Federal Regulations: Necessary or Burdensome? Experts weigh in at ICIE's Annual Meeting

At ICIE’s Annual Meeting in November, a panel addressed the issue of federal environmental regulations – are they unduly burdensome, or absolutely necessary?  Most speakers, while differing in opinion occasionally, fell somewhere in the middle of these two ends of the spectrum.

Jim Werntz, Director of Idaho Office of EPA noted that Republican presidential candidates have gone so far as to call for abolishment of his agency, arguing that federal regulations negatively impact businesses and therefore the economy.  But Werntz also noted there have been some major successes attributable to the laws and regulations even when examined from a cost/benefit standpoint.

“You won't hear me say that protecting our environment doesn't cost money, but these are wise investments, and often result in cost savings overall, resulting in lower health care costs, less cancer and fewer deaths.”

Werntz said there are those who think our economic recovery is going to gain steam and momentum if we cut regulation.  But he noted a recent Idaho Statesman article with figures from the Idaho Department of Labor citing the number of jobs lost overall as a result of the burden of federal regulations as 1/20^th of one percent.  The impact of regulations, Werntz said, is measurable but small, with a National Federation of Independent Businesses survey that cited poor sales as the biggest impact on jobs, followed by regulations.

Werntz said that the most significant successes of the EPA have been its addressing of health and environmental problems including the Clean Air Act and the Clean Water Act and the Superfund. 

Werntz conceded that there are problems with having the bar of a federal standard set by the EPA as directed by Congress.  One example of this problem, he said, is illustrated by the issue of arsenic in drinking water, the levels for which were reset about a decade ago from 50 ppb to 10 ppb.  This is problematic, because so much arsenic comes from Idaho’s geology, and Werntz says the cost to communities to get down below that new arsenic standard is “ridiculously high.”

Werntz pointed out that a lot of EPA regulations come from court decisions, leaving the agency in the position of having to struggle to implement complex regulations.

“I can only imagine what small businesses are struggling with,” he said. “Many of our rules are more complex and more convoluted than we'd like.”

The Small Business Perspective

Suzanne Budge of the National Federation of Independent Business agreed with Werntz about the complexities of EPA rules and the burden they represent to small businesses.  To a large degree, she said, small businesses are affected more than large businesses.  Budge cited some specific examples, and statistics:
-  For small businesses, the average cost per employee to comply with Federal regulations is $10,585
- There are 800 new or pending regulations that can impact small businesses
- President Obama in his first 2 years in office has presided over regulations (not just environmental) that Budge says cost the economy at least $100 million annually. Budge said this is an amount that is dramatically higher than either the Clinton or Bush administrations.

The Big Business Perspective

Trent Clark, Monsanto’s Public and Government Affairs Director, weighed in on the topic of environmental regulations from the perspective of big businesses, from the standpoint of Monsanto’s herbicide product, RoundUp.

This product originates in Idaho, he said, and uses elemental phosphorus, which requires that phosphate be stripped of its oxygen component after mining.  Soda Springs, Idaho, is the location of the last phosphate furnace in the US, where there used to be 28 nationwide, a decrease largely due to environmental regulations.

Other critical needs for elemental phosphorus, Clark said, include the nonflammable hydraulic fluid for airplanes and tracer rounds such as those used by the military over Bagdahd.

Clark says that in the last 6 years Monsanto has encountered a significant obstacle to their domestic source for phosphorus.  Conforming to water quality standards for Bluegill fish, a mine project near the Blackfoot river must exceed even drinking water quality standards.  Even though the Blackfoot River is not blue gill habitat, the cost of the project was inflated from $3 million to $30 million.  Monsanto did, however, show that there is a way to mine the Blackfoot Ridge mine in a way that does not produce an effluent that would be bad for blue gills. 

Additional modeling on selenium sources resulted a need to account for burrowing rodents.  That was done by caping the mine with a geo-synthetic clay liner laminate material that costs about $28,000 per acre.

In the midst of this work, Clark said, a new problem arose: the Blackfoot river was declared to be impaired for selenium.  The standard for selenium effluent changed to 0.    Idaho declared that “zero” is actually a level that is detectable at less than a  1/2 part per billion standard.  Monsanto therefore designed a water collection system underneath the pile, again increasing the cost of the mine, this time to $60 milion.

Clark said that Monsanto produces elemental phosphorus in direct competition with China, where 50% of their phosphorus comes from artisan operations – essentially, where families burrow in the hillside, filling wicker baskets.  A task master weighs the baskets and metes out about enough to buy that day's food.  In this operation, nothing is spent making sure that the nearby water is safe for blue gills.   Clark said he wonders about the environmental impact will be if Monsanto decides $60 million is too much to open such a mine.

“The impact would be taking a world-class sustainable operation out of the US, forcing dependence on artisan mining in China,” he said.  “I can't see how anyone would say that that would be good for the environment.”


Court interpretation of EPA rules complicate clean water regulations

Attorney Andy Waldera provided context on the NPDES permit program under the Clean Water Act, which dictates under what circumstances pollutants can be discharged into jurisdictional waters and by whom.

The purpose of the CWA is to protect water bodies to make them safe for fishing and swimming, with an overarching goal to prevent discharge.  Waldera qualified the permit program as the exception to that general rule.  If you get a permit, and are meeting the terms of the permit, you’re allowed to function as a point source, or a discrete conveyance of pollutants.   The fines for not complying with the terms of the permit are up to $37,000 per day per violation, per point source.   There are also criminal provisions.

Waldera said a big concern with the CWA is citizen supervision.   A citizen can file suit against anyone they feel is in violation of the CWA.  Those who do so, and are successful in bringing in an enforcement action, can recover legal fees.  In the long run, the cost of filing suit is covered by tax dollars.

Exemption from the permit requirements include return flows from irrigated agriculture.  Irrigation facilities are jurisdictional waters, which more often than not, include interconnections with waters of the US.

How did an effort to maintain clean water become so complicated? Waldera said a lot of EPA's direction lately has been coming from the courts. 

“I feel for the EPA,” he said, “it has to deal with fairly reasonable regulations that come through the courts, and then through litigation become much more cumbersome.”

Another issue is the Federal Insecticide, Fungicide and Rodenticide Act.  FIFRA says as long as pesticides are applied in accordance with the label, the applicant is protected. But Waldera said this is in conflict with the CWA, which considers issues on a case by case analysis rather than a cost/benefit analysis. 

What about applications with drift where you could hit waters of the US?  The Court ruled that insecticides are pollutants to begin with.  How can you have a pesticide or an insecticide that performs a beneficial service, Waldera asked, particularly when you're applying it in accordance with its FIFRA label, you don't over apply, or have lingering breakdown residue, and still treat it as a point source?  The EPA, in considering this decision came up with the Aquatic Pesticide rule, which addresses direct application and the concept of drift.  This rule says that if you are using a compound that serves a beneficial purpose and is in compliance with FIFRA, the benefits outweigh the costs. Even if there is some impact to the environment, you are in compliance with the CWA.  This decision also noted that you could not have a point source discharge of a pollutant, because it had not broken down into a pollutant yet. 

Waldera said the 6th Circuit Court ruled that the EPA's new rule did not meet the requirements of the CWA.  So the court vacated the rule, but then clarified that not all pesticides are pollutants at the time they are applied, those that leave behind a chemical residue are pollutants.  Also, if you apply it in excess of what is needed, the excess product is a chemical waste and a pollutant. The court also said the NPDES permit applies to indirect application as well as direct application.

The Clean Water Act also called out biological materials as pollutants.  The court did not accept the  timing analysis that said you could not have the point source responsible for the pollutant, because the pollutant is the result of the chemical breakdown.  The courts said that you would not have the breakdown products without the point source.

So as a result, Waldera said, what would have been a reasonable rule becomes the NPDES permit.

Idaho Department of Lands decides on rules governing conservation of crude oil and natural Gas in Idaho.

