Last Thursday, the Environmental Protection Agency released its proposed rule for the 2013 Renewable Fuel Standard (“RFS2”) volume obligations. Every year the EPA is required to determine and publish the annual volume requirements for each class of renewable fuel that obligated parties will have to comply with for the upcoming year under the RFS2 program. The volumes required under the proposed rule for 2013 are as follows (generally in ethanol equivalent volume): 14 million gallons of cellulosic biofuel, 1.28 billion gallons of biomass-based diesel (actual volume), 2.75 billion gallons of advanced biofuel, and 16.55 billion gallons of renewable fuel. As always the categories are nested and the advanced biofuel volume includes the volumes set for the cellulosic and biomass-based diesel categories. The renewable fuel category accounts for all renewable fuel including traditional corn starch ethanol.
Three of the four categories are consistent with the volumes set forth by statute. The volume for cellulosic biofuel, however, is set by this rule because it must be the lesser of the statutory volume and EPA’s projection of industry production for any given year. As with each ruling prior to this one under the program, EPA set a dramatically lower cellulosic biofuel volume than the statutory volume based on its assessment of the industry’s status. Rather than 1 billion gallons as would otherwise be required by statute, EPA is requiring obligated parties to account for 14 million gallons of cellulosic fuel. Despite the dramatic reduction from the statutory requirement, this is significant because it is an increase over the 2012 standard of 10.45 million gallons that has been the subject of considerable recent controversy.Continue Reading...
ITC Confirms Anti-Competitive Trade Practices Finding -- Major Duties Imposed on Chinese Solar Imports
The U.S. International Trade Commission (ITC) today affirmed its preliminary ruling that Chinese trade practices were harming the U.S. solar technology industry. The ruling stems from the submission of trade cases by domestic solar-industry companies on October 19, 2011, that argued the Chinese government was using improper subsidies to underwrite its solar industry export campaign and dumping products at artificially low prices in order to gain U.S. market share.
The ITC ruling means that a series of duties will be imposed on Chinese solar products. Under a previous U.S. Department of Commerce ruling, the duties will consist of 31.73 percent on imports of solar photovoltaic cells and panels from Suntech, 18.32 percent from Trina Solar, 25.96 percent from other companies that had requested but not received individual duty determinations and 249.96 percent from all other Chinese producers, including those controlled by the Chinese government. In addition, the Commerce Department ruling called for anti-subsidy duties of 14.78 percent for imports made by Suntech, 15.97 percent Trina Solar and 15.24 percent for all other Chinese manufacturers.
The Commerce department ruling did not include photovoltaic cells produced in other countries and assembled in China within its scope. Some domestic solar companies have announced they will seek separate enforcement actions for these products, following the ITC’s harmful trade practices finding announced today.
The deadline for public comments on petitions seeking a waiver of the Renewable Fuel Standard (RFS) expired last night on October 11, 2012. The Governors of Arkansas and North Carolina had submitted separate requests, in letters dated August 13, 2012 and August 14, 2012, asking for a waiver of RFS volume requirements. Under Section 211(o)(7)(A) of the Clean Air Act, the Administrator of the EPA is permitted to waive national volume requirements of the RFS in whole or in part if implementation of those requirements would severely harm the economy or environment of a state, a region, or the United States, or if the Administrator determines there is an inadequate domestic supply of renewable fuel. Such a waiver may either be triggered through petition by one or more States, a party subject to RFS program requirements, or at the Administrator’s own motion. If a waiver is granted, it can last no longer than one year, but may be renewed by the Administrator after consultation with the Secretary of Agriculture and the Secretary of Energy.Continue Reading...
In a decision released this morning, the DC Circuit rejected a challenge to the introduction of E15, a gasoline blended with 15 percent ethanol, under an EPA waiver grant. Currently, the national gasoline supply consists largely of E10, a 10 percent ethanol/gasoline blend. With fuel manufacturers confronting mandatory annual increases of renewable fuels under the Renewable Fuel Standard (RFS), Growth Energy, a trade association representing the ethanol industry, had sought an EPA waiver for a new 15 percent ethanol/gasoline blend. The EPA provided partial waivers (1 and 2), under the Clean Air Act for the E15 blend, restricting the fuel’s use to light duty motor vehicles and engines from model-year 2001 and newer. Three sets of industry groups representing engine manufacturers, food producers and petroleum suppliers then sued, challenging the EPA’s waivers.
In a 2-1 decision, the court declined to make a decision on the merits, finding that the petitioners lacked standing to bring the action. In a strongly worded dissent, Circuit Judge Brett Kavanaugh disagreed. Kavanaugh then addressed the merits of the case, finding they were “not close.” He concluded that in granting the E15 partial waiver the “EPA ran roughshod over the relevant statutory limits.”
