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US EPA Proposes Snur for Trichloroethylene
Aug 4, 2015 | Chemical Watch
The US EPA is proposing to restrict new uses of trichloroethylene (TCE) in certain consumer products through a significant new use rule (Snur). -
Spokane, Wash., Sues Monsanto Over PCB Cleanup
Aug 4, 2015 | E&E - Greenwire
The city of Spokane, Wash., has filed suit against Monsanto Co., arguing the company sold chemicals it knew were harmful to human health. -
Move to Fight Obama’s Climate Plan Started Early
Aug 4, 2015 | The New York Times
By Coral Davenport and Julie Hirschfeld Davis
In the early months of 2014, a group of about 30 corporate lawyers, coal lobbyists and Republican political strategists began meeting regularly in the headquarters of the U.S. Chamber of Commerce, often, according to some of the participants, in a conference room overlooking the White House. -
A Clean-Energy Breakthrough
Aug 4, 2015 | The Wall Street Journal
By Fred Krupp
With the Environmental Protection Agency’s Clean Power Plan now final, the era of unlimited carbon pollution from U.S. power plants is finally coming to an end. -
How the Clean Energy Boom Let EPA Toughen Up Its Carbon Rules
Aug 4, 2015 | The Washington Post
By Chris Mooney
The Obama administration’s new Clean Power Plan, released Monday, is being heralded as a “game-changer.” -
California is Ahead of the Game as Obama Releases Clean Power Plan
Aug 4, 2015 | Los Angeles Times
By Tony Barboza
President Obama's plan to cut carbon pollution from power plants over the next 15 years will force states to address climate change by pushing them to act more like California. -
Three Lines of Attack Against Obama’s Climate Change Rule
Aug 4, 2015 | The Hill - E2 Wire
By Timothy Cama
Opponents of the Obama administration’s sweeping new standards for power plant emissions have identified three avenues of attack, as they formulate a strategy to beat back the central pillar of the president’s climate change initiative. -
Reid: Republicans ‘Have No Plan’ on Climate Change
Aug 4, 2015 | The Hill - E2 Wire
By Devin Henry
Senate Minority Leader Harry Reid (D-Nev.) defended President Obama’s new climate rule for power plants on Tuesday and hit its Republican opponents for not having a viable climate change agenda. -
Obama Rule Adds 'Safety Valve' for Grid Emergencies
Aug 4, 2015 | E&E - Energywire
By Peter Behr and Rod Kuckro
Faced with warnings of possible grid blackouts tied to future coal plant closings, U.S. EPA added a reliability "safety valve" to its final Clean Power Plan that gives states a 90-day period to exceed carbon limits during emergencies. -
Final Clean Power Plan Shifts Toward Renewables and Away from Natural Gas
Aug 4, 2015 | E&E - Climatewire
By Scott Detrow and Elizabeth Harball
When President Obama unveiled his signature effort to cut the United States' greenhouse gas footprint yesterday, he ticked off all the different ways his administration has already worked to lower carbon emissions. -
EPA Proposes Carbon Trading to Deal with Reluctant States
Aug 4, 2015 | E&E - Climatewire
By Emily Holden and Evan Lehmann
Republican governors who refuse to comply with President Obama's new climate plan might find themselves facing a more detested option: cap and trade. -
EPA Toughens Targets, Stokes Political Fire in Appalachia
Aug 4, 2015 | E&E - Greenwire
By Jean Chemnick and Manuel Quiñones
Two Appalachian governors who've resisted calls to "just say no" to U.S. EPA's Clean Power Plan are facing increased political pressure today after the final rule assigned their states much stiffer responsibilities for curbing heat-trapping emissions from power plants. -
E&E Reporters Kuckro and Chemnick Discuss Rule Details, Impact on Legal Challenges and State Compliance
Aug 3, 2015 | E&E - TV
As the Obama administration rolls out its final Clean Power Plan today, what impact will changes made to the rule have on the potential for legal challenges and the ability for states to comply? -
Former EPA General Counsel Martella Says Final Rule Legally Vulnerable
Aug 4, 2015 | E&E - TV
Following yesterday's White House release of the final Clean Power Plan, what are the possible legal vulnerabilities that exist for U.S. EPA in its final rule? -
Why the Clean Power Plan Will Survive in Court
Aug 3, 2015 | Environmental Defense Fund
By Tomas Carbonell
The “Just Say No” campaign fighting the Obama administration’s Clean Power Plan is gambling the public will overlook an important detail. -
Crude Oil Exports and the Price of Gasoline
Aug 4, 2015 | The Hill - Pundits Blog
By Benjamin Zycher
Government policies virtually without exception create economic distortions, so that policy reform can yield results highly counter intuitive. -
Methane Leaks May Greatly Exceed Estimates, Report Says
Aug 4, 2015 | The New York Times
By John Schwartz
A device commonly used to measure the methane that leaks from industrial sources may greatly underestimate those emissions, said an inventor of the technology that the device relies on.
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US EPA Proposes Snur for Trichloroethylene
Aug 4, 2015 | Chemical Watch
The US EPA is proposing to restrict new uses of trichloroethylene (TCE) in certain consumer products through a significant new use rule (Snur).
Substances subject to a Snur require anyone who intends to manufacture or import them to notify the agency at least 90 days before doing so.
The proposed rule would apply to new uses in consumer products, with several exceptions:cleaners and solvent degreasers;film cleaners;hoof polishes;lubricants;mirror edge sealants; andpepper spray.
Prior to the product's introduction, EPA would evaluate the intended use and would have the authority to prohibit or limit TCE use if the agency deemed it to present an unreasonable risk to human health or the environment. The EPA released a prepublication version of the Snur on 30 July. A 60-day comment period will begin after it is published in the Federal Register.
The proposed Snur follows a June 2014 TSCA work plan risk assessment of the chemical, which identified risks associated with the use of TCE in commercial degreasing, in spot treatment during dry cleaning operations, and in certain arts and crafts uses (CW 31 March 2015).
Following the risk assessment's release the EPA has been engaging with companies to phase out the chemical's use.
It recently reached an agreement with PLZ Aeroscience Corporation to voluntarily phase out the use of TCE in its aerosol arts and crafts spray fixative product by 1 September. This is the only such product on the market still used in arts and crafts. The company will be permitted to sell its existing stocks until they are depleted.
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Spokane, Wash., Sues Monsanto Over PCB Cleanup
Aug 4, 2015 | E&E - Greenwire
The city of Spokane, Wash., has filed suit against Monsanto Co., arguing the company sold chemicals it knew were harmful to human health.
The lawsuit, filed in U.S. District Court in Spokane, also alleges Monsanto is to blame for high levels of polychlorinated biphenyls, or PCBs, in the Spokane River.
PCBs have been found in the water, sediments, and fish and wildlife in the Spokane River. The city is trying to meet a 2017 deadline from the federal government to stop discharges of PCBs from entering the river through water and stormwater systems.
The lawsuit notes that Monsanto was the sole producer of PCBs between 1935 and 1979. The suit claims Monsanto hid the fact that it knew PCBs were toxic until after Congress banned PCBs under the Toxic Substances Control Act of 1976.
The city's lawsuit is seeking unspecified compensatory damages.
Monsanto spokeswoman Charla Lord said the company is reviewing the claims but "is not responsible for the costs alleged in this matter" (Nicholas Deshais, Spokesman-Review, Aug. 3). -- SP
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Move to Fight Obama’s Climate Plan Started Early
Aug 4, 2015 | The New York Times
By Coral Davenport and Julie Hirschfeld Davis
In the early months of 2014, a group of about 30 corporate lawyers, coal lobbyists and Republican political strategists began meeting regularly in the headquarters of the U.S. Chamber of Commerce, often, according to some of the participants, in a conference room overlooking the White House. Their task was to start devising a legal strategy for dismantling the climate changeregulations they feared were coming from President Obama.
The group — headed in part by Roger R. Martella Jr., a top environmental official in the George W. Bush administration, and Peter Glazer, a prominent Washington lobbyist — was getting an early start.
By the time Mr. Obama announced the regulations at the White House on Monday, the small group that had begun its work at the Chamber of Commerce had expanded into a vast network of lawyers and lobbyists ranging from state capitols to Capitol Hill, aided by Republican governors and congressional leaders. And their plan was to challenge Mr. Obama at every opportunity and take the fight against what, if enacted, would be one of his signature accomplishments to the Supreme Court.
Within minutes of the announcement, West Virginia’s attorney general, Patrick Morrisey, stepped before a bank of cameras for a news conference at the Greenbrier resort in his home state. Flanked by Mike Duncan, the president of the American Coalition for Clean Coal Electricity, one of the nation’s top coal lobbying groups, and Greg Zoeller, the attorney general of Indiana, Mr. Morrisey announced that a group of at least 15 Republican state attorneys general were preparing to jointly file a legal challenge to Mr. Obama’s proposal.
“The final rule announced Monday blatantly disregards the rule of law and will severely harm West Virginia and the U.S. economy,” Mr. Morrisey said. “This rule represents the most far-reaching energy regulation in this nation’s history, drawn up by radical bureaucrats and based on an obscure, rarely used provision of the Clean Air Act.”
“Our coalition, in short order, will comprise of many states, consumers, mine workers, coal operators, utilities and businesses who are united in opposition to this radical and illegal policy,” he added.
While Mr. Obama had not even put forth a draft proposal of his plans when the group started its work, the president had made plain in several speeches that he intended to act forcefully on climate change — and that he would flex the muscle of his executive authority to do so. “If Congress won’t act soon to protect future generations, I will,” he said in his 2013 State of the Union address. The lawyers and lobbyists wanted to be ready to fire back hard and fast when he did.
In devising its strategy, the group worked closely with the office of Senator Mitch McConnell of Kentucky, the majority leader whose coal-producing home state also stands to suffer under the regulation. While Mr. McConnell opposes the climate change regulations, his advisers knew that he had little chance of enacting legislation to block them in Congress. Instead, Mr. McConnell has taken the unusual step of reaching out directly to governors and attorneys general, urging them to refuse to submit compliance plans for the regulations, and encouraging a state-by-state rejection of the rules.
Mr. Morrisey, whose coal-producing home state is also struggling with the nation’s highest unemployment rate, was chosen as the public face of the suit. But key strategists joining the original planning were Gov. Greg Abbott of Texas, a former attorney general there, and Scott Pruitt, the attorney general of Oklahoma. Both already had experience suing the Obama administration over major Clean Air Act regulations.
An important ally in the effort was the American Legislative Exchange Council, or ALEC, a conservative advocacy group that pushes policy through state legislatures. Typically, the council’s committees of corporate members will craft a model bill designed to push through policies it supports, such as rolling back environmental regulations.
At a July meeting in San Diego, ALEC’s energy committee — which includes Mr. Duncan, the coal lobbyist who also worked closely with Mr. McConnell on his tactics — enacted a model bill designed to directly support state attorneys general who legally challenge the climate change plan. According to a person present at that July meeting, the bill would allow states to create funds, which could be funded by corporate donations, to support legal challenges to the climate change rules.
