Pooling–the New Default in West Virginia?

Forced pooling—or compulsory pooling—is common practice in states with significant oil and gas development.  Forced pooling allows for adjacent parcels of land to be developed as one large unit so long as a majority of the lessors and surface owners agree to such development. Generally, pooling or unitization grants an operator access to hundreds of acres of oil and gas from one surface site.  From a production standpoint, this approach is considered efficient and practical; instead of drilling multiple wells, operators can take advantage of the latest technology and stretch long “laterals” underneath adjacent parcels of varying acreage.  The accounting is fairly simple—royalties are usually divided among the lessors according to their share in the acreage of the entire unit or provided for in an agreement between the owners.

Usually, pooling is provided for in a modern oil and gas lease. The pooling and unitization clause will either expressly grant or deny this method of development. In West Virginia, older leases that are currently held by traditional production or leases from forms that simply omitted the relevant language must be individually amended to expressly allow for pooling before the lease can be included in a unit.

On January 25, 2016, Senators Boso, Ferns and Maynard introduced Senate Bill 383 to the West Virginia Legislature. The stated purpose of the bill is to “promote efficient extraction of oil and gas resources and to prevent waste by authorizing the development of horizontal drilling of multiple adjacent leases held by the same operator.” The operative language to be added to §22-6-31 of the Code of West Virginia is as follows: “Where an operator has the right to develop multiple contiguous oil and gas leases separately, the operator may develop these leases jointly by horizontal drilling unless the development is expressly prohibited by the terms of the lease.” While this language is not representative of forced pooling in the classic sense, it creates a new default rule for oil and gas leases in the state: absent an express prohibition of pooling, an operator may pool contiguous properties so long as it holds leases to those properties.

The argument over the proposed language rests almost entirely on mineral interest owners’ negotiating power. There are thousands of acres’ worth of leases that are held by production from as early as the turn of the twentieth century. The clause “so long as [oil or gas] is produced in paying quantities” can actually stretch that many decades. When the Marcellus boom hit, these mineral owners’ only advantage in negotiation was granting permission for pooling and unitization. Otherwise, they received no bonuses and had no other terms re-worked from centuries-old leases while their neighbors received payments for as much as $5,000/acre up-front and up to 18% royalty interest.

From the industry perspective, pooling as the default rule would remove virtually all legal barriers between holding a group of leases and production. Other proponents of forced pooling involve the fugacious nature of natural gas and the rule of capture. If a mineral owner refuses to consent to unitization, and the operator forms a unit clear up to and surrounding that non-consenting owner’s property lines, the developer is likely extracting oil and gas from underneath the non-consenting owner’s land, but that mineral owner receives no royalties for it. While precaution may be taken to avoid such unauthorized extraction, natural gas does not respect property lines and will flow from wherever it rests towards the path of least resistance.

It is important to note that a default pooling rule is not the only way developers and lessors can achieve a unit, but it would be a far simpler one than what currently exists on the books. W.Va. Code § 22C-9-7(b) provides that in the event a cotenant refuses to consent to pooling, the consenting interest owners can appeal to the Oil and Gas Conservation Commission and request a pooling order. Such an order, if issued, provides the non-consenting owners the option to be bought out by the other interest owners or to participate in the drilling on a limited basis.

SOURCE: Andrew Brown, “Without forced-pooling law, WV gas industry sues landowners to gain access,” Charleston Gazette-Mail, June 21, 2015.

SOURCE: Andrew Brown, “Without forced-pooling law, WV gas industry sues landowners to gain access,” Charleston Gazette-Mail, June 21, 2015. http://www.wvgazettemail.com/article/20150621/GZ01/150629922/


How Clean are Wind Turbines?

When it comes to renewable energy, I’m a big fan. But implementing a workable, and efficient system is no breeze. I’m running against the wind when I say turbines are harmful, but I’m not blowing smoke when I say that there are environmental dangers. We just have to keep in mind, that you can’t just throw caution to the wind.

