Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

In National Farm Bureau Federation v. EPA, the D.C. Circuit Court of Appeals has granted environmental group petition for review of the NAAQS for fine particle pollution known as PM 2.5.  Environmental groups and industry groups both challenged portions of EPA's standard.  The EPA had decided to maintain the annual standard at 15 μg/m3.  The Court concluded the EPA lacked a valid scientific basis to support their decision:

We conclude the EPA failed adequately to explain why, in
view of the risks posed by short-term exposures and the
evidence of morbidity resulting from long-term exposures, its
annual standard is sufficient “to protect the public health [with]
an adequate margin of safety,”

We conclude the EPA has failed reasonably to explain why
it believes its daily standard will “provide an appropriate degree
of protection from health effects associated with short-term
exposures to PM2.5.” Id. at 61,174/3. We therefore remand the
annual standard to the EPA for further consideration of whether
it is set at a level requisite to protect the public health while
providing an adequate margin of safety from the risk of shortterm
exposure to PM2.5

The Court also granted the petition for review of the secondary NAAQS for the fine PM brought by the environmental groups.  The Court said EPA unreasonably concluded that the NAAQS are adequate to protect the public welfare from adverse effects on visibility. 

The Clean Air Scientific Advisory Committee (CASAC),along with medical and public health groups who submitted comments, challenged the EPA’s proposal to retain the existing level of the primary annual fine PM standard at 15 μg/m3 . They urged the EPA to lower the level to somewhere between 12 and 14 μg/m3. The CASAC and several public commenters also objected to setting the secondary standards for fine PM at the same level and averaging time as the primary standards, arguing that they were insufficient to protect against adverse visibility effects.

The Court decided not to vacate the annual standard, but only remand it for Agency review.  The Court left open the possibility EPA could provide a better explanation for maintaining the standard at 15 μg/m3.  However, based on the strong opposition to the standard and CASAC's recommendation to lower the standard, EPA will most certainly oblige.

So what is the potential impact of a lower PM 2.5 standard? The yellow and orange dots are areas that have readings below the 15 μg/m3 but within the CASAC recommendations.  Of course its not just more potential non-attainment areas, it is also the red dots finding it much hard to reach attainment. 

States will need to be aggressively looking at diesel reductions as well as a stronger CAIR program to reach the standards.

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On February 18th another permit, Northern Michigan University Ripley Heating Plant, for a new coal facility was remanded by U.S. EPA's Environmental Board of Review.  The Board remanded the permit because the State (the Michigan Department of Environmental Quality), in issuing the permit, failed to address whether CO2 was a regulated pollutant under the Clean Air Act.  The most interesting aspect of the decision is that the Board apparently gave absolutely no weight to former EPA Administrator Johnson's Memo which said CO2 was not a "regulated pollutant" and therefore new permits need not consider BACT controls for CO2.  Here is what the Board said on the issue:

For the reasons set forth in that decision (Deseret Power), we similarly remand the CO issue here, directing MDEQ, guided by our findings in Deseret, to undertake the same consideration whether the CAA’s “pollutant subject to regulation” language requires application of a BACT limit to CO emissions.

The Board does not elaborate or even address the Johnson memo.  Therefore, it is impossible to know whether new EPA Administrator Jackson's grant of the Sierra Club's petition for reconsideration rendered the Johnson Memo meaningless.  That seems like a difficult legal conclusion to reach given the fact Jackson's action specifically did not block the effectiveness of the Johnson memo while it was undergoing review.

The permit had authorized Northern Michigan University (NMU) to construct a new circulating fluidized bed (“CFB”) boiler at the Ripley Heating Plant on its campus in Marquette, Michigan. As permitted, the CFB boiler will function as a cogeneration unit that provides both electrical power and heat to NMU’s facilities through the burning of wood, coal, and natural gas

Another interesting aspect of the decision was the Board also remanded the BACT analysis for the SO2 limit.  The permit called for a mix of fuels- mainly wood and coal.  The Board found there was not enough information provided to justify the limited amount of wood which would lower SO2 emissions.  The Board also questioned the fuel choice relative to coal.  It said the MDEQ needed to provide more information as to why lower sulfur coal was not required to lower SO2 emissions.

