Month / September 2013

by Frank Maduri

EPA Limits on New Power Plants

Analyzing the Issue from Both Sides

 

The recent EPA (Environmental Protection Agency) ruling regarding the future requirements for the energy industry to build new power plants in the U.S. has reinvigorated the issue of “clean” energy. Both the environmental groups and the interest groups and executives representing the energy industry have very strong feelings on this issue. This article will explain the ruling, compare the new requirements to the current standards used in the energy industry and detail the potential ramifications of the changes as they would impact the consumer.

 

 

The Ruling

 

The EPA announced a ruling where the amount of heat-trapping greenhouse gas emissions from new power plants would be capped (www.usatoday.com). The coal-fired plants will not meet this new standard without costly technology enhancements to capture and store carbon emissions.

 

This new technology is called the Carbon Capture and Sequestration (C.C.S.) system. This technology has never been used in a coal plant, though two plants with this technology are currently under construction in Canada (www.usatoday.com).

 

Two sides to the issue

 

The EPA stated in the announcement that the cap on the emissions from these power plants is a “necessary step to address a public health challenge”.

 

The coal industry responded, and it was widely reported in the media, that it is not legal for the EPA to require the use of technology that is commercially unproven.

 

The coal industry leaders continued by explaining that the EPA usually requires that new technology be cost effective and that the C.C.S. system is not cost effective (www.usatoday.com).

 

I have a vested interest in the environment, and these statements and reports in the media clearly signal to me a growing potential conflict between the EPA and the coal industry.

 

In my past dealings with the EPA, I have found their representatives to be very fair and professional. I found that I generally agree with their assessments regarding the changes we need to make to our business practices to increase sustainability. The agency has made great strides to improve the compliance of the federal government with regard to their product procurement protocols by introducing more green alternative products into the purchasing system.

 

The C.C.S. System

 

The C.C.S. system is a technology which utilizes equipment to capture the greenhouse gas emissions. It then compresses the captured carbon. Then, the compressed material is sequestered by being transported via pipeline and stored underground (www.usatoday.com).

 

The energy industry is balking at the price tag associated with the installation of the C.C.S. system, and the EPA maintains that the government will not allow the construction of new power plants without this system in place.

 

The Cap

 

The EPA cap on the emissions from power plants is now being set at 1,100 pounds of carbon dioxide per megawatt hour (www.usatoday.com). The measurement for emissions for a new power plant without the C.C.S. technology is 1,800 pounds of carbon dioxide per megawatt hour.

 

Therefore, every new plant is going to be required to install the C.C.S. technology in order to be compliant with the new emissions cap. The coal industry intends to take legal action to fight this new emissions ruling.

 

The coal industry has stated to the USA Today that the C.C.S. rules will lead to coal plant closures and a halt in new coal plant construction. This combination will lead to higher electric bills for the consumer.

 

It is widely known that the coal plants are responsible for the majority of electric energy produced in the U.S. and that this ruling from the EPA could have a drastic effect on the supply of that energy, which will lead to an increase in electric energy prices.

 

The Future

 

This is a potentially contentious issue because you have the EPA, which is clearly trying to follow their mandate and enforce some type of standards to limit the amount of carbon emissions from these plants. Those same carbon emissions can have a dramatic impact on the environment and our ecosystems.

 

The energy industry has some reservations about the cost and also the implementation and the effectiveness of the C.C.S. technology. They contend that they could install this system and it may not work to adequately address the issue, and they could be then forced to pass along some of the install costs to the consumer.

 

The consumers are caught in the middle and many are dealing with rising costs for everything, flat wages, a sluggish economy, and many are also concerned with our environment. Now, those consumers are going to be told that the cost of electricity could increase, and that will have a dramatic impact on their everyday lives.

 

I am very concerned about the environment, and I think the carbon emissions cap is a good idea. I think the federal and state governments need to get involved and mediate this situation to protect the environment, make sure that the new technology works by incentivizing a few plants to install the equipment, and to protect the consumer from an increase in energy costs.

 

This is an issue that concerns our environmental sustainability and could have big implications on how we continue to consume energy for our everyday living activities. I hope a resolution can be reached that will be satisfactory to all parties involved. If not, we are all in for some long, difficult days ahead.

by Frank Maduri

Reflecting on 9/11

Today we remember all of the victims of the 9/11 terror attacks on our nation. That day is one that I will never forget. It changed our society forever.

No words can adequately express the sorrow I feel for the families who lost a loved one on that terrible day. The courage of the firemen, police officers, and first responders that day is still very humbling to me. They saved the lives of many that day, and so many of our emergency services workers, NYPD, NYFD, and Port Authority police lost their lives in those horrible events.

It has been 12 years since that tragic day, but we will always remember, and we have a responsibility to teach the generations to follow about the attacks and the events of that day. We have children now who were not even born when the attacks took place; which is one of the reasons why I think that 9/11 should be a national holiday spent in remembrance and service to others.

God bless the victims and may they rest in peace. I will continue to pray for peace in this world and an end to hatred and violence.

 

 

by Frank Maduri

The E.P.P. and Green Products Marketing

The issue of environmental protection is one in which we all have a vested interest. The federal government and their respective agencies and entities are enormous purveyors of a huge range of products for use within their operation.

