Climate, Energy, & Air Update - Oct. 24 - Nov. 6, 2013

November 6, 2013

Obama issues executive order on climate resiliency . . . Interior Department issues plan to mitigate environmental impacts from energy projects on federal lands . . . EPA will take comment on “social cost of carbon” determination . . . Udalls introduce bill to establish renewable electricity standard . . . House committees hold hearings on impact of EPA regulations on coal communities, and status of CCS . . . D.C. Circuit agrees to expedite review of petition challenging 2013 Renewable Fuel Standard . . . Judge orders EPA to finalize Coal Ash Rule.

Executive Branch

  • President Obama Issues Executive Order on Climate Resiliency.  On November 1, President Obama issued an Executive Order directing federal agencies to prepare – and to help states, local governments, and tribal governments prepare – for impacts from global climate change.  President Obama’s Executive Order directs agencies to: (1) directly support and remove barriers that discourage investments that increase climate change resilience and to reform policies that inadvertently increase vulnerability to climate impacts; (2) reform land- and water-related policies, programs, and regulations to make the United States more resilient to climate impacts; (3) provide data to states, local governments, and tribes that can better inform climate preparedness and resilience; and (4) include in already required agency Adaptation Plans how each agency will help increase climate resilience including through interagency and intergovernmental coordination. The Order also replaces the Interagency Climate Change Adaptation Task Force with a new interagency Council on Climate Preparedness and Resilience, co-chaired by the Chair of the Council on Environmental Quality, the Director of the Office of Science and Technology Policy, and the Assistant to the President for Homeland Security and Counterterrorism.  This Council will coordinate interagency efforts and work with state, local, and tribal governments, the private- and non-profit sectors, and research institutions to assess vulnerabilities and support cost-effective resilience measures.  Finally, the Order establishes a State, Local, and Tribal Leaders Task Force on Climate Preparedness and Resilience to inform federal efforts by providing recommendations to the President on how to best implement the goals of this Executive Order. A copy of the Executive Order can be found at http://www.whitehouse.gov/the-press-office/2013/11/01/executive-order-preparing-united-states-impacts-climate-change.

  • OMB Revises, Takes Comment on Social Cost of Carbon. Howard Shelanski, Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, announced on November 1 that the Administration will take comment on a revised estimate of the social cost of carbon.  The social cost of carbon is a regulatory estimate of the economic cost to society associated with continued GHG emissions.  The Obama Administration has said that it intends to use the calculation in the cost-benefit analyses required under Executive Order 12866 for all major federal regulatory actions.  Under such analyses, where higher estimates can be used to justify more rigorous regulations that reduce carbon emissions.  The initial government-wide social cost of carbon estimate was developed in 2010 through an interagency process composed of OMB, the Council of Economic Advisors, the Council on Environmental Quality, and other agencies, and contained estimates that ranged from approximately $5 to $35 per metric ton COfor the year 2010, and from approximately $10 to $50 per metric ton COfor the year 2030. Much of the variation was due to disagreement over the appropriate discount rate to be applied to future damages anticipated from climate change.  The interagency technical support document contained central estimates for each year, which agencies have used in setting regulations, with the value in 2013 set at $22.80.  The interagency group updated the estimates in May in response to an updating of the underlying economic and scientific models that the values are based on, with a new 2013 central estimate of $36 per ton for 2013.  These higher values have been used by the Department of Energy in setting energy efficiency appliance standards and the Environmental Protection Agency in setting GHG emission standards for new power plants.  The increase has been subject to significant criticism, however, including claims that the estimates are too high and that the revision should have been subject to public comment under the Administrative Procedure Act.  OMB has announced “technical corrections” of the estimates, including revising down the 2013 central estimate to $35 per ton, and invited public comment on the new values.  OMB’s blog post explaining the change can be found at http://www.whitehouse.gov/blog/2013/11/01/refining-estimates-social-cost-carbon, and the full revised technical support document can be found at http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.