Anyways, wind is the solution to all of our problems; those majestic turbines that dress our hillsides that produce electricity by harnessing the power of something as pure as the wind. We have come to know wind as a clean solution to fossil fuel energy, but how accurate is it? Carbon dioxide emissions are the specter that looms over the production of all electricity. With all of us thinking about our carbon footprint, it is easy to turn to a solution like giant fans making our lights turn on. But is it clean?

On April 6, 2015, ABC news ran a story about a toxic lake in Inner Mongolia, China. This lake, 5.5 miles in diameter is made up entirely of black sludge. This toxic concoction is the byproduct of rare earth mining. Rare earth minerals have one of their highest concentrations in this region, and the mining for these minerals has never been more lucrative. There has been a recent boom in the mining for these rare earth minerals, causing the drainage hoses to pump more and more of this toxic sludge into the water table. This recent boom is the production of wind turbines.

From miles away, wind turbines look like nothing more than big fans that spin at slow speeds. But when you look under the hood into the housing behind the router, you’ll find a magnet. This magnet is the catalyst for electricity production and it is made from a mineral called neodymium, a rare earth mineral that is mined in Inner Mongolia. “But magnets are everywhere . . .” you may say. And you would be correct. However, with the recent push for wind farming, turbines have become one of the largest uses for these magnets in the world. According to the Bulletin of Atomic Sciences, a 2 megawatt wind turbine contains about 800 pounds of neodymium.   By the Institute for the Analysis of Global Security’s count, the United States added a record of 13,131 megawatts of generating capacity in 2012, putting the neodymium count up to 6.1 million pounds.   Mining one ton of this rare earth mineral produces about one ton of hazardous, toxic waste.

For those unfortunate enough to live close enough to this 5.5 mile wide lake, the outlook is bleak. The rates of cancer, osteoporosis, skin and respiratory diseases are abnormally high for the region. Residents recall losing hair at abnormally young ages, their teeth beginning to fall out. The lake’s radiation levels are ten times higher than the countryside surrounding it. Ironically, America’s nuclear industry only produces between 4.4 and 5 million pounds of spent nuclear fuel each year. Nuclear energy has fallen to disfavor because of its potential for cataclysmic disasters. With wind energy, are we systematically endorsing another?



  1. http://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-cost-Britains-clean-green-wind-power-experiment-Pollution-disastrous-scale.html
  2. http://abcnews.go.com/Technology/toxic-lake-black-sludge-result-mining-create-tech/story?id=30122911
  3. http://www.nei.org/Knowledge-Center/Nuclear-Statistics/On-Site-Storage-of-Nuclear-Waste
  4. http://instituteforenergyresearch.org/analysis/big-winds-dirty-little-secret-rare-earth-minerals/


Wind Energy Lease Basics: A Comparison Between Wind and Natural Gas Leases

Understandably, renewable energy sources have become a point of emphasis in our modern world.  Several renewables, in particular wind and solar, have been at the heart of the evolving discussion on replacing oil dependence in the coming decades.  Natural Gas has also emerged as a much cleaner burning, somewhat abundant alternative to petroleum.   Several of our law school classes focus on the oil and gas legal field, and they are often honed in on the legal aspects involved in the leasing transaction.   All of this got me thinking, what about wind farm leasing?  So many of us know the general terms involved in an oil and gas lease, but very few of us know what a wind farm lease entails.  In short, I thought a discussion comparing the two types of leases in some fashion would be an informative and interesting way to use my blog post and subsequent presentation.

When we are discussing oil and gas leases, we often begin with the primary and secondary term clauses.  They tend to be somewhere between five and ten years.  In the sphere of wind energy, this is nowhere near the case.  A lease for a wind farm tends to be much, much longer.  Most of the literature tends to agree that lease terms are between twenty and forty years.  Also, the wind energy lease examples obtainable on the net usually do not mention any kind of secondary term which would be comparable to a natural gas lease.  Instead, wind energy leases, if they include anything about a subsequent term, tend to contain a discretionary renewal provision in favor of the lessee.  Often, these provisions simply extend the lease for a term identical to the initial life of the lease in favor of the lessee.  So, in theory, a wind energy company could hold their lease for up to eighty years if their lease provided for such.