 

The Environmentally Preferable Purchasing (E.P.P.) program was started by the federal government under the umbrella of the Environmental Protection Agency (E.P.A.) to oversee the purchase of “green” products. The E.P.P. program was designed to improve the compliance of the federal government agencies with regard to the purchase of environmentally friendly products.

 

The E.P.P. program was started in 1993 with the following main functions:

  1. Find and Evaluate green products and services
  2. Identify Federal green buying requirements
  3. Calculate the cost and benefits of purchasing choices
  4. Manage the green purchasing processes

(www.epa.gov/epp)

 

The role of the E.P.P. is very important because the federal government is such a huge entity requiring a wide variety of products within its operation.

 

In fact, the Federal government is the largest purveyor of goods and services in the U.S. with spending on goods and services totaling
$350 billion per year (www.epa.gov).

 

 

The Five Guiding Principles

 

The central components of the E.P.P. program were divided into five principles to streamline the focus for the other federal government entities to consult the system when making decisions on product purchasing.

 

The 5 Guiding Principles of the E.P.P. program are:

  1. Environment + Price + Performance
  2. Pollution Prevention
  3. Life Cycle Perspective/ Multiple Attributes
  4. Comparison of Environmental Impacts
  5. Environmental Performance Information

(www.epa.gov/epp)

 

These five principals must be given consideration by the federal procurement or purchasing agent when making a decision on a product or a service. In my own experience with marketing “green” products to the federal government, I have found that all of these principals are important.

 

However, the two principals that I found to be the mitigating factors are: price = performance, and the life cycle perspective/multiple attributes principal.

 

The environmental protection of a product could be great, but if it has performance differentials that lag behind the “non-green” or standard product alternative, that is a big issue.

 

The sensitivity to a given price point is always a consideration with green products. It can have a great environmental protective quality, and it could be an efficient, high performance product as well. The price has to be in line with the other products available on the market; if the price point is too high then it is going to be problematic to sell to the federal government.

 

Furthermore, the life cycle perspective/ multiple attributes principal is a critical component to federal government purchasing decisions. In my experience, the requests from federal entities were made for information on the performance of our product throughout its life cycle.

 

The federal procurement officers wanted to see data on how the product performed in certain conditions over certain intervals of time (30 days, 60 days, 120 days etc.) and during certain weather conditions.

 

They would study or inquire as to whether the product could do multiple green functions, for instance, if the product could be used on both land and water. The products with versatility and multiple uses, or attributes, will fare better in potentially gaining a federal government sales order.

 

Executive Order 13514

 

The E.P.P. program was given further significance with the implementation of Executive Order 13514, which essentially orders federal agencies to use sustainable practices when buying products or services (www.epa.gov/epp).

 

In my own experience in the green products area, working for a distributor, this executive order changed everything when dealing with the various federal government agencies. I could sense a change in the approach of the procurement officers that they felt it was important for them to take a more comprehensive look at the green product alternatives available.

 

The cost benefit analysis was, and always will be, an important factor in the decision making process as well. The difficulty with certain green alternatives is that their price point may be higher than a standard product with no environmental benefit.

 

The reasons for this higher price level are variable but could include the sourcing of certain commodity ingredients which are made from sustainable sources. Due to limited supply those ingredients will be more expensive, thus driving up the cost of the finished green product.

 

Role of E.P.P. and small businesses

 

The role of the E.P.P. can be very helpful to small businesses which are attempting to gain a foothold within a federal government agency. Any small business that is trying to market products to the federal government has to be familiar with the Federal Acquisition Regulation (FAR) guidelines.

 

The FAR guidelines are a uniform policy for the acquisition of supplies and services by federal agencies (www.epa.gov). Two important decisions occurred which provided further credence to the E.P.P. program and FAR:

 

  • In 2007: The Secretary of Agriculture announced that procurement preference be afforded to biobased products within certain designated items (www.epa.gov/epp)
  • In 2008: The Department of Agriculture published rules designating 27 biobased products for federal preferential procurement within the following areas: personal & facility cleaning products, greases, oils, lubricants, and construction products (www.epa.gov/epp)

 

In the event, you were a small business with production and/or distribution rights to any of the above mentioned products, then your business had a good chance to make a sale with the federal government.

 

The E.P.P. program has a great section of the website called Information for Vendors which provides valuable information to businesses who are looking to market green products or services to the federal government (www.epa.gov/epp).

 

This section of the website contains critical information on how to sell green products to the federal government. The section also provides a link to U.S. Business Advisor, which lists all the information on federal agencies: contact information and current procurement opportunities.

 

The benefits for a small business to work with E.P.P. are numerous and should be a strong consideration if you are in the green products market, or if you are looking to gain entry into this very important market.

 

The E.P.P. program was introduced to increase the availability of green products into the operations of the federal government. The goal being to minimize the environmental impact of their activity and to create opportunities for small businesses to partner with the federal government to implement these new products or services.

 

I think we can all agree that the focus on bringing more sustainable products into the marketplace is a very positive development for our future. I encourage you to visit their website www.epa.gov/epp for more information.