that he preferred using nitrogen as an element in fracking rather than water, but there were few details in the newspaper story.

While providing scarce details on who would actually handle the drilling, how it would be done and who would be responsible for damages, DeJarnette repeatedly emphasized the monetary benefits and jobs fracking would bring.

If it proceeds, fracking in the Taylorsville Basin would likely be confined to Virginia, which is more business-friendly than Maryland where the basin also extends. The field stretches across the Potomac River into Charles, St. Mary’s, Calvert and Anne Arundel Counties but Maryland has a moratorium on fracking until it can be studied further.

DeJarnette says he wants drilling to start by late this year or in 2015. Major oil firms explored the Northern Neck area and found some evidence of oil and gas deposits there in the 1980s.

An Ex-Coal Baron’s Strange Movie

Blankenship

Blankenship

By Peter Galuszka

Almost four years after 29 miners employed by then Richmond-based Massey Energy were killed in a West Virginia mine explosion, its former chief executive under federal investigation for widespread safety violations has come forward with an apparently self-funded “documentary” proclaiming his innocence.

Donald Blankenship released the film “Upper Big Branch, Never Again” this week which reiterates his claims that he and the firm were innocent of wrongdoing and that an unexpected flood of natural gas and meddling by federal regulators caused the blast.

Three investigations have cited Blankenship and Massey for a culture of cost-cutting  and ignoring safety problems. So far, four former Massey employees have been imprisoned for related convictions.

The strange, 51-minute film brought immediate demands for its retraction by U.S. Sen. Joe Manchin of West Virginia who claims he did not know of Blankenship’s involvement when was interviewed for the film  being played on YouTube. Manchin is shown making what seem to be supportive statements of coal in general and, presumably, Blankenship.

The film also features interviews with E. Morgan Massey, a retired Massey executive who lives in Richmond. Another is University of Utah mining professor named Tom Hethmon who has told National Public Radio that he was also misled about the film and wants nothing to do with it.

The movie was made by a Chesapeake –based firm called Adroit Films whose officials have refused to tell reporters who funded the production.

In the film, Blankenship, Massey and Stanley Suboleski, a former Massey director who lives in Chesterfield County, repeat earlier claims that the explosion at the Upper Big Branch mine in Montcoal, W.Va. on April 5, 2010 was caused by an unexpected flood of natural gas. The explosion was affected by what Blankenship claims were wrong-headed demands by the federal Mine Safety and Health Administration to change the ventilation system which stretches for more than seven miles underground.

An MSHA probe along with one ordered by Manchin when he was state governor claim that the blast was caused when badly-maintained mining equipment hit a pocket of gas that touched off a huge coal dust explosion. The company was required but failed to keep highly combustible coal dust at bay by spraying mine shafts with powdered limestone, investigators say.

After he was forced out as Massey’s CEO in 2010 and the company was sold in 2011 for $7 billion to Alpha Natural Resources of Bristol, Blankenship kept a low profile.  He stirred to life about a year ago when he launched a website offering his views that coal is overregulated and that global warming is a hoax.He is also well-known for his staunchly anti-labor views and his support for mountaintop removal mining methods that are highly destructive of watersheds, wildlife and landscapes.

The film also shows footage of President Barack Obama as if to suggest a connection between him and the mine blast. At the time, Obama had been in office for a little more than a year. In other words, if he mangled the coal industry, he did so in a remarkably short period of time. The film also revives “War on Coal” footage shot during the 2012 presidential campaign. It tends to suggest that the coal mined at Upper Big Branch was used to generate electricity for America’s benefit when, in fact, all of it was of a metallurgical variety bound for export to foreign steel mills.

Another odd aspect of the film is why Manchin would agree to an interview with filmmakers he did not know. When I was researching my 2012 book “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal” (St. Martin’s Press), I could only talk to Manchin and other elected officials at public events, although Massey, Suboleski and other former company officials spoke with me at length. Blankenship declined to be interviewed.

Federal prosecutors in West Virginia say that their ongoing probe may extend to top officers and directors of the defunct firm. It is unclear why Blankenship made the movie now.

Full Disclosure: I have been interviewed and have acted as an unpaid consultant for an upcoming documentary  titled “Blood on the Mountain” produced by Evening Star Productions.

