The confirmation of Gina McCarthy as head of the US Environmental Protection Agency in July is a sign the Obama administration will put greater emphasis on climate change issues. McCarthy was assistant administrator of the office of air and radiation, where she oversaw the efforts the administration has been making to reduce greenhouse gas emissions.

McCarthy is expected to be a detail-oriented administrator and a pragmatic regulator. Her past actions suggest she will consider the practical implications before she acts. She inherits a full inbox, including new rules on greenhouse gas power plant emissions, management of coal ash from power plants and guidance on hydraulic fracking fluids. 

Climate Change

The administration released a multi-pronged climate action plan in July to reduce US greenhouse gas emissions, better prepare the US for the unavoidable effects of climate change and reengage in international efforts. The plan involves more than 30 new policy actions. It does not require action by Congress to implement. The goal is to reduce US greenhouse gas emissions by 17% below 2005 levels by 2020. The plan is already receiving significant Congressional criticism, particularly from members in coal-producing states. 

The centerpiece of the plan is a Presidential memorandum directing EPA to issue greenhouse gas performance standards or other regulatory or market-based measures to reduce greenhouse gas emissions from both new and existing power plants. 

The agency has been ordered to re-propose greenhouse gas performance standards for new power plants no later than September 20, 2013, with a final rule to be issued in a “timely fashion” following public comment. Since the announcement, EPA has already sent a revised proposal to limit emissions from new power plants to the White House for interagency review. 

Since the plan was released, several sources have suggested that EPA will re-propose performance standards for new power plants that set different emissions limits based on fuel type, including for coal-, oil- and natural gas-fired plants. The coal industry had called for different standards for different fuels because a uniform standard would put coal units at a disadvantage. EPA is expected to back away from an April 2012 proposal to require new coal-fired units to install carbon capture and sequestration within a decade. 

In a more controversial move among certain sectors of the power industry, the President instructed EPA to issue draft greenhouse gas performance standards for modified, reconstructed and existing power plants by June 1, 2014, and then to make them final a year later. The states will then have another year until June 30, 2016 to submit their own plans for controlling greenhouse gas emissions from existing power plants in accordance with the EPA guidelines. 

This will be the first time the federal government has tried to limit greenhouse gas emissions from existing power plants.

EPA has flexibility under the plan to adopt a market-based approach and to require states to impose cuts in greenhouse gas emissions. This “flexibility” may mean that EPA will consider some form of federal cap-and-trade system for the power sector, possibly a federal program that accommodates existing state or regional market-based programs to reduce carbon pollution. EPA has been directed to engage with stakeholders on establishing the new standards. The plan sets a goal of doubling renewable energy generation in the United States by 2020. Among a variety of planned means to that end, the federal government will work toward consuming 20% of its electricity from renewable sources, and the Department of the Interior has been instructed to allow 10,000 megawatts of renewable energy facilities to be built on federal lands by 2020. 

The plan directs the US Department of Energy to open the window to applications for up to $8 billion in federal loan guarantees under the section 1703 loan guarantee program for advanced fossil energy and efficiency projects. The goal is to encourage use of “clean coal” and other innovative technologies. 

Looking beyond the US, the US government will work to encourage greater free trade in clean energy technologies worldwide, including those used in solar and wind power facilities. The administration also intends to encourage other countries to switch from coal to cleaner forms of electricity production and to spur the advancement of carbon capture and storage. The plan calls for an end to US taxpayer financing of new coal plants in other nations unless carbon capture and storage are used, at least in the absence of feasible alternatives. 

The President said he will also push for a global climate treaty at the next United Nations Framework Convention on Climate Change in November.

China-US Pact 

The United States and China agreed to five new initiatives to reduce greenhouse gas emissions and other types of air pollution on July 10. Specifically, by October 2013, the two nations will develop plans to reduce emissions from heavy-duty vehicles, promote carbon capture and increase energy efficiency in buildings, industry and transport. They also agreed to improve greenhouse gas emissions data collection and promote the use of smart grid technology. Together, the US and China account for more than 40% of global carbon dioxide emissions. 

Bats, Birds and Wind 

The US Fish and Wildlife Service announced a $950,000 grant in early July to help agencies in eight Midwestern states prepare habitat conservation plans that allow wind energy development to continue while limiting the effects on the Indiana bat and certain endangered bird and bat species. 

A habitat conservation plan is an agreement between a landowner and the Fish and Wildlife Service that allows the landowner to undertake otherwise lawful activities on his or her property, such as wind and solar development, even at a cost of affecting specifically identified listed species. In exchange, the landowner agrees in advance to conservation measures designed to minimize and mitigate the potential impact. The agreements are called “HCPs.” HCPs developed by counties or states can cover multiple landowners within a jurisdiction and address multiple species. 

The grant is supposed to make it easier to draw up individual HCPs by funding baseline surveys and inventories, document preparation, outreach and similar planning activities by states and territories. Specifically, these funds will allow the natural resource agencies within the Great Lakes-Big Rivers Region (Illinois, Indiana, Iowa, Michigan, Missouri, Minnesota, Ohio and Wisconsin) to continue to develop a landscape-level, multi-species HCP throughout the eight states to provide conservation benefits to listed species while accommodating wind development. 

This should provide a means for wind developers to avoid, minimize, mitigate and compensate for adverse effects to covered species, including the endangered Indiana bat, gray bat, interior least tern, Kirtland’s warbler and piping plover, as well as several unlisted bat species. All eight states are expected to collaborate with the wind industry and The Conservation Fund to lead a strategic conservation planning process that focuses on integrating species’ needs with potential habitat mitigation across the area.

