Climate, Energy, & Air Update - Nov. 7 - 20, 2013

November 20, 2013

EPA revises RFS targets downward . . . Interagency climate task force working on methane limitations . . . House Republicans send letter to EPA saying 2005 Energy Act bars GHG standards for new coal plants . . . D.C. Circuit admonishes DOE again on nuclear waste fee . . . California judge rejects challenges to auction provisions in state cap-and-trade program; appeal is likely. 

EXECUTIVE BRANCH
  • BLM Policy Will Disclose Location of Oil and Gas Lease Nominations, Not Identity of Nominator.  The Bureau of Land Management (BLM) announced a new policy for disclosure of individual and company expressions of interest (EOI) in the opening up of federal lands for oil and gas leases.  Under the new policy, which will take effect in January, all EOI’s will be disclosed on BLM state office websites; however, BLM will no longer require nominators to provide their name.  Therefore, names of individuals or companies nominating particular lands will be kept anonymous.  Some oil and gas producers are opposed to disclosure of EOI locations, arguing that mandatory disclosure will cause some producers not to submit EOI's for fear of revealing competitive information. Some environmental advocates are also unhappy with the new policy, arguing that the public has a right to know the identities of all parties submitting EOIs.  A memorandum from BLM outlining the new policy is available online, here.
  • Interagency Climate Change Taskforce Working on Methane Limitations. At an oversight hearing by the Senate Environment and Public Works Committee, EPA Office of Atmospheric Programs director Sarah Dunham testified that the Obama Administration’s Interagency Task Force on Climate Change is looking at existing authorities and incentive-based programs to reduce methane emissions.  Dunham refused to disclose whether part of that plan is the direct regulation of methane emissions from oil and gas wells.  Methane emissions, which have 28 times the global warming potential of CO2, are projected to rise over the coming decade.  In 2012, EPA issued a regulation indirectly limiting methane in the oil and gas production sector by requiring “green completion” of wells for purposes of controlling Volatile Organic Compounds.  At the hearing, Senator Sheldon Whitehouse (D-RI) called on EPA to more directly regulate methane emissions from the sector.  For more information on the 2012 Oil and Gas New Source Performance Standards rule, see VNF’s April 20, 2012 Alert.

  • EPA Releases Revised Renewable Fuel Standard (RFS) Targets.  The RFS, as established in the 2007 Energy Independence and Security Act (EISA), requires 18.15 billion gallons of biofuels to be mixed with transportation fuels, but allows EPA to modify this mandate (and related EISA  biofuel mandates) under certain circumstances.  EPA invoked this authority in a proposed rule issued on November 15, which would reduce the mandate to 15.21 billion gallons for 2014.  The 15.21 billion gallon target is down from the 2013 target of 16.55 billion gallons.  EPA justified its proposed decrease in the RFS by citing the ethanol “blend wall” – a limit on the amount of ethanol that can be blended with conventional gasoline before the blend exceeds 10% ethanol and proves potentially damaging to some engines.  The “blend wall” issue has emerged as a result of the combination of EISA’s increasing annual ethanol mandates and the declining demand for gasoline.  Biofuels advocates have argued that EPA’s justifications do not meet the legal requirements established in EISA for a waiver and that the “blend wall” concerns are overstated.  In addition, EPA has proposed reducing the mandate for advanced biofuels such as biodiesel from 3.75 billion gallons to 2.2 billion gallons and for cellulosic biofuels from 1.75 billion gallons to 17 million gallons.  The proposal also would retroactively eliminate the 2011 cellulosic biofuel targets.  The public comment period will be open for 60 days.  EPA says it anticipates finalizing the rule by spring 2014.  EPA’s proposed RFS rule is available at http://www.epa.gov/OTAQ/fuels/renewablefuels/documents/rfs-2014-standards-nprm-11-15-13.pdf

