Weekly Climate Change Policy Update - February 7, 2011

Three flavors of legislation curbing EPA’s authority to regulate GHGs became available in Congress as of this past week: remove EPA’s authority to regulate GHG emissions under the Clean Air Act (Upton/Inhofe); preclude regulation of GHG emissions under several federal statutes (Barrasso); and delay EPA regulation of GHG emissions for two years (Rockefeller) . . . A House Energy and Commerce subcommittee will hold a legislative hearing on the Upton bill this coming Wednesday . . .  President Obama announced his support for new funding initiatives for energy efficiency and clean energy activities at a speech in State College, Pennsylvania . . . Natural gas companies and semiconductor companies have filed a legal challenge against EPA’s mandatory GHG reporting rules . . . House Democrats issued a report alleging that 12 drilling companies used diesel fuels in hydraulic fracturing activities without first obtaining required federal permits . . . Utilities and the Department of Justice filed briefs in the Supreme Court for the Connecticut v. AEP proceeding.

Executive Branch

• President Obama Outlines Commercial Building Efficiency Proposal.  At a speech in State College, Pennsylvania, the President gave a preview of a new commercial building energy efficiency program that will be included in the President’s fiscal year 2012 budget.  Dubbed the “Better Building Initiative,” the proposal calls for replacing an existing tax deduction for commercial building efficiency improvements with a more generous tax credit.  In addition, the proposal envisions a pilot program under which the Department of Energy will provide loan guarantees for energy efficiency retrofits in commercial buildings, as well as a competitive grant program to encourage state and municipal governments to create more favorable regulatory environments for energy efficiency improvements.  The Administration estimates that the proposal would stimulate sufficient investments to save almost $40 billion per year in energy costs.  A fact sheet describing the initiative is available at http://www.whitehouse.gov/the-press-office/2011/02/03/president-obama-s-plan-win-future-making-american-businesses-more-energy. 
• Jackson Will Advise Veto of Bills Eliminating EPA Authority to Regulate GHGs.  Responding to the growing number of bills introduced in Congress to limit or abolish the Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas (GHG) emissions under the Clean Air Act, EPA Administrator Lisa Jackson said that “these efforts would halt EPA’s common-sense steps under the Clean Air Act to protect Americans from harmful air pollution that until now has not been regulated at all for any sources in this country.”  Jackson said that the President’s advisers would recommend vetoing any legislation that would remove EPA’s GHG authority.   
• EPA Allows Certain Facilities With Long-Pending PSD Permit Applications to Avoid GHG Requirements.  Retreating from a position adopted in its June 2010 “Tailoring Rule,” the Environmental Protection Agency (EPA) announced in a court filing that it will “grandfather” certain pending Prevention of Significant Deterioration (PSD) permits with respect to new permitting requirements for GHG emissions.  The Tailoring Rule stated that PSD permit applications that were pending as of January 2, 2011 would have to be amended or resubmitted to ensure compliance with new PSD requirements for GHG emissions.  Under the new grandfathering policy, PSD permit applications that have been pending for an extended period would not be required to be amended to reflect “best available control technology” for GHGs or otherwise address GHG emissions.  The policy was articulated with respect to a single facility—a 600 MW power plant in the San Joaquin Valley that has been awaiting the issuance of a permit for over three years—but EPA said it will extend the same treatment to other facilities that can demonstrate they are “similarly situated.” 

Congress

• Competing Bills to Curb EPA Regulation of GHG Emissions Circulate.  The debate in Congress over whether and how to restrict federal regulation of GHG emissions under the Clean Air Act and other laws heated up with the circulation of three divergent bills.  The only area of common ground between the three bills is the preservation of EPA’s tailpipe emission standards for model year 2012-2016 passenger cars and trucks.

  • Sen. John Barrasso (R-WY) introduced the “Defending America’s Affordable Energy and Jobs Act” (S. 228).  The bill would prohibit federal agencies from promulgating or enforcing regulations to control GHG emissions, taking any action relating to the climate effects of GHG emissions, or taking into consideration the climate effects of GHG emissions in implementing any law.  The bill would also nullify all rules and actions previously taken by federal agencies to regulate GHG emissions.  In addition, the bill would preclude any entity from being held legally liable for emitting GHG emissions due to their impact on climate change.  Ten Republicans have signed on as co-sponsors:  Sens. Roy Blunt (MO), John Cornyn (TX), Michael Enzi (WY), Orrin Hatch (UT), James Inhofe (OK), Mike Lee (UT), Jerry Moran (KS), Pat Roberts (KS), John Thune (SD), and David Vitter (LA).
  • House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. Ed Whitfield (R-KY), Chairman of the Energy and Power Subcommittee, circulated a draft version of the “Energy Tax Prevention Act.”  Sen. James Inhofe (R-OK) is supporting a similar proposal in the Senate.  The draft legislation would amend the Clean Air Act to eliminate EPA’s authority to regulate GHG emissions due to their climate change effects.  The draft would also repeal EPA’s finding that GHG emissions endanger public health and welfare and other actions EPA has taken to facilitate the regulation of GHG emissions under the Clean Air Act.  The Energy and Power Subcommittee of the Energy and Commerce Committee will hold a legislative hearing on the draft bill on February 9th at 10:00 a.m.  The draft bill is available at http://republicans.energycommerce.house.gov/Media/file/PDFs/GG_01_xml.pdf.