The National Environmental Policy Act requires the Fish and Wildlife Service to do an analysis before it permits any incidental take of a protected species. 

In what may be a first for the Fish and Wildlife Service, the agency also approved an extensive HCP designed specifically for the Indiana bat and issued an incidental take permit to the Buckeye wind project in Ohio on July 17. The permit allows for the incidental “take” of a small number of endangered Indiana bats at a wind farm in eastern Champaign County. The permit allows the take of 130 Indiana bats over the project’s projected 30-year lifespan. If more than 5.2 Indiana bats are “taken” in any given year, Buckeye is required to take action. 

The project must take measures to reduce the likelihood of taking Indiana bats by adjusting operating hours during spring and fall migrations, the summer maternity period and between sunset and sunrise. Some habitat protection and enhancement efforts, monitoring of any take through post-construction mortality studies and adaptive management are required, as well as research to understand Indiana bat and wind turbine interactions.

Indiana bats have been considered an endangered species since 1967. They are dwindling in numbers, in part due to the spread of white-nose syndrome. Indiana bats are found over most of the eastern half of the United States. Other HCPs and incidental take permits related to Indiana bats are now under consideration by the Fish and Wildlife Service at both the Fowler Ridge wind farm in Indiana and the Beech Ridge wind project in West Virginia.

In June, the Fish and Wildlife Service issued another “first” — a “biological opinion” that would allow the taking of one California condor. The opinion dealt with the Alta East project on mainly public lands in Southern California. It includes an “incidental take statement” that allows one “lethal take” of a California condor over the project’s 30-year lifespan. If the Bureau of Land Management approves and the project proceeds, the Fish and Wildlife Service would require another formal review of the potential effect of the project on condors in the event a single condor is killed. The project is expected to generate a maximum of 318 megawatts from 106 turbines, each with 190-foot-long blades. Fewer than 250 California condors are known to exist in the wild and nearly 65 of those live in the Tehachapi mountains near the project. 

Coal Ash and Wastewater Effluent

A showdown is developing over a cost-benefit analysis that EPA did before issuing proposed wastewater effluent guidelines to regulate discharges from power plants. The proposed effluent guidelines were published in June as part of a court-approved settlement with environmental groups. The agreement requires EPA to finalize the effluent guidelines by
May 22, 2014. 

The proposed guidelines address discharges of mercury, selenium, zinc and phosphorus from 1,200 existing power plants nationwide, as well as from any new plants. 

EPA proposed eight options, each covering various waste streams. Different size units have been selected for control with varying degrees of controls. The proposed requirements would apply to discharges of wastewater associated with flue gas desulfurization, fly ash, bottom ash, combustion residual leachate, flue gas mercury control, non-chemical metal cleaning wastes and gasification of fuels like coal and petroleum coke.

EPA acknowledges that many of the discharges result from the implementation of stricter air pollution controls that redirect pollutants from air emissions into other waste streams.

The agency extended the comment period to
September 30, 2013. 

Environmentalists want EPA to adopt a standard that requires dry handling of coal ash and moves away from use of settling ponds. The power industry argues that EPA has underestimated the cost of removing bottom ash from wastewater and significantly overestimated the bottom ash removal efficiencies of power plants in its cost-benefit analysis.

EPA is also asking for comment on whether to align the proposed effluent guidelines for power plants with a related rule for coal combustion residuals that the agency proposed in 2010. Coal ash is a byproduct of burning coal at power plants for electricity. In 2010, EPA issued standards for ash disposal under the Resource Conservation and Recovery Act that would have regulated coal ash as either a special waste or as non-waste material. The agency has still not issued a final coal ash rule, but has been collecting additional technical data. Its final decision could significantly affect coal ash recycling and reuse and potentially require more stringent storage requirements. Coal ash is used in a variety of products, including roof shingles and cement. 

The US House of Representatives voted in late July to transfer control of coal ash regulation to the states. The bill is not expected to pass the Senate.

“Good Neighbor” Petitions

A US appeals court said in July that EPA can grant petitions by downwind states to impose emissions cuts in neighboring, upwind states. The unanimous ruling is expected to boost efforts by downwind states to force power plants and factories in upwind states to curb their emissions. 

The court said that section 126(b) of the Clean Air Act “unambiguously” allows the federal government to order sulfur dioxide cuts at a 427-megawatt power plant in Portland, Pennsylvania in response to a good neighbor petition filed by New Jersey. New Jersey argues that the plant’s emissions make it impossible the state to meet EPA’s one-hour SO2 national ambient air quality standard. The case is called GenOn REMA, LLC v. EPA.

The decision opens the door to attempts to do piecemeal what EPA tried to do more broadly in a “cross-state interstate transport rule” that another appeals court struck down last year. 

Greenhouse Gas Challenge

A US appeals court dismissed a lawsuit in late July by Texas, Wyoming and the Utility Air Regulatory Group to block rules that EPA issued in December 2010 requiring states to enlarge their state implementation plans for reducing air pollutants to include greenhouse gases. Any large industrial source of air emissions that expands or modifies its facilities to increase emissions must get a prevention of significant deterioration permit from the state before doing so. The permit requires installation of updated pollution controls known as best available control technology. EPA required 13 states, including Texas and Wyoming, to revise their implementation plans to address greenhouse gases.