We're Fracked?!

We've been talking quite a lot about land policies in one corner of Southern Nevada. Yet while we were focused on that part of the state, some huge news dropped in another part of the state. In one corner of Northern Nevada, fracking has already begun.

Wait, what?! Yes, fracking has already begun in Elko County. Noble Energy is now fracking on mostly private land just outside Wells, but it now has approval to frack on some BLM land nearby as well. And thanks to SB 390, the fracking regulations bill passed by the Nevada Legislature last year, it's legal.



It's already been making waves in Pennsylvania, North Dakota, Texas, and elsewhere. And now, fracking is happening in our state.

We've already become familiar with the more upfront dangers of fracking. However, there's an even greater danger that we simply can't ignore.



Noble Energy is fracking for oil. Noble Energy is risking contaminating the entire water supply for that area to extract fossil fuels from the ground. Noble Energy is extracting fossil fuels that worsen climate change.

Remember climate change? It just happens to be the greatest global security threat of our time. And Rural Nevada is already feeling it.

Nevada is already experiencing a rather serious drought. We can't afford to waste water. And we especially can't afford to waste water on extracting fossil fuels that are endangering our future.

Fracking the Hell Out of Nevada?

Since January, we've been closely monitoring the surreptitious campaign to bring fracking to Nevada. Since then, Senator Tick Segerblom (D-Las Vegas) introduced SB 390 to institute state fracking regulations... And NV Energy unleashed its NVision into SB 123. While the (again) revised SB 123 does not call for as many new natural gas power plants as the earlier version of NVision, it does nonetheless call for more natural gas power in Nevada. And we've yet to see answers on where NV Energy expects to find the natural gas for these proposed new power plants.

Today, Senator Segerblom testified in favor of SB 390. However, he was not alone. Nevada Conservation League's Kyle Davis spoke in favor... And so did Paul Enos. He's President of the Nevada Trucking Association, but today he testified as a lobbyist for Noble Energy, the company pursuing a fracking license in Elko County.

Question time soon began. And Assembly Member Heidi Swank (D-Paradise) kicked it off by asking about "swarms of earthquakes" that have recently been striking Arkansas. Enos claimed they were likely just caused by a "bad drill".

Assembly Member Ira Hansen (R-Sparks) called fracking "a miracle". "We should be praising you guys from freeing us from the oil cartels," he said. Enos appreciated the praise... Because it at least temporarily deflected from the frightening reality that Assembly Member Swank alluded to. Earlier this month, The Nation published an expose on the ugly reality that fossil fuel fracking has brought to Western Pennsylvania. And that can be added to the growing pile of fracking horror stories.



Assembly Member Lesley Cohen (D-Henderson) then asked about water. There's a reason for that: Fracking is very water intensive. And the chemicals used in fracking contaminate the remaining water supply. And last time we checked, Nevada doesn't have much water. So why again are we even considering opening our lands to fracking?



More fossil fuel industry representative then spoke in favor of SB 390... But qualified it by saying they only now support the bill because it does NOT ban fracking, as a growing coalition of environmental and community health activists have been calling for. They then disputed the growing body of evidence showing the real dangers of fracking. I wonder if they've ever spoken with anyone from Timpson, Texas (and for that matter, the Dallas-Fort Worth region as well).



Assembly Member Cohen later corrected earlier claims that fracking doesn't affect water supply. That certainly is not the case in Colorado. And it certainly is not the case in Pennsylvania. And it's hard to believe that somehow Nevada is immune to the dangers being realized elsewhere.



Assembly Member Paul Aizley (D-Paradise) asked state regulators testifying at today's hearing about cleaning up. That's also what many residents of West Virginia, Pennsylvania, North Dakota, Colorado, and elsewhere continue to ask.

No action was taken on SB 390 today. But considering SB 390's unanimous approval by the Senate on Tuesday, the bill is expected to easily pass the Assembly. And considering the broad support the bill seems to have now, it's unlikely Governor Brian Sandoval (R) will veto it.

So is this really "good news"? Keep in mind that various fossil fuel industry lobbyists testified in favor of SB 390 precisely because it does not ban fracking. And considering one of them said he changed his mind on the bill precisely because its language was watered down amended, this should set off alarms.

