Gabrielle Sigel and Jennifer Cassel, attorneys in Jenner & Block's Environmental, Energy & Natural Resources Law Practice, recently posted to Jenner & Block's Climate Change Update Resource Center their March 2010 Update of Climate Change developments. Of particular note in this month's update are: (1) an announcement by EPA’s Administrator that GHG emissions requirements for stationary sources are to begin in 2011; and (2) the involvement of sixteen states in litigation attacking EPA’s endangerment finding for GHGs. Click here to read the March 2010 Climate Change Update.
On March 8 and 9, 2010, respectively, India and China submitted letters to the executive secretary of the United Nations Framework Convention on Climate Change (“UNFCCC”) indicating their support for the “Copenhagen Accord,” reached in December 2009 at the 15th Annual Conference of the Parties to the UNFCCC in Denmark. In its letter, India, represented by joint secretary of the Ministry of Environment and Forests, Rajani Ranjan Rashmi, states that India may be listed in the introductory text of the agreement - the “chapeau” - with the caveat that India understands the accord to be “a political document” which is not legally binding, but rather which “could have value if the areas of convergence reflected in the Accord are used to help the Parties reach agreed outcomes under the UN multilateral negotiations….” In Chinese Premier Wen Jiabao’s letters, one of which was originally sent to U.N. Secretary General Ban Ki-moon and the other to the Prime Minister of Denmark, China states that it “highly commends and supports the Copenhagen Accord” and reaffirms that China will “take active steps to meet the targets we have set out for our voluntary domestic actions….”
The letter from India is available at http://unfccc.int/files/meetings/application/pdf/indiacphaccord.pdf
The letter from China is available at http://unfccc.int/files/meetings/application/pdf/chinacphaccord.pdf
On March 10, 2010, the Regional Greenhouse Gas Initiative (“RGGI”), comprised of Connecticut, Delaware, Massachusetts, Rhode Island, Maine, Maryland, Vermont, New Jersey, New York, and New Hampshire, held its seventh auction of carbon dioxide (CO2) emission allowances. RGGI reported on March 12 that all 40.6 million CO2 allowances available for immediate use were sold for a clearing price of $2.07 per allowance, up from $2.05 at the previous RGGI auction last December. Approximately two million allowances available for use after 2012 also were sold at the March 10, 2010, auction for a clearing price of $1.86 per allowance. The auction raised approximately $88 million, increasing the total proceeds from all seven auctions to $582 million.
More information on the seventh RGGI auction is available at http://www.rggi.org/docs/Auction_7_Release_MM_Report_2010_03_12.pdf
On March 18 and 19, 2010, Governor Ted Kulongoski (D) of Oregon and Governor Christine Gregoire (D) of Washington signed bills which pave the way for greater information about and potential reductions of GHG emissions in their states. The Oregon bill, S.B. 1059a, directs the Oregon Transportation Commission to “adopt a statewide transportation strategy on [GHG] emissions…,” including establishing guidelines for developing land use and transportation alternatives that would decrease GHG emissions and creating a program to assist local governments in reducing GHG emissions from vehicles. The bill also calls for the Oregon Department of Transportation and the Department of Land Conservation to educate the public about the need to reduce GHG emissions from vehicles and other sources. Those two agencies are to report back to Congress on the financing needed to implement the bill’s directives, as well as the progress made in achieving them.
The Washington legislation, SSB 6373, modifies the state’s GHG reporting requirements so that they align more closely with the requirements established by the U.S. EPA in September 2009. In contrast to EPA’s requirements, however, Washington will require reporting from any source that emits greater than 10,000 metric tons per year of carbon dioxide equivalent (“CO2-e”), rather than the limited type of sources that are required to report if their emissions equal or exceed 25,000 tpy of CO2-e under the EPA rule.