Natural gas and wind leases also require descriptions of the land to be used.  The natural gas companies often try to lease the entirety of a landowner’s land.  However, in the wind energy industry, the companies only require a certain amount of land to build a wind farm.  While the leases still tend to cover large swaths of land, landowners seldom wish to lease their entire property for wind energy development.  This landowner interest competes with the wind energy corporation’s interest in obtaining as much land as possible.  Wind farms must be large to generate enough power to be economically feasible.  So, as you can imagine, companies often try to tie up as much land as possible and tend to use much less land than they lease.  So, in summation, wind companies will typically lease as substantial a portion of the landowner’s acreage as they can in furtherance of wind energy development without leasing the entire property .

Finally, the payment clauses in natural gas and wind energy leases, although using similar general terms, tend to differ substantially.  Natural gas leases usually give initial bonus payments to landowners on a per acre basis.  Those same leases often involve rental payments and royalty payments.  Wind energy leases actually involve many of the same elements operating in substantially different ways.  They tend to pay landowners on a per acre basis at a substantially lower rate than do natural gas leases.  While natural gas leases can pay anywhere between $2,500 and $7,500 an acre and beyond, wind energy leases can be as low as two dollars an acre.  However, in regard to wind energy leases, the payment per acre can fluctuate.  Typically, companies will compensate for the increases and decreases by paying landowners in phases instead of a steady rate.  The example lease I observed used five year increments and the price fluctuated according to the consumer price index.  Thus, although the payment provisions share similar qualities, they also differ in many regards.

To briefly conclude, the two types of leases have similar general provisions.  However, the operational specifics of the provisions were quite dissimilar, showing that wind energy leases, although seldom considered, have their own important and unique quarks.








Rudolf Diesel

Rudolf Diesel ran his first engine, a single 10 foot cylinder with a flywheel at its base, for the first time in 1893.  The engine was fueled by peanut oil.  “The use of vegetable oils for engine fuels may seem insignificant today,” said Diesel, “but such oils may become, in the course of time, as important as petroleum and the coal-tar products of the present time.”


Design of Diesel’s first engine

Today, biodiesel can refer to a fuel product created from any number of diverse “feed stocks.”  It is produced through a process called transesterification in which glycerin is separated from the fat or vegetable “feed stock” leaving behind glycerin and methyl esters-otherwise known as biodiesel.  Common “feedstocks” are rapeseed and soybean oil, waste vegetable oil, animal fats, algae, and even sewage sludge.  Because biodiesel can be born from a multitude of sources, the exact specifications of the fuel have been defined by the ASTM.

ASTM International is one of the largest voluntary standards development organizations and sets technical standards for materials, products, systems, and services.  Using the standard set by the organization, biodiesel can be specifically defined as a fuel comprised on mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, designated B100, and meeting the requirements of ASTM D6751.  When a biodiesel blend meets these standards it is able to be run in unmodified diesel engines in the USA and Canada.

Although many believe that an engine conversion of some kind is necessary to run an existing diesel engine on biodiesel fuel, biodiesel that conforms to the ASTM D6751 requirements is meant to be used in standard diesel engines.  Additionally, biodiesel can be blended with traditional diesel fuel, these blends are designated by Bxx where xx becomes the percentage of biodiesel used in the blend (B100, B20, etc.).

Being derived from plant and animal sources makes biodiesel a renewable fuel, but it also makes it a cleaner-burning diesel replacement.  A standard diesel engine running on biodiesel emits 67% less unburned hydro carbons than the same engine running on traditional diesel fuel.  Additionally, biodiesel reduces Carbon Monoxide emissions by 48% and reduces particulate matter emissions by 47%.  Biodiesel is the only alternative fuel to have fully completed the health effects testing requirements of the Clean Air Act.

Biodiesel Cycle

Biodiesel operates in what is called a “closed carbon cycle” because the carbon dioxide released into the atmosphere by burning biodiesel is recycled by growing plants which can later be used to produce the fuel.

Biodiesel is cleaner than traditional diesel, renewable, and able to be used in existing diesel engines, yet, although its production is growing, remains a far less popular alternative to petroleum based diesel.  With current technology and “feedstock” options, producing enough biodiesel to meet traditional diesel demands is not possible.  Already as production of biodiesel has increased, new environmental concerns, like deforestation to create fields to grow “feedstock” have arisen.  Still, even used in smaller percentages, biodiesel offers many benefits over traditional diesel fuel as it is clean, renewable and domestic.