The BACT requirements for fuel choice are interesting.  For instance, once (not if) CO2 is regulated would BACT require a coal and biomass mix which can lower emissions of CO2?  This could be very good news for biomass producers who blend biomass with coal to form briquettes or pellets. 

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I was asked by a reader (Associate Law Professor at UT) to provide a free advertisement about a fellowship program for lawyers interested in teaching energy law.  I don't put advertisements on  my blog, but I thought this may be an interesting opportunity for some of my readers.  The information below was provided by my reader.

The University of Texas School of Law is seeking applicants for an energy law fellowship. Fellows will be jointly affiliated with the Law School’s Emerging Scholars Program and the Robert S. Strauss Center for International Security and Law. Fellows do not need to have a specific interest in security issues.

The Emerging Scholars Program offers two-year fellowship to help attorneys prepare for tenure-track faculty positions in U.S. law schools. The Program is designed to give talented attorneys the chance to develop a scholarly agenda and publish one or more articles in preparation for the academic job market. Fellows will be full participants in the rich intellectual life of the Law School, and will receive substantial faculty assistance with their projects.

(see the extended entry for more information)

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I have been following discussion regarding the green elements of the Presidents Stimulus Package, known as the American Recovery and Reinvestment Act of 2009.  There is certainly a lot directed toward environmentally related projects, especially renewable energy development.  Leading some to call these provisions the "Green New Deal." 

What is the real story behind some of the spending that has been reported?  You certainly can find information all across the web and on government sites that simply lists the amount of money in the bill and which program it has been directed.  However, detail about what the money will really be used for can be hard to find.

Bottom line, some provisions are better than others.  For instance, much of the money directed toward U.S. EPA will pay for existing projects.  This includes prior grant applications, clean ups already under contract or projects previously selected for funding.  So, for many of you expecting great new opportunities for EPA related projects, I don't think the bill offers you that much. (with the exception of diesel engine related grants- see below).

The renewable energy side of the equation is a totally different story.  There are continued and new tax incentives as well as new grant opportunities.  There is a lot in the bill and it will literally pay to stay on top of what is available. 

I.  EPA Side- the American Recovery and Reinvestment Act of 2009 specifically includes $7.22 billion for projects and programs administered by EPA. 

Below is a description of the major areas of funding as well as an analysis of whether this funding presents new opportunities. EPA has established a web site page with helpful links that discuss the opportunities in the Stimulus Bill relative to the money designated for EPA.

Brownfields:  There is over $100 million directed to U.S. EPA's brownfield redevelopment program.  I was intrigued regarding this new slug of money for it could present another great opportunity for clients outside of the Clean Ohio program.  However, after asking for more details from U.S. EPA, I learned that this money is basically already spent.  The U.S. EPA intends to use it for projects that requested funding back in 2008 but were not funded due to an over abundance of proposals.  While its good news more projects are getting funded, I believe U.S. EPA could have even received better project proposals if they would have allowed for new applications. 

Diesel Emission Retrofits Act (DERA):  The Stimulus directed over $300 million in new money to fund the DERA program. DERA is the federal grant program that pays for diesel engine retrofits, repowers and replacements.  Last years allocation was only $50 million for the entire country.  So the Stimulus does provide real, new money for this program.  U.S. EPA intends to spend the money quickly so watch U.S. EPA's website and Recovery.gov to jump in with your project.

