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

This post was written by Jennifer Smokelin.

From the U.S. Environmental Protection Agency’s (USEPA’s) BACT guidance to recent rules finalized by USEPA, all signs appear a “go” for USEPA to give the nod to carbon capture and sequestration (CCS) as a control technology of greenhouse gas (GHG) emissions in the future. In the second “niche” article on the blog, this post takes a look at USEPA’s references in the BACT guidance to carbon sequestration and asks whether this portends CCS being listed in USEPA’s central data base of air pollution technology information known as the RACT/BACT/LAER Clearinghouse in the near future. At this point, the answer is definitely possibly.

Prior to the release of the BACT guidance, industry groups had worried that USEPA would require facilities to use costly CCS technology to trap carbon dioxide and store it underground, but the guidance does not go that far.

The guidance states that: “[w]hile CCS is a promising technology, EPA does not believe that at this time CCS will be a technically feasible [best available control technology, or BACT] option in certain cases.”" It adds that ”[a] permitting authority may conclude that CCS is not applicable to a particular source, and consequently not technically feasible, even if the type of equipment needed to accomplish the compression, capture, and storage of GHGs are determined to be generally available from commercial vendors.” The BACT Guidance also states that “there may be cases at present where the economics of CCS are more favorable (for example, where the captured CO2 could be readily sold for enhanced oil recovery)….

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This post was written by Eric McLaughlin.

California’s Department of Toxic Substances Control (DTSC) released a revised version of the Safer Consumer Product Alternatives Regulations (SCPA Regulations) for public comment on November 16, 2010. Once finalized, the SCPA Regulations will implement California’s Green Chemistry Initiative, a new program aimed at refocusing the regulation of chemicals used in consumer products. DTSC will accept comments on these regulations – which were revised in response to extensive comments the agency received on the previous draft published in September – until December 3, 2010. Comments may be submitted only concerning the revised portion of the SCPA Regulations and new documents that DTSC has added to the rulemaking file.

The revisions made to the current draft of the SCPA Regulations are substantial. Significant changes were made to clarify and streamline the regulations, including moving a number of provisions from the body of the regulations to the definitions section and eliminating other elements of the regulations altogether (e.g., the Guiding Principles and tiered alternatives analysis process). The resulting regulations are much easier to understand and apply, and are 30 pages shorter than the previous iteration.
 

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This post was written by Nicolle Bagnell and Ariel Nieland.

On November 18, 2010, the Pennsylvania Independent Regulatory Review Commission (IRRC) voted unanimously in favor of imposing more stringent standards on construction of natural gas wells. Some of the key features of the proposed regulations include a provision requiring operators to implement a pressure barrier plan to minimize well control events, a provision requiring operators to condition the wellbore to ensure an adequate bond between the cement, casing and the formation, a requirement for the use of centralizers to ensure casings are properly positioned in the wellbore, and a provision improving the quality of the cement placed in the casing to protect fresh groundwater. In drafting the regulations, the Pennsylvania Department of Environmental Protection relied on input and comments from the public solicited as part of a series of public meetings held by the Environmental Quality Board this summer. The new gas well regulations have already been approved by the House and Senate Environmental Resources and Energy committees, and must now go before the Office of the Attorney General for final review and approval.

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This post was written by David Wagner.

Earlier this month, the International Energy Agency released the Carbon Capture and Storage Model Regulatory Framework. Reed Smith environmental attorneys Dave Wagner, Jennifer Smokelin, Steve Nolan and Ariel Nieland were core contributors to the development and drafting of the Model Regulatory Framework. The Model Framework aims to assist national and regional development of regulatory frameworks for carbon capture and storage (CCS) by harnessing the regulatory work of early-movers such as Australia, Europe and the United States. Building on the progress to date, the Model Framework proposes key principles for addressing a broad range of regulatory issues associated with capturing, transporting and storing carbon dioxide.

Significant analysis by the International Energy Agency indicates that CCS will play a vital role in worldwide, least-cost efforts to limit global warming, contributing around one-fifth of required emissions reductions in 2050. For CCS to reach this potential, rapid deployment of CCS technology is necessary. The International Energy Agency estimates that about 100 CCS projects must be implemented by 2020 and over 3,000 by 2050. Such rapid deployment raises many regulatory issues that must be considered before this scale of deployment can occur.
 

Altogether, 29 critical regulatory issues for CCS are addressed in the Model Framework, which provides an explanation of each issue and examples of how the issue has been addressed in existing legislation. The Model Framework also provides model legislative text for countries to consult in developing their own national carbon capture and storage regulatory framework. It is also structured to provide guidance to authorities around the world, operating in diverse legal and regulatory environments and with varying levels of existing legislation. Obviously, if you have an interest or want further information, you can contact us for some "inside" perspective.

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This post was written by Jennifer Smokelin.

The United Nations Climate Change Conference (UNFCCC), which will be held in Cancun, Mexico, from November 29 to December 10, 2010, encompasses the sixteenth Conference of the Parties (COP) and the sixth Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP). It sounds like a big deal but you don’t hear much about the COP in the media these days. Does anyone recall the frenzy about the COP this time last year? We certainly remember the speculation regarding which heads of state would be attending and what agreements would be reached. It felt like the Super Bowl of COPs. This year feels a lot different. The COP is meeting with far less hype and we wonder whether the conference parties learned their lesson from last year and decided to abide by the adage “under promise and over deliver”.
 

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This post was written by Jennifer Smokelin.

