Natural Gas Generation Predicted to Emit More CO2 Than Coal in 2016

The Energy Information Administration (EIA) has predicted that energy-associated CO2 emissions from natural gas will be greater than those from coal for the first time since 1972.  While coal is more carbon-intensive than natural gas, changes in generation mix have led to increased CO2 emissions from natural gas (and a decrease from coal-fired generation).

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Litigation Update: EPA’s Methane Rules for Oil and Natural Gas

Nine petitions challenging EPA’s final New Source Performance Standards for the oil and natural gas sector have been filed with the D.C. Circuit (the rule was published in the Federal Register in early June).  EPA’s rule limits certain greenhouse gas, including methane, and volatile organic compound emissions from oil and natural gas operations, such as hydraulically fractured oil wells.  EPA stated that it expects the final rule to reduce 510,000 short tons of methane in 2025, or the equivalent of eleven million metric tons of CO2.

States (Alabama, Arizona, Kansas, Kentucky, Louisiana, Michigan, Montana, North Dakota, Ohio, Oklahoma, South Carolina, West Virginia, Wisconsin, Texas, Kentucky Energy and Environment Cabinet, Texas Commission on Environmental Quality, and North Carolina Department of Environmental Quality) and industry groups have challenged the rule, with North Dakota being the first to file and thus the named petitioner in the consolidated cases.  Other states—California, Connecticut, Illinois, New Mexico, New York, Oregon, Rhode Island, Vermont, and Massachusetts—and the City of Chicago have filed a motion to intervene in support of EPA, as have several environmental groups.  EPA has filed an unopposed motion to extend certain deadlines, which would push the next big steps in this proceeding, including the submission of dispositive motions, into October.

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Who’s Up to Bat?

The D.C. Circuit has issued an order setting the “lineup” for the September 27 oral argument on challenges to the Clean Power Plan.*  The argument, which is scheduled to be held before the full court, will be divided into five segments.  The court’s order implicitly acknowledges that the briefing format does not cover all of the issues raised by the numerous parties, but states that the exclusion of an issue from the argument “should not be construed as an indication of the merit” of that issue.

The total scheduled oral argument time (218 minutes) is much shorter than the petitioners’ proposed 2-day schedule, though it is half an hour longer than what EPA had proposed.  The argument segment are as follows:

Segment 1: All issues related to EPA’s statutory authority, including generation shifting and state authority issues, except those related to Clean Air Act Section 112.

For State Petitioners:
Elbert Lin, Solicitor General of the State of West Virginia
For Non-State Petitioners: Peter D. Keisler, Sidley Austin LLP
35 minutes total 
For Respondent EPA: Eric Hostetler, U.S. Department of Justice 25 minutes
For State Intervenors in support of EPA:
Michael Myers, Assistant Attorney General of the State of New York
For Power Company Intervenors in support of EPA:
Kevin Poloncarz, Paul Hastings LLP
10 minutes

Segment 2: Issues related to whether Section 112 of the Clean Air Act bars regulation of carbon dioxide under Section 111(d).

For State Petitioners: Elbert Lin
For Non-State Petitioners: Allison Wood, Hunton Williams LLP
22 minutes total
For Respondent EPA: Amanda Berman, U.S. Department of Justice 17 minutes total
For Environmental Intervenors in support of EPA:
Sean Donahue, Donahue & Goldberg LLP
5 minutes

Segment 3: Constitutional issues including whether the CPP violates the Tenth Amendment.

For State PetitionersDavid B. Rivkin, Jr.,
Baker & Hostetler LLP, counsel for the State of Oklahoma
For Non-State Petitioners: Laurence H. Tribe, Professor,
Harvard Law School, counsel for Dixon Bros. Inc., et al.
12 minutes total
For Respondent EPA: Amanda Berman 7 minutes
For State Intervenors in support of EPA: Michael Myers 5 minutes

Segment 4: Issues related to whether the CPP was properly noticed.

For State Petitioners: Matthew H. Frederick,
Deputy Solicitor General of the State of Texas
For Non-State Petitioners: Thomas A. Lorenzen, Crowell & Moring LLP
10 minutes total
For Respondent EPA: Chloe Kolman, U.S. Department of Justice 10 minutes

Segment 5: Records-based issues not submitted on briefs (Petitioners’ Opening Brief II, IV.C-d, V.A, D).