  • In other developments . . .
    • EPA issues draft strategic plan for fiscal years 2014-2018.  EPA’s strategic plan is open for public comment through Jan. 3, 2014, after which the plan will be finalized and presented to Congress by February 2014.
    • Riverkeeper agreed to extend EPA’s deadline to produce the 316(b) cooling water intake rule by an additional 55 days to January 14, 2014.  Riverkeeper and other environmental groups had sued EPA to finalize the rule.  The revised settlement extends the deadline.  This marks the fourth extension for EPA since 2010.
LEGISLATIVE BRANCH
  • Senator Sends Letter Defending Development in ANWR. On November 12, Senator Mark Begich (D-AK) sent a letter to Interior Secretary Sally Jewell following her remarks regarding the Arctic National Wildlife Refuge (ANWR) during a speech at the National Press Club.  In that speech, Jewell stated that ANWR should “remain off limits to development.”  The Begich letter expresses “interest and alarm” over the comments and calls the notion of restricting ANWR development “short sighted, poor public policy and old fashioned thinking.”  The letter is available at http://www.begich.senate.gov/public/?a=Files.Serve&File_id=0f2259a0-d5bc-440f-8f0c-5f965766780c.

  • Senate Committee Moves NOAA and DOE Nominees Forward. On November 12, the Senate Commerce, Science and Transportation Committee voted to proceed with the nominations of Kathryn Sullivan to be Under Secretary for Oceans and Atmosphere, Department of Commerce, and Administrator of the National Oceanic and Atmospheric Administration; and Bob Simon to be Associate Director for Environment and Energy, Office of Science and Technology Policy, Executive Office of the President.  The nominees will now move to consideration by the full Senate.  The full list of nominees approved by the Committee is available at http://www.commerce.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=0c5c9a3b-1433-4c73-9f71-b56b7468491a&ContentType_id=14f995b9-dfa5-407a-9d35-56cc7152a7ed&Group_id=b06c39af-e033-4cba-9221-de668ca1978a.

  • House Subcommittee Holds Hearing on EPA Regulation of Power Plants.  On November 14, the House Energy and Commerce Subcommittee on Energy and Power held a hearing entitled “EPA’s Proposed GHG Standards for New Power Plants and H.R. __, Whitfield-Manchin Legislation.”  Specifically, the Subcommittee heard from witnesses on the proposed greenhouse gas emission standards for new power plants issued by EPA on September 20, 2013, and the discussion draft of legislation released by Senator Joe Manchin (D-WV) and Representative Ed Whitfield (R-KY) to restrict the EPA’s ability to regulate greenhouse gas emissions from new and existing power plants.  Witnesses included Senator Manchin and EPA’s Acting Assistant Administrator for Air and Radiation Janet McCabe.  Committee members focused on the status of the carbon capture and sequestration technologies that effectively would be required under the proposed rule for new coal-fired power plants.  McCabe told the subcommittee that the technology is “available” and “feasible” and “has been used in industrial applications for years.”  A full list of witnesses, committee issued documents and a webcast of the hearing are available at http://energycommerce.house.gov/hearing/epas-proposed-ghg-standards-new-power-plants-and-whitfield-manchin-legislation.  Additional information on the Manchin- Whitfield discussion draft is available at http://www.manchin.senate.gov/public/index.cfm/press-releases?ID=e09c4797-3ca1-42fc-9411-76906be83f0c.

  • House Committee Hears from EPA Administrator.  Later that morning, the House Science, Space and Technology Committee held a hearing entitled “Strengthening Transparency and Accountability within the Environmental Protection Agency.”  The sole witness, EPA Administrator Gina McCarthy, focused on defending the Agency’s practice for evaluating and conducting scientific evidence when promulgating regulations.  Committee members’ questioned the Administrator on both air and water regulations.  The webcast is available at http://science.house.gov/hearing/full-committee-hearing-strengthening-transparency-and-accountability-within-environmental.

  • Senate Committee Hears from Nominees.  On November 14, the Senate Energy and Natural Resources Committee held a hearing to consider three pending nominations.  The Committee reviewed the nominations of Steven Croley to be the General Counsel of the Department of Energy; Christopher Smith to be an Assistant Secretary of Energy for Fossil Energy; and Esther Kia’aina to be Assistant Secretary of the Interior for Insular Areas.  Committee members asked witnesses about all types of issues pending before the Administration, from the role of the Bonneville Power Administration to crude exports.  Further Committee action on these nominees has not yet been announced.  A webcast of the hearing and full list of witnesses are available at http://www.energy.senate.gov/public/index.cfm/hearings-and-business-meetings?ID=3ae65c1b-4098-49e4-b733-84f295bfa022.

