AB 32: New Challenge Targets California Cap-and-Trade Law

The California Air Resources Board (“CARB”) has again been sued over its implementation of the Global Warming Solutions Act of 2006 (also known as AB 32). The lawsuit, Morning Star Packing Co. et al. v. CARB, filed on April 16, 2013, resembles an earlier action brought by the California Chamber of Commerce (“CalChamber”) in November of 2012 (discussed here). Both cases allege that the auction of allowances under the cap-and-trade amounts to an illegal tax because AB 32 was not approved by two-thirds of both houses of the state legislature, as required by the California Constitution.

Where the two cases differ is that Morning Star adds explicit examples of how the alleged unconstitutional tax is causing petitioners to bear increased costs and expenses, an important element in establishing the standing of the petitioners. For example, Morning Star Packing Company, the only petitioner that is also regulated by the cap-and-trade, has purchased nearly $400,000 worth of 2013 vintage allowances. At stake is not only the future of one critical element of the cap-and-trade, but also revenue which over the life of the cap-and-trade program is expected to be between $7 and $75 billion.  (Marten Law)

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EIS Requirements For Fracking on BLM Lands

NEPA: California Federal Court Requires Full Environmental Impact Statement for BLM Leases Involving Hydraulic Fracturing

 

In the first federal court decision to directly examine an agency’s review of the potential environmental impacts of hydraulic fracturing, a federal magistrate judge in the Northern District of California ruled that the U.S. Bureau of Land Management (BLM) violated the National Environmental Policy Act (NEPA) when the agency failed to prepare an Environmental Impact Statement (EIS) prior to entering into two oil and gas leases with companies seeking to conduct hydraulic fracturing (commonly called “fracking”). Order Re Cross-Motions for Summary Judgment, Center for Biological Diversity v. Bureau of Land Management, No. 11-06174 (N.D. Cal. filed Dec. 8, 2011).

 

The March 31, 2013 decision turned directly on a finding that increasing interest in hydraulic fracturing has rendered prior development forecasts in older Resource Management Plans (RMPs) and accompanying environmental reviews obsolete. The decision, if upheld, may cause BLM to require greater environmental scrutiny of hydraulic fracturing proposals on public lands, including preparation of an EIS. (Marten Law)

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California Wildfires 2013

Unseasonal wildfires that started last week ravaged California. At least four large uncontrollable fires burned acreage and threatened homes in Northern and Southern California.  Fires burned in Riverside County, Tehama County, Glenn County and Ventura County.   In Northern California, a fire has blackened 11 square miles of wilderness in Tehama County.

According to the California Department of Forestry and Fire Protection, commonly known as Cal Fire, thousands of firefighters are fighting the fires using engines, bulldozers and aircraft worked to corral the blaze.

The Center is proposing to build woodchip-to-electricity plants (10 MW) in California that would use wood from wildfire areas pre-cut to prevent them from damaging valuable areas and destroying homes.  There is no reason that uncontrolled wildfires should be allowed to ravage California year after year.  Not only can the wildfires be contained, pre-cut wood can serve as a renewable resource for producing electricity.  The links below provide more information about our proposed program(s):

Green Electric

$15 Million Donation For Biomass Plant

 

Green Electric California Biomass-To-Electricity Plant

Scoping Visit: Sacramento Outreach

Scoping Visit 1
 

 

Fire that moved through neighborhoods of Camarillo Springs and Thousand Oaks burned numerous homes and threatened thousands of homes.  The fire also swept through Point Mugu State Park, a hiking and camping area that sprawls between those communities and the ocean.  Fires burned in the western end of the Santa Monica Mountains.

A large blaze, the Panther Fire in Tehama County, burned nearly 7,000 acres by Sunday night and was concentrated in rugged terrain.  In Riverside County, the so-called Summit Fire was fully contained Saturday night after burning more than 3,000 acres, destroying a home and causing two injuries. The cause of it, too, remained under investigation.

The blazes are part of more than 680 wildfires in the state so far this year -- about 200 more than average. East of Los Angeles in Riverside County, a new fire that broke out Saturday afternoon burned 650 acres of wilderness south of Banning. (Fox News, 5/5/2013, NBC News, 5/6/2013, Cal Fire Current Fire Incident Information)

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USDA and EPA Release New Report on Honey Bee Health

The U.S. Department of Agriculture (USDA) and the U.S. Environmental Protection Agency (EPA) today released a comprehensive scientific report on honey bee health. The report states that there are multiple factors playing a role in honey bee colony declines, including parasites and disease, genetics, poor nutrition and pesticide exposure.

