Source: http://climatelawyers.com/category/Carbon-Dioxide.aspx
Timestamp: 2019-04-23 16:50:25+00:00

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When one talks of pipelines in recent days one hears nearly an incessant buzz about Keystone XL, as if that is where the real action is. But it isn't, notwithstanding the histrionics over President Obama's veto of S.1, the Keystone XL Pipeline Approval Act. The real action lies not with an 850,000 barrel per day oil pipeline, but instead with the natural gas pipelines that are needed to supply the natural gas electricity generating plants that will be required to replace, in part, 103 gigawatts of coal powered generation. What are we talking about? Building Block 2 of EPA's Clean Power Plan posits the replacement of coal-fired generation with cleaner natural gas-fired plants. Natural gas plants are also part of the solution to compliance with the strict Mercury and Air Toxics Standards, which are also driving coal plants off the grid. But to get and keep those natural gas plants on-line, the natural gas needs to get there and to do that it needs a means of transportation, which for natural gas, means pipelines. How many miles of pipelines are needed? EPA concluded: "the power industry in aggregate can support higher gas consumption without the need for any major investments in pipeline infrastructure." But the Nation's reliability watchdog, the North American Reliability Corporation, politely disagrees. In its November 2014 review, Potential Reliability Impacts of EPA's Clean Power Plan, NERC noted EPA's position, but then commented: "there are a few critical areas that likely will need additional capital investments. As an example, current and planned pipeline infrastructures in Arizona and Nevada are inadequate for handling increased natural gas demand due to the CPP. Pipeline capacity in New England is currently constrained, and more pipeline capacity additions will be needed as more baseload coal units retire." And that was not the end of it. NERC concluded that more pipeline capacity was needed independent of Clean Power Plan retirements. Further, as should be obvious, pipeline construction will not occur in an instant. NERC points out that "it takes three to five years to plan, permit, sign contract capacity, finance, and build additional pipeline capacity." In other words, planning and permitting of new pipelines is required now if the EPA's initial 2020 compliance date is to be met. But as we reported in a recent post, States aren't even drafting their implementation plans, much less making determinations about what plants to shut down and where pipelines need to be built.Which suggests that we should ask the miles-of-pipeline-needed question again. We have not seen that number but NERC reports that, based on EPA's own estimates for plant retirements due to the Clean Power Plan and other regulatory requirements (primarily the Mercury and Air Toxics Standard), "the power industry will need to replace a total of 103 GW of retired coal resources by 2020, largely anticipated to be natural-gas-fired NGCC and CTs. We tried to compare 103 gigawatts to Keystone XL's 850,000 barrels of oil per day. We came up with a rather stunning number: the energy needed to replace the to-be-retired coal plants is almost 2000 times more than Keystone XL can deliver.* Which leads us back to the beginning of this post: the real action in pipeline permitting is going to be in natural gas. *A barrel of oil contains about 1700 kW-h of energy. So Keystone XL will deliver 850,000 bbl x 1700 kW-h or 1.445 x 10e9 W-h in one day. 103 GW of coal plants operating for 24 hours yields 2472 x 10e9 W-h.