  • USDA Issues Almost $1 Billion in Loan Guarantees for the Grid. On October 24, the United States Department of Agriculture (USDA) Rural Utilities Service awarded $980 million in loan guarantees to help build over 3500 miles of transmission lines, deploy smart-grid technology, and improve electricity service for Native Americans. USDA's announcement of this funding is available at http://usda.gov/wps/portal/usda/usdahome?contentid=2013/10/0200.xml&navid=NEWS_RELEASE&navtype=RT&parentnav=LATEST_RELEASES&edeployment_action=retrievecontent

  • Interior Department Issues Plan to Mitigate Environmental Impacts of Energy Projects on Federal Lands. Department of the Interior (DOI) Secretary Sally Jewell issued a secretarial order announcing a new strategy to offset the impact of energy projects on federal lands while continuing to provide predictability for project developers.  The Order directs the DOI Energy and Climate Change Task Force, led by the Deputy Secretary, to develop within 90 days a coordinated Department-wide strategy to “strengthen mitigation practices so as to effectively offset impacts of large development projects of all types through the use of landscape-level planning, banking, in-lieu fee arrangements, or other possible measures.” This order would apply to both renewable energy projects and fossil fuel projects on federal land.  The DOI order can be found at http://www.doi.gov/news/loader.cfm?csModule=security/getfile&pageid=380602 Secretary Jewell’s speech announcing the order can be found at http://www.doi.gov/news/pressreleases/secretary-jewell-offers-vision-for-conservation-balanced-development-youth-engagement-in-national-press-club-speech.cfm

  • Treasury Issues Guidance to Limit Funding of Overseas Coal Projects. The Department of Treasury issued guidance limiting U.S. support for the funding of coal plants by multilateral development banks (MDBs), including the World Bank.  This guidance was issued in response to President Obama’s June 25th speech on climate change and the President’s Climate Action Plan, and calls for the elimination of the funding of coal plants without carbon capture and sequestration (CCS) technology, except for the world’s poorest countries (as determined by the World Bank).  This policy is largely consistent with, though not wholly identical to, a United States Export-Import Bank draft policy currently under consideration, which was also issued in response to President Obama’s Climate Action Plan.  While the United States does not have direct control over MDB funding decisions, this guidance is intended to set U.S. policy as the World Bank’s largest shareholder and is expected to impact World Bank decision making regarding the funding of future coal plants.  The Department of Treasury Guidance is available at http://www.treasury.gov/resource-center/international/development-banks/Documents/CoalGuidance_2013.pdf The Export Import Bank draft policy is available at http://www.exim.gov/generalbankpolicies/upload/Draft-Ex-Im-Supplemental-Guidelines-High-Carbon-Intensity-Projects-9-30-2013.pdf

  • DOE Issues Final EIS for FutureGen 2.0.   On October 25, the Department of Energy finalized its Environmental Impact Statement (EIS) for FutureGen 2.0, a project located in Morgan County, IL, which will retrofit an existing power plant with CCS, resulting in a zero-emitting coal-fired power plant utilizing enhanced oil recovery.  The EIS identified no significant environmental impacts from the project.  Finalization of the EIS paves the way for $1 billion in federal funding for the public-private partnership.  The EIS has been criticized by some environmental organizations, including the Sierra Club, and may be challenged.  DOE cannot move forward with the funding until 30 days after the EIS’s November 1 publication in the Federal Register.  Construction on the project is expected to begin in summer 2014.  The Final EIS is available at http://energy.gov/nepa/downloads/eis-0460-final-environmental-impact-statement DOE’s announcement is available at http://energy.gov/nepa/articles/doe-issues-final-environmental-impact-statement-futuregen-20-project-morgan-county

  • In Other Developments
    • EPA Delays Cooling Water Intake Rule. Due to the government shutdown, the Environmental Protection Agency (EPA) has invoked a clause in a settlement with environmental organizations to delay until November 20 the finalization of its cooling water intake rule.  This rule, promulgated under Section 316(b) of the Clean Water Act (CWA), would set standards for hundreds of power plants and industrial facilities that have cooling water intake structures.  The standards are intended to protect fish and other aquatic wildlife by minimizing capture both in screens attached to intake structures (impingement mortality), and in the actual intake structures (entrainment mortality).  Environmental organizations have agreed not to challenge this delay.  

    • EPA Issues Draft Climate Adaptation Plans.  On October 30, EPA issued seventeen draft Climate Change Adaptation Implementation Plans, which further expand on EPA’s Agency-wide Climate Change Adaptation Plan, issued in February 2013.  These seventeen plans, including one from each of the seven program offices and one from each of the ten regional offices, have been issued in response to President Obama’s October 2009 Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance.  Public comment on these draft plans is open for 60 days.  The draft plans are available at http://epa.gov/climatechange/impacts-adaptation/fed-programs/EPA-impl-plans.html.