OK, OK, so SB 390 at least fills the regulatory void left by the Bush Administration in 2005. That's a start. But considering Noble Energy supports this bill, it may very well leave the door to fracking wide open here in Nevada. And remember that companies like Noble want to frack for more of the very fossil fuels that are fueling the climate crisis.

There's a reason why many Californians have been protesting Governor Jerry Brown's (D) consideration of fracking there. And there's a reason why over 250 communities across the US have passed anti-fracking resolutions. Oh, and there's a reason why France and Bulgaria will not allow any future fracking. This shit is dangerous, and we're only opening ourselves up to peril if we start fracking the hell out of Nevada.

So what will it take for our state to realize the peril that lies ahead?

The Final Twist

On Tuesday, something quite interesting happened... Yet hardly anyone noticed. We're about to correct that today. So pay close attention to this.

On Tuesday, SB 390 passed unanimously. Remember that SB 390 aims to regulate oil and natural gas fracking in Nevada. If most Assembly Members and Governor Brian Sandoval (R) soon concur, then the State of Nevada will begin to fill the oversight void left when then President George W. Bush exempted fracking from numerous federal environmental and health safety laws. But of course, this still falls far short of the full fracking ban pursued by CREDO Action and many other environmental activists.



What's further complicated this issue is SB 123. NV Energy's NVision has run into controversy for several reasons, but at least some have been asking what NV Energy's proposal for more natural gas power plants means for future fracking in Nevada. While the matter of fracking still hasn't directly been addressed by NV Energy, SB 123 was revised again to pare back new natural gas power plant proposals before passing the full Senate earlier this month.

But yesterday, we saw an entirely new twist to this story. All of a sudden, a new player emerged at the very last minute. And now, Carson City is abuzz over the news of multi-billionaire super-investor Warren Buffett stepping in to buy NV Energy.

"I've spoken to Warren Buffett, (NV Energy president and CEO) Michael Yackira and (chairman of the board) Phil Satre, and it is not often I have been as enthused about a deal as I am now,” said U.S. Senate Majority Leader Harry Reid of Nevada. ”I am elated. It is really good news for Nevada that Warren Buffett wants to invest $5.5 billion in our state. He told me that he loves Nevada and now has an excuse to come here more often."

According to a news release, under the terms of the agreement, MidAmerican will purchase all outstanding shares of NV Energy’s common stock for $23.75 per share in cash. The transaction, which has been unanimously approved by both companies’ boards of directors, has an enterprise value of approximately $10 billion.

The acquisition is subject to customary closing conditions, including the approval of the transaction by NV Energy’s shareholders and the receipt of required state and federal approvals. The transaction is currently expected to be completed in the first quarter of 2014.

So what happens now? So far, both SB 123 and SB 390 seem to be on track for final passage. In fact, SB 390 has an Assembly hearing this afternoon.

And so far, Warren Buffett has shown interest in divesting from fossil fuels & investing in renewable energy. Was he noticing NVision & SB 123 when deciding to buy NV Energy? What does he want NVision to look like in the future?



And let's not forget what triggered all this in the first place. NV Energy was facing increasing pressure to shut down the Reid-Gardner Coal Plant near Moapa. At the same time, the company wants to cash in on Nevada's burgeoning green economy. Oh, and then there's that whole matter of the greatest global security threat of our time.

We've seen so many twists and turns as we've been tracking on the intersection of renewable energy policy, NV Energy's business plan, and fossil fuel fracking, and climate change. And now, we have the final twist provided by Warren Buffett. This should be fun.

NVision... Fracking?

Over the course of the month, we've been seeking the truth behind the spin surrounding NV Energy and the bill (SB 123) it consumed. Fortunately, we haven't been alone. The Nevada Public Utilities Commission [PUC] also recently chimed in and questioned the numbers behind the estimated $494 million cost of NVision (aka the NV Energy possessed SB 123). They also questioned NV Energy's promise that NVision won't significantly increase electricity costs for consumers.

And funny enough, this nugget slipped out.

As [PUC Commissioner David] Noble said, ratepayers have helped build $3.5 billion in generating capacity in the past decade and gas prices have declined.

If NVision and its baked-in power plant construction regimen doesn’t pass, rates could decrease.