In mid-May, the Oil and Gas Conservation Commission instructed the IdahoDepartment of Lands to start a negotiated rule making to update the existing rules for recovery of natural gas and oil deposits in Idaho. Those rules had been put in place twenty years ago before the current discovery of potentially economic reserves of gas and oil.  Industry, environmental groups, county governments, individuals and state agencies produced a draft rule which the Commission has accepted and which will be submitted to the 2012 session of the Idaho Legislature for final approval.

On November 15^th, the Commission met to take testimony on the proposed rule and vote on it.

The meeting opened with a presentation by Eric Wilson, Idaho Department of Lands Program Manager-Minerals at the meeting of the Commission, which is made up of the Governor, Secretary of State, Attorney General, Superintendent of Public Instruction, and Controller.

It was time to review the existing rules and the negotiated rulemaking process allowed many stakeholders to be heard.  These rules are useful and usable and will apply to the entire state.

Wilson outlined some of the changes made to the current regulation:

•  Adding a15 day public comment period on applications to drill
• Handling well treatments, called fracturing or fracking, in two sections: application and approval.  Use and disposalof volatile compounds is also regulated.
• Adding pit requirements and surface reclamation measures to protect fresh water;
• Requiring reports of actual amounts of fluids used intreatment of wells (fracturing) as well as notification of treatment anddisposal sites of fluids;
• Increasing bonding amounts and additionalbonding;
• Adding a 3-tiered system for blanket bonds.  Wells that have been inactive for 24 months must have individual bondsrather than be under a blanket bond;
• Adding a new section on surface owner protections that is based on case law throughout the states;
• Updating casing requirements, pit constructionstandards, short and long term standards;
• Class 2 injection wells will no longer beallowed.
• Adding very specific standards on improved wellplugging
• Including new reclamation standards were included.

Testimony included support for the new regulations, pointing out this willbe an economic benefit to the counties and the state.  Others said we need regulations on this activity butdon’t need to regulate the industry out of the state.

Others expressed concern that we were rushing to develop these fossil fueldeposits and needed to take care that we did not leave poisons behind thatwould last for a long time.  Anotherconcern was the issue of lining pits which needs to stay in the rule.  There was support for more work on theblanket bonding section and concern over the use of carcinogenic chemicals inthe fracturing fuels

The commissioners asked several questions about disclosure of ingredients inthe fluid; blanket bonding; the APAprocess and timeline and pointed out that these rules will not be in placeuntil after the Legislature has approved them. The current temporary ruleswould stay in place until then.

Lt. Governor Brad Little, acting as chairman in the absence of the Governor,recused himself because of a potential conflict of interest.  The rest of the commission voted to submitthe pending rule to the Idaho Legislature for approval.

For official rules, see this website: http://adm.idaho.gov/adminrules/rules/idapa20/0702.pdf

Committee takes comment on Idaho's Energy Plan

On Wednesday, consumer associations, conservation organizations and private individuals gathered to offer testimony to the legislative interim committee on Energy, Environment and Technology on the draft 2012 energy plan.


The Reality of Renewable Energy Credits
Annie Black, a Boise resident and former Idaho Power employee and regulatory consultant offered testimony on  renewable energy credits (RECs) and advocate for transparency with rate payers


Black is concerned that Idaho's energy conversation should be about where our energy is coming from.  She refers specifically to what she says is a difference in the generation of fuel mix and the power delivered to Idaho Power customers.  When local rate payers believe that the energy they consume is renewable energy, they don't realize the credits for those renewables have been sold to other states that have renewable energy portfolios.


The question, Black admits, is largely academic, but with one of the tenants of the plan being energy awareness on behalf of consumers, it's an important point.

"​Geothermal and wind energy aren't making it to my electrical outlet because Idaho Power is required to sell renewables. ... stripping RECs from renewables by selling them to other states fundamentally changes how we consider the environmental benefits.  ​If you think you are getting geothermal or wind energy as a part of your fuel mix, you're not alone," Black says.  "RECs have muddied up the waters.  We need to differentiate between generational fuel mix and delivery fuel mix."

​Representative Wendy Jaquet tried to clarify: "You're saying that if I really want to promote green energy in my state, I should be wanting to know where those RECs are going and generate a dialogue about where my energy is coming from?"


Black concurred, "what I'm saying is let's be all on the same page. I'm advocating that if we are selling our renewable energy in the state, we should be aware of it."

Representative Reed DeMordaunt wondered about the renewable energy market in Idaho.
"Isn't this about getting about getting more people to check the REC box on their power bills?"  


Black noted that in her tenure at Idaho Power, the utility came forward to the PUC and asked for the opportunity to offer a component of renewables in their deliverable energy.  The PUC decided against this, Black says, specifically saying "we don't have a REC market in Idaho."


Advocating for Seniors
Lynn Young of AARP Idaho says her organization wants to ensure consumers have access to affordable energy.  While she says  the plan cites affordability it fails to address it in a substantial manner.  She says older americans devote a higher percentage f their income on home heating.  about 1 in every 4 of low income seniors spend 15% or more of their income in home energy.  


"Some of our seniors have to make regular decisions between paying their utilities or prescriptions, and end up exposing themselves to chronic health conditions and premature death due to exposure to heat and cold."

Young recommended appointing a consumer advocate.  Senator Elliot Werk wondered if the Public Utilities Commission considers their staff to be advocates for the consumers. 


"The PUC does the work they've been given to do," Young said, "but we don't believe they carry a role to be an advocate for the consumer. We feel a need to have the same representation that other groups have."

She noted Idaho is one of eight states nationwide and the only one in the west that doesn't have a consumer advocacy office. 


Ben Otto of the Idaho Conservation League served on the energy conservation task force of the ISEA.  He, too, advocates for the idea of a specific consumer advocate.  In his job, he says he frequently intervenes to represent residential customers to advocate on efficiency and conservation.  The system for reimbursing intervenors is cumbersome and drawn out, leaving individuals at a disadvantage compared to large corporations and other organizations that have specialists and lawyers at their disposal.


Conservation Groups Weigh In, Question Public Process
From the standpoint of the Idaho Conservation League, Otto highlighted specific areas of priority for the legislature to put real policies into place: tax incentives, regulatory policy and energy efficiency.


"The potential for efficiency is vast, the price is right, it addresses critical issues such as energy independence for Idaho," he said.

Lisa Young, of the Snake River Alliance noted that her organization objected to the informal nature of the revisions made to the first draft of the Idaho Energy Plan at an early October meeting.

Public Utilities Commissioner Paul Kjellander noted that, despite the lack of a public record of comments made at the meeting, in his opinion nothing underhanded had taken place.  


"We may not have seen minutes only because there hasn't been a subsequent meeting of the board.

Regarding the plan itself, the nuclear watchdog agency pointed out several specific points of interest:
- The treatment of energy efficiency in the latest draft of the plan, wherein language describing energy efficiency as of the  "highest priority" was downgraded to "high priority" where "cost effective."
- The removal of language on incentives for renewables 
- The removal of policy recommendation that would encourage customer owned combined heat/power source development
- Language specific to monitoring and exploring all advanced energy technology

Transportation Group: Don't Forget Community Planning
Heather Wheeler, director of the Community Transportation Association of Idaho (CTAI) outlined energy efficiencies and fuel conservation measures that should be incorporated into the plan:


Petroleum and transportation - restore natural gas purchase of high efficiency and alternative fuel vehicles to the plan.


Incentives - restore language that encourages alternative fuel and conservation of fuels to drive the market toward meeting energy efficiency goals.


Don't delete language about local transit tax options  - which will greatly decrease fuel consumption.


Don't delete recommendations that focus on conservation through community and transit planning.  Idaho should encourage land use planning that reduces vehicle miles traveled.



Interim Committee reviews recommendations, extends comment period
The committee took these and more than 80 other comments logged online into consideration the following morning as they went through each recommendation of the draft 2012 plan.   The committee will continue the discussion at their November 21st and 22nd, and has extended the public comment period through to November 18.


Among several areas of particular concern during the meeting was language regarding transmission.  Senator Werk described transmission's role in the Draft Energy Plan as akin to the act of capturing a bridge in a battle - a small act, but critical to accomplishing broader objectives.