Underground Storage Tank (USTs) Cleanups: $200 million was provided to U.S. EPA's Leaking Underground Storage Tanks (LUST) Program, EPA provides resources to states and territories for the oversight, enforcement and cleanup of petroleum releases from underground storage tanks (USTs). EPA estimates that every year 7,570 new releases occur which just adds to the sites that have not yet been completed.  There could be as many as 116,000 sites requiring clean up actions in 2009. However, it appears the funding will be used to help pay for clean ups of abandoned tanks rather than create a new grant program.  Here is additional detail from the from the Convenience Store News regarding the Stimulus package:

Other measures relevant to c-stores include a final approval of $200 million for the Leaking Underground Storage Tank (LUST) Trust Fund, which assists in the cleanup of abandoned gas stations, but will not pay for inspections or to assist state reimbursements programs.

Superfund Cleanups: $600 million was provided to U.S. EPA's superfund program.  However, these funds will be obligated mostly through existing contracts and Interagency Agreements.  In 2009 there could be as many as 20 Superfund sites ready for construction, but not funded due to budget shortfalls. The Recovery funds will begin to address those sites, plus accelerate construction at many of 600 sites where work has been limited in the past by funding constraints.

Clean Water State Revolving Fund and Drinking Water State Revolving Fund: $4 billion for assistance to help communities with water quality and wastewater infrastructure needs and $2 billion for drinking water infrastructure needs. A portion of the funding will be targeted toward green infrastructure, water and energy efficiency and environmentally innovative projects. (guidance on the green infrastructure component)

Ohio EPA has begun soliciting projects for its Drinking Water and Wastewater Revolving Loan Programs.  However, projects must already have been planned and reviewed by Ohio EPA for inclusion on project planning lists.  For instance, drinking water projects must be on the Drinking Water Project Priority List (PPL).

II.  Renewable Energy- the American Recovery and Reinvestment Act of 2009 bill is anticipated to provide around $43 billion for renewable energy in the form of tax breaks and other incentives

The extended entry includes a summary of the renewable energy incentives and investment as assembled by the American Council on Renewable Energy (ACORE). (the link provides you a hard copy of the ACORE document- which does a great job of assembling the relevant information for renewable energy incentives- or see the extended entry for a summary).

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Kudos to those in Cleveland  responsible for launching the country's first community based carbon offset fund- the Cleveland Carbon Fund.  It is an innovative approach to offsetting your personal or business carbon footprint.  Richard Steubi's Cleantech blog describes the difference between the Cleveland Fund and other offsetting options:

"There are already several options in the marketplace for interested parties to acquire emissions offsets to mitigate their carbon footprint. However, customers of these services usually do not know where the emission reductions will occur. For instance, if I use a service like TerraPass to offset the emissions from my next airline flight, I don't know exactly where the emission reductions will occur. Looking at the emission reduction projects sponsored by TerraPass, they span the width of the entire U.S."

Similar to other carbon funds, green conscious individuals or businesses can calculate their carbon footprint then make a donation to offset their carbon emissions. However most other funds use donations to purchase renewable energy credits to fund renewable energy projects or carbon credits.  The Cleveland Carbon Fund uses donations to fund  and provide technical support for specific projects right here in Cleveland.   An example of the types of projects funded include:

Compact Fluorescent Lamp (CFL) Installation
 [I]t is estimated that $20,000 from the Cleveland Carbon Fund could fund local community development organizations to install 8,000 CFLs in 1,000 low-income homes across Cleveland. In five years, this initiative would save these homeowners $250,000 and reduce carbon emissions by 2,000 tons at a cost of $5 – $10 per metric ton of carbon reduced.

Showerhead Replacement
Low-flow showerhead valves use half as much water while providing the same level of pressure. According to the Department of Energy, installing these valves saves $11 in water heating every three months...a $30,000 grant from the Cleveland Carbon Fund could fund non-profit organizations to install these valves in more than 200 low-income homes...This project would save Cleveland homeowners almost $10,000 in hot water heating and annually reduce carbon emissions by more than 100 tons at a cost of less than $10 per metric ton of carbon dioxide reduced.

Home Weatherization
For approximately $50,000, the Cleveland Carbon Fund can support more than 20 weatherization projects in low-income neighborhoods across the community, employing many local citizens. Sealing and insulating homes to better retain heat during the winter will save Cleveland homeowners more than $5,000 in energy bills and reduce carbon emissions by 40 tons each year.