The Wednesday hearing will be the first legislative hearing to be held under new Subcommittee Chair Whitfield.  It is significant in several ways.  Full Committee Chairman Fred Upton (R-MI) has expressed his strong support for what he calls “regular order.” Under this system—which, during the last two party switches of control, has sometimes seemed to be honored only in the breach—matters of policy and legislation are first assigned to a subcommittee.  The subcommittee, at the call of its Chair, may hold hearings on those matters and invite witnesses.  The Republican majority likely will control the choice of a vast majority of the witnesses; the minority subcommittee Democrats, led by Ranking Member Bobby Rush (D-IL), likely will have the right to invite a witness or two.  By endorsing “regular order” for his committee and subcommittees, Chairman Upton has made more possible a vigorous debate on issues under his committee’s jurisdiction.  In another significant change from past practice, EPA has announced that Administrator Lisa Jackson has accepted the subcommittee’s invitation to testify at the Wednesday hearing. Generally, in the past two Presidential Administrations, the heads of Executive Branch agencies have declined invitations from subcommittees.  This gesture of accommodation, therefore, is a significant departure from recent practices.

• Sen. Jay Rockefeller (D-WV) reintroduced his “EPA Stationary Source Regulations Suspension Act” (S. 231), which would suspend EPA regulation of stationary sources of GHG emissions under the Clean Air Act for two years following enactment.  Six Democrats co-sponsored the bill:  Sens. Kent Conrad (ND), Tim Johnson (SD), Joe Manchin (WV), Claire McCaskill (MO), Ben Nelson (NE), and Jim Webb (VA).
• House Dems Report Unpermitted Use of Diesel in Fracking.  Reps. Henry Waxman (D-CA), Edward Markey (D-MA), and Diana DeGette (D-CO) wrote to EPA Administrator Lisa Jackson reporting that 12 drilling services companies had used 32.2 million gallons of diesel or diesel-containing fluids in fracking operations without obtaining the required permits or conducting studies to ensure that the fluids used would not endanger drinking water.  The letter concludes that this practice “appear[s]” to violate the Safe Drinking Water Act’s exemption of EPA regulation of fracking (the exemption does not apply when diesel-containing fluids are used), and urges EPA to examine the practice and investigate any impacts on drinking water.  The letter is available at http://www.springerlink.com/content/u0352236x6n868n2/fulltext.pdf.
• Bingaman Unveils Legislative Goals for 112^th Congress.  Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) announced that he hopes to move legislation to improve the energy efficiency of appliances, homes, and commercial buildings; provide reliable financing for new clean energy projects; support the development of clean energy manufacturing facilities in the United States; and address oil spill liability and prevention.  Sen. Bingaman said that the bills will draw from legislation passed by his committee during the 111^th Congress.  Sen. Bingaman also said that his staff members are talking with White House aides about how to develop a clean energy standard to meet President Obama’s goal of generating 80 percent of U.S. electricity with clean energy sources by 2035.  Senate Republicans formally approved Sen. Lisa Murkowski (R-AK) as ranking member of the Energy and Natural Resources Committee.

Judicial

• Natural Gas and Electronics Industries Challenge New GHG Reporting Requirements.  Companies and trade associations in the natural gas and electronics industries have filed petitions for review in the United States Court of Appeals for the District of Columbia Circuit challenging EPA’s recently-finalized mandatory reporting requirements for petroleum and natural gas systems and sources of fluorinated gases.  Petitions challenging the petroleum and natural gas requirements (known as “Subpart W”) were filed by the Interstate Natural Gas Association of America, the American Gas Association, the Gas Processors Association, American Exploration & Production Council, Chesapeake Energy Corporation, and the American Petroleum Institute.  The Semiconductor Industry Association and 3M filed petitions for review of the regulations affecting sources of fluorinated gases.  The deadline for filing petitions was January 31, 2011.   
• Utilities and DOJ File Opening Briefs With Supreme Court in Connecticut v. AEP.  Briefs were filed with the Supreme Court by the appellants in Connecticut v. AEP, a case brought by eight states, the City of New York, and three land trusts alleging that GHG emissions from four investor-owned utilities and the Tennessee Valley Authority (TVA) constitute a public nuisance under federal common law.  In 2009, the United States Court of Appeals for the Second Circuit reversed a lower court decision dismissing the lawsuit on political question grounds.  In their brief to the Supreme Court, the four appellant investor-owned utilities claim that: the Second Circuit erred in finding that plaintiffs had standing to bring a lawsuit; the political question doctrine bars the courts from considering the plaintiffs’ claims; and federal common law does not recognize a cause of action for climate change-related injuries.  Representing TVA, the Department of Justice (DOJ) filed a separate brief arguing that plaintiffs lack “prudential” standing, but also advising the court not to decide the case on the basis of constitutional standing arguments or the political question doctrine.  

