Rep. Cartwright (D-PA) introduced the “Focused Reduction of Effluence and Stormwater runoff through Hydrofracking Environmental Regulation” (FRESHER) Act on March 14, which would remove a provision in the Clean Water Act (CWA), added by the Energy Policy Act of 2005, that exempts oil and gas sites from stormwater permitting requirements. The exemption applies to all uncontaminated runoff from oil and gas sites of any acreage. The FRESHER Act, if passed, would also require the Department of Interior (DOI) to study the impact of stormwater from oil and gas sites on surface water, groundwater and drinking water.

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Last week, the U.S. Court of Appeals for the District of Columbia declined to grant a rehearing of EME Homer City Generation LP v. EPA, a case that challenged EPA’s Cross-State Air Pollution Rule (CSAPR). The court, in a 2-1 ruling in August, vacated the CSAPR. The court stated that EPA was exceeding its statutory authority, as the agency should allow states to develop their own rules to address emissions and CSAPR could have required states to account for more emissions than necessary. EPA hoped to challenge the ruling of the court and asked for an en banc hearing, so that the case could be heard before all eight of the circuit’s judges. However, a majority of the judges voted against the request, so the court will not rehear the case. The question now is whether EPA will take its challenge to the Supreme Court.

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The California Chamber of Commerce filed suit against the California Air Resources Board (CARB) in a last minute effort to thwart the state's greenhouse gas auction. The Chamber says that the auction is essentially an “unconstitutional tax” on businesses that are impacted by AB32, the state’s global warming law. The Chamber says in their suit that AB32 “does not expressly authorize ARB to impose any fees/taxes other than a minor administrative fee.” They believe that if the state legislature wants to give CARB the power to enact such a tax they can do so through passing new legislation. The carbon emission credits auction will take place today.

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In the wake of a recent spate of RIN fraud cases involving a reported 140 million invalid RIN (renewable identification number) credits, EPA is considering revisions to the Renewable Fuels Standard (RFS2) program that would provide greater clarity for obligated parties (oil companies that refine and import gasoline and diesel). Although EPA has taken aggressive enforcement action against fraudulent RIN producers, EPA's current "buyer beware" policy also penalizes oil companies that are victims of RIN fraud by imposing civil penalties and requiring replacement of fraudulent RINs, thus adding insult to injury.

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The U.S. Court of Appeals for the District of Columbia Circuit ruled today by a 2-1 margin that EPA’s Cross-State Air Pollution Rule (CSAPR) exceeded EPA’s statutory authority. CSAPR was to put a limit on sulfur dioxide emissions in 28 states, but the court issued a last minute stay at the end of 2011 before the rule went into effect.

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EPA published the final rule, “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews,” last week. The rule, which was finalized in April, and we blogged about here, sets the first air pollution standards for hydraulic fracturing operations. For hydraulic fracturing, the rule will require owners/operators to use reduced emissions completions, also known as RECs, and a completion combustion device to reduce VOC emissions beginning on January 1, 2015. Up until January 1, 2015 owners/operators may flare gas to reduce emissions. The new rule not only addresses hydraulic fracturing, it also includes performance standards for other modified oil and gas operations, such as centrifugal compressors, storage vessels, and pneumatic controllers. The final rule is effective on October 15, 2012.

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On June 25, 2012, the Supreme Court issued its decision in American Coatings Association, Inc. v. South Coast Air Quality Management District, 2012 Cal. LEXIS 155822.  The decision centered on 2002 amendments to the South Coast Air Quality Management District’s (SCAQMD’s) Rule 1113, which limited certain pollution-causing substances in paints and coatings.  At the time the amendments were adopted, emissions from architectural coatings in the South Coast Air Basin were larger than those generated by the entire refinery community, the furniture manufacturing industry and the aerospace industry combined.  As such, the amendments were intended to force innovative technology and assist the SCAQMD in meeting federal ozone standards, by substantially reducing the VOC emissions generated by architectural coatings in the District. 

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Today, the U.S. Court of Appeals for the District of Columbia Circuit Court issued its decision on industry petitions concerning the Environmental Protection Agency’s(EPA) rules limiting greenhouse gas emissions. The main focus of the suit was on EPA’s “tailoring” rule, which requires only major polluters to obtain permits for their greenhouse gas emissions. The three judge panel denied this challenge from industry groups. The judges also dismissed all petition for EPA’s “tailpipe” rule, which set standards for cars and light-duty trucks beginning in the 2012 model year; and the “timing” rule, which focused on limiting greenhouse gas emissions from stationary sources. The decision by the court resulted in a victory for the EPA and the Obama administration and is a big blow to a number of industry groups.

Carbon capture and sequestration has been seen as a key technology in the battle against climate change. The International Energy Agency has estimated that in order to meet carbon emission goals, 100 CCS projects would need to be up and running by 2020 and over 3000 projects would be needed by 2050. As a result, countries have been seeking funding and the best available method to implement these commercial scale projects. At one time, Europe seemed like it had the ability to meet the demand first but according to a new report from Bloomberg, it appears that North America is now likely to get the first projects up and running.

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Last week, Judge Lawrence O’Neill issued a preliminary injunction against California’s low-carbon fuel standard(LCFS). The LCFS program, which was originally ordered by former Gov. Schwarzenegger in 2007 and later approved by the California Air Resources Board(CARB) in late 2009, would cut vehicle emissions by 10 percent by 2020. Judge O’Neill believes that the LCFS ultimately discriminates against interstate commerce. His ruling reads in part, “California is attempting to stop leakage of GHG emissions by treating electricity generated outside of the state differently than electricity generated inside its border. This discriminates against interstate commerce.” CARB has said they will appeal the ruling and seek a stay on the injunction, as will other environmental groups. This is not a surprise, as the LCFS along with the state’s cap-and-trade program are two key policy initiatives for the state to reduce greenhouse gas emissions. It will be interesting to see if this ruling affects other states in their efforts to begin greenhouse gas reduction programs.

Today, the California Air Resources Board(CARB) met to consider final adoption of a proposed cap and trade program that is part of the state’s implementation of AB 32. CARB approved the cap and trade program by a unanimous vote. At a public hearing in August, CARB reviewed and heard testimony on the Functional Equivalent Document(FED). CARB has now posted its response to the comments of the FED on its website, and reviewed them during today’s hearing. The cap and trade plan will cover 85% percent of California’s emissions. Beginning in 2013 the plan places emission allowances on California’s power plants, refineries, cement plants and other high polluting facilities in the state. Other facilities won’t be part of the program until 2015.

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On October 12, the Pennsylvania Department of Environmental Protection (PaDEP) released draft technical guidance for single source determinations for oil and gas operations, otherwise known as “air aggregation” determinations. The guidance involves three sections of the Clean Air Act (CAA) - Prevention of Significant Deterioration regulations, nonattainment New Source Review regulations and the Title V permitting program. Specifically, the technical guidance requires aggregation when three conditions are met: 1)the different sources must belong to the same industrial grouping; 2) the sources must be located on one or more contiguous or adjacent properties; and 3) must be under the control of the same person. The guidance centers on the plain meaning of the words; “contiguous or adjacent,” is interpreted as the distance or spatial relationship between locations. A similar approach has been affirmed in West Virginia. Other states, including Texas, Oklahoma and Louisiana, consider sources contiguous or adjacent if they are within a quarter-mile apart. Although public comments will be accepted until November 21, the guidance will be implemented, on an interim basis, immediately.

The new Corporate Average Fuel Economy(CAFE) standards were scheduled to be released at the end of this month, but yesterday President Obama announced that the new standards will be delayed until November. The new standards, which were agreed to in July by the White House and the automobile industry, would set the CAFE standard to 54.5 miles per gallon by model year 2025. The new rule was supposed to be released in a notice officially this Friday; however the rule is simply not completed according to administration officials. It is expected with the extra six weeks that the U.S. EPA, the National Highway Traffic Safety Administration(NHTSA) and the state of California will be able to complete the proposed rule and have it ready to be released in mid-November. There would then be a comment period on the proposed rule. The final rule would remain on schedule for a release in July 2012.

Citing the “importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover,” President Obama has asked Environmental Protection Agency (EPA) Administrator Lisa P. Jackson to withdraw the draft National Ambient Air Quality Standards for ground-level ozone (smog), proposed in January of 2010.  Characterized as a victory for business, Obama’s request means that current smog standards will not be revisited until 2013. 

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The California Air Resources Board(CARB) held a board meeting today to review the Final Supplement to AB 32 and the AB 32 Scoping Plan Functional Equivalent Document. The ARB staff gave a presentation updating the current status of AB 32 implementation and also detailed the updated environmental analysis of alternatives to the scoping plan. The presentation reviewed the current progress of key measures already being implemented under AB 32, including: the low carbon fuel standard, SB 375, and the renewable portfolio standard.

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California Air Resources Board(CARB) Chairwoman Mary Nichols told state lawmakers yesterday that California will now begin implementation of its cap and trade system in January of 2013. Nichols said that regulators need more time to implement the cap-and-trade system. The cap-and-trade system had been tied up in a legal battle until the State was granted the ability to move forward with plans to begin the program in January 2012. Now, just a few days later Nichols has determined it is in the best interest of the state to tap the brakes on the process. Nichols said that the rules will be in place by January of 2012 allowing for a slow roll-out process to guarantee stakeholders that everything will move as smoothly as possible when implementation begins in January 2013. Nichols said it “gives us the year 2012 in order to work our stress tests, go through any issues anyone might raise ... and be able to come up with the answers before anyone actually has to demonstrate they're in compliance."

Today, the United States Supreme Court ruled that federal courts cannot use the federal common law of nuisance to regulate greenhouse gas emissions.  In American Electric Power v. Connecticut, No. 10-174, 540 U.S. ___ (2011), the Court reversed the decision of the Second Circuit Court of Appeals and held that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of greenhouse gas emissions.

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The Supreme Court unanimously ruled(8-0) today that six states cannot seek to limit greenhouse gas emissions through a tort action based on federal common law. The Court's opinion can be accessed here. The Court ruled that the Clean Air Act and the efforts of the Obama administration to regulate greenhouse gasses preempts the states’ claims. The Supreme Court heard oral arguments in American Electric Power v. Connecticut in mid April, and we blogged about it here.

The other issue before the court was whether or not federal courts even had the jurisdiction to hear the states' claims. On this issue the Supreme Court was split down the middle with a 4-4 ruling. Therefore, the 2nd Circuit Court of Appeals ruling that it did have jurisdiction stands, but that ruling does not control decisions in other federal circuits.

Late last week a California judge issued a stay on California’s cap-and-trade program. The stay will last until state regulators are able to provide the judge with justification that a market-based system is necessary to curb greenhouse gas emissions. California’s cap-and-trade program was scheduled to begin next January.

We have previously blogged about Judge Goldsmith’s rulings on the issues here, and he continues with that line of thinking in this ruling as he says that the California Air Resources Board(CARB) has violated the California Environmental Quality Act by not looking hard enough at alternatives to the cap-and-trade program. Under the ruling CARB must set aside its previously approved trading system for emitters over 25,000 metric tons per year and stop with any other rulemaking activities related to cap-and-trade. CARB has 15 months to comply with the order.

CARB has filed an appeal with the San Francisco Superior Court. California's 1st District Court of appeals will determine the next steps and schedule oral arguments.

The United States Supreme Court heard oral arguments today in the case of American Electric Power v. Connecticut. The states argued that power companies, like American Electric Power, create a public nuisance by emitting greenhouse gases into the air. Therefore the states believe they should to be able to regulate greenhouse gas emissions as a public nuisance under federal common law. If the court agreed with the states, they could then force the power companies to reduce their greenhouse gas emissions.

At the oral arguments this morning, it appears the members of the court do not see things the way the states do. At times during the arguments the judges strayed away from the question at hand and instead tried to determine if the Clean Air Act and EPA rulemakings have displaced federal common law. A number of the judges seem to believe what the states are asking for should be something that the EPA or the administration handles. Justice Ruth Bader Ginsburg went as far as saying that the judges don’t have the “resources or expertise” to make the decisions about reducing greenhouse gas emissions.

Whatever decision the court ultimately reaches, it could affect similar cases that have yet to be heard. For a transcript of the oral arguments in American Electric Power v. Connecticut click here.