There is an important link between the health of American agriculture and the health of our honeybees for our country's long term agricultural productivity. The forces impacting honeybee health are complex and USDA, will be engaged in addressing this challenge.

The decline in honey bee health is a complex problem caused by a combination of stressors, and at EPA we are committed to continuing our work with USDA, researchers, beekeepers, growers and the public to address this challenge. The report we've released today is the product of unprecedented collaboration, and our work in concert must continue. As the report makes clear, we've made significant progress, but there is still much work to be done to protect the honey bee population.

In October 2012, a National Stakeholders Conference on Honey Bee Health, led by federal researchers and managers, along with Pennsylvania State University, was convened to synthesize the current state of knowledge regarding the primary factors that scientists believe have the greatest impact on managed bee health.

Key findings include:

Parasites and Disease Present Risks to Honey Bees:

• The parasitic Varroa mite is recognized as the major factor underlying colony loss in the U.S. and other countries. There is widespread resistance to the chemicals beekeepers use to control mites within the hive. New virus species have been found in the U.S. and several of these have been associated with Colony Collapse Disorder (CCD).

Increased Genetic Diversity is Needed:

• U.S. honeybee colonies need increased genetic diversity. Genetic variation improves bees thermoregulation (the ability to keep body temperature steady even if the surrounding environment is different), disease resistance and worker productivity.

• Honey bee breeding should emphasize traits such as hygienic behavior that confer improved resistance to Varroa mites and diseases (such as American foulbrood).

Poor Nutrition Among Honey Bee Colonies:

• Nutrition has a major impact on individual bee and colony longevity. A nutrition-poor diet can make bees more susceptible to harm from disease and parasites. Bees need better forage and a variety of plants to support colony health.

• Federal and state partners should consider actions affecting land management to maximize available nutritional forage to promote and enhance good bee health and to protect bees by keeping them away from pesticide-treated fields.

There is a Need for Improved Collaboration and Information Sharing:

• Best Management Practices associated with bees and pesticide use, exist, but are not widely or systematically followed by members of the crop-producing industry. There is a need for informed and coordinated communication between growers and beekeepers and effective collaboration between stakeholders on practices to protect bees from pesticides.

• Beekeepers emphasized the need for accurate and timely bee kill incident reporting, monitoring, and enforcement.

Additional Research is Needed to Determine Risks Presented by Pesticides:

• The most pressing pesticide research questions relate to determining actual pesticide exposures and effects of pesticides to bees in the field and the potential for impacts on bee health and productivity of whole honey bee colonies.

Those involved in developing the report include USDA's Office of Pest Management Policy (OPMP), National Institute of Food and Agriculture (NIFA), Agricultural Research Services (ARS), Animal and Plant Health Inspection Service (APHIS), National Resource Conversation Service (NRCS) as well as the EPA and Pennsylvania State University. The report will provide important input to the Colony Collapse Disorder Steering Committee, led by the USDA, EPA and the National Agricultural Statistics Service (NASS).

An estimated one-third of all food and beverages are made possible by pollination, mainly by honey bees. In the United States, pollination contributes to crop production worth $20-30 billion in agricultural production annually. A decline in managed bee colonies puts great pressure on the sectors of agriculture reliant on commercial pollination services. This is evident from reports of shortages of bees available for the pollination of many crops.

The Colony Collapse Steering Committee was formed in response to a sudden and widespread disappearance of adult honey bees from beehives, which first occurred in 2006. The Committee will consider the report's recommendations and update the CCD Action Plan which will outline major priorities to be addressed in the next 5-10 years and serve as a reference document for policy makers, legislators and the public and will help coordinate the federal strategy in response to honey bee losses.

To view the report, which represents the consensus of the scientific community studying honey bees.

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IRS raises Production Tax Credit, Defines Eligible Construction Projects

During April 2013, the Internal Revenue Service increased the Production Tax Credit (PTC) from 2.2-cents/kilowatt-hour (kWh) to 2.3-cents/kWh to adjust for inflation. PTC is a financial incentive that supports the development of wind-powered generation. Also this month, the IRS released an advanced copy of Notice 2013-29, which describes the way projects under construction can now qualify for the credit.

