As reported in various newspapers, several states have moved forward with the next round of climate change litigation. The States have sued U.S. EPA arguing that the Agency illegally refused to regulate greenhouse gas emissions (GHG) from refineries. 

Thelen’s Climate Law Update, had a recent post discussing the lawsuit:

New York, California and 10 other states launched the latest lawsuit this week in the U.S. Court of Appeals for the District of Columbia Circuit. Although the document itself was bare-bones, officials said it’s focused on the failure of the U.S. Environmental Protection Agency to adopt regulations known as New Source Performance Standards to control pollutants blamed for causing global warming.

Lawyers working for California Attorney General Jerry Brown told Climate Law Update the case would draw legal support from last year’s landmark Massachusetts v. EPA decision last year. In that ruling the Supreme Court held the EPA had the authority under the Clean Air Act to regulate greenhouse gases if it found they endangered human health or welfare.

So far, as Climate Law Update has reported, government officials have balked at such a move, calling the law "ill-suited" to controlling such emissions, and they have launched a lengthy effort to study the issue.

U.S. EPA pronounced that the Clean Air is "ill-suited" for regulation of GHGs when it issued its proposed rulemaking on regulation of greenhouse gases under the Act.   U.S. EPA’s rulemaking is an analysis of the whether and how GHGs could be effectively controlled under the Clean Air Act. 

In U.S. EPA’s latest action, refusal to regulate GHG emissions under the NSPS (new source performance standards), U.S. EPA asserted:

  1. The Clean Air Act does not mandate U.S. EPA regulate GHGs under the standard
  2. The Agency should be allowed to proceed with a more deliberate and thoughtful process in developing greenhouse gas regulations, then simply incorporating regulations as it develops source specific rules
  3. Regulating GHG under NSPS could require the Agency to develop regulations for other categories of sources and under several other parts of the Act.

While U.S. EPA may prefer a more deliberative process and a comprehensive approach, it does not prevent Courts from interpreting the Act to require regulation and force application on a case by case basis. As an example, we have already had one Court determine the Clean Air requires analysis of greenhouse gases during the permit process.

There is no doubt the wave of climate change litigation has not even crested. It is also certain that the Clean Air Act structure does not mesh well with regulation of greenhouse gases.  In fact, some of the most complicated provisions in the Clean Air Act, such as New Source Review, are overly complicated when applied to criteria pollutants (SO2, NOx, PM)  However, as long as Congress and U.S. EPA delay comprehensive action on climate change, we are likely to construct climate change regulation by default and in piecemeal fashion. 

 

 

Federal hazardous waste regulations (RCRA) have long been referred to as management from "cradle to grave."  In order meet this management principle, the regulations require detailed paper work and reporting from both small and large businesses. 

Failure to maintain the proper paper work can result in significant penalties or even change your regulatory status which will have even greater implications.  Just in 2008, Ohio EPA Division of Hazardous Waste Management (DHWM) has taken 24 formal enforcement actions that included assessment of civil penalties.  Those penalties have ranged from $4,000 to $75,000.  Many of the actions were against small to medium sized businesses.

In addition, hazardous waste enforcement cases will often be reported in the newspaper, even in the small town local newspaper.  If you want to avoid the bad publicity and a costly fine, it pays to review your company’s paper work practices. 

A recent EHS blog post provided a good example of the dangers of missing paperwork. 

But in the absence of any documentation that showed the facility never generated more than 2200 lbs of waste in a calendar month, the inspector assumed incorrectly that the facility generated all the wastes that were shipped out in August of 2001 in that month. [shipped out more than 2200 lbs in the month] The reality was that the wastes in the two shipments made in August had been accumulated over the past several months.

The fact the company did not maintain good records resulted in the inspector citing them for being a Large Quantity Generator (LQG) even though in reality the company was a Small Quantity Generator (SQG).  Without the proper records, the inspector’s conclusion becomes difficult to refute.

Ohio EPA has identified the most frequently cited RCRA violations in Ohio.  Reviewing the following list of frequent  categories of violations is a good place to start in determining if your company is property managing hazardous waste. 

