Friends,

It seems that things should be slowing down, yet we all seem busier than ever. The bailout discussion continues and the UN has finished up it climate meetings in Poland. It appears the formal announcement on last week's Obama "Green Team" is expected today at 5:00 p.m., but there is no indication if Interior will be a part of it. Still rumors flying on the Interior pick. It seems National Zoo head John Barry, Colorado Senator Ken Salazar and AZ Rep. Raul Grijalva are leading candidates.

I hope no one hurls any footwear at me when saying there continues to be doubts about the claims of great progress with developing countries at the Poland climate meeting. We have been down that road many times before and I suspect we are going down it again – again with the wild optimists of the environmental community in the lead telling us how these developing countries really do mean it this time. See more on the meeting below.

Several rules are expected this week including Interior's Polar Bear rule, interagency cooperation rules and potentially the MMS offshore wind permitting guidelines (although we hear there is still one minor FERC/MMS jurisdictional hang-up on that rule). Call with any questions.

Frank Maisano

(202) 828-5864

c. (202) 997-5932

IN THE NEWS

Climate Meeting in Poland Wraps – The UN climate meeting ended this week in some disarray. While there will be the typical "look how great we are" press conferences and proclamations, I will remind you of three things which I would be happy to discuss in further detail. 1) We've heard this song before about developing countries – There were numerous claims about developing countries being ready to step up to the table and take on reductions. We heard that many times before and all have fallen by the way side, as it is suspected that these will too. 2) Tough Tasks Remain – If one thing was clear, it was a tremendous amount of backtracking on many people's parts about actually getting a deal next year. These were the "pro-treaty" people. In that same vein, many US-based enviros and politicians were downplaying expectations that the new Obama administration will have acted by next year's meeting. 3) The economic downturn is a much larger factor than most are willing to admit – If anything, most people seemed to keep the message that no matter the economic conditions, something must be done. That's seems to be an unrealistic approach, given most of the globe is suffering significant economic woes. Finally, I wanted to share with you as someone who has followed this issue for more than 10 years one of the more outrageous things I have heard in the coverage. As you know, EU was debating taking on tougher targets (well beyond the current ones they are not close to meeting) and there was much controversy on how to make them work without massive economic dislocation. While the debate rages, one environmentalist actually spun: "The key thing to watch is whether the target is changing, and the answer is no. The fight in the E.U. is over who gets the money. Nobody is eroding that target. That's what counts in this debate." The fight is over who gets the money doesn't matter? In fact, that really is the only thing that matters, not whether they agree to meaningless targets that they won't meet anyway.

Energy, Enviro Appointments Official – The Obama Administration named its energy and environment team. While formal announcement will happen today at 5:00 p.m. EST in Chicago, it has been reported that the President-Elect's energy/environment teams includes Lisa Jackson at EPA, Steven Chu at Energy, Nancy Sutley at CEQ and Carol Browner as White House Energy Czar. Through the grapevine we are still hearing that there is some concern about Browner, her husband's lobbying issues, her ability to rally on this issue and the overall structure/role of czar. Perhaps we'll see some of these issues play out. As for what we know, Lisa Jackson is dedicated public servant with time in service at the EPA and as head of a state agency. She has experience with enforcement and rulemaking matters. Moreover, as head of an agency in New Jersey, she has had real world experience dealing with areas of scenic beauty, large populations, and substantial industrial development. We hope that means she will bring a true sense of balance to a very complicated job. As for Steven Chu, despite some of the media's recent "coal" revelations from his speeches, he comes from a background as Director of the one of America's most distinguished national laboratories. His experience seems to dovetail perfectly with the President-elect's commitment to bringing new energy technology to market in a timely fashion. An understanding of the art of the possible in energy technology will be critical to the development of a cost-effective climate change policy. As industry folks, we look forward to working with both individuals should they be confirmed for their important positions.

NSR III Rule Let on Cutting Room Floor –The EPA also announced that it would not finalize another New Source Review proposal aiming at improving the NSR program last week. While environmentalists claimed victory, it is important to remember what is lost when such improvements are not made. Scott Segal, director of the Electric Reliability Coordinating Council (ERCC), the EGU rule would have brought further clarity to Clean Air Act enforcement. Unfortunately, the Agency missed an important opportunity to advance the cause of energy efficiency projects with material benefits for the environment and the economy. Segal said "it seems clear that EPA wants to give the Obama Administration an opportunity to grapple with this important issue on their own, and that's understandable. We hope that as the next Administration will seek pragmatic solutions to issues like enhanced air quality and global climate change that they will realize the necessity of policies that promote energy efficiency." As you know, the drive to bring common sense to the NSR program did not begin in the current Administration, but was also an important reform effort in both the first Bush Administration and the Clinton Administration. While many environmental groups portray it this way, there is no need to view the effort as partisan.