At the beginning of the year, Congress extended the PTC through 2013 and expanded the credit to include projects that were able to commence construction in 2013, although the legislation did not provide guidance on what level of construction would need to be achieved to qualify.

The IRS notice describes two ways facilities can qualify:

1) if “physical work of a significant nature” has begun that includes a “contiguous program of construction,” or

2) a Safe Harbor provision can be met that includes incurring costs of 5% of more of the total cost of the facility in addition to an effort to continue construction.

Congress continues its examination of the Production Tax Credit, most recently with a House Science, Space, and Technology Committee hearing exploring a Government Accountability Office study that examined several federal programs supporting wind energy. Members and witnesses debated the benefits to federal support for wind energy, as well as the support for wind energy compared to current incentives for oil and natural gas.  (ISO Newswire, 5/1/2013)

 

To learn more about the PTC, read the related articles.

 

Federal Update: PTC extension legislation passed

Federal Update: Uncertainty surrounds tax credit for wind energy in New England

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U.S. Exports of Liquefied Petroleum Gases Projected to Continue Through 2040

In 2012, the United States became a net exporter of liquefied petroleum gases (LPG) for the first time. LPG includes the natural gas liquids (NGL) components ethane, propane, butanes, and marketed refinery olefins. In its Annual Energy Outlook 2013 (AEO2013), EIA projects that the United States will continue to be a net exporter of LPG through 2040, mainly because of continued increases in natural gas and oil production.

The supply of ethane and propane, in particular, is expected to grow because of increases in natural gas production in the Marcellus Shale in Pennsylvania and in other shale areas. Pipeline companies plan to add more infrastructure to support LPG exports because of growing oil and natural gas production from shale gas and tight oil resources.

Net exports of LPG are projected to grow by more than a half-million barrels per day from 2011 to 201. In that scenario, LPG exports decline after 2017 as wet gas (containing liquids) production declines, resulting in lower NGL production from natural gas processors. Variations in NGL supply affect LPG exports.

AEO2013's High Oil and Gas Resource case projects higher levels of long-term net exports for two reasons:

• Natural gas production is 36% higher in the High Oil and Gas Resource case than in the Reference case, and most of the difference is in shale gas production, which is heavy with liquids.
• Tight oil production in the High Oil and Gas Resource case is projected to be more than double the level in the Reference case. Refinery processing of crude oil also contributes to the LPG supply. Industrial demand for LPG in the United States is not projected to keep pace with supply despite the number of ethylene crackers and other chemical projects under construction and planned through 2017. As a result, net LPG exports in the High Oil and Gas Resource case are 1.4 million barrels per day higher than in the Reference case by 2040.

Further detail on EIA's analysis of the effect of natural gas liquids growth can be found in the full Annual Energy Outlook 2013. (DOE-EIA)

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Ultra Supercritical Coal Power Plants

American Electric Power Co's Louisiana-based utility said its $1.8 billion Turk power plant in Hempstead County, Arkansas, has begun commercial operation, the nation's first ultra-supercritical coal-fired unit and one of the few coal plants currently being completed.  The 600-megawatt John W. Turk Jr. power plant is owned by Southwestern Electric Power Co (SWEPCO) and was built in about four years despite numerous legal challenges by local and environmental groups to stop the plant.

Turk uses an advanced coal combustion technology that burns low-sulfur coal at higher temperatures, which requires less coal and produces fewer emissions, including carbon dioxide, than traditional

Turk will supply power for SWEPCO's 406,000 retail customers in Louisiana and Texas, as well as about 400,000 customers of an East Texas electric cooperative.

In Arkansas, where the Arkansas Supreme Court reversed state regulatory approval allowing the plant to serve retail customers, Turk will sell power to SWEPCO's wholesale customers- the cities of Hope, Prescott and Bentonville - and the 490,000 customers of the Electric Cooperatives of Arkansas.
SWEPCO holds a 73 percent stake in the plant. Co-owners include the Arkansas Electric Cooperative Corp, 12 percent; East Texas Electric Cooperative, 8 percent; and the Oklahoma Municipal Power Authority, 7 percent.

The project was announced in August 2006. An air permit issued in 2008 was the subject of a number of court appeals. In late 2011, SWEPCO announced a broad settlement to end pending legal challenges to the plant's air and wastewater permits brought by the Sierra Club, the National Audubon Society and Audubon Arkansas.  (Reuters, 12/20/2013)

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