EPA Announces "Endangerment" and "Cause or Contribute" Findings
Stoel Rives partner Tom Wood reports:
Minutes ago EPA announced its long awaited “endangerment” and “cause or contribute” findings in relation to six key greenhouse gases – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. While technically this announcement is of limited significance (applying only to motor vehicle emissions), the policy import of these determinations is tremendous.
In 2007, the U.S. Supreme Court held that greenhouse gases are air pollutants covered by the Clean Air Act in the Massachusetts v. EPA decision. This case arose in relation to EPA’s choice not to regulate carbon dioxide emissions from new motor vehicles. The Court held that EPA must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision.
Earlier this year EPA proposed to issue the two part finding required to commence regulation of greenhouse gas emissions from new motor vehicles. This required first a finding that greenhouse gas emissions endanger public health and welfare and a second finding that emissions from new motor vehicle engines cause or contribute to greenhouse gas air pollution. The comment period for these proposed findings ended June 23, 2009 and EPA received over 380,000 public comments. Today, Lisa Jackson (EPA Administrator) signed final findings that greenhouse gases endanger both the public health and the public welfare of current and future generations and that the combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas air pollution that endangers public health and welfare.
As a legal matter, today’s findings relate only to vehicle emissions. However, the precedent that they create will almost certainly result in substantial regulation for other source categories. It is no coincidence that this finding was announced on the first day of the Copenhagen talks on climate change. The Obama administration both wanted to show that some progress was being made in the U.S. and it wants to leverage this progress into further statutory or regulatory requirements.
Towards this goal, one of the more interesting things to come out of the determinations is the formal establishment of the new pollutant: “Well-Mixed Greenhouse Gases.” This term is now officially entered into EPA’s regulatory lexicon as a pollutant to be regulated. Well-Mixed Greenhouse Gases consists of the 6 Kyoto gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride) but introduces the grouping now as a regulatory unit. It is noteworthy that vehicles are not material sources of all of these greenhouse gases and so the use of this term should be seen as setting the stage for future regulation.
Also of interest is an EPA restatement in a footnote that at this time it does not consider greenhouse gases to be a regulated air pollutant. This is of tremendous significance to stationary sources of greenhouse gases as the moment that greenhouse gases become regulated, there is the potential argument that they are subject to Title V and major new source review permitting. At the risk of understating the issue, that would be a mess of biblical proportions.
For those wishing to read all 284 pages of the findings document, it can be found at: http://www.epa.gov/climatechange/endangerment/downloads/FinalFindings.pdf
The findings are not valid until 30 days after they are published in the Federal Register. Expect publication to occur later this month.
Governor Kulongoski Proposes Nine Bills to Promote Renewable Energy Projects, Energy and Fuel Efficiency
Oregon Governor Ted Kulongoski continues to take aggressive action in the green business realm. Having made renewable energy one of his budget priorities, Gov. Kulongoski filed nine bills under the climate change umbrella to be considered in the 2009 legislative session. According to Gov. Kulongoski, the bills will “build on our leadership in renewable energy that will create jobs and reduce greenhouse gas emissions.”
SB 80 would authorize Oregon’s participation in a regional cap-and-trade program. To flesh out the program details, SB 80 calls for the creation of the Oregon Climate Initiative Task Force, a citizen-led public process to help the Department of Environmental Quality craft the program’s administrative rules over a two-year period. The rules will then be presented to the 2011 legislature for consideration, with the program slated to go into effect in 2012.
Drawing from Germany’s success with a solar feed-in tariff program, HB 2121 seeks to promote solar energy in Oregon by creating a production incentive pilot program that will pay for the electricity produced by a solar project. The pilot program will evaluate whether production payments—as opposed to incentivizing capital expenditures—make investments in solar energy more affordable.
SB 79 is intended to give green buildings a boost by creating energy performance certificates that will function like vehicle miles-per-gallon ratings. This proposed bill charges the Oregon Department of Energy (“ODOE”) with creating an energy efficiency rating system to be adopted and implemented for new and existing residential buildings and commercial buildings of a certain size by 2011 and 2012, respectively. SB 79 also establishes a goal of net-zero emissions homes and buildings by 2030. To accomplish this, the bill calls for increased energy efficiency in commercial and residential building codes by 30 percent and 15 percent, respectively.
Pursuant to SB 101, ODOE and the Public Utility Commission would develop an emissions performance standard requiring new energy production sources to be at least as clean as natural gas.
HB 2186 would authorize the Environmental Quality Commission to develop and adopt a low-carbon fuel standard that will require fuel providers to reduce the average carbon intensity of fuels sold by 10 percent over time.
In addition to the feed-in tariff legislation, three bills would help fund energy efficiency and renewable energy projects. HB 2180 would create a Renewable Energy Fund, similar to the Cultural Trust program, that would provide up-front funding for small renewable energy projects. The bill would enable citizens to donate money into the fund and take a tax credit on the donation. To help finance energy efficiency projects, HB 2181 would give municipal and county governments bonding authority, enabling participating homeowners to pay for energy efficiency upgrades over time. SB 201 would authorize the creation of an “Energy Matchmakers” fund in the Department of Housing & Community Services. Relying in part on federal and private sector investments, the fund would be used to make houses of low-income families more energy efficient.
Finally, to help meet the Governor’s goal of 100 percent renewable electricity use for state government, SB 168 would clarify the authority to develop renewable energy projects in state buildings or on state lands.