  • Waste Determination- The regulations require all waste to be evaluated.  This is often an area overlooked by businesses. Failing to evaluate just one barrel of waste can result in a citation. Ohio EPA developed a handy fact sheet that is worth reviewing to get yourself familiar with these requirements.
  • Annual Reports-  All LQG must submit a report by March 1st for the preceding year.  Review your files to makes sure you have submitted annual reports. 
  • Container Management- Must inspect your hazardous waste storage areas at least once a week and maintain a log documenting those inspections.  Ohio EPA has provided a hazardous waste storage inspection log sheet that can be used to maintain your records.
  • Emergency Equipment Inspections- SQG and LQG must maintain a log of inspections showing all emergency equipment (fire suppression, spill containment, alarms) were inspected as recommended by the manufacturer or supplier of the equipment.  Ohio EPA also has a emergency equipment inspection log sheet you can use to maintain these required records.
  • Used Oil Storage-  All containers use to store used oil must be properly labeled with a sign that says "used oil."  Using terms like "hazardous waste" or "waste oil" is not sufficient.
  • Large Quantity Tank Systems-  All LQG’s that use tanks to store hazardous waste must inspect the tank once "each operating day."  A log of inspections must be maintained. According to an Ohio EPA fact sheet, this means each day the tank is in use.  Even if workers are not on-site seven days a week.

(photo from flickr: Ashe-Villian)

On August 20th, the Public Utilities Commission of Ohio (PUCO) proposed administrative rules for the implementation of Ohio’s Alternative Energy Portfolio Standard.  Approximately 26 states have enacted renewable portfolio standards (RPS) that mandate a certain percentage of electricity supplied in the state come from renewable sources.  Only one other State, Pennsylvania expanded the mandate to cover additional sources of energy beyond renewables. 

Ohio has now gone beyond Pennsylvania in promoting other "advanced energy sources."  Ohio is the first State in the Country to allow the following resources to be eligible toward meeting the advanced energy mandate:

  • Clean Coal Technology
  • Technology or improvements that reduce CO2 emissions
  • Enhancement of Nuclear Power

Under Senate Bill 221, and as set forth in the proposed rules, 12.5% of power supplied in Ohio must come from these and other advanced energy sources (fuel cells, distributed generation, fuel cells, solid waste to energy and energy efficiency projects) by 2025. 

The proposed rules are pretty standard on the renewable side.  The include provisions used by other states who have already had an RPS.  The rules provide for annual benchmarks, alternative compliance payments, use of renewable energy credits (RECs) and costs caps on meeting the RPS. 

It is significant that Ohio has developed a more complex and interesting portfolio standard for advanced energy sources.  However, where the SB 221 was very prescriptive as to meeting the renewable standard requirements, the legislation was vague on the advanced energy side of the standard.  Unfortunately, the draft rules fail to provide much needed detail.

Here are some issues that should be addressed to better promote advanced energy sources:

  1. Benchmarks-  SB 221 did not include them for meeting the advanced energy standard.  The rules should at least require meaningful evaluation as to progress toward meeting the mandate to supply 12.5% from advanced energy sources by 2025.
  2. Establish a Currency-  On the renewable side, Ohio is following the well established method of buying and selling renewable energy certificates (RECs).  One megawatt of renewable power equals one REC.  There is no such currency established for the advanced energy portion of the standard.
  3. Better define each advanced energy resource-  Most importantly, the definitions of what types of projects qualify are far too vague.
  • Example 1: The rules say "a significant improvement to an existing nuclear" facility qualifies.  There is no definition of "significant."  What type of enhancements are we trying to promote?  If one change is made, does the whole plant qualify as an advanced energy resource?
  • Example 2:  "Clean Coal Technology"- the rules don’t provide anymore specification then SB221.  The bill just says qualifying technology is something that reduces pollutants like arsenic, chlorine, nitrous oxide, mercury, sulfur dioxide.  By how much?  Again, does a small reduction, like one particle of mercury, make the whole 500 megawatt plant an "advanced energy resource?"

 

As reported in Platts, the Court of Appeals has granted US EPA until September 24th to determine whether to pursue rehearing of the ruling that struck down the Clean Air Interstate Rule (CAIR).

