A coalition of business groups, including the National Association of Manufacturers, have filed a request to block the effectiveness of EPA’s climate change rulemaking.  The business groups have filed a motion seeking a stay of the effectiveness of EPA regulations that will soon require stationary sources (factories, utilities and boilers) to reduce greenhouse gas (GHGs) emissions from those sources beginning in 2011.

There are two interesting strategic decisions that emerge from the brief filed seeking a stay of EPA’s GHG rules:

  • Business groups are not trying to block the mandatory GHG rules pertaining to motor vehicles; and
  • The stay would not be of EPA’s Tailoring Rule, but would seek to block any legal ability to begin regulating GHGs from stationary sources

The Clean Air Act requires all sources emitting above 100/250 tons per year of a regulated pollutant to go through federal permitting- EPA’s New Source Review Program.  EPA adopted the Tailoring Rule to raise those thresholds that EPA asserts would otherwise apply once it finalized its regulation of GHGs from vehicles.

It is the premise that the vehicle rules trigger regulation of stationary sources that the business groups are challenging in this motion.  This from the brief filed seeking a stay:

Movants offer a distinct request for a partial stay that would enable EPA to
realize its goal of imposing GHG emission limits on cars while preserving the status quo for stationary sources. Specifically, Movants request the Court stay the effects of the Tailpipe Rule, Tailoring Rule, and PSD Interpretive Rule on stationary sources, such that GHG emissions are not subject to PSD and Title V pending this appeal.  Movants do not request a stay of the Tailpipe Rule as applied to cars.

Business groups challenge EPA assertion on two separate grounds:

Emissions of a pollutant triggers PSD permitting if, and only if, the pollutant is subject to a NAAQS and the source is located in an attainment area for that pollutant. GHGs are not such a pollutant, so GHG emissions alone cannot trigger PSD permitting.

The very impetus for the Tailoring Rule’s revision of statutory thresholds was EPA’s recognition that requiring sources to obtain PSD permits solely based on GHG emissions is “absurd” and inconsistent with Congress’s vision for the PSD program. Congress did not enact the CAA to bring any part of the American economy to a dead stop, and EPA’s interpretation of the CAA threatening that result is unreasonable, arbitrary, and capricious. In addition, EPA’s view that GHGs are subject to regulation under the PSD program—which is plainly focused on local air quality—is unreasonable. Congress never intended the PSD program to regulate pollutants like GHGs.

Business groups had no alternative but to seek a stay given the ramifications of EPA embarking on this regulatory path.  Typically, you would ask to stay the effectiveness of a specific rule.    However, delaying the legal effectiveness of the Tailoring Rule would arguably subject all businesses to the ridiculously low permitting thresholds 100/250 tons in the Clean Air Act. 

As result, business group are challenge the very premise the EPA had to enact the Tailoring Rule because otherwise the 100/250 ton thresholds would take effect after enactment of the vehicle tailpipe rule.

The only concern is if the Court agrees, in part, with the business group’s arguments.  First, the Court may say a stay can only be granted of a specific rule.  Second, the Court may agree EPA went too far but provide a different result.

Let’s remember no one was asking the Court to throw out the Clean Air Interstate Rule (CAIR).  What happens if the Court agrees EPA has no authority to change the statutory thresholds in the Clean Air Act (100/250 tons per year), but agrees the vehicle rule automatically triggers PSD regulation of GHGs?

While litigation is necessary with so much at stake, it is also very unpredictable.  Let’s hope the Court gets this one right by looking at the real world implications of its decision.

By all accounts, Republicans are set to enjoy major gains in both the House and Senate following midterm elections.  Speculation is that the Republicans could likely regain control of the House and could even get close in the Senate.

What implications could this change in the political landscape have for climate change regulation?

We have already seen the Senate scrap all efforts at a cap and trade bill this summer.  Based upon Senator Reid’s comments that a "piecemeal" approach is on tap, its more than likely cap and trade is off the table for the foreseeable future.

With cap and trade’s dim future, all eyes have been shifting toward U.S. EPA promulgation of climate change regulations.  EPA has already finalized greenhouse gas standards for vehicles and will require consideration of greenhouse gases from major stationary sources beginning in 2011 (Tailoring Rule). 