If we have learned anything from the first few weeks of the Obama Administration its that climate change, renewable energy and sustainability will be key themes repeated early and often.  Rather than fighting this change, Ohio and Cleveland would be smart to see how they can leverage this massive impending change to grow its economy. 

Innovation and leading will be key to securing green jobs in this difficult economy.  We need to see more proposals like the Cleveland Carbon Fund in order to compete with all the other areas of the country that are actively trying to brand themselves green states and cities. 

(Photo: laszlo-photo/everystockphoto.com)

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May you live in interesting times....Yesterday EPA Administrator Jackson issued a letter granting the Sierra Club's petition for reconsideration of a Deseret Power memo issued by former EPA Administrator Johnson.  The Petition seeks reconsideration of the Johnson memo which interpreted EPA regulations defining the pollutants covered by federal permitting under the Clean Air Act.  The Johnson memo said that CO2 was not a regulated pollutant under the Clean Air Act (CAA) for purposes of permitting. 

The memo was issued following the decision by the EPA's Environmental Board of Review in the Deseret Power case concluding the CAA was ambiguous and that EPA had discretion to determine whether CO2 was a pollutant subject to regulation.  Johnson, in one of his last acts before leaving office, tried to fill the void by issuing an interpretive memo determining CO2 was not a regulated pollutant.

There was tremendous pressure on new EPA Administrator Jackson to revoke, stay or invalidate the memo.  Such action would have effectively put on hold about a 100 pending permits for coal fired power plants.  In a prior post, I predicted that despite the pressure Jackson would take a more deliberate approach.  She has done exactly that by not issuing a stay and announcing EPA will embark on a formal rulemaking process.  (even I get one right now and then)

While Jackson has chosen to address the issue slowly, she did include language in her letter that cast a great deal of uncertainty regarding pending permits:

In the meantime, the Agency emphasizes a point noted in the memorandum itself: the memorandum does not bind States issuing permits under their own State Implementation Plans.  In addition, given the Agency's decision to grant reconsideration of the memorandum, other PSD permitting authorities should not assume that the memorandum is the final word on the appropriate interpretation of Clean Air Act requirements.

While this statement casts some uncertainty, the Johnson memo is still legally effective.  Unlike others in the blogosphere predicting stoppage of all permitting for new coal plants,  I believe permits will still move forward in State's willing to issue them. 

Yesterday, EPA Administrator Jackson also issued a statement regarding her decision to grant reconsideration:

“I am granting this petition because we must learn more about how this memo affects all relevant stakeholders impacted by its provisions,” said EPA Administrator Lisa P. Jackson “This will be a fair, impartial and open process that will allow the American public and key stakeholders to review this memorandum and to comment on its potential effects on communities across the country. EPA’s fundamental mission is to protect human health and the environment and we intend to do just that.”

My take on the statement is: a) EPA intends to move through a slow rulemaking process; and b) once EPA completes the rulemaking process you can pretty much count on the fact CO2 emissions will be regulated. 

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There is good news for area businesses.  Additional compliance costs and restrictions on economic growth will be avoided that were deemed all but certain a few years ago.  The compliance costs were associated with new air pollution controls needed to achieve  U.S. EPA's 1997 8-hour ozone standard (0.85 ppm). The deadline to meet this standard is 2009.

When I was Director of Ohio EPA,  all the modeling and projections showed there was no way Cleveland would meet the standard by the deadline. I remember giving speeches around the State with the basic theme- "we would have to de-populate Cleveland to meet the Ozone deadline."   I remember briefing the Governor that it appeared likely the Cleveland-Akron-Lorain Nonattainment Area would have to "bump up" to the next category of nonattainment-"serious."  By bumping up Cleveland would buy time to reach the standard, but the cost was a list on new federally mandated controls and restrictions.  Bump up would have had devastating impacts on the local economy.

