Climate Change Legislation is Dead. Long Live Climate Change Regulation!

This post was written by Larry Demase, Jennifer Smokelin and David Wagner.

Although an energy bill is now on the Senate floor, it is limited to energy conservation and issues related to the oil spill. It does not include a price on carbon in the form of cap and trade for any sector, and we are unlikely to see comprehensive climate legislation in September or later this year. So now what? Congressional failure to act now or later in 2010 means that, on the federal level, the U.S. Environmental Protection Agency ("USEPA") will step in and use its authority under the Clean Air Act to regulate greenhouse gases ("GHGs") from the utility, transportation and industrial sectors, and there is a small possibility that such regulation by USEPA will include a cap-and-trade program. To be sure, USEPA has already taken several steps to regulate GHGs. 

The following post discusses what will likely come out of Congress and USEPA's ongoing efforts to enact measures that regulate GHGs.

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Stakeholders Speak Out to USEPA on Hydraulic Fracturing

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

Reed Smith joined an audience of 1,200 attendees at last night's "Opportunity for Stakeholder Input on Criteria for Selecting Case Studies for Consideration in USEPA's Hydraulic Fracturing Research Study" meeting in Southpointe, PA, just outside of Pittsburgh. The standing-room only event marked the largest turnout yet in this series of public hearings sponsored by the U.S. Environmental Protection Agency (USEPA). Approximately 600 people attended the first hearing in Fort Worth, Texas on July 8, while nearly 350 attended in Denver, CO on July 13. The last hearing in the series of four will take place in Binghamton, NY on August 12.

USEPA has explained that the purpose of the hearings is to solicit input from community and industry stakeholders on the design of USEPA's upcoming study of the potential impact of hydraulic fracturing ("hydro-fracking")­—which involves pumping large volumes of water mixed with frac fluid and sand into geologic formations to extract natural gas—on groundwater and drinking water. To facilitate this goal, USEPA welcomed members of the community to register for two-minute slots of speaking time during which they could address their thoughts on the scope and design of the study, as well as on the potential costs and benefits posed by Marcellus Shale natural gas production in Pennsylvania.

It became clear from the comments of the 130 or so speakers that public concern over the potential adverse environmental and health impacts of hydro-fracking has reached fever pitch. Some concerned community members advocated for a moratorium to be placed on all Pennsylvania natural gas drilling, similar to the one currently in effect in New York state, until USEPA completes its hydro-fracking study (expected sometime in late 2012). Industry supporters expressed fears that over-regulation could chill the significant increases in job opportunities and government revenue expected in Pennsylvania as a result of Marcellus Shale natural gas development and production.

According to USEPA, the study is scheduled to begin in early 2011, with preliminary study results expected in 2012. In addition to conducting the series of four public hearings, USEPA is also soliciting comments from the public via email at hydraulic.fracturing@epa.gov on the following inquiries: (1) where should USEPA prioritize its efforts?; (2) where are gaps in current knowledge?; (3) is there data and information already in existence that USEPA should be aware of?; and (4) are there potential candidate sites or case studies that would be useful for the study?

Pennsylvania Regulators Amend Public Meeting Schedule for Proposed Regulations for Casing and Cementing Wells

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

On July 21, 2010, Pennsylvania's Environmental Quality Board (EQB) amended the public meeting schedule for proposed regulations that aim to improve the safety of state oil and gas wells and protect the state’s water resources from contamination. According to the EQB's press release, the public meeting schedule is as follows:

  • July 21, 2010 - 7:00 p.m. - Lycoming College, Helm Science Center Bldg., Rm G-11, 700 College Place, Williamsport
  • July 22, 2010 - 7:00 p.m. - DEP Northwest Regional Office, 1st Floor Conference Rm, 230 Chestnut Street, Meadville
  • July 22, 2010 - 7:00 p.m. - DEP Southwest Regional Office, Waterfront Conf. Rm A & B, 400 Waterfront Dr., Pittsburgh
  • July 26, 2010 - 7:00 p.m. - DEP Southwest Regional Office, Waterfront Conf. Rm A & B, 400 Waterfront Dr., Pittsburgh

Pennsylvania Proposes Oil & Gas Well Casing and Cementing Rules

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

On July 10, 2010, the Pennsylvania Environmental Quality Board (EQB) published its proposed rulemaking measures to update existing state requirements for drilling, casing, cementing, testing, monitoring and plugging of oil and gas wells. The proposed rulemaking, originally adopted by the EQB in May, is now open for public comment until August 9, 2010. Once the period for public comment is over, the proposal will go before the Pennsylvania Independent Regulatory Review Commission for review and final publication.