For State Petitioners:
Misha Tseytlin, Solicitor General of the State of Wisconsin

For Non-State Petitioners:
F. William Brownell, Hunton & Williams LLP
30 minutes total
For Respondent EPA:
Norman Rave, U.S. Department of Justice
(addressing individual plant achievability analyses,
interstate trading programs, grid reliability and infrastructure issues,
and the state-specific issues raised by Wisconsin and Utah)

Brian Lynk, U.S. Department of Justice
(addressing arguments concerning the achievability of
Building Blocks 1, 2 and 3, and EPA consideration of costs
25 minutes total
For Power Company Intervenors in support of EPA:
Kevin Poloncarz
5 minutes total

* Neither Chief Judge Garland (who is not participating in cases or matters while his Supreme Court nomination is pending) nor Circuit Judge Pillard participated in the matter.

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Eight States Raise Concerns Over EPA’s Proposed Regional Haze Amendments

On April 25, 2016, EPA proposed revisions to its “Regional Haze Rule.”  Promulgated under the Clean Air Act, this Rule requires states to submit plans to protect visibility at certain federal lands, such as national parks, and to update them periodically.  EPA asserts that the revisions will “streamline, strengthen, and clarify” portions of the Rule and will apply to the next set of Regional Haze plans (originally due in 2018 but now proposed to be due in 2021).

Last week, the Attorneys General of Arkansas, Alabama, Colorado, Kansas, Michigan, North Dakota, Oklahoma, and South Carolina jointly filed comments on EPA’s proposed amendments.  The eight Attorneys General expressed concern that the proposed revisions afford too much authority to Federal Land Managers, and would deprive states of their traditional responsibility for deciding when visibility problems are “reasonably attributable” to a specific source or set of sources.  They argue that EPA’s proposed revisions would move away from the use of measurable and objective criteria for assessing visibility impairment and for determining the least and most impaired days.

The Attorneys General also focused on EPA’s proposed push back of the deadline for the submission of State Implementation Plans for the second planning period.  EPA says that the delay will allow states to coordinate their Regional Haze Rule planning with their planning for other regulations, such as MATS and the Clean Power Plan.  But the eight Attorneys General countered that the coordinated deadlines improperly pressure states to comply regulatory programs that are subject to ongoing legal challenges.

EPA received over three hundred comments on the proposed revisions to the Regional Haze Rule (the public comment period is now closed).  The commenters included environmental officials from several other states, as well as industry and environmental groups, a number of which supported at least some aspects of EPA’s proposed revisions.

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Massachusetts Enacts Energy Diversity Law

On Monday, August 8, 2016, Massachusetts Governor Baker signed into law legislation aimed at promoting energy diversity within the commonwealth. Highlights of House Bill No. 4568, An Act to Promote Energy Diversity, include the following:

  • The Department of Public Utilities is authorized to require electric distribution companies to include small hydroelectric facilities (2 MW or less) in their net metering programs.
  • Distribution companies are required by June 30, 2017 to “jointly and competitively solicit proposals for offshore wind energy generation.”  If the proposals are “reasonable,” the distribution companies are to enter into “cost-effective long-term contracts” to meet a schedule to procure approximately 1,600 MW of aggregate nameplate capacity by June 30, 2027.
  • Distribution companies are also required by April 1, 2017 to “jointly and competitively solicit proposals for clean energy generation” which is defined as hydroelectric generation and new Class I renewable portfolio standard eligible resources (e.g. solar, wind, geothermal, small hydropower).  If the proposals are “reasonable,” the distribution companies are to enter into “cost-effective long-term contracts for clean energy generation for an annual amount of electricity equal to approximately 9,450,000 megawatts-hours.”
  • The Massachusetts Development Finance Agency is directed to develop a “commercial sustainable energy program” and to issue property-assessed clean energy (PACE) bonds in order to facilitate the implementation of energy efficiency and renewable energy improvements on private commercial and industrial property.
  • The Department of Energy Resources is authorized to develop targets for electric companies to procure energy storage systems and to establish a carbon reduction research center to investigate, among other things, fuel cells, energy storage, and increasing the efficiency of fossil-based fuels.
  • A nuclear decommissioning citizens advisory panel will be convened to discuss issues related to the Pilgrim Nuclear Power Station’s decommissioning planning activities.  The panel is to hold quarterly public meetings starting on or about June 1, 2017.
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