[This is a slide taken from one of the speeches on reaching the ozone standard.  The numbers show various ozone levels at each monitor in the nonattainment area after imposing various control options.  The black number was a series of draconian measures that would have devastated the local economy.  Even after imposing those controls the models predicted continued nonattainment.]

Perhaps this is a lesson about not putting too much faith in modeling, but  based upon recent air quality monitoring Cleveland has indeed attained the 1997 8-hour ozone standard.   Area businesses may never be fully aware of the crisis that was averted.  But this is certainly good news for an area that has struggled to meet federal air quality standards.

Below is additional background on the recent Ohio EPA submittals.

In 2008, Ohio EPA submitted an State Implementation Plan (SIP) for the Cleveland-Akron-Lorain nonattainment area that requested redesignation to attainment status.  This was based on monitoring data from 2005,2006 and 2007 that showed Cleveland close to attainment [0.0853 compared to 0.0853]. 

This month, February 2009 Ohio EPA has prepared an updated attainment demonstration for the Cleveland that incorporates the most recent air monitoring data from the summer of 2008.  Due to ever improving air quality, the updated monitoring data shows Cleveland complies with the Standard [0.084 compared to 0.085 standard]. 

Here is additional detail regarding the two submissions:

2008 Ohio EPA Redesignation Request to U.S. EPA
In the February 2008, Ohio EPA submitted its request to U.S. EPA to have the Cleveland-Akron-Lorain nonattainment area redesignated to attainment. The document included two key conclusions:

1) Monitoring data for 2005-2007 showed the area just above the standard. The data showed 0.853 ppm compared to the 0.85 ppm standard.

2) Ohio EPA was requesting redesignation of the Cleveland-Akron-Lorain area based upon modeling that showed it expected the area to attain the standard by 2009. This was known as the "weight of evidence" approach (WOE). Under the WOE policy, U.S. EPA can redesignate an area attainment even though monitoring data shows it has not met the standard.  However, Ohio EPA must provide the federal EPA convincing evidence the area will reach the standard by the 2009 deadline.

Ohio EPA included the following language in the January 2008 submittal to U.S. EPA:

"The (air) modeling results as well as the previously submitted weight of evidence information supports the conclusion that Cleveland-Akron-Lorain OH area should attain the eight-hour ozone standard on time.

In spite of this evidence, Ohio EPA is developing additional emission reduction options. Ohio EPA recognizes that the ozone standard is currently under review and a final revision to the standard will most likely result in a revised standard that will require additional emission reductions above those necessary to achieve the existing standards. Ohio EPA is currently in discussions with U.S. EPA and local stakeholders assessing the options available to meet the future standard, including the use of lower Reid-Vapor Pressure gasoline. "

Bottom line: Ohio EPA left open the possibility it would impose additional control measures to support its WOE demonstration to U.S. EPA.

2009 Revised Ohio EPA Redesignation Request to U.S. EPA: Ozone levels improved significantly in the summer of 2008. The average of the 2006, 2007 and 2008 ozone seasons shows an overall average of 0.84 ppm which is below the 0.85 ppm standard.

This is very good news for the Cleveland-Akron-Lorain area. This means Ohio EPA no longer has to propose a WOE approach to U.S. EPA. Rather, Ohio EPA can rely on the real monitoring data which already shows attainment with the standard. As a result, all of the language I quoted above regarding evaluating additional control options has been dropped. In the 2009 submittal Ohio EPA states:

"The Cleveland-Akron-Lorain ozone nonattainment area has attained the 1997 NAAQS for ozone and complied with the applicable provisions of the 1990 Amendments to the Clean Air Act regarding redesignations of ozone nonattainment areas...Based on this presentation, the Cleveland-Akron-Lorain ozone nonattainment area meets the requirements for redesignation under the CAA and U.S. EPA guidance....Furthermore, because the area is subject to significant transport of pollutants, significant regional NOx reductions will ensure continued compliance (maintenance) with the standard with an increasing margin of safety."

