Environmental Regulation, Energy and Market Entry:

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Environmental Regulation, Energy and Market Entry:
DELPF Symposium looks at present and future challenges

Scholars, practitioners, and policy makers from across the energy and environmental spectrum gathered at Duke Law School on November 19 th to discuss issues at the intersection of environmental regulation, energy, and economics. The student-organized Duke Environmental Law and Policy Forum symposium was praised by participants as a unique opportunity to look at the future of traditional energy sources, such as coal and natural gas, in a restructured energy market, explore regulatory challenges, and contemplate emerging and future energy sources and issues, including those related to wind, hydrogen, and nuclear power.

“When it comes to energy, the environmental regulators rarely speak to each other, certainly don’t work in concert, and frequently–though inadvertently–work at cross purposes. So bringing the focus on environment and economics in the context of energy is critically important, because it is only there that the problems can really be solved,” observed Mary Anne Sullivan, a partner with Hogan and Hartson in Washington D.C., and a former general counsel to the Department of Energy, as well as a senior lecturer at Duke Law School. “Access to energy is the number one indicator on the UN Human Development Index–it best measures the quality of people’s lives, day-to-day. On the other hand, access to energy usually carries with it environmental insult–from mining and refining, to transportation, to generation, to waste disposal.”

Three panel discussions, which focused on traditional energy sources, emerging issues, and the future of energy, respectively, frequently provoked lively discussion. Professor Richard J. Pierce, Jr. of the George Washington University Law School, addressing the clash between national and state regulatory goals and powers, called “ludicrous” the prevailing 1930s-era statutes that confer to states and localities the power over such things as siting transmission lines and approving liquid natural gas (LNG) terminals.

“In the 1930s, energy was almost exclusively local–production, transmission, and consumption pretty well took place within a single state. Turning on the lights [in Durham] today affects Provincetown and Akron, as much as Greensboro,” he pointed out, referring to vast, interstate power grids. “States and localities have far too much power to affect energy policy goals. In every case, we need to reduce state power and give federal regulators the power to regulate preemptively and unilaterally.”

While there was general consensus on the need for alternatives to such traditional energy sources as coal, the viability of some also came into question. Dean Joseph P. Tomain of the University of Cincinnati College of Law said the general stagnation of nuclear power over the past 25 years–dating from the Three-Mile Island disaster of 1979–is largely due to economics–with a contemporary twist.

“We will have nuclear power when the benefits outweigh the costs–and the costs are not limited to the cost of a megawatt hour of nuclear energy vs. a megawatt hour of coal,” he observed. “You also have to factor in catastrophic incidents, multiplied by the likelihood they will happen, and these can include a core meltdown and terrorist attack.”

Commissoner Sudeen KellyCommissioner Sudeen G. Kelly, of the Federal Energy Regulatory Commission (FERC), also discussed terrorism against LNG terminals and tankers–“the small chance of a big catastrophe”–as one of the environmental and safety issues to be taken into account in the planning process for new and essential facilities. LNG is an emerging energy issue, she said, because the U.S. is falling seriously short of pipeline gas.

Vague environmental standards can represent a formidable barrier to energy market entry, as investors shy away from areas where they may encounter costly surprises, Sullivan argued during the all-panel discussion that closed the symposium. “What we need are environmental standards that are clear and well-defined. It is clarity that spurs investment.”

“It’s rare to bring together environmental law scholars, regulated industry scholars, and folks who focus on these kinds of problems at the highest levels of public policy,” observed Professor Jim Rossi of the Florida State University College of Law who spoke on transmission line siting in deregulated power markets. “There are many industry conferences, where lawyers will get together to talk about the cutting-edge cases, there will be various interest groups that get together, but it’s very rare to get together in a context in which everybody’s taken outside the stakeholders they are representing, and we’re trying to address the issues in more global ways, in ways that are subject to intellectual challenge.”

DELPF Editor-in-Chief Scott Edson ’05 called the symposium a great success. “I feel as though we served our overall mission of facilitating discourse in a vibrant, interdisciplinary environment, and I look forward to publishing it in our Spring 2005 issue. It is a tribute to our great staff and particularly to [special projects editors] Allison Ridder and David Nefouse.”

Duke Law Professors Christopher Schroeder and Jonathan Wiener took part in the symposium as panelists and moderators, as did faculty members from the Nicholas School of the Environment and Earth Sciences. The symposium was sponsored by DELPF, Duke Law School and the Program in Public Law, the Nicholas School of the Environment and Earth Sciences, and Hogan and Hartson L.L.P. Additional funding was provided by the UN Foundation-The People Speak Program, the Terry Sanford Institute of Public Policy, the Duke Environmental Law Society, the Duke Law Democrats, Duke Law Republicans, and the Duke Law Federalist Society.

View the webcast of the DELPF symposium on “Environmental Regulation, Energy and Market Entry”.