“Holding everything else constant, the next few rate cases may actually result in a rate decrease,” said Anne-Marie Cuneo, commission staff.

Yackira said this could also hold true if NVision becomes law. He said the commission is “really pointing to natural gas prices.”

“If those prices go down, our customers’ rates will go down,” he said.

Bottom line: Cheap natural gas is holding rates down now, coal is on its way out regardless of NVision, and the effect of the NVision plan won’t really be felt until new construction brings new costs to ratepayers several years down the road.

Aha! So NV Energy is basing its promises of lower (or at least not-significantly-higher) electric costs on "cheap natural gas". And come on, we all know what that means. Fracking is likely in the mix.

So what's the big deal here? Fracking has artificially held down the cost of natural gas extraction. And I say it's artificial because we see cheap natural gas, yet we're also increasingly seeing the high costs of decimated communities and ecosystems due to fracking.

This is why outrage has steadily been growing over the fossil fuel industry's sneaky ploy to frack across America. And this why we may soon see action to halt this next door.

"It's clear that we must heed the call from our concerned constituents and demand answers about the safety of fracking," said Assemblywoman Holly Mitchell, D-Los Angeles, author of Assembly Bill 1323.

A branch of the [California] Department of Conservation has released some draft regulations that would govern fracking, but lawmakers have criticized the proposed rules as too vague and lambasted the Division of Oil, Gas, and Geothermal Resources for moving too slowly.

"The lack of regulations in an environment that should be regulated is a recurrent theme," said Assemblyman Richard Bloom, D-Santa Monica, author of Assembly Bill 1301. "Public and scientific concerns have increased exponentially yet regulatory oversight lags behind."

Bloom said a moratorium would offer a needed window for study and would "get everyone to the table" to craft a framework for fracking.

"We must identify the risks and assure the public that we are doing everything in our control to protect them," Bloom said, "but to date the state has failed to do that."

In recent days, the fossil fuel industry has kicked into high gear to try to spin away all the worries over fracking. It's even gone as far as trying to silence the filmmaker behind the Gasland documentaries! Apparently, California legislators may finally be wisening up to fossil fuel industry spin.

Will our legislators do the same here? SB 390 doesn't even go that far. It only sets new regulations on fracking to fill the void left by the feds. (Then President George W. Bush pushed to exempt fracking from federal environmental safeguards in 2005.) And right now, it's sitting in the Senate Finance Committee, just waiting for action.

Funny enough, NV Energy hasn't said a peep about SB 390. Why not? NV Energy claims that NVision is all about expanding renewable energy opportunities right here in Nevada while closing the door on coal fired power plants for good. And to be fair, NVision does include plans for new solar plants while guaranteeing the closing of the Reid-Gardner coal plant near Moapa.

However with that being said, NVision calls for even more generation of natural gas power. And NV Energy executives have recently admitted to the PUC that their forecasts for lower consumer costs depend on "cheap natural gas". And as mentioned above, fracking technology has been artificially keeping natural gas costs low... While wreaking havoc on communities where this kind of extraction is occurring.

So what's the deal? How does NV Energy plan to access all the natural gas that NVision calls for? Does NV Energy have any ties to Noble Energy's pursuit of a fracking license in Elko County? What price will consumers ultimately pay for NVision if/when natural gas prices are not so artificially low? And why can't we accelerate both our economy and our commitment to solving the climate crisis by focusing more on the renewable energy bonanza that's right under our noses here in Nevada?

These questions need to be answered. #NVLeg, you're now on notice.

New Twists in Saga Over Fracking in Nevada

Well, this is interesting. Earlier this morning, CREDO Action dropped an email for a petition created by activist Christian Gerlach demanding a ban on fracking. Last December, plans were announced for fracking in Elko County. Since then, we've learned that Noble Energy wants fracking rights for 40,000 acres of publicly owned land in Elko County... As Nye County has also started to flirt with allowing fracking.

Keep in mind that this is what officials in Elko and Nye Counties are considering.



And because the fossil fuel industry secured fracking exemptions from federal environmental safeguards in 2005, companies have been allowed to get away with this wherever fracking has been allowed. Already, there have been horrifying reports of illness and toxic chemical contamination in Pennsylvania and North Dakota, two states that were early in jumping into the fracking rush. Since then, many communities throughout the country (and around the world) have been running in the other direction in adopting fracking bans.



