On May 14, 2013, the 5th Circuit dismissed a suit filed by Mississippi Gulf Coast residents and property owners against more than 30 companies and the Tennessee Valley Authority alleging defendants’ greenhouse gas emissions intensified the wrath and resulting property damage of Hurricane Katrina. The 5th Circuit dismissed the claims as barred by res judicata. Plaintiffs first filed such claims in 2005, which the district court dismissed with prejudice (“Comer I”). The 5th Circuit reversed that decision in part, then sought to rehear the claims en banc. After many judges’ recusal, the 5th Circuit held it did not have a quorum and dismissed the appeal. The Supreme Court denied reviewing the case.
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The Environmental Protection Agency (EPA) had a deadline of April 13 to impose the first-ever greenhouse gas limits on new power plants, but they did not finalize the proposal on time. EPA is in the process of altering the rule to make sure it can withstand any legal challenges that may come its way. The rule if implemented as it was written would require new power plants to emit no more than 1,000 pounds of carbon dioxide per megawatt hour of electricity produced. EPA is debating the possibility of establishing separate standards for coal-fired power plants and gas-fired power plants. There is no timetable for when EPA will announce their next move.
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Pacific Legal Foundation filed a lawsuit today in the Superior Court of California County of Sacramento challenging California’s cap-and-trade auction. The suit was filed on behalf of a broad group of California businesses, trade associations and individuals, who believe the auction process acts as an unconstitutional tax because it was not enacted by two-thirds majorities in both chambers of the California Legislature, which is required by the California Constitution. The lawsuit states that the California Air Resources Board (CARB) instituted the auction as a plan to raise billions of dollars in revenue without direction from the Legislature. They argue, if citizens and corporations must obey the state Constitution, shouldn’t an agency of the California government?
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Earlier this week, Sen. Murkowski (R-AK) released an energy blueprint, entitled “Energy 2020.” The blueprint was developed with seven principles in mind: producing more, consuming less, clean energy technology, energy delivery infrastructure, effective government, environmental responsibility, and an energy policy that pays for itself. Murkowski believes this can be done with more oil and gas production, reducing carbon emissions, and the development of a “trust fund” for clean energy. Her hope is the blueprint could serve as a basis for starting a comprehensive energy discussion in Congress, which may result in a number of small, bipartisan energy bills this year.
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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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President Obama called for the United States to step up and be a leader as the world transitions towards new energy technologies to help combat climate change during his inaugural address earlier this week. Obama hoped to have climate legislation passed during his first term, but was unsuccessful with his push. So he and his administration will make another effort to push for climate change legislation and regulations in his second term. He said, “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.” He went onto say that fighting climate change is not a choice, but rather an obligation and that the obligation can be met with the development of new, cleaner energy technologies.
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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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The AB32 Implementation Group (AB32IG) sent a letter to California Governor Brown requesting that the cap-and-trade program and first allowance auction scheduled for November 14, 2012 be delayed. AB32IG had hoped CARB would address some of their concerns at the September board meeting, however CARB failed to do so. The letter requests that Gov. Brown step in to protect the state’s economy; and states that the independent Legislative Analyst’s Office confirmed that the auctioning of allowances is not necessary to reach the state’s greenhouse gas reduction goals set forth in AB32. Part of the letter reads, “CARB’s requirement to buy allowances will impose high and unnecessary costs on California businesses, threatening jobs and tax revenues in the state.” It continues to say that consumers will be impacted by higher costs of fuel, utilities, food and other essential services. So far the Governor has yet to respond to AB32IG’s letter.
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As consumers have become more environmentally conscious, manufacturers have increasingly used environmental benefit marketing claims to promote sales of their products. The Federal Trade Commission (FTC) has created guidelines, known as the Green Guides, to aid marketers in properly utilizing environmental benefit claims, out of concern that consumers’ perceived environmental benefit may exceed the actual environmental benefit provided by the manufacturer. On October 1, 2012, the FTC released its final revisions to its Green Guides after a multiyear investigatory process, which included reviewing comments submitted by companies, trade organizations, government entities and individuals. This advisory outlines the major changes contained within the final revisions to the Green Guides.
The advisory is provided in PDF on the Alston & Bird website:
http://www.alston.com/advisories/products-liability-ftc-green-marketing-guides
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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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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.
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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.
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In Ballona Wetlands Land Trust v. City of Los Angeles, the Second District of the California Court of Appeal upheld a revised Environmental Impact Report (EIR) for a mixed-use development that was certified by the City of Los Angeles (City) under the California Environmental Quality Act (CEQA). The revised EIR was issued after the petitioners successfully overturned limited portions of a previous EIR. In addition to revising and supplementing the land use, archeological resources and wastewater sections of the revised EIR, the City included a new global climate change section in light of changes in the California legislation regarding greenhouse gases and climate change.
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In March of this year, California’s roll-out of AB 32 hit a legal hold up which we blogged about here. The Plaintiffs in the case sought a petition for writ of mandate on a total of eight causes of action in regards to a 2008 Functional Equivalent Document (FED) alternative analysis under the California Environmental Quality Act (CEQA). Judge Goldsmith granted the Plaintiff’s writ of mandate on two of the causes of action in May of this year, requiring the state to further justify its selection of the greenhouse gas cap-and-trade market, in light of alternatives. Finding that the state had adequately justified its selection, on Monday, Judge Goldsmith issued his final ruling on the issue discharging the Peremptory Writ of Mandate, and he wrote in his decision that “respondents having demonstrated satisfactory compliance with the Court’s Peremptory Writ of Mandate.” With this legal hurdle now cleared, California can move forward with AB 32 and its cap-and-trade program.
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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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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.
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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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