Sources and Additional Reading:

ASTM International www.astm.org

Environmental Protection Agency www.epa.gov

National Biodiesel Board www.biodiesel.org

Sustainable Biodiesel Alliance sustainablebiodieselallicance.com

The Waymart Wind Farm

I live less than 15 minutes from one of Pennsylvania’s largest wind farms, the Waymart Wind Farm, located in the Northeast corner of Pennsylvania in Wayne County. Every time I would drive by it with my grandfather in the car, and he would see the windmill blades turning, he would say that it was making him money in Florida. I asked him what he meant by this, and would tell me that it had something to do with a Florida company that owned the windmills. My grandpa, who is very active in the stock market, and lives in Florida 9 months out of the year, apparently owns stock in this energy company in Florida. This sparked my interest in learning more about this company.



The Waymart Wind Farm began operation in 2003. It has 43 1.5-megawatt GE turbines, which are each 213 feet tall, making it a 64.5-megawatt wind generation plant. It is capable of generating enough electricity to power more than 21,000 homes. The wind farm is owned and operated by a Florida company called NextEra Energy Resources (formerly known as Florida Power and Light Energy Services). The energy produced at the Waymart Wind Farm is then purchased by a company called Exelon generation and is then distributed in the Mid-Atlantic region, which includes Pennsylvania.

Updated January 1, 2015 http://www.nexteraenergyresources.com/images_redesign/chart_portfolio.jpg

Updated January 1, 2015

Because I found it strange that a company like NextEra Energy Resources would have this kind of presence in Pennsylvania, I dug a little deeper into the company. They are a subsidiary of NextEra Energy, which is headquartered in Florida. NextEra Energy Resources is very involved in clean energy, and are actually the largest generator of wind and solar power in North America. Just about 95% of their electricity comes from clean and renewable sources, with 58% of it coming from wind.




NextEra build their wind farms on land owned by other people, meaning they enter into lease agreements with the landowners, typically farmers and ranchers. They do this so that the land can still be used as it was before the windmill was built. This is true at the Waymart Wind Farm as well. In addition to the economic benefit to the landowners, Waymart’s Wind Farm employs a staff of six people to maintain the wind farm.

Although I could not find out whether this was true for the Waymart Wind Farm, it is typical during the construction of wind farms to hire local contractors, laborers, and drivers to help complete the project.

So although my grandfather has indeed benefited by owning stock in NextEra Energy Resources, my local community has also been benefiting as well.


Waymart Wind Energy Center Fact Sheet, NextEra Energy Resources http://www.nexteraenergyresources.com/pdf_redesign/waymart.pdf (last visited April 14, 2015).

Wind Farms in Pennsylvania, Pennsylvania Wind Working Group, http://www.pawindenergynow.org/pa/farms.html (last visited April 14, 2015).

FPL Energy is Now NextEra Energy Resources, http://www.renewableenergyworld.com/rea/news/article/2009/01/fpl-energy-is-now-nextera-energy-resources-54451 (last visited April 14, 2015).

Delivering For You, NextEra Energy Resources, http://www.nexteraenergyresources.com/pdf_redesign/NatLeaderWind.pdf (last visited April 14, 2015).

NextEra Energy Resources – Who We Are, NextEra Energy Resources, http://www.nexteraenergyresources.com/who/index.shtml (last visited April 14, 2015).

Denise Allabaugh, In What Could be the State’s Largest Wind Farm, Protest and Promise Emerge, The Scranton Times-Tribune, July 31, 2011, available at http://thetimes-tribune.com/news/in-what-could-be-the-state-s-largest-wind-farm-protest-and-promise-emerge-1.1182019

Renewable Resources: An argument for concentrating on Invention and Innovation

The American Public debate on the need to find sustainable, climate friendly, consistent, domestically produced renewable energy is all but concluded.

Due to national (physical and financial) security needs (which are becoming more intertwined with each passing year), no logical individual can deny the need for a “homegrown” solution to U.S. energy needs.  Coupled with the still controversial climate change argument, the need for an energy shift should be viewed as a national priority.