Congressional Efforts to Stop EPA

With renewed focus on EPA’s efforts, Republicans made lead the charge toward blocking EPA’s actions through budget maneuvers or by directly blocking the effectiveness of the EPA regulations. (See Reuter’s article)

  • Budget Bill Prohibition-  Republicans could include in an appropriations bill a ban on the use of EPA funds to administer climate change regulations. 
  • Block EPA Authority or Delay it- Earlier this year, the Senate debated legislation that would directly block EPA from implementing its rules by undermining its Endangerment finding.  Another alternative was floated by Senator Rockefeller- delay EPA’s implementation for two years which would take us to the next Presidential Election. There were 47 out of 100 votes in the Senate supporting a delay in implementation of EPA’s climate change regulations.  Its hard to imagine this issue will not be revisited after the midterm elections.

Effectiveness of an Appropriations Blockage 

The utility of a budgetary blockage of EPA’s authority to implement the climate change regulations should be seriously questioned.  As discussed below, a budget provision prohibiting expenditures doesn’t remove the requirements from the books.  Industry will still have to comply with the Tailoring Rule even if EPA can’t use funds to enforce it.

The strategic limitations on use of the appropriations tool was pointed out in a Congressional Research Service in an extensive report:

The regulatory restrictions in appropriations bills that have been enacted during the last 10 years illustrate that Congress can have a substantial effect on agency rulemaking and regulatory activity… These appropriations provisions can prevent an agency from developing a proposed rule, from making a proposed rule final, or from implementing or enforcing a final rule. However…these appropriations provisions cannot nullify an existing regulation (i.e., remove it from the Code of Federal Regulations) or permanently prevent the agency from issuing the same or similar regulations. Therefore, any final rule that has taken effect and been codified in the Code of Federal Regulations will continue to be binding law — even if language in the relevant regulatory agency’s appropriations act prohibits the use of funds to enforce the rule. Regulated entities are still required to adhere to applicable requirements (e.g., installation of pollution control devices, submission of relevant paperwork), even if violations are unlikely to be detected and enforcement actions cannot be taken by federal agencies.
 

Such an appropriations maneuver could mean businesses must prepare PSD permit applications that address greenhouse gases only to have those permits sit at EPA because it is legally prohibited from paying staff to review them.

Hopefully the real world implications of Congressional efforts to block EPA will be considered.  There is no doubt a strong effort will be made after the midterms to block EPA climate change regulations.  Without passage of legislation that directly addresses the issue, maybe…just maybe litigation is a better alternative than tricky legislative tactics. 

 

On June 4, 2010, U.S. EPA released its much anticipated proposed standards for industrial boilers to reduce hazardous air pollutants ("HAPs").   Since their release, EPA has faced an outcry that the proposed standards are "fundamentally flawed" or "unachievable."

So what is the controversy?

EPA’s boiler standards are supposed to reflect the application of the maximum achievable control technology (“MACT”). 

What is MACT?

MACT requires the maximum reduction of hazardous emissions, taking cost and feasibility into account.  The MACT must not be less than the average emission level achieved by controls on the best performing 12 percent of existing sources, by category of industrial and utility sources.

I highlighted a couple key terms in U.S. EPA’s definition. 

Cost and Feasibility-  Unlike other EPA standards, cost and feasibility in achieving the standards are relevant.  Many argue cost of compliance with proposed standards will be dramatically too high.

Best Performing 12%-  As discussed below, many assert EPA’s methodology for developing the top 12% performing sources is fundamentally flawed.  They assert EPA simply "cherry picked" certain sources and unfairly based its limits on too small of a data pool.

Controversy Builds

On August 2nd, 100 members of Congress submitted a letter to Administrator Jackson asking EPA reconsider its proposed boiler MACT standards:

EPA should use a method to set emission standards that is based on what real world best performing units can achieve.  EPA should not ignore biases in its emissions database, the practical capabilities of controls or the variability in operations, fuels and testing performance across many regulated sectors.

Impact on Biomass Industry

One group strongly opposing EPA is proposal is the biomass industry which believes the proposal unfairly lumps biomass in with all other fuels.  The biomass industry has indicated the standards, if finalized, could prevent the development of additional biomass sources.  The National Alliance of Forest Owners (NAFO) provides the following description of EPA’s flawed MACT methodology:

EPA explains that “[f]or each pollutant, we calculated the MACT floor for a subcategory of sources by ranking all the available emissions data from units within the subcategory from lowest emissions to highest emissions, and then taking the numerical average of the test results from the best performing (lowest emitting) 12 percent of sources.” 75 Fed. Reg. at 32019.This “pollutant-by-pollutant ” approach to determining MACT is not appropriate because it results in standards that do not reflect the performance of the best performing boilers for any fuel source. 