EPA to Issue Rule Aimed at Acid Rain Program Uncertainty Following CAIR Decision – The Environmental Protection Agency will issue an interim final rule today reaffirming provisions of the Acid Rain Program in light of the recent court decision that vacated its program for reducing emissions of sulfur dioxide and nitrogen oxides from power plants in 28 Eastern and Midwestern states and the District of Columbia. The rule, effective immediately for one year, reaffirms EPA's sulfur dioxide emissions credit trading program, which had been incorporated into Clean Air Interstate Rule (CAIR) prior to its vacatur. Upon the vacatur of the CAIR rule, trading markets collapsed and raising significant uncertainty about the future. For more on this, please don't hesitate to call former EPA Air Administrator Jeff Holmstead (202-828-5852).

Refiner Standards Revised Slightly – EPA also revised its new source performance standards for petroleum refineries following comments and public hearing in late November. Under the original proposal, the rule was expected to help refiners reduce emissions and increase flexibility as they expand to meet consumer demand and would establish three subcategories of process heaters, setting nitrogen oxides performance standards for natural draft process heaters, forced draft process heaters, and co-fired process heaters. The revision will require refineries to do additional monitoring on the amount of excess gas and sulfur flared off and take corrective measures if a unit relies on flaring more than expected. Refineries would be required to perform root-cause analyses for flaring events that exceed certain levels of a 24-hour period. Whatever happened, the rule must not be stayed as it is currently. Refiners need to have this done as soon as possible for clarity’s sake so they can move forward on projects that will increase future gasoline supplies.

Australia Roiling Climate on Both Sides – Australia said it will aim to reduce its greenhouse gas emissions by between 5–15% by 2020 angering both industry officials for too aggressive cuts and environmental groups that had been lobbying for deeper cuts. Apparently, final targets would depend on whether developed and developing nations, like China and India, can agree to binding reductions under a new United Nations climate treaty next year and include free allocations which has the enviros in a rage. Rudd, who took a strong political position during his run and inauguration, apparently has gotten a little softer when he actually had to propose the plan. There is a surprise.

Invenergy Projects Close Financing – Perhaps signaling a thawing of credit markets, Invenergy closed on equity financing for its Middle-South Wind Holdings portfolio, which consists of the 150-MW McAdoo Energy wind farm in Dickens County, Texas, and the 99-MW Grand Ridge Energy Center in La Salle County, Ill. The investments, made by GE Energy Financial Services and MetLife, were used to retire construction financing on the facilities. The McAdoo investment helps Texas achieve its mandate of 5,880 MW of renewable energy by 2015. Power from that facility, which consists of 100 GE 1.5-MW turbines, is being sold into the Electric Reliability Council of Texas market. The Grand Ridge Energy Center, which consists of 66 GE 1.5-MW turbines, is helping Illinois meet its requirement to supply 2% of electricity from renewable sources in 2008 (rising to 25% by 2025); energy produced at Grand Ridge is going into the PJM Interconnection market. The wind farm is about 80 miles southwest of Chicago.

Mt. Storm WV Wind Project Finalized, Operational – Shell WindEnergy and Dominion said that the NedPower Mount Storm wind energy project in West Virginia is finally completed and fully operational. The two companies each own a 50% interest in the 264-MW project, which is located in Grant County; construction began in 2006. Output from the wind farm will be sold into PJM Interconnection, the regional transmission operator and wholesale electricity market serving 51 million people in 13 states and the District of Columbia. It is the second fully-functional wind project in West Virginia. Three others have been approved and three more are in various stages of consideration.

ON THE SCHEDULE THIS WEEK:

Commissioners to Look at Changes for PA Wind Project – The Fayette County Commissioners are expected to vote this week on enacting the planning commission's recommendations to amend the County Zoning Ordinance that will enable wind projects to keep with current industry standard requirements as they are built. Earlier this year, a county panel rejected changes which has now become a lawsuit. A summary of the changes include Tower heights of up to 300’ as opposed to 250’, property line setback issues and sound levels not to exceed 55 dBA/dBC down from 70dB, among other issues.