Bottom line: It appears Ohio EPA is no longer evaluating additional controls to comply with the 1997 ozone standard. In addition, the language referring to "subject to significant transport of pollutants" is a reference to the fact our ozone levels are heavily influenced by emissions from elsewhere in Ohio and the Midwest. This means continued strengthening of programs like CAIR (power plant reductions) will continue to result in improved air quality.

Of course the story does not end here... U.S. EPA is in the process of imposing the new 2008 ozone standard (0.75 ppm). Current monitoring shows Cleveland is a long way from achieving the new standard. Unfortunately, this means Cleveland-Akron-Lorain will not get out from under its nonattainment status anytime in the near future.  But at least we are no longer discussing draconian measures to meet the old ozone standard.

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On August 20, 2008, the Public Utility Commission of Ohio (PUCO) put forth proposed rules governing alternative and renewable energy sources.  The rules main purpose was to govern implementation of the State's new Advanced Energy Portfolio Standard (AEPS) established in Senate Bill 221.  The AEPS is broader version of a renewable portfolio standard (RPS) adopted by other states which mandates a certain percentage of power come from designated renewable energy sources.

The PUCO set a very aggressive public comment period in an attempt to finalize the rules quickly.    The comment period closed on September 26, 2008.  In the short month long comment period, the PUCO received hundreds of pages of divergent comments on the proposed rules. (See my prior post: Issues with proposed rules governing the AEPS)  Since closure of the comment period, the PUCO has failed to developed a second version of the rules. 

Today, a company filed a new letter on the docket which discusses the real world impacts of the delay in finalizing the rules governing the administration of the AEPS in Ohio.  Until the rules are finalized, no one knows what the renewable energy credit (REC) market will look like in Ohio.   A REC is the certificate issued to generators of renewable energy sources.  The certificate can be sold to the utilities to meet their compliance requirements with the AEPS.  REC are seen as a way to encourage renewable energy development.

The problem is that there are so many questions left regarding the construction of the rules, no one can set a reliable price for RECs. S.B. 221 contained a cap on REC prices of $45 per megawatt which certainly is the ceiling on REC prices in Ohio.  However, that leave a huge range in potential prices that is highly dependent on the construction of the rules.

The compliance period for the AEPS in Ohio begins in 2009.  Without an established market projects will get delayed.  This will make it far more difficult for Utilities to comply with the AEPS mandates.  In 2009, Utilities must develop or purchase .25 % of their total generation capacity from renewable energy sources.  While a quarter of a percent may seem tiny, in an energy market as big as Ohio's there will be a significant need for RECs.

In 2008 Ohio generated 13,000 megawatts of power.  A quarter percent means the REC compliance market in 2009 will be around 32,500 megawatts.  This is certainly enough to drive a significant amount of project develop in the State. 

Until the rules are established, the market for RECs will be uncertain.  Without this needed certainty many will delay moving forward with projects.  Of the states with an RPS, Ohio was one of the last states to establish an RPS.  This has meant Ohio has been late to the game in attracting investment and green jobs related to the renewable energy market.  The rules need to be finalized quickly so that Ohio doesn't lag further behind. 

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There has been major developments as a result of litigation, policy, rulemaking and legislation in the last few weeks relating to climate change and coal fired power plants.  Some changes are a result of outstanding litigation.  However, the most significant changes are indicative of the sea change that is occurring at the federal level under the Obama Administration relative to climate change. 

