Weekly Climate Change Policy Update - August 16, 2010

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Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

Commentary

EPA is taking further steps to roll out the Prevention of Significant Deterioration (PSD) permitting program for greenhouse gases (GHGs). EPA issued a proposed rule in which it could at least temporarily take over permitting for 13 states that cannot quickly modify their programs to implement PSD for GHGs in accordance with the timetable and thresholds set forth in the Tailoring Rule . . . Sen. Jeff Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, predicted no action on energy or climate legislation before the November elections . . . But White House energy and climate change advisor Carol Browner said clean energy legislation could "potentially" be enacted in a lame duck session of Congress . . . A federal interagency group issued recommendations for federal support for carbon capture and sequestration projects, including potential approaches to long-term liability . . . The State Department's Deputy Climate Envoy, Jonathan Pershing, expressed concerns that other countries are slipping on their commitment to Copenhagen Accord pledges . . . The Chinese government said it would close 2,000 facilities to decrease its energy intensity.

Executive Branch

• EPA Issues Proposed Rules on State Implementation of PSD Permitting of GHG Emissions. EPA took an additional step towards implementing permitting of stationary sources of greenhouse gases (GHGs) under the Prevention of Significant Deterioration (PSD) provisions of the Clean Air Act (CAA) by proposing to find that 13 states lack authority under their State Implementation Plans (SIPs) to issue such permits for GHG sources. Simultaneously, EPA proposed a Federal Implementation Plan (FIP) that would allow the agency to directly issue PSD permits in those 13 states unless and until those states submit adequate SIPs to EPA. The thirteen states that would be subject to the FIP under the proposal include: Alaska; Arizona (most areas); Arkansas; California (Sacramento region); Connecticut; Florida; Idaho; Kansas; Kentucky (most areas); Nebraska (most areas); Nevada (Clark County); Oregon; and Texas. Comments on the proposed rules will be due within 30 days of their publication in the Federal Register. Under the agency's recently-finalized "Tailoring Rule," PSD and Title V permitting of GHG emissions will commence on January 2, 2011; in order to meet that deadline, EPA expects to finalize these pending proposals by December 2010. The proposed rules are available at http://www.epa.gov/nsr/actions.html#aug10 .
• Browner Says Clean Energy Legislation Could Pass in Lame Duck Session of Congress. Carol Browner, Director of the White House Office of Energy and Climate Change Policy, said during an interview on "Meet the Press" that the Administration was "deeply disappointed" that climate change and clean energy legislation had not yet passed both chambers of Congress. However, she said the President had "not yet" conceded defeat on the issue and noted that clean energy legislation could "potentially" be enacted in a lame duck session of Congress following this fall's midterm elections.
• Deputy Climate Envoy: Some Countries Backing Away from Copenhagen Commitments. Following a major round of climate change negotiations in Bonn, Germany, State Department Deputy Special Envoy for Climate Change Jonathan Pershing said he is "very concerned" about progress towards reaching agreement at an upcoming climate change summit in Cancún, Mexico. Pershing also said that some countries appear to be moving away from the political commitments made in the Copenhagen Accord in December 2009; without naming specific delegations, Pershing said that some negotiators have begun questioning the principle that all major emitting countries should commit to specific mitigation actions, while other delegations from developing countries have begun asking for additional financial assistance beyond the $100 billion per year that was promised by developed countries at Copenhagen. "If we proceed down the road we are currently on," said Pershing, "there is no hope for Cancún."
• Interagency Panel on CCS Issues Final Recommendations. An interagency task force established by President Obama in February of this year has issued its final recommendations for achieving widespread commercial deployment of carbon capture and sequestration (CCS) technology over the next ten years. The fourteen agencies represented on the panel agreed that a vital way to encourage greater use of CCS was to place a price on greenhouse gas (GHG) emissions. However, the panel also recommended continued federal financial incentives for CCS and improved federal coordination of CCS regulatory efforts. In particular, the panel recommended that a permanent federal "roundtable" on CCS be established; that the Department of Energy (DOE) and EPA coordinate regulatory efforts on early commercial projects; that federal agencies work closely with local communities to build support for hosting CCS projects; and that federal agencies continue to work towards establishing a long-term liability framework for GHG sequestration. The task force expressed optimism that five to ten commercial-scale CCS projects can be established around the country by 2016. The panel's report is available at http://www.fe.doe.gov/programs/sequestration/ccstf/CCSTaskForceReport2010.pdf.

Congress

• House Rejects "No Assembly" Resolution. By a procedural vote of 236 to 163, the House of Representatives rejected a resolution offered by Rep. Tom Price (R-GA) that would have prevented the House from holding a lame duck session between the November elections and January 3, 2011 except in the event of a national emergency. The resolution cited press articles describing a climate bill as one item that could be addressed in a lame duck session.
• Bingaman Skeptical of September Action. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) told reporters that he does not think Congress will pass any major legislation before the November elections because he believes "the Republicans are reluctant to support anything that might result in another signing ceremony between now and the election." Sen. Bingaman said he expects Congress to act in response to the oil spill in the Gulf, but that it might be during a lame duck session and that he thinks it will be difficult for the Senate to pass any cap-and-trade legislation.