States and Cities       

• California Democrats Focus on Clean Energy Amid Struggle With CARB Over RES.  California Democrats are preparing a legislative package intended to promote clean energy and clear the way for new clean energy projects in the State.  The “Clean Energy Jobs Initiative,” announced by Assembly Speaker John Perez and Senate President Darrell Steinberg, consists of four bills aimed at clean energy.  The bills would establish a 33 percent renewable energy standard (RES); expedite the siting and construction process for renewable energy projects; provide loan guarantees for residential and small business energy efficiency and renewable energy projects; and provide funding for education to support clean energy jobs.  Several of the bills are similar to legislation that was introduced, but not passed, in the most recent legislative session.  The announcement of the clean energy package comes as Senate Democrats took action in an on-going struggle with the California Air Resources Board (CARB) over whether the agency has legal authority to implement an RES rule it passed late last year.  In a vote on the CARB budget, the Senate cut $2 million that was to fund implementation of CARB’s existing RES rule.  CARB promulgated the RES rule pursuant a 2009 executive order issued by then-Governor Arnold Schwarzenegger (R).  Many legislators, among others, have argued that the agency exceeded its legal authority in passing the RES rule because the RES was not authorized by legislation.  Senate Democrats cut CARB’s implementation funding in the hopes of passing the new, more stringent RES as part of the Clean Energy Jobs Initiative.  Although both the existing RPS and the new RES legislation set the standard at 33 percent, the new legislation contains greater limitations on the ability of California utilities to meet their obligations through the purchase of out-of-state renewable electricity. 

Industry and NGOs

• Eminent Scientists Advise Congress to Take “Fresh Look” at Climate Science.  Eighteen leading scientists—including eight members of the National Academy of Sciences, three MacArthur Fellows, and a recipients of the National Medal of Science—sent a letter to all members of the House and Senate arguing that “the science [of climate change] is strong and that there is nothing abstract about the risks facing our nation.”  The letter states that climate change “is not the product of a belief system or ideology” and that “no amount of argument, coercion, or debate among talking heads in the media can alter the physics of climate change.”  Noting that the National Academy of Sciences recently published a series of research reviews that unambiguously confirm the existence of anthropogenic climate change, the letter argues that “the fruits of the scientific process are worthy of your trust.”  The letter is available at http://thehill.com/blogs/e2-wire/677-e2-wire/141453-scientists-put-aside-politics-and-focus-on-climate-science. 
• Nucor Corp. Receives First GHG PSD Permit.  North Carolina-based steelmaker Nucor Corp. has been issued the first PSD permit to include GHG limitations.  The permit was issued in connection with the construction of a new iron manufacturing facility in Louisiana.  The permitting authority, the Louisiana Department of Environmental Quality, required Nucor Corp. to meet “best available control technology” (BACT) requirements for GHGs by installing energy efficient equipment.  In comments on the draft version of the permit, EPA’s Region VI office critiqued the absence of a binding, quantitative GHG emission rate in the permit as well as the permit’s failure to consider carbon capture and sequestration as a potential BACT option.  However, it is not yet clear whether EPA will appeal the issuance of the permit to the agency’s Environmental Appeals Board. 

Studies and Reports

• East African Droughts Linked to Climate Change.  Research published in Climate Dynamics found that climate change has caused particularly rapid warming of surface waters in the Indian Ocean over the past 60 years.  According to the research, the warmer surface water temperatures generated increased temperatures and precipitation over the tropical Indian Ocean and led to atmospheric circulation changes that sent dry air over eastern Africa and decreased precipitation.  The scientists concluded that the increased drought frequency that resulted is likely to continue if global temperatures continue to rise, potentially causing extreme food insecurity in Ethiopia, Kenya, and Somalia.  The article is available at http://www.springerlink.com/content/u0352236x6n868n2/fulltext.pdf.
• Polls Shows Strong Support for Clean Energy, EPA.  According to a Gallup poll, Americans more strongly support Congressional action to develop alternative energy than any other issue listed, including expanding domestic oil and gas drilling, overhauling the tax code, hastening troop withdrawal from Afghanistan, or passing stronger gun control laws.  83 percent of respondents supported passage of incentives for solar and other forms of alternative energy, with 93 percent of Democrats, 82 percent of Independents, and 75 percent of Republicans in support.  The poll results are available at http://www.gallup.com/poll/145880/Alternative-Energy-Bill-Best-Among-Eight-Proposals.aspx.  A poll funded by NRDC and conducted by ORC International found that 63 percent of respondents believe EPA “needs to do more to hold polluters accountable and protect the air and water.”  Less than 30 percent (and only 44 percent of Republicans) agreed that EPA “places too many costly restrictions on businesses and individuals.”  The poll results are available at http://switchboard.nrdc.org/blogs/paltman/2-2%20ORC%20International%20EPA%20Survey%20Report.pdf.