However, given that there are decades worth of fossil fuels domestically available, over-committing federal funding to wind, solar, geothermal, and other currently available renewable energy sources may not be the best answer.

That may sound counter-argumentative, but hear me out.  The biggest complaints about our current sources of renewable energy are that they are expensive to implement (a lot of up front capital is required to build the facilities), that many have unpredictable energy production, that the ideal locations of generation are far from the end user (expensive transmission costs), and many have a low yield of production. (fn 1).

The traditional U.S. policy on energy is to let the market drive production and price. (fn 2). However, due to renewable costs, the federal government has used tax incentives and subsidies to assist the “adoption” of certain renewable resources.(fn 3).

This offers two questions.

  1. Why is the market rejecting current renewable resources?
  2. Why is the government pushing renewable resources the market has rejected (an inconsistent approach to historical policy)?

The answer to the first question is quite simply, cost.  If renewable resources were price competitive to implement and sell on their own, government financial intervention would not be required– other regulation to ensure entry into the market isn’t blocked may still be necessary.

The answer to the second question is a bit more complex; however, I would venture to argue that it is derived from the need to show that something is being done to attempt to alleviate the need for energy independence and environmental protection.

Conceding that wind, solar, wave, geothermal, and other renewable energy projects provide real-life experimentation to make the systems better; a wiser use of limited federal money is increasing the funding of research and development of new technology.

One does not have to expend much energy to find intriguing invention and innovation in the energy field.

Some examples include the following:

1) Solar Space Panels: The Japanese Space Agency (JAXA) has an ongoing project to harness solar power from space and wirelessly transmit it back to Earth.  On March 12, 2015, Mitsubishi Heavy Industries, Ltd. (MHI) was able to transmit 10 kilowatts of electricity wirelessly over 500 meters; a small but significant step. (fn 4).


2)Hydrogen Tram:  Chinese company Sifang has built the first hydrogen powered tram.  (fn 5).

3)  Princeton University engineers developed a small chip that uses body movement to generate power. (fn 6).


The current policy to renewable energy sources uses a layered approach to spread the adoption of traditional renewables like solar, wind, and geothermal energy.  While this may provide for some relief, none of the resources have, as of yet, proven to have the capability to be a viable solution for moving off of fossil fuels.  Will the sum of the parts be enough to meet future needs?   That is to be seen.

It is my belief that the answer to the United States’ energy needs is yet to be found.  Invention and innovation are still the driving force for growth.  It is through the federal government’s support of these pursuits that it can best serve the country’s needs; not subsidizing current renewable resources.

The capitalist in me desires to see the market drive this research and development; the nature lover in me desires swift action in order to protect the environment for future generations; and the military veteran in me desires the national security a legitimate substitute to fossil fuels could present.  Although I am not usually in favor of government nationalization of industry, it may be time for the federal government to take a stronger approach in developing a true energy plan; adopting innovation and invention as its cornerstone.

fn 1:  http://web.grinnell.edu/courses/ant/s00/ant154-01/magar/disadv.html

fn 2:    Joseph P. Tomain, Richard D. Dudahy, Energy Law in a Nutshell, pg 105 (2d ed., West 2011).

fn 3  Joseph P. Tomain, Richard D. Dudahy, Energy Law in a Nutshell, pg 513 (2d ed., West 2011).

fn 4:   http://www.alternative-energy-news.info/japan-solar-energy-from-space/

fn 5:  http://www.bloomberg.com/news/articles/2015-03-25/china-s-hydrogen-powered-future-starts-in-trams-not-cars

fn 6:  http://www.alternative-energy-news.info/human-power-is-the-future/.

Finally, After 15 Years, Significant Advances in Solar Technology!!!


Solar power is a renewable energy that is still in its infancy. For nearly two decades, solar power has only moderately improved. Fortunately, we are finally seeing more interest and innovation in this amazing renewable energy.

