As voting begins, think back to December 2010: Ohio was a national leader in advanced and cleaner energy. Despite heavy dependence on coal to generate electricity, Ohio was enacting a strong renewable energy standard for our public electric utilities. We had also included a standard for advanced cleaner technologies that were not renewable. We were beginning to implement one of the most aggressive energy efficiency standards in the country.
Ohio had an energy policy to create the 21st century clean energy economy right here. It would be built on the strengths of Ohio’s workers, manufacturers, entrepreneurs and researchers. We began to add tens of thousands of jobs that would last and pay living wages. We began to diversify our electricity generation fuels. We moved toward cleaner air. We reduced our energy risk through diversifying our sources.
Then John Kasich took office.
After his energy summit, Kasich appeared to embrace an all-of-the-above energy strategy. Sure, we were going to seize the shale gas opportunity through fracking. But we were also going to focus on renewables…and cleaner technologies…and widespread efficiency. And then policy implementation began.
It quickly became apparent that Ohio would begin to transfer its reliance upon coal as the key energy driver to an equally risky reliance upon natural gas recovered through fracking. The first step was Kasich’s SB 315. It established a necessary regulatory framework for the burgeoning shale gas industry and was touted as the toughest regulation in the nation. But the regulations protected the industry at the expense of workers, communities and the environment.
The biggest risk in fracking comes from the toxic chemicals used to break apart geologic formations. The potential for toxic contamination comes when the fluid is first injected, when a portion of it remains underground and when fluid is recovered and either recycled or pumped into hazardous waste wells. The key, of course, is knowing what’s in the fluid. Logic suggests that this knowledge would be gained during the application for a permit to drill. But Kasich’s plan requires disclosure 60 days after the fluid has been used–unless the drillers claim that some of the fluid recipe is proprietary. In that case, the Kasich law allows them to withhold “the identity, amount, concentration or purpose” of the proprietary component.
Now, if there is a spill or accident, the Ohio Department of Natural Resources can ask for the secret sauce but cannot reveal it to anyone. The flaw in this approach moved beyond the theoretical on Saturday, June 28. A mechanical malfunction at a StatOil well pad in Monroe County started a fire in the frack fluid tubing that spread to 20 trucks and multiple trailers around the site. The fire resulted in evacuation of local residents and runoff that killed 70,000 fish in a nearby creek. Responding local firefighters were slowed by a series of 30 explosions on site and the fact that upon initial arrival company employees prevented them from entering the property. When finally allowed to engage, firefighters could not get anyone to tell them what chemicals were burning. The only list at the site was in a trailer that was on fire. The fracking fluid company, Halliburton, provided a list of chemicals to ODNR five days after the accident; Halliburton refused to provide the same data to EPA.
Kasich says it might be time to revisit the law and be sure first responders know what they are facing. The Ohio Oil and Gas Association says all the involved companies were is full compliance with the law. I feel better; don’t you?
But SB 315 went beyond fracking regulation. It kept the renewable and energy efficiency standards for electricity but changed key definitions to significantly weaken those standards. It redefined the capture of waste heat as a renewable energy resource—even if burning fossil fuels created that waste heat. The size of industrial waste heat recovery projects could easily push real renewables out of the equation. Likewise, it added all combined heat and power projects to eligibility for the efficiency standards. Only a late compromise limiting how much credit utilities could take for those projects kept that inclusion from being a disastrous threat to the efficiency standard. And the utilities can get credit for these investments even if they play no role in the projects. Finally, the redefinition of non-renewable advanced energy made that alternative energy standard meaningless.
Kasich and the Republican controlled General Assembly were not finished. After 18 months considering whether or not to repeal the remaining electricity standards, the GA passed, and Kasich signed, SB 310. This bill received a lot of public attention, most of it focused on its two year freeze of the standards and the creation of a legislative study committee to review those standards. Put aside your quibbles about why the same people “studying” the same material they’ve looked at for two years should be expected to come up with different answers. Ignore the fact that Senate President Faber has stacked his part of the committee with SB 310 yes votes and even disregarded the Minority Leader’s recommended Democrat members to appoint term limited Democrat Sen. Shirley Smith who also voted for SB 310. Never mind that the bill instructs the study committee that it is the intent of the General Assembly to lower the standards.
The real story is that Kasich insisted upon the two-year freeze. Happily for him, it delays a decision on whether to repeal the standards completely until after his re-election campaign and after early Republican presidential primaries in states that are pro-renewable.
But even if the standards are fully restored, Kasich signed a bill that cripples them with permanent law changes. It completely abolishes the advanced (non-renewable) energy mandate. It eliminates the requirement that 50% of renewable energy be generated in Ohio. It expands renewable to cover dams in the Ohio River put into service since 1980. It counts renewable resources toward the electric requirement even if they do not generate electricity. It expands the definitions of energy efficiency to include improvements that reduce transmission and distribution line loss. It allows the utilities to pick the method by which to calculate efficiency and, if they pick a method different than the one used by PUCO, to recalculate back to 2006. It requires utility bills to specify the customer cost of each standard; it does not require the bill to specify the benefits of the standards. It allows large industrial users to opt out of the efficiency rider with even less accountability than was in place.
Not content with that level of damage, language in the Mid-biennium Budget Review changes the set back requirements for commercial wind turbines in Ohio. The Ohio Farm Bureau estimates that the change means that as much as 90% of farmland is now excluded. The wind industry says this probably rules out any future development of commercial wind energy in Ohio. Kasich could have line item vetoed that language. He did not.
Kasich and his crew learned a key lesson from the overturning of SB 5: don’t try to go too far too fast. On the energy front, they appear to believe that if they go step by step and take their time we won’t notice until it’s too late. Remember in November!
Mark R. Shanahan is a principal at New Morning Energy. He served as Governor Strickland’s Energy Advisor and was Executive Director of the Ohio Air Quality Development Authority.