Oregon’s S.B. 1059a is available at http://www.leg.state.or.us/10ss1/measures/sb1000.dir/sb1059.en.html
Washington’s SSB 6373 is available at http://apps.leg.wa.gov/documents/billdocs/2009-10/Pdf/Bills/Senate%20Passed%20Legislature/6373-S.PL.pdf
On March 5, 2010, Wyoming’s Supreme Court affirmed the issuance of a Clean Air Act (“CAA”) permit for a coal-fired power plant, holding that the plant is not required to limit Greenhouse Gas (“GHG”) emissions because GHGs are not subject to Best Available Control Technology requirements under the CAA. Powder River Basin Res. Council v. Wyoming Dep’t of Envtl. Quality, 226 P.3d 809 (Wyo. 2010) (“PRBRC”). In PRBRC, plaintiffs PRBRC and Sierra Club challenged the air permit issued to Basin Electric Power Cooperative (“Basin Electric”) for the Dry Fork Station power plant, arguing that the permit was improperly issued because it failed to require Basin Electric to limit GHG emissions. The plaintiffs argued that GHGs, including CO2, are “subject to regulation” under the CAA and thus permit limits must be established for the plant’s GHG emissions. The Wyoming Supreme Court rejected plaintiffs’ argument, noting that, while the EPA had agreed to reconsider whether CO2 is ‘subject to regulation’ under the CAA, in agreeing to do so EPA did not stay its interpretation that CO2 is not currently subject to regulation under the CAA. Moreover, the Court reasoned, even if EPA were to determine that CO2 is subject to regulation under the CAA, the plaintiffs did not establish that GHGs were subject to regulation when the permit was issued.
On March 18, 2010, the U.S. District Court for the District of Montana approved a settlement between the U.S. Bureau of Land Management (“BLM”) and the Montana Environmental Information Center under which BLM has agreed to review its duties under National Environmental Policy Act ("NEPA"), the Federal Law Policy and Management Act (“FLPMA”), the Mineral Leasing Act (“MLA”), and a Department of Interior order, to evaluate the climate impact of leasing lands for oil and gas development. BLM has also agreed to temporarily suspend 61 oil and gas leases it has issued, representing over 30,000 acres of land, while conducting that review. Plaintiffs filed the settled lawsuit in January 2009, at which time they alleged that BLM had violated NEPA, FLPMA, MLA and the Department of Interior order in issuing those 61 leases.
The settlement agreement is available at http://meic.org/files/energy/2010-blm-settlement-docs/MEIC__ExecutedSettlementAgreementSTAMP_3.11.2010.pdf
On March 10, 2010, EPA entered into a legal settlement with the Center for Biological Diversity (“CBD”) in which EPA agreed to sign, by March 15, 2010, a Federal Register notice seeking comments on ocean acidification as it pertains to § 303(d) of the Clean Water Act (“CWA”). The settlement resolves a suit in which CBD sued EPA for alleged violating its CWA duties to identify Washington’s ocean waters as impaired due to acidification (caused by absorption of CO2). Under the terms of the settlement, EPA will seek comment on (1) whether EPA should issue guidance concerning the listing of waters as impaired or threatened due to ocean acidification, and if so, what that guidance should state; (2) how states can determine if waters are threatened or impaired by acidification; (3) how states can monitor acidification and its effects; and (4) recommendations for development of Total Maximum Daily Loads (“TMDL”) for waters impaired or threatened by acidification. By November 15, 2010, EPA will issue a memorandum detailing EPA’s plan for its CWA § 303(d) program in light of the comments it receives in response to the Federal Register notice. EPA issued the Federal Register notice on March 22, 2010, and the comment period will close on May 21, 2010.
More information on the settlement agreement is available at http://www.biologicaldiversity.org/news/press_releases/2010/ocean-acidification-03-11-2010.html
The Federal Register notice is available at http://www.biologicaldiversity.org/campaigns/ocean_acidification/pdfs/EPA_Ocean_Acidification_Notice_2010.pdf.