Mark Warner: Let’s Out-Gas Putin

 mark warnerBy Peter Galuszka

One way to clip the wings of Russian President Vladimir Putin and his aggressive land grabs, says U.S. Sen. Mark Warner who is running for reelection, is to expedite permitting of the 20 or so proposals to export liquefied natural gas, including one by Richmond-based Dominion Resources.

“Most of Europe and Ukraine are heavily dependent on Russian gas in particular for their energy use,” Warner told reporters. Europe depends on Russia for 30 percent of its gas.

It is true that hydraulic fracking has turned the oil and gas business in the U.S. upside down by creating such a flood of products that the U.S. may not only become energy independent but in a position to export. Environmentalists point out that fracking has its dangers but the remarkable change in energy dynamics plays to the producers’ hands.

The big problems with Warner’s proposal are that exporting LNG to Europe will be more time-consuming and costly than he might imagine. It also does nothing to address the climate change issues that gas contributes to, albeit not as much as coal.

One reason why Warner may be so interested in the issue — House Speaker John Boehner, a Republican, is making exactly the same proposal — is because of Dominion. The utility plans a $3.8 billion expansion of its Cove Point, Md. LNG import facility on Chesapeake Bay so that it can export LNG as well. Some of that gas could very well come from fracking operations in the Marcellus Shale fields of Pennsylvania and West Virginia along with the Gulf Coast.

Dominion is in the permitting process – perhaps No. 3 or 4 in line – for Cove Point. It has the gear to take super cold gas pf about minus 265 degrees and warm it up to a gaseous state so it can be sent through pipelines. Now it wants equipment to reverse the process – take gas and chill it into shippable LNG. Dominion has everything else it needs – a water terminal, tanks, and so on.

Warner, of course, gets lots of campaign money from Dominion and has just brought on as his campaign manager Eva Teig Hardy, who retired as one of Dominion’s top lobbyists and public affairs executives. I have known Eva since the 1970s and can attest that she is supremely competent.

There’s nothing wrong with Warner’s ties to Dominion although they should be known. What is troublesome is that his plan may not work.

Take Dominion. If Dominion gets its permits, it won’t be able to export LNG for maybe three years. By that time Putin will either have calmed down or gone beyond Crimea to conquer Europe as far as the Czech Republic or maybe France.

Dominion already has customers lined up for its LNG and they aren’t in Europe. They are utilities in India and Japan – which are the markets of choice for many of the American export hopefuls.

And as Steve Mufson of The Washington Post points out, while Russia exports gas via pipelines to Europe, it still isn’t as big a supplier as Norway. In fact, Cove Point used to see the odd tanker full of Norwegian LNG pull up at its bay terminal. Why can’t Norway increase its sales on the Continent?

Europe would have to build more LNG import facilities and that may take a few years. Meanwhile, the global money seems to be on sending LNG to Asia. Continue reading

The Terrible Link Between Income and Longevity

RAM in Wise County

RAM in Wise County

By Peter Galuszka

Call it a tale of two Virginias.

One is rich with military retirees, ample benefits and gated communities. The other is remote, poor and polluted, where the life expectancy for men is merely 64 years.

The former is Fairfax County at the heart of NOVA, Virginia’s economic engine, the land of federal largesse. The other is 350 miles away in McDowell County, in the coal belt of southern West Virginia just a stone’s throw from the Old Dominion border.

In one of the best and most glaring reporting of income disparity in this country, Annie Lowery of The New York Times lays out the stunning contrasts in two very different places maybe a six-hour car ride distant. The nut of her report is that higher income means longer lives thanks to better access to decent food, retirement benefits and medical care.

In Fairfax County, men live to be 82 and women 85. In McDowell County, men (as noted) live to 64 and women to 73. Even more astonishing is that this is happening in 21st century America, the supposed land of plenty. If ever there were a call to do something about health care, this is it.

Think what you will about the Affordable Care Act, the prior system of managed care with Big Insurance calling the shots just isn’t working. One also wonders, in the case of McDowell, where Medicaid and Medicare are. Where are the benefits from the coal companies that used to dominate employment in the area?

This hits home for me because I grew up partially in West Virginia when my father, a Navy doctor, decided to retire and go into practice there. I also traveled about researching a recent book on the coal industry. I spent a lot of time in Mingo County, the next one over from McDowell. I drove plenty of times through the small town of Williamson, a major rail marshaling yard, and was struck by how many elderly people I saw pacing slowly with oxygen tanks strapped to their aluminum walkers. Coal-related black lung? Too many cigarettes? Breathing air dirty from coal trains and trucks  and strip mines? Over in Fairfax, people of a similar age are more likely to be in a warm swimming pool at an aquatic aerobics class.

