Environmental update

Environmental update

August 11, 2016 | By Andrew Skroback in Washington, DC

The US Environmental Protection Agency filled in details in late June about how it will reward generators in states that move early to reduce carbon emissions ahead of deadlines in the Clean Power Plan.

The rewards are under a part of the Clean Power Plan called the “clean energy incentive program.”

The Clean Power Plan assigns each state individual carbon reduction targets and requires each to submit an implementation plan demonstrating how it will achieve them. States that fail to submit plans will have a federal plan imposed on them.

The plan is currently stalled after the US Supreme Court imposed a stay on implementation in February to give it time to hear arguments about whether the plan goes beyond what the Obama administration has legal authority to do. The court is not expected to render a decision until late 2017. A number of states and Indian tribes have said they plan to continue working on their own implementation plans anyway. EPA continues to provide support.

Owners of qualifying projects in states that cut emissions ahead of deadlines in the plan will receive emission allowances or emission rate credits in 2020 and 2021 for the electricity they save or the renewable power they produce. These allowances or credits can be sold in the market for cash.

EPA originally proposed that only solar and wind projects were eligible for allowances or credits. It proposed in late June to expand eligibility to geothermal and hydropower projects.

The date that projects become eligible to receive allowances or credits has also changed. Eligibility had been tied to the date on which a state submitted its final implementation plan, with final plans due on or before September 6, 2018. With that deadline no longer applicable in light of the US Supreme Court stay, EPA is now proposing that qualifying energy projects in all communities should become eligible for matching allowances or credits if they begin commercial operation on or after January 1, 2020. EPA also proposes that energy efficiency projects in low-income communities become eligible for double the matching allowances or credits if they begin operation on or after September 6, 2018. With the length of the stay uncertain, these dates remain subject to change.

A project will be considered a low-income project if it is in or benefits a low-income community. A project will be considered in commercial operation when energy is being sold for renewable energy projects or when the community is saving electricity for energy efficiency projects.

Opponents of the Clean Power Plan are arguing in court that the Supreme Court stay prohibits EPA from working on any element of the plan, including the incentive program. The attorneys general of Texas and West Virginia and Republicans in the US House of Representatives are calling on EPA to cease action on the incentive program on grounds that that its continuing work on filling in details of the program amount to a “shadow regulatory structure” that undermines the stay.

EPA is accepting comment on the latest proposals until August 29, 2016.

Clean Water Act

The US Supreme Court ruled on May 31 that property owners who are told by the government that their lands include waters subject to the Clean Water Act may challenge that finding in court immediately, rather than having to complete the process of obtaining a permit or subjecting themselves to the threat of an enforcement action for failing to obtain a permit.

The Clean Water Act requires a permit before discharging fill material or other pollutants into “jurisdictional” waters, meaning certain streams, wetlands and other water bodies. As a practical matter, most construction and related disturbances in jurisdictional waters are regulated and require a permit. The first step in determining whether a permit may be required is a jurisdictional determination by the US Army Corps of Engineers.

There are two types of jurisdictional determinations: “preliminary” and “approved.” A preliminary jurisdictional determination advises a property owner that regulated waters may be present, while an approved jurisdictional determination definitively states that such waters are present or absent. An approved jurisdictional determination requires detailed fact finding and is the US Army Corps of Engineers’ final decision. In contrast, preliminary jurisdictional determinations are not definitive declarations of jurisdiction, but instead operate as determinations on the scope of jurisdictional waters that the property owner has agreed not to contest. One of the purposes of a preliminary jurisdictional determination is to avoid a potentially lengthy and expensive regulatory process.

The Supreme Court held that an “approved” jurisdictional determination is a final agency action that can be appealed to a court.

The Court’s ruling is narrow and limited to approved jurisdictional determinations, but it may help projects that are challenging preliminary jurisdictional determinations that affect jurisdictional waters. Until now, in instances of contested impacts, property owners faced a choice of moving to an approved jurisdictional determination in the hope that the outcome will be different or delaying project plans for months or years in order to secure the required permit. Before this decision, courts had held that approved jurisdiction determinations were not final agency action and, thus, not subject to judicial review until completion of the permitting process or commencement of enforcement proceedings. Now, in such instances, the property owner may go directly to court without waiting for the permitting process to be completed. The decision has no impact on preliminary jurisdictional determinations.

Lesser prairie chicken

The US Fish and Wildlife Service removed the lesser prairie chicken from its list of threatened species in mid-July after declining to appeal a Texas federal district court decision that vacated the listing.

It said it would re-examine the bird’s status to determine whether a threatened listing is still warranted.

Fish and Wildlife said in a written statement, that “[r]esponding to this court ruling by removing the bird from the Federal List does not mean we are walking away from efforts to conserve the lesser prairie chicken. Far from it. We are undertaking a new status review to determine whether listing is again warranted, and we will continue to work with our state partners and others on efforts to protect vital habitat and ensure this flagship of the prairies survives well into the future.”

The court said, when delisting the bird, that the government had failed to take into account the success that the species has had in re-establishing itself. “The LPC population has been increasing, the severe drought conditions have abated, oil and gas development has slowed significantly due to the decrease in oil prices, and wind development has not and seemingly will not pose a substantial threat to the species.” The court said that ongoing multistate conservation efforts have also contributed to the success, and the Fish and Wildlife Service should have factored them into its analysis when it listed the bird.

These conclusions are hotly disputed by environmental groups, who criticized the Service for failing immediately to propose new protections for the bird. It remains to be seen which way Fish and Wildlife will go.

Climate change

The US presidential candidates are offering voters a stark choice on the issue of climate change.

Republican presidential nominee Donald J. Trump has called climate change a “hoax” created by the Chinese. Trump also has said he will renegotiate the multi-lateral COP-21 accord that 174 countries reached in Paris last fall to work together to limit carbon emissions. By selecting Indiana Governor Mike Pence as the party’s nominee for vice president, Trump doubled down with a vocal critic of any government efforts to address climate change.

Pence helped lead Republican efforts against comprehensive climate change legislation in 2009 and backed legislation barring the US Environmental Protection Agency from regulating greenhouse gas emissions when he was in the US House of Representatives. As Governor of Indiana, he vowed not to implement the Clean Power Plan to control emissions from power plants. He said, “I believe the Clean Power Plan as proposed is a vast overreach of federal power that exceeds the EPA’s proper legal authority.” Pence has called the idea that human activity is a primary driver of climate change a “myth” and says he does not believe science has established a connection.

In contrast, Democratic presidential nominee Hillary Clinton said in her acceptance speech at the Democratic convention that climate change is one of the most important issues facing the US government. She has a long record of supporting legislative and regulatory action to address the issue.

Clinton’s campaign has said she would probably focus on smaller legislative actions and employ executive powers in light of Republican opposition to more dramatic action like a carbon tax. This would reportedly include more investment in clean energy, energy efficiency and research and development, measures that could get traction in Congress because of the money that would flow directly to states and create jobs.

Clinton’s choice for vice president, Senator and former Virginia Governor Tim Kaine, supports the Clean Power Plan and has a record of pressing coastal communities and military bases to prepare for rising sea levels. At the same time, Kaine has a more moderate record with the fossil fuel industry than Clinton, including past support for offshore oil drilling and legislation to put construction of LNG export terminals on a fast track.

Carbon emissions

The US Department of Energy reported in July that the US transportation sector surpassed the energy sector in terms of the amount of carbon emitted for the first time in more than 30 years. According to DOE, the transportation sector now emits 25% to 30% of total US carbon emissions. The number of vehicles worldwide is expected to double in the next 20 years.

— contributed by Andrew Skroback in Washington, DC