According to the EQB, a large portion of the updates contained in the proposal are already employed as part of best management practices among operators. However, the new regulations are said to further decrease any risk of gas migration from well sites to neighboring water supplies. The proposed rulemaking was prompted, in part, by public concern over the potential impact that the increasing number of Marcellus Shale wells could have on groundwater and drinking water supplies. Although the Pennsylvania Department of Environmental Protection's review of current well site construction and operation practices revealed that "many, if not all, Marcellus well operators met or exceeded the current well casing and cementing regulations[,] . . . the current regulations were not specific enough" in detailing guidelines for proper well construction or requirements for operators to respond to complaints over gas migration. The current updates would provide for more specificity in these areas, as well as establish a requirement that well operators conduct quarterly inspections of the structural integrity of all wells in operation. 

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Follow-up on Reed Smith's Quarterly Climate Change Report

This post was written by David Wagner.

If you missed Reed Smith's Quarterly Report on Climate Change, feel free to listen to an audio recording of the event. In addition, the slideshow presentation is available here. The report covered a lot of information and featured:

  • A status report on Congressional action on comprehensive climate regulation;
  • A summary of issues regarding the GHG cap-and-trade scheme under AB 32 in California;
  • An overview of the legal issues related to carbon capture and storage; and
  • A discussion of offset projects in the United States.

 

Pennsylvania PUC Issues Proposed Rulemaking on Pipeline Safety

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

The Pennsylvania Public Utility Commission issued a proposed rulemaking today that adopts applicable federal regulations and brings its safety regulations in line with the Federal Pipeline Safety Program. The proposed amendment will increase the PUC's enforcement and safety capabilities in regulating hazardous materials and liquid fuels. Public comments will be accepted for 30 days after publication of the proposed changes in the Pennsylvania Bulletin.

 

USEPA Proposes Rule to Reduce Air Emissions from Utilities in the Eastern and Midwestern United States

This post was written by Larry Demase and Steve Nolan.

Last week, the U.S. Environmental Protection Agency proposed the Transport Rule to reduce sulfur dioxide and nitrogen oxide emissions from utilities in 31 eastern and midwestern states and in the District of Columbia. The proposed rule is in response to a 2008 court decision by the U.S. Court of Appeals for the D.C. Circuit, which vacated USEPA’s 2005 Clean Air Interstate Rule. In this Reed Smith client alert, we summarize the new rule and highlight issues for which USEPA is soliciting public comments.

U.S. General Accounting Office Provides Recommendations to USEPA on the Regulation of Nanomaterials

This post was written by David Wagner.

Underscoring the U.S. Environmental Protection Agency (USEPA) intent to issue rules regulating nanomaterials this year, the U.S. Government Accountability Office (GAO) raised some concerns and offered remedies in its report issued late last month titled, “Nanotechnology: Nanomaterials Are Widely Used in Commerce, but EPA Faces Challenges in Regulating Risk”.

In the report, GAO (an investigative arm of the U.S. Congress) stated its concerns that products with nanomaterials may be entering the market without USEPA review of all available information on their potential risk. Moreover, USEPA faces challenges in effectively regulating nanomaterials that may be released in air, water, and waste because it lacks the technology to monitor and characterize these materials or the relevant statutes include volume-based regulatory thresholds that may be too high to effectively regulate the production and disposal of nanomaterials.

Before offering recommendations, the GAO report discussed the growing world market for products that contain nanomaterials, which is expected to reach $2.6 trillion by 2015. The report identified a variety of products that currently incorporate nanomaterials already available in commerce across the following eight sectors: automotive; defense and aerospace; electronics and computers; energy and environment; food and agriculture; housing and construction; medical and pharmaceutical; and personal care, cosmetics, and other consumer products. Within each of these sectors, GAO also identified a wide variety of other uses that are currently under development and are expected to be available in the future. According to GAO, the extent to which nanomaterials present a risk to human health and the environment “depends on a combination of the toxicity of specific nanomaterials and the route and level of exposure to these materials.”

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Canada to Develop Carbon Capture and Storage Standard

This post was written by David Wagner.

Seeking to gain public and regulator confidence in carbon capture and storage (CCS), in late June two Canadian standards organizations announced plans to develop the first industry-wide standard for the underground storage of captured carbon emissions. CSA Standards, a certification firm, and the International Performance Assessment Centre for Geologic Storage of Carbon Dioxide will work together to develop a CCS standard. The two groups said that the completed standard with technical and safety guidelines will be submitted to the Standards Council of Canada for recognition, and would be the world's first formally recognized CCS standard for underground storage. CSA Standards said that it hoped the new standard would also be used as the basis for an international standard endorsed through the International Organization for Standardization (ISO).

CCS technology can reduce carbon dioxide emissions from power plants and carbon emission-intensive industries, and a formally recognized national or international standard will work to improve public confidence in the safety of the long term storage of carbon dioxide. In particular, a carbon dioxide storage standard would help to ensure risks are identified and then addressed. A standard should also remain flexible to address site-specific characteristics and improvements, especially given that technical CCS expertise is still evolving.