Unfortunately for Christian Gerlach and CREDO, there's currently no fracking ban pending in the Nevada Legislature. However, Senator Tick Segerblom (D-Las Vegas) has proposed SB 390 to have the State of Nevada fill the regulatory gap left wide open by the federal government. It passed the Senate Natural Resources Committee with a friendly amendment, and now awaits action by the full Senate.

However, there's been another twist to this story. Early this month, NV Energy announced its NVision plan to swallow up a proposed update to Nevada's renewable energy standards invest in more home grown renewable energy while shutting down the last of its coal fired power plants. Yet hidden in depths of NVision was also a proposal for more natural gas power plants. NV Energy officials have not said yet whether they intend to rely on fracking to access the natural gas they seek for their proposed new power plants.

Last Friday, NV Energy seemed to get its way as SB 123 was stripped of its original soul and implanted with NVision. Yet since then, there's been a surprising backlash as several people and companies throughout Nevada have expressed concerns over NVision's cost to consumers. Even though R&R power player Pete Ernaut was able to secure his BFF Governor Brian Sandoval's (R-GML) support, he couldn't quell the growing protests from the state's biggest power players: the gaming industry. Earlier today, Las Vegas Sun reporter Anjeanette Damon went on KNPR's "State of Nevada" to explain the increasingly complicated politics surrounding NV Energy's big policy move.

At first glance, it seems like the fight over fracking is being lost in the shuffle of the new brawl over SB 123. That probably couldn't be further from the truth. NV Energy has the chance to come out and say it's not pursuing fracking. NV Energy can simply say it won't try to trade in one major health hazard (in the Reid-Gardner coal plant) for another (in natural gas fracking).

But because it's not (yet?) done that, this just adds to the many concerns over SB 123-turned-NVision. Will it truly be a chance for Nevada to declare independence from fossil fuels? Or is this just a backdoor attempt to pursue even more fossil fuels... And do so in a way that risks the health of many in this state?

Until these questions are answered, legislators should pause and review what's actually in SB 123-turned-NVision. And they should keep asking these questions. And they should at least pass SB 390 as more information is unearthed on fracking.

Perhaps this isn't what CREDO had in mind when sending out the email for Christian Gerlach's fracking ban petition, but it may very well add fuel to the fire of the latest controversy to turn the Nevada Legislature upside down.

Behind the (Coal Fired) Smoke & Mirrors

Last week, many were shocked by NV Energy's sudden commitment to shutting down the last of Nevada's coal fired power plants and transition to renewable energy & natural gas. However, this move actually wasn't all that sudden. NV Energy was plotting this behind the scenes. And perhaps NV Energy executives were hoping that the "surprise" announcement would catch the Nevada Legislature by surprise.

At least Jon Ralston wasn't caught completely by surprise. He asked NV Energy CEO Michael Yackira about his big new energy plan last Thursday. And of course, Yackira said it was all good for everyone.

(The fun starts at 19:23.)



However, not everyone is convinced. On KNPR's "State of Nevada" this morning, Dan Jacobsen begged to differ.

Dan Jacobsen of the Bureau of Consumer Protection did the math, and realized that NV Energy wants to replace 1,000 Megawatts of coal power with 2,700 Megawatts of natural gas and coal. So in the process of winding down its coal plants, the company will nearly triple its generating capacity -- despite a decline in energy demand, Jacobsen said. [...]

“If the legislature were to approve it as they’ve proposed it, this would guarantee the company that, in a period of time when there isn’t much growth, they get to build and add more investment to their rate base, which will result in larger profits over about a ten to twelve year period,” Jacobsen said.

But how will it work out for consumers? Although the investment in new energy may pay off in 30 to 40 years, in the next decade or so, customers will pay more for NV Energy’s investment in new sources of cleaner power.

“It’s about a 9 percent price increase, and that’s above inflation,” Jacobsen said. “A 9 percent price increase is pretty significant on customers, particularly, you know, Nevada has the highest of any Mountain West electricity rates, so adding 9 percent to that is a burden that we think ought to be wrestled with at the Public Utility Commission.” [...]