The CAA requires that EPA set standards based on the performance of actual
“sources.” Yet EPA’s analysis does not reflect the performance of any actual sources. Instead, it is a compilation of the best data, for each pollutant, regardless of which source the data came from. As a result, the proposed rule’s limits are unnecessarily stringent. They do not reflect the variability that occurs in real-world.

There is no denying EPA failed to look at fuel types when establishing standards.  Rather, EPA went pollutant by pollutant and looked for the smallest emissions without considering the fuel being used in the boiler.

Genreal Industry Concerns

The biomass industry is just one of many industry sectors strongly opposing the rules.  The American Chemistry Council described the rules as "fundamentally flawed" in their comments:

“EPA’s faulty methodology begins with pollutant-by-pollutant analyses that select a different set of ‘best performing sources’ for each pollutant. In other words, EPA ‘cherry picks’ the best data in setting each standard, without regard for sources. The result is a set of standards achieved by a hypothetical set of ‘best performing’ sources able to maximize emission reductions for each hazardous air pollutant (HAP), rather than standards representative of actual performance of real sources. EPA’s approach produces unachievable standards."

How is EPA cherry picking its data?  Industry says EPA uses a limited data set of emissions from sources in establishing the standards. EPA has failed to test enough sources to truly reflect each category of sources.  Without a full or adequate data set, EPA is skewing the top 12% of best performing sources. It really becomes the top 12% of sources EPA tested, which can be a small percentage of boilers in use.

Furthermore, Industry argues EPA failed to account for variations critical when establishing a MACT standard.  Boilers can vary in design, pollution controls and fuels utilized. Industry argues these variations should have been considered in evaluating the top 12% performing sources.

[For more insight into industry’s general concerns here is a link to Ohio Chamber Comments]

Regulators Echo Industry Concerns

Industry is not alone in strongly criticizing EPA proposal.  Ohio EPA filed its own comments on the U.S. EPA proposed boiler MACT standards supporting the notion EPA’s methodology is flawed:

Limited Data Concerns:

[EPA’s] analysis seems to only utilize emission performance data from a limited number of sources and in some cases as few as one or two sources.  At a minimum a NESHAP standard needs to be based on the performance of five sources or all sources if fewer than five in a category.

Emission Standard Methodology

The emission limits proposed in the rule seem to be based on the lowest demonstrated emission rates within a source category (based on a limited number of sources) and does not directly evaluate control efficiency of equipment.  Using the emission rate approach may not identify the sources demonstrating the highest control efficiencies, but rather may simply reflect low fuel content of the pollutants.  In this case, resulting emission limits can be more stringent than achievable for sources utilizing certain fuels.

Impact on Fuel Types

EPA’s approach may be eliminating certain fuels from use in industrial boilers.  For example, midwest coal with higher sulfur or mercury content.  Or in the case of biomass, wood feed stocks that have already have lower hydrogen chloride (HCL) content, may not be able to remove additional quantities to achieve the low standards EPA is proposing.

Conclusion

EPA’s rule impacts such a huge portion of industry and commercial operations.  It should be carefully crafting a set of standards that are achieveable as well as flexible. Two final points:

  •  Not all pollution controls are appropriate for every sized boiler;
  • Restricting fuel types by establishing standards that discount pollutant content of those fuels does not reflect "real world" practices that NESHAP standards are intended to reflect.

(Photo:  U.S. EPA website)

U.S. EPA has released its fiscal year 2011 request for proposals (RFP) for brownfield assessment and clean up grants.   There is a relatively short window of opportunity to file your application- the deadline is October 15, 2010. 

[Click here for access to U.S. EPA’s RFP for the brownfield assessment, clean up and revolving loan]

There is a total of $92.9 million available.   While the RFP allows for greater funding under certain circumstances, the basic limit is $200,000 per site for assessment or clean up.  EPA is required to expend 25% of the total amount available for sites contaminated with petroleum. 

