Environmental Law ReSource : Environmental Lawyer & Attorney : Reed Smith Law Firm : Climate Change, Sustainability

This post was written by Siobhan Hayes and Indeg Kerr.

We wrote a variety of blog postings on the UK’s Carbon Reduction Commitment (Energy Efficiency) Scheme (‘CRC’) whilst the Government was consulting on the draft Regulations. A lot of the information must have seemed unimportant prior to April 2010 but now the CRC Energy Efficiency Scheme Order 2010 (‘CRC Order’) is in force and many businesses will need to evaluate whether, how and to what extent they must comply with the CRC. 

The CRC is aimed at organisations which are not energy intensive and will cover many sectors including offices, retailers and hotels. The CRC affects overseas companies that do business in the UK and applies whether or not they do so using UK subsidiaries. Private equity investors have to determine how to manage their CRC liabilities.

This posting covers how to determine whether the first phase of the CRC Order is going to apply to your business and provides pointers on what to do next.

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This post was written by Phil Lookadoo and Jennifer Smokelin.

The future of greenhouse gas (GHG) regulation in the United States, as well as the future mix of electric power generation sources, is linked to the fate of climate and energy legislation in Congress. With all eyes on the Senate recently released Kerry-Leiberman comprehensive climate and energy legislation and what by most accounts is its slim chances for passage, let’s consider the possibility that Congress will fail to pass climate or energy legislation.

If that is the case, this does not mean no regulation of greenhouse gases and no energy reform. It simply moves the discussion to another government branch, namely, the Executive Branch, and in particular the U.S. Environmental Protection Agency (USEPA) and the Federal Energy Regulatory Commission (FERC). In other words, if Congressional climate and energy legislation fails to pass, executive branch initiatives gain in importance, and these initiatives will proceed apace regardless of Congressional inaction.

A Shift to USEPA Regulation of GHGs

USEPA can be expected to move forward with regard to regulating GHGs from stationary sources. On December 7, 2009, in compliance with the US Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), USEPA issued its Endangerment Finding, opening the door to USEPA regulation of GHGs under the existing Clean Air Act (CAA). Although the Endangerment Finding is currently being challenged in the Federal Circuit, challenges to the Endangerment Finding will not likely impede further EPA action to regulate GHGs under the CAA. However, challenges to these USEPA further actions are likely.

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This post was written by Nicolle Snyder Bagnell and Ariel Nieland.

The Pennsylvania Environmental Quality Board approved two regulations this week to address concerns over the potential for Marcellus Shale fracking operations to lead to groundwater and drinking water contamination. The first measure aims to limit the amount of "total dissolved solid," a measure of combined chemical substances dissolved in water, allowed to reenter streams and other bodies of water by requiring operators to treat all "frac water" containing over a certain amount of the pollutant before releasing it. The second measure would impose a requirement on all new Marcellus Shale developments to have 150-foot "buffer zones" separating them from high-quality streams. These new measures are now en route to the environmental committees of the Pennsylvania House and Senate for further review. The Independent Regulatory Review Commission, along with environmental and gas industry officials will also have an opportunity to provide comments.

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This post was written by Ariel Nieland.

After much anticipation, Senators Joe Lieberman (I-Conn.) and John Kerry (D-Mass.) finally unveiled their comprehensive energy and climate bill, known as the American Power Act, in a press conference yesterday afternoon. The bill's release was delayed by several weeks after prior co-sponsor Senator Lindsey Graham (R-SC) withdrew his support following a dispute over unrelated immigration reform legislation. Below are some of the bill's key features:

• Aims to reduce greenhouse gas emissions by 17% from 2005 levels by 2020 and 83% by 2050, targeting heavy industry, power plants and transportation infrastructure.
• Removes disincentives for natural gas generation at merchant plants in order to level the power sector playing field, and plans to help guide state regulators by requiring public disclosure of chemicals used in natural gas production.
• Places a cap on carbon emissions for producers of more than 25,000 tons of carbon pollution annually, which includes approximately 7,500 U.S. companies. Producers with a mandatory cap may trade carbon credits in the primary market, while the secondary market will be open to all participants. Carbon credits would start at $12 per ton.
• Provides financial incentives for a variety of energy producers, including regulatory risk insurance and loan guarantees for a dozen new nuclear plants; $2 billion a year for coal technologies that can capture and store greenhouse gas emissions, such as carbon capture and storage; and $7 billion a year for improvements to transportation infrastructure and efficiency.
• Encourages offshore oil drilling while providing states with veto power over drilling in neighboring states along with the ability to opt out of any drilling within 75 miles of the state's own shoreline. States that oppose drilling could pass laws blocking the activity, while states that choose to drill may retain 37% of federal royalties raised.
• Preempts any state-operated cap-and-trade programs already in existence, and compensates states for any revenue lost as a result.
   

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This post was written by Nicolle Snyder Bagnell.

In a unanimous opinion authored by President Judge Leadbetter, the Commonwealth Court affirmed the Environmental Hearing Board's opinion last week in Foundation Coal Resources Corp. v. DEP, No. 619 C.D. 2009, ---A.2d --- (Pa. Commw. April 27, 2010), in a case involving objections filed by a coal owner to an oil and gas producer's natural gas well permit application. The Board had held that the coal company, Foundation, did not have standing to bring an objection under Section 202 of the Oil and Gas Act, which allows owners of "projected and platted but not yet operating" coal mines to object to the proposed location of a producer's well. The Commonwealth Court agreed that where a coal company owned the mine, but where the mine was not "projected and platted" it did not have standing to to make such an objection.

Foundation also challenged the Department of Environmental Protection's decision to issue permits to the gas producer without imposing five "special conditions" that the coal company had proposed. The Board had previously determined that the conditions were beyond the scope of the Department's authority to impose where they tried "to rewrite the Oil and Gas Act under the guise of necessary special conditions to ensure safety..." EHB's Adjudication at 54. The Commonwealth Court agreed, finding that while the Department has the authority to impose conditions "where it has been shown to be necessary for the safe operation of a particular mine, it has no obligation to do so where such necessity has not been shown."

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