Where We Go From Here
The decision preserves flexibility for implementing the RFS renewable fuels mandates – for now. However, the lack of a decision on the merits means the EPA waiver process remains vulnerable to judicial challenge. In the meantime, the debate over corn-based ethanol fuel mandates may be shifting to Congress, as predictions for historically low corn crop yields continue to accumulate.
The Electric Power Research Institute (“EPRI”) recently released the smart grid white paper: “Needed: A Grid Operating System to Facilitate Grid Transformation.” The white paper dissects the first two distinct phases in grid operating systems and then calls for the creation of the 3rd. In order to support the “tectonic changes” already happening in the power system, EPRI offers to help fund, facilitate and catalyze the development of the architecture and functional specifications for Grid 3.0. Without this development, EPRI argues, “the full value of a lot of individual technologies like electric vehicles, electricity energy storage, demand response, distributed resources, and large central station renewables such as wind and solar will not be fully realized.”Continue Reading...
We are pleased to announce for our Chinese readers the publication of a new Chinese translation of the Stoel Rives Law of Wind guide. Purposed for Chinese investors and companies exploring business opportunities in the U.S. wind energy market, the guide covers such issues as real property procedures, permitting requirements, EPC agreements, project finance, tax, interconnection, transmission and power purchase negotiations, labor management, U.S. Securities regulations and U.S. Foreign Corrupt Practices Act compliance. The translation was prepared in cooperation with our friends at the U.S.-China Energy Cooperation Program (“ECP”) Wind Power Working Group, the only non-governmental organization with bi-lateral government recognition in the U.S.-China sustainable energy sector.
Download a copy (registration required)
A group of western utility executives, transmission officials, and regulatory analysts are convening in Portland, Oregon next week to discuss the creation of a western Energy Imbalance Market (“EIM”). The EIM is part of an Efficient Dispatch Toolkit (“EDT”) proposed by a WECC subcommittee and the Western Interstate Energy Board (“WIEB”) that would include: (1) the EIM to supply energy imbalance service and congestion management, and (2) an Enhanced Curtailment Calculator (“ECC”) to manage power flow impacts across Balancing Authority (“BA”) seams. As a point of reference, the Southwestern Power Pool launched a similar “Energy Imbalance Service” in 2007.
Why: Renewable energy capacity in the West is expected to grow from roughly 13,000 MW today to 70,000 MW by 2020 as the result of state renewable energy requirements. Current energy balancing practices are insufficient to meet the challenges of the anticipated variable generation increases in the Western Interconnection, according to a white paper prepared by WIEB staff. Current bilateral transmission and scheduling practices do not, for instance, make use of remote balancing resources in the Western Interconnection and the EIM could help make more efficient use of generating resources located throughout its footprint.Continue Reading...
The Oregon Department of Fish and Wildlife (“ODFW”) posted the final draft rules and draft conservation strategy related to the greater sage-grouse. After years of negotiation and numerous public meetings on the ODFW’s approach, the final drafts are open for public comment. On April 22 they will be presented to the Fish and Wildlife Commission for consideration for adoption.
In March of last year the US Fish and Wildlife Service (“USFWS”) determined that protection of the greater sage-grouse was warranted under the federal Endangered Species Act (“ESA”) but was precluded from listing by the USFWS’s need to take action on species facing more immediate or severe threats. The species is now a candidate for listing, but it is uncertain if or when a formal ESA listing may occur. Oregon, through ODFW’s approach to sage-grouse conservation, joins other western states (e.g., Wyoming) in taking preventative state action, at least in part, to preclude the need for an eventual federal listing.
Both the USFWS determination and the ODFW’s conservation strategy identify energy, and renewable energy development specifically, as posing threats to the specie. The ODFW’s conservation strategy points out that there is great potential for geo-thermal, solar and wind energy in most sage-grouse regions in Oregon, but the same windswept ridges that make for great wind facility siting, for example, may also be important sources of accessible winter forage for sage-grouse.
Among other things, the draft rule would formally adopt the ODFW’s Core Area Approach to Conservation and directs the ODFW to maintain maps of sage-grouse core areas. The rule stops short of directly equating sage-grouse core areas with habitat categories under the Fish and Wildlife Habitat Mitigation Policy. By referencing the ODFW’s conservation strategy, the rule instead outlines micro-siting guidance for development projects (e.g. a wind facility) proposed in identified core areas. As part of the siting process, the ODFW recommends that sage-grouse habitat in core areas be classified as “irreplaceable, essential habitat” and impacts on such Habitat Category I areas avoided. In past iterations of the core area maps, much of eastern Oregon, and southeastern Oregon in particular, was identified as being home to sage-grouse core areas.