The US Circuit Court of Appeals for the District of Columbia announced
….it was giving EPA more time to file any petition for a rehearing,
which it can seek either before the same three judges or before the full
six-judge court.

Any such petition would originally have been due August 24.

The extra time would likely delay implementation of the court’s ruling
for at least another two to three months until the court decides whether it
will approve or deny any EPA petition, according to John Walke, clean air
director for the Natural Resources Defense Council.

The court would seek comments from other parties on any government
petition, giving them up to 30 days, before making a decision, Walke added.

The full effect of the Court’s decision takes place on issuance of its "mandate" which effectively throws out the program. The Court of Appeals typically issues its mandate 7 days after the time period for appeal expires. So earliest the full decision would likely take effect is October 1st.

EPA could file a motion to stay the effectiveness of the mandate while it seeks appeal. If no one opposes the motion the stay is effective for 90 days. If the motion to stay is granted, then it will continue while EPA seeks review in front of the Supreme Court.  So, EPA through legal maneuvering can try and delay the inevitable.

Rehearing still appears unlikely as does any Congressional action to provide legal support for CAIR.  Also, the decision to seek more time will keep EPA silent on many aspects how it proposes to deal with CAIR decision.  EPA traditionally provide great deference to the Court while determining whether to seek an appeal.  An information vacuum is not the best thing right now for those struggling to understand how to effectively address the many ramifications of the Court’s decision.

On August 20th, the Public Utilities Commission of Ohio proposed rules governing greenhouse gas reporting and carbon dioxide control planning.  Parties wishing to file comments have until September 6th to file comments.

The most interesting aspect of the rule is it proposes to mandate all electric generating facilities in Ohio become participating members in the Climate Registry.  It also mandates electric generating facilities to report report greenhouse gas emissions according to protocols approved by the Climate Registry.  While Senate Bill 221 provided discretion to the PUCO to establish the level of participation in the Climate Registry, the Commission has decided to mandate participation.

I’m sure the Commission will receive comments on their definition of "electric generating facility" covered by the mandatory reporting requirement.  The definition is as follows:

"Electric generating facility" means an electric generating plant and associated facilities capable of producing electricity.

There is no minimum size requirement specified in the proposed rule.  Therefore, it would appear an electric generating facility of virtually any size under PUCO’s jurisdiction faces a mandatory reporting requirement.

I would also expect comments from the Utilities that the mandatory reporting requirements should wait until U.S. EPA proposes its mandatory greenhouse gas reporting rule in September.  U.S. EPA’s reporting rule will specify required reporting as well as include limitations on the size of the generating unit covered by the mandatory reporting requirement. 

U.S. EPA propose rule will also shine light on the interplay between the Climate Registry and mandatory federal reporting requirements. Perhaps the Commission left themselves some wiggle room by inserting "or as otherwise directed by the Commission" right after the mandate to participate in the Climate Registry.

The rule also requires each owner and operator of a electric generating facility to file an annual report specifying its control plan for both criteria pollutants (NOx, SO2) and for carbon dioxide.  However, the rule lacks any specificity as to what elements must be included in the plan.  The proposed rule requires the environmental control plan include:

"…all relevant technical information on current conditions, goals, and potential actions based upon the current scientific and engineering design capability of any facility…to control emissions of criteria pollutants and carbon dioxide within the parameters of economically feasible best technology."

 

This picture may be one of the last of the "big three" (Strickland, Husted, and Harris) holding hands over Clean Ohio. Governor Ted Strickland’s administration is proposing to mandate prevailing wage for all construction that occurs on land for which the State has funded environmental remediation.  A key political debate is shaping up as to how this change will affect projects funded using brownfield grant funds through the Clean Ohio Program. 

 

To provide answers a few points must be addressed:

  • Which type of Clean Ohio grant funded the project?
  • Which costs are at issue?  Remediation costs or construction costs post-clean up?

Clean Ohio recently created a new "redevelopment-ready" grant track.  This is in addition to the "known end-user track."  Apparently, under the proposed policy how much work at a brownfield is covered by prevailing wage will depend upon which grant track your project was funded.  