For the past 15 years, the typical solar panel efficiency has hovered around 25%. What this means is that these solar panels have not even come close to meeting their potential. Scientists are now using numerous methods to make these shinny panels more efficient. One method is to stack different types of solar panels on top of each other to increase efficiency. By stacking different types of solar panels it allows each panel to use different types of processes to produce electricity. One such example, is to stack perovskite and silicon panels in tandem. Perovskite panels are a recently developed panel, created in 2009, and consists of a crystalline material that can achieve a 20% efficiency. They are also relatively low cost to produce. Silicone panels are the most commonly used solar panels around the world and are the familiar black solar panels that dot the landscapes. They achieve a 25% efficiency rate and have a 25 year life span. To produce electricity, perovskite panels use the photons from the visible part of the solar spectrum, whereas silicon panels produce electricity by absorbing photons of visible and infrared light. Scientist are currently working on using the existing silicon panels and retrofitting them by installing a perovskite panel on top of them. This has the potential to make existing solar sites that are 25% efficient, almost 50% efficient. Fortunately, innovations in solar technology are not stopping with stackable panels, other scientists are focusing on creating new types of solar panels altogether.

Transparent solar panels appear to be one of the most promising new types of panel. Unfortunately, they have a very low efficiency rate, currently at 1%, but they have the potential to easily obtain 5%. Although they are very inefficient, they are still in the development stages and the efficiency has the potential to significantly increase. However, even with the low efficiency rate they still have the versatility to be used in a variety of applications. Transparent solar panels could possibly replace the traditional glass panel in any widow. So the windows that we already have, that produce no electricity, could, with very little inconvenience, start producing power. The glass could replace home windows and also replace windows in skyscrapers. Scientist could possibly, with double pain windows, essentially stack the solar panels making windows even more efficient. Additionally, cars could become more efficient by installing transparent solar panels in their sky view roofs. Finally, clear solar panels could be installed in all of our electronics making them that much more efficient. These transparent solar panels could replace the standard screens on electronics making the screens more functional, which could potentially eliminate the need to plug the device into a charger.

Currently, solar energy only accounts for a very small percentage of electricity produced and by no means is solar energy the solution to cure the demand for energy. However, solar energy has the potential to alleviate some of the strain on our electrical grid. Solar energy has the potential to accomplish this by incorporating these new technologies, all without the need to consume any more land and with little to no environmental impact.






Severance Tax on Natural Gas Drilling to Fund Wind Energy Projects

The Pittsburgh Power Source recently reported on an interesting budget proposal by Governor Tom Wolf.  The new budget would rely on natural gas to pay for the funding of energy projects, including projects focused on wind energy.  The governor is proposing a $675 million bond that would help to fund economic development activities.  Approximately one-third of the $675 million bond, or $225 million, will be used to fund a variety of energy projects, including wind energy projects.

In order to fund this budget, Governor Wolf has proposed a five percent tax for the value of natural gas at the wellhead, and a 4.7 cents tax per thousand cubic feet of gas produced.  A portion of the revenues generated from this tax on the natural gas industry would be used to pay for the annual debt service for the bond, which is estimated at $55 million annually.

In Governor Wolf’s proposal, he plans to allot $20 million for the construction of new wind farms.  This investment in wind energy would also support connecting the wind farms that are constructed to the power grid.  There would also be an allocation of $30 million to the Pennsylvania Energy Development Authority.  This agency finances clean and renewable energy projects in the state, which can include the financing of wind energy projects.

There are numerous concerns regarding this proposal.  For instance, Republican leaders in the General Assembly and groups within the oil and gas industry have suggested that the severance tax will result in a cut in the investments made by the oil and gas industry in the state.  The parties that oppose the severance tax also do not believe the tax will generate the $1 billion that the administration suggests that it will in the first full year of the tax.

The Pennsylvania Chamber of Business and Industry has also questioned the fairness of the severance tax.  The concern that has been raised by the Pennsylvania Chamber of Business and Industry is whether it is fair to use the revenue from a tax on natural gas production to support renewable energy projects, including wind and solar energy projects.  Kevin Sunday, who is the chamber’s government affairs manager, is concerned about the expectation of one industry, in this case the natural gas industry, to subsidize its competitors.