Judicial

• Mirant Appeals Dismissal of Challenge to Local Carbon Tax. According to a recent filing with the Securities and Exchange Commission, a lawsuit brought by Mirant Corp. to overturn a Montgomery County, MD carbon tax has been dismissed in federal district court. The suit was filed in May of this year after the Montgomery County Council enacted a fee of $5 per ton of CO₂, applicable to any stationary source in the county that emits in excess of 1,000,000 tons of CO₂ per year. Mirant's Dickerson electric generating unit is the only facility in the county that is subject to the new tax. The United States District Court for the District of Maryland apparently dismissed Mirant's claims that the carbon tax constitutes an unconstitutional bill of attainder and an excessive fine. The company has appealed the ruling to the Fourth Circuit Court of Appeals.

States and Cities

• Governors Ask for Clarity on Federal Biomass Policy. The Western Governors' Association wrote to Carol Browner, Director of the White House Office of Climate Change and Energy Policy, to ask that the White House develop a "clear and cohesive" federal policy on the use of biomass for energy production. The letter argues that using forest residues for energy generation could help fund forest health management, decrease fossil fuel usage, and support lumber and forest-product markets. Specifically, the letter urges "a more quantitative assessment" of the environmental benefits of forest management and accounting for any increased potential for wildfire in unmanaged forests. The text of the letter is available at http://www.westgov.org/index.php?option=com_content&view=article&id=308:increased-use-of-biomass-energy-improved-forest-health-require-cohesive-federal-policy-&catid=222.
• County Pulls Out of FutureGen 2.0 Project. The president of the Coles County economic development organization "Coles Together" wrote to Senator Dick Durbin (D-IL) to inform him that the county's leaders and citizens were "nearly unanimous" in finding that involvement in the revised FutureGen project was not in the county's best interest. As originally proposed, the FutureGen project would have involved construction of a new integrated gasification combined cycle coal-fired power plant with carbon capture technology in Coles County and storage of the captured CO₂ in underground reservoirs near the plant. Under FutureGen 2.0 as proposed last week by the Department of Energy (DOE), an existing coal-fired power plant in Meredosia, IL would be retrofitted with oxy-fuel technology to capture CO₂, and the captured CO₂ would be transported to Coles County to be stored in the reservoirs identified for the original project. Sen. Durbin issued a press release expressing disappointment with the county's decision, and said he would ask DOE to solicit other communities to host the CO₂ storage component of the project.

Industry and NGOs

• Peabody Energy Files New Petition Challenging Data Used in Endangerment Finding. Following EPA's rejection of petitions for reconsideration of its December 2009 finding that GHGs from mobile sources endanger public health and welfare, Peabody Energy has filed a new petition with the agency challenging the global surface temperature records relied upon in making the finding. The petition is based on the Data Quality Act (DQA), which requires federal agencies to ensure that scientific data used in rulemakings is objective, reproducible, and peer-reviewed. Under the DQA, agencies must respond to petitions challenging scientific data and ensure that any data falling short of DQA standards are corrected. Peabody's petition alleges that EPA described temperature records from the University of East Anglia, the National Aeronautics & Space Administration, and the National Oceanic & Atmospheric Administration as independent data sets confirming a global warming trend, and alleges that all three of these records are in fact based on measurements collected through the Global Historical Climatology Network. Peabody also claims that the data sets used have incomplete geographic and historical coverage.

Studies and Reports

• Study Finds Biochar Emissions Reduction Potential Exceeds Biomass Energy. Research published in Nature Communications found that the use of biomass to create biochar could reduce 25 percent more net GHG emissions on average than the combustion of the same quantity of biomass for energy. Biochar is formed by heating biomass in the absence of or with reduced availability of oxygen. Biochar is then used to increase soil fertility. The study concluded that the production of biochar using strict sustainability criteria for the biomass inputs could reduce net anthropogenic emissions of CO₂, methane, and nitrous oxide by a maximum of 12 percent annually; using the same biomass for energy generation would reduce emissions by a maximum of 10 percent annually. According to the analysis, use of biomass for energy generation rather than biochar production can produce greater emission reductions only in those areas with already rich soil and coal-based electricity generation. The article is available at http://www.nature.com/ncomms/journal/v1/n5/full/ncomms1053.html .
• Report Identifies 9 Challenges for Alternative Energy. An analysis by David Fridley of the Lawrence Berkeley National Laboratory identified 9 challenges facing alternative energy sources: (1) achieving scale within the needed time frame; (2) commercialization; (3) substitutability (for existing energy sources within existing infrastructure); (4) material input requirements (such as rare-earth elements used in fuel cells and light-emitting diode (LED) lighting); (5) intermittency of generation (such as from wind farms or solar cells); (6) low energy density (and associated resource requirements); (7) water requirements; (8) rising production costs with oil price increases; and (9) energy consumption needs of such sources. The analysis concludes that utilizing alternative energy sources to address constrained fossil fuel availability and GHG emissions will likely require managing energy demand and decentralizing energy production. The analysis is published in The Post Carbon Reader: Managing the 21^st Century's Sustainability Crises, which is available at http://www.postcarbon.org/reader.

International

• China to Close Over 2,000 Industrial Facilities in Bid to Improve Energy Efficiency. The Chinese government announced that it would force about 2,087 aging steel mills, cement factories, and other industrial facilities to close by September of this year, citing the country's goal of improving the energy intensity of its economy by 20% relative to 2005 by the end of this year. The factories will lose access to government privileges including bank loans, export credit, and potentially even electric service. According to the Christian Science Monitor, however, approximately three quarters of the facilities scheduled for closure have already ceased operations – some as long as two years ago.

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