 Here is a review:

1. EPA will not regulate mercury by cap and trade-  EPA Administrator Jackson announced today that the Agency will be moving forward with rulemaking to regulate mercury emissions from coal plants.  "President Obama's EPA does intend to regulate mercury under section 112 of the Clean Air Act," said Jackson. Acting solicitor general Edwin S. Kneedler will drop the prior appeal of the decision in New Jersey v. EPA which struck down the Bush Administration cap and trade proposal for regulating mercury.
2. NEPA reviews of climate change impact required for oversees projects- The Obama Administration has settled an outstanding lawsuit which sought to compel NEPA reviews of climate change impacts for oversees projects financed with federal money.  Western cities and environmental groups alleged that Export-Import Bank of the United States and the Overseas Private Investment Corporation illegally provided more than $32 billion in financing and insurance to fossil fuel projects over 10 years without assessing whether the projects contributed to global warming or impacted the U.S. environment, as they were required to do under the National Environmental Policy Act (NEPA).  The settlement will require NEPA reviews and will also require future reductions of greenhouse gases.
3. BACT for coal plants does not mean IGCC-  A Texas Appeals Court rejected a challenge to a permit for a new 800 mw pulverized coal plant.  Appellants has argued the permit should have required IGCC technology as BACT instead of the proposed pulverized coal technology.  Consistent with other Court decisions looking at BACT, the Court said control technologies under BACT must be applied to the proposed project which in this case was a pulverized coal plant.
4. No Climate Change Legislation This Year-  Senator Boxer released here principles for what must be included in the Senate version of climate change legislation.  Senator Boxer said “Copenhagen is December...That’s why I said we’ll have a bill out of this committee by then.”  However, any bill passing out the committee still must pass the full senate and be reconciled with the House bill.  This schedule renders it impossible that cap and trade legislation will pass Congress in 2009.
5. EPA begins review of California Waiver Decision-  In a press release today, EPA announced they are beginning the review of the California waiver request to regulate greenhouse gas emissions from vehicles.  I think this quote from the EPA press release pretty much tells you what the outcome will be - "EPA believes that there are significant issues regarding the agency’s denial of the waiver. The denial was a substantial departure from EPA’s longstanding interpretation of the Clean Air Act’s waiver provisions. "

 (Photo: CJJohnson7/everystockphoto.com)

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During Governor Strickland's State of the State he made the "no new taxes" pledge.  However, the Governor did mention that to balance the budget he will propose "new fees, fines and penalties."  No specifics were provided, however, now that details are beginning to take shape the Governor Strickland has been criticized for his roll out of the nearly 120 fee increases.

While there are more significant fee increases on vehicle registration and other health care related services, this being an environmental blog, I will focus on the new ODNR and Ohio EPA fee increases.  As discussed below, it is going to be more costly for businesses (and residents) to get rid of their waste.  This should create even a greater incentive for businesses to look at their practices and see if there are ways to reduce the amount of waste that has to be disposed of in solid waste landfills.   This could be through process changes that reduce the amount of waste generated or it could be recycling/re-use of waste materials generated.

However, the ability to recycle or re-use solid waste generated as part of business operations is dependent upon Ohio EPA's beneficial re-use rules.  Unfortunately, those rules have not come forward which makes it more difficult for businesses to evaluate their options.  While the fee increases may push evaluation of "greener" alternatives to disposal, businesses face uncertainty as long as clear re-use standards are not established.

Here is a link to a spreadsheet put together by the Ohio Office of Budget Management which shows all the fee increases and the projected revenue (which reaches over $1 billion dollars). Here is a breakdown of the proposed fee increases as it relates to the environment:

Municipal Solid Waste (MSW)
While I was at Ohio EPA, the agency moved from general revenue (GRF) to fees to pay for its programs.  The municipal solid waste tipping fee was chosen because it was a broad based fee that touches residents and businesses.  Due to its broad based application, the Agency could use the funding to support various programs outside of the Division of Solid and Infectious Waste.  Sort of like a tax...right.

The proposed state budget will build upon past fee increases and further increase the MSW tipping fee by $1.25 a ton. This will bring the MSW tipping fee from $3.50 a ton to $4.75 a ton. Of the proposed $1.25 increase,  Twenty-five cents would go to ODNR for the Soil and Water Conservation Districts. The remaining $1.00 will go to Ohio EPA to support various programs.