Would an 80% premium steer you away from an energy source that was low-carbon, naturally abundant in the United States, not subject to the vicissitudes of weather, incapable of nuclear meltdown and accompanied by a well-established infrastructure? Suppose the premium was only 40%? Hearings last week before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigation explored that topic in connection with the development of carbon capture and storage technology. In prepared remarks Dr. Julio Friedmann, Deputy Assistant Secretary for Clean Coal with the Department of Energy, delivered an update on the status of CCS. Coal fuels approximately 40% of the nation's energy needs. "Because it is abundant, the clean and efficient use of coal is a key part of President Obama's all-of-the-above energy strategy." A central component of the President's program is the Clean Coal Research Program, which " is designed to enhance [the nation's] energy security and reduce environmental concerns over the future use of coal by developing a portfolio of cutting-edge clean coal technologies." To accomplish this the Department of Energy is focusing on research to capture carbon dioxide directly from the fuel stream (pre-combustion), from the stack gas (post-combustion) and from combustion in nearly pure oxygen (oxy-combustion, which yields nearly pure CO2 and water, which are easily separated). Dr. Friedmann went on to discuss the Regional Carbon Sequestration Partnerships, which are investigating the viability of CCS projects in a variety of circumstances. "Together, the Partnerships form a network of capability, knowledge, and infrastructure that will help enable geologic storage technology to play a role in the clean energy economy. They represent regions encompassing 97 percent of coal-fired CO2 emissions, 97 percent of industrial CO2 emissions, 96 percent of the total land mass, and essentially all the geologic storage sites that can potentially be available for geologic carbon storage.” Last, Dr. Friedmann addressed the commercialization of CCS. This has two components: the operation of CCS facilities, and the utilization of the captured CO2. The idea behind utilization in activities such as enhanced oil recovery and algae production is to "provide a technology bridge" which can smooth the " transition to the deployment of the large-scale, stand-alone geologic sequestration operations that will ultimately be needed to achieve the much larger emissions reductions required ..." As for those operations, Dr. Friedmann acknowledged dozens of projects, including 5 he listed by name, where CCS is being tested in commercial environments. But the real interest of the committee, at least as reported in the trade press, was in cost. As reported in Power and Power Engineering International, Dr. Friedman advised that implementing CCS "looks something like a 70% or 80% increase on the wholesale price of electricity." Second generation technologies could cut that in half. But half is still a 40% increase. Some might pull the plug on CCS right now. If it is going to raise the price by 40%, that is simply too much. To our mind, however, that is antediluvian thinking. Regulation of carbon dioxide emissions is already happening. Climate change is not taking a wait-and-see approach. Inexorably the earth warms, the oceans rise, the world of yesterday is not the world of tomorrow. CCS has a place at the energy banquet. Further, before turning off CCS, it is useful to consider the costs of the alternatives. The Energy Information Administration has calculated the "levelized" cost of various energy sources. "Levelized cost is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-kilowatthour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle." Two things relevant here come out of the EIA table. First, among dispatchable power (i.e., power that can respond when it is needed), with or without CCS, the most cost-effective power source is natural gas. Second, when non-dispatchable power is included, even with CCS, coal is more cost-effective than offshore wind and both photovoltaic and thermal solar. In other words, if the issue is solely cost, coal loses to natural gas and the effect of CCS does not change the outcome. If the issues are non-cost values, then coal with CCS comes to the table with green credentials, high power density, dispatchable output, good jobs, national security bona fides, and installed infrastructure, many of which coal's renewable competition cannot match.
2013 has drawn to a close; here is our take on the top six climate change legal stories in the last six months. 1. Climate Change Assessments - Blockbuster legislation may have been evaded once more but that has not stopped those in the trenches. Assessments of climate change risk are becoming more routine. For example, the September 2013 Record of Decision for the Gowanus Canal Superfund Site required assessment of “periods of high rainfall, including future rainfall increases that may result from climate change” in implementing certain aspects of the cleanup remedy. Another example was provided by the Department of Housing and Urban Development, which in November required in its second round of community block grants for disaster relief that prospective grantees consider in their Comprehensive Risk Analysis “a broad range of information and best available data, including forward-looking analyses of risks to infrastructure sectors from climate change and other hazards, such as the Northeast United