Ohio is lucky to have one of the best state brownfield grant programs- Clean Ohio.  Often Clean Ohio is a better option than pursuing the U.S. EPA grant funding because U.S. EPA’s program is a national competition.  However, there are certain circumstances that make the U.S. EPA brownfield grant program potentially a better option than Clean Ohio.

COAF Clean Up Funding Exhausted for this Fiscal Year

The Ohio Dept. of Development announced that it is no longer providing funding under the Clean Ohio Assistance Fund (COAF) for clean up of brownfields in fiscal year 2011.  However, assessment funding remains.

COAF can provide provide up to $750,000 in funding for clean up of brownfields.  Projects are evaluated and grants awarded on a rolling basis. 

Clean Ohio Revitalization Fund (CORF) is still available to fund clean up.  It provides up to $3 million in funding per site.  However, a 25% match is required and there are only two CORF rounds per year which typically are competitive.  Therefore, for smaller clean up projects looking for funding in the next year, U.S. EPA’s program may be the better option.

Abandoned or Vacant Gas Stations

Under the Clean Ohio policies, removal and clean up of BUSTR (Bureau of Underground Storage Tank Regulation) regulated storage tanks and remediation of leaks from such tanks are not eligible costs under either the Clean Ohio Assistance Fund (COAF) or the Clean Ohio Revitalization Fund (CORF).

For local governments that are trying to deal with abandoned or vacant gas stations in their communities, the U.S. EPA brownfield grant may be their best option.  Communities can seek money for sampling of the site to determine if contamination exists. 

The fear of the unknown (whether contamination exists) acts as a strong deterrent to purchase and redevelopment by private parties.  Once sampling data has been generated, it removes one more impediment to purchase and redevelopment of the site.

Of course if sampling reveals contamination, this can act as a major obstacle to redevelopment.  However, communities can secure clean up funding for these sites under the U.S. EPA program.

Community Assessment Grants

U.S. EPA’s program may also be better for communities that are interested in creating a brownfield inventory of various sites within their jurisdiction.  Also, U.S. EPA’s program is great for local communities that want to create and fund their own local brownfield assessment programs. 

For example, in Northeast Ohio, the Northcoast Brownfield Coalition was created using U.S. EPA funding.  The Coalition is made up of  the Cuyahoga County Board of Commissioners, the City of Cleveland, the Cleveland-Cuyahoga Port Authority and the Northeast Ohio First Suburbs Consortium.  The Coalition makes provides local grant funding for brownfield projects in Northeast Ohio in amounts up to $30,000.

Below are the applicable limits for assessment grants under the U.S. EPA program:

 

 

 

 

 

 

(Photo:  everystockphoto peasap)

A group of eight states and conservation groups ("Plaintiffs") have been pushing a massive federal nuisance claim against utilities. The Plaintiffs claim that major emitters of carbon dioxide in twenty states have created, contributed to, or maintained a common-law public nuisance by contributing to global warming thereby injuring States and landowners feeling the impacts of climate change. (See prior post discussing 2nd Circuit decision to let nuisance action stand) .

The Plaintiffs claims were dismissed by the district court.  Their suit was reinstated when Plaintiffs won their appeal in the Second Circuit Court of Appeals.  The Appeals Court determined the Plaintiffs had a right to seek relief under federal common law nuisance doctrines.  Now the utilities are requesting the Supreme Court reverse the Appeals Court.

Two critical legal questions at issue throughout the litigation have been:

  1. Political Question- Resolution of the issue is best suited for Congress and not the Court because the relief sought would raise complex issues balancing economic, environmental, foreign policy, and national security.
  2. Whether common law has been displaced by Congressional or Executive Branch actions regulating greenhouse gases.

The 2nd Circuit Court of Appeals determined the claims did not raise a "political question" and were not displaced by the mere presence of regulatory authority in the Clean Air Act. ( Federal common law claims are "displaced" whenever Congress establishes a mechanism to address the problem.)   Now the utilities have petitioned the U.S. Supreme Court to hear their appeal of the lower Appeals Court decision. 

