Secretary Jewell, of the Department of Interior, announced approval of two utility-scale solar projects located on the California-Nevada border. The Stateline Solar Project will be located in the Mojave Desert in San Bernardino County, California, and supply 300-megawatts of renewable energy to power 90,000 homes and create an estimated 400 jobs during constructions and 12 permanent jobs for ongoing operations. The second project, the Silver State South Solar Project located just across the border in Nevada, will provide 250-megawatts to power 80,000 homes and create 15 permanent jobs. Read More
On January 22nd, the Ninth Circuit Court of Appeals declined petitions to reconsider their decision upholding of enforceability of California’s Low Carbon Fuel Standard (LCFS). The petitions were spearheaded by various trade groups and energy groups, including the Rocky Mountain Farmers Union and the American Fuel and Petrochemical Manufacturers, who argued that the LCFS’s strict requirements — which seek to greatly reduce greenhouse gas emissions in the state — discriminate against businesses importing fuel into California from other states.
The LCFS requires all transportation-fuel selling businesses in California to reduce their fuels’ “carbon intensity” — a number calculated based upon a fuel’s greenhouse gas emissions resulting from its production, distribution and use — by ten percent by the year 2020. Those opposing the LCFS argued under the U.S. Constitution’s Commerce Clause that it discriminated against non-California businesses and their fuels because the carbon intensity calculation factors in the added emissions from transporting the out-of-state fuel to California. The consequently higher carbon intensity of out-of-state fuel made it more difficult for the businesses to adapt to the state’s emission lowering requirements.
The original complaint against the LCFS was filed in 2009, with a 2011 ruling determining the requirements were discriminatory and thus unconstitutional. That ruling was appealed by the California Air Resources Board, and the Ninth Circuit held last September that the LCFS’ requirement were in fact not discriminatory.
EPA’s proposed greenhouse gas emission standards for new power plants rest on the agency’s finding that carbon capture and sequestration (CCS) technologies are “achievable” and the “best system” for the reduction of carbon dioxide emissions from coal-fired power plants. This finding is highly debatable and will likely be the focal point of political and legal challenges to the regulations, if adopted. Read More
The Western states face two reciprocating and overarching problems in water resources policy. First, water is an increasingly scarce resource facing sharply competitive needs. Climate change is projected to put even more strain on water supplies. Second, most streams listed as water-quality impaired in the West are designated as such for issues related to the biological integrity of the waterway. The combination of aggressive human use of waters, manipulation of stream channels, and failure to control agricultural runoff has resulted in widespread degradation of aquatic habitat. Read More
On January 15, the Environmental Protection Agency (“EPA”) issued its final Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska, concluding that large-scale mining in the region poses risks to salmon, wildlife, and Native Alaska cultures. Read More
Last Thursday residents of Kanawha County reported a foul licorice odor in the air. State and local officials traced the smell to a leak from a 35,000-gallon above ground storage tank along the Elk River.The chemical had overflowed a containment area around the tank, then migrated over land and through the soil into the river. The leak happened about a mile upriver from the intake for a water supply. Read More
The U.S. Environmental Protection Agency (EPA) has re-proposed greenhouse gas (GHG) emission standards for new fossil-fuel power plants, exercising existing authority under section 111(b) of the Clean Air Act. Proposed rule re Electric Utility Generating Units. The key proposal is an emission standard for new coal-fired power plants that would require the incorporation of substantial (but not complete) capture and sequestration of carbon dioxide emissions. This proposal is controversial because the GHG emission standard is based on carbon capture and sequestration technology that is not widely deployed and has not been demonstrated to be cost-effective for electric generation, absent government subsidies and location-specific opportunities to use sequestered carbon dioxide to enhance oil production (with its attendant, unsequestered GHG emissions). Read More
The latest battle in the timber wars provides vividly contrasting views of the impact of last summer’s Rim fire, which burned across over 250,000 acres in the Stanislaus National Forest, Yosemite National Park and on private lands, at one point threatening the water supply for the San Francisco Bay Area as the fires reached toward Hetch Hetchy Reservoir. In early December, the Governor of California, in a letter to President Obama requesting a national disaster declaration by FEMA to allow access to federal funds for recovery efforts, cited a report by resource economists estimating the range of losses in environmental benefits from the fire at $100 million to $736 million, with another $102 million to $797 million in lost carbon storage. Indeed, in a news account the author of the report characterized those estimates as “very, very conservative,” adding that “spending a few million dollars on tree-thinning in the Stanislaus National Forest may appear more appetizing when the costs of fire damage to the environment are better known.” The report itself noted that the policy of managers in Yosemite in recent years to allow low intensity fires to burn, reducing understory vegetation was at least in part the cause of “beneficial low intensity slower moving ground fire” in areas near the Hetch Hetchy reservoir.