"it's interesting to look at the proposed language, which is limited to what the utilities should be doing ... where it should be focused on broader policy implications," he said.


Also discussed was language concerning the priority level of efficiency and conservation, incorporating renewables where cost effective, and keeping language as broad as possible to allow for incorporation of new technologies, recognizing the role they play in a robust energy portfolio with conventional resources.


The subject of local option taxes for transportation projects was discussed as well, with policy makers noting that this subject is likely to come up in the upcoming session.


A local option tax bill failed to pass the House in 2009.  Although supported by many legislators, the bill's provision that such option taxes require a two-thirds vote rather than a simple majority was something several potential supporters of the bill sited as their reason for voting against it.


Comments on the 2012 Draft Energy Plan can be emailed to Mike Nugent of the Legislative Services Office at mnugent@lso.idaho.gov by 5 pm, November 18.

Energy Integrity Projects challenges validity of wind as a viable energy source

A group representing ratepayers recently presented to the Interim Committee on Energy, Environment and Technology. Representatives of the Energy Integrity Project say a great deal of the discussion on wind as an energy source has been done without the input of stakeholders who represent the ratepayers. The EIP believes that the Idaho Legislature is working with incorrect information when it comes to wind energy.

Last year the legislature looked at a moratorium on wind development backed by the group, who insist this issue is not necessarily as simple as not wanting turbines in their backyards. They say wind energy has been subsidized and promoted without proper research and oversight, that with up to two thirds of the value of a wind project coming from federal programs and tax subsidies including accellerated depreciation, federal cash grants and loan guarantees, the major beneficiaries of wind power are wind power developers. The group notes that Federal subsidies for wind projects have doubled over the last three years, and the total 2010 subsidies for wind energy exceed all other sources combined.

Energy Integrity Project representative Tauna Christensen noted that what they says is a 'green jobs agenda' destroys american jobs, touting a Madrid study and a ABC News investigative report on stimulus funds spending, among other sources.

"Implementing rigorous legislation in an effort to reduce our own nations' emissions is effectively pushing manufacturing intense industry to higher-emitting places like China," Christiansen said, causing more detrimental effect on the climate than maintaining those jobs on american soil. This, she said, damages the US economy and exacerbates greenhouse gas emissions world wide.

Senator Werk cautioned the group to examine the sources of these studies, noting additional information about who was backing these studies has been published.

Representative Cronin asked why the group is comparing jobs in the renewable sector to those in the manufacturing sector, taking issue with the suggestion that creating jobs in one cancel out those that may be created in the other.

Representatives of the group insist, however, that creation of jobs in the renewable sector is taking away from efforts to create manufacturing jobs. Overall, the group representatives said that their efforts were to illustrate that renewables is not a job-creation enterprise.

Senator Anderson noted that since taxpayer money has been spent on job creation in the renewables sector, this question is legitimate: that of how many jobs do we have out there on the wind farms, because we did spend taxpayer money to get there.

Idaho Petroleum Council Update - Suzanne Budge and Mike Christian

Idaho Petroleum Council Update - Suzanne Budge and Mike Christian
PUPRA Presentation

Pacific Northwest Power and Conservation Council - Jim Yost

Energy Integrity Project

Update on Idaho’s Energy Plan

The Interim Energy, Environment and Technology Committee has enlisted the help of the Governor’s Office of Energy Resources, and specifically the Idaho Strategic Energy Alliance to assist with revising the 2007 Idaho Energy Plan to recommend changes to bring it current with present day energy issues.

The Plan is a comprehensive investigation of all of Idaho’s energy systems, with recommendations to help develop policy ensuring a reliable, low-cost energy supply, protecting the environment and promoting economic growth.

The body of the review document will include suggested policy actions, outline what has and has not worked, and what needs to be changed structurally, but the focus of the Alliance is not to provide specific tactical actions, which will be up to the interim committee. The draft will be available for public comment on the Alliance's website on October 17: http://www.energy.idaho.gov/energyalliance/.

With the final review almost complete, pending public input and vetting by the interim committee, the good news, says Dr. Aumeier, of the ISEA's board of directors, is Idaho's progress on conservation and energy efficiency as resources.

A few points from the ISEA’s report:
- Idaho ranks 26th in terms of energy efficiency, a fact which carries significant economic benefit.
- The task of educating an energy workforce is important, and also an important part of the Governor's Project 60 Plan.
- There has been tremendous growth in renewable sources of energy, especially wind. A section on “Lessons Learned,” will reflect that the innovation in renewables has real benefits as well as negatives in terms of accommodating the intermittent nature of the same. Whether to integrate more renewable energy will depend upon public sentiment on the costs and benefits and how they're weighted in our stakeholder groups. It's good to see people get engaged.
- Technology advances are offering approaches in conservation and use. It's important to keep a close eye on technology advances. Things are moving so fast, that options and costs are changing in real time.

Examples of technology improvements include improved drilling techniques are opening up opportunities in Idaho. These bring up questions regarding implications in regulation and structure. We’ve seen similar questions begin to pop up in expansion in renewable markets.

These technology improvements and the questions they raise are also impacting costs, since the last energy plan was drafted, the energy reserves that have been uncovered in our region are massive. They are also fundamentally changing energy options and choices, and Dr. Aumeier says the public needs to be kept up to date with the costs and benefits associated with each.

"We need to enable people to make the best possible decisions... what we know is there is no free lunch when it comes to energy production."

Ken Miller, clean energy director for Snake River Alliance offered a less rosy update from the perspective of his organization’s review of the Energy Plan. His organization has reviewed 34 of the 44 2007 plan recommendations they reviewed, finding:
- 17 were incomplete or showed no progress.
- 10 partially implemented.
- 7 implemented or mostly so.

Miller noted that the lack of progress is not one entity's responsibility and that of those unimplemented items, most are energy efficiency related. He stressed efficiency as a priority resource going forward, followed by the development of renewables and cleanest conventional resources.

In particular, Miller noted that the 2007 plan avoided climate recommendations. He stressed that regardless of political views of the committee, the 2012 plan must consider implications of climate issues.

“The federal government and surrounding states are defining the carbon issue for Idaho,” he said. “Bonneville Power, Idaho electric utilities are already planning for carbon constraints that will affect their resources decisions.”

Miller encouraged the ISEA to resist general or “easy-lifting” recommendations in the updated plan, and to avoid scrubbing element of the 2007 plan such as tax incentives simply due to budget constraints.

Members of newly formed Idaho Petroleum Council present to interim Energy, Environment and Technology Committee

Council members include representatives from oil and gas companies, Bridge Energy and others who cite Idaho, with its geographic landscape, as a state with potential to be an important part of solving our nation's energy challenges.

Members noted that concerns about aquifer contamination don’t take into consideration the fact the seismic data that show the shallowest gas reservoir is at 1650 feet. The clay sands at the top (the deepest of which is 216 feet) hold the aquifer. There is further protection for the aquifer from surface casing used in the well drilling process, which extends a concrete and steel barrier down to 700'.

While some fracturing processes are designed to create reservoirs out of shale, the process proposed by Bridge Energy, representatives say, is more akin to “cleaning lint out of the dryer, allowing gas to flow,” with the amount of fluid injected equaling about the same as one and a half back yard swimming pools.

Representative Wendy Jaquet noted a Public Television program in which someone said that the ingredients in the injection fluid were proprietary information and did not need to be made public. Current rules of the state of Idaho would seem to be counter to that sort of secrecy.

Bridge Energy representative Kim Parsons noted that her company has maintained complete transparency as to injection materials.

The council presentation focused on three specific areas:

The Importance of Consistent Regulatory Framework – Such framework ensures good compliance, takes advantage of well understood programs administered nationally, and helps operators understand expectations. Idaho state statute is based on IOGCC Model Statutes and regulatory issues that govern hydraulic fracturing including acts focusing on air and water quality, the National Environmental Policy Act, OSHA, Emergency Planning and Community Right-to-know Act, and the National Pipeline Safety Act.