As the first of several “niche” articles analyzing the U.S. Environmental Protection Agency’s (USEPA) “Prevention of Significant Deterioration (PSD) and Title V Permitting Guidance for Greenhouse Gases” (BACT guidance), this blog post takes a look at a specific Title V issue: Title V permitting for sources with pending Title V renewal applications not issued in draft before January 2, 2011 (“Renewal Sources”). 

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This post was written by Dan Dixon.

In an effort to maximize local economic growth related to Marcellus Shale, last week 18 senators from the Pennsylvania State Senate introduced a new bill titled the "Marcellus Shale Job Creation Tax Credit" that, if enacted, would provide a "tax credit" of $2,500 per new job created for a Pennsylvania resident. As introduced, the bill requires that the jobs created must pay 350% of the Federal Minimum wage, include benefits, and be "family sustaining." A company taking the credit must express intent to maintain operations in Pennsylvania for a period of five years (after its certified to receive the credits). Preference will be given to companies employing residents who meet certain classifications (terminated due to plant closure, geographically difficult to employ, etc.).

Under the current version of the proposed legislation, the Department of Revenue would be permitted to award over $24M in total tax credits per year. These credits could be applied to a company's Pennsylvania income or franchise tax (up to 100% of the liability). Importantly, the credits could be transferred to an affiliated entity and applied to the affiliates Pennsylvania income or franchise tax liability. We will provide additional posts as this legislation progresses through the Senate and House.

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This post was written by Jennifer Smokelin.

The U.S. Environmental Protection Agency (USEPA) recently released the final piece of the greenhouse gas (GHG) permitting puzzle, a guidance entitled “PSD and Title V Permitting Guidance for Greenhouse Gases.” With the January 2011 implementation of the Tailoring Rule requiring large industrial sources to obtain permits for GHG emissions, this guidance aims to assist permitting authorities in enacting GHG permitting programs. In particular, the 97-page document addresses Prevention of Significant Deterioration (PSD) applicability to GHG and BACT (Best Available Control Technology), and other PSD requirements. The guidance also discusses Title V applicability requirements and GHGs, as well as permitting requirements for Title V permits with regard to GHGs.

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This post was written by Jennifer Smokelin.

Investment in energy infrastructure is in turmoil. Consider that large energy infrastructure projects are big investments. Ever since scientific evidence of climate change has called into question the use of coal-fired generators, how to build projects and finance these projects has been a challenge. Large utilities and the banking industry were seeking certainty in regulation – for no other reason than to have a clear baseline for investment purposes to evaluate what made sense (and cents) for a long term investment. And in the last Congress, the banking industry thought it would get some clarity. However, with the election earlier this month, it is clear the banking industry – indeed, all industry – now faces increasing uncertainty in federal climate change regulation and a patchwork of state and regional approaches. This means investment decisions in energy infrastructure, renewable energy, and other large-scale energy projects are in turmoil.
 

Last week, a report written by/for investment advisors for Deutsche Bank (“DB”) identified a by-product of climate change regulatory uncertainty and documented the trends in domestic climate change litigation. The report, titled "Growth of U.S. Climate Change Litigation: Trends and Consequences” concludes that US climate-related litigation is likely to triple this year over the suits filed last year. This spike in climate change litigation appears to be caused by lack of a clear federal policy, i.e., if environmental groups can’t get Congress to act, they will try to force policy change through the courts. Why is DB concerned? And why should any bank making an investment decision in energy infrastructure closely follow the trends in climate change litigation and regulation? Because without a clear federal policy, climate change policy may be dictated by the courts similar to the way tobacco litigation established US tobacco policy.
 

In a court-dictated climate policy era, banks need to understand the trends in litigation (and dictates of the courts) to make clear investment decisions, especially with respect to profitable projects for their investors. Uncertainty or not, investment in energy infrastructure will go on; the demands of our fuel-hungry society demand it. But the banks that will profit – and “weather the energy climate” – are the ones with the best understanding of litigation and regulation trends so that they can make the best investing decision for their investors – and thus adequately discharge their fiduciary duty to investors.
 

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This post was written by Stéphane Illouz.

In France, the “Grenelle II” law (known in English as “The French Green New Deal”) has significantly changed the regulatory approach related to onshore wind turbines. Before this law was passed in July 2010, requirements for onshore wind turbines were fairly straightforward. For the installation of an onshore wind turbine, owners had to obtain a building permit. For wind turbines higher than 50 meters, owners had to complete an impact report (“étude d’impact”) and a public enquiry (“enquête publique”).

Under Grenelle II, the requirements for wind turbines higher than 50 meters have increased. Onshore wind turbines of this size are now also subject to a specific classified installation process (“Installations Classées pour la Protection de l’Environnement” or “ICPE”). This issue was the subject of significant debate in the French Parliament because the ICPE process is usually only applicable to polluting or dangerous activities -- activities typically not associated with wind turbine installation.

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This post was written by Catrin Phillips and Siobhan Hayes.

Over the last two years, much has been written – on this blog and elsewhere – about the UK Government’s Carbon Reduction Commitment (Energy Efficiency) Scheme (CRC). As a result, the property sector is largely aware of the complications around reporting carbon emissions to comply with the CRC and charging the costs of allowances to those consuming the fuel. But things are changing… The UK Government’s comprehensive spending review last week has actually taken a positive step to simplify the CRC while undoubtedly increasing the cost of the CRC for all participants.
 

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