In late March, 2010, sixteen states sought permission to intervene in a lawsuit filed by Virginia in the U.S. Court of Appeals for the District of Colombia Circuit, in which Virginia alleges that EPA’s finding that GHGs endanger the public health and welfare (“the endangerment finding”) is based on unsound science and would have adverse economic effects. Coalition for Responsible Regulation Inc. et al v. United States Envtl. Protection Agency, No. 09-1322 (D.C. Cir. filed Feb. 16, 2010). The sixteen states seeking intervention to oppose the endangerment finding, Alaska, Florida, Hawaii, Indiana, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Nebraska, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota and Utah, also contend that the administrative burden on EPA and state permitting authorities that would result from the endangerment finding would be overwhelming. Meanwhile, approximately 15 states, including New York, California and Arizona, as well as environmental groups such as Sierra Club, Natural Resources Defense Council, Environmental Defense Fund and Wetland Watch, have sought permission to intervene on EPA’s behalf in the suit.
On March 18, 2010, the National Oceanic and Atmospheric Administration (“NOAA”) published its final determination to list a population of euchalon, also known as Pacific smelt, as threatened under the Endangered Species Act (“ESA”). 75 Fed. Reg. 13012. In the notice, NOAA states that it has identified “changes in ocean conditions due to climate change as the most significant threat” to the southern distinct population segment (“DPS”) of Pacific smelt, which live in the British Columbia, Fraser, Columbia and Klamath rivers. In addition, NOAA finds, “climate-induced change to freshwater habitats is a moderate threat” to the southern DPS of Pacific smelt. NOAA has not yet determined what measures must be taken to protect the smelt under the ESA, but will promulgate protective regulations and publish those rules in the Federal Register. The effective date of NOAA’s listing is May 17, 2010.
The Federal Register notice is available at http://edocket.access.gpo.gov/2010/pdf/2010-5996.pdf.
On March 29, 2010, EPA formally announced that it had reconsidered its interpretation of the term “subject to regulation” under the Clean Air Act (“CAA”), and as a result, will delay the effective date of greenhouse gas (“GHG”) emissions requirements for stationary sources until at least January 2, 2011. 75 Fed. Reg. 17004. The announcement stems from EPA’s February 2009 agreement to reconsider the December 2008 “Johnson memorandum,” in which memo former EPA Administrator Stephen Johnson interpreted the terms “subject to regulation” under the CAA to include only those air pollutants for which the CAA requires actual control of emissions. EPA has decided to maintain that interpretation, refining it only to clarify that GHG emission requirements for stationary sources under the Prevention of Signification Deterioration (“PSD”) program “will not apply to a newly regulated pollutant until a regulatory requirement to control emissions of that pollutant ‘takes effect.’” Because GHG emissions limits for vehicles will not take effect until at least January 2, 2011, EPA explains, the PSD requirements will not take effect until that time. EPA published notice of its announcement in the April 2, 2010 Federal Register.
The Federal Register notice is available at http://edocket.access.gpo.gov/2010/pdf/2010-7536.pdf.
On March 4, 2010, Sen. Jay Rockefeller (D.-W. Va.) and Reps. Nick Rahall (D-W. Va.), Rick Boucher (D-Va.) and Alan Mollohan (D-W. Va.) introduced identical bills, S. 3072 and H.R. 4753, that would suspend for two years the U.S. Environmental Protection Agency’s (“EPA”) authority to regulate carbon dioxide (“CO2”) or methane emissions from stationary sources under the federal Clean Air Act, excepting reporting requirements. The bills, called the “Stationary Source Regulations Delay Act,” would preclude CO2 and methane from being deemed pollutants “subject to regulation under the Clean Air Act” during the two year period of the bills’ effect, regardless of any other law or EPA action. The bills would not modify EPA’s authority as to emissions from motor vehicles. On March 4, 2010, H.R. 4753 was referred to the House Committee on Energy and Commerce, and S. 3072 was referred to the Senate Committee on Environment and Public Works.
H.R. 4753 is available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4753ih.txt.pdf.
