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Energy Law Basics Duvivier 00 Fmt.Qxp 11/23/16 11:45 AM Page Ii Duvivier 00 Fmt.Qxp 11/23/16 11:45 AM Page Iii duvivier 00 fmt.qxp 11/23/16 11:45 AM Page i Energy Law Basics duvivier 00 fmt.qxp 11/23/16 11:45 AM Page ii duvivier 00 fmt.qxp 11/23/16 11:45 AM Page iii Energy Law Basics K.K. DuVivier Carolina Academic Press Durham, North Carolina duvivier 00 fmt.qxp 11/23/16 11:45 AM Page iv Copyright © 2017 K.K. DuVivier All Rights Reserved ISBN 978-0-76986-952-0 LCCN 2016960221 Carolina Academic Press, LLC 700 Kent Street Durham, NC 27701 Telephone (919) 489-7486 Fax (919) 493-5668 www.cap-press.com Printed in the United States of America duvivier 00 fmt.qxp 11/23/16 11:45 AM Page v To my children, their children, and all children as my effort to bestow on your world a better energy future. duvivier 00 fmt.qxp 11/23/16 11:45 AM Page vi duvivier 00 fmt.qxp 11/23/16 11:45 AM Page vii Contents Acknowledgments xxiii Part I Context and Global Energy Issues 1 Chapter 1 · The Life of an Energy Lawyer 3 A. Energy Practice 3 B. Staying on Top of Energy Practice 4 C. Reliable Information 6 D. Energy Basics 7 Chapter 2 · Climate Change 11 Climate Change Timeline 11 A. Climate Science 13 B. Intergovernmental Panel on Climate Change (IPCC) 15 C. International Climate Change Treaties 16 1. United Nations Framework Convention on Climate Change 18 2. The Kyoto Protocol 19 3. Beyond the Kyoto Protocol 23 D. U.S. Climate Change Law and Policy 24 1. Regulating Climate Change under the Clean Air Act 24 2. Executive Action 27 3. State Action 28 4. Non-State Actors 28 Recent Articles on Climate Change 29 Chapter 3 · Energy Justice 31 Energy Justice Timeline 31 Introduction 32 A. Defining Energy Justice 32 vii duvivier 00 fmt.qxp 11/23/16 11:45 AM Page viii viii CoNTENTS B. Access to Energy 34 C. Access to Electricity 39 D. Indigenous Peoples 41 Recent Articles on Energy Justice 44 Part II Energy Consumption and Delivery 45 Chapter 4 · Electricity 47 Electricity Timeline 47 Introduction 49 A. U.S. Electric Utility Structure 50 B. The History of Harnessing Electricity 52 C. Local Regulation 54 1. Free Market 54 2. Monopoly Regulation 56 D. Federal Involvement 60 1. Federal Regulation 60 2. Federal Support of Electricity Development 61 3. Deregulation 65 4. Mergers 66 5. Increased Federal Attention 68 Recent Articles on Electricity 69 Chapter 5 · Customer Demand and Efficiency 71 Customer Demand and Efficiency Timeline 71 Introduction 72 A. History 74 B. Consumption Patterns 78 C. Strategies for Improving Energy Efficiency 84 1. Buildings 85 2. Industry 89 3. Transportation 92 4. Appliances, Lighting, and Electronics 95 5. Military 97 Recent Articles on Energy Efficiency 98 Chapter 6 · Customer Generation and Storage 99 Customer Generation and Storage Timeline 99 A. Conventional Delivery of Electricity 100 B. Rate Design 100 C. Rates 105 D. Distributed Generation 110 1. Environmental 111 2. Reduced Costs 113 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page ix CoNTENTS ix 3. Consumer and Community Control 113 4. Security 115 E. Storage 116 Recent Articles on Customer Generation and Storage 121 Chapter 7 · Transportation 123 Transportation Timeline 123 A. Context 124 B. History 127 C. Motor Vehicles 131 1. Passenger Vehicles 131 2. Freight 133 D. Rail 136 1. Passenger 136 2. Freight 137 E. Air 141 1. Passenger 141 2. Freight 144 F. Marine 147 1. Passenger 147 2. Freight 148 Recent Articles on Transportation 150 Chapter 8 · Infrastructure 151 Infrastructure Timeline 151 Introduction 152 A. Waterways 152 B. Rail Lines 153 C. Pipelines 156 D. Highways 161 E. Emerging Infrastructure 164 1. Gas Taxes 164 2. Toll Roads 166 3. Driverless Cars 167 Recent Articles on Infrastructure 168 Chapter 9 · Transmission 169 Transmission Timeline 169 Introduction 170 A. Context 171 B. History 173 C. FERC Regulation of Transmission 174 1. Federal Power Act 174 a. Interstate Sales 174 b. Ratemaking 175 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page x x CoNTENTS c. other Powers 176 2. PURPA 177 3. Energy Policy Act of 1992 178 4. Energy Policy Act of 2005 182 D. Reliability 184 E. Siting and Cost Allocation 187 1. Siting 187 2. Cost Allocation 188 Recent Articles on Transmission 191 Part III Energy Production 193 Chapter 10 · Petroleum 199 Petroleum Timeline 199 Introduction 202 A. Context 202 1. What Is Petroleum? 