Construction and Demolition Debris (CDD)
The proposed budget will increase the CDD tipping fee by $2.70 a ton. This will bring the CDD tipping fee from $1.70 a ton to $4.40 a ton. This amounts to an 60% increase in the fees for CDD.  The $2.70 increase would be divided as follows:  $2.25 will go to ODNR for the Soil and Water Conservation Districts and .45 will got to Ohio EPA for operation costs throughout the agency.

Green building practices under the U.S. Green Building Council's LEED program award points for recycling and reuse of construction waste.  With this significant fee increase contractors and project owners should seriously contemplate recycling this material versus disposal even if they are not working on a green building project.

New E-Check Fee
Ohio EPA has proposed an increasing the fee for purchasing new tires by $2.30 per tire.  This fee is projected to generated $15 million in new revenue.  The previous tire fee was used to pay for programs to eliminate tire dumps around the State.  This has been one of the greatest success stories in Ohio.  This increase would be devoted to an entirely new purpose-paying for Ohio's automobile emission testing program (E-check).

Energy Extraction Fees

ODNR for its part has proposed a new fee on oil, coal and natural gas extraction.  Together these fees are projected to generate over $7 million in new revenue.  The energy extraction fees have not been warmly received by industry who argue that raising costs on these energy related resources will simply result in increased costs for individuals and businesses around the state.  

As fees go up for use of resources and disposal of waste, businesses have further incentive to examine green alternatives.  This could be improved energy efficiency. establishment of a co-gen facility that could reduce electric fees, recycling, and reduction of waste streams.

(Photo:D'Arcy Norman/everystockphoto.com)

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I am attending the 12th annual EUEC (Energy and Environment Conference) in Phoenix for the early part of this week.  I guess they had to move the conference from previous venues to the Phoenix  Convention Center to accommodate the large number of registrants.  There are over 450 different speakers and presentations. 

My observations from the first day have been as follows:

1)  Despite the terrible economy the interest in environmental, green energy and climate change continues to grow.  It is truly amazing to see the number of companies and organizations in attendance.  There is also a distinct feeling in the air that the change in Administration will mean explosive growth and new opportunities. 

2) The most interesting presentation on the first day was from U.S. EPA's Frank Princiotti. He discussed the prospect of global climate change and the implications for the planet.  But even more interesting was his assessment of the world's ability to meet this challenge.  Despite the many statements that we have the technology right now to address global climate change, his assessment was much more dire.  For example, he said carbon sequestration would not be ready until at least 2020 or 2030 saying his "DOE colleagues would back him on that statement." 

His basic theme was "we need a technology revolution" and even if that happens it will not  be enough to avoid significant impacts from global warming.   We are at best trying to avoid catastrophic impacts from global warming even with very significant mitigation efforts. 

He indicated that efforts to reduce greenhouse gas emissions should be supplemented with other efforts.  Namely man made engineering to reduce the impacts of climate change.  Such as seeding clouds or creating a reflective layer in the earth atmosphere to deflect the suns effects on a warming planet-Now that is a scary proposition.  Man trying to effect the global temperature through quick fix engineering.  But he put up a slide of leading scientists from around the globe that say this must be under serious consideration.

3)  Another interesting presentation was made by Roger Martella, who is no with the law firm of Sidley Austin,  Prior to that he was EPA's general counsel during the Mass v. EPA litigation.  His perspective was that despite the knocks on the Bush Administration the EPA had done a tremendous amount of work on climate change.  In essence, his perspective was the foundation was laid during the Bush Administration EPA for President Obama to move quickly on climate change. He predicted that April 2nd of this year (the 2nd anniversary of Mass. v. EPA) may be the date of a major announcement by the Obama Administration on Climate Change.  Perhaps the endangerment finding will move forward which will trigger regulation under the Clean Air Act of greenhouse gases. 

I look forward to the next couple days.  My first certainly has been enlightening.  My conclusion from the first day is that if President Obama is serious about addressing climate change (and I think he is) most still do not comprehend the magnitude of change that is upon us.

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