Climate, Energy, & Air Update - June 20 - July 3, 2013

July 2, 2013

President Obama unveiled a multi-part climate change policy agenda consisting of measures that do not require Congressional action. As part of this agenda, he directed EPA to develop greenhouse gas regulations for existing power plants . . . The Supreme Court agreed to review the D.C. Circuit decision vacating the Cross-State Air Pollution Rule . . A bipartisan group of Senators introduced a bill to repeal the Renewable Fuel Standard. Meanwhile, the chairs of the Senate energy and agriculture committees introduced a bill to promote alternative fuel vehicles and infrastructure . . . President Obama nominated Ron Binz of Colorado to be the next Chairman of the Federal Energy Regulatory Commission.

EXECUTIVE BRANCH
  • President Obama Unveils Major Climate Initiative. On June 25, President Obama announced a series of major Executive Branch actions intended to reduce greenhouse gas (GHG) emissions and prepare the country for the effects of climate change. One of the most significant announcements was a commitment to regulate GHG emissions from new, modified, and existing power plants. For a discussion of issues and options associated with power plant regulation, see our June 27 Alert: http://www.vnf.com/1102. The President also announced a series of programs to increase the climate preparedness and resilience of U.S. buildings and infrastructure. Additional measures called for in the Administration’s plan include investments in renewable energy and energy efficiency; support for siting renewable energy on public lands; new heavy duty truck emission standards; and an initiative to reduce methane emissions from pipelines, coal mines, and other sources. The President also indicated that approval of the Keystone XL pipeline would be based in part on whether the project would “significantly exacerbate the problem of carbon pollution.” Finally, the President committed to taking the lead in global efforts to address climate change. The text of the President’s speech and the White House’s Climate Action Plan are available here: http://www.whitehouse.gov/blog/2013/06/26/comprehensive-action-plan-fight-climate-change. Additional information about the Administration’s timeline for regulating GHG emissions from power plants is available in our Alert (http://www.vnf.com/1102) and at http://www.whitehouse.gov/the-press-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards.

  • EPA, Plaintiffs Agree to Extend Deadline for Cooling Water Intake Rule. On June 27, the EPA and environmental group Riverkeeper agreed to extend until November 4, 2013 the deadline for EPA to issue a final rule under Section 316(b) of the Clean Water Act (CWA) setting 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). In a 2010 settlement that resolved two citizen suits brought by environmental plaintiffs, EPA had committed to issue a final cooling water intake rule by July 27, 2012. The new rulemaking deadline will give EPA additional time to obtain a Biological Opinion under the Endangered Species Act from agencies within the Department of Interior before issuing the final rule. The modified settlement agreement is available here: http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/upload/amendment3rd.pdf.

  • EPA Reopens Comment Period for Power Plant Startup and Shutdown Rules. On June 25, EPA issued a notice requesting additional comments on rules for startup and shutdown of power plants covered under its Clean Air Act (CAA) Mercury and Air Toxics (MATS) and Utility New Source Performance Standards (NSPS) for Particular Matter rules. EPA issued those rules in 2012, and subsequently re-opened the startup and shutdown provisions for reconsideration following industry petitions. In its June 25 notice, EPA is soliciting further comment on a number of issues that were raised during the reconsideration process, including the definition of startup, the types of “clean fuels” generating units must use during startup, the means by which non-mercury emissions are calculated during startup and shutdown, and the manner in which generating units that share a common smokestack may demonstrate compliance during startup and shutdown. Comments are due by August 26, 2013. The June 25 Notice is available here: https://www.federalregister.gov/articles/2013/06/25/2013-15146/reconsideration-of-certain-startupshutdown-issues-national-emission-standards-for-hazardous-air.

  • Additional Developments:
CONGRESS
  • Senators Shuffle Committee Assignments. On June 20, Senator Chris Coons (D-DE) was appointed to fill the vacancy on the Senate Appropriations Committee left by the passing of Senator Frank Lautenberg (D-NJ). On June 21, Senator Tammy Baldwin (D-WI) was appointed to fill the vacancy left by Senator Coons on the Senate Energy and Natural Resources Committee.

  • Senator Introduces Bill to Repeal the RFS. On June 20, Senators John Barrasso (R-WY), Mark Pryor (D-AR) and Pat Toomey (R-PA) introduced S. 1195, the “Renewable Fuel Standard Repeal Act.” S 1195 would repeal the statutory authorization and regulations implementing the Renewable Fuel Standard. Additional co-sponsors include Senators John Boozman (R-AR), Saxby Chambliss (R-GA), Ted Cruz (R-TX), Mike Enzi (R-WY) and Tim Scott (R-SC). Additional information is available at http://www.barrasso.senate.gov/public/index.cfm?FuseAction=PressOffice.PressReleases&ContentRecord_id=62b6454c-fa15-c3dc-d2e2-85e0caac0c5e&Region_id=&Issue_id.