While it is not unusual for major corporations to sue the federal government over environmental regulations, people involved in the effort to craft a legal strategy against the climate change rules said the time, labor and coordination of the effort were unusual. That effort reflects the sweeping scope of climate change regulations, which, unless struck down in the Supreme Court, could transform huge sectors of the economy, potentially crippling the coal industry and other industrial sectors whose economic well-being relies on coal.
The Obama administration contends that despite the massive scale of the challenges trained against it, the climate change plan is legally sound. “The final rule is built on a rock-solid legal foundation,” said Thomas Reynolds, a spokesman for the agency.
“E.P.A. is using its clear authority under the Clean Air Act to set emission standards for air pollutants,” he said. “The rule is wholly consistent with the law, and we are confident it will withstand any and all legal challenges.”
But Michael McKenna, a Republican energy lobbyist who has worked closely with the group, says that the attorneys general will not back down. “This rule was more aggressive than any of us could have imagined,” he said. “There is no lack of state attorneys general who would like to put a bullet in this thing.” The rules, a final, stricter version of a plan that the Environmental Protection Agency announced in 2012 and 2014, assigns each state a target for reducing its carbon pollution from power plants. States will be allowed to create their own plans to meet the requirements and will have to submit initial versions of their plans by 2016 and final versions by 2018.
The most aggressive of the regulations requires that by 2030, the nation’s existing power plants must cut emissions by 32 percent from 2005 levels, which is an increase from the 30 percent target proposed in the draft regulation.
The president on Monday called the new rules a public health imperative and “the single most important step America has ever taken in the fight against global climate change.” He also sought to wrap the policy in the legitimacy of transcendental values, noting that Pope Francis issued an encyclical in June, calling action on the issue a “moral obligation.”
Even as Mr. Obama acknowledged the steep resistance from coal-producing states and industry critics, he said it was up to the United States to adopt tough standards so that other countries like China would feel compelled to take similar steps.
But Mr. McConnell made it clear he would do everything in his power to combat the rules, which he said the president had crafted because he was “tired of having to work with the Congress the people elected.”
“That’s why the administration is now trying to impose these deeply regressive regulations — regulations that may be illegal, that won’t meaningfully impact the global environment, and that are likely to harm middle- and lower-class Americans most — by executive fiat,” Mr. McConnell said. “It represents a triumph of blind ideology over sound policy and honest compassion,” he added.
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Aug 4, 2015 | The Wall Street Journal
By Fred Krupp
With the Environmental Protection Agency’s Clean Power Plan now final, the era of unlimited carbon pollution from U.S. power plants is finally coming to an end. That’s excellent news, because climate change has put us in the race of our lives—and the countries that move the fastest toward clean energy will be the most competitive, create the most jobs and have the healthiest air. It’s a race to the top, and the Clean Power Plan gives the U.S. a better chance of winning.
Some question whether the EPA has the authority to take this step. They are arguing a point that was settled eight years ago. The Supreme Court ruled in 2007 that the EPA has a clear responsibility under the Clean Air Act to act to reduce emissions of climate-altering pollution.
The plan is also necessary. Without it, a lack of basic federal standards to reduce power-plant emissions created a bad mix of uncertainty for industry and unsafe pollution for the climate. The longer we delay addressing climate-change issues in a serious way, the greater the risk posed to national economic growth, long-term investment and job creation. The Clean Power Plan represents an important step toward addressing those risks.
The EPA has created a prudent framework for action choosing the most flexible options available. The final standards are eminently reasonable. Indeed, the plan gives each state broad latitude to design an approach that fits its needs and maximizes its strengths, while ensuring that emissions goals are met at the least cost.Opinion Journal VideoEditorial Page Editor Paul Gigot discusses the Clean Power Plan, the first-ever national standard imposed on existing power plants. Photos: Getty Images
States can choose to expand renewable energy and distributed generation, rely more on lower-emitting sources, or a host of other approaches. Each state has the opportunity to align emissions reductions with its own policy priorities, boosting innovation and job creation, modernizing its energy infrastructure, and saving businesses and families money by improving energy efficiency.
States should use this watershed moment to remove existing barriers to energy freedom and consumer choice. Outmoded rules in many states make it harder for homeowners to install solar panels—and Americans across the political spectrum have made it clear that they want more control over the electricity they use.
Driving down carbon emissions will ramp up the energy transformation that is already happening across America. What once seemed exotic—electric cars, highly efficient appliances, competitively priced clean energy—is becoming commonplace. In 2014, the clean-energy market in the U.S. expanded by 14%, to almost $200 billion. That is bigger than the domestic airline industry. Solar panels cost one-fifth of what they did in 2008, while installed capacity of solar is six times higher. Wind power now costs less than coal in some places—and will likely be less expensive than even natural gas within the next 10 years. There is positive data on the jobs front, too. Clean energy now delivers three times as many jobs per dollar invested as fossil-fuel investments.
Because of this progress, many states are well-positioned to meet the 2030 goals that the EPA first proposed in the Clean Power Plan last year. Most states are already well on their way. And now this growth will happen even faster, as the EPA’s plan gives companies the incentive to make investment decisions that focus on cleaner energy. For the customer in states that lower emissions by creating opportunities for more efficient use of energy, the plan will mean that home electric bills will be lower and individual control of electricity use will be higher.
These new standards will cut climate pollution directly, and they have already helped drive climate action at the international level. We saw direct evidence of that last year when the U.S. and China made an unprecedented joint announcement of their climate goals.
It is also important to understand that this plan will not solve climate change by itself. Millions of Americans joined the fight for these standards because we have a responsibility to leave the world a better place than we inherited. There is no silver bullet for this fight, and we will have plenty of opportunities to build on this step in the months and years ahead, including:
• Reduce methane pollution that accounts for one-quarter of today’s warming.
• Continue American leadership to get other nations to cut climate pollution, and to agree on targets that will meet the scale of this challenge.
• Sign into law a comprehensive, market-based system that puts a price and limit on climate pollution from major emitters and gives businesses further incentives for clean-energy innovation.
Bill Gates recently said, “If we create the right environment for innovation, we can accelerate the pace of progress, develop and deploy new solutions, and eventually provide everyone with reliable, affordable energy that is carbon free.” I believe that the Clean Power Plan will help establish that environment for innovation and lead us to a cleaner, healthier and more prosperous future.
Mr. Krupp is the president of the Environmental Defense Fund.
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How the Clean Energy Boom Let EPA Toughen Up Its Carbon Rules
Aug 4, 2015 | The Washington Post
By Chris Mooney
The Obama administration’s new Clean Power Plan, released Monday, is being heralded as a “game-changer.” In fact, a better description is that it’s trying to cement changes already occurring in how we get electricity, and in particular, the stunning recent boom in solar energy — as well as in wind.
In fact, the renewables boom has come on so fast in the United States that it actually appears to have allowed the EPA, and the Obama administration, to make the final Clean Power Plan more ambitious than its draft version, released a year ago. The final rule will achieve a projected 32 percent reduction in U.S. power sector greenhouse gas emissions below 2005 levels by the year 2030 — as opposed to a 30 percent reduction in the 2014 proposed rule.
Similarly, the EPA now expects 28 percent of U.S. electricity capacity to be provided by renewable sources like solar and wind in 2030, up from 22 percent in the 2014 rule, according to an administration fact sheet.
“Our country’s clean energy transition is happening faster than anyone anticipated — even as of last year when we proposed this rule,” said EPA administrator Gina McCarthy on a press call with reporters Sunday. “The accelerating trend toward clean power, and the growing success of energy efficiency efforts, mean carbon emissions are already going down, and the pace is picking up.”
[What you need to know about Obama’s biggest global warming move yet — the Clean Power Plan]
Indeed, it appears that in the time interval between the releases of the proposed and finalized Clean Power Plan, EPA went back and took a second look at the clean energy industry in this country — and was impressed by what it saw. Adding this into the models and assumptions behind the Clean Power Plan then seems to have led to a projected future in which renewables come online more quickly.
More specifically, EPA said in the new finalized rule that it switched from using a 2013 report by the U.S. Energy Information Administration to a 2015 report by the National Renewable Energy Laboratory to gauge trends in “cost and performance” for renewables. The agency thus concluded that “[renewable] technologies, particularly wind and solar, have realized gains in cost and efficiency at a scale that has altered the competitive dynamic between [renewable energy] and conventional resources.”
The Solar Energy Industries Association Sunday released an exultant press release that summed up some of the trends, including the fact that the industry now employs almost 174,000 people in the United States, and that the cost of installing residential solar has dropped by half since 2010 alone.
If you look at the net amount of energy being generated by solar, it, too, is growing rapidly. According to recent data from the Energy Information Administration, from 2013 to 2014, the net amount of electricity generated from solar more than doubled. And that’s in only one year.
According to Rhone Resch, president and CEO of the Solar Energy Industries Association, the industry’s consultations with the EPA over the last year helped lead the agency to see just how big the solar boom is. “What the solar industry has done in the last year is to spend time with EPA educating them about the solar market, both the size, the residential and commercial installations, as well as how rapidly the cost has come down,” says Resch.
Following the release of the proposed version of the Clean Power Plan last summer, the solar industry filed comments to EPA, suggesting that the agency was underestimating solar growth, particularly in the realm of rooftop or residential solar.
“We were not surprised to see EPA substantially increase the contribution of renewables in meeting Clean Power Plan rules,” said Malcolm Woolf, head of policy and government affairs for Advanced Energy Economy, a national business group that contains a number of clean energy and energy efficiency companies as its members, in a statement. “The approach to calculating the contributions from renewables under the proposal badly understated the current size of the renewables fleet and the growth trajectory of this industry that is driven by customer demand and rapid cost declines that have made these technologies cost competitive today.”
It’s not just solar — the wind industry is also seeing a considerable boom. “Thanks to technological improvements and greater domestic manufacturing, we’ve seen the cost of wind energy decline by more than half over the last five years,” says Michael Goggin, senior director of research at the American Wind Energy Association.
Three states, according to AWEA, now get more than 20 percent of their electricity from wind — Iowa, South Dakota, and Kansas. From 2005 to 2014, AWEA adds — based on data from the U.S. Energy Information Administration — wind went from accounting for less than half a percentage of total U.S. electricity generation to nearly 4.5 percent.
On a press call Monday, the EPA’s Office of Air and Radiation acting assistant administrator Janet McCabe confirmed that one reason for the final Clean Power Plan’s more ambitious targets is indeed more bullish projections for the growth of renewables. “The costs are coming down and the pace of construction of these activities is picking up,” she said.
The agency, in the final rule, also cited the fact that even traditional power companies are starting to generate more and more of their energy from renewable sources. Indeed, the agency noted that “of the 404 entities that owned part of at least one affected [electricity generating unit] under this rule, 178 also owned [renewable energy]” – and these tended to be the largest power companies.
Take, for instance, American Electric Power (AEP), one of the largest utilities in the U.S. In 2016, the company says, it will get 51 percent of its generation from coal, 28 percent from natural gas, and 11 percent from renewables — including hydro, wind, and solar. That’s a significant change even over this year, when AEP says it is at 61 percent coal, 23 percent natural gas, and 8 percent renewables.