Under the proposed prevailing wage policy, if your project receives Clean Ohio funding under the "known-end user track" the use of grant funds will "presumptively subject all construction on the entire project to prevailing wage."  However, if the state were to fund the cleanup at the brownfield under the "redevelopment ready track" (i.e. there is no identified end-user of the property), then only the remediation work is subject to prevailing wage. 

According to the Columbus Dispatch,  Speaker Jon Husted expressed concern that application of prevailing wage to brownfield development could drive people to using green space or farmland for development.  What type of cost increases would decrease the attractiveness of public-subsidized redevelopment of brownfield sites?

A Legislative Service Center (LSC) study of the exemption of school projects from prevailing wage concluded it reduced costs by around 10% and saved $487 million.   The conclusions of the LSC study were challenged, so it is difficult to really know whether similar cost increases could occur at brownfield sites.

Here is my take:

  • Environmental remediation is an expensive business, application of prevailing wage may not impact the costs associated with this type of clean up work. However, it may be different when dealing with the redevelopment of the site post-clean up (i.e. pure construction work).  It is possible that construction costs at a brownfield could increase by a comparable amount (10%) as was found in the LSC study. 
  • A 10% increase in costs is probably unlikely to make most projects that are premised upon receiving public subsidies no longer attractive.  However, why diminish the cost effectiveness of a grant program designed to spur redevelopment in neglected areas. 

 Yesterday, U.S. EPA announced its proposed non-attainment designations for counties not meeting the new P.M. 2.5 (fine particle) pollution standard.  Ohio was second only to California in total counties designated non-attainment with 28 total counties. 

A county’s designation as non-attainment makes economic development efforts more difficult and increases competitive pressure on existing businesses.  The designations mean regulatory restrictions on economic growth and increased pollution control compliance costs for existing businesses. 

How is economic growth impacted?  Before a company can build a new factory or expand, if that factory will result in a moderate pollution increase of fine particles it must offset that emission increase.  An offset is achieved through pollution reductions from existing businesses already located in that county.  The offset requirement, as part of U.S. EPA’s New Source Review Program, acts as a strong disincentive to locate in non-attainment counties.  The offset requirement only goes away if the county is redesignated attainment.

How does County get out of its non-attainment designation?  Through reductions in fine particle pollution to levels that comply with the federal standards. Reductions are achieved through a combination of federal and state pollution programs.  The State must develop a pollution control plan (SIP) that shows its strategy for achieving the federal air quality standard by the applicable deadline (2012).

What are the largest sources contributing to fine particle pollution?  Transportation, in particular diesel engines and coal-fired power plants.  While, fine particle pollution is more localized than ozone, it still has a regional component.  Therefore, counties must see state and regional reductions in order to achieve the standard. (Note: the recent letter from State EPA heads to U.S. EPA)

How can Ohio and other states effectively achieve reductions from these sources?  While U.S. EPA has adopted tougher standards for diesel engines, the reductions won’t come until there is turnover in the fleet.  Therefore, the full benefits may not be seen for 25 years.  That is why programs like DERG that accelerate diesel reductions are so important. (see yesterday’s post on Ohio’s diesel grant program). 

Furthermore, Ohio and the other state’s efforts to meet the fine particle standard are further complicated by the court decision throwing out U.S. EPA’s CAIR program.  CAIR, as described by U.S. EPA, was the "linchpin" program designed to help states achieve attainment with ozone and fine particle standards. (see post "CAIR Decision Will Have Many Aftershocks")

Implementation of the new standard: Below is U.S. EPA’s implementation schedule for both the old (65 ug/m3)  and new (35 ug/m3) 24-hour fine particle standards.  While Ohio submitted its SIP in July for the old standard it relied heavily upon CAIR.  So, even for the old program Ohio’s SIP will need significant revisions.  It is yet to be seen how states can achieve either standard without regional reductions from coal-fired power plants.  Unfortunately, it doesn’t appear Congress is going to act quickly to provide relief to the States.