Economics - Arkansas commissioned a study in 2005 and 2009 as to the economic benefits in Arkansas and Council representatives have developed some estimates for Idaho based upon direct activities, extraction, production and supply chain. Industry employees are paid more than twice the average compensation in Arkansas. In 2007, the combined direct economic impact was $1.7 billion and 3776 jobs, indirect sources accounted for another 4,000 jobs and $400 million and state taxes of $54 million. The oil and gas industry is the only industry that receives no federal subsidies. Comparing these figures to Idaho specifics, this would equate to combined state and local taxes of $206 million, and additional revenues from severance taxes and royalties.

Environmental Considerations – With regard to protecting Idaho's water, council representatives cite physical and regulatory mechanisms already in place, including the design of the well with multiple layers of cement and steel in the bore hole, mechanical integrity testing, annual pressure monitoring and adherence to substantial federal and state rules and regulations.

Idaho fracturing process proposed on a smaller scale than North Eastern states

In two fields near Payette and New Plymouth, a total of seven gas-producing wells can access reservoirs of natural gas in deposits of sandstone between layers of impermeable shale. The reservoirs are between 2,000 and 7,000 feet below the surface and accessible, industry experts say, through a reduced scale fracturing process.

The interim legislative Energy, Environment and Technology Committee heard presentations regarding the fracturing process last week.

Fracturing injects fluid and sand into a formation under pressure to restore or create pathways for gas to flow into a well bore. Energy company Bridge Energy is proposing to utilize the process at a level they say is much smaller than the process that has received attention in the cases of large scale fracturing in the eastern United States.

The process proposed for Southwestern Idaho wells requires about 700 barrels of fluid injected at a rate of 1,000 to 2,400 pounds per square inch over a fracture radius of 150’. Larger scale efforts to create pathways for gas and oil to flow through shale have a radius of 5,000’ and inject 25,000 barrels of fluid at 10,000 psi.

This spring negotiated rulemaking efforts have focused on protecting groundwater aquifers from the injection fluids, which officials note include non toxic ingredients such as guar gum (from legumes), potassium hydroxide, soap, detergent enzymes, boron and acidic acid (vinegar) in water.

Other rule changes include revisions proponents say are necessary because the rules are 30 years out of date for things like minimum bond rates and requirements with regard to environmental protection.

Statutory changes proposed during the next legislative session include increasing application fees, limiting confidentiality of drill logs to one year, changes to severance tax collection process, updating definitions, and addressing class II injection wells. Representative Wendy Jaquet asked about including value statements in proposed statutes about maximizing the resource while protecting the public interest.

Eric Wilson with the Idaho Department of Lands noted that there is a definition of "fresh waters" in the rules regarding conservation of oil and gas. Specifics in this area will be left up to legislators to determine, he said.

Not all law makers in attendance were convinced this answer was adequate.“Everything in the (proposed) statute is about the best use and conservation of the resource,” said Senator Elliot Werk. “The bottom line is that health and safety is secondary to the conservation of the resource … that may not be the best priority setting.”

Although Werk conceded that the fracturing process described is minor, “what’s to say the rule won’t apply to a developer of a major fracturing operation in hard rock?” he asked.

Williams noted that geologists don't know of any shale gas or oil, and therefore there is no reason for a large scale fracturing operation, in Idaho.

“This is a tough area for oil or gas because of the vulcanization of the rock that tends to drive out oil and gas,” he said.

Wind, Water and the Problem with Too Much Energy

Bonneville Power Administration's John Williams briefed the Energy, Environment and Technology interim legislative committee last week on the challenges presented by over generation caused by high water and wind energy integration.

High water years such as this one create a need for environmental redispatch, or the release of excess energy in a way that is sensitive to environmental objectives. When system conditions trigger environmental redispatch to reduce the load, Williams said, BPA prioritizes energy production reliability, fish protection, mitigating increased costs to BPA customers, and supporting integration of renewable energy sources such as wind power.

Williams noted that, for some, the current over generation situation raises the question of the relevance of the four lower Snake River dams. Replacing these energy sources, he says, is a question of replacing the generation of power valued at half a billion dollars in load peak demand support and transmission support as we take power from other states and move it to the load centers.

If the lower Snake River dams were to be removed, Williams said, natural gas would be the most likely solution for replacing the power they generate.

BPA has created a wind integration team to find and develop creative solutions to integrating and supporting wind development in the region. Transmission plays a huge role in wind integration, and BPA is looking toward improving transmission throughout the Northwest, Williams said.

While integration of wind power has contributed to the need for environmental redispatch recently, Williams said excess generation from water conditions alone has created the same situation in the past.

High water years, in short, produce problems. Water must be moved through turbines rather than spilled over dams to reduce harm to fish. Spill produces a higher quantity of Total Dissolved Gas (TDG) in the water, which harms fish. Still, reduction of wind power for environmental redispatch is a last resort after TDG caps are reached and thermal power is reduced.

Williams stressed the need to reach some type of balance with all interested parties including other energy suppliers, users, and elected officials. The general public is becoming more aware of issues and is questioning - and sometimes criticizing - the reduction in wind power due to over generation.

Idaho does not have a renewable portfolio standard (RPS)like other states have. The renewable portfolio standards are driving wind development in the Northwest. Economics are a big part of why states went to mandatory renewable energy portfolios. There is a cost for increasing wind power. For example, in the case of redispatch, compensating wind generators for losses would increase costs to BPA customers, and be an incentive for other energy producers to seek compensation for reducing their generation.

In the past, BPA was able to sell its excess power to California, resulting in cost savings to its customers. As wind power has increased, secondary revenue sources like this have dried up. Wind developers are also purchasing transmission rights, which decreases BPA's ability to transmit power to other states.

Williams noted that wind power has far exceeded initial analyses of integration needs. Compared to hydro power, wind generation load is still one fifth to one fourth as much generation, with a lower level of consistency.

Representative chastises EPA for lack of action to protect salmon, but organization questions the data behind the threat

Representative chastises EPA for lack of action to protect salmon, but organization questions the data behind the threat

President Obama has issued an executive order for a retrospective review of existing regulations (including existing environmental regulations) that are unduly burdensome to industry. Section 5 of the order also says that “each agency shall ensure the objectivity of any scientific and technological information and processes used to support the agency's regulatory actions.” A review of the whole consultation process within the regulations governing the Endangered Species might be a great place to start.

Last month Rep. Edward Markey, a Democrat from Massachusetts and two representatives from California issued a press release about a letter they had sent to the Environmental Protection Agency (EPA) about its lack of action to protect endangered Northwest salmon from pesticides. While EPA has jurisdiction over registration of herbicides and pesticides, the National Marine Fisheries Service (NMFS) has jurisdiction over salmon recovery. And therein lies the problem.

Under ESA, EPA needs to consult with NMFS on the issue of the impact of herbicides and pesticides in salmon streams. NMFS, however, has no expertise with the products while EPA has been testing, studying and regulating them for decades.

A lawsuit was filed in 2002 against EPA by environmental and fishing groups, including the Washington Toxics Coalition. The U.S. District Court for the Western District of Washington at Seattle found that EPA had violated its obligations under the Endangered Species Act.

The court ordered EPA to review the effects of 54 pesticide active ingredients on threatened and endangered salmonids and to consult, as appropriate, with NMFS on any of the 54 pesticides that may affect salmon. In 2004, the court ordered protections—including buffer zones—to prevent the potential adverse effects of any of the 54 pesticides on threatened and endangered salmonids.

The letter from the three Congressman to the EPA Administrator says that it is time for EPA to take action and asking EPA for a progress report in protecting this “critically important species” and pointing out that restoring salmon “could yield annual economic benefits of over $5 billion.” According to the Congressmen from Massachusetts and California, “We have science on our side…It’s time for EPA to take action.”

There are a couple of problems with the assertions made in this letter. First, the data used to determine the pesticide threat to salmon looks to be inaccurate.

Washington Friends of Farms & Forests (WFFF) is an organization concerned with producing safe, abundant, economical food, fiber and landscaping and maintain a healthy, productive and safe environment for our agricultural and urban communities. They responded to the Congressmen, calling into question the facts, science and computer models that NMFS used in making the determination that these 54 pesticides posed a threat to salmon.