  • House Republicans Argue that 2005 Energy Legislation Bars EPA Proposed GHG Standards for New Coal Plants.  On November 15, House Energy and Commerce Committee Chairman Fred Upton (R-MI), Chairman Emeritus Joe Barton (R-TX), Subcommittee on Energy and Power Chairman Ed Whitfield (R-KY), and Vice-Chair Steve Scalise (R-LA) sent a letter to EPA Administrator Gina McCarthy requesting that she withdraw the agency’s proposed GHG emission standards for new power plants.  EPA’s proposed standard for new coal-fired power plants is based on the emissions performance of a plant using partial carbon capture and sequestration (CCS).  The agency has argued that such a standard is justified under section 111 of the Clean Air Act because CCS is “adequately demonstrated.”  In support of its “adequately demonstrated” determination, the agency’s proposal cites a series of power plants currently under construction that will use the CCS.  The Upton et al letter argues that EPA may not cite these plants in support of its “adequately demonstrated” determination because the plants are receiving federal subsidies pursuant to the 2005 Energy Policy Act and the Act specifically provides that plants receiving such subsidies may not form the basis of an “adequately demonstrated” determination under the relevant provisions of the Clean Air Act.  The letter goes on to request that the Administrator “advise the Committee of the agency’s planned actions with regard to this request no later than November 22.”  The letter is available at http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/letters/20131115EPA.pdf

JUDICIAL BRANCH

For more information on pending environmental law cases, see the VNF Environment Appellate Litigation Tracking Tool at http://www.vnf.com/litigationtracker

  • Mingo Logan Coal Co. Petitions Supreme Court for Review of Vetoed Permit.  On November 13, the Mingo Logan Coal Co. petitioned the U.S. Supreme Court to review the U.S. Court of Appeals for the District of Columbia Circuit’s (D.C. Circuit) ruling that upheld the EPA’s authority to veto portions of Mingo Logan’s dredge-and-fill permit under section 404 of the Clean Water Act (CWA).  Mingo Logan Coal Co. v. EPA, No.12-05150.  For more information on the case, please see a VNF CEA Update here.

  • Federal Judge Finds California’s Cap-and-Trade Auctions are Legal.  On November 14, a state superior court judge in California dismissed two challenges to provisions in the state’s cap-and-trade regulations that establish an auction for emission allowances.  California Chamber of Commerce v. California Air Resources Board, No. 34-2012-80001313; and Morning Star Packing Co. v. California Air Resources Board, No. 34-2013-80001464.    Challengers to the auction provisions made two arguments.  First, they argued that the authorizing statute for the regulations, A.B. 32, did not authorize the California Air Resources Board (CARB) to impose fees other than those needed to administer the program.  Second, they argued that the allowance auction is effectively a tax – and, as such, does not meet a requirement under the state constitution that any tax be enacted by two-thirds majorities in both houses.  The court, however, found that CARB did not exceed its authority under A.B. 32 and that “[o]n balance, the court agrees that the charges are more like traditional regulatory fees than taxes, but it is a close question.”  One of the challengers has already stated its intent to appeal the decision. 

  • D.C. Circuit Orders Energy Department to Zero-Out Nuclear Waste Fee.  On November 19, the D.C. Circuit ruled that the Department of Energy (DOE) must eliminate the nuclear waste fee it charges to owners of nuclear plants until “the Secretary chooses to comply with the Act as it is currently written, or until Congress enacts an alternative waste management plan.”  National Association of Regulatory Utility Commissioners, v. DOE, No. 11-1068.  Under the Nuclear Waste Policy Act, Congress directed DOE to collect fees from nuclear waste producers to be paid into the Nuclear Waste Fund, which is supposed to pay for a permanent disposal solution.  However, DOE has failed to identify such a solution; the agency recently rejected Yucca Mountain as the disposal site.  In 2012, the court gave the DOE Secretary another opportunity to come up with a “legally adequate fee assessment,” after finding that the DOE had failed to make “the statutorily required determination as to whether the fee was adequate.”  In its recent opinion, the court again found that the Secretary had failed to conduct an adequate fee assessment.  The Secretary had concluded that the range of the Nuclear Waste Fund’s balance would be between a $2 trillion deficit and a $4.9 trillion surplus; making it impossible for the Secretary to determine the fee assessment.  The court held “[t]he Secretary may not comply with his statutory obligation by ‘concluding’ that a conclusion is impossible.”

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