The last concern regarding the Governor’s proposal is the success or failure of the various alternative energy programs is directly linked to the success or failure of the natural gas industry in Pennsylvania.  If the natural gas industry is unsustainable in the current market and the oil and gas companies pull out of natural gas production in the state, then the funds to support these alternative energy projects will not be available.


Legere, Laura. (2015, March 10), Wolf’s budget relies on natural gas to fund new energy projects, http://powersource.post-gazette.com/powersource/policy-powersource/2015/03/10/Wolf-budget-relies-on-Marcellus-natural-gas-to-fund-new-energy-projects/stories/201503100010 (last visited April 9, 2015)

Ferral, Katelyn. (2015, March 8), Gov. Wolf’s budget to boost green energy on back of fossil fuels, http://triblive.com/business/headlines/7899220-74/million-energy-budget#axzz3WqOOtdNj (last visited April 9, 2015)

Hydrowpower: Opportunity for Change

Water is a renewable resource.  As such, harnessing its power would seem a clean, affordable way to generate electricity and other power sources to meet the demands of Americans’ ever increasing energy needs.  But the stagnancy of hydropower plants over the past fifty years and the limited prospective growth begs the question:

Just How Green is Hydropower?

While water itself may be renewable, the ecology of rivers is not.  Damming a river can have far-reaching consequences, including manufacturing droughts and floods; destroying the natural habitats of fish and other aquatic wildlife; interfering with local residential, cultural, and agricultural resources; and destabilizing land.  In fact, recent studies focusing on the effects of damming for hydropower plants in Brazil have produced startling statistics.  In addition to the negative outcomes listed above, the resulting deforestation in the rain forests of Brazil has begun to produce drowned forests researchers have termed “methane factories.”

Though hydropower has been touted as a cleaner alternative to the burning of coal, and less damaging than the extraction of coal or natural gas, environmental groups and those concerned with the responsible use of hydropower explain that drowned forests have contributed as much as 10% of all man-made methane through a process known as ebullition.  When bacteria begin to break down the submerged organic matter of a drowned forest—an area created by the man-made reservoirs of a hydropower plant—methane is released in bubbles, which rise to the surface of the reservoir and release the methane into the air when they burst.

Opportunity to Reform

Construction on the majority of dams and hydropower plants in the United States was completed in the 1960s, before the passage of environmental laws requiring impact studies.  Thus, the damage done from artificially rerouting rivers has been allowed to run its course virtually unchecked since then.  The operating licenses granted by the Federal Energy Regulatory Commission (FERC) typically last fifty years, however, and the majority of these licenses are expiring now.   With FERC now requiring environmental impact studies for license renewal, and with the passage of the Hydropower Regulatory Efficiency Act of 2013, which makes licensing requirements easier on smaller, less destructive facilities, hydropower plants have the opportunity to begin managing, if not rectifying, their environmental impact.

Organizations such as the Low Impact Hydropower Institute, the Union of Concerned Scientists, and the National Resource Defense Counsel, offer certification for facilities instituting some of these reforms.  Facilities planning for the protection of several factors, including threatened and endangered species protection, cultural resource protection, fish passage and protection, river flow and water quality, and watershed protection can qualify for these certifications, making themselves more attractive to consumers and possibly eligible for tax write offs.  Conversions to a lower impact plant involve timing power generation to mimic a river’s natural flow, providing safe passage for fish, and updating older turbines for greater efficiency.  According to recent FERC study, such changes resulted in 1.6% loss in power generation, analogous to scrubbers at a coal fueled power plant, while drastically reducing the facility’s environmental impact.

Holtwood Power Plant

One power plant that has successfully instituted such changes is the Holtwood Power Plant, which has been generating electricity since 1910, using the power of the water held back by a 55-foot-high dam across the Susquehanna River between Lancaster and York counties.  In 2013, Holtwood completed a 125-megawatt powerhouse expansion, achieving both LIHI Certification and the National Hydropower Association’s Outstanding Stewards of America’s Water award in the process.

During the expansion, Holtwood developed a Bald Eagle Protection Plan and a Historic Properties Management Plan, and considered the health, safety, and welfare of visitors as well as shoreline protection.  The effects of these plans and consideration feature a protected area rich in recreation and cultural resources for local residents, a fish lift to protect and ensure the passage of indigenous fish, and minimized impact to the existing river ecology.