  • Markey Wins Senate Race. On June 25, 18 term Congressman Ed Markey (D-MA) won the special election to fill the Senate seat vacated by current Secretary of State John Kerry. Markey, a leader on climate change and environment policies in the House, is widely expected to continue to champion these issues in the Senate.

  • Senate Committee Chairs Introduce Bill to Promote Alternative Transportation Fuels. On June 26, Senate Energy and Natural Resources Committee Chairman Ron Wyden (D-OR) and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) introduced S. 1230, the “Alternative Fueled Vehicles Competitiveness and Energy Security Act of 2013.” Among other things, the bill would: allow fueling infrastructure projects to qualify for the Department of Energy’s Section 1703 Loan Program; provide technical assistance to public-private partnerships as well as state, local, and tribal governments to assist with deployment of alternative fuels, vehicles, and infrastructure ($50 million per year for FY2014-2018); and, provide grants for workforce training to community colleges and other higher education institutions to develop training programs for manufacturing, maintaining, and installing alternative fuel vehicles and refueling infrastructure ($50 million per year for FY2014-2018). The text of the bill, summary and section-by-section analysis are available at http://www.energy.senate.gov/public/index.cfm/democratic-news?ID=a24b7566-e6ac-4c49-88bb-ebd009076125.

  • House Subcommittee Holds Hearing on PMAs. On June 26, the House Natural Resources Subcommittee on Water and Power held hearing entitled “the Power Marketing Administrations: A Ratepayer Perspective.” A recurring theme from Member statements was that Power Marketing Administration (PMA) successes come from regional partnerships and not from top-down management. Witnesses included Scott Corwin, Executive Director of the Public Power Council; and, Craig Collar Assistant General Manager for Power, Rates & Transmission Management at Snohomish County PUD (SnoPUD). Collar testified to the success of SnoPUD’s integration of renewable resources. Many of the Members in attendance took the opportunity to attack the so-called 2012 “Chu memo,” which outlined a strategy for the PMA’s to integrate renewable energy. A full list of witnesses, webcast and written testimony are available at http://naturalresources.house.gov/calendar/eventsingle.aspx?EventID=339291.

  • House and Senate Committees Move FY 14 Appropriations Bills. On June 26, the House Appropriations Committee passed the Energy and Water Appropriations bill for Fiscal Year (FY) 2014 by a vote of 28 to 21. On June 27, the Senate Appropriations Committee passed a significantly different version of the spending bill by a vote of 24 to 6. As an example, the Senate bill would increase funding for the Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) to $2.28 billion, up from its pre-sequester level of $1.8 billion. The House, however, would combine EERE with the agency’s Office of Electricity Delivery and Energy Reliability, providing $983 million for both accounts. A significant difference also emerged in the funding decisions on ARPA-E, the early stage research funding program. A summary of the House bill and a breakdown of Committee amendments considered are available at http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=340615 and a webcast of the Senate Appropriations mark-up and supporting documents are available at http://www.appropriations.senate.gov/news.cfm?method=news.view&id=ba47a4ea-f6df-4341-9716-89343ce3e8c6.

  • Senate Confirms NRC Chair and OIRA Administrator. On June 27, the Senate confirmed Allison Macfarlane to be the Chair of the Nuclear Regulatory Council for a five-year term. Macfarlane was appointed to be the Chair of the NRC after Gregory Jaczko resigned from the post in May, 2012. Howard Shelanski was confirmed as head of the White House Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB), filling the vacancy left after the departure of “regulatory czar” Cass Sunstein last August.