Nicholas Akins, the CEO of AEP, does criticize some aspects of the renewables boom, though — he thinks large solar photovoltaic plants are a better investment than rooftop solar installations. Photovoltaics on a utility scale plant, he said, “are half the cost of rooftop solar. So they take much less in terms of government incentives. If you’re going to address the Clean Power Plan… you’re going to get a much bigger impact with much less incentives and more carbon impact — a win win win.”
Earlier, Akins said he was worried that if EPA seeks “onerous targets at the beginning, it will drive inefficient solutions,” citing rooftop solar as an example. “We know that utility solar is half as expensive with less government incentives. So this is an area where a utility can step in and make significant progress.”
In the end, it’s important to realize that even with EPA’s more optimistic projections, there is a strong case to be made that renewables still aren’t growing fast enough to reduce our economy’s dependence on fossil fuels — or to adequately slow climate change. In 2030, the final Clean Power Plannotes, “coal and natural gas will remain the two leading sources of electricity generation in the U.S., with coal providing about 27 percent of the projected generation and natural gas providing about 33 percent of the projected generation.”
Steven Mufson contributed to this report.
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California is Ahead of the Game as Obama Releases Clean Power Plan
Aug 4, 2015 | Los Angeles Times
By Tony Barboza
President Obama's plan to cut carbon pollution from power plants over the next 15 years will force states to address climate change by pushing them to act more like California.
The Clean Power Plan announced Monday poses significant challenges for states that rely on coal-fired power plants for much of their electricity, but complying with the rules will be a breeze for California. That's because the state has practically eliminated coal from its energy portfolio and leads the nation with the toughest regulations to cut the greenhouse gas emissions that are warming the planet.
California officials said Monday that their existing climate change programs put the state on course to meet the U.S. Environmental Protection Agency's new carbon-dioxide emissions target years ahead of schedule.
Gov. Jerry Brown welcomed the president's "bold and absolutely necessary carbon reduction plan."
If anything, the federal government's measures could accelerate the transition to solar, wind and other renewable energy sources that was spurred on by California's policies, experts said. And green business groups said the EPA's rules are likely to boost the California economy, which is at the forefront of developing technology for renewable energy and efficiency.
"This is going to expand the markets that California policies have worked to establish," said Mary Solecki, Western states advocate for Environmental Entrepreneurs, a nonprofit advocacy group of business leaders.
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Nationwide, the new climate change regulations are expected to cut the electricity sector's greenhouse gas emissions 32% below 2005 levels by 2030, according to EPA estimates. The rules, issued under the federal Clean Air Act, give each state its own pollution reduction goal and allow each to choose the measures it will use to comply.
The new rules won't have much direct effect on California because they are less stringent than the carbon-cutting targets already on the books. State regulators have for years targeted carbon emissions with strict standards on vehicle emissions, energy efficiency, low-carbon fuels and renewable power. Key to California's efforts is the cap-and-trade program to cut greenhouse gas emissions from power plants, factories, transportation fuels and other major sources.Gregory Wetstone, left, Randy Hoyle and Kevin Martin visit Terra-Gen Power's wind energy project in the Tehachapi Mountains. (Irfan Khan / Los Angeles Times)
An analysis of the EPA's proposed carbon plan last year by the California Air Resources Board found the state could meet its federal emissions target as much as 10 years early, in 2020, just by fully executing existing climate change programs.
"We're going to be able to comply and even over-comply," said Edie Chang, who oversees the resource board's climate change programs.
California is on track to cut greenhouse gas emissions to 1990 levels by 2020 as required under AB 32, its landmark 2006 global warming law. Earlier this year, Brown issued an executive order that would continue that trend, setting a target of reducing emissions by 40% from 1990 levels by 2030.
In 2013, the most recent year available, nearly 19% of California's electricity came from renewable sources, while less than 8% came from coal, according to the California Energy Commission. In January, Brown proposed an ambitious target of 50% renewables by 2030.
Obama's climate plan faces fierce resistance from lawmakers and industry groups in Midwestern and Southern states that rely heavily on coal. They say the regulations will bring job losses and economic harm.
But in California, some of the largest utilities, including the Los Angeles Department of Water and Power, applauded the plan.
Solar and wind industry trade groups said Obama's plan could foster more regional cooperation, with potential for some states to develop renewable energy projects to trade the emissions reductions with their neighbors.
"The EPA rules are going to drive a lot of renewable energy investments in the rest of the country, including Western states that border California," said Tom Darin, senior director of Western state policy for the American Wind Energy Assn., an industry trade group.
When President Obama announced the regulations, he noted the success of clean-air policies in California. Obama recalled being a student at Occidental College more than three decades ago, when L.A.'s smog made it hard to breathe when he went out for a run.
"You fast-forward 30, 40 years later, and we solved those problems," he said.
"At the time, the same time, the same characters who are going to be criticizing this plan were saying this is going to kill jobs. Despite those scaremongering tactics," he added, "you can actually run in Los Angeles without choking."
State Sen. Fran Pavley (D-Agoura Hills), a leading voice on climate change in the California Legislature, said "a national policy would help us defend ourselves against opposition claims that businesses will move out of state for cheaper coal-fired electricity."
Pavley said opponents of California's policy have argued that it is unimportant because the state's emissions are a small percentage of the global total.
"Now, with Obama's announcement, the opposition from the coal companies will be that the United States is just a small part of world greenhouse gas emissions," Pavley said. "Here we go again."
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Three Lines of Attack Against Obama’s Climate Change Rule
Aug 4, 2015 | The Hill - E2 Wire
By Timothy Cama
Opponents of the Obama administration’s sweeping new standards for power plant emissions have identified three avenues of attack, as they formulate a strategy to beat back the central pillar of the president’s climate change initiative.
States, industry groups and congressional Republicans are vowing an all-out resistance campaign aimed at weakening, delaying or altogether blocking the Environmental Protection Agency’s (EPA) new carbon limits.
Senate Majority Leader Mitch McConnell (R-Ky.), who has urged states to defy the rule, vowed Monday to do “everything I can to fight” the rule.
“These regulations would likely mean fewer jobs, shuttered power plants and higher electricity costs for families and businesses,” he said in a floor speech. “I will not sit by while the White House takes aim at the lifeblood of our state’s economy.”
That means going through bureaucratic channels — the National Mining Association struck first, lodging a formal request Monday for a stay of the rule before Obama unveiled it during an event at the White House — as well as through legislative maneuvering and legal assaults at both the state and federal levels.
And if all else fails, conservatives say, Obama’s successor could unwind the regulations, if a Republican wins the White House next year.
But the Obama administration and its allies are confident that the rule will survive all of those attacks, maintaining that opponents have a high bar to overturn it.
“It’s a rule that’s enforced within the Clean Air Act, which has been litigated against by coal-burning utilities for decades, and they’ve largely been unsuccessful,” said Michael Brune, executive director of the Sierra Club.
“So we’re very confident that this is a rule that will be defended successfully and enforced successfully,” he continued.
The top threats to the rule come from each branch of government: The federal courts, Congress and, potentially, the Oval Office.
Legal challenges
The courts represent a key threat to the regulations. They have the power to decide whether the Obama administration overstepped, and could invalidate parts of the rule, or strike it down in its entirety.
A number of conservative states’ attorneys general have already pledged to file lawsuits in federal court, including West Virginia, Texas and Arkansas. They’ll join Murray Energy Corporation and likely numerous other energy companies, business interests and states who stand to face increased costs, decreased business or other problems from the carbon limits.
The ultimate test of the court challenges, which are almost certain to reach the Supreme Court in the coming years, will be whether the climate rule aligns with the Clean Air Act and with the Constitution.
“This rule represents the most far-reaching energy regulation in this nation’s history, drawn up by radical bureaucrats and based upon an obscure, rarely used provision of the Clean Air Act,” West Virginia Attorney General Patrick Morrisey said in a Monday statement. “We intend to challenge it in court vigorously.”
He and his allies will have to wait until the rule is formally published in the Federal Register to file lawsuits, which will likely happen in the coming weeks.
The arguments generally fall into three categories: The rule unconstitutionally usurps state power, the Clean Air Act prohibits carbon regulations on power plants that are already regulated for other pollutants and the EPA cannot regulate activities in the states that are outside of the power plants themselves.
The EPA, however, boasts a successful record in the courts in recent years, including the Supreme Court, which has granted the agency wide latitude to enforce environmental rules under the Obama administration.
And Richard Revesz, director of the Institute for Policy Integrity at New York University, predicted none of the arguments against the power plant regulations would stand.
“Those arguments are entirely without merit,” he said.
Congressional attacks
McConnell and other Republican leaders have pledged to do everything in their power to block regulations their party has assailed as a major front in the Obama administration’s “war on coal.”
The Senate Committee on Environment & Public Works will meet Wednesday to vote on a bill sponsored by Sen. Shelley Moore Capito (R-W.Va.) to overturn the regulations and make it very difficult for the EPA to rewrite them.
McConnell also put language into the Senate’s appropriations bill for the EPA that would effectively block the rule by starving it of funding for implementation.
“These aren’t the only legislative options Congress can consider. We can pursue other avenues, like [Congressional Review Act] resolutions and further appropriations riders, as these regulations are published and as they wind their way through the courts,” McConnell said.
The Congressional Review Act provides an expedited avenue for overturning regulations, but they are still subject to presidential veto, which would be difficult for critics of the rule to override.
House Speaker John Boehner (R-Ohio) also promised to fight the rules. The House passed a bill last month sponsored by Rep. Ed Whitfield (R-Ky.) to significantly weaken and delay them.
But since Republicans do not have a filibuster-proof majority in the Senate and Obama is still president, Congress has little power to act.
“Do I think McConnell and Boehner will put their leadership power behind a Congressional Review Act challenge as soon as possible? Sure, I totally suspect that,” said Will Yeatman, a senior fellow at the Competitive Enterprise Institute. “But that’s more of a show.”
Yeatman questioned whether GOP leaders would go so far as to threaten a government shutdown over the rules. “I don’t see that happening,” he said.
A Republican president
All of the major Democratic candidates for president have vowed to uphold and enforce the rule, but a GOP win in 2016 could represent opponents’ best shot of killing the regulations.
Every Republican running for president who has weighed in on the issue has sharply criticized President Obama’s rule, signaling that they would likely move to overturn or weaken it.
“President Obama’s plan should be called the Costly Power Plan because it will cost hard-working Americans jobs and raise their energy rates,” Wisconsin Gov. Scott Walker said, making a play on the EPA’s Clean Power Plan name for the rule.
“It will be like a buzzsaw on the nation's economy,” he said. “I will stand up for American workers and stop the Costly Power Plan.”
Sen. Ted Cruz (R-Texas), another White House hopeful, said in a statement: “The President’s lawless and radical attempt to destabilize the Nation’s energy system is flatly unconstitutional and—unless it is invalidated by Congress, struck down by the courts, or rescinded by the next Administration—will cause Americans’ electricity costs to skyrocket at a time when we can least afford it.”
Former Florida Gov. Jeb Bush said the Obama administration does not have the power to impose the rules.