Because the majority of land suitable for hydropower development has already either been used or protected by environmental groups, the possibility of new hydropower plants seems unlikely.  But as Holtwood shows, the hydropower industry can still develop and grow by improving existing facilities in responsible, environmentally considerate ways.

Sources and additional reading:













The State of Solar: A Sunny Outlook Despite the Approaching ITC Expiration


The Big Picture

The global demand for renewable energy has steadily grown over the course of the last decade, shifting the world’s focus from fossil fuels to cleaner sources of energy such as wind, hydroelectric, and solar. With the practical and environmental drawbacks of wind and hydroelectric power, solar has been touted as the future of green energy. However, the looming expiration of the federal Investment Tax Credit (ITC) has caused many to wonder what the future of solar energy may actually look like.

It is safe to say that in the last fifteen years, the solar industry has exploded. Solar power is typically supplied through photovoltaic (PV) cells, a system that utilizes solar panels composed of various solar cells to convert sunlight into electricity. In 2000, the US saw 4 PV installations across the residential, non-residential, and utility sectors. In 2014, this number grew to 6,476, marking an overall PV installation increase of 1,619% with an average compound annual growth rate of 76%. This spike in solar installations is increasingly occurring in the residential sector, with 2014 marking the first time in decades that the commercial market was surpassed by the residential market.

The comprehensive growth in solar power can be largely attributed to federal- (ITC) and state-level incentive programs. Implemented in 2006, the ITC is a 30% federal tax credit for solar systems on residential and commercial properties that is set to expire at the end of 2016. State-level tax credit programs, which have proven just as vital to PV installation as the ITC, are seeing a similar pattern of expiration now that solar energy has achieved relative market success[1].

Fortunately, decreased solar installation costs are combatting the effects of declining federal and state programs.


Research has shown that in order to maintain grid-competitiveness, PV systems must offer the customer a net annual savings of at least 10% over conventional energy systems. At this time, most states are still working toward grid parity, in which PV systems generate power at a cost similar or equal to the cost of purchasing power from the electricity grid. As of 2014, only three states—California, Arizona, and Hawaii—met the 10% marker, with four others meeting grid parity. However, as the ITC expiration date approaches, more states are expected to cash in on the federal tax incentives and increase grid-competitiveness. Nevada, New Mexico, and surprisingly, New Jersey, are likely to join the ranks of those states meeting 10% net annual savings, and some sources estimate universal rooftop PV grid parity by 2016.

The Bottom Line 

The expiration of solar tax credits is likely to look similar to the expiration of wind production tax credits. Although it may deliver an initial blow, a continued drop in installation costs is expected to counteract the decline in federal- and state-level incentive programs. Still, solar energy has a long way to go before becoming a significant energy source: It currently accounts for less than 1% of the nation’s energy needs. It would be wise for the federal and state governments to think carefully before kicking the solar industry out of the energy nest before it can fly.



GTM Research: 10 Slides That Show the Complex Future and ‘Tipping Point’ of US Solar, Greentechmedia.com http://www.greentechmedia.com/articles/read/Shayle-Kann-and-the-Bratwurst-Problem (last visited Apr. 1, 2015).

Here’s How US Commercial Solar Can Bounce Back in 2015, Greentechmedia.com http://www.greentechmedia.com/articles/read/heres-how-u.s.-commercial-solar-can-bounce-back-in-2015 (last visited Apr. 1, 2015).

 Photovoltaic (Solar Electric), seia.org http://www.seia.org/policy/solar-technology/photovoltaic-solar-electric (last visited Apr. 1, 2015).

Solar Investment Tax Credit (ITC), seia.org http://www.seia.org/policy/finance-tax/solar-investment-tax-credit (last visited Apr. 1, 2015).

Solar Grid Parity in All 50 US States by 2016, Predicts Deutsche Bank, cleantechnica.com http://cleantechnica.com/2014/10/29/solar-grid-parity-us-states-2016-says-deutsche-bank/ (last visited Apr. 1, 2015).


[1] Success as measured by increase in PV installation and not overall market power.