Milestone

1997 PM2.5 Primary NAAQS

2006 PM2.5 Primary NAAQS

Promulgation of Standard

July 1997

Sep. 2006

Effective Date of Standard

Sep. 1997

Dec. 18, 2006

State Recommendations to EPA

Feb. 2004
(based on 2001-2003 monitoring data)

Dec. 18, 2007
(based on 2004-2006 monitoring data)

Final Designations Signature

Dec. 2004

No later than Dec. 18, 2008*

Effective Date of Designations

April 2005

Typically no later than 90 days after publication in the Federal Register

SIPs Due

April 2008

3 years after effective date of designations

Attainment Date

April 2010
(based on 2007-2009 monitoring data)

No later than 5 years after effective date of designations

Attainment Date with Extension

Up to April 2015

No later than 10 years from effective date of designations

 

 

 

You don’t often hear Buckeye’s saying they need to be more like Longhorns, but Ohio would do well to imitate the Texas approach to reducing diesel emissions in its state.  Back in 2001, Texas established the Texas Emission Reduction Plan (TERP) that has approximately $500 million in funding to help reduce diesel emissions.

Why has Texas made such a heavy investment in its diesel emission reduction program?  Because Texas identified the connection between air quality and business development.  

Here is a quick tutorial on the connection: Counties that do not meet federal ozone or fine particle standards are designated as "non-attainment."  A "non-attainment" classification constrains economic development and puts businesses in those counties at a competitive disadvantage. Reducing diesel emissions through grants and other incentives can be an effective way of reducing emissions to help attain federal air quality standards. 

Ohio’s Diesel Emission Grant Program (DERG), with $19.8 million in financing set aside in the last budget, was an initial step toward a Texas like program.  On July 29, 2008 the Ohio Department of Development awarded 10 grants under the Ohio Diesel Emission Reduction Grant (DERG) program.  The grants pay for retrofits of emission controls, engine rebuilds, and a portion of the purchase price of new diesel vehicles.  Total amount requested by the 10 successful grants recipients is $8.5 million. 

Records obtained from ODOD show robust demand for diesel grants across the state.  A total of 42 applications were filed requesting a total of $42 million dollars in funding.  The requests were more then quadruple the total money available. 

There is no doubt there has been frustration with the implementation of the DERG program. Thirty-two (32) of the applications had to be rejected for failing to provide necessary information.  The most common errors that resulted in rejection were: inadequate or missing public-private partnership (PPP) agreements, missing emission calculations or no quote was provided for the diesel equipment to be replaced with grant funds.

On August 14th, I helped facilitate a meeting on behalf of the Ohio Diesel Coalition with the State agencies responsible for implementing the program (Ohio EPA, ODOD and ODOT).  The meeting was productive and many positive suggestions were made for improving the grant application process in the second round of funding.  Stay tuned for an update on the changes adopted by the State for the next grant round likely in September or October.

This will be the last chance to obtain a portion of the $19.8 million set aside in the State budget for the DERG program.  The business community and the Diesel Coalition should have a common goal of seeing applications submitted that far outpace the remaining funding available (between $9 to 13 million).  This will provide a solid platform to ask the Legislature to continue this important program or perhaps even be more like Texas and increase available funding.

 

 

 

Here is a sampling of sustainable practices that can directly improve  your company’s bottom line. As you can see from the descriptions, these practices involve large Fortune 500 companies.  However, there is no reason they can’t be implemented by smaller companies.  The examples in this post can help save fuel and reduce energy costs.  With ever increasing prices for both the incentives and advantages of thinking proactively continue to grow.

Plastic or Wood Pallets?  The Wall Street Journal reported that using plastic pallets instead of wood for trucks is not only more environmentally friendly, but also a money saver. The Journal reported:

They last longer, they weigh less, and they don’t need paint or chemical treatments. Since a plastic pallet can easily handle 100 trips—versus two trips for a single-use wooden pallet—the difference in greenhouse-gas emissions is stark: 45,000 kilograms of carbon dioxide for the plastic pallets, compared with 300,000 kilograms for the wooden pallets. Most importantly, says iGPS, you don’t have to chop down trees to get plastic pallets: A Virginia Tech study found that 40% of the U.S. hardwood harvest goes to wooden pallet production.