Then in a report issued this month, the Center for Biological Diversity argued that the high ecological value of burned forest land dictates rejection of Forest Service plans for timber-cutting on 70,000 acres of severely burned-over land in the Stanislaus National Forest scarred by the Rim fire. There is truth in both conclusions; forest fires are natural, and inevitable, occurrences, and nature has developed ways of dealing with their consequences, but in the “unnatural” conditions that often exist on federally-managed lands, a forest fire can cause severe and long-lasting damage to the environment. And, at least in the view of the State of California and the people living, working and recreating around Yosemite, CBD may have gone a bit too far with its conclusion that “[t]he Rim fire was not ecologically damaging, but rather biologically restorative.”
At least in this case the State is not using its ecological loss study to assert a massive damage claim. In connection the 2007 Moonlight Fire, the US used a broadly worded California state statute to support use of a similar analysis in litigation. The outgrowth of that claim and the magnitude of the resulting settlement was a modification of the statute to limit the measure of damages in forest fire claims.
However, the State’s effort to monetize the destruction resulting from forest fires does highlight another increasingly frequent tactic – the use of resource economists to provide estimates of the value of resource impacts to drive policymaking. Generally, there is no objective, reliable way to monetize the benefits provided by natural resources. Direct use of these methodologies for the purpose of damage calculation in litigation has appeared to be nearly dead after repeated court rejections (although contingent valuation is apparently being attempted in the Deepwater Horizon spill). However, agencies are relying on “willingness to pay” survey methodologies, such as contingent valuation, to develop a monetary measure of how the public values the resources. E.g., the National Park Service announced in November 2013 year that it was undertaking a survey of roughly 6400 people to determine what they would pay for improved visibility in national parks and wilderness areas, with the results to be used by EPA as it works with states to reduce regional haze.
In the case of the Rim fire, no new studies were undertaken. Instead, the economists used what is referred to as the “benefits transfer” approach, in which the economists simply identify existing studies – often “willingness to pay” surveys — by other researchers who had examined the value of similar habitats, and used those (widely varying) reported values to develop a range of minimum and maximum values for the habitat destroyed or injured by the fire. The use of “willingness to pay” surveys, either conducted specifically for a site, or through use of “benefits transfer,” to weigh policy options is less contentious than the use of those methodologies in judicial proceedings as evidence of actual resource damages.
However, be careful. An agency can justify very expensive regulatory schemes through use of a flawed “willingness to pay” analysis. And it can be expected that these types of surveys, developed initially only to assist agency policy cost/benefit analyses, will later return in a natural resource damage context as studies included in a plaintiff’s “benefits transfer” damage report.
The Federal Energy Regulatory Commission (FERC) and the Commodity Futures Trading Commission (CFTC) have entered into a long-overdue, congressionally mandated Memorandum of Understanding (MOU) to establish procedures to resolve conflicts between the agencies over their respective overlapping jurisdictions to police, respectively, physical energy markets (i.e., contracts for physical delivery) and financial energy markets (i.e., futures, swaps, and derivative contracts). While the MOU adopts inter-agency, non-public procedures for the two agencies to discuss how they might resolve their respective regulatory concerns on a case-by-case basis, the MOU does not establish legal criteria for determining the scope of either agency’s jurisdiction or the potentially overlapping reach of either agency’s enforcement authority. CFTC and FERC concurrently agreed to share non-public information relating to the markets within their jurisdiction that may be relevant to the other agency’s market surveillance and investigations into potential manipulation, fraud, or market power abuse. This means that it is likely that FERC will continue its aggressive investigations of allegedly manipulative and fraudulent schemes that involve coordinated trading of both physical and financial energy contracts. Read More
In October 2013, The California Public Utilities Commission (CPUC) responded to the exceptional growth in the state’s demand for solar power with an energy storage mandate – the first of its kind in the US – that requires investor-owned utilities to purchase 200MW of energy storage by 2014 and 1.325 GW by 2020. Read More