They pointed out that use of the pesticides listed is significantly lower than in the past, asserting that no fish kills have been reported from the legal use of these products. In fact many salmon runs have been at record high levels in recent years.

It seems NMFS created its own computer models rather than use the ones that EPA had developed to evaluate the safety of these products for decades. In addition, NMFS used a farm pond model which assumes stagnant water to predict the exposure levels of salmon, forgetting that juvenile salmon swim in fast moving waters and rest is in areas of moving water. One NMFS model included a use that was never labeled and modeled uses not currently on labels. The agency assumed amounts much higher than are actually used. The models were so inaccurate that the EPA, the California Department of Pesticide Regulation, the Oregon and Washington Departments of Agriculture were all critical. The National Association of State Departments of Agriculture has asked that the BiOps be redone.

In six years of monitoring surface water in agricultural areas, the Washington State Department of Agriculture has noted that these pesticides are at or below detection levels. NMFS did not to consider this data in their findings. They also left out the department’s database which helps determine the amount and locations of product used and correlates the location and timing of fish presence.

Next, with regard to the economics which the Congressmen raised in the letter to EPA: the NMFS outlined the economic cost to EPA to implement the BiOps, but not the costs to farmers and foresters. One farmer in Oregon estimated that if the buffer zones were enacted he would not be able to produce crops on 50% of his farm.

Rep. Markey estimated that full recovery of salmon would bring $5 billion in annul economic benefits to Oregon and Washington. A substantial figure, but compare it to agriculture production in Washington at $16 billion in economic impact; food processing and manufacturing, $17 billion in total economic impact; and agriculture and forestry support industries; $1.8 billion in total economic impact. These figures were compiled by Washington State University in November, 2010.An updated study based on 2009 figures shows that Oregon agriculture is directly and indirectly linked to $22 billion in sales of goods and services—15% of the statewide totals of sales in all industry sectors, and that’s during a recession year. Processing added $2.2 billion to the value of Oregon-grown food and fiber.

Fires in beetle-killed timber get scrutiny

An Associated Press article in Thursday’s Idaho Statesman said that new studies presented at a Helena, Montana, seminar are getting close to leading to great understanding of the connection between mountain beetle epidemics and wildfires in the West. A study by a Forest Service ecologist shows for the first time that beetle-killed trees contain 10 times less moisture and a different chemical makeup than healthy trees. According to the story “that means the red needles of beetle-killed trees can ignite three times faster and burn more intensely than healthy trees.”

There it is: a study confirming what we all have observed if we’ve watched a forest fire.

Idaho's Oil and Gas Conservation Commission approves temporary rule on fracturing

Some of us discovered that Idaho has an Oil and Gas Conservation Commission during an information hearing on natural gas drilling in Payette County before the Idaho House Environment, Energy & Technology Committee during the legislative session.

Idaho Land Board members, including the Governor, Secretary of State, Attorney General, State Controller and Superintendent of Public Instruction also serve as the State Oil and Gas Conservation Commission. On April 19th they met first as the latter body to discuss issues related to drilling for natural gas in Payette County.

The duties of the Oil and Gas Commission are to prevent waste of natural gas, regulate drilling and review requests for directional drilling. If there are concerns about air quality, dusty roads or sage grouse, those are handled by other agencies such as the Office of Species Conservation, Department of Environmental Quality or the Idaho Public Utilities Commission. At this meeting, the Governor acting as Chairman of the Commission asked those who wished to testify to limit their remarks to the issues which can properly come before the commission, not roads, air quality or sage grouse.

The first order of business was the number of wells per acre that should be permitted. Bridge Energy had requested the spacing be based on one well per 160 acres instead of one well per 640 acres in order to properly capture all the natural gas being sought. After a contested case which required a public hearing, the hearing officer recommended approval of one well per 160 acres.

While there was no opposition stated during the contested case, Melinda Harper, a source water protection specialist with the Idaho Rural Water Association testified that there was no physical printout presented at the original hearing and no technical information for the March 31st meeting was available. She raised concern about the impact on drinking water and asked that the variance not be applied unless more information is presented to those who have concerns.

The Commission adopted the amended rule as recommended by the hearing officer.

The next topic on the agenda was consideration of temporary rules for hydraulic fracturing to establish consistent standards. The Idaho Department of Lands (IDL) modified draft rules to address concerns that had been raised about the process of fracturing or “fracing” as it is known in the industry. The hydraulic fracturing that is being proposed in Payette County is a common process that is generally considered safe. Problems that have been publicized have to do with fracing in large shale and coal methane drilling.

IDL believes this proposed temporary rule meets the state’s needs and that it goes beyond what other states currently have for this type of drilling and fracing. A request for a negotiated rulemaking will be presented at the May commission meeting.

Justin Hayes with Idaho Conservation League participated in the public meeting in Payette County and has visited with concerned members in the New Plymouth area. He presented friendly amendments to protect groundwater quality saying that the temporary rule needs to capture the need to protect ground water quality.

The amendments would prohibit the use of known carcinogens as well as the use of toxic substances that inhibit the human embryo growth and cause fetal mutations. A second amendment would prohibit fracturing that is more than 150 feet. Hayes suggested that we close the door on these items so that they can be discussed during negotiated rulemaking.

He also wanted to amend the temporary rule to require sufficient bonding. ICL wants bonding for each well, bonds for surface disturbances, and bonds for mitigation of ground water contamination. The attorney general questioned the timing of these proposals. ICL did submit proposals which were received and reviewed by IDL

IDL testified that it can use the permitting process to be vigilant until more formal rules are negotiated. How much bonding to require is limited by Idaho Code. Hayes pointed out the IDL is directed by statute to have reasonable performance bonds. Bonding for fracturing and well treatments is included in the bond required by IDL for drilling the wells (either per well or by a blanket bond). IDL responded that a statutory change would be needed to get authority for more bonding.

Diesel fuel is not allowed in fracturing and Bridge will continue to make all the compounds available to the public. Idaho does not allow use of any BTEX or volatile organic compounds

Steve West and Kim Parsons spoke for Bridge Energy. Parsons pointed out that definitions of carcinogenic and other such compounds are unclear. She mentioned that the temporary rule is one of the most restrictive there is at this time. With current rules, Bridge is required to make full disclosure of material used in fracing and the materials must be approved by IDL.

Parsons said Bridge uses the highest quality protection of ground water with liners and berms. The aquifer is protected by two to three layers of cement. The fracing is taking place 1000 fee below the aquifer. Bridge has invited the rest of the industry to come up to the levels of groundwater protection that its uses. Materials used are evaluated under Idaho’s groundwater rules and Bridge uses a number of safety measures and engineering redundancies.

IDL pointed out that the temporary rule was previously amended to answer the concerns of New Plymouth residents.

David Hawk who represents a competitor of Bridge is in favor of the draft temporary rule. From an operation and experience point of view, Bridge is very protective of groundwater. He urged the committee to support the temporary rule and not block the potential for other drilling that is currently held up by the BLM.

Melinda Harper testified again asking that the ingredients used in the fracing be food grade quality on the small chance that something not food grade enters the aquifer.

Justin Hayes said that ICL wants to create sideboards to protect groundwater and ensure that Bridge does what it needs to do to protect it as well.

“We can’t clean an aquifer once it is fouled,” he said.

After further questions of Bride Energy, the commission voted to adopt the temporary rule as recommended by IDL.

2011 Legislative Wrap Up

Idaho’s legislators called it quits Thursday with a couple of startling results.After killing a wind farm moratorium bill in committee and negotiating a compromise on the extension of the sales tax rebate for alternative energy in the final days, the House passed two bills on April 5 in favor of wind projects.

H347 would extend the rebate for those projects already in the works to December 31st. H348 would give the Idaho Public Utilities Commission jurisdiction over the avoided cost rates paid to PURPA solar and wind qualifying facilities. Only wind and solar projects producing 100 kW or less would continue to receive the standard avoided costs under PURPA but bigger projects would negotiate a purchase price.