In a surprise to environmentalists, the Department of Justice (DOJ) filed a brief in support of the utilities appeal to the Supreme Court.  In its brief, DOJ argues that EPA, since the 2nd Circuit Court of Appeals decision was rendered, has issued a series of regulatory actions thereby displacing the common law claims of the plaintiffs.  These include:

  • Finalization of the "endangerment finding"
  • Regulation of greenhouse gas emissions (GHGs) from motor vehicles- light duty vehicle standards
  • Issuance of the "Tailoring Rue" which will subject new or expanded major emitters of GHGs to federal permitting requirements
  • U.S. EPA is developing New Source Performance Standards for existing major emitters

While EPA regulatory actions is not completed, there actions may be sufficient for the Supreme Court to ultimately determine common law rights have been displaced.  However, industry has also filed challenges to every regulatory action cited above.  Those challenges may give the Court pause in dismissing the Plaintiffs claims.

DOJ’s brief in support of the utilities came as a major surprise to some environmental groups.  This from the Mother Jones website:

This is cold comfort to environmentalists, who are anxious that the administration isn’t moving fast enough on those regulations. "It reads like a Bush administration brief," Matt Pawa, an environmental lawyer representing the plaintiffs in this case, told Mother Jones. "It felt like being stabbed in the back. The Obama administration claims to care about global warming, so why is it opposing an effort curtail greenhouse gas emissions from coal-fired power plants?"

Why is the Obama Administration opposing this effort?  Because having the Courts establish climate change regulation would be chaotic.  Here are some good quotes from the DOJ brief:

[Plaintiffs] are but a tiny subset of those who could allege they are injured by carbon-dioxide emissions that have contributed or will contribute to global warming…Moreover, global warming’s effect will not be limited to landowner; they will also be felt by governments, individuals, corporations, and interest groups throughout the Nation and around the world.

…Any potential plaintiff could claim to have been injured by any (or all) of the potential defendants.  The medium that transmits injury to potential plaintiffs is literally the Earth’s entire atmosphere–making it impossible to consider the sort of focused and more geographically limited effect characteristic of traditional nuisance suits targeted at particular nearby sources of water or air pollution.

The practical reality is that Courts are ill-equipped to address climate change.  How could they possibly be in the best position to address issues such as:

  • What percentage of reductions should be required and over what time period?
  • What sources should be required to reduce emissions?
  • What technologies are viable and should be employed?
  • How does forcing reductions by select emitters balance with similar emitters elsewhere in the country or the world?
  • When are the costs of compliance too significant?
  • How will reductions be monitored and enforced?

While the pace of Congressional action by be slow, turning to the Courts to develop perhaps the most complex, costly and extensive environmental regulatory scheme ever contemplated would not be wise. 

Back in 2007, U.S. EPA was sued by some States and environmental groups who challenged the legitimacy of the ozone standard -75 parts per billion (ppb)- selected by the Bush Administration.  In 2009, the Obama Administration announced that it was reconsidering the 75 ppb standard.

Ostensibly 75 ppb remains on the table. However, U.S. EPA is likely to revise the standard to somewhere between 60 ppb to 70 ppb.  Back in September 16, 2009, U.S. EPA filed a pleading informing the Court that it would finalize the new standard by August 31, 2010.

As the election looms and the economy’s lack of a strong recovery is playing a bigger role, U.S. EPA’s revised ozone standard has been sharply criticized as raising costs on industry.  U.S. EPA estimated the cost of compliance at between $19 billion to $90 billion a year by 2020, which will be largely imposed on manufacturers, oil refiners and utilities. 

The U.S. Supreme Court determined in Whitman v American Trucking that U.S. EPA could not consider costs in setting the standard.  The Court held EPA can only consider costs if its expressly granted that authority by Congress:

Section 109(b) [of the Clean Air Act] does not permit the Administrator to consider implementation costs in setting NAAQS. Because the CAA often expressly grants the EPA the authority to consider implementation costs, a provision for costs will not be inferred from its ambiguous provisions. 

The Bush Administration standard of 75 ppb was criticized as not meeting the standard established by the Court because it was inconsistent with recommendations by the EPA’s science advisory panel.

While EPA may not be able to consider costs, it apparently can consider politics.  On August 20th, EPA filed a brief with the U.S. Court of Appeals District of Columbia informing the Court that it will take longer to finalize the new standard.

"EPA expects that this process will take approximately two months longer than initially estimate. Thus, EPA’s current schedule is to sign a final rule on the reconsideration of the 2008 Ozone standard on or about the end of October 2010."

End of October…or may sometime after November 2, 2010? 