The Federal Energy Regulatory Commission (FERC) recently issued an order rejecting a Common Facilities Agreement (CFA) under section 205 of the Federal Power Act (FPA) and related request for waiver from open access requirements. The CFA between Sky River and Windstar Energy involved a 9-mile, 230 kV generator tie-line in California known as the Wilderness Line. Sky River owns and operates a 77 MW wind facility and has an interest in the Wilderness Line along with several other Qualifying Facilities (QFs).
Windstar is developing a 60 MW wind facility for which it already has a generator interconnection agreement with SoCal Edison and the California ISO. Sky River entered into the CFA with Windstar to license a portion of Sky River’s interest in the Wilderness Line to enable the output from Windstar’s wind facility to reach the point of interconnection with SoCal Edison. In other words, the CFA served to support Windstar’s interconnection with SoCal Edison. Sky River sought approval of the CFA and the open access waivers on the basis that the gen-tie line is not an integrated component of the grid and was designed solely as an interconnection line.
FERC did not accept the CFA or the waiver from the open access transmission tariff (OATT) filing requirement. FERC determined that the CFA was an “attempt to govern transmission service for an unaffiliated third party over the Wilderness Line outside the context of an OATT, with all its attendant rights and obligations.” Further FERC noted that waiver of obligation to file an OATT applies only until such time as a request for transmission service is made and that any transmission over the Wilderness Line for non-owners must be made pursuant to an OATT.
Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells See Pre-publication Rule
The rule finalizes minimum federal requirements under the Safe Drinking Water Act for underground injection of carbon dioxide (CO2) for GS purposes. It establishes a new class of well, Class VI, and sets minimum technical criteria for projects. The guidance covers steps from permitting and site characterization to ongoing monitoring of the CO2 stream, injection wells and CO2 plume to well plugging, post-injection site care and site closure. All criteria are set for the purposes of protecting underground sources of drinking water (USDW) only. The rule covers owners and operators of new CO2 injection wells used for Class VI GS as well as those transitioning CO2 injection wells from Class I,II, or V to Class VI GS. Notably the final rule, as changed or clarified from the earlier proposed rule, provides for the following:
- Independent primacy exclusively for Class VI wells under subparagraph §145.1(i) of the final rule;
- Adaptive rulemaking whereby EPA will review the rulemaking every 6 years to make changes as necessary to incorporate new research, data and information about GS technologies;
- Reevaluation of the Area of Review (AoR) for GS projects every 5 years in order to address concerns about the inherent uncertainties in modeling CO2 movement and with emerging GS technology;
- Requirement that owners or operators use direct methods to monitor for pressure changes in the injection zone and to supplement with indirect, geophysical techniques; and
- Clarification of the requirements necessary to ensure financial resources are available to protect USDWs from endangerment over the long term.
The Final Rule will be published in the Federal Register. Information on the Final Rule and earlier actions can also be found at www.regulations.gov, under Docket ID No. EPA-HQ-OW-2008-0390.
Final Rule: Mandatory Reporting of Greenhouse Gases: Injection and Geologic Sequestration of Carbon Dioxide See Pre-publication Rule
EPA amended the Greenhouse Gas (GHG) Reporting Program, 40 CFR part 98, to cover GHG monitoring and reporting requirements for owners and operators of facilities conducting GS activities (subpart RR) and of any other facility conducting CO2 injection (subpart UU). The data collected under the GHG Reporting Program will inform EPA policy decisions under the Clean Air Act related to the use of CO2 capture and sequestration (CCS) for mitigating GHG emissions. Owners or operators of GS facilities are required to develop and implement a site-specific Monitoring, Reporting and Verification (MRV) plan that would be used to verify the amount of CO2 sequestered and quantify any emissions leaks.
All UIC permitted Class VI wells will be covered under subpart RR. Enhanced oil and gas recovery (EOR) projects using CO2 will be covered under subpart UU, but could be covered by subpart RR if they choose to opt in or apply for a Class VI well permit. Opting into subpart RR would not, for example, require an existing EOR project with a UIC Class II well permit to obtain a Classs VI permit.
The EPA approval process for the purposes of GHG reporting and verification is separate from the UIC permitting process, and the GHG reporting requirements were developed to minimize overlap with the UIC requirements. Despite the effort to avoid overlap, both programs require regular reporting on the quantity of CO2 injected (flow rate) but at different frequencies and specifications. There may also be overlap in monitoring for CO2 leakage to the surface, although the UIC purpose in doing so is to protect USDWs whereas the GHG program’s purpose is to assess the efficacy of GS as a climate change mitigation strategy. The GHG rule is drafted to build upon the UIC requirements and accept information obtained under the UIC program where feasible. Research and development projects meeting eligibility requirements are exempt from reporting under subpart RR.
The Final Rule will be published in the Federal Register. Information on the Final Rule and earlier actions can also be found at www.regulations.gov under Docket ID No. EPA-HQ-OAR-2009-0926.