States Regional Climate Trends and Scenarios from the U.S. National Climate Assessment, the Sea Level Rise Tool for Sandy Recovery, or comparable peer-reviewed information." Even the Nuclear Regulatory Commission looked at climate change with regard to its September draft generic environmental impact statement for the long-term continued storage of spent nuclear fuel. 2. Low Carbon Fuel Standards - In Rocky Mountain Farmers Union v. Corey the Ninth Circuit reversed several district court rulings limiting under the “dormant Commerce clause” the California Air Resources Board’s Low Carbon Fuel Standard. Although the Commerce clause of the Constitution, U.S. Const., art. I, § 8, cl. 3. “does not explicitly control the several states,” it "has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.’” Rocky Mountain at 31 (citation omitted). California’s Low Carbon Fuel Standard supported carbon dioxide emission reduction “by reducing the carbon intensity [i.e., the amount of carbon dioxide emitted per unit of energy produced] of transportation fuels that are burned in California.” It thus potentially burdened producers of ethanol in the Midwest and petroleum producers outside California, but that did not matter. Specifically, the court held that the LCFS was not facially impermissibly discriminatory in favor of ethanol, was not improperly extraterritorial and did not discriminate against petroleum fuels. Accordingly, California is still on its path to a reduction in the carbon intensity of its fuels by 10% by 2020, as mandated by the 2006 Global Warming Solutions Act. 3. The Cost of the Grid - On November 14, the Arizona Corporation Commission ruled that Arizona's net metering program should spread the cost of maintaining a reliable grid among all of Arizona Public Service's customers, including its rooftop solar customers. Up to that point rooftop solar customers were paid for the electricity they provided to the grid at retail rates, without any adjustment for the cost of the grid. The Commission concluded that this resulted in a "cost shift" from customers that were paying for the grid, to rooftop solar customers, who weren't. APS put on a good case demonstrating that rooftop solar customers were substantially benefitting from the grid by drawing power at night, during cloudy weather and during the periods of daylight when solar power production did not exceed the customer's needs. Many have criticized solar power as unfairly subsidized. In Arizona at least, one of those subsidies is being addressed. 4. New Carbon Dioxide Emission Standards - Following over 2.5 million comments, EPA rescinded its proposed rule governing carbon dioxide emissions from new coal-fired power plants. In its place it proposed on September 20 a rule setting CO2 emission standards for new large natural gas power plants (1,000 lbs/MW-hr), new small natural gas power plants (1,100 lbs/MW-hr), and new coal-fired power plants (1,100 lbs/MW-hr). From our perspective, the most significant facet of this new rule is that it actually will apply to plants that are being built. The withdrawn proposed rule only applied to new coal plants, which EPA concluded would not be built anyway before 2030. Equally significant, as pointed out in EPA’s news release on the proposal, is that “EPA has initiated outreach to a wide variety of stakeholders that will help inform the development of emission guidelines for existing power plants.” 5. The Fifth Assessment Report of the Intergovernmental Panel on Climate Change – The IPCC’s Working Group I issued The Physical Science Basis, its part of the Fifth Assessment Report. Working Groups II and III will publish in 2014. Among other things WG I concluded: "Unequivocal evidence from in situ observations and ice core records shows that the atmospheric concentrations of important greenhouse gases such as carbon dioxide, methane, and nitrous oxides have increased over the last few centuries." "The temperature measurements in the oceans show a continuing increase in the heat content of the oceans. Analyses based on measurements of the Earth's radiative budget suggest a small positive energy imbalance that serves to increase the global heat content of the Earth system. Observations from satellites and in situ measurements show a trend of significant reductions in the mass balance of most land ice masses and in Arctic sea ice. The ocean's uptake of carbon dioxide is having a significant effect on the chemistry of sea water." But if one remains skeptical, this consensus view of the world’s leading climate scientists should not cause one alarm, the climate change skeptics have not thrown in the towel. For example, according to one website, “climate science as proclaimed by the IPCC is a morass where what is scientific knowledge cannot be easily separated from speculation and what is wrong.” One won't find seafarers plying the Northern Sea Route in the skeptic camp, however. Russia logged a record year of transits in 2013 (over 200), up from just 4 in 2010. 6. Climate Change Liability Lawsuits - For the first time since 2005, when Comer v. Nationwide Mutual Insurance was filed, there is no climate change liability lawsuit on the docket anywhere. All have been defeated. Comer was the last to succumb, with its opportunity to file a petition for certiorari expiring on or about August 14. The IPCC Fifth Assessment establishes climate change is not going away, but we will have to wait to see if anyone is going to attempt to make someone pay for it.