On the iGPS website (a manufacturer of plastic pallets) even has a calculator which lets shipping companies tally how much fuel they’d save by switching from wood to plastic.

Retailers Discovering Energy Efficiency-  Another Wall Street Journal article covered the increased usage by major big box retailers and supermarkets to energy efficient heating, cooling and lighting. Stores like Office Depot, Kroger and Walmart are saving energy and money by adopting advanced energy efficient designs in their stores.  In Ohio, a state that will be facing significant increases in energy prices, smaller retailers and commercial store owners are wise to take heed.  Here are some of the changes being implemented:

  • Skylights that have reflective mirror that tracks the sun to provide natural lighting throughout the store thereby reducing energy costs
  • Intelligent lighting systems that automatically adjusts the fluorescent lighting based on the availability of natural light in the store
  • Parking lots use concrete not tar to reduce heat generated around the store
  • LEDs (light-emitting diodes) rather than incandescent bulbs in freezer units

The article notes that construction costs increased by 10% to add these energy efficient technologies, but each store is projected to save 25% in energy costs.  This will allow recovery of their upfront costs within a matter a few years.  I am certain those calculations don’t even take into account the likelihood of increased energy prices.

Smartway the "smartway" to reduce diesel costs-  U.S. EPA’s Smartway program is an innovative brand that represents environmentally cleaner, more fuel efficient transportation options.  Smartway can help finance equipment that can significantly save fuel costs.  For example, Auxiliary Power Units (APUs) allow truckers to power their truck without idling.  Smartway also rates vehicles based upon their emissions.  Perhaps one of the most useful tools you can find on U.S. EPA’s website is the Smartway calculator.

 

MSNBC reported today that the Interior Department has proposed changes to the rules governing required reviews under the Endangered Species Act (ESA).  From the news report is appears the two most significant proposed changes are:

 

 

  • Removal of the requirement  to "consult" with Fish and Wildlife or other federal experts as part of the required review under Section 7 of the ESA.  The proposed rules would allow federal agencies on their own, without consultation with sister federal agencies, to determine if project  will have an impact on endangered species. To give you an idea of the breadth of projects being reviewed, the article states that Fish and Wildlife performed 300,000 consultations between 1998 and 2002.
     
  • Prevent the ESA to be used as tool to regulate greenhouse gases.  This change was proposed after the Department of Interior proposed listing the polar bear as a "threatened" species. When the listing action was announced, Secretary Kempthorne clarified that the Department of the Interior (DOI) intends to act “to make certain the ESA isn’t abused to make global warming policies.”  Today’s announcement appears to be the action referenced by Secretary Kempthorne.  It would bar federal agencies from assessing the emissions from projects that contribute to global warming and the corollary effect on species and habitats.

Section 7 of the ESA required federal agencies to consult with FWS (or other federal agencies) to ensure that any action they authorize through permitting or other means are not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of designated critical habitat.  Some developers have complained that Section 7 results in long delays and unnecessary expenses associated with projects. 

The proposal to overhaul the Section 7 process is controversial and will be challenged if it moves forward. On its website, the Department of Interior characterizes the proposal as "narrow changes" to the ESA..  Whether you support ending the consultation process or not, it is simply not accurate to describe it this a narrow change.  More importantly, the proposal and surrounding controversy detracts from the legitimate concern over the use of the ESA to regulate greenhouse gas emissions.

The real issue is taking steps necessary to prevent the use of a myriad of federal and state regulations to leverage reviews of an individual project’s contribution to global warming. Global warming by its very nature is a global issue.  Unlike other pollutants, emission of greenhouse gases themselves do not have local impacts.  The impacts stem from the overall increase in temperature associated with the accumulation of gases in the atmosphere. 

The best way to address global warming is through comprehensive federal legislation establishing a cap and trade program that lowers emissions in a cost effective manner.  Use of the ESA or portions of the Clean Air Act to combat global warming is like fitting round holes with square pegs.  Unfortunately, the Department of Interior actions and announcement detracts from this important policy debate. 

(photo: from flickr, Frank Wouters)