“I believe it’s unconstitutional, and, I think, in a relatively short period of time, the courts will determine that as well,” Bush said at a Sunday event.
The next president will have a lot of power over the rule. States do not even have to start submitting their plans until September 2016, and can delay them for a variety of reasons.
“This is wholly the next president’s issue,” said Yeatman. “This is a discretionary regime, and whoever’s in charge has a great deal of leeway to tailor any aspect of it.” -
Reid: Republicans ‘Have No Plan’ on Climate Change
Aug 4, 2015 | The Hill - E2 Wire
By Devin Henry
Senate Minority Leader Harry Reid (D-Nev.) defended President Obama’s new climate rule for power plants on Tuesday and hit its Republican opponents for not having a viable climate change agenda.
“It has been disappointing, but not surprising, to see Republicans’ knee-jerk opposition to addressing climate change,” he said in a floor speech Tuesday. “It has been all the more frustrating because they have no plan of their own — just to let the smoke keep billowing.”
Reid said Republicans were more interested interested in protecting “the bottom line of the coal and energy barons” than preserving the public health benefits that would result from the Obama administration’s Clean Power Plan.
“President Obama’s Clean Power Plan is good for this country,” he said. “It is the strongest action we can take today to ensure a cleaner, healthier tomorrow for our children and grandchildren.”
Obama rolled out the final version of power plant rule on Monday, and it met immediate resistance from congressional Republicans.
Senate Majority Leader Mitch McConnell (R-Ky.) has proposed attacking the regulations on three legislative fronts: through a bill blocking the rule, resolutions against it under the Congressional Review Act and attaching policy riders to spending bills. In June, McConnell attached an amendment to an environment appropriations bill that would block the rule.
“I am not going to sit by while the White House takes aim at the lifeblood or our state’s economy,” said McConnell, whose state depends on the coal industry. “I’m going to do everything I can to fight them.”
The Clean Power Plan looks to reduce carbon emissions from power plans by 32 percent below 2005 levels by 2030. The regulations will improve public health, Reid said, by cutting down on greenhouse gas levels and other air pollutants.
“Republicans would leave our children and grandchildren to pay the devastating cost of climate change,” he said. “They have no solutions, these Republicans. they are afraid to acknowledge that climate change is a problem. It is.”
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Obama Rule Adds 'Safety Valve' for Grid Emergencies
Aug 4, 2015 | E&E - Energywire
By Peter Behr and Rod Kuckro
Faced with warnings of possible grid blackouts tied to future coal plant closings, U.S. EPA added a reliability "safety valve" to its final Clean Power Plan that gives states a 90-day period to exceed carbon limits during emergencies.
U.S. EPA air chief Janet McCabe said, however, that her agency expects that regulatory relief for reliability purposes will be a rarity.
The final carbon rule rolled out during a ceremony in the East Room of the White House yesterday builds in periods of time during which power plant emissions can be averaged and exceptions made to carbon emissions limits. Electric grid reliability had been a major point of contention during the months of buildup toward a final rule. The issue pulled the Federal Energy Regulatory Commission into a highly charged debate about what happens when environmental policy to combat global warming forces the closure of dozens of baseload coal plants and reconfigures the electricity system.
McCabe said grid operators and regulators have options if another extreme weather event like the polar vortex of 2013 and 2014 happens again. Short-term needs for coal- and gas-fired plants to run harder can be "smoothed out over these long averaging times," she said. The safety valve is "a place to go in a truly unexpected situation."
The rule would require states to justify the need for the a safety valve exception and get signoff from the grid operator or coordinator in their region. "While the initial 90-day period is in use, the emissions of the affected [generators] that exceed their obligation will not be counted against the state's overall goal or emission performance rate," the rule states.
But if conditions require a plant to continue operating under the safety valve provisions beyond 90 days -- for example, if a nuclear plant were forced out of commission for a lengthy period -- a state would have to revise its compliance plan to make up for the excess carbon emissions.
McCabe noted that electric reliability concerns are also addressed by the extra time in the final rule for states to prepare compliance strategies and to start cutting emission in 2022.
FERC Commissioner Tony Clark, a Republican critic of the EPA plan, posted a lengthy, pointed statement on his home page to "outline the difficult path that now lies ahead."
He expressed concern that even the extra two years to begin compliance might not be enough to build "major infrastructure projects necessitated by this regulation."
Achieving EPA's goals under the rule will not be "easy or inexpensive," said Clark, who continued to be a thorn in the administration's side this year as EPA sought to quell accusations that it hadn't reached out to FERC enough for a clearer picture of grid reliability issues.
"Such is the stuff of unicorns and leprechauns," he wrote. "For if EPA's energy vision was the most reliable and affordable means of providing power, we would not need the rule. Engineering experts, markets, utilities and their regulators would already be choosing these resources without EPA dictates. No amount of political posturing changes that fact."'Much work lies ahead'
On the other hand, FERC Chairman Norman Bay praised EPA for its efforts to address reliability concerns "by adding time and flexibility for compliance, adopting a reliability safety valve, and requiring state plans to be reviewed for reliability."
"Much work lies ahead," said Bay as he released a "coordination document" reached among FERC, EPA and the Energy Department pledging to work together on the implementation of the Clean Power Plan.
"The three agencies will meet frequently, no less than quarterly, to discuss what they are learning about the developing state plans and any potential reliability concerns," thedocument said.
"Where potential reliability issues of concern are identified with elements of a developing plan from a state or group of states," said the document, "EPA, DOE, and FERC will meet to determine an approach to resolving the issues, which may include meeting with the state or states that are developing the plan along with the relevant planning authorities and/or reliability coordinators."
Others charged with overseeing the nation's electric grid reserved judgment yesterday, promising further analysis to gauge the rule's effect on reliability.
PJM Interconnection, the nation's largest grid operator, plans to analyze the final rule "for potential impacts to the power grid."
The Midcontinent Independent System Operator is launching its stakeholder process to "fully assess its impact," it said in a statement.
"MISO is in the process of developing analysis of both a regional and state-by-state view of the total impact of the rule, including electric and gas infrastructure," the grid operator said. "We will work now on modeling the final rule and run the analysis to help stakeholders better understand compliance options."
The North American Electric Reliability Corp., the federally appointed reliability monitor for the interstate high-voltage grid, warned in comments to the original EPA proposal for a 2020 start date that the timeline "does not provide enough time to develop sufficient resource to ensure continued reliable operation of the grid by 2020." That timetable, it said, increased the potential for "wide-scale, uncontrolled outages."
In a statement yesterday, NERC said it "appreciates that the Environmental Protection Agency's final Clean Power Plan rule reflects changes identified in NERC's two special reliability assessments released earlier this year. While we continue to review the details, initial reports indicate that the final rule addresses several topics identified as needing attention by the NERC reports and many stakeholders," the organization said.
"NERC's principal finding recommended additional time in order to allow for extensive planning and significant investments in new energy infrastructure that will be needed to achieve emission reduction goals," it added.
NERC expects to issue an updated reliability assessment in the second quarter next year.
Jürgen Weiss, lead author of a rebuttal study by the Brattle Group in February, said that NERC overlooked or underestimated the carbon-reduction strategies that are available to reduce the impact of coal-plants closing. "We think NERC has not taken into consideration a number of factors that would substantially mitigate NERC's concerns," Weiss said (EnergyWire, Feb. 12).
EPA's final plan takes issue with NERC's reliability warning, adopting the Brattle Group's analysis. "The EPA appreciates NERC's attention to, and interest in, the proposed rule. However, we note that like some other studies, NERC assumes considerably less flexibility than actually is provided to states and [electric generating units] in this final rule. The final rule provides states with considerable time and latitude in designing plans that are tailored to the system in which their EGUs operate, which should be reflected in any reliability analysis."
"The NERC study does not fully reflect the current electric grid," EPA said. For example, the agency noted that the amount of renewable energy generation that NERC assumes for 2020 is about the same as what's being produced today. "Projections for 2020 are considerably higher."
EPA's expectation of a large step-up in wind production is not dependent upon congressional action to reinstate a production tax credit for wind energy, McCabe said yesterday. Rather, it adopts the newest forecasts of comparative costs of wind energy and competing sources, she said.
However, the American Wind Energy Association continues to stress that the tax credit is vital to the industry's growth. New wind energy installations fell 92 percent in 2013 after the tax credit expired. It was eventually renewed for a single year and faces an uncertain future in Congress.
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Final Clean Power Plan Shifts Toward Renewables and Away from Natural Gas
Aug 4, 2015 | E&E - Climatewire
By Scott Detrow and Elizabeth Harball
When President Obama unveiled his signature effort to cut the United States' greenhouse gas footprint yesterday, he ticked off all the different ways his administration has already worked to lower carbon emissions.
"We set new fuel economy standards that mean our cars will go twice as far on a gallon of gas by the middle of the next decade," Obama said in the White House East Room. "We doubled that on our investment in renewable energy. We're generating three times as much wind power, 20 times as much solar power as we did in 2008. These steps are making a difference."
"Over the past decade, even as our economy has continued to grow, the United States has cut our total carbon pollution more than any other nation on Earth," Obama said.
But absent from Obama's remarks was one key reason for that carbon reduction: the broad, economically driven shift from coal to natural gas-fired power plants (ClimateWire, Oct. 24, 2013).
The omission wasn't an accident: While Obama and U.S. EPA Administrator Gina McCarthy have long embraced natural gas as a "bridge fuel," the administration kept the focus on renewable power sources like wind and solar during the Clean Power Plan rollout.
That's because the final rule puts a greater emphasis on promoting renewable energy than the initial draft. EPA is now predicting that by the time the Clean Power Plan is fully implemented in 2030, renewable energy will make up 28 percent of total generating capacity. That's significantly higher than the draft rule's 22 percent estimate.
The administration believes that boost in renewables will come largely at the expense of natural gas. In an initial press briefing on the plan, a White House official said projections for natural gas would be "business as usual," compared to the initial increase expected for the fuel source as a result of the draft rule.
A central part of that renewed emphasis on renewables is a new component of the Clean Power Plan: a voluntary "Clean Energy Incentive Program" that would provide credits to states that expand their wind and solar generation as well as energy efficiency efforts in the two years before the Clean Power Plan's interim goals take effect.
"Through this program, EPA intends to make allowances or emission rate credits available to states that incentivize these investments," an EPA fact sheet explained. "EPA is providing additional incentives to encourage energy efficiency investments in low-income communities."
The allowances -- or credits -- could then be awarded by the state to electricity generating units like a coal-fired power plant, which can in turn use these credits to comply with the upcoming emission standards.Providing more flexibility to states
Intended to provide additional flexibility to states, the optional program requires an early rollout of wind and solar energy over other renewables because the agency argued those technologies can be constructed relatively quickly and also "because stakeholders were concerned that the Clean Power Plan could potentially shift investment away from these zero-emitting technologies," it stated in a fact sheet.
In a press call with reporters Sunday, EPA's McCarthy suggested that the program will speed states' CO2 emission reductions and the resulting health benefits: "The Clean Energy Incentive Program means more states will take action early, so we'll see those health benefits quickly," McCarthy said.