The Congress may be dysfunctional but the administrative agencies are still moving the ball. A case in point is last week’s Christmas present from EPA to the carbon capture and storage community. On December 17 EPA issued its final rule, Hazardous Waste Management System: Conditional Exclusion for Carbon Dioxide (CO2) Streams in Geologic Sequestration Activities. In so doing, EPA provided “regulatory clarity to help facilitate the implementation of [CCS] technology in a safe and responsible way.” Carbon capture and storage is a technology with three distinct steps: 1. “the capture and compression of the CO2 stream from fossil-fuel power plants or other industrial sources,”2. ”[the transportation of] the CO2 stream (usually in pipelines as a supercritical fluid) to an on-site or off-site location,” and3. “inject[ion] underground for purposes of sequestration.” The new rule addressed the third element. The rule had been foreshadowed by a 2010 recommendation from the government’s Interagency Task Force on Carbon Capture and Storage. The Task Force, instituted by President Obama, “was charged with proposing a plan to overcome the barriers to the widespread, cost-effective deployment of CCS within ten years,” and in its report assessed the progress and impediments to developing carbon capture and storage as a viable technology to combat climate change. Among other things, the Task Force recommended that EPA ““propose a Resource Conservation and Recovery Act (RCRA) applicability rule for CO2 that is captured from an emission source for purposes of sequestration.” The goal was a final rule by 2011. EPA was only two years late, which in the current climate should probably be considered timely. Carbon dioxide is not a listed RCRA waste. Nevertheless there was concern that substances derived from the source materials and the capture process could render the carbon dioxide stream a characteristic RCRA hazardous waste. Accordingly, RCRA regulations potentially applied. EPA concluded, however, that RCRA regulation was not necessary because the stream being injected already was being regulated by Department of Transportation requirements for pipeline operations and EPA permitting requirements for underground injection in UIC Class VI injection wells. “[E]limination of exposure routes through these requirements, which are implemented through a [Safe Drinking Water Act] UIC permit, will ensure protection of human health and the environment such that RCRA subtitle C regulation would be duplicative and unnecessary.” “The UIC Class VI requirements are designed to ensure that the CO2 streams (which may include low concentrations of hazardous constituents) remain isolated in the injection zone and confined by confining zones in an appropriate, well-characterized geologic setting that is continuously monitored to ensure that the CO2 streams remain in the injection zone. “ Thus, advocates for CCS should be heartened that EPA has removed a potential impediment to deployment of CCS. But the realities of CCS implementation may make all this for naught. The Task Force report notes that ”the incremental costs of new coal-fired plants with CCS relative to new conventional coal-fired plants typically range from $60 to $95 per tonne of CO2 avoided.” With no federal program limiting CO2 emissions, the incentive to incur such costs is vanishingly small. EPA acknowledges this in its comments: “based upon current market conditions and the existing regulatory framework (i.e., lack of Federal legislation), it appears unlikely that there would be any significant expansion in CCS management for CO2 over the next several years.” Simply stated, lack of RCRA regulation is not going to be the trigger that unleashes a wave of CCS projects.
“Therefore, the Court declines to assert supplemental jurisdiction over the remaining state law claims which are dismissed without prejudice to their presentation in a state court action.” So ends the last analytical paragraph in Native Village of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863 (N.D. Cal. 2009). Thus, while plaintiffs’ federal common law carbon-dioxide-liability claims were extinguished on standing and political question grounds, state law claims could go forward should the plaintiffs choose to re-file. Then, the Supreme Court decided American Electric Power Co., Inc. v. Connecticut, 564 U.S. __ (2011), and held a set of different plaintiffs’ federal common law claims were displaced by the Clean Air Act. The Court specifically declined to rule on state law claims of the type at issue in Kivalina: “None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.” Last fall we relied on Bell v. Cheswick Generating Station, 903 F. Supp. 2d 314 (W.D. Pa. 2012), out of the Western District of Pennsylvania as support for the proposition that state law nuisance claims were futile – preemption by the Clean Air Act doomed such claims. The Third Circuit's recent review, while reversing the trial court, has not upended our conclusion. In Bell, 1500 neighbors of the 570 megawatt coal-fired Cheswick Generating Station operated by GenOn Power Midwest, L.P. became annoyed by ash and other contaminants allegedly settling on their property. And so they brought a class action under Pennsylvania state tort law. GenOn defended based on the comprehensive regulation of the Clean Air Act, which, it was asserted, preempted state law tort claims; the trial court agreed. On appeal, however, broad preemption by the Clean Air Act was not accepted. The Court of Appeals acknowledged the comprehensive program established by the Act. But it also recognized that Congress had specifically provided for a citizens suit provision, 42 U.S.C. § 7604, and that the Act contained two "savings" clauses. The first, the "citizen suit savings clause," provided: "Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any emission standard or limitation or to seek any other relief (including relief against the Administrator or a State agency)." 42 U.S.C. § 7604(e). The second, the "states' rights savings clause," stated: "Except as otherwise provided ... nothing in this chapter shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution ...." 42 U.S.C. § 7416. Read together, a more restrictive state law could be enforced in a citizen suit. This idea was consistent with the Cheswick Generating Station's permit: "Nothing in this permit shall be construed as impairing any right or remedy now existing or hereafter created in equity, common law or statutory law with respect to air pollution, nor shall any court be deprived of such jurisdiction for the reason that such air pollution constitutes a violation of this permit." Could a citizen suit successfully address the ill-placed ash and contaminants? The trial court said "no": “Based on the extensive and comprehensive regulations promulgated by the administrative bodies which govern air emissions from electrical generation facilities, the Court finds and rules that to permit the common law claims would be inconsistent with the dictates of the Clean Air Act.” But the Third Circuit said "yes." Its primary authority was the Supreme Court's 1987 decision in International Paper Co. v. Ouellette, 479 U.S. 481 (1987), a Clean Water Act case where Vermont plaintiffs asserted a (Vermont) common law nuisance suit in Vermont state court, where the pollution originated from a New York facility. To quote: The Ouellette Court found that the Clean Water Act's savings clauses clearly preserved some state law tort actions, but that the text of the clauses did not provide a definitive answer to the question of whether suits based on the law of the affected state were preempted. 479 U.S. at 492, 497. However, it found definitively that "nothing in the [Clean Water Act] bars aggrieved individuals from bringing a nuisance claim pursuant to the laws of the source State." Id. at 497 (emphasis in original). The Court reasoned that, "[b]y its terms the Clean Water Act allows States . . . to impose higher standards on their own point sources," and "this authority may include the right to impose higher common-law as well as higher statutory restrictions." Id. (internal citation omitted). The Court acknowledged that a source state's "nuisance law may impose separate standards and thus create some tension with the permit system," but explained that this "would not frustrate the goals of the Clean Water Act," because "a source only is required to look to a single additional authority, whose rules should be relatively predictable." Id. at 498-99. Thus, a suit by Vermont citizens would not be preempted if brought under the law of New York, the source state. But, GenOn argued, the Clean Water Act and its savings clauses are distinguishable from the Clean Air Act and its savings clauses. Not so said the court; "a textual comparison of the two savings clauses at issue demonstrates there is no meaningful difference between them." Accordingly, the Bell plaintiffs, who brought suit as “Pennsylvania residents under Pennsylvania law against a source of pollution located in Pennsylvania,” were not preempted. Now let’s return again to Kivalina. The concurring opinion laid out the rule: “Kivalina may pursue whatever remedies it may have under state law to the extent their claims are not preempted.” Bell limits those claims. Where Alaska natives sue in California a collection of greenhouse gas emitters from around the country, they would appear not to satisfy the requirement of emission-source-state-law-applies unless they are arguing that the nuisance rules of a score of jurisdictions must be considered. In which case, their case falls apart for improper joinder. And if they attempt to sue in multiple jurisdictions, they only amplify a fundamental flaw in their approach. Whomever they sue has only contributed a tiny fraction of global greenhouse gases in either volume or over time and thus could not be the proximate cause of the Kivalina plaintiffs’ loss. See Comer v Murphy Oil USA, Inc., 839 F. Supp. 2d 84 (S.D. Miss. 2012) ("[t]he assertion that the defendants’ emissions combined over a period of decades or centuries with other natural and man-made gases to cause or strengthen a hurricane and damage personal property is precisely the type of remote, improbable, and extraordinary occurrence that is excluded from liability.") Carbon dioxide liability plaintiffs may attempt to rely on the Third Circuit's decision in Bell to attempt to revive their litigation fortunes. From our perspective, such attempts still won't ring the bell.
How is the Government Shutdown the Same as Climate Change? How is it Different?
If you read this blog for tips on how to advance your practice, or protect your employer from surprises, or keep your job (which may be the same thing), stop reading. Today is for introspection and evaluation. We went off this weekend to western Maryland to go camping. Two things struck us. The 15 Mile Creek Campground on the C&O Canal run by the National Park Service was closed. The sign said "Due to Emergency Conditions." We suppose it is an emergency when the richest nation in the world puts itself in a position where people have to consider whether it will default. A colleague described the Congress as a rudderless ship manned by fourth graders. We could find no points of disagreement. Our own view is: you pay the mortgage. Period. The other point burned into our consciousness was the temperature: 88 degrees in October. We slept on top of the sleeping bag. We know that a hot night or two is indicative of nothing. Indeed, this was not even a record. But we are troubled by these anecdotal events, that in their totality match up with what the scientists are saying. And as those two thoughts came together, we wondered about how they would play on SNL or with Jay Leno or Conan. "How are the government shutdown and climate change the same?" "They both will end." "How are they different?" "Only one will end in our lifetime." We leave it to you to sort out which is which. If it helps, the last time the government shut down was in 1995-96; the last time carbon dioxide was at 400 ppm was 3 million years ago.

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