Flatt Out Environmental

Government's quantification of greenhouse gases for federal agencies leaves out "offsets"

victorflatt — Tue, 10 Aug 2010 22:05:00 GMT

Last week, the Federal Energy Management Program (of the Department of Energy) released its draft Guidance on “Federal GHG Accounting and Reporting.” This Guidance was required by Presidential Executive Order 13514, regarding “Federal Leadership in Environmental, Energy, and Economic Performance (dated October 5, 2009). The Executive Order required federal agencies to create an accounting of their emissions and to undertake yearly reductions compared to FY 2008. The most surprising part of the Guidance might be the lack of “offsets” for purposes of calculating reductions, with the Guidance describing them as “not eligible at this time.” The recognition and establishment of offset protocols would have provided the federal government with its first chance to specify a methodology for measuring offsets in a greenhouse gas system. But perhaps this expectation, controversies over offsets generally, as well as the hard choices needed in determining methodology proved to be too much. While the Executive Order allowed the use of biological and land management sequestration for purposes of an agency calculating its GHG footprint, which by most definitions would be considered an offset, the Guidance simply punts on this requirement, noting that methodologies for accounting for this kind of sequestration were not sophisticated enough on a local scale.

These methodologies are of course available and have been used in many private offset systems. But as the Guidance makes clear, the US government itself is not ready to embrace a particular method or wade into the “offsets” debate. At least not yet. When the EPA starts its regulation of stationary sources in 2011, expect that to change. By almost all calculations, offsets will be needed to control the costs of greenhouse gas reductions.

Tailoring Rule Draws Mutiple Challenges

victorflatt — Tue, 03 Aug 2010 19:46:00 GMT

As expected, the EPA's "tailoring rule" under which it proposes to regulate stationary sources of greenhouse gases under the Clean Air Act (CAA) only if they produce over 75,000 tons of carbon dioxide equivalent forcing per year has been challenged in court by numerous organizations. These include industry, several states (the usual suspects including Texas), and more surprisingly several environmental organizations.

The crux of industry and state challenges to the tailoring rule is that it is illegal pure and simple. Specifically, the challenges note that the CAA requires that when the EPA regulates stationary sources under the CAA, that it do so for sources over either 100 or 250 tons per year. Of course, industry doesn't really want all of these smaller sources regulated, but they want to make it virtually impossible for EPA to regulate at all. If the EPA had to regulate all of these small sources, regulation would be virtually impossible. (EPA's primary argument for the legality of the tailoring rule is a doctrine known as "administrative impossibility") Even if the EPA tried to, Congress would surely take action then to suspend the regulation (something that it has not been able to do so far though several Senators have tried).

The environmental organizations take the other tack, claiming that while they don't oppose "tailoring" out small sources, that the level is not small enough. (They prefer 25,000 tons per year).

In Texas letter explaining its position, it goes further and eschews the EPA's interpretation that greenhouse gases are now "subject to regulation," and declares that the state of Texas will not regulate. Though the letter puts up some straw men in the argument about the fact that Texas can't regulate greenhouse gases because the state definition of "subject to regulation" doesn't include greenhouse gases, the bottom line is that Texas, like all other states with delegated programs, must comport its State Implementation Plan (or SIP) to the EPA's definitions or be subject to withdrawal of authority. Of course, