Greenhouse Gases

Proposed Rule for Power Plant Greenhouse Gas Emissions: Much Ado About Nothing?

March 29, 2012 21:20
by J. Wylie Donald
Wow!  Whether one likes the president or not, one must concede he's not afraid of leading. Just a little over seven months from the election he has drawn a line in the sand and proposed a rule that may fundamentally alter America's energy mix and takes a big step toward addressing carbon dioxide emissions.  Or it does nothing at all.  We are talking of course of Tuesday's announcement of new source performance standards for electricity plants.   In EPA's words: The EPA is proposing standards of performance that require that all new fossil fuel-fired EGUs meet an electricity-output-based emission rate of 1,000 lbCO2/MWh of electricity generated on a gross basis. This proposed standard is based on the demonstrated performance of natural gas combined cycle (NGCC) units, which are currently in wide use throughout the country, and are likely to be the predominant fossil fuel-fired technology for new generation in the future.  EPA, Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units (proposed rule) at 13 (Mar. 27, 2012) . So natural gas is in.  And what about the other fossil fuels?  New plants using coal or oil and even IGCC (integrated gas combined cycle) can be built but EPA expects that they will need to use carbon capture and storage (CCS) to meet the standards.  Id. What brought about this groundbreaking new rule?  We set forth the legal foundation in a companion post.  Suffice to say here that EPA has moved a long way from the days before Massachusetts v. EPA, 549 U.S. 497 (2007), when greenhouse gases were not Clean Air Act "pollutants."  But the non-regulatory drivers were perhaps even more significant.  All are aware of "fracking".  The use of horizontal drilling with hydraulic fracturing in shales a mile beneath the surface has unleashed a torrent of natural gas.  As Forbes reports this month natural gas prices are half of what they were just a few years ago.  And the glut is not seen to be abating.  EPA has seized on this surfeit:  "technological developments and discoveries of abundant natural gas reserves have caused natural gas prices to decline precipitously in recent years and have secured those relatively low prices for the near-future."  Proposed Rule at 15.  As a result, "energy industry modeling forecasts uniformly predict that few, if any, new coal-fired power plants will be built in the foreseeable future."  Id.  In other words, the proposed regulation will have hardly any effect (even none) on coal-fired generation because no one was going to build those plants anyway.  "Our IPM modeling, using Energy Information Administration (EIA) reference case assumptions, projects that there will be no construction of new coal-fired generation without CCS by 2030. Under these assumptions, the proposed rule will not impose costs by 2030."  Id. at 17. We have read the commentary that this is the death of coal.  The cost of capturing and storing carbon dioxide, which will be the only way for a new coal plant to meet the new standard, is prohibitive. Accordingly, no coal plants will be built. According to EPA, however, coal-fired production was dead anyway because of the glut of natural gas.  Crystal balls are notoriously unreliable.  Some may remember that nuclear power was to make electricity too cheap to meter. But that didn't happen.  America built the largest man-made construction the world has ever seen (the interstate highway system) on the assumption that gasoline would always be abundant.  That was in error.  An oil embargo introduced Americans to long lines at the fuel pump and locking gas caps. Most forget that natural gas production peaked in the early 1970s, not to be exceeded again until over twenty years had passed.  The point is:  smart people took their best science and made plans.  But reality somehow did not get the message.  For what it is worth, here is our crystal ball on the demise of coal.  First, CCS technology is pertinent not only to coal. Combustion of natural gas emits carbon dioxide as well. The regulatory imperative will push natural gas plants to address their CO2, and coal will be able to take advantage of improvements in CCS technology. Second, the United States has been called the Saudi Arabia of coal. To expect that industry to dry up and blow away is naïve. Shale gas went from a vanishingly small fraction of the US energy mix to over 20% in five years or less. Innovation made this possible.  Just as ten years ago we could not imagine today's natural gas industry, we may not be able to recognize our coal resource in another ten years. Third, we thought it was fundamental that energy security depends on a mix of energy sources. It would be foolhardy to rely completely on natural gas.  It will only take one cold winter and a natural gas pipeline calamity to make coal seem like a sensible alternative.  Whether the proposed rule will actually have an impact depends on numerous factors.  All can agree, however, that climate change has been thrust back on the national agenda. 

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation

Soldiering On: The Western Climate Initiative and RGGI in 2012 and Beyond

January 8, 2012 20:47
by J. Wylie Donald
Last week a big step forward was taken by the Western Climate Initiative (WCI). Or what remains of it. On January 1, 2012 members were to establish binding caps on emissions of carbon dioxide from electricity generators and certain industrial sources, issue allowances for those emissions and then permit the trading of those allowances.  At least that was the plan back in September 2008 when  Design Recommendations for the WCI Regional Cap-and-Trade Program was released and when climate change response was popular and states had money in their budgets.  Since then Arizona, Montana New Mexico, Oregon, Washington and Utah have withdrawn from the WCI leaving only California and four Canadian provinces.  As the WCI puts it:  "British Columbia, California, Ontario, Quebec and Manitoba are continuing to work together through the Western Climate Initiative to develop and harmonize their emissions trading program policies."  And of those remaining only two (California and Quebec) are moving forward with a cap-and-trade program. So is this the end of regional greenhouse gas initiatives?  After all, on the East Coast New Jersey has bolted from the Regional Greenhouse Gas Initiative, while New Hampshire attempted to bolt and New York faces a lawsuit (attached) aimed at ejecting New York. We think not.  Our reasoning is three fold.  First, climate change is not going away.  We are going to have to do something.  The theory behind regional initiatives -- that they act as a laboratory for experimenting with greenhouse gas regulation -- remains valid.  And until federal legislation takes over (certainly not in 2012), regional initiatives are going to be the only game in town.  Second, organizations exist around the globe to develop manufacturing or construction or laboratory or telecommunications or you-name-it standards.   Companies ignore these organizations at their peril and often join so they can influence the result and at a minimum have inside knowledge of what the standard is and how it came to be.  Regional initiatives operate in a similar manner where the development of the rules and the issues behind them are  critical in effectively implementing the rules.  States and provinces that are out in front on climate change issues are going to have two advantages going forward.  They will have a program in place when federal rules ultimately come along; that primacy will undoubtedly influence the federal program.  And they will have experience implementing the program which likely will translate into a more effective program when compared with newly minted greenhouse gas regulators. And third they are reported to add economic benefit.  In November RGGI released a report by The Analysis Group that analyzed  the effect of RGGI:   "The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States."    To quote the report's authors: Key findings include: ■The regional economy gains more than $1.6 billion in economic value added (reflecting the difference between total revenues in the overall economy, less the cost to produce goods and services)■Customers save nearly $1.1 billion on electricity bills, and an additional $174 million on natural gas and heating oil bills, for a total of $1.3 billion in savings over the next decade through installation of energy efficiency measures using funding from RGGI auction proceeds to date■16,000 jobs are created region wide■Reduced demand for fossil fuels keeps more than $765 million in the local economy■Power plant owners experience $1.6 billion in lower revenue over time, although they overall had higher revenues than costs as a result of RGGI during the 2009-2011 period This is not a surprise.  By limiting the emission of carbon dioxide, RGGI drove up, at least initially, the cost of electricity production.  This had the effect of promoting more efficient use of electricity.  So practitioners would do well to pay attention to California's efforts.  It is likely to be the source of what ultimately happens in Washington. Thrun v. Cuomo (RGGI Complaint).pdf (1.34 mb)

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation

Renewable Fuels Take Off - Algae Arrives and Certiorari Denied

November 8, 2011 08:41
by J. Wylie Donald
Yesterday was a good day for renewable fuels enthusiasts and not because someone figured out how to make ethanol cocktails from pond scum.  In Houston American renewable fuel use literally took off on its maiden flight and in Washington the Supreme Court denied certiorari in a suit brought by the oil industry challenging the USEPA's regulations promulgating a revised renewable fuels standard. In National Petrochemical Refiners Association and the American Petroleum Institute v. EPA, the plaintiffs asserted the EPA's final rule, Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program, 75 Fed. Reg. 14,670 (Mar. 26, 2010), was invalid because it "violate[d] statutory requirements setting separate biomass-based diesel volume requirements for 2009 and 2010; [was] impermissibly retroactive; and it violate[d] statutory lead time and compliance provisions."  630 F.3d 145, 147 (D.C. Cir. 2010).  From those arguments, one might justifiably conclude that watching paint dry would be far more exciting than this opinion; we will leave it to others to explicate.  E.g., see the case comment in the Texas Journal of Oil, Gas and Energy Law Blog. In any event, the court of appeals denied all of petitioners' arguments and left EPA's rulemaking completely intact.  The Supreme Court saw no reason to step in.  What does the standard mean in the real world?  It is huge.  Among other things, according to the EPA's website it raised the mandated volume of renewable components in motor vehicle fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022.   And it "appl[ied] lifecycle greenhouse gas performance threshold standards to ensure that each category of renewable fuel emits fewer greenhouse gases than the petroleum fuel it replaces."  In other words, if one measures all the greenhouse gases emitted in the production of, for example, one gallon of corn-derived ethanol, fewer gases would be emitted than in the production of one gallon of gasoline. But the standard is not huge for airlines.  It only applies to motor vehicle fuel. 42 U.S.C. § 7545(o)(1)(C)(i).  Nevertheless, airlines are starting to line up for renewable fuels.  A case in point is the news story in yesterday's Houston Chronicle, Algae helps power flight to Chicago.  The gist of the story is that a United Airlines Boeing 737 lifted off from George Bush Intercontinental Airport for Chicago with a fuel tank filled with a blend derived from algae and conventional aviation fuel.  Passengers noted nothing different despite participating in history.  As stated by United:  "the first U.S. airline to fly passengers using a blend of sustainable, advanced biofuel and traditional petroleum-derived jet fuel."  More details are provided in the press releases from Solazyme (the biofuel manufacturer) and United. The blend was 40/60 algae to conventional fuels, complied with the ASTM D7566 specification for aviation fuel, and is a "drop-in replacement[] for petroleum-based fuel, requiring no modification to factory-standard engines or aircraft."  Tomorrow Alaska Airlines takes off with used cooking oil product in its tanks. The price for this "green" fuel?  One internet source puts it at between $17 and $26 per gallon.  Is this cutting edge?  For the United States, yes, for Europe not at all. Lufthansa flies 8 flights daily to and from Hamburg and Frankfurt using 50% biofuel in one engine. The press release goes on to explain the single engine:  "next to reducing CO2 emissions, the main aim of this long-term operational trial, [is] to examine the effects of biofuel on the maintenance and lifespan of aircraft engines."  That is, the two engines will be torn down to the last o-ring at the next overhaul and compared, providing valuable data for future operations. Both United and Lufthansa emphasize the role renewable fuel has in their sustainability initiatives.  Good public relations and potential competitive advantage may be reason enough to incorporate biofuels.  But besides green-ness can $17 per gallon be justified? It might be if it could reduce costs elsewhere, and faithful readers have already figured out where that might be. As we reported recently, the EU will start imposing carbon emission fees on flights originating or terminating in the European Union. Bio-fueled flights can get credits and reduce their fees.  With that, a little innovation, some economies of scale, and some luck, we might soon find ourselves enjoying a little pond scum at 30,000 feet.

Green Marketing | Greenhouse Gases | Regulation | Renewable Energy | Sustainability

Damascus Citizens for Sustainability Attack Marcellus Shale Gas

August 28, 2011 21:10
by J. Wylie Donald
No, this is not jihad or the last gasp of a d esperate despot.  Instead, it is a citizens group taking on the government and seeking to compel the completion of environmental impact statements (EISs) prior to the promulgation of regulations for the development of shale oil wells in the Delaware River Basin.  If they are successful, they will certainly delay the drilling of hundreds if not thousands of wells.  And as part of that success, the role of natural gas as a "bridging" fuel to ease us into a carbon-free world may be substantially diminished. Taking a page from the playbook of past environmental challenges, Damascus Citizens for Sustainability, Inc. filed suit earlier this month against the Army Corps of Engineers, Fish and Wildlife Service, National Park Service, Department of the Interior, EPA and Delaware River Basin Commission (DRBC), as well as various officers in their official capacities to block hydraulic fracturing ("fracking") activities in the Delaware River Basin. The gravamen of the complaint (attached) is that the agencies have violated federal law by failing to require the completion of an environmental impact statement before promulgating regulations allowing natural gas development within the Basin.  Plaintiff seeks declaratory and injunctive relief.  DCS is a non-profit conservation group whose members "live, work and recreate" in the Basin. Complaint ¶ 11.  Members of DCS include organic farmers, bird watchers, hunters and fishermen. Id. ¶ 12.  Some will take offense at the disengagement of some of the plaintiff's members who "escape on weekends and vacations to their refuge in the Upper Delaware Basin where they can commune with nature in the bucolic setting of the Basin."  Id.  As summarized by the complaint, "For each member of DCS, the Basin's unspoiled resources are his or her own Walden Pond."  Id. Defendants are government agencies responsible in one way or another for the watershed.  As such, effects from fracking (which, according to the complaint, will result in between 15,000 and 18,000 natural gas wells in the Basin, id. ¶ 62) fall under their jurisdiction. A substantial hurdle in plaintiff's suit is whether the National Environmental Policy Act (NEPA) (which requires EISs) even applies to an interstate commission such as the DRBC. As the complaint acknowledges, "DRBC has stated that it is not subject to NEPA, noting that four of the five commissioners are appointed by states.  DRBC thus refuses to comply with NEPA."  Id. ¶ 32.  There is support in the case law for this position:  "That DRBC is a federal agency for purposes of NEPA is very doubtful."  Delaware Water Emergency Group v. Hansler, 536 F. Supp. 26, 35 (E.D. Pa. 1981).  DCS argues that, among other things, the DRBC is a federal agency as it was established by federal legislation, publishes its regulations in the Code of Federal Regulations, publishes its activities in the Federal Register, is listed as a U.S. Government Agency by USA.gov and is viewed as a federal agency by the Council of Environmental Quality, which oversees the federal government's compliance with NEPA.  Complaint ¶¶ 26, 28, 29. If DCS gets past that hurdle then numerous aspects of fracking may come under the microscope.  Allegations include:  highly contaminated return flows of water, gas and other materials, confidential fracking fluid formulas containing "carcinogenic, acutely toxic, chronically toxic and bioaccumulative" materials, methane emissions as greenhouse gases, "systematic evidence of methane contamination of drinking water from gas extraction activities", "large-scale changes in land use and increased water withdrawals," "significant air pollution from truck exhaust emissions," "serious vehicular accidents,"  "significant public health problems" and  permanent change to the rural and scenic character of the area.  Id. ¶¶ 50, 51, 54, 59, 62, 63, 65 and 66.  It is obvious that full development of all these topics will substantially delay the development of the Marcellus shale. To focus on just one aspect of the allegations, it is worth looking at greenhouse gas emissions.  The conventional wisdom is that because natural gas is composed of lighter, less complex hydrocarbons, and therefore when combusted it emits less carbon dioxide per BTU than other fossil fuels, it is to be preferred over oil and coal.  NaturalGas.org reports on its webpage that "The combustion of natural gas emits almost 30 percent less carbon dioxide than oil, and just under 45 percent less carbon dioxide than coal."  (Particulates, SOx and NOx and mercury are likewise much lower.)  Methane, an even more potent greenhouse gas than carbon dioxide, and a significant component of natural gas, likewise is reported to have better characteristics in natural gas. An EPA/Gas Resources Institute 1997 study concluded "that the reduction in emissions from increased natural gas use strongly outweighs the detrimental effects of increased methane emissions."  Id.  Accordingly, many believe that if one substitutes natural gas for coal and oil, one could continue to grow the economy while at the same time reducing greenhouse gas emissions. This proposition is under attack.  Citing a 2010 EPA study, DCS pleads that EPA "revised its estimated potential emissions from gas well completions from 0.02 tons of methane per well to 177 tons of methane per well."  Complaint ¶ 63. We tracked down the EPA study and some additional scholarship.  In Greenhouse Gas Emissions Reporting from the Petroleum and Natural Gas Industry, Background Technical Support Document, the EPA walks away from its earlier study:  "new data and increased knowledge of industry operations and practices have highlighted the fact that emissions estimates from the EPA/GRI study are outdated and potentially understated for some emissions sources."  Background Technical Support Document at 8.  One of those sources is unconventional natural gas production, aka fracking.  Appendix B of the study lays out the sources of the new data and they are thin: four presentations at a 2007 EPA Natural Gas STAR Production Technology Transfer Workshop .  Nevertheless, they may be a game changer. Cornell researchers Howarth, Santoro and Ingraffea took the new numbers and applied them to the proposition that natural gas should be used "as a transitional fuel, allowing continued dependence on fossil fuels yet reducing greenhouse gas (GHG) emissions compared to oil or coal over coming decades."  Howarth at 2.  They concluded that shale gas has a greenhouse gas footprint substantially larger than previously thought and that, depending on circumstances, the footprint of coal can be superior to that of shale gas (i.e., smaller).  Id. ¶ 8.  Thus, "the large GHG footprint of shale gas undercuts the logic of its use as a bridging fuel over coming decades, if the goal is to reduce global warming."  Id. One thing that was striking in the EPA study was the acknowledgment of "great variability in the natural gas sector and [that] the resulting emission rates have high uncertainty."   Background Technical Support Document at 86.  EPA also noted that its results do not include reductions due to control technologies.  Id. at 87.  Howarth et al. acknowledge the efficacy of technology and that "methane emissions during the flow-back period in theory can be reduced by up to 90%."  Howarth ¶ 7.  In practice, they assert it does not happen.  If Damascus Citizens for Sustainability has anything to say about it, we will know more. Damascus Citizens for Sustainability, Inc. v. U.S. Army Corps of Engineers et al, 11-cv-03857 Complaint (Aug. 10, 2011).pdf (828.33 kb)

Carbon Dioxide | Carbon Emissions | Climate Change Litigation | Greenhouse Gases | Sustainability

Comer Resurgens: Life After American Electric Power v. Connecticut

July 7, 2011 10:23
by J. Wylie Donald
We thought last January, when the Supreme Court denied a writ of mandamus, that the long saga of Ned Comer through the courts had finally come to an end.  We were wrong.  At the end of May, the case, Comer, et al. v. Murphy's Oil USA, et al. (attached), was refiled in the Southern District of Mississippi.  Although predating the Supreme Court's June decision in American Electric Power v. Connecticut, one could be excused for concluding that it was filed afterward as it relegates federal common law to a sentence and instead is all about state law causes of action. But before we get into the resurgent Comer, we thought we would point out a June paper published by the Geneva Association, an insurance industry think tank.  One of the industries most affected by climate change is insurance. In Why Insurers Should Focus on Climate Risk Issues, Chief Climate Product Officer, Lindene Patton, outlines some of the risks and opportunities she perceives.   Her perspective is particularly worth considering as her employer, Zurich Financial Services, faces climate change issues across a broad spectrum of activities. (Ms. Patton notes, however, that the positions in the paper are hers alone.) Ms. Patton's views are insightful:  "society at large appears increasingly underinsured for the impacts of climate change at the time of its greatest need."  And they are ominous:  "Unless global societal risk management of climate change improves, the mismatch between the loss exposure and monies needed to cover economic loss associated with climate change-related severe weather events and other impacts will only become more extreme."  The solution she calls for is for insurance companies to take the lead to overcome the current "governance gap with respect to climate change policy."  Even without leadership, important social decisions can be made if the right price signals (i.e., premiums) are sent. Such signals can lead to "cogent risk management decision-taking" and assist in the spreading and management of climate change risks. An example of such price signals from an earlier period are the fire proofing of much of America as the result of the insurance industry's support of fire codes and the underwriting to go with them. The alternative to leadership in the marketplace is what Ms. Patton refers to as the frictional costs of litigation. In some cases those costs can be trivial, such as occurred with Y2K. In other cases, the outcomes can be devastating -- think asbestos and tobacco, on which insurers have paid, by some estimates, $150 billion and $750 billion respectively. Driving litigation in the climate change sphere is the relatively unknown fact of "a trend of decreasing percentage of insured loss when calculated as a percentage of damages from extreme weather events on an annualized basis."  Stated more simply, those harmed by hurricanes are not insured or are underinsured and the path to being made whole lies with a judge, not with an adjuster. The litigation path is not set out in black and white. Yet. But there are areas that may be fruitful for plaintiffs. Ms. Patton identifies SEC disclosure rules, fractional allocation (market share) schemes, and de minimus liability regimes as potential routes for "activist judges to find liability associated with" greenhouse gas emissions.  Regardless of the theory du jour, the ongoing injuries and displacement caused by climate change "may ultimately end up over a number of years in dedicated, repeated efforts by plaintiffs to find a legal theory that 'sticks' as happened in tobacco or asbestos." Which brings us back to Ned Comer and his protean and unvanquishable litigation.  All remember Hurricane Katrina; most will recall the lawsuit filed 20 days after Katrina made landfall.  In various iterations it sued insurance companies, mortgage lenders, oil companies, electric utilities, coal companies, and chemical companies; it alleged against all of the greenhouse-gas-emitting defendants responsibility for Katrina's "unprecedented" ferocity.  Its appellate travails are legend.  Following dismissal in the district court, and reinstatement by a Fifth Circuit panel, that decision was vacated when the Fifth Circuit accepted the case for en banc argument, and then dismissed the case when its quorum dissolved.  The petition for mandamus did not avail and everyone thought the case was gone. Everyone, that is, except Ned Comer's lawyers.  On May 27, 2011 Comer v. Murphy Oil USA, Inc. was re-filed.  It is a monstrous class action lawsuit with over 90 named corporate defendants - a crowd even larger than the earlier iterations of the case.  Like a Who's Who of particular industries, it alleges against classes of oil companies, utilities and coal companies, and chemical companies claims in three counts of public and private nuisance, trespass and negligence. But it also includes, almost as afterthoughts, a strict liability claim (¶ 36) and a conspiracy claim (¶ 41).  It concludes with a count for a declaratory judgment that federal law does not preempt state law claims. Ms. Patton's frictional costs are here in vast numbers.  As is her recognition that it is injury rather than an interest in climate change policy that provides the litigation incentive:  "Plaintiffs do not ask this Court to regulate greenhouse gas emissions or change national policy regarding climate change. Instead, Plaintiffs seek legal redress for the damages caused by these Defendants."  (¶ 11). Those damages are broad.  "[Plaintiffs'] homes and property were destroyed by Katrina's destructive winds and storm surge, which effects were increased in frequency and intensity by Defendants' emissions of greenhouse gases." (¶ 18)  "Plaintiffs' property also is damage[d] by sea level rise as a result of submersion and/or increased exposure to hurricanes. (¶ 19) "Plaintiffs' insurance premiums for their coastal Mississippi property have risen dramatically, and the resale values of their homes and property values have plummeted."  (¶ 20) The insurance premium allegation is thought-provoking.  Plaintiffs recognize that proving a particular defendant caused Hurricane Katrina will be difficult. Pleading in the alternative, they assert that the Defendants' greenhouse gas emissions "put Plaintiffs' property at greater risk of flood and storm damage, and dramatically increase Plaintiffs' insurance costs." (¶ 37) They link insurance company efforts to price climate change risk to increased premiums (Ms. Patton's risk-based price signals), and, because those "insurance costs attributable to global warming are distinct and quantifiable", they assert they are entitled to recovery. (¶¶ 38-40)  This theory of damages based on increased risk, rather than actual harm, bears watching. Ms. Patton concludes, "the AEP case only addresses nuisance cases and does not address broader theories under tort liability law.  A verdict for the defendants on the nuisance issue may not arrest the flow of cases and associated defence costs.  The plaintiffs bar may still continue to file demands and claims for other types of tort damages."  We would go further. With apologies to Atlanta, Comer Resurgens demonstrates that the conditional "may" is being replaced by the declarative "will." 20110527 Comer v. Murphy's Oil (re-filed) Complaint.PDF (796.31 kb)

Climate Change | Climate Change Litigation | Greenhouse Gases | Insurance | Supreme Court

Our Children's Trust Unleashes Wave of Climate Change Litigation

May 5, 2011 10:40
by J. Wylie Donald
When we wrote last month concerning the implications of the upcoming decision by the Supreme Court in American Electric Power v. Connecticut, we were fully expecting to wait for the decision to test our powers of prognostication.  We were very wrong.  In a collection of lawsuits and regulatory filings across the nation, environmentalists have joined the climate change litigation fray in a very big way.  Here is what we wrote:  "[A dismissal of Connecticut] says nothing about state law nuisance claims, nor new theories that have not yet been tested, nor even thought up. We strongly believe that carbon dioxide liability suits will be with us for a while yet. Our reason: climate change is ongoing and those whose interests are harmed will look for succor. So theories of liability will be spun and suits will be brought. And such suits will require a defense." Here is what has happened:  On Monday, May 4, in state courts across the nation lawyers representing children and young adults filed (and apparently will continue to file) suits seeking to compel State governments to recognize the application of the public trust doctrine to greenhouse gas emissions and to take action to abate those emissions.  The environmental group coordinating these actions is Our Children's Trust, based in Eugene, Oregon.  Its mission:  "Protecting Earth's Climate for Future Generations."  It is joined by Kids vs. Global Warming, whose "youth activists" are named plaintiffs in a number of the actions.  So far (according to the Associated Press), cases have been filed in California, Colorado, Minnesota, Montana, New Mexico, Oregon, and Washington, and also in federal court in California.  Our perception is that these jurisdictions are friendlier to environmental issues than other places.  In those other places regulatory petitions are being filed. We won't go into the details of all of these filings but here is the gist of the claims brought in New Mexico: Sanders-Reed v. Martinez.  New Mexico is at risk from the effects of climate change.  From loss of snowpack to drought to extreme heat waves, as temperatures rise life in New Mexico is being degraded.  Enter the State.  Before the current administration of Governor Martinez, New Mexico was taking steps to limit the discharge of greenhouse gases within New Mexico.  State agencies studied the problem and made recommendations.  The governor issued executive orders.  The Environmental Improvement Board promulgated greenhouse gas regulations.  New Mexico joined the Western Climate Initiative.  Id. ¶¶ 61-73, 76.  Then Governor Martinez took office at the beginning of this year.  According to the complaint, she attempted to block the publication of the greenhouse gas rules and announced that she would keep New Mexico from joining a regional cap-and-trade program. She also removed all of the members of the Environmental Improvement Board because she believed the Board was anti-business.  The Small Business-Friendly Task Force, created by the Governor, has recommended that New Mexico shift to “observer” status in the Western Climate Initiative. Id. ¶¶ 74-76.  Plaintiffs, one teen-ager (a member of Kids vs. Global Warming) and one environmental group, sued under the public trust doctrine, which has not yet been applied to the atmosphere.  In a nutshell, plaintiffs assert that "Defendant State of New Mexico has failed in its fiduciary duty to recognize and protect our atmospheric public trust resource, thereby injuring these Plaintiffs."  Id. ¶ 19.  In more detail, plaintiffs desire a declaration by the New Mexico court that "(1) the public trust doctrine is operative in New Mexico and, pursuant to this doctrine, the State holds the atmosphere in trust for the public; (2) the State has an affirmative fiduciary duty to establish and enforce limitations on the levels of greenhouse gas emissions as necessary to protect and preserve the public trust in the atmosphere; (3) the State’s fiduciary duty to protect the atmospheric trust is defined by the best available science; and (4) the State has breached its fiduciary duty to protect the public trust in the atmosphere by failing to exercise its right of control over the atmosphere in a manner that promotes the public’s interest in the atmosphere and does not substantially impair this resource."  One will note that the claim is for declaratory relief, but not damages.  Plaintiffs' goal is to stabilize before 2100 the earth's atmosphere at 350 ppm carbon dioxide.  Id. ¶¶ 51-53.  Today it is at 390 ppm and increasing.  Id. ¶¶ 43, 45.  Failure to achieve such stabilization will lead to catastrophe.  Id. ¶ 46. (If you wish to read other complaints and petitions, visit Our Children's Trust's website.) There are a host of issues before these lawsuits are successful.  First, is the atmosphere subject to the public trust doctrine?  Second, can private parties require the State to act to preserve that trust?  Third, what are the elements of standing for those parties?  Fourth, what is the "best available science"?  Fifth, could federal preemption apply?  And probably many more.  But plaintiffs have a lot of opportunities to address these questions and will undoubtedly learn from one case so as to improve the others. In the meantime, the battle for control of the public dialog will continue.  Environmentalists have chosen a broad-based attack and will certainly make the most out of any successes they have.  Further, although we will not link the Tuscaloosa tornadoes and this year's record Mississippi flooding to climate change, some certainly will because more extreme weather is a central prediction of the climate change story.   Those kinds of extreme weather events may be all that is necessary to push climate change back onto the federal agenda.   Perhaps the most interesting facet of this set of cases is how it juxtaposes with Connecticut.  In that case, States are suing private parties to compel them to abate carbon dioxide emissions.  Commentary on the Supreme Court argument suggests that the Court may have some sympathy to States who are trying to remedy a problem that the federal government is ignoring.  Now private parties are suing those same State governments asserting that they are not doing enough either. And where does all this leave our prediction.  We are right about new theories, right about claims of ongoing injuries and right that more suits would be brought.  We are wrong that those suits would be suits for liability.  We are wrong today, anyway.

Carbon Dioxide | Climate Change | Climate Change Litigation | Greenhouse Gases | Supreme Court

ClimateLawyers Blog Nominated for Top 50

February 8, 2011 12:44
by J. Wylie Donald
There was a lot of hype in the papers today about some contest in Dallas with people running around, bumping into each other, dropping balls and otherwise exhaling a lot of greenhouse gases.  We contemplated a discussion of the Superbowl but knew you would be more interested in some shameless marketing.  So here's where we are:  LexisNexis has nominated the blog for the first ever LexisNexis “2011 Top 50 Environmental Law & Climate Change Blogs.”  In their words, “For the first time, the LexisNexis Environmental Law & Climate Change Community is honoring a select group of blogs that set the online standard for our practice area,” said Karen C. Yotis, ELCCC Community Manager, in an emailed statement to us. As some of you may know, we initiated the blog, ClimateLawyers.com, in 2008, in the vanguard of those addressing climate issues in the legal profession.  We have focused on not just being a news blog, but instead try to incorporate analysis in everything we post.  We like to think that we are succeeding as our readership is consistently growing.  The blog is dedicated to the discussion of legal, public policy, and business risk questions presented by climate change and renewable energy initiatives. LexisNexis has created an online community page to allow members to provide commentary on the list.   To show your support of ClimateLawyers.com, please click here.   The deadline for comments is February 14.And since we promise analysis, here is some. In climate change circles, there has been much written about the conclusions that can be drawn from the hard data.  The scientific community is agreed that climate change is occurring.  It is also agreed that atmospheric carbon dioxide levels are the highest they have been in thousands and thousands of years.  Where the controversy has been is whether one can conclude that anthropogenic carbon dioxide is the cause of climate change.  Similarly here.  The hard facts are the writings in the various blogs under consideration.  There is no dispute that we and our peers labor to churn out our best thoughts.  The question, though, is what are those thoughts' significance?  And that in turn depends on who is reading, which in turn may depend on whether he or she has found what was in the blog worth reading before.  So there is a large amount of serendipity in this blog competition and the ultimate conclusion may depend on exactly what question the judges ask.  Be that as it may, if you have positive comments about our writing, we would be grateful if you would let the folks at LexisNexis know.  Thanks.

Climate Change | Greenhouse Gases | Year in Review

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EPA proposes backstop rules to help GHG Tailoring Rule Rollout

August 18, 2010 09:53
As the U.S. Environmental Protection Agency continues to roll out the details for the so-called greenhouse gas (GHG) tailoring rule, Step 1 of which is set to take effect on Jan. 2, 2011, EPA last week announced two expedited rulemakings designed to plug regulatory gaps that could impair the GHG Tailoring Rule’s implementation. EPA announced last week that 13 states have non-compliant state implementation plans (or SIPs) in that they do not clearly identify GHGs as pollutants subject to the Prevention of Significant Deterioration (PSD) program permitting.  As a result, large existing sources in those states that might be increasing their GHG emissions by more than 75,000 tons per year (the GHG Tailoring Rule first step threshold) cannot obtain a PSD permit that covers GHGs as required by the GHG Tailoring Rule. EPA is therefore proposing to launch a “SIP Call” to those 13 states and any other state that determines its own program is inadequate to cover GHGs.  Separately, recognizing that some states may not act quickly enough to allow for compliance by the January 2, 2011 implementation of the GHG Tailoring Rule, EPA announced that, for the first time since the Clean Air Act was enacted, the EPA plans to issue its own Federal Implementation Plan (or “FIP”) for GHGs to allow for the EPA to issue its own federal PSD permit to sources above the thresholds that are located in states not yet compliant with the rules. These gap-filling regulatory developments are aimed at facilitating GHG Tailoring Rule compliance by the biggest sources of GHG emissions. It covers large industrial facilities such as power plants, cement kilns and oil refineries that are responsible for 70% of the GHGs from stationary sources. Beginning January 2nd, the GHG Tailoring Rule permitting requirements will apply for large facilities already permitted as major sources under the Clean Air Act for non-GHG pollutants, such as sulphur dioxide and nitrogen oxides. These facilities will have to account for GHGs in their applications if they increase GHG emissions by at least 75,000 tons of carbon dioxide equivalent a year.  Subsequent regulatory triggers apply in the future under the GHG Tailoring Rule. Effective July 1, 2011, the GHG Tailoring Rule will extend to all new facilities with GHG emissions of at least 100,000 tons a year and modifications at existing facilities that increase GHG emissions by at least 75,000 tons a year. EPA said last week in a statement that the results of these new expedited rulemakings would be temporary measures in place until states revise their SIPs and assume responsibility for GHG permitting. EPA is expediting its rulemaking process to ensure the rules are finalized before the January 2nd start. A public hearing has been scheduled on its proposals for August 25th and EPA will accept written public comments over the next 30 days.

Carbon Emissions | Climate Change | Greenhouse Gases

EPA Denies Petitions for Review of Endangerment Finding

August 13, 2010 14:47
The U.S. Environmental Protection Agency Friday denied 10 petitions for reconsideration of its Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act. Led by the Chamber of Commerce of the United States of America, the petitions sought to put the brakes on EPA’s regulatory steps that would serve as the trigger for classifying greenhouse gas (GHG) emissions as pollutants under the Clean Air Act.  Although Section 202(a) covers exhaust from new motor vehicles, regulating GHGs in this context has far broader implications because other sections of the Clean Air Act use the same definition of “pollutant” and the regulatory findings, if allowed to stand, will trigger broader consequences for stationary sources like major power plants, industrial boilers and cement kilns.  (EPA’s original findings can be found in the December 15, 2009 Federal Register at 74 FR 66496). In denying the petitions to reconsider its findings, EPA said that petitioners’ arguments and evidence are inadequate, generally unscientific, and do not show that the underlying science supporting the Endangerment Finding is flawed, misinterpreted by EPA, or inappropriately applied by EPA.  The denial can be found in the August 13th Federal Register at 75 FR 49556 and a 3-volume, 360-page compendium supporting EPA’s denials can be found at www.epa.gov/climatechange/endangerment.html. Citing widely-reported e-mails from the United Kingdom-based Climatic Research Unit of the Intergovernmental Panel on Climate Change questioning the climate science, the petitioners argued that recent revelations show that the science supporting the EPA’s findings was flawed or questionable, and that EPA should reconsider the Endangerment Finding. EPA replied that the petitioners’ claims and supporting information do not change or undermine the scientific understanding of how anthropogenic emissions of GHGs cause climate change and how human-induced climate change generates risks and impacts to public health and welfare.  “This understanding has been decades in the making and has become more clear over time with the accumulation of evidence,” EPA wrote in response. “The core defect in petitioners’ arguments is that these arguments are not based on consideration of the body of scientific evidence.  Petitioners fail to address the breadth and depth of the scientific evidence and instead rely on an assumption of inaccuracy in the science . . .,” said EPA. EPA’s response to the petitions shows that EPA remains committed to pursuing regulatory changes that address climate change even as global warming legislation continues to stall in the Congress.

Climate Change | Green Buildings | Greenhouse Gases

How Do You Spell Certiorari? Climate Change Suits En Banc

April 1, 2010 18:33
by J. Wylie Donald
"Plaintiffs' homeowner's insurance premiums have dramatically increased as a result of global climate change." So asserts Ned Comer and his co-plaintiffs in their Supplemental Brief on Rehearing En Banc, filed yesterday with the Fifth Circuit in the en banc appeal of Comer v. Murphy Oil USA. Although those premiums do not resurface anywhere else in the brief, presumably their insertion is to demonstrate "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual and imminent, not 'conjectural' or 'hypothetical'. Lujan v Defenders of Wildlife, 504 U.S. 555, 560 (1992). In other words, they may establish the constitutional base for standing. Little did we know ....   Unfortunately for the plaintiffs, the requirements for standing do not stop there. The Lujan decision continues: "there must be a causal connection between the injury and the conduct complained of - the injury has to be fairly traceable to the challenged action of the defendant ..." Id. Plaintiffs are dismissive of the Comer defendants' abilities to sustain their arguments on this point. That may be myopic. The causation hurdle was expressly enunciated in the district court's opinion: "I foresee daunting evidentiary problems for anyone who undertakes to prove, by a preponderance of the evidence, the degree to which global warming is caused by the emission of greenhouse gases; the degree to which the actions of any individual oil company, any individual chemical company, or the collective action of these corporations contribute, through the emission of greenhouse gases, to global warming; and the extent to which the emission of greenhouse gases by these defendants, through the phenomenon of global warming, intensified or otherwise affected the weather system that produced Hurricane Katrina."  Comer v. Nationwide Mut. Ins. Co., Civ. A. No. 1:05 CV 436-LTD-RHW, 2006 WL 1066645, *4 (S.D. Miss. 2006). Defendants recognize a winning argument and are pressing it in their papers: "Plaintiffs' claims require a piling of inference upon inference to causally connect Defendants' GHG emissions with damages suffered by Plaintiffs during Hurricane Katrina." Petition for Rehearing En Banc.  As stated in the defendants' introduction: "Plaintiffs seek to impose liability on Defendants premised on conclusory and speculative allegations: Defendants' GHG emissions over decades, along with the emissions of millions of other actors around the world, contributed to global warming, which in turn increased ocean temperatures, which in turn raised the possibility of hurricanes forming with increased ferocity, which in turn contributed to Hurricane Katrina's strength, which in turn harmed Plaintiffs."  Id.  Plaintiffs counter, however, that proximate cause simply is not an element of standing analysis. Coupled with the causation element of standing, defendants also re-assert the political question doctrine, which was adopted by the Native Village of Kivalina v. ExxonMobil trial court (now on appeal to the Ninth Circuit) and the California v. General Motors trial court (appeal abandoned), but rejected by the Second Circuit in Connecticut v. American Electric Power. The Second Circuit likewise rejected the Connecticut defendants' petition for rehearing or rehearing en banc. Observers feel that a petition for certiorari is inevitable. Oral argument in Comer is scheduled for the week of May 24. It is sure to be interesting. If defendants prevail, the circuit court split increases the chances that climate change will lodge another appearance before the Supreme Court. For my purposes (following insurance issues), I will be watching to see if plaintiffs' premium argument is indeed a premium argument.

Climate Change | Weather | Greenhouse Gases

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