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July 11, 2013

Climate Change Poses Risks to U.S. Energy Sector

Climate Change Alert

Climate change poses significant risks to U.S. energy infrastructure, and the reliability and cost of the services it enables, according to a report released yesterday by the U.S. Department of Energy.

The report, U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather Report, was developed as part of the Obama Administration's efforts to support national climate change adaptation planning and to advance the U.S. Department of Energy's goal of promoting energy security. These efforts are embodied by the Interagency Climate Change Adaptation Task Force and Strategic Sustainability Planning process established under Executive Order 13514.

The report is predicated on the findings that the U.S. climate is changing, and that these changes impact energy resources and infrastructure. As the report states, "Climatic conditions are already affecting energy production and delivery in the United States, causing supply disruptions of varying lengths and magnitude and affecting infrastructure and operations dependent upon energy supply." The report provides more than 30 recent examples of energy infrastructure adversely impacted by climate change-related events such as power plant outages due to high temperatures or low water availability, storm damage to transmission lines, oil wells, pipelines and generators, and flooding-related disruption of fuel transportation systems.

Building on these findings, the report identifies a broad set of risks posed by climate trends, including increasing temperatures, decreasing water availability, and increasing storms, sea level rise, and flooding, as well as the current and potential future impacts of these climate trends on the U.S. energy sector. According to the report, each of these trends will independently, and in some cases in combination, affect the ability of the United States to produce and transmit electricity from fossil, nuclear, and existing and emerging renewable energy sources. These changes are also projected to affect the nation's demand for energy and its ability to access, produce, and distribute oil and natural gas.

In particular, significant risks identified include:

  • Thermoelectric power generation facilities are at risk from decreasing water availability and increasing ambient air and water temperatures, which reduce the efficiency of cooling, increase the likelihood of exceeding water thermal intake or effluent limits that protect local ecology, and increase the risk of partial or full shutdowns of generation facilities
  • Energy infrastructure located along the coast is at risk from sea level rise, increasing intensity of storms, and higher storm surge and flooding, potentially disrupting oil and gas production, refining, and distribution, as well as electricity generation and distribution
  • Oil and gas production, including unconventional oil and gas production (which constitutes an expanding share of the nation's energy supply) is vulnerable to decreasing water availability given the volumes of water required for enhanced oil recovery, hydraulic fracturing, and refining
  • Renewable energy resources, particularly hydropower, bioenergy, and concentrating solar power can be affected by changing precipitation patterns, increasing frequency and intensity of droughts, and increasing temperatures
  • Electricity transmission and distribution systems carry less current and operate less efficiently when ambient air temperatures are higher, and they may face increasing risks of physical damage from more intense and frequent storm events or wildfires
  • Fuel transport by rail and barge is susceptible to increased interruption and delay during more frequent periods of drought and flooding that affect water levels in rivers and ports
  • Onshore oil and gas operations in Arctic Alaska are vulnerable to thawing permafrost, which may cause damage to existing infrastructure and restrict seasonal access, while offshore operations could benefit from a longer sea ice-free season
  • Increasing temperatures will likely increase electricity demand for cooling and decrease fuel oil and natural gas demand for heating

Looking on the brighter side, the report notes that while climate change will, on balance, create challenges and costs for the energy sector, there are potential benefits to the energy sector as well. Examples include reduced average heating loads during the winter in parts of the United States, such as New England, and the opening of new regions to offshore oil and gas exploration due to shrinking sea ice cover in the Arctic. The report also covers adaptation actions underway, as well as other major opportunities to prepare for climate change through adaptation. Nevertheless, on balance, the report finds that the magnitude of the challenge posed by climate change on an aging and already stressed U.S. energy system could outpace current adaptation efforts, unless a more comprehensive and accelerated approach is adopted. Will the U.S. follow that path? What measures will it include? Will it make a difference?

You can find this and other energy-related posts on our blog, Energy Policy Update. For more information on this alert, contact Todd or any of our Energy attorneys.

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