When H347 failed by one vote in the Senate yesterday, the companion bill, H348, was returned to the State Affairs Committee at the request of Sen. Curt McKenzie.

An anti-degradation rule was negotiated this summer and fall. As with all rules it had to go by the legislature. In a rare move, the legislature chose to reject portions of the rule and replace them with H153. In doing so, legislators were acquiescing to a request by the industries involved and supported by the Department of Environmental Quality. They assured the legislators that this action will meet with EPA’s approval. Opponents may still proceed with a lawsuit to challenge the new rule and the statutory changes.

Under NOT SO STARTLING BUT IMPORTANT news: an amendment to Idaho’s current Right to Farm statute was challenged in committee hearings by several people whose concerns centered on dairies and confined animal feeding operations (CAFO). The amended law protects agricultural practices from nuisance lawsuits by adding an extensive list of standard agricultural practices. It does not add protection for negligent practices or change the current regulation of dairies or CAFOs. It also does not interfere with local planning and zoning authority. It passed the House and Senate and was signed by the Governor on April 6th.

Other Legislation That Made It:

H40: PROPANE FLAMING - There was a successful negotiated rulemaking to streamline the process for propane flaming of fields which is necessary for crops like mint but should not be regulated under the regular crop residue burning program. This bill changes the current law so that fees shall not apply to this practice.

H137a: ALTERATION OF CHANNELS OF STREAMS – This amends existing law relating to the alteration of channels of streams to provide that in specified situations, no permit shall be required by the state or any agency or political subdivision thereof from a water user or his agent.

H206: POULTRY – This adds to and amends existing law relating to poultry to provide for the Poultry Environmental Act; to provide for permits and registration of existing facilities; permits for expansions of operations; to provide for the design and construction of certain new and modified wastewater storage and containment facilities; to provide that the review and approval of plans by the Idaho Department of Agriculture shall supersede that of the Idaho Department of Environmental Quality.

H270: AGRICULTURE DEPARTMENT - RULEMAKING – This requires the director of the Idaho State Department of Agriculture to notify the public and the legislature in the event rules of the director are more stringent than federal law or regulations, or propose to regulate an activity not regulated by the federal government. It requires the director to use the best available science and apply well established risk assessment methods (The Idaho Department of Environmental Quality already has similar requirements).

H328: PUBLIC RECORDS – This amends existing law relating to public records to provide that public agencies may charge fees for the cost of filling requests for public records. This legislation was the result of records requests that were more like fishing expeditions and required a large commitment of staff time and copying thousands of pages.

HJR 2: NO MORE WILDERNESS - Idaho shall not support any wilderness designations without having used the public process, which includes the citizens of the state of Idaho, and urging our elected officials to defend this position whenever necessary with the full support of the citizens of the state.

S1001aa: SPECIALTY OFF-HIGHWAY VEHICLES – This amends existing law relating to all-terrain vehicles, utility type vehicles, specialty off-highway vehicles or motorbikes to revise provisions relating to certain operators of all-terrain vehicles, utility type vehicles, specialty off-highway vehicles or motorbikes on certain roads, to provide that certain unlicensed operators on national forest roads must have completed a safety course, to provide that a certificate or proof of completion shall be in the possession of the unlicensed operator and shall be provided for inspection upon request. This came about as a result of Forest Service action to close roads to ATV use because of concern for the safety of children under the age of 16 operating ATVs.

SCR105: WILD LANDS – This urges the Secretary of Interior to abandon the "Wild Lands" wilderness re-inventory and request the United States Congress to honor the longstanding commitment to multiple use management of public lands in Idaho and the western United States....

And some legislation that did not:

H242aa: EMINENT DOMAIN – This would have amended existing law to provide that eminent domain shall not be used for trails, bike paths, walking paths, greenways, or other alternate or limited use transportation corridors, except where bike lanes, bike paths, sidewalks, walking paths, greenways or other alternate or limited use corridors are adjoining or adjacent to highways, roads, streets, permitted bridges, toll roads, byroads, plank and turnpike roads. This passed the House but was held in the Senate Local Government Committee.

H268: EMINENT DOMAIN – This would have amended existing law relating to eminent domain to provide that certain entities exercising the right of eminent domain in behalf of certain public uses shall demonstrate that such use materially serves the interests of the citizens of Idaho. This bill would have applied to a private company trying to use eminent domain to build a merchant power transmission line that did not serve the interests of Idaho citizens. It was also held in the Senate State Affairs Committee after passing the House.

Federal agency has some 'splaining to do, lawmaker says

The 2011 state legislative session, in which almost every conversation was dominated by the subject of budget shortfalls, wrapped up today. 43 other states and the District of Columbia face similar difficulties, for a combined shortfall of $112 billion.

The federal budget for the fiscal year starting October 1, 2011 includes a $1.5 trillion deficit. Congress has not even finished the budget for this fiscal year. While all the wrangling is going on in Washington, D.C., agencies are presenting their budget requests for the next fiscal year. In light of the economy and the state of the national debt, it is surprising that not all of these agencies are setting their sights on making do with less. For example, the National Oceanic and Atmospheric Agency (NOAA) has submitted a budget that includes an increase of 15.8% ($700 million) over last year.

Rep. Doc Hastings (4th District of Washington), Chairman of the House Natural Resources Committee issued a statement to the oversight hearing on NOAA’s budget request. “This hearing is very important for my constituents in central Washington—as well as for Americans nationwide. As NOAA comes to testify in support of a sizable budget increase over current funding levels, many of the millions of people that live on the land and coastal areas NOAA regulates are struggling economically.”

He points out that for the past 20 years NOAA has expanded its management responsibilities over listed salmon to include 28 separate populations. NOAA has only finalized a handful of salmon recovery plans while increased lawsuits have taken a “huge bit out of our nation’s economy.”

NOAA has spent more than $150 million since 2001 studying the Steller sea lion which eats endangered salmon. It is suggesting new restriction on fishing in the western Aleutian Islands because of three tagged animals. The impact of these restrictions on the fishing economy of the islands would total up to $61 million per year.

With the 15.8% increase, NOAA will add expensive new satellite programs while cutting funds for existing fishery research vessels that provide data to guide fishery regulations. It also wants to create a new bureaucracy called the NOAA Climate Service which includes plans for a “customer engagement and education division.”

Maybe the federal bureaucracy has “some ‘splaining to do.”

Chairman Hastings' entire statement is below.

STATEMENT BY THE HONORABLE DOC HASTING
CHAIRMAN
HOUSE NATURAL RESOURCES COMMITTEE
WILDLIFE, OCEANS, AND INSULAR AFFAIRS
OVERSIGHT HEARING ON
THE FY2012 BUDGET REQUEST OF THE NATIONAL OCEANIC
AND ATMOSPHERIC ADMINISTRATION (NOAA)
MARCH 31, 2011

This hearing is very important for my constituents in central Washington—as well as for Americans nationwide. As NOAA comes to testify in support of a sizable budget increase over current funding levels, many of the millions of people that live on the land and coastal areas NOAA regulates are struggling economically.

For the past 20 years, NOAA has expanded its management responsibilities over Endangered Species Act-listed salmon to include 28 separate populations, resulting in severe economic impacts on vast portions of Washington, Oregon, Idaho and California.

These listings have resulted in policies that require federal approval of literally every human activity involving water and salmon. Over the past decade, increased lawsuits against agriculture, irrigation, forestry, transportation, operators of clean hydropower-producing dams, and other development, have taken a huge bite out of our nation’s economy. These lawsuits have even blocked efforts to stop sea lions from eating more and more endangered salmon.

Despite several recent years of record and near-record salmon returns, not one population of salmon has been removed from the ESA list. NOAA has finalized only a handful of salmon recovery plans. NOAA has even suggested in a recent decision that more ESA-listed salmon species will be needed to feed another listed species under its jurisdiction—the orca whale.

President Obama, in his State of the Union address, referred to the duplicative federal endangered salmon management in the ocean and in rivers as an example of how the government needs to be more efficient and competent. I agree the federal government can and must be more efficient in these areas. Unfortunately, this latest NOAA budget request falls far short.