Back in the Appalachians, one morning my photographer Scott Elmquist and I were traveling from Kentucky back into Mingo County and I happened to see a Remote Area Medical free clinic at a high school in Pikesville. We turned in and found more than 1,000 people thronging the gymnasium floor waiting for doctors or for their turns at the more than seven dozen dental chairs for free care they couldn’t otherwise afford. Some I spoke with had been waiting there since 1:30 that morning. RAM runs a circuit that includes Wise County in Virginia, also in coal country.

So how did these people slip through the cracks? The Times notes that in McDowell, there aren’t any organic food stores or Whole Foods. The place in inundated with fast food and convenience stores that sell ready-to-go hot dogs, energy drinks and salty chips.

Another reason is the connection with the coal industry which has been so lucrative over the years that it should have provided plenty for the elderly. Instead, as coal seams play out and natural gas usurps coal’s role in electricity generation, coal firms are setting up to skedaddle. One is Patriot Coal, an offshoot of St. Louis giant Peabody, that took over its Appalachian interests so the mother firm could concentrate on richer areas in the U.S. West and Asia. Patriot was set up to fail and perhaps take retirement benefits with it. It’s an obvious scam. You spin something off to get some distance between you and having to pay pensions and health benefits.

Another factor is what they are doing with the local environment. Mountaintop removal is a powerful instrument in places around McDowell. At the blog Blue Virginia, they ran an intriguing map showing just how this highly destructive form of mining that rips up thousands of acres overlays with high poverty areas. Out of sight out of mind. It’s a shame how many in the green movement are forgetting the horrors of mountaintop to beat up on fracking which may be closer to home for them. Continue reading

No Negative Coal Poetry, Please

WV Governor's ArtsBy Peter Galuszka

Meanwhile, over in West Virginia, the long arm of King Coal reaches over to a high school poetry reading.

Grace Pitt, a Hurricane High School student, wanted to read a poem by Charleston poet Crystal Good about Richmond-based Massey Energy’s April 5, 2010, disaster at its Upper Big Branch mine that killed 29 men. The reading was to be held at the West Virginia Governor’s Arts Awards ceremony this week.

The poem describes how the disaster, the deadliest in this country in 40 years, created 29 black diamonds “in what they call a ‘mine disaster’; others ‘industrial homicide.’ (The United Mine Workers of American titled their report on Upper Big Branch as “industrial homicide.”)

According to the Charleston Gazette, before the reading, Tabitha Walter, grants coordinator for the Division of Culture and History and a sponsor of the ceremony, emailed that “I really hate to do this, but because your poem deals with coal and many state representatives will be there, our director wants you to choose a different poem.”

The email went viral and the push back was so strong that the state department backed down.

The poem will be read Thursday.

It is not unusual in the coalfields for coal companies and other energy firms to bankroll cultural events and perhaps maintain some degree of control over them. Alpha Natural Resources, the Bristol-Va.-based coal firm that bought Massey, funds “Mountain Stage,” a roots and folk music program with a national audience that is produced by West Virginia Public Broadcasting.

The public broadcasting group also recently ran a soft documentary that noted how natural gas has been drilled for years in the Mountain State. The film was an apparent propaganda effort to smooth public acceptance of using controversial “fracking” to reach Marcellus Shale gas fields.

Coal Giant Alpha Pays Biggest Water Fine Ever

MTRBy Peter Galuszka

Alpha Natural Resources of Bristol, the coal giant that took over troubled Massey Energy of Richmond in 2011, has the dubious honor paying the highest fines ever of $27.5 million for water pollution violations at its coal mining operations in five Appalachian states, including Virginia.

Massey Energy, the owner of the Upper Big Branch mine in West Virginia where an explosion killed 29 miners in the worst such disaster in the U.S. in 40 years, held the previous water pollution fine record of $20 million issued in 2008.

The Environmental Protection Agency says that from 2006 to 2013, Alpha and its subsidiaries violated water pollution permits 6,000 times and allowed toxic materials such as heavy metals into streams and the watersheds of Tennessee, West Virginia, Kentucky and Pennsylvania besides Virginia. The firm will also pay $200 million to reduce such toxic discharges.

