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Archive for the ‘Regulation’ Category

Endangerment is my middle name

Posted by Danny Morris on December 9, 2009

This post originally appeared on Weathervane, RFF’s climate policy blog.

COPENHAGEN — If the old adage I just made up, “A party without someone from the Environmental Protection Agency is not a party,” is true, then Copenhagen officially became a party today. The cavalcade of Obama administration officials kicked off today when EPA Administrator Lisa Jackson delivered a ‘this is where we stand’ speech in the U.S. Center at the COP meeting. Jackson summarized many of the important actions the administration has taken since the beginning of 2009, highlighting:

  • $80 billion from the stimulus package spent on renewable energy and smart grid projects
  • EPA’s Energy Star program for household appliances
  • CAFE standards of 35.5 mpg starting in 2016
  • A new national greenhouse gas registry for large emitters, covering 85 percent of U.S. emissions
  • An executive order from the president requiring all government agencies to adopt emissions reduction standards by 2020, improve their energy efficiency, and reduce fuel use.

Now, that’s all well and good, but there was another issue in which people were keenly interested. That would be the announcement Monday that the EPA finds greenhouse gases are a threat to the public health and can be regulated by the Clean Air Act. Jackson said the announcement was the latest in a chain of events set of by the Supreme Court ruling on Massachusetts vs. EPA, which gave the agency the authority to regulate CO2 and other GHGs as pollutants. By finalizing the ‘endangerment’ finding, she asserted that Clean Air Act allows EPA to take reasonable and common sense steps to reduce pollutants (emphasis hers).

All in all, not much ground-breaking news in this speech, which is essentially what one would expect from someone trying not to rock the boat before the boss shows up. She avoided speaking about the negotiations whenever possible, and repeated that actions under the CAA will be reasonable and common sense.

One interesting, slightly off-script response occurred when she was asked about Exxon’s criticisms of CAA regulation. Jackson said that you can’t call the CAA not transparent and that it can provide the clear signal businesses are hoping legislation will give in the form of a price on CO2. One could call her comment not transparent, as it was unclear whether she meant the CAA sends businesses a clear signal with a price signal or it just sends a clear signal to businesses that they will be regulated. But, as Jackson mentioned in a later question, the EPA tends to think in terms of who is going to sue them and why, so the answers will come regardless eventually.

Posted in Climate Change, COP, Regulation | 1 Comment »

Endangered(ment) Species

Posted by Danny Morris on April 17, 2009

It’s a nice day here in our nation’s capital (one of the few over the past few months), which is making many of us here feel chipper, sunny, and generally at peace with the world. We shouldn’t feel that way though, because we are in DANGER! Well, sort of. The WaPo is reporting that sometime this afternoon the EPA will official announce its findings that carbon dioxide emissions pose a danger to the public’s health and welfare. The endangerment finding, as some in the Beltway bubble call it, is a response to the Supreme Court’s ruling on Massachusetts vs. EPA two years ago, where it found that the EPA can regulate emissions of GHG emissions under the Clean Air Act.

There have been rumors that this was going to drop right around Earth Day, which could ensure a lot of media coverage and much green revelry. Now that it’s official (it needed approval from the OMB), consider it one more spice in the fiery cauldron that is the U.S. response to climate change. If Congress can’t get its act together and pass some kind of legislation passed (Henry Waxman wants his bill through committee by Memorial Day), then the EPA will step up to the plate and regulate, which will be industry’s worst nightmare come true. Truth be told, not many people want EPA to regulate on its own, including EPA head Lisa Jackson. As she says in the article:

The best solution, and I believe this in my heart, is to work with Congress to form and pass comprehensive legislation to deal with climate change. We hope to avert a regulatory thicket where governments and businesses spend an inordinate amount of time fighting. We are not looking for a doomsday solution.

This is a big trump card for the Obama Administration and those in Congress who want to see something passed this year. The way things are going these days, doomsday solutions don’t seem all that unlikely. Stay tuned…

Posted in Climate Change, Regulation | 1 Comment »

CCS and the long haul

Posted by Evan Herrnstadt on February 29, 2008

When carbon capture and sequestration is discussed, the phrase “in perpetuity” tends to come up. This cannot be literal, but what we conceptualize as forever is at least a very long time, and someone needs to be liable (or at least responsible) for potential damages related to geological sequestration (GS).

I recently attended an EPA public workshop on Underground Injection Control (UIC) regulations for carbon sequestration. The Agency is in the midst of writing regs pertaining to GS of carbon, and they were looking for input. It was made perfectly clear that no comments were to be attributed to participants during the main session, so there’s going to be a lot of anonymity in this post.

I went to a breakout session on financial assurance of long-term site care and monitoring (LTCM). Although the discussion was meant to focus on EPA regulations under the Safe Drinking Water Act, it spread to broader themes of long-term liability and responsibility. Specifically, the conversation quickly turned to state indemnification (Note: EPA has no authority under the UIC regime to transfer liability away from the owner/operator of a site; it would take an act of Congress to do so).

The main argument for indemnification in GS is that uncertainty reigns at this point, and the damages associated with a major release or leak are sufficiently large as to deter investment in sites. One of the speakers countered this idea, stating that there are surely some firms that would be willing to take on this liability — it all depends on whom you want in the GS business. In response, a participant memorably noted that to store carbon “in perpetuity”, we need an institution to last as long. He suggested the Catholic Church, as it has significantly split only once in the past 2000 years or so. Joking aside, his point was that corporations are too short-lived to take on liability stretching far into the future. However, he claimed that a nation would be the next-best option.

Indemnification is by no means new to the U.S. government. Read the rest of this entry »

Posted in Coal/ CCS, Regulation | Leave a Comment »

CCS on the Hill: FutureGen, Regulation, and Public Perception

Posted by Evan Herrnstadt on February 5, 2008

I went to a hearing on the Hill last Thursday pertaining to regulatory aspects of carbon capture, transport, and sequestration. The hearings were for the benefit of two bills (S. 2144 and S. 2323) making their way through the Senate Committee on Energy and Natural Resources, but were also conveniently held the day after the DOE announced it was backing out of the FutureGen project (at least in its current manifestation).

Indeed, the big attraction for many in attendance was the presence of James Slutz, Deputy Assistant Secretary in the DOE Office of Natural Gas and Petroleum. In a bold move, he started off asserting that “DOE has assumed the lead in CCS technology”. When pressed by Sen. Barrasso to explain how eroded confidence in public-private partnerships can be rejuvenated after the DOE FutureGen pullout, Slutz simply replied that “when a project doubles in cost, it’s time to rework the agreement”, that the project was “no longer in the interest of the American people”, and that market-based plants would be more successful. Aside from the fact that a large proportion of the cost overruns are related to inflation and delays, this statement also completely ignores the point of public-private demonstration partnerships. There is an enormous amount of risk involved in this type of project and, as such, it would not be viable as a purely private endeavor. FutureGen was not designed to be profitable, it was designed to demonstrate commercial-scale technology.

Read the rest of this entry »

Posted in Coal/ CCS, Public Opinion, Regulation | 1 Comment »