[+] Are we the "last generation" that can limit the dangers of climate change? He thinks so. Photo by Susan Walsh, courtesy of AP Images.
The program is still under development, however. In a call with reporters yesterday, acting Assistant Administrator for the Office of Air and Radiation Janet McCabe said EPA will use the upcoming public comment period to meet with interested parties and "flesh out the details."
While Republican critics have long criticized the president for his "war on coal," the administration has often been effusive in its praise of natural gas drilling. "The abundance of low-cost natural gas has started an energy transition that we are taking advantage of and hoping to follow through the [Clean Power Plan] process," McCarthy said last fall, when selling the regulation to lawmakers (ClimateWire, April 7).
That approach -- symbolized by an "all of the above" energy strategy the president has often touted during speeches and on the campaign trail -- has frustrated environmentalists, who harbor deep concerns about hydraulic fracturing extraction methods primarily responsible for the natural gas boom, as well as the potent greenhouse gases released when methane leaks from drilling operations.Moving beyond 'all of the above'
"If we are truly serious about fighting the climate crisis, we must look beyond an 'all of the above' energy policy and replace dirty fuels with clean energy," Sierra Club Executive Director Michael Brune said after last year's State of the Union address (E&E Daily, Jan. 29, 2014).
So Brune and other environmental leaders were quick to take notice when Obama and McCarthy put renewable energy, not gas, front and center during yesterday's announcement. He called the Clean Power Plan the "end of an era for coal plants and gas plants across the United States."
Pointing to updated EPA analysis showing relatively steady -- rather than increased, as initially projected -- overall natural gas power generation, Brune said, "we believe that the bridge -- the natural gas bridge -- has just been declared closed."
It's worth noting that shifting from coal to gas generation is still one of the three remaining "building blocks" EPA used to calculate its state-level goals. Many states may still emphasize that approach when crafting their compliance plans over the coming years.
"We believe the White House is perpetuating the false choice between renewables and natural gas," Marty Durbin, president and CEO of America's Natural Gas Alliance, said in a statement. "We don't have to slow the trend toward gas in order to effectively and economically use renewables. States' ability to incorporate more wind and solar energy into their power mix is dependent on natural gas combined cycle turbines that will quickly and cost-effectively pick up the slack when the sun doesn't shine or the wind doesn't blow."
Still, many observers are hopeful that the renewable and efficiency credits will not only spur investment in zero-emissions approaches but also kick-start broader carbon-trading efforts.
"[EPA is] proposing credits for early action for compliance," explained Bob Perciasepe, president of the Center for Climate and Energy Solutions. "If some state could do more than they need for compliance in a certain area, they could, in theory, have extra credits that they might be able to use in a joining state or another state. So the sources -- not necessarily the state -- but the sources of power in those states could actually move credits back and further across state lines in a very simple way."
The Center for Climate and Energy Solutions, along with many other think tanks, has long advocated for regional trading markets as the most efficient way for states to comply with EPA's carbon-reduction requirements.
Obama was blunt about the fact that a full transition to a lower-carbon economy would be difficult. "I don't want to fool you here," he said at the White House event. "This is going to be hard, dealing with climate change in its entirety. It's challenging. No single action, no single country will change the warming of the planet on its own."
But, the president warned, the change is necessary. "This is one of those rare issues, because of its magnitude, because of its scope, that if we don't get it right, we may not be able to reverse and we may not be able to adapt sufficiently," he said. "There is such a thing as being too late when it comes to climate change."
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EPA Proposes Carbon Trading to Deal with Reluctant States
Aug 4, 2015 | E&E - Climatewire
By Emily Holden and Evan Lehmann
Republican governors who refuse to comply with President Obama's new climate plan might find themselves facing a more detested option: cap and trade.
In addition to the Clean Power Plan released yesterday, EPA also publicized a proposal revealing how it will handle states that refuse to submit their own plans for emission reductions from the power sector. The agency plans to impose a federally enforced carbon trading program.
It would fall predominantly on conservative states. Sen. Mitch McConnell (R-Ky.) has encouraged Republican governors to defy EPA's rules, and a handful have vowed to decline to submit proposals.
"I think it's very questionable whether it's legal to do backdoor cap and trade," Sen. Ben Sasse (R-Neb.) said yesterday. "It's 1,600 pages of legislating through a regulatory agency. That's not how it's supposed to work."
The final Clean Power Plan released yesterday didn't include EPA's plan to deal with obstinate states. Thatproposal is an additional 755 pages, much of which is devoted to the idea of carbon trading. EPA expects to complete it next year after accepting feedback from states and other parties.
Under the proposed federal implementation plan, or FIP, EPA would either assign a cap on emissions and allow for the trading of pollution credits or require a state to meet an average emissions rate across its electricity fleet. A rate-based standard with trading could technically allow emissions to grow, as long as generators only emit a certain amount of carbon per megawatt-hour of power produced. A state with a rate around the same level as a natural gas plant could theoretically keep building more and more natural gas plants and stay in compliance.
The agency plans to settle on one of the two strategies in a final federal plan in summer 2016, shortly before states that are writing plans are expected to submit initial drafts in September 2016. EPA will be gathering comments on the draft federal plan and holding public meetings.
The federal plan would be directed at electricity generators, effectively bypassing states that refuse to implement carbon cuts.
"While states may impose the emission rates directly on their affected [electric generating units], states also have the option of submitting more tailored plans that meet state-specific emissions goals," the proposal says.
Legal experts have said aiming the rule's requirements at generators is more legally defensible, because the power units themselves -- not states -- are regulated under the Clean Air Act.
Generators are unlikely to risk breaking federal law, and they have some familiarity with trading, environmental advocates add (EnergyWire, July 30]).States may still have some say in imposing a federal plan
EPA reiterates that states should take the first stab at cutting emissions.
"While it has been the EPA's longstanding view that the statute identifies states as the preferred implementers of Clean Air Act (CAA) programs, the agency makes clear in the [emission guidelines] that states cannot and will not be penalized for failing to participate in this program," the proposal says. "However, if a state does not submit an approvable plan under section 111(d) of the CAA, the EPA will develop, implement, and enforce a federal plan to reduce CO2 from the fossil fuel-fired power plants in that state."
EPA says it aims to gives states flexibility even when imposing a federal plan.
"This is wholly consistent with the 'cooperative federalism' structure of the CAA and many of our nation's other environmental laws," EPA argues in the proposal.
For example, "states may take delegation of administrative aspects of the federal plan in order to become the primary implementers."
That could respond to some complaints from states that have argued the Clean Power Plan would set a precedent for the federal government to take control of state electricity policy decisions.
"States may submit partial state plans in order to take over the implementation of a portion of a federal plan," the proposal adds.
Even after EPA assigns a federal plan, states may have an opportunity to replace it with their own blueprint.
The proposal issued yesterday is also meant to serve as a model plan for states that want a ready-to-go option that they can tailor to suit their needs. Many states had asked for details on how they could work together and trade compliance credits for building renewable energy or cutting power demand.
"Often, federal plans can be used as a tool for states that are developing plans to sort of see where the agency is headed towards types of approaches that are deemed acceptable," said Matt Stanberry, vice president of market development for green business group Advanced Energy Economy.
Ken Colburn, a principal at the Regulatory Assistance Project, said the federal and model plans are important because "states have huge flexibility, but essentially no guidance under 111(d)."
"Although state officials are certainly appreciative of flexibility (vs. not having it), absent ANY guidance they are more likely to default to their prior experience," which reflects solely on less flexible sections of the Clean Air Act, Colburn said in an email.
"What EPA has done by putting the Federal Plan proposal out there now is to implicitly and adroitly provide 'guidance' to states regarding what IT is thinking about," he added. "States, naturally, could reasonably assume that were they to undertake something similar to that federal plan, it would be approvable."
Republican opponents of Obama's plan described EPA's rules as illegal, impossible and expensive. But they might not have anticipated being forced to shoulder a federally imposed version of cap and trade, one of the most controversial pieces of legislation to rattle around Congress in the last decade.Return of a much-maligned alternative
At more than 1,500 pages, the Clean Power Plan resembles in length the ungainly cap-and-trade bill introduced by former Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), now a senator, in 2009. The attacks it aroused led many observers to describe the system as politically dead.
Now it's back. And it could affect the states that are most ardently opposed to the president's plan. More than a dozen states have filed suit to fight the regulations.
Several lawmakers said they were not aware of the FIP proposal released in tandem with the Clean Power Plan yesterday.
"I would say it's not good for Wisconsin families," Sen. Ron Johnson (R-Wis.) said when asked about cap and trade.
His state under Gov. Scott Walker (R) has bucked the idea of abiding by EPA's new rules, making it a potential candidate for a federally enforced carbon trading program. A regional cap-and-trade program was pursued by Walker's predecessor, former Gov. Jim Doyle, a Democrat.
Other Republicans seemed resolute in their opposition to EPA's climate program, even when faced with the threat of cap and trade. Sen. John Barrasso (R-Wyo.) noted that a handful of GOP governors have said they'll defy the Clean Power Plan. He wants to see that number grow.
"I'm going to encourage additional governors to do the same thing," Barrasso said.
EPA doesn't view cap and trade as punishment for oppositional states. The trading system is highlighted throughout the Clean Power Plan as a cost-effective way to lower emissions.
"The EPA views an emission budget trading program as a highly efficient, market-based approach for reducing CO2 emissions," the plan says.Is a carbon tax a viable alternative?
Some conservative groups that oppose the Clean Power Plan were somewhat buoyed by its inclusion of market-based trading options. The R Street Institute strongly opposes the regulations, hoping instead that Congress will pass a revenue-neutral carbon tax.
But the complexity of the plan's trading options could push states, even those that voluntarily comply, into a "complicated and layered cap-and-trade scheme," said Catrina Rorke, who oversees energy policy at R Street.
She noted that states can join a regional trading program or go it alone, swapping credits with other solo states that establish similar programs. But there are many options in the design process, she said, meaning that there might be a patchwork of trading programs.
"I hate to say it, but this makes Waxman-Markey look pretty elegant," Rorke said.
Overall, many regulatory experts and grid operators have said trading and broader regional approaches would help to keep electricity prices lower. The final Clean Power Plan also adds guidance on how states that don't adopt a model plan can work together to trade compliance credits.
"Trading programs in general tend to open up additional flexibility for compliance entities and in doing so give them access to more cost-effective resources," Stanberry said.
Although Stanberry thinks the federal plan does a lot to provide flexibility, he said that "developing a state plan is still the most flexible route that states have for complying with the Clean Power Plan."
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EPA Toughens Targets, Stokes Political Fire in Appalachia
Aug 4, 2015 | E&E - Greenwire
By Jean Chemnick and Manuel Quiñones
Two Appalachian governors who've resisted calls to "just say no" to U.S. EPA's Clean Power Plan are facing increased political pressure today after the final rule assigned their states much stiffer responsibilities for curbing heat-trapping emissions from power plants.
Kentucky Gov. Steve Beshear and West Virginia Gov. Earl Ray Tomblin -- both Democrats -- are being urged by their states' congressional delegations, attorneys general and coal companies to not submit plans for complying with the rule for existing power plants. The governors have resisted, saying their states would fare better with their own emissions plans. This stance was eased by the fact that EPA's 2014 draft assigned both states light targets.