  • House Passed Energy Bill. On June 28,, the House passed H.R. 2231, the “Offshore Energy and Jobs Act” by a vote of 235 to 186. As passed by the House, H.R. 2231 calls for a new 5-year planning process for new leases in offshore areas where oil and gas exploration is currently banned. Additionally, H.R. 2231 would establish a 37.5 percent revenue sharing program with states that produce oil and gas off of their shores. Additional information is available at http://naturalresources.house.gov/news/documentsingle.aspx?DocumentID=341045.
JUDICIAL
  • U.S. Supreme Court Grants Review of EPA Cross-State Air Pollution Rule. On June 24, the U.S. Supreme Court granted certiorari to review the EPA’s Cross-State Air Pollution Rule (CSAPR), which the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) vacated in August 2012. EPA v. EME Homer City Generation, No. 12-1182; American Lung Ass’n v. EME Homer City Generation, No. 12-1183. The Court will consolidate these two cases and will limit its review to the three questions presented in the Solicitor General’s petition: (1) whether the Court of Appeals lacked jurisdiction to consider the challenges on which it granted relief; (2) whether States are excused from adopting State Implementation Plans prohibiting emissions that “contribute significantly” to air pollution problems in other states until after the EPA has adopted a rule quantifying each state’s particular interstate pollution obligation; and (3) whether the EPA permissibly interpreted the statutory term “contribute significantly” so as to define each upwind state’s “significant” interstate air pollution contributions in light of the cost-effective emission reductions it can make to improve air quality in polluted downwind areas, or whether the Act [Clean Air Act] instead unambiguously requires the EPA to consider only each upwind State’s physically proportionate responsibility for each downwind air quality problem. The three issues before the Court mirror the three issues that Judge Rogers of the D.C. Circuit raised in her dissent. For more information on the D.C. Circuit’s decision, including Judge Roger’s dissent, VNF Alert here.

  • U.S. Supreme Court Denies Certiorari in E-15 Waiver Case. The U.S. Supreme Court has denied multiple industry groups’ petitions to overturn two EPA waivers, which will allow the use of gasoline containing up to 15 percent ethanol (E15) in the nation’s gasoline supply for new vehicles. Grocery Manufacturers Ass’n v. EPA, No. 12-1055. In August 2012, the D.C. Circuit found that the industry groups lacked standing to challenge the E15 waivers. For more information, see a VNF CEA Update here: http://www.vnf.com/news-policyupdates-791.html.

  • Multiple Groups Sue EPA Over Reconsidered MATS Rule. On June 24, environmental and industry groups filed separate lawsuits in the D.C. Circuit challenging EPA’s reconsidered Mercury and Air Toxics Standard (MATS) rule. Chesapeake Bay Foundation v. EPA, No. 13-1200. The MATS rule sets National Emissions Standards for Hazardous Air Pollutants (NESHAPs) limits for coal-and-oil fired power plants under section 112 of the Clean Air Act (CAA). The NESHAPs are determined by identifying the Maximum Achievable Control Technology standards for each pollutant type. The lawsuits were filed in response to EPA’s April 24 final rule, which set a mercury emission limit of .003 pound per gigawatt-hour. EPA originally published MATS standards in February 2012; however, the agency agreed to reconsider provisions of the standards related to new plants. The petitions for reconsideration argued that the original standard of .0002 pound per gigawatt-hour was too low to be accurately detected by current technology. In response to these challenges, EPA raised the emissions limit in the final rule. Environmental groups are now challenging this decision, arguing that the original standard was appropriate. Industry groups have also filed petitions for review. These latest lawsuits do not address the agency’s decision not to finalize proposed changes to the start-up, shut-down (SSM) malfunction provisions of the MATS rule. Challenges to this decision are addressed in separate cases.

  • EPA Sued Over Missing Statutory Deadline to Review Ozone Air Quality Standards. On June 19, environmental and health groups sued the EPA in the U.S. District Court for the Northern District of California arguing that the agency missed a five-year statutory deadline for reviewing the ozone National Ambient Air Quality Standard (NAAQS). Sierra Club v. EPA, No. 13-2809. Under the CAA, the EPA is required to review and consider revising NAAQS every five years. The ozone NAAQS was last revised in March 2008 to the current standard of 75 parts per billion. EPA has said it intends to propose a new ozone standard in 2013 and issue a final rule in 2014. The Sierra Club complaint alleges that EPA has acknowledged that the current ozone NAAQS are inadequate to protect the public from ozone pollution, yet the agency has failed to comply with the CAA’s review deadlines.

  • U.S. Supreme Court Finds Denial of a Land-Use Permit a “Taking.” In a decision that has potential implications for permit applicants seeking government approval, a June 25 decision of the U.S. Supreme Court found that a state water management district’s decision to place certain conditions on a permit applicant ran afoul of the Taking Clause of the Constitution’s Fifth Amendment. Koontz v. St. Johns River Management District, No. 11-1447. Specifically, the water district told the applicant it would not approve his permit to develop land the applicant had purchased unless he paid for improvements to a Government-owned land parcel and reduced the size of his development plans. The Court found that the government cannot condition the issuance of a land-use permit on the owner’s relinquishing portions of his property unless there is a “nexus” and “rough proportionality” between the Government’s demand and the proposed land use. The majority held that “[e]xtortionate demands for property in the land-use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation.”
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