The settlement comes after a pair of unrelated water pollution situations involving coal in West Virginia and North Carolina. Some 300,000 residents of the Charleston area went without drinking water for several days when a toxic chemical used to treat coal leaked into a river. Duke Energy faces fines in North Carolina for improperly maintaining its coal ash storage facilities, leading to a substantial spill into the Dan River which provides drinking water for Danville and eventually, Virginia Beach.

Alpha has touted its “Running Right” safety and management program as it absorbed Massey Energy and its rich coal reserves in a $7 billion deal. Alpha said it was retraining Massey workers who had suffered from Massey’s abusive corporate culture that cut corners on mine safety and environmental control, regulators say.

Alpha had agreed to pay $200 million in a deal with the U.S. Attorney’s Office of Southern West Virginia to cover violations from the Upper Big Branch which it bought and closed after acquiring Massey. Alpha later settled a number of shareholder lawsuits for $265 million. Some of the payout funding had factored into funds set up by Massey before the acquisition by Alpha.

Like most Appalachian coal producers, Alpha has been taking hits with soft markets for steam and metallurgical coal. Its 2013 revenues were $5 billion compared with $7 billion the year before.

Environmentalists say that Alpha’s fine does not address the massive ecological destruction of mountaintop removal strip mining which they say should be stopped at the permit stage. Alpha operates a number of such mines.

The latest fines involve 79 active coal mines and 25 coal processing plants.

Federal investigators are still probing Massey for violations of safety laws related to the operation of Upper Big Branch where the explosion occurred April 5, 2010 and other mines. So far, three former employees have been convicted and Massey’s former CEO Don Blankenship is said to be a target of the probe. There is also a suggestion that Alpha is cooperating with federal investigators in the investigation.

The Surreal Tensions With Russia

soldier in crimeaBy Peter Galuszka

Back in the 1950s, when I was a little kid living in North Carolina or the Washington area, our family would take a semi-annual trip to visit my father’s relatives in western Massachusetts. My grandparents lived in a nice two-story house with an old-style brick barbecue in the back but that wasn’t the thrill for me.

The reason I loved visiting was because of Westover Air Force Base, a Strategic Air Command facility on constant hair-trigger alert to blow the Soviet Union to kingdom come.

Gigantic B-52s would drill, roaring over the house on takeoff, sometimes in the middle of the night. Interspersed among them would be KC-135 tankers modeled on Boeing 707 jetliners. They would thunder over the house, shaking everything, at intervals of 30 seconds or maybe a couple of minutes. I was too young to understand but the reason they took off that way was to get the bombs in the air before the Russians could nuke the entire area, including my family and me. Use ‘em or lose ‘em.

So, more than 50 years later, it is bizarre to see Russia and the U.S. in their worst conflict since the 1962 Cuban Missile Crisis over Ukraine and Crimea. There are actually serious and intensely hedged think pieces online outlining what a modern day war between Moscow and Washington would look like. It could be a proxy war,  an air war but an ocean war is unlikely since the Black Sea is a bathtub and an American ship would be easy meat. The most likely worst case would be a NATO member on the border somehow getting involved and then we go in because we have to by treaty. If things ramp up, military-heavy Old Virginny will be high on the hit parade of love.

Every morning, I go through the surreal headlines about what seems to be Vladimir Putin’s shameless land grab. I agree with analysts who say this is time for firmness but patience. Conservative yahoos should chill their stupid upbraiding of Obama. He didn’t do this. In fact, he’s been much tougher with Putin than George W. ever was. And, there isn’t much he can do. Any doubts, look at a convenient map.