This budget request represents an increase of more than $700 million over current funding levels—a 15.8% increase—largely for expensive new satellite programs and to create a whole new bureaucracy—the NOAA Climate Service, including plans for a “customer engagement and education division.”

In exchange for that huge increase, NOAA seeks to ramp up law enforcement against fishermen in the midst of recent media reports that NOAA officials shredded documents, imposed unjustified fines and shut down fisheries.

NOAA also seeks a $37 million increase for a “national catch share program” –in the process moving money out of a more productive cooperative research program. While I understand the need to fund existing catch share programs, I am concerned that the Administration seems intent on imposing catch shares in fisheries where they are not wanted.

I am concerned with adequacy of NOAA’s data collection activities. This budget request significantly cuts ship time from fishery research vessels and heightens concerns about whether NOAA will have reliable science to guide its fishery regulations.

This data concern is particularly apparent in the science used by the agency to regulate activities—like ocean-based fishing—that might affect listed species.

Even though NOAA has spent more than $150 million since 2001 for Steller sea lion research, significant questions remain unanswered. This is especially true in the western Aleutian Islands where NOAA-imposed restrictions could result in up to $61 million in losses per year based on the actions of only three tagged animals. Such decisions made without adequate scientific information are unacceptable.

NOAA also seeks new funds to implement the controversial Coastal and Marine Spatial Planning initiative and National Ocean Council activities, which is constructed to lead to sweeping new regulations on coastal and inland waterway across the nation. I am troubled that these executive branch actions are moving forward without Congressional or statutory approval.

In the coming months, I look forward to a robust oversight of NOAA’s programs and activities to ensure that species, coastal area—and American jobs—are protected for generations to come, and that NOAA decisions are based on sound science and only move forward under proper statutory authority.

Right to Farm bill seeks to counter conflicts arising from urbanization in rural areas

The Senate Agricultural Affairs Committee heard testimony on H210, the Right to Farm bill on Tuesday, March 22. Roger Batt, representing several agricultural groups, opened with testimony on the importance of agriculture to the state. For every dollar that is generated by agriculture, $6 circulates through the community. Twenty percent of Idaho’s total workforce is related to agriculture.

Batt noted that farming operations need to expand if they are going to compete in global markets; however there has been dramatic growth in urbanization in the last few years. Canyon County has lost 25% of its ag land to urbanization between 2000 and 2007. The intent of this bill is to reduce the loss to the state of its agricultural resources.

H 210 is the result of thorough study of 50 right-to-farm statutes. Idaho’s current statute defines agriculture operations broadly and says that no city, county or taxing district can limit the right to farm. It does not, however, protect farming operations from nuisance lawsuits. This new law has been declared constitutional by the Idaho Attorney General’s office and does not deny local governments' ability to grant or deny a permit.

Expansions of farming operations are allowed if they follow applicable laws and the existing operation has been in place for one year. This legislation is not a CAFO or dairy bill and it does not protect a farmer from a lawsuit based on negligence.

Dan Steenson, the attorney who researched and helped draft the legislation went through each section of it and explained how it differed from current law and what it contained line by line.

Ben Otto, representing the Idaho Conservation League, raised concerns about the proposed legislation. ICL is concerned about expansion. Otto used the example of a retiree living on five acres the he has turned into a wildlife refuge. Then a cheese factory expands and becomes very loud. This bill would take away a right of action against an agricultural operation that expands and becomes a nuisance to the residents who were already living there.

Another person testified against the bill, citing a feedlot operation that she said had been out of compliance for 14 years and no one has done anything about the violations.

Individual farmers and representatives of agriculture groups testified in favor of the legislation.

After several questions from the committee members, the bill was sent to the Senate floor with a do-pass recommendation by a party line vote of six to two.

Conservation Fund Raises Ire of Lawmakers

El Paso Western Pipeline Group president Jim Cleary presented to a joint session of the Senate Resources and Environment and House Resources and Conservation committees this week on a multi-million dollar conservation fund established to mitigate environmental impacts from the Ruby Pipeline. The project is a $3.5 billion, 680-mile buried pipeline that will conduct natural gas through Wyoming, Utah, Nevada and Oregon, serving roughly 4 million homes.

The Sagebrush Habitat Conservation Fund was established to address concerns of environmental groups that sued the company over anticipated impacts to the sage-steppe habitat through which it would be constructed. The fund’s board includes representation from Ruby Pipeline, the Western Watersheds Project – a party in one of the lawsuits against the project – and one independent member.

The fund will support conservation projects in the pipeline’s area of impact (which includes southern Idaho counties). It will also fund the purchase and retirement of grazing permits from willing sellers – a point which has caused a significant amount of anxiety among land users and policy makers throughout the western states impacted by the fund.

Lawmakers were quick to question assertions of the fund’s independence from the conservation groups who were a party to the settlement. The fund’s current president and executive director, Debra Ellers, negotiated the terms of the settlement of behalf of the environmental groups suing over the pipeline project and represents the Western Watershed Project’s interests.

There was also considerable consternation over what could be seen as a precedent for paying what lawmakers called “blood money” to appease environmental groups.

“You have set a template for a group that has as its mission to remove livestock from public lands,” said Senator Siddoway, a sheep rancher from eastern Idaho. “How is removing livestock going to alleviate the scars from construction on this project?”

“Traditionally, multiple land users stick together,” added Representative Bedke, “now we’re left with one of those multiple users setting the terms for the rest of us.”
Cleary disagreed that a precedent had been set.

“Typically such settlements involve writing a check to the organization bringing the suit,” he said. “We set up a fund with conservation at its center, but that funds projects aimed at conservation. Our mission is very different from that of Western Watersheds.” He gave lawmakers his word that no one would be coerced into selling grazing permits.

Irrigation bills come before Senate committee

Wednesday this week, the Senate Resources & Environment Committee examined several pieces of legislation dealing with irrigation issues. H136 made changes to existing processes in order to increase efficiency for the Idaho Department of Water Resources (IDWR) and the irrigation districts. The bill proposed that when a water master is re-appointed in consecutive years, he does not have to re-take the oath each time which saves time and money for IDWR and the districts which don’t have to process identical paperwork every year. In addition, the bill allows the appointment of a water master without the requirement of a written petition; allows districts to present yearly budgets 14 days before their annual meetings and to submit only the final approved budget to IDWR. In addition, districts that have budgets of $7500 or less are allowed to have the water master also serve as the treasurer.

The committee sent the bill to the Senate floor with a do-pass recommendation.

H 137a dealing with channel alterations brought more questions from the committee. The legislation allows work by districts to repair diversions and keep water flowing to begin without a permit from the county. According to IDWR rules (which are 36 pages long), cleaning, maintaining, and clearing debris does not require a permit. This exemption has not been recognized in Blaine County which requires a separate permit process without any exemption for cleaning & maintenance type work. It can take 1-3 months to get such a permit from the county commissioners. This puts a burden in the way of water delivery. Recognizing the exemption for cleaning, maintaining and clearing debris does not wipe out the existing city and county permit system that requires permits for substantial work in streams.

According the Tom Bowman, Blaine County Commissioner, the county requires permits for substantial work that has an impact on the flood plain and threatens flood insurance. Blaine County does not see a need for this legislation and are concerned when routine maintenance turns in to substantial work that abuses the permit.

The legislation as amended is opposed by the Idaho Association of Counties (IAC) which agrees that removing debris and routine maintenance does not need a permit but constructing or using equipment in the water which could cause a possible loss of flood insurance under FEMA rules requires a permit.

The dispute seems to have been caused by work that was supposed to be routine rebuilding of a diversion and cleaning debris but did extensive modifications using heavy equipment in the stream and altered the flow of the stream. The committee voted 5-4 to hold the bill for one week to allow the parties to negotiate a compromise.