Legislative Branch

  • House Chairman Talks Senate Energy Efficiency Bill.  On October 25, House Energy and Commerce Committee Chairman Fred Upton (R-MI) appeared on C-SPAN’s Newsmakers program.  The focus of the interview was the Committee’s efforts to delay or bar implementation of the Affordable Care Act.  During the interview, however, Upton told the interviewers that he had met with Senate Energy and Natural Resource Committee Chairman Ron Wyden (D-OR) to discuss the possibility of House Energy and Commerce Committee action on S. 1392, the “Energy Savings and Industrial Competitiveness Act,” which has been championed by Senators Shaheen (D-NH) and Portman (R-OH).  Upton said that the Committee would take up the bill if the Senate passes the measure.  The interview is available at http://www.c-spanvideo.org/program/315856-1, and his comments on the bill begin approximately 20 minutes into the program. 

  • Bipartisan, Bicameral Duo Unveil Draft Climate Bill. On October 28, House Energy and Commerce Subcommittee on Energy and Power Chairman Ed Whitfield (R-KY) and Senator Joe Manchin (D-WV) unveiled draft legislation to restrict the EPA’s authority to set greenhouse gas (GHG) standards for new and existing fossil fuel-fired power plants. Whitfield said his Energy and Power Subcommittee will hold a hearing on the legislation on November 14.  The discussion draft and summaries are available at http://whitfield.house.gov/press-release/whitfield-unveils-plan-keep-american-electricity-affordable-and-reliable

  • Senators Introduce Bills to Establish Renewable Electricity Standard.  On October 29.  Senator Tom Udall (D-NM) –joined by Senators Mark Udall (D-CO), Benjamin Cardin (D-MD) and Sheldon Whitehouse (D-RI) – introduced S. 1595, the “Renewable Electricity Standard Act of 2013.”  As introduced, the bill would require electric utilities to generate 25 percent of their electricity from certain renewable resources.  Additional information on S. 1596 is available at http://www.tomudall.senate.gov/?p=press_release&id=1463.  On October 31, Senator Ed Markey (D-MA) introduced S. 1627, the “American Renewable Energy and Efficiency Act.”  S. 1627 would also establish a Renewable Electricity Standard of 25 percent by 2025 but would also require electric and natural gas utilities to implement energy efficiency programs.  Additional information on S 1627 is available at http://www.markey.senate.gov/record.cfm?id=346975.  

  • House Subcommittee Holds Hearing on Cross-Border Energy Delivery Permitting.  On October 29, the House Energy and Commerce Subcommittee on Energy and Power held a legislative hearing on H.R. 3301, the “North American Energy Act.”  H.R. 3301, sponsored by Committee Chairman Fred Upton (R-MI) and Representative Gene Green (D-TX), would change the process for the approval of cross-border natural gas pipelines, electric transmission lines and oil pipelines.   The debate among Committee members and witnesses focused on a provision in the bill that would establish a 120-day deadline for regulatory approval.  Witnesses included Jeff Wright, Director of the Office of Energy Projects at the Federal Energy Regulatory Commission.  Wright told the Committee that the legislation would slow the approval process rather than expedite it.  A webcast of the hearing, full list of witnesses and committee-issued documents are available at http://energycommerce.house.gov/hearing/north-american-energy-infrastructure-act.  

  • House Subcommittee Holds Hearing on Coal Regulations.  On October 29, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled “EPA’s Regulatory Threat to Affordable, Reliable Energy: The Perspective of Coal Communities.”  According to documents issued by the Subcommittee, the hearing was to explore the “role of coal in providing affordable, reliable electricity to localities; impacts of regulatory actions on county and community public services; and impacts of regulatory actions on local jobs, local economy, and consumers.”  Witnesses included John Pippy, Chief Executive Officer Pennsylvania Coal Alliance.  A webcast of the hearing, full list of witnesses and committee-issued documents are available at http://energycommerce.house.gov/hearing/epa%E2%80%99s-regulatory-threat-affordable-reliable-energy-perspective-coal-communities

  • House Science Subcommittees Hold Hearing on CCS.  On October 29, the House Science Committee Subcommittee on Environment held a joint hearing with the Subcommittee on Energy entitled “EPA Power Plant Regulations: Is the Technology Ready?”  According to committee-issued documents, the hearing was set to “explore the technological basis for concluding that carbon capture and sequestration (CCS) is adequately demonstrated as a technology for controlling carbon dioxide emissions in full-scale commercial power plants.”  Witnesses included Charles McConnell, Executive Director of the Energy & Environment Initiative at Rice University; and Kurt Waltzer, Managing Director of the Clean Air Task Force. A webcast of the hearing, full list of witnesses, and committee-issued documents are available at http://science.house.gov/hearing/subcommittee-environment-and-subcommitte-energy-joint-hearing-epa-power-plant-regulations

  • Conferees Begin Official Process to Reconcile Farm Bills. October 30 marked the first meeting of the conferees appointed by the House and Senate to reconcile the differences between the farm bills passed by the two chambers.  The House bill is H.R. 2642, the Federal Agriculture Reform and Risk Management (FARRM) Act of 2013. It passed the House on July 11, 2013, by a vote of 216-208.  The Senate bill is S. 954, the “Agriculture Reform, Food and Jobs Act of 2013”.  It passed the Senate on June 10, 2013, by a vote of 66-27.  The Conference Committee aims to complete the reconciliation process before Thanksgiving. 