On April 27, 2010, Australian Prime Minister Kevin Rudd announced that implementation of the country’s carbon trading program, which would cap the amount of carbon dioxide that polluters could emit and require those emitters which exceeded the cap to purchase trading permits, would be delayed until at least 2013. The Prime Minister stated that the reason for the delay is that the controversial program lost the support of the Liberal Party, and could not garner enough votes to pass this year for Rudd’s planned start date of July 2011. Opposition lawmakers, in contrast, claim that Rudd pulled the plug on the program because he was afraid he would lose votes in an expected election this year.
More information is available at http://news.yahoo.com/s/afp/20100427/sc_afp/australiapoliticsclimate
In April 2010, Utah, Arizona and New Mexico each took actions to limit the states’ plans to regulate GHGs. First, on April 13, 2010, a state judge in New Mexico issued a preliminary injunction preventing the New Mexico Environmental Improvement Board (“EIB”) from considering or adopting a rulemaking petition to cap GHG emissions until the court determines whether EIB is authorized, under New Mexico law, to regulate GHGs. Leavell v. New Mexico Envtl. Improvement Bd., N.M. Dist. Ct., No. D-506-CV-201000050, preliminary injunction issued Apr. 13, 2010). Plaintiffs, a group of state Congressmen, utility companies, and farming and petroleum-related associations, argued in their complaint that EIB may not regulate air contaminants, including GHGs, until EIB “determine[s] the quantity and duration at which that air contaminant becomes ‘air pollution,’” which determination, they argued, EIB makes by adopting an ambient air quality standard for the contaminant. Because no ambient air quality standard for GHGs has been set, plaintiffs asserted that EIB may not entertain or adopt the rulemaking petition.
On April 19, 2010, the Environmental Defense Fund (“EDF”) and Tenaska, Inc., announced that they had reached an agreement under which EDF agreed not to oppose a 600 megawatt coal-fired power plant Tenaska proposes to construct near Sweetwater, Texas, in exchange for Tenaska’s promise to capture and sequester 85% of the estimated 7.5 million tons of carbon dioxide (“CO2”) the plant will produce each year, as well as reduce water use. Tenaska will arrange for the transport and injection of the captured CO2 into the Permian Basin oil fields, to be used for enhanced oil recovery. EDF, in turn, will withdraw from a contested case hearing on the air quality permit for the proposed plant, called the Trailblazer Energy Center, and will not attempt to delay the granting of the air quality permit or any future air quality permits for the plant. The proposed plant has not yet received all required approvals, however, and other organizations may oppose it. If the plant receives all required approvals, construction will begin in 2011 and operation is expected to start in 2016.
A press release about the agreement is available at http://www.tenaskatrailblazer.com/media/press-100419b.html
On April 26, 2010, the California Court of Appeal of the First Appellate District upheld the injunction prohibiting modifications to Chevron’s Richmond, California oil refinery, holding that the City of Richmond improperly approved permits without requiring measures, mandated by the California Environmental Quality Act (“CEQA”), to mitigate the increased GHG emissions that would result from the refinery’s modifications. Communities for a Better Envt. v. Richmond, Cal. Ct. App., No. A125618 (Apr. 26, 2010). The case dates back to 2005, when Chevron initially proposed the modifications. In July 2008, Richmond approved the permits for the modifications, and issued an Environmental Impact Report (“EIR”) pursuant to CEQA. As part of its approval of the EIR, although Richmond acknowledged that the increase of 898,000 metric tons per year of GHG emissions would have a significant effect on the environment, the only mitigation measure Richmond required was that Chevron prepare a plan, within one year of the permits’ approval, “for achieving complete reduction of GHG emissions up to… 898,000 metric tons per year…,” which plan would be approved by the Richmond City Council. Stating that “the development of mitigation measures, as envisioned by CEQA, is not meant to be a bilateral negotiation between a project proponent and the lead agency after project approval; but rather, an open process that also involves other interested agencies and the public,” the Court held that the mitigation measure “does not satisfy CEQA’s requirements.”