But that changed yesterday when EPA finalized a rule with significantly different state targets under which both Kentucky and West Virginia ended up with much heavier lifts (E&ENews PM, Aug. 3).
Kentucky's Energy and Environment Cabinet had planned for a rule requiring the state to hold its power-sector emissions rate to 1,763 pounds per megawatt-hour by 2030. But EPA is demanding 1,286 pounds per MWh by that year, a 41 percent emissions cut compared with 18 percent in the draft rule.
West Virginia's target also increased from the proposed 1,620 pounds per MWh to 1,305 pounds per MWh in the final rule -- a 37 percent emissions cut, compared with 20 percent in the draft.
The new targets demand sharp pivots from coal, which has long been a cornerstone of their power mixes and identities.
Beshear and Tomblin expressed discomfort with the final rule in statements yesterday, but neither jumped onto the "just say no" bandwagon.
Despite expressing frustration and disappointment, Beshear said the state would "continue to explore ways for Kentucky to comply with the rule should it become law, because we believe that a Kentucky-specific plan would be better than a federal plan imposed on us."
And while Tomblin noted pressure from "those who employ our hardworking miners," he said his administration remains undecided about compliance.
"At this point," he said, "West Virginia still has not determined whether it will submit any plan to the EPA."Elections, coal lobby could shift state responses
But the pressure on the administrations is mounting in the face of the final rule's tighter targets and because of upcoming elections.
Kentucky Republican gubernatorial candidate Matt Bevin has vowed to reject EPA's rule and has made it a cornerstone of his campaign. In statements yesterday, he tried to tie Democratic opponent Jack Conway to environmental groups and President Obama. Beshear is term-limited and cannot seek re-election.
Despite the criticism, Conway, the state's attorney general, also pledged to "just say no." He told Beshear that trying to comply "would be a waste of time and resources." Conway also vowed to participate in litigation against EPA.
Meanwhile, the state's coal industry showed growing frustration with Beshear's administration and with some state representatives, including Rep. John Yarmuth (D), who have not come out swinging against the rule.
Bill Bissett, president of the Kentucky Coal Association, said yesterday that "unfortunately, a handful of Kentucky's political leaders have been out of step by working with the EPA to not only support, but also develop this job-killing regulation." He was referring to Beshear and other state leaders working on compliance.
Pressing for a boycott, Bissett said, "The good news for Kentuckians is that both candidates to be our next governor have made their positions clear against these GHG regulations."
In West Virginia, Republican gubernatorial candidate and state Senate President Bill Cole touted the GOP takeover of the state Legislature and a measure giving lawmakers veto power over plans to implement the Clean Power Plan. So either at the state Capitol or at the Governor's Mansion, he vowed to veto an implementation plan. Tomblin is term-limited and won't be running for re-election.
Bill Raney, head of the West Virginia Coal Association, applauded lawmakers and Attorney General Patrick Morrisey (R) "for their previous efforts to protect West Virginia's coal miners and electric consumers from this reckless and expensive plan."
Raney's statement did not mention Tomblin. While the governor and many of the state's Democrats have also long been pro-coal, industry interests in Appalachia have increasingly been relying on Republicans for support.
West Virginia Democrats vying for victory in 2016 include Senate Minority Leader Jeff Kessler, who has talked about diversifying the state's economy away from coal, and billionaire businessman Jim Justice, who owns coal mines. Both have been relatively silent on the Clean Power Plan.
The states' congressional delegations urged their governors to refuse to comply as well.
"The final rule announced today doubles down on the destruction of West Virginia's economy," Sen. Shelley Moore Capito (R-W.Va.) said in a statement yesterday. She is pushing a bill with support from her Democratic West Virginia colleague, Sen. Joe Manchin, that would allow states to opt out of the rule for a variety of reasons related to reliability and cost.
"Several governors have already decided they won't allow the administration to rush them into adopting these regulations. I expect more to follow," said Senate Majority Leader Mitch McConnell (R-Ky.), who has spent the last several months urging governors to not comply with the rule.
McConnell noted that the Senate will devote some time this fall to trying to topple the rule through any means available, including the rarely used Congressional Review Act and riders on legislation to fund the federal government (E&E Daily, Aug. 4).State laws and the Clean Power Plan
Besides the political pressures in Kentucky and West Virginia, there is also the question of whether either state can comply with the standard given state laws now on the books that limit the scope of state plans.
The tighter targets might make that trickier as well.
Before yesterday, Kentucky Energy and Environment Secretary Leonard Peters thought he had found a way to submit a plan that did not run afoul of a state law that limits a state implementation plan to reductions that can be achieved on site at fossil fuel power plants.
That's because the draft target asked Kentucky to make few additional reductions beyond those that would have occurred under a business-as-usual scenario.
While the state's 2012 baseline average rate of emissions was 2,166 pounds per MWh, reflecting a 90 percent reliance on coal-fired power that has long characterized Kentucky's fuel mix, the state was already diversifying.
Peters and his Cabinet said in March that they were working on an "80 percent plan" -- or set of recommendations -- to hand off to the next governor's administration that would claim full credit for a spate of power plant shutdowns that were already in the works and would take Kentucky's emissions to about 1,796 pounds per MWh by 2030 under a business-as-usual scenario.
Fuel switching that is already planned would take the state within striking distance of its goal, they said (Greenwire, March 4).
Reached today, the Cabinet said it was still reviewing the EPA rule.
And West Virginia regulators must submit any plan to the state Legislature for vetting -- complete with a cost-benefit analysis and other materials. Tomblin seemed to take a dim view yesterday of the state's chances of crafting a plan that would pass muster.
"While the [Department of Environmental Protection] works on the report required by the legislature, we continue to review our legal options and are working to determine what a federally developed state implementation plan would involve," Tomblin said, referencing a proposed federal implementation plan that relies on emissions trading. The plan would be enforced in states that opt not to submit a strategy of their own.
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Aug 3, 2015 | E&E - TV
As the Obama administration rolls out its final Clean Power Plan today, what impact will changes made to the rule have on the potential for legal challenges and the ability for states to comply? During today’s OnPoint, EnergyWire reporter Rod Kuckro andGreenwire reporter Jean Chemnick discuss the details of the final plan and preview the next steps for stakeholders.Transcript
Monica Trauzzi: Hello and welcome to a special edition of OnPoint. I'm Monica Trauzzi. We are tracking developments as the White House rolls out its cornerstone Clean Power Plan. Joining me today are E&E reporters Rod Kuckro and Jean Chemnick. Thank you both for joining me today.
Rod Kuckro: You're welcome, thank you.
Jean Chemnick: Yes, yes.
Monica Trauzzi: Jean, the White House today is releasing its final Clean Power Plan. It's a key regulation for the administration and its action on climate change. Big changes were expected, and EPA seems to have delivered on what many stakeholders called for. During the public comment period, Administrator McCarthy said the comments were very good. What changes stand out to you?
Jean Chemnick: Well there is a change of intention towards sort of efficiency and renewable energy, and away from incentivizing the shift to natural gas from coal, which was happening anyway for market reasons, and they did that through sort of giving extra time for states to factor renewable energy and efficiency standards and efforts into their state plans. They pushed back the submission date for submission, and then also the beginning of the interim compliance date two years in each case, and they are rewarding states for efficiency and renewable specifically.
Monica Trauzzi: And Rod, what stands out to you?
Rod Kuckro: I think the biggest surprise was how explicitly EPA has gotten behind cap-and-trade program essentially. They want to let states that trade carbon credits, and they're encouraging that in a very strong way.
Monica Trauzzi: Jean, the clean energy incentive program is a new thing, and it seems to be a really crucial element of this final rule. What is EPA trying to achieve through this program?
Jean Chemnick: Well they are trying to reward states that make reduction efforts in 2020 and 2021, because now those years are no longer included in the mandatory compliance period, which now ... begins in 2022. So I guess there is matching funds, and they're going to provide in credits in states that do those early reductions.
Monica Trauzzi: Yeah, and there's a question of how that incentive program interacts with the PTC and ITC, and how all of that is going to play out. I know we'll be reporting on that. That's an interesting element. Rod, the nuclear lobby got its wish, plants under construction are not included in state targets, but they can be used for compliance. Who does that affect the most?
Rod Kuckro: Yes, yesterday was Christmas Day for the nuclear industry. Well there are five plants under construction in the United States. One in Tennessee Valley Authority, two in South Carolina being built by South Carolina Electricity and Gas, and two in Georgia being built primarily by Georgia Power, but there is some other ownership stakes. So those five plants right away will be credited towards part of the goals for those states. In addition, any uprates, so if a nuclear operator wants to take a plant increase let's say from 1,000 megawatts to 1,050 megawatts, those added megawatts were also counted as clean power. What we don't know is how the rule is going to affect the handful of plants that are in trouble in the Midwest because they don't clear the power auctions. They're primarily owned by Exelon Corporation so we'll have to wait more to find out about that.
Monica Trauzzi: Jean, as you mentioned, compliance timelines have changed. We have been reporting on that since last week, but the agency says it's a stronger rule. How do they achieve that if they're giving states more time to comply, and yet it's still stronger?
Jean Chemnick: Well I mean they have, they say they've evened out a lot of the state targets. There are going to be states that have more responsibilities than they used to, and the aggregate is 32 percent compared with the 30 percent by 2030, which is a 9 percent improvement in stringency over what the draft rule would've required. There is, we were talking about this before, there is the possibility that this might be a stronger rule legally as well. I mean that's been raised. Who knows if that pans out, but they are giving extra time for planning and compliance, which might make it less easy to get a stay on the rule.
Rod Kuckro: I think that's what they mean by stronger. They don't mean more stringent necessarily. They mean it's going to be much easier for them to defend any state challenges.
Monica Trauzzi: And Administrator McCarthy, Rod, yesterday during a press call said that the agency switched to using these uniform standards for power plants that will have an impact on what the state target numbers look like. According to EPA, coal will have 27 percent of the market in 2030. How does that compare to projections, and you were saying before the show that this kind of is that all of the above?
Rod Kuckro: Ironically it is. Well the Clean Power Plan proposed last year had coal at 30 percent in 2030. Right now it's about 36 percent, and it's been declining for many years, but at the end of the day in 2030 if you believe the power plan's projections, coal will be 27 percent, renewables will be 28 percent, and gas will be about where it is now 27 to 30 percent, and the other 20 percent will be nuclear. So in a way, those advocates on the Hill from both parties who have been complaining that they want to see an all-of-the-above energy program, this is it.
Monica Trauzzi: Jean, we've already seen a stream of reactions rolling in. Is it sort of the usual suspects saying the usual things? Is anyone happy with what we've seen so far?
Jean Chemnick: Yes, the usual suspects saying the usual things. You know when we started getting details last week, and would go up to the Hill and ask lawmakers if this changed their minds, I mean some said, and Republicans who've been staunch opponents of this rule since it came out as a draft said, well maybe it would help to have a couple of extra years to put together a SIP, but really it doesn't change the underlying fundamentals, which is that they feel that this is a very harmful rule that they're going to throw everything they possibly can at including a variety of legislative options when they get back from August recess.