  • Booker Sworn-In, Gets Committee Assignments.  On October 31, Newark Mayor Cory Booker was sworn in to the U. S. Senate.  Shortly after the ceremony, he announced his assignment to the Environment and Public Works Committee; Commerce, Science and Transportation Committee; and, the Small Business and Entrepreneurship Committee.   

Judicial Branch

  • Federal Court Expedites Review of Challenge to EPA’s 2013 Renewable Fuel Standard.  On October 29, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) agreed to hear an oil refiner’s challenge to the EPA’s 2013 Renewable Fuel Standard (RFS) under an expedited schedule. Monroe Energy, LLC v. EPA, No. 13-1265.  Under EPA’s 2013 RFS, petroleum refiners and importers are required to blend 16.55 billion gallons of ethanol and other renewable fuels into the nation’s fuel supply.  Refiners must meet their compliance obligation by submitting credits called “Renewable Identification Numbers” (“RINs”) by June 30, 2014.  EPA issued its 2013 RFS rule in August 2013, eight and a half months after the statutory deadline of November 30, 2012. On October 10, Monroe Energy asked the court for an expedited review of its petition, arguing that “the deadline for obligated parties like Monroe to demonstrate their compliance by submitting RINs is June 30, 2014.  Thus, Monroe will be forced to spend tens of millions of dollars over the next several months acquiring RINs at artificially inflated prices.”  

  • Environmental Groups Sue Army Corps Over Proposed 150-MW Wind Project.  On October 29, environmental groups filed a lawsuit against the U.S. Army Corps of Engineers (Army Corps) in a federal court in Maine, alleging the Army Corps violated the Clean Water Act (CWA) by failing to adequately analyze how a proposed 150-megawatt (MW) wind project would impact waterways and wildlife.  Protect Our Lakes, et al., v. U.S. Army Corps of Engineers, No. 1:13-cv-00402. Under section 404 of the CWA, the Army Corps is authorized to issue permits, commonly known as Dredge-and-Fill permits, to place dredge-and-fill material into waterways for various projects; however, the Army Corps is required to perform a thorough analysis of how the “fill” will impact the waterways.  In June, the Army Corps issued a 404 permit to Evergreen Wind II LLC, to temporarily and permanently fill-in inland waterways and freshwater wetlands in order to build the wind turbine’s infrastructure and to build access roads and turbine pads. The environmental group’s complaint alleges that the Army Corps did not fully evaluate the impact the construction would have on area wildlife, including bald eagles and Atlantic salmon. 

  • Judge Orders EPA to Complete Coal Ash Rule Schedule Within 60 Days.  On October 29, the U.S. District Court for the District of Columbia ordered the EPA to propose a schedule for completing the agency’s review of its long-delayed rulemaking regulating coal combustion residuals from coal-fired electric power plants (Coal Ash Rule).  Appalachian Voices v. McCarthy, No. 12-00523.   EPA’s proposed Coal Ash Rule, originally published on June 10, 2010, included two options for regulating coal combustion residuals (CCRs).  Under option 1, EPA would list CCRs as “special” wastes under subtitle C of the Resource Conservation and Recovery Act (RCRA) when the wastes are destined for disposal in landfills or surface impoundments.  Under option 2, EPA would regulate disposal of CCRs under subtitle D of RCRA, by issuing national minimum criteria.  Subtitle C covers hazardous wastes, while subtitle D covers nonhazardous wastes.  The court’s order requires EPA to propose a schedule to finalize the Coal Ash Rule within sixty days.  A binding Coal Ash Rule schedule will likely provide regulatory certainty to members of the regulated community, especially in light of EPA’s stated intention to harmonize the Coal Ash Rule with another recently released proposed rule- regulating effluent wastes under the CWA.      

  • In Other Developments
    • D.C. Circuit Sets Oral Argument for Utility MACT Case.  On October 25, the D.C. Circuit scheduled oral argument in Utility Air Regulatory Group v. EPA, No. 12-1166. On December 10, the court will hear challenges to the EPA December 2011 Mercury and Air Toxics Standard (MATS) rule, which established air toxics standards for existing coal- and oil-fired utility emission of particulate matter, mercury, other heavy metals, and acid gases. 

 

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