The opinion is available at http://caselaw.lp.findlaw.com/data2/californiastatecases/a125618.pdf?DCMP=ESP-pro_calcases
On April 2, 2010, the same day EPA published its final reinterpretation of the meaning of “subject to regulation” under the Clean Air Act, triggering regulation of GHG emissions from stationary sources in January 2011, several industry groups filed a petition for review of that final EPA action in the United States Court of Appeals for the District of Columbia Circuit. Coalition for Responsible Regulation v. Envtl. Protection Agency, D.C. Cir., No. 10-1073 (filed Apr. 2, 2010). Petitioners, which include the Coalition for Responsible Regulation, Inc., the Industrial Minerals Association-North America, the National Cattlemen’s Beef Association (“NCBA”), Great Northern Project Development, L.P., Rosebud Mining Company and Alpha Natural Resources, Inc., do not specify in their petition why they are requesting review of EPA’s action. However, in a press release issued by petitioner NCBA, NCBA chief environmental counsel Tamara Thies opined that EPA is acting in violation of the Clean Air Act by not issuing a National Ambient Air Quality Standard for GHGs prior to regulating them under the Prevention of Significant Deterioration program for stationary sources. “Before imposing very-real, long-term negative impacts on the entire U.S. economy,” This continues, “the EPA should at least follow Congress’ strict instructions for regulating pollutants under the PSD program.”
The NCBA press release is available at http://www.beefusa.org/NEWSNCBAChallengesEPAsInterpretationofGreenhouseGasPermittingRules40507.aspx.
On April 6 and 7, 2010, automakers filed motions to withdraw their appeals in three lawsuits challenging California’s GHG emissions standards for vehicles. Central Valley Chrysler-Jeep Inc. v. Goldstene, 9th Cir., No. 08-17378, (motion to dismiss filed Apr. 6, 2010), Lincoln-Dodge Inc. v. Sullivan, D. R.I., No. 06-70T, (motion to dismiss filed Apr. 7, 2010), and Green Mountain Chrysler-Plymouth-Dodge-Jeep v. Crombie, D. Vt., No. 05-cv-302 (motion to dismiss filed Apr. 7, 2010). In Lincoln-Dodge, Inc. and Green Mountain, automakers had challenged Rhode Island’s and Vermont’s adoption of California’s vehicle emission standards before California agreed, in May 2009, to accept compliance with revised federal emission limits as compliance with its own standards. The automakers’ challenge in Goldstene to California’s GHG emission limits for vehicles was likewise withdrawn after the May 2009 agreement between California and the federal government eliminated the disparities between California emission limits and federal limits until at least 2016. The withdrawal of appeals in all three cases fulfilled the automakers’ promise, made as part of the May 2009 agreement, to drop their suits after federal GHG emission standards were issued and California agreed to recognize those standards as compliant with the state’s rules.
On April 12, 2010, EPA published notice of a proposal to require facilities subject to the mandatory GHG reporting rule, issued by EPA in October 2009, to report whether any of their GHG emissions come from combined heat and power generation, or “co-generation,” units at those facilities. 75 Fed. Reg. 18455. EPA explains that it is requesting this additional data because “information on the types and characteristics of facilities that employ cogeneration technologies and the performance of cogeneration units could be important to future development of greenhouse gas mitigation strategies.” The proposed rule also calls for covered facilities to report any U.S. parent companies of those facilities, and to provide the North American Industry Classification System (“NAICS”) code applicable to the facility, in their annual emissions reports. The comment period on the proposed rule will close on June 11, 2010.