Monica Trauzzi: Rod, reliability, a key concern as we were going through this proposed rule process. They've included a reliability safety valve in the final rule. What do we know about it?
Rod Kuckro: Well what we know about it is very little actually. We're told it's modeled after the reliability safety valve that's in the MATS rule for mercury. What Administrator McCarthy said yesterday on the conference call with media is that they're going to be working very close with FERC to kind of refine that, but you said the way it's designed to deal with an emergency situation to keep a plant online for reliability purposes, she doubts that it'll ever have to be exercised. I mean that's their hope.
Monica Trauzzi: Yeah that is their hope. Jean, the administration has a full schedule planned for this month to kind of sell and talk about this Clean Power Plan. What's on tap?
Jean Chemnick: Well, I mean they're doing the rollout today at the Rose Garden, which sort of drives home how important this is to Obama himself personally, and later in the month he's going to the Arctic also to do a tour. You know I haven't looked at a lot of the events that he's doing.
Monica Trauzzi: Yeah and he'll also be speaking in Nevada.
Jean Chemnick: Oh OK, yes, that's right. He's headlining Reid's --
Rod Kuckro: Clean Power Summit.
Jean Chemnick: Clean Power Summit, that's it, yes.
Monica Trauzzi: All right, well we will be watching. We will be reporting; a lot to watch and report on over the next two weeks. Thank you both for coming on the show.
Rod Kuckro: You're welcome, nice to be here.
Jean Chemnick: Thanks.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]
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Former EPA General Counsel Martella Says Final Rule Legally Vulnerable
Aug 4, 2015 | E&E - TV
Following yesterday's White House release of the final Clean Power Plan, what are the possible legal vulnerabilities that exist for U.S. EPA in its final rule? During today's OnPoint, Roger Martella, a partner at Sidley Austin and a former general counsel at EPA, explains how changes made to the rule may not strengthen EPA's legal standing before the courts.Transcript
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Roger Martella, a partner at Sidley Austin and a former general counsel at U.S. EPA. Roger, great to have you here.
Roger Martella: Thanks for having me in.
Monica Trauzzi: Roger, the White House yesterday released its final Clean Power Plan, and we've all been sorting through the details of this more-than-1,500-page document. What are the most significant developments that you see in this final plan?
Roger Martella: Well, when I was reading through it, I thought of three things. First was a sense of déjà vu. This is, I think, the closest we've come to comprehensive climate change regulation or legislation since the legislation at the beginning of the Obama administration. This really looks and reads and is as complex as climate change legislation. It talks about trading, incentive programs, multiple state plans. So I think this is really an effort to have economywide climate change controls, similar to what the president was trying to do towards the beginning of the administration, but now do it through regulation.
The second is that this truly seems to be one of the most significant energy policy decisions at the federal level of a generation, if not more. The original proposal was focused primarily on coal-fired power plants. Here we've seen a theme from the White House, from EPA, that this is more about fossil fuels generally, not just coal, but also natural gas, and also a discussion of setting the state for even post-2030 -- they're already thinking that far ahead -- for a zero carbon or de-carbonization of the energy sector.
And then the third thing was kind of -- I imagine we'll talk about this -- kind of the legal chess game going on, the fact that there were some levers that were pulled and some things that were changed to address some of the legal issues, but at the same time I would say this is even further unhinged from the statutory text. The statutory text, which is basically a paragraph in the Clean Air Act, a paragraph that's only been invoked on five occasions and has now led to 1,500 pages, as you pointed out, of effectively comprehensive climate change controls. And I think this has actually gone a step in the direction of being more legally vulnerable.
Monica Trauzzi: So we are going to dig into the legal vulnerability in just a bit. Let's talk about the Clean Energy Incentive Program, because that is kind of -- it's new, and it's kind of this major part of the final rule. Its focus is on renewables, and it takes focus away from natural gas. What do you think the agency's intention is here moving from natural gas to renewables in the final rule?
Roger Martella: Well, I think it's a combination of two things. I think again in some of the lead-up documents, we saw that since the proposal, the administration I think is going bigger, basically, and saying we now want to set the stage not only between now and 2030 but even referencing beyond 2030 to creating de-carbonization, as they put it, or a zero-carbon energy society, and so promoting renewables in the short term over natural gas and over fossil fuels. And part of it, I think, is in response to some of the legal issues. They're pointing out -- they're pushing back some of the compliance dates in response to some legal concerns, but they don't want to wait that long. They don't want to wait till 2020 to get results. And so they're creating more incentives in the short term to drive results sooner that are consistent with the zero-carbon generation of electricity.
Monica Trauzzi: So it sounds like you're saying this is more of an energy policy than an environment policy, and to that end, then, is this within EPA's jurisdiction?
Roger Martella: Yeah, absolutely, and I think we should step back for a second. After all, this is called the Clean Power Plan, and it was the Clean Energy Incentive Program. Even the White House and EPA are recognizing this is primarily an energy program. It will have greenhouse gas impacts, but again, it's hard to fathom a more significant energy policy, federal energy policy over the states than what is being promulgated here.
Monica Trauzzi: Let's talk about the legal aspects. I know you've argued that a stay on the rule is a likely option. With the final rule giving stakeholders more time to comply, do you think that that strengthens EPA's legal argument and then decrease the likelihood of a stay?
Roger Martella: Sure. I think a stay is something that parties always look at when they engage in litigation, and I imagine what everybody's doing right now is -- they always look at it as an option and say, "Is this something that we can wait for the courts to entertain cases in the ordinary course? Do we need to seek relief sooner?" It normally takes about two to four years to get a decision from the court, and so there's different mechanisms, including a stay, including expedited review. I think what's going to happen in the short term is everyone's going to have to really digest these 1,500 pages. And it's not only the 2020 deadline people are going to be looking at, but the sooner deadlines like 2016 when states have to start submitting state plans, that could drive irreparable harm and potentially create arguments for a stay. But again, it's too soon to prejudge that because everybody's fresh to looking at the rule.
Monica Trauzzi: Right. On a press call on Sunday, Administrator McCarthy said the final rule stays within the four corners of the Clean Air Act, and that the language of the rule effectively explains that. When you and I discussed the draft rule last year, you said it would not survive a court challenge. What are your thoughts on this rule? Is it still too early to say? Overall, what do you think?
Roger Martella: As I mentioned, there's something of a legal chess game going on. There's no doubt that EPA carefully looked at the legal arguments and made some changes here and there. But the fundamental structure for this, the fundamental approach under Section 111(d), which we believe is pre-empted by Section 112, and the beyond-the-fence-line approach, which goes beyond a specific source and for the first time in the 45-year history of the Clean Air Act sets standards for a source beyond what's achievable from that source. Those are just fundamental, inherent flaws with the legal approach that cannot be reconciled. And given the direction of the Supreme Court in the last year, and even the D.C. Circuit to some extent, the decisions have gone the wrong way in terms of using this one paragraph from the Clean Air Act to engage in a comprehensive kind of economywide regulation that includes incentive programs and trading programs and all these complexities, is exactly what the court's been pushing back against.
Monica Trauzzi: But then what about the removal of Building Block 4? Greenwire reporter Jeremy Jacobs reported that one suggestion is that EPA may have removed that to boost the legal defensibility of the rule, and it kind of takes away that beyond-the-fence-line argument.
Roger Martella: Sure. So Building Block 4 would've been very legally vulnerable, but so is Building Block 2, so is Building Block 3. Beyond the fence line goes anytime you step beyond Building Block 1, so removing Building Block 4 hasn't significantly increased the likelihood of the rule surviving judicial review on the whole, and you still have other arguments like the constitutional arguments, the pre-emption argument of Section 112, and the general beyond the fence line. And Building Block 4 is still well and alive in the rule itself. It's fully incorporated in terms of a compliance option. Every time the rule mentions renewable energy, it always says "and energy efficiency," and so holistically, atmospherically, the rule definitely keeps Building Block 4 front and center in terms of the options that the rule can address.
Monica Trauzzi: And you're predicting that this will hit the Federal Register in early September. When could we start seeing filings?
Roger Martella: Sure. It's always hard to predict the Federal Register. I don't think EPA could predict it soon, but I think this is a case where they have incentive to get it published sooner, both the kickoff, the proceedings, and also because they need to bring some certainty to the states. The states have a one-year deadline for those initial plans or requesting extensions, so they're going to want that in the Federal Register as soon as possible. And the normal course is 60 days after the Federal Register publication is the deadline for filing lawsuits. Nothing's been quite of the ordinary so far with this rule, so it's hard to predict what could happen immediately after the Federal Register, what might happen after that, what might happen sooner. But there's probably going to be a lot of legal developments through the end of the year.
Monica Trauzzi: We'll be watching. Thanks for coming on the show.
Roger Martella: Yeah, thank you, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]
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Why the Clean Power Plan Will Survive in Court
Aug 3, 2015 | Environmental Defense Fund
By Tomas Carbonell
The “Just Say No” campaign fighting the Obama administration’s Clean Power Plan is gambling the public will overlook an important detail.
Almost all major Clean Air Act rules that have so successfully protected human health and the environment in recent years have undergone intense legal challenges – and most of those challenges have failed. It’s a detail worth remembering as talk about more litigation is now ramping up.
The Environmental Protection Agency has a strong track record of success defending Clean Air Act rules in the nation’s federal courts, and there’s every reason to think they will win this one, too.
Critics of the Clean Power Plan are also claiming – falsely – that the Supreme Court invalidated another power plant rule, the Mercury and Air Toxics Standards, earlier this summer.
The “Just Say No” campaign’s point: It was a waste of money for power plants to have complied with the mercury standards and the same thing will now happen with the Clean Power Plan.
That’s just plain wrong – as is the idea that EPA rules don’t hold up in courts.
Consider these recent examples:
EPA v. EME Homer City Generation: In a major victory for the EPA, the Supreme Court reversed a D.C. Circuit decision invalidating the Cross-State Air Pollution Rule.
Utility Air Regulatory Group v. EPA: The Supreme Court upheld the EPA’s interpretation of the Clean Air Act, requiring that new and modified industrial facilities obtain permits limiting their emissions of greenhouse gases to reflect “best available control technology.” The Court did rule against EPA on whether those permitting requirements should apply to smaller facilities, but the EPA itself had concluded those requirements would pose practical problems and yield relatively small pollution benefits.
Coalition for Responsible Regulation v. EPA: The D.C. Circuit Court of Appeals upheld the EPA’s science-based finding that climate pollution endangers public health and welfare, and the agency’s first generation of greenhouse gas emission standards for passenger vehicles. The Supreme Court ruling laid the groundwork for subsequent rules reducing greenhouse gas emissions from passenger vehicles and medium and heavy-duty trucks.
Delta Construction Co. v. EPA: The D.C. Circuit dismissed, on procedural grounds, multiple legal challenges to EPA’s first greenhouse gas standards for medium and heavy duty vehicles.
National Association of Manufacturers v. EPA: EPA fended off challenges to the National Ambient Air Quality Standards for particulate matter (better known as soot).