“I’m very hopeful that the company will come to the negotiating table and come up with a more reasonable approach —one that just focuses on closing down the coal plants and replacing that capacity and leaving the rest of this to the Public Utilities Commission [PUC],” Jacobsen said.

NV Energy actually doesn't need the Legislature's approval to shut down its remaining coal fired power plants. So what is Nevada's electric monopoly waiting for?

That's a good question. What is NV Energy waiting for? An open door to natural gas fracking? New ways to sidestep the PUC? Or just new excuses to raise consumers' electric rates?

Or have NV Energy executives just made this decision to ditch coal out of the goodness of their hearts? If that's the case, then why not simply do what Dan Jacobsen suggested and just shut down the coal plants already while taking the rest of the proposal to the negotiating table? That's what they need to consider. And that's what the Nevada Legislature should demand.

What's Behind NV Energy's Latest Move?

Remember what happened in February? US Senate Majority Leader Harry Reid (D-Don't Mess With Searchlight) addressed the Nevada Legislature... And asked them to fix the loophole in state law that's allowed the state's electric monopoly, NV Energy, to meet Nevada's renewable energy standard by buying hydroelectric power from Utah and occasionally handing out new light bulbs at Home Depot.

Ever since then, and especially with climate change returning to the headlines in recent weeks, NV Energy has been feeling the heat. So now, NV Energy is making a big announcement. Surprise, it will finally be investing more in homegrown renewable energy, along with investing in more natural gas power and shutting down the last of its coal fired power plants.

“I applaud the utility in having the foresight and the courage to try to answer the questions about the future of coal in Nevada and their willingness to recognize that coal needs to be exiting stage left,” said Assemblyman David Bobzien, D-Reno, who chairs the Assembly Commerce and Labor Committee that could hear the bill if it passes the Senate. [...]

“In the coming weeks the Legislature is going to have some questions about how we get there so that it’s done in a way that’s going to be predictable and stable for ratepayers,” he said.

In place of coal, NV Energy wants to invest in a 60-40 split of natural gas and renewables.

NV Energy would construct, acquire or contract for 600 megawatts of renewable energy in Nevada during the next five years.

The bill mandates that the utility own or operate 25 percent of that renewable energy.

This would be the first time the utility would own and operate renewable energy power plants, [NV Energy Senior Vice President Tony] Sanchez said.

In addition, NV Energy is also planning to produce another 2,000 megawatts of natural gas powered electricity over the next 15 years. And it's all part of NV Energy's "NVision" plan... Which it's now offering as an amendment to SB 123, the bill offered by State Senator Kelvin Atkinson (D-North Las Vegas) and Assembly Member David Bobzien (D-Reno). It actually addresses what Harry Reid called for in February, which is updating and strengthening Nevada's renewable energy standard.



Does anyone think NV Energy executives suddenly decided to do this out of the goodness of their hearts? {Crickets.} Yep, me too. What's more likely is they were feeling the heat from Senator Reid, concerned about the increased controversy of Reid Gardner coal power plant near Moapa, and jittery over the prospect of SB 123 becoming law. So what else were they do to? All of a sudden, they're now rushing to invest in more renewable energy (and natural gas) in Nevada!

Of course, there are even more concerns regarding this sudden shift. For one, what's with all the natural gas? While it is cleaner than other fossil fuels, it still emits greenhouse gases along with other pollutants. And as of late, it's led to a huge controversy regarding its extraction. Is NV Energy looking to join the fracking fiasco? I wonder what NV Energy has to say about SB 390, Senator Tick Segerblom's (D-Las Vegas) bill calling for more regulation of fracking.

Another concern regards the cost... And specifically who pays for all of this. Will NV Energy try to use this to justify another rate increase? Will it seek some state funding for this program? That's another issue for legislators to examine further.

So NV Energy is now trying to get in front of calls for less dirty energy and more renewables. While it's great to see NV Energy agree to shut down Reid Gardner by 2017 and invest in more homegrown renewable energy, there are still unanswered questions that the Legislature must address. Again, how is NV Energy planning to pay for all this? How will it seek more natural gas? And will this truly be the start of a real transition from fossil fuels to renewables? Hopefully legislators will find the answers soon... And this will actually be something to celebrate.