A few takeaways:

  • Putin’s not doing this to win over the Russian people. A poll shows that 73 percent of them want no part of military operations against Ukraine or Crimea.
  • It’s not clear that Putin is doing this to reinstate Viktor Yanukovich who was ousted as Ukrainian president in a street putsch in Kieva couple of weeks ago. Writing in today’s New York Times, Ruslan Pukhov of the Center for Analysis of Strategies and Technologies says that Putin actually favored former Ukrainian leader Yulia Tymoshenko, a darling of the West, who was released from prison when Yanukovich was ousted. This is not to say that Putin’s squeaky clean. He’s put plenty of people in prison, including, recently, Boris Nemtsov, a Russian liberal reformer.
  • The global economy can work against Putin. One of my biggest disappointments with the failure of 1980s and 1990s Russian reforms is that they have done little if anything to transform themselves from a fossil fuel kleptocracy into something more economically viable. They have enormous brainpower available but have squandered it. They need to get with the program and/or find someone to buy their oil and gas. The buyer doesn’t necessarily have to be Europe.
  • It’s awfully quiet there. There have been few if any reports of violence since the Crimea incursion began. That’s a far cry from a couple of weeks ago in Kiev. If he withdraws the extra forces, Putin can keep his Crimean bases anyway.

Somehow, I have faith that the fortitude and common sense of ordinary Russians and Ukrainians will prevail. They did when I witnessed, up front and personal, my very own coup in 1993 in Moscow that killed a few hundred (including almost me a couple of times) and wounded thousands. The skinhead guys in the camo fatigues running around with AKs looked very much like some of the characters I saw on TV in Kiev. If they can be kept at bay, the U.S. doesn’t overplay its hand and ignorant American conservatives shut their yap, maybe this madness will end.

Dominion Benefits As Renewables Struggle

North Anna PixBy Peter Galuszka

Dominion Virginia Power, as is its style, has achieved a quiet but far-reaching regulatory victory. The General Assembly has passed a complicated bill that would help Dominion write off costs for a new nuclear reactor while avoiding giving potential refunds or rate cuts to customers.

The bill, which easily sailed through the legislature, has drawn attention to whether the utility really will build a third nuclear unit at North Anna and why bills to help smaller players trying to create renewable sources of energy seem to get nowhere in Virginia.

Dominion will be allowed to deduct $400 million from its profits in a scheme that allows it to count as costs the nuclear research it does. This will likely help it avoid paying rebates to consumers the next time the State Corporation Commission considers its rates.

There are several curiosities with the scheme. For one, although Dominion filed early plans for a third reactor about a decade ago, the project hasn’t seemed to move very far. The disaster at the Fukushima plant in Japan in 2011 forced a rethink of how the U.S. plans its new reactors. Another problem is that North Anna suffered a major setback later in 2011 when an earthquake forced a shutdown at that station and pushed reactors past their design limits.

The danger is hardly news but may be largely forgotten. In the 1970s, Virginia Electric & Power Co., Dominion’s predecessor, was fined by federal regulators for knowing and lying about some aspects of a geological fault line that runs under the North Anna area when it planned the nuclear power station in the 1960s.

I have visited North Anna in recent years and have asked Dominion about how they plan to pay for a third reactor. Some estimate it may cost about $10 billion. Many reactors on the drawing boards can’t be built without federal loan guarantees. Dominion has said it won’t need such guarantees.

Last month, the Department of Energy announced that the federal government will provide $6.5 billion in federal loan guarantees for two new reactors planned by the Southern Company in Vogtle, Ga. They are the first in such government backing.

A big question is how far along is the third unit at North Anna and why the General Assembly felt comfortable about making such beneficial moves if there’s any question about it.

Meanwhile, Bill Sizemore at The Virginian-Pilot has an intriguing story about how Dominion, which gave $1 million to Virginia politicians last year, has little trouble with its laws while smaller fry in the renewable energy sector struggle.

They have failed at getting the General Assembly to push tax credits to help install solar, wind and other, non-fossil and non-nuclear forms of power. Originally, the proposal called for $100 million in tax credits a year but that was pared down to $10 million and then was put off for consideration next year.

Virginia has voluntary Renewable Portfolio Standards calling for a percentage of new power generation to come from renewable sources. The approach favors large utilities such as Dominion and Appalachian Power. Neighboring states North Carolina and Maryland have mandatory standards and that may be one reason why Virginia has only 5 percent of North Carolina’s solar power capacity.

Dominion points out that it has renewable projects such as solar powered panels at a university and has plans for offshore wind, but these efforts are relatively modest.

One irony with the current situation involving renewables is that conservatives argue that their promoters must meet strict free market tests. If solar and wind and other sources can expand, they need to make it without government help based on their ability to innovate and market salable products. But the traditional, large utilities have no trouble getting billions in government help in federal loan guarantees or in rate write offs that Dominion will enjoy.