After this summer’s anti-climatic end to federal climate change legislation, some thought that perhaps there would be a temporary end of the discussion of climate change regulation.  However, recent weather events (wildfires in Russia, floods in Pakistan and an ice sheet breaking off Greenland) and extreme heat have reinvigorated the debate. 

Here is some highlights of the recent discussion. 

Is Climate Change Causing Wild Weather? –  I like the National Journal’s discussion of controversial topics.  The website features view points from well recognized experts, politicians or interest groups.  The current thread discusses the science (or lack thereof) behind linking climate change to this summer’s wild weather. 

GOP Candidates Knock Climate Change-  This article on Politico discusses the number of Republican candidates who are willing to take the stance linking man made emissions to climate change is simply unproven.  With the economy possibly heading to a double dip recession, support for a new "tax" on emissions has become a basis for attack this November.

Chamber Sues EPA Over Endangerment Finding-  In late July, EPA rejected the Chamber’s petition for reconsideration of EPA’s Endangerment ruling.  The Chamber argued that e-mails released in "climate-gate" justified EPA reconsideration of its finding.  EPA said the e-mails were taken out of context and there is no evidence that undermines its finding. This month, the Chamber pushed its legal finding further by filing suit challenging the basis for EPA’s finding that greenhouse gases endanger public health and the environment. 

EPA Marches Forward with Rule Making-  As discussed in my previous post, U.S. EPA is moving forward with regulation of greenhouse gas emission under the Clean Air Act.  Beginning in 2011, without passage of any federal legislation, emissions of GHGs from large sources will trigger new requirements. 

Concluding Comment-  All of this may be a surprise to some of you who thought that the Senate’s decision to scuttle federal cap and trade legislative efforts meant the end of the debate.  It is clear that this issue will not go away.  While direct connection to weather events cannot be made, there is no denying the connection between extreme weather events and re-invigoration of our national debate.
 

On August 12th, the U.S .EPA released two proposed rules to address the potential gap that exists while States adopt rules to regulate greenhouse gases (GHGs) from large stationary sources. What U.S. EPA is really doing is making sure all fifty states will be regulating GHGs beginning January 2011.

On May 12, 2010, U.S. EPA finalized its controversial Tailoring Rule, which raised the trigger level for federal permitting associated with GHG emissions.  Unless the U.S. EPA raised the trigger levels from 100/250 tons per year, very small sources would have required federal permits. The Tailoring Rule is U.S. EPA’s attempt to phase in GHG, beginning with only very large sources.

Beginning 2011, very large stationary sources of GHGs (like power plants and oil refineries) will need to address GHGs emissions when seeking permits for expansion or new facilities. For the first time, these sources will need to meet Best Available Control Technology (BACT) standards under the Agency’s New Source Review Program to control or reduce GHG emissions.

Thirty-Seven (37) states, including Ohio, operate U.S. EPA approved air permitting programs.  State approved programs cannot be "less stringent" than U.S. EPA regulations.  Therefore, when U.S. EPA adopts new standards, States are required to incorporate those standards into their programs. 

However, each State has its own rulemaking process.  U.S. EPA recognized that some states may not be able to complete the rulemaking process to incorporate GHG regulations prior to 2011. Therefore, the August 12th proposal is EPA’s attempt to create a backstop rule should states fail to complete their rulemaking process.  The backstop is referred to as a "federal implementation plan" or FIP.  It really means U.S. EPA would temporarily take over permitting functions for sources above the GHG trigger levels in the Tailoring Rule. 

Ohio doesn’t like the prospect of U.S. EPA imposing the FIP.  If the FIP is imposed U.S. EPA would temporarily issue PSD permits in Ohio until the State finalizes its rules.  Ohio has released its proposed modifications to incorporate the Tailoring Rule into Ohio EPA’s regulations to try and avoid U.S. EPA direct involvement in its permitting program.
 

There is a very good article in the Akron Beacon Journal discussing the debate over the use of biomass as a replacement for coal.  Here is an excerpt from the beginning of the article (click here for full biomass article):

Burning Ohio trees at Burger sets fire to debate
Opponents are hot that FirstEnergy will get credits, question if state can produce enough fuel for power plant

By Bob Downing
Beacon Journal staff writer

Switching from dirty coal to clean wood at FirstEnergy Corp.’s R.E. Burger Power Plant will require millions of trees — year after year.  Where those trees will come from and new questions about whether the switch helps the environment have triggered objections from Ohio environmental and consumer-advocacy groups.