The notice is available at http://edocket.access.gpo.gov/2010/pdf/2010-6765.pdf
On April 1, 2010, EPA and the Department of Transportation (“DOT”) released joint fuel economy and the first ever greenhouse gas (“GHG”) emission limits for 2012-2016 model year light-duty vehicles, mandating that those vehicles decrease CO2 emissions each year until they achieve a combined average of 250 grams of CO2 per mile for model year 2016 vehicles. 75 Fed. Reg. 25324. Under the new standards, vehicles may decrease their CO2 emissions either by improving fuel economy or by taking other GHG-reduction measures, such as cutting leaks of hydroflourocarbons (HFCs) from vehicle air conditioning systems. If all of the vehicles’ CO2reductions come from improved fuel economy, they would achieve an average fuel economy of 35.5 miles per gallon by model year 2016. EPA estimates that the new standards will decrease GHG emissions by approximately 960 million metrics tons over the lives of each of the covered 2012-2016 vehicles. The standards result from the May 2009 agreement among EPA, DOT, the state of California and other entities, discussed in the May 2009 issue of GE Climate Change EWS. The final standards were published in the May 7, 2010 issue of the Federal Register.
The final rule is available at http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf
On April 19, 2010, Sen. Sherrod Brown (D-Ohio), along with Senators Ted Kaufman (D-Del.), Tom Caper (D. Del), Susan Collins (R-Me) and Olympia Snowe (D-Me), introduced a bill that provides funds to expand research and development (“R&D”) of offshore wind energy resources in the U.S. The bill, titled the “Program for Offshore Wind Energy Research and Development Act of 2010,” or the “POWERED Act of 2010” (S. 3226), would create a grant program for R&D on numerous subjects pertaining to wind energy development, including research of ice formation and other weather-related matters, integration of offshore wind energy into the power grid, impacts of offshore wind development on wildlife, and mooring technologies, among many others. The bill also directs the Secretary of Energy to formulate a “comprehensive roadmap” towards expanding offshore wind energy resources in the U.S., which roadmap would be reported to Congress within 180 days of enactment of the bill. S. 3226 was referred to the Senate Committee on Energy and Natural Resources on April 19, 2010.
S. 3226 is available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:s3226is.txt.pdf
On April 20, 2010, Sen. James Inhofe (R-Okla.) introduced a bill which would prohibit agencies from taking climate change impacts into account when conducting environmental impact evaluations under the National Environmental Policy Act (“NEPA”). Specifically, under Inhofe’s NEPA Certainty Act (S. 3230), “compliance with [NEPA] shall not include consideration of—(1) the greenhouse gas emissions, or any climate change effects of those emissions, of a proposed action and alternative actions; or (2) the relationship of climate change effects to a proposed action or alternatives, including the relationship to proposal design, environmental impacts, mitigation, and adaptation measures.” The bill, co-sponsored by 6 other Republican Senators, also includes a “declaration” that NEPA “should not be used to document, predict, or mitigate the climate effects of specific Federal actions.” The NEPA Certainty Act was referred to the Senate Committee on Environment and Public Works on April 20, 2010.
S. 3230 is available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:s3230is.txt.pdf
Federal Legislative Developments
- Obama Requests Increased Funding for Climate Change
On February 1, 2010, President Obama sent to Congress a budget request for fiscal year 2011 in which he requested increased funding for climate change measures even as he decreased his overall budget request.
Some of the items listed in the President’s budget request include: $54.5 billion for Dept of Energy loan guarantees for clean energy technologies; $21 million for EPA to implement the mandatory greenhouse gas (“GHG”) reporting rule; $56 million for EPA and State climate change programs, including $25 million to be used to assist EPA and the States to incorporate GHG emission restrictions into Clean Air Act (“CAA”) permitting, $5 million to develop best available control technology (“BACT”) for GHG emission limits in CAA permits, and $7 million to develop new source performance standards for certain sources that produce GHG emissions; $7 million to fund carbon capture and sequestration (“CCS”) projects and $545 million to fund research of CCS technologies; $6 million for EPA to implement GHG emission standards for vehicles; and $2.6 billion to fund research related to climate change. Unlike his budget request for FY 2010, President Obama does not request funding to implement a cap-and-trade program in FY 2011.