So, it seems the fix is in for traditional power in Virginia. That was certainly the case with former Gov. Robert F. McDonnell who wanted to make Virginia “the energy capital of the East Coast.” He strongly backed offshore drilling. Incoming Gov. Terry McAuliffe had been suspicious of offshore drilling in 2009 when he first ran for governor but has since changed his position to the consternation of environmentalists.

“We’re really disappointed but not surprised,” says Glen Besa, head of the Sierra Club’s Virginia chapter.

Protests Pick Up Against Bay LNG Exports

cove point By Peter Galuszka

Protests are picking up against plans to convert a liquefied natural gas shipping facility on Maryland’s western shore of the Chesapeake Bay at Cove Point so  it can both export as well as import the product. The proposed, $3.8 billion project is owned by Richmond-based Dominion Resources.

Four protestors were arrested today for blocking the entrance to the Allegany County Courthouse in Cumberland, Md.  according to the Chesapeake Climate Action Network which has officials in suburban Washington and Richmond.

They are trying to raise concerns that the Dominion project will increase the likelihood of using controversial hydraulic fracturing for gas exports at Cove Point and lead to more greenhouse gas emissions.

The Chesapeake network is just one of a number of activist groups that are drawing attention to fracking for natural gas. The method, which yields more product from hard-to-reach geological formations, involves the use of powerful chemicals. Other worries are that wells leak and are prone to fire. According to the network’s Kelly Trout, leakage throughout the LNG conversion cycles at Cove Point and at its shipping destinations could case as much or more greenhouse gas emissions as coal.

The Cove Point issue of interest to me because I have visited written about the facility and am familiar with coal mining and burning which fracked gas is displacing. Just a few years ago, green groups correctly protested what was going on in the Appalachian coalfields with highly destructive mountaintop removal and mine deaths. There is no question that coal is a major and negative factor for the lives of its workers and the environment in general. It is the single largest contributor to greenhouse gas emissions in this country.

Coal, however, is slipping in importance precisely because of the rise of fracked gas. Although gas prices have been rising recently partly because of harsh winter weather, the surprising crash in gas prices four years ago caught the energy industry off guard. A decade ago, coal had supplied half of the electricity generated in this country and that number has slipped to 35 percent.

Cheap gas has presented the U.S. with another unexpected benefit – rising energy independence. This is why Dominion is so eager to convert an aging LNG import facility in Maryland built in the mid-1970s into an export facility. It has long-term contracts already for exported LNG with Japanese and Indian utilities. Dominion bought the Cove Point facility about 12 years ago after a checkered history in which it  had been through several owners. Cove Point is one of about 20 facilities that are being proposed for LNG exports.

Cheap gas is likewise a curse and brings new uncertainty. Its economic benefits have meant that it is no longer worthwhile to invest billions in carbon capture technologies that might have allowed safer and less-polluting use of coal. Gas is also pushing back the urgency for expanding non-fossil and renewable energy sources such as wind and solar.

I’m of two minds on gas and LNG. On the one hand, gas beats coal hands down. It doesn’t kill as many workers, doesn’t destroy mountains and produces half of the carbon dioxide as coal.

Yet as time goes on, there’s more reason to be suspicious about fracking. There’s no certainty that the toxic chemicals used in the process will not hurt ground water. Natural gas wells do tend to leak and fires, fatalities are not uncommon. Pipelines blow up. Fracking has also been used with great success to tap previously inaccessible oil and shale oil in places like North Dakota. But that raises yet another problem: the use of unsuitable and unsafe railroad tanks cars to haul great quantities of it.

Ms. Trout provided me with material compiled by her group raising questions about leakage and Cove Point. Their research says that with a relatively low leakage point of 1.4 percent, taken over the entire LNG shipment cycle, enough methane would be released into the atmosphere that makes it about 80 percent as bad a carbon dioxide from other sources such as coal.

Cove Point would receive natural gas via pipeline from fracked gaslands in Pennsylvania and possibly Maryland or from pipelines running from Louisiana. At the Bay facility, it would be processed, cooled to minus 265 degrees Celsius, but in huge Thermos-style tanks aboard ship which would travel halfway around the world. In Asia, the LNG would be warmed back into gas, processed and used for fuel. This, she says, presents plenty of opportunities for leaking.

It very well could be. I have no data supporting or refuting the points. Meanwhile, the protests grow stronger and the arguments become more complicated.