Ag Affairs addresses "rock snot" and other invasive species

Senator Corder presented SCR101 to the House Committee on Agricultural affairs. The resolution highlights the threat of aquatic nuisance species to Idaho’s lakes and streams. Senator Corder specifically pointed out the threat of an invasive algae, Didymo, otherwise known as “rock snot,” which has decimated prized salmon spawning areas in New Zealand, and has recently been found in Priest River, likely from the contaminated felt soles of waders commonly worn by fly fishermen.

Senator Corder noted that herbicides are ineffective because of the lack of ability to maintain contact with the species in moving water.

“The best solution is to keep an invasive species from being introduced,” he said.
Amy Ferriter, ISDA. Invasive Species. Coordinator, gave the committee an update on efforts to stave off invasive species in Idaho waters such as quagga and zebra mussels.

Before January 2007, these organisms were not in the western United States. Now they’re in Lake Mead. Anything touching the water, including infrastructure in Hoover Dam, Parker Dam and Davis Dam, are covered shortly after immersion. Divers have to chip the organisms off on a regular basis.

This year is a bumper crop of quagga muscles at Lake Mead, Ferriter says. Boat owners are beginning to lift their boats out of the water for storage. Western states including Washington, Oregon, Wyoming, Idaho and Montana are still quagga free. Idaho set a trend in initiating sticker fees. Oregon and Wyoming are following our lead. Oregon is not allowed to do mandatory inspection stops, all of their inspection stations at boat ramps are voluntary. Our stops are roadside. Oregon does more expensive boat launch inspections. Washington has mandatory roadside blitzes as funding is available. The passport program has helped expedite boaters through the inspection stations.

Questionnaires show that every state except Delaware has sent boats to Idaho.
The large, moored boats that leave the state for the winter are the highest risk boats. Ferriter’s office is working with the department of transportation and training the port of entry inspectors.

House Ag looks at privacy for dairy farmers

The House Agriculture Affairs Committee on Thursday passed HB269, which will provide the
same private information protection to dairies nutrient management programs that the beef industry has been granted. Representative Boyle noted that such information may have very little to do with a violation of rule or law, but may contain proprietary information.

Testifying on behalf of the bill were Roger Batt of Food Producers of Idaho, and Brent Olmstead of the Milk Producers of Idaho, pointing out that last year's testimony on behalf of a similar bill relating to the beef industry applies here. Information such as how a dairy farmer manages his fields, tests his product and transports waste is proprietary information, similar to a business plan, with information that could give a competitive advantage to one dairy over another. Wally Butler, range and livestock specialist for the Farm Bureau Federation, also voiced his organization's support for the bill.

Idaho Conservation League's Courtney Washburn said her organization opposed last year's cattle bill as well as this one, in what she said is interest in protecting public health and the environment.

"I’m not convinced nutrient management plans are trade secrets," she said.

When Washburn was questioned further by committee members about similar legislation that affords Micron exemptions to the public records law, she noted that ICL had the same opposition in the case of that legislation.

ICARE's Alma Hasse noted that two bills were not similar, however.

"Cow chips and micro chips are two completely different things," she said. "Any time that an industry feels the need to make every aspect of it’s industry proprietary, especially when it’s cow dung, I don’t see how it helps the public, especially rural communities that are battling water and air quality issues."

Hasse noted that her organization conducted an audit that showed approximately a third of the time a dairy is in noncompliance, it is not listed as such but revealed to be so by inspectors' notations. Such notations would be considered proprietary under the new law.

"If you want the public to know what’s going on in these sites, then this is a bad bill," she said.

John Foster representing the Idaho Press Club expressed his opposition to the bill, but only reluctantly, noting that this bill in particular has come up too quickly for them to have the opportunity to work with the industry to accomplish their objectives but still allow access to information.

"The Press Club likes to position itself as an organization that utilizes the public records law," he said, "The assumption is that the persons making the request and those fulfilling the request are both fulfilling the common good ... We just wanted a seat at the table to help avoid anything inadvertent."

House Energy, Environment and Technology looks at the impacts of tax incentives for wind projects

The impact of Idaho tax incentives for renewable energy projects was the focus of presentations to the House Environment, Energy and Technology Committee this week.

A study from the Boise State University Center for Business and Economic Research was commissioned by a consortium of alternative energy producers. Another presentation from John Church of Idaho Economics followed, focusing on Exergy Development Group, developer of wind projects in Idaho.

The first study utilized data collected from projects of various sizes and from different locations combined and averaged into representative projects representing a 160 MW wind project and a low impact hydro project of 2.5 MW. The study included costs of permitting, construction and operations, as well as how much of the expenditures were local, and projected revenues over the life span of the project. Also considered were the types of jobs created when energy projects come into the state, the corresponding increases in income and expenditures. The study focused particularly on the impacts in rural areas.

Not surprisingly, much of the costs of renewable projects come from the construction phase. The representative wind company generated 380 jobs annually, with $36.7 million in labor income during the construction period. In the operations phase, the total fell to 94 jobs annually for the life of the project and $3.6 million in annual labor income.

The low head hydro project, in contrast, generated 92 jobs during the construction period with a labor income of $3.3 million. The operations phase represented one employee annually, with $50,000 in annual labor income.

The study concluded that Idaho’s tax exemptions and rebates for renewable energy projects have been successful in bringing more such projects to Idaho and have a net positive impact. But a prevailing question throughout the presentations dealt with the impact to the consumer when utility rates go up as a result of buying energy from these projects. Neither study took this factor into account. Committee members also questioned new job figures, some of which may represent workers brought in from other states to function in specialized fields, although they also represent a share of the consumer spending realized by communities in which such projects were sited.

Representative Anderson questioned the value of the incentives, is a 6% sales tax rebate truly what motivates such projects to locate here? Analysts noted that Idaho’s population centers and transmission capabilities typically factor into such decisions.

Idaho’s alternative energy projects have grown from 75 to 400 MW since 2006, and there does not appear to be a decline in new projects. Given what he describes as this “explosion of wind energy in the state,” Representative Simpson asked when we stop incentivizing such projects. Experts assert that developers are aware that this rebate is scheduled to sunset in 2012, and are continuing to locate in Idaho, based upon the assumption that the rebate will be extended.

But what of existing public utilities’ need to pick up the slack when the wind doesn’t blow, Chairman Raybould asked, perhaps rhetorically, pointing out traditional utility's ineligibility for tax incentives when they back up wind projects.

Dr. John Church's presentation focused on economic and fiscal impacts to the state from the perspective of Exergy Development's construction and operation of 300 MW of wind energy in Idaho.

Over a 2 year period, this project would create an additional 650 jobs throughout the state, including specialized workers from outside Idaho. Post construction, the jobs from wind projects shrink dramatically, representing another 125 in ongoing jobs in rural Idaho over a lifetime of 25 years.

This study also evaluated the net effect on state income for each $1 increase in personal income. Income to the state can be realized in sales tax, some in vehicle license fees, registration taxes and product taxes. The additional jobs represented by Exergy projects total $120 million in additional tax revenues from all sources.

Exergy also pays property owners a royalty for placement on their lands. A farmer with ten windmills would realize $60k per year.

Representative Simpson reiterated the prevailing concern about the impact of these projects on utility rates.

“I’m looking at the increased cost for the rate payers,” he said of the rebate. “They hurt everyone, and the end result is we’re paying more for utilities. There should be no net negative over the lifetime of the project to the rate payer . . . most of these projects aren’t base load projects, but intermittent projects, and they’re very costly. “

“I’m not advocating for this as the end-all for energy supply,” Dr. Church said, responding to Representative Simpson's comment and others about the intermittent nature of wind energy and the costs to the consumer.

“It (wind energy) may have some characteristics that are somewhat variable, as others are variable,” he said. “It is one piece of an ideal portfolio, the combination of wind and hydro. There are some synergies that could work very well together. These two are not incompatible in any stretch of the imagination.”

But for Representative Anderson, the question came back to whether or not tax incentives for such projects should continue, although this committee is focused on the energy supply in Idaho and it will be the job of the Revenue and Taxation Committee to deal with the issue of extending tax incentives.

“I’m not convinced with any of these studies that the rebate is the deciding factor,” Representative Anderson said. “I’m not there with whether or not to extend this rebate.”