The dispute has brought Akron-based FirstEnergy’s application for renewable energy credits — a financial incentive to make the conversion — to a standstill at the Public Utilities Commission of Ohio.

While the article does a great job discussing the different view points, it does not cover one important aspect- Ohio desperately needs to diversify if energy generation.  Right now it relies almost 90% on coal. 

Coal is facing more and more stringent regulation.  These include:

  • Tighter caps on Nox and SO2 emissions in U.S. EPA’s proposed Transport Rule
  • Multi-pollutant legislative proposals in Congress
  • MACT standards for mercury reduction
  • Legislation and/or regulation of greenhouse gas emissions
  • Tighter waste disposal requirements

All of this new and potential regulation means the cost of energy production in Ohio will be escalating.  In addition, the prospects for significant added regulatory cost are great.  The challenge for Ohio is great given that it is a highly energy intensive State due to its population and manufacturing base. 

Similar to diversification in your stock portfolio, Ohio needs energy diversification.  The reality is there are not many sources of energy that can provide baseload power.  While wind farms and solar are clean and good investments, they do not produce significant power.  

Nuclear, biomass and natural gas are the current alternatives to coal for baseload power generation.  New nuclear capacity will take years to construct.  Natural gas has its own wild price fluctuations.  Which leaves biomass. 

Outside of greenhouse gas emissions, biomass is a cleaner fuel.  In addition, while  the need for large supplies of biomass fuel may leave wood as the only immediate option, that will change.  Once demand is created, the market will develop other alternatives. 

Energy policy means hard choices.  For those groups strongly opposing biomass, they must answer- if not coal, biomass or nuclear, then what is left as an option given the realities of current technology?

In my tenure at Ohio EPA, no issue was as vexing as Environmental Justice (EJ).  In a nutshell, there is a legitimate issue behind the concept of EJ- low income and minorities are exposed to more pollution.  Here is how EPA presents the EJ issues:

Fair Treatment means that no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.

The root causes of disproportionate impacts can be traced to the history of how our country developed and expanded. Lower income housing can typically be found near areas zoned industrial.  In our past, this occurred for easy access to plant and factories.  However, this history has carried forward and people living in these communities are disproportionately impacted by pollution. 

However, the difficulty was trying to address this social problem through EPA rulemaking or decision making on permits for new industrial facilities.  EJ issues come into conflict with concepts of urban redevelopment, brownfield redevelopment and creating jobs in low income communities. 

Are we really prepared to declare an industrial area off limits to new factories or manufacturing because the pollution burden is too great?  How would someone establish a standard for what is deemed too great an exposure?

How does EPA "regulate away" this social issue?  EPA struggled with answer to these questions for so long that is has released and than retracted EJ policies over time.  For long stretches the Agency simply put EJ issues on the back burner. 

Now, EPA has released its first new Environmental Justice guidance document in a long time.

EPA is required to develop procedures to evaluate EJ issues in its decision making process as a result of Executive Order 12898 which directs agencies such as EPA to do the following:

 “[t]o the greatest extent practicable and permitted by law,” to “identify[…] and address[…], as appropriate, disproportionately high and adverse human health or environmental effects” of agency programs, policies, and actions on minority populations and low-income populations.

EPA’s new fifty page guidance document walks through a complex process for evaluating EJ issues in EPA decision making.  I think the chart below says it all.   Is this really helpful in addressing a complex social issue?

Reading the document, the EJ document is strinkingly similar to past efforts by EPA.  It really seems to boil down to two requirements that fall onto EPA staff.

1.  Ensure participation by low income and minority groups in the EPA decision making process-  the guidance offers suggestions for how to reach out to communities and make sure they are informed regarding EPA actions.

2.  Document that EJ issues were considered in the decision making process-  When EPA issues is response to public comments, it must include a description of the EJ issues that were identified and how those impacted the decision making process.

What the guidance document doesn’t address- When EPA is required to take alternative action as a direct result of EJ considerations?  The reason EPA avoids setting such standards is that a uniform "regulation" would be nearly impossible to develop.  Therefore, the new guidance appears to be very similar to past EPA approaches to incorporate EJ considerations in its decision making-

  1. Inform;
  2. Consider the alternatives; and
  3. Document how EJ issues were considered in the decision making process