202 2. Petroleum Production 203 B. History 205 C. Petroleum Rights under the Common Law 208 1. origins of oil ownership 208 a. Minerals Ferae Naturae 210 b. Ad Coelum Doctrine 210 2. The Rule of Capture and Severance 210 3. The Accommodation Doctrine 212 D. Local and State Regulation of Petroleum 212 1. Prorationing 213 2. Conservation Commissions 213 3. Pooling and Unitization 214 4. Environmental Regulations 214 E. Federal Influences on Private Petroleum Production 214 1. Responses to Shortages 215 2. Deregulation and Regulation 216 3. oil Pollution Liability 216 4. Environmental Statutes 217 5. oil Exports 218 F. oil and Gas Contracts 218 1. Private 218 a. oil and Gas Leases 218 b. Farmout Agreements 223 c. Joint-operating Agreements 223 2. Federal Leasing. 223 a. on Land 223 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page xi CoNTENTS xi b. Federal offshore Leasing 225 c. Statutory Framework 226 d. State Limitations on offshore Exploration 228 e. Subsistence Rights 230 G. Spills 232 Recent Articles on Petroleum 234 Chapter 11 · Alternative Fuels 235 Alternative Fuels Timeline 235 Introduction 237 A. Fuel Additives 237 B. Biofuels 239 1. First-Generation Biofuels 241 a. Ethanol 241 i. Corn ethanol 241 ii. Sugarcane Ethanol 242 c. Biodiesel 242 2. Second-Generation Biofuels 246 3. Third-Generation Biofuels 248 4. Diversification of Sources 248 C. Alternative Fuels 252 1. Propane 253 2. Natural Gas 253 3. Electricity and Hybrids 254 4. Hydrogen 256 D. Regulation of Alternative Fuels 256 1. Legislation 256 2. Case Law 263 Recent Articles on Biofuels 265 Chapter 12 · Natural Gas 267 Natural Gas Timeline 267 Introduction 269 A. Context 269 1. What Is Natural Gas? 269 2. Consumption 271 B. History 272 C. Conventional Versus Unconventional oil and Natural Gas Deposits 273 1. Conventional 273 2. Unconventional 274 D. oil and Gas Development 278 1. Upstream Development 278 a. Drilling a Well 278 b. Hydraulic Fracturing 280 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page xii xii CoNTENTS 2. Midstream Development 283 3. Downstream Development 283 E. The Legal Status and Regulation of Natural Gas 285 1. Case Law 285 2. Regulation 287 F. Flaring 290 Recent Articles on Natural Gas 292 Chapter 13 · Coal 293 Coal Timeline 293 A. Understanding the Resource 295 B. History of Coal as Fuel 296 C. Coal ownership 298 1. Private Lands 298 a. Split Estates 299 b. Leasing 299 i. What does “coal” mean? 300 ii.What does “mining” mean? 301 a. When should strict liability apply? 302 2. Public Lands 302 D. Coal Extraction 305 1. Mine Safety 305 2. Underground Mining 307 Keystone Bituminous Coal Association v. DeBenedictis 309 3. Surface Mining 311 4. Reclamation 312 E. Regulation of Coal Use 315 1. Clean Air 315 a. The Proposed Clean Power Plan 318 2. Clean Water Act 320 3. RCRA 321 Recent Articles on Coal 322 Chapter 14 · Nuclear 323 Nuclear Timeline 323 Introduction 325 A. origins of Nuclear Energy 326 B. Post-War Nuclear Energy 329 C. Safety 333 D. Waste Disposal 337 E. Additional Considerations 340 Recent Articles about Nuclear Energy 344 Chapter 15 · Hydropower 345 Hydropower Timeline 345 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page xiii CoNTENTS xiii A. Brief History of Hydropower 347 B. How Hydropower Works 350 C. Conventional Dams — Construction 351 1. Early Hydropower and the Mill Acts 351 2. Federal Power Act 353 3. Alternative Regulation Schemes 354 D. Conventional Dams 356 1. Relicensing 356 2. Decommissioning 356 E. New Hydropower Sources and Small Hydro 359 F. Hydrokinetics 361 Recent Articles on Hydropower 362 Chapter 16 · Wind 363 Wind Timeline 363 A. Introduction 365 B. History 368 C. Benefits and Drawbacks of Wind Energy 373 D. Wind and Wildlife 375 1. The Migratory Bird Treaty Act 378 2. The Bald and Golden Eagle Protection Act 380 3. The Endangered Species Act of 1973 382 E. other Concerns 384 1. ownership Rights and Wake Issues 384 2. Delivery and Grid Integration 385 F. Federal Land Wind 386 G. offshore Wind 387 Recent Articles on Wind Energy 389 Chapter 17 · Solar 391 Solar Timeline 391 A. Context 394 B. The Science of Solar Power 397 1. Solar Fuel 397 2. Solar Technologies 397 C. Solar under the Common Law 402 D. Solar Legislation 404 1. Federal Incentives 404 2. Solar Development on Federal Lands 408 3. State and Local Regulation 409 Recent Articles on Solar Energy 412 Chapter 18 · Biomass 413 Biomass Timeline 413 Introduction 414 duvivier 00 fmt.qxp 11/23/16 11:45 AM Page xiv xiv CoNTENTS A. Sources 416 1. Solid and Cellulosic Biomass 416 2. Wet Biomass 418 B. Regulation 420 1. State 420 2. Federal 423 C. Sustainability Concerns 427 1. Pollution 427 2. Land Use Conversion and Resource Conservation 429 3. GHG Emissions 429 4. Energy Return on Energy Invested (ERoI) 431 5. Applying Biomass Sustainability Standards 433 Recent Articles on Biomass 436 Chapter 19 · Geothermal 437 Geothermal Timeline 437 A. Context 439 B. Technology 442 1. Geothermal Direct Use 442 2. Geothermal Electricity Production 443 3. Hot Dry Rock 445 C.
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