The health and environmental benefits of the Clean Power Plan will be invaluable. As the EPA prepares for the inevitable legal attacks, it has a strong legal foundation and a track record of litigation success.
Nothing about the June 29 Mercury and Air Toxics Standards decision changed that, no matter what Senate Majority Leader Mitch McConnell (R-KY) and other critics now suggest.
The court only held that the EPA should have taken into account the costs of the standards when deciding to issue them. Fortunately, EPA carefully evaluated the costs and benefits of the Mercury and Air Toxics Standards during the rulemaking process - so the agency should be able to respond quickly to the court’s ruling. Moreover, it is almost certain the standards will remain in place while EPA revisits its regulatory findings.
Taken together, all these legal decisions should give pause to litigants contemplating a new round of flawed legal challenges that will waste tax dollars, time and resources.
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Crude Oil Exports and the Price of Gasoline
Aug 4, 2015 | The Hill - Pundits Blog
By Benjamin Zycher
Government policies virtually without exception create economic distortions, so that policy reform can yield results highly counter intuitive. That is the case with the emerging effort to end the current U.S. ban on the export of crude oil, enacted as part of the 1975 Energy Policy and Conservation Act. The ban was justified as a tool with which to insulate the U.S. economy from the effects of international supply disruptions and to reduce the prices of such refined products as gasoline.
Both of those justifications were and remain fallacious. In the absence of policy distortions, domestic prices (net of international transport costs) must equal international prices. If domestic prices were lower, foreign suppliers would shift sales to other economies, reducing the overall supply of crude oil or refined products to the U.S. market until domestic and international prices were equalized. The most obvious policy distortions in this context would be import limitations (quotas), which would raise domestic crude prices artificially, as they did from 1959 through 1973; and export limitations, which have the opposite effect.
Just as the past limitations on imports increased domestic crude prices above international prices, so does the current export ban suppress domestic prices below international levels. The current price difference between domestic (West Texas Intermediate) and foreign (Brent) crudes is about $5 per barrel. A repeal of the export ban would increase domestic prices modestly, by an amount around $2 to $3 per barrel. This would be a straightforward supply-and-demand effect reducing the difference between the spot prices for crudes produced domestically and overseas, a difference that has been increased artificially by the export ban.
One might assume that an end to the export ban, by increasing the domestic price of crude oil, would yield a rise in the prices of such refined products as gasoline and diesel fuel. Counterintuitively, that is not correct, because ending the export ban would remove an important market distortion. The crucial factor to bear in mind is the fact that refined products are not included in the export ban; they are traded freely in the international market. That means that the domestic and international prices of gasoline must be equalized by market competition, abstracting from transport costs and taxes and the like.
Accordingly, ending the export ban on crude oil cannot increase product prices; if it did, foreign refiners would sell more gasoline in the U.S. market, thus driving prices down until U.S. and international prices were equalized.
Moreover, ending the export ban on crude actually would put downward pressure on product prices, for two reasons. First: The increase in the international supply of crude oil created by increased U.S. exports would reduce both crude and product prices overseas. Accordingly, product prices in the U.S. would decline because, again, products are traded more-or-less freely in the world market, creating the one-price outcome described above.
`Second: Both internationally and domestically, the export ban has distorted the allocation of various types of crude oil among refineries, which are designed in various ways to refine particular crude oil types more efficiently than others. An end to the export ban would improve the alignment of refinery and crude oil characteristics, particularly in the U.S., thus reducing the cost of refining crude oil generally, and therefore of producing refined products.
Many do assume that ending the export ban on crude oil would increase the U.S. price of crude and thus necessarily domestic product prices as well, because the refiner cost of crude oil is a major component of the cost of producing products. That analysis fails to understand that the current export ban distorts the market in such a way as to reduce domestic crude prices while increasing domestic product prices, by reducing the international supply of (U.S.) crude oil and by increasing refining costs. Perhaps counterintuitively, ending the export ban on crude oil would have the opposite effect: U.S. crude prices would rise (modestly) while gasoline and other product prices would be driven down by the falling price of product prices in the international market and reductions in U.S. refining costs.
There is the further matter that an increase in crude exports would have the effect of strengthening the dollar, an impact the magnitude of which is very difficult to estimate among all the many factors influencing the dollar exchange rate. But however difficult to measure, this effect is real, and it would put some downward pressure on the dollar prices of crude oil internationally, thus offsetting to some degree the crude oil supply/demand effect just noted. And that stronger dollar would reduce the overall price of the U.S. basket of goods and services, thus increasing aggregate wealth in the U.S., again an effect difficult to measure in isolation, but that is real.
Some prominent members of the Beltway policy community simply do not understand the implications of the distortionary effect of government policies. The relationship between the export ban on crude oil and the attendant effects on gasoline prices is a newly prominent example of that phenomenon. An end to the export ban would end the distortionary impacts, yielding benefits for the energy sector, for consumers, and for the economy as a whole. After four decades, Congress should do away with this perverse policy.
Zycher is the John G. Searle scholar at the American Enterprise Institute.
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Methane Leaks May Greatly Exceed Estimates, Report Says
Aug 4, 2015 | The New York Times
By John Schwartz
A device commonly used to measure the methane that leaks from industrial sources may greatly underestimate those emissions, said an inventor of the technology that the device relies on.
The claim, published Tuesday in a peer-reviewed scientific journal, suggests that the amount of escaped methane, a potent greenhouse gas, could be far greater than accepted estimates from scientists, industry and regulators.
The new paper focuses on a much-heralded report sponsored by theEnvironmental Defense Fund and published by University of Texas researchers in 2013; that report is part of a major effort to accurately measure the methane problem. But if the supposed flaws are borne out, the finding could also have implications for all segments of the natural gas supply chain, with ripple effects on predictions of the rate of climate change, and for efforts and policies meant to combat it.
Almost all of the methane leakage calculated from the Texas research “could be affected by this measurement failure,” according to the paper; “their study appears to have systematically underestimated emissions.”
The new paper describes a pattern of low measurements of leaks by theBacharach Hi Flow Sampler, a device approved by the Environmental Protection Agency for its required monitoring of natural gas facilities and in use around the world.
The problem, according to the author of the paper, Touché Howard, is that the backpack-size tool uses two sensors: one for low levels of methane emissions and one for higher levels. As methane levels rise beyond the capacity of the first sensor, the device hands off to the second, high-level sensor.
Mr. Howard found that under some conditions, unless the sampler is carefully and frequently recalibrated, the switchover from the first sampler to the second can fail. When that occurs, the device does not measure the amount of methane that the second sensor would capture, and so it underrecords methane leakage rates.
Mr. Howard, a semiretired gas industry consultant and firefighter who lives in North Carolina, holds the patent for a high-flow-rate sampler whose technology is used in the Bacharach product.
Complicating the issue, he wrote, is that when the device malfunctions, “there is no way to determine the magnitude” of the error without independent measurement at the time, so the missed emissions could be extremely high — perhaps tenfold to a hundredfold for a particularly large leak, he said. Researchers have found that a relatively small number of leaks produce most escaped methane, he wrote, so an instrument that underreports large leaks might skew official assessments like the E.P.A.’s overall methane inventory. Mistakenly low leak readings could also create safety issues in industrial settings, he noted.
“That such an obvious problem could escape notice in this high-profile, landmark study highlights the need for increased vigilance in all aspects of quality assurance” for all methane measurement programs, he wrote.
The paper appears in the journal Energy Science & Engineering.
The Texas study, the first of 16 reports on methane emissions sponsored by the Environmental Defense Fund, measured emissions at 190 natural gas production sites.
The lead author of the Texas study, Prof. David T. Allen, stood by his work. “There may be issues with some of these instruments, but we tested our instruments pretty thoroughly and when we went out into the field we had multiple instruments, all of which gave us information,” he said. Alternate measurement methods were used at some sites, he said, and “we didn’t see any evidence that we were missing any large numbers.”
The maker of the instrument, Bacharach, reviewed Mr. Howard’s new paper, along with one he co-wrote earlier this year. It issued a statement that the sampler, first produced in 2003, was initially tested and validated with gas streams that are not the same as those in the study, which involved high levels of the class of chemicals known as volatile organic compounds.
Even so, the company stated, “we believe that some of the primary test results and conclusion” of the studies “are not valid” because the sensor failures reported by Mr. Howard could be caused by other factors. The company suggested frequent recalibration of the device, and said it would update operating manuals; it also recommended further testing.
A spokeswoman for the E.P.A. said the agency would assess information “from a number of channels,” including the research community and industry and the new Howard paper, “as a part of our routine review of new information” for its annual inventory of greenhouse gases.
Methane is the main component of natural gas, and the expansion of techniques such as hydraulic fracturing, known as fracking, has greatly increased the amount of natural gas being extracted, sold and transported around the country. This shift has been widely hailed as environmentally helpful, to the extent that more reliance on natural gas to generate electricity means less reliance on coal and thus smaller amounts of carbon dioxide and other pollutants being pumped into the atmosphere.
Even so, burning natural gas produces some carbon dioxide, and the process of extracting and transporting it inevitably leads to some leakage. Methane has powerful short-term effects on climate change — by some estimates, 80 times the heating effects of carbon dioxide in the first 20 years in the atmosphere — though it breaks down far more quickly than carbon dioxide does.
The Obama administration has lauded the expansion of natural gas as an alternative to coal, but has also called for industry action to sharply reduce leaks while promoting renewable energy sources like solar and wind power.
An expert on methane, Robert Howarth of Cornell University, said he found Mr. Howard’s paper “very compelling.” Professor Howarth was not involved in the research but has long argued that official estimates of methane emissions are far too low.
Mr. Howard said that before he wrote his paper for the scientific journal, he shared his findings about the sampler with the Environmental Defense Fund and Professor Allen. He said he felt that his concerns were given short shrift, and that early agreements to work together on addressing the issue were brushed aside. “In my opinion, there’s been some real stonewalling going on,” he said.
Professor Allen said in response that “our research team made efforts to cooperate with Mr. Howard,” adding that he was reluctant to discuss “issues like nondisclosure agreements, email communications, and other university legal matters.” A spokesman for the university, Geoffrey Leavenworth, said that communications with Mr. Howard ceased after disagreements over a standard nondisclosure form.
An official of the Environmental Defense Fund said the organization welcomed the new paper. “We’re happy when people read these papers, critique them, raise questions about the instruments used, the methodology used,” said Mark Brownstein, who leads the group’s work on methane emissions.
Other papers in the group’s methane series, including a recent studyabout leaks in the Barnett shale field in Texas, have found far greater emissions of methane than estimated by the E.P.A., he noted, and the studies should be seen as a whole.
The important point, Mr. Brownstein said, is that research shows that relatively inexpensive measures can sharply reduce emissions, however high they turn out to be. “The bottom line is the question is, ‘Are emissions high, or are they higher?’ Either way, the focus needs to be on reducing them. That’s where we come in.”Correction: August 4, 2015
An earlier version of a headline with this article misidentified the measurement challenged by a new report in the journal Energy Science & Engineering. It is methane leaks, not methane in the atmosphere.
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