Spencer Discusses PDO, Warming at Marshall Event – The George Marshall Institute held a Noon forum today featuring former NASA scientist Dr. Roy Spencer of the University of Alabama-Huntsville at the Capitol Hill Club. The Intergovernmental Panel on Climate Change (IPCC) assumes that there are no long-term natural sources of energy imbalances in the Earth's radiative budget that would cause natural periods of global warming or global cooling. But recent satellite evidence suggests that the Pacific Decadal Oscillation (PDO) does indeed change the Earth's energy balance. When that PDO-related forcing is put into a simple climate model, along with the 100-year history of the PDO, a global temperature history results which is very similar to that observed, including 75% of the centennial temperature trend. This suggests that the IPCC's claim of high confidence in global warming being manmade is misplaced. Dr. Roy Spencer is a principal research scientist for University of Alabama in Huntsville. In the past, he has served as Senior Scientist for Climate Studies at NASA's Marshall Space Flight Center in Huntsville, Alabama, where here he directed research into the development and application of satellite passive microwave remote sensing techniques for measuring global temperature, water vapor, and precipitation. He currently is the U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer (AMSR-E) on NASA's Aqua satellite. Dr. Spencer is the recipient of NASA's Medal for Exceptional Scientific Achievement and the American Meteorological Society's Special Award for his satellite-based temperature monitoring work.

AGU Sets Fall Meetings for San Francisco – The American Geophysical Union will hold its annual Fall meeting in San Francisco on December 15-19 at the Moscone Center. The event is always chalk full of science and climate related events and usually includes some major announcements. Here is a link: http://www.agu.org/meetings/fm08/

Marine Scientists to Address Ocean Issues – The National Press Club will hold a Newsmaker Event tomorrow at 10:00 a.m. current threats to marine ecosystems and global fisheries. Some say climate change is creating conditions for a dangerous and irreversible tipping point for the ocean, which now absorbs roughly 30% of atmospheric carbon dioxide. A handful of the nation's top marine scientists and a deep sea photographer will describe how the cumulative impact of climate change, overfishing, oil extraction, and toxic pollution could portend the loss of innumerable species. The group includes National Geographic Photographer Brian Skerry, Scripps Institution of Oceanography's Dr. Jeremy Jackson, Prof. of Oceanography and University of Maryland Center for Environmental Science Director, Dr. Donald Boesch, former NOAA fisheries researcher and chemist Dr. Jeffrey Short of Oceana and Dr. Michael Hirshfield, Chief Scientist of Oceana. They will summarize the group's and his own federal policy change recommendations will make legislative recommendations about ways to prevent further damage to oceans and a potential collapse of fisheries by mid-century. They will outline incentives to try to save what's left of marine life worldwide -- from the tiny phytoplankton and krill at the bottom of the food chain to awe-inspiring predators such as sharks -- before it's too late. BNA's Pat Rizzuto will moderate.

Beverage Cos Focus on Recycling, Climate – The Climate Group and the American Beverage Association will announce a new partnership at the national Press Club's First Amendment Lounge tomorrow at 1:00 p.m. The partner will focus on recycling and will feature ABA's leading members, including the Coca-Cola Company, Pepsico, Dr. Pepper/Snapple and Nestle Waters. The partnership will be a part of an initiative called, "Recycle Together." This new initiative will demonstrate that recycling can play a major role in the fight against climate change while saving valuable resources and energy.

NRC's Klein to Discuss Nuclear Issues at Forum – The U.S. Energy Assn. will host an Energy newsmaker event with Nuclear Regulatory Commission Chairman Dale Klein at the Ronald Reagan Building and International Trade Center at 10:00 a.m. on Wednesday to discuss the future of the nuclear industry.

EIA Head to Talk Future Energy – The Johns Hopkins University Paul Nitze School of Advanced International Studies' (SAIS) Global Energy and Environment Initiative will hold a discussion featuring Energy Information Administration (EIA) Director Howard Gruenspecht on Wednesday at 9:30 a.m. focused on the Energy Forecasts to 2030. The event will be at the JHU SAIS Nitze Building (1740 Massachusetts Ave.) in the Kenney Auditorium. The report released earlier this month shows continued use of fossil fuels and expansions in renewables and biofuels.

Obama Energy Agenda Focus of Web Forum – Infocast will hold a web forum on Thursday that will address the Obama administration and the 111th Congress imprints on energy and climate policy energy issues. The event will begin at 1:00 p.m. and feature Richard Glick of Iberdrola Renewables, Tony Kavanagh of AEP, Joe Mikrut of Capitol Tax Partners and Jonathan Weisgall of MidAmerican. It will be moderated by Chadbourne and Parke's Keith Martin. Both the administration and leading congressional leaders have pledged that energy policy will change to address the economic and national security implications of our dependence on oil as well as widespread concerns about climate change. However, standing in the way of change are technological obstacles and an ongoing economic crisis. The panel will discuss what new proposals, initiatives and legislation are we likely to see—and when and will focus largely on the power sector.

THE WEEKS AHEAD:

CA's Nichols Climate Event Rescheduled – Resources for the Future and the Commonwealth Club of California has rescheduled a discussion entitled “A New Climate of Change” from Tuesday November 18 until sometime in next January. The event will still be held in Washington, DC. The full-day event will include a keynote address by Mary D. Nichols, chairman of California’s Air Resources Board.

AMS Meeting Set for 2009 – The American Meteorological Society will hold its annual meeting on January 10 – 15 in Phoenix , AZ and is expected to bring together more than 2,000 of the world's leading atmospheric scientists to discuss weather and climate-related topics, including hurricanes, climate change, space weather, drought, flash floods, 2008 weather highlights, atmospheric chemistry, and much more. The meeting will host more than 1900 scientific sessions and posters. For More: http://www.ametsoc.org/MEET/annual/index.html

CA Oil Sands Summit Set for Calgary – For any brave souls that really like the cold, the 6th Annual Canadian Oil Sands Summit will be held in Calgary on January 13-14 at the TELUS Conference Centre. For more information first go and buy some warm clothes/jackets and then go to: http://www.insightinfo.com/index.cfm?ci_id=25525andla_id=1

Press Club to Host Oil CEO for Luncheon Speech – James Mulva, Chairman and CEO of ConocoPhillips, will address a National Press Club luncheon on January 13. Stay tune for more.

AWEA Wind Power Asset Workshop to Discuss Challenges – AWEA will hold its 4^th annual Wind Power Asset Management Workshop in San Diego January 13-14. Not that is more like it. Topics will include safety/health issues, operations and maintenance, wind project lifecycle costs and financial challenges in today market, among other topics. For more: http://www.awea.org/events/am2009/

FL Forum to Focus on Energy Freedom – Citizens for Energy Freedom, the grassroots movement of the Set America Free Coalition, will hold an energy conference January 17 and 18 in Jupiter, FL. The event will be held at Florida Atlantic University and the West Palm Beach Marriott Hotel. Experts will address energy independence trends in economics, environment, technology, national security and politics, including the Methanol Institute's Greg Dolan, RFA's Bob Dineen and energy security expert Frank Gaffney. For more see: http://www.citizensforenergyfreedom.org/html/conference.html

Conference to Hit Latest Developments in Air Modeling – For those of you looking to get out of DC while 5 million other descend on the nation's Capitol, the Air and Waste Management Association (AandWMA) will hold a conference in Toronto, Canada January 19 and 20 that will examine the most recent advances in air modeling in Canada and the United States. The program is divided into four sessions that cover: what is new and needed in air modeling; combined modeling and monitoring; cumulative effects; and case studies and practical applications. Rumor has it that there will significant monitoring experiments held inside the Air Canada Centre with about 18,000 other subjects. Count me in on that one. For more on the event, see: http://www.awma.org/events/view_event.html?typeid=1andid=116

Gore to Headline Green Inaugural Ball – AWEA is one of several sponsors that will be hosting the 2009 Green Inaugural Ball on January 19th, 2009, in Washington, D.C. AWEA is partnering with fellow renewable energy trade associations and the environmental community to create the premiere event emphasizing the importance of the green economy to our country. It is our time to convey to the new Administration and Congress that a new approach to energy offers a clear path to a more secure and prosperous future. Former Vice President Al Gore will be the Honorary Chair for the Green Inaugural Ball and will speak at the event. Tickets will go on sale on Dec. 19th for sponsors and December 22nd for general admission.

January 20 – Presidential Inauguration Day

Solar Conference Slated for Las Vegas – Solar Power Generation USA will be held in Las Vegas on January 21 and 22 and will focus on the different levels of government contributing to solar policy as well as understanding the true market potential of CST, CPV and large scale PV. Leading experts will discuss the different business strategies that are emerging and how stakeholders are working together to address key issues such as permitting and grid connection. Speakers will include a cadre of experts in solar technology development, manufacturing, finance as well as utility exec, developers, policy makers and regulators. For more: http://www.greenpowerconferences.com/renewablesmarkets/solar_power_usa.html

Clean Tech Conference to Focus on Products, Companies – The 5^th Clean Tech Investor Summit will be held in Palm Springs on January 21-22. The event is run by International Business Forum and Clean Edge, and is the premier clean-tech investment and innovation event. It brings together leading clean-tech investors, Fortune 500 executives, entrepreneurs, and service providers for two days of high-level presentations and conversations. Emerging growth companies delivering clean-tech products and services represent the next big wave of technology innovation. Applied Materials, GE, Intel, Siemens, and Wal-Mart are just some of the multinationals joining forces with emerging growth companies that are literally reshaping the economic landscape. Over the last eight years, venture investments in the sector have increased from less than 1 percent of total venture investments to more than 10 percent. Clean-energy investing in the U.S. reached $2.7 billion alone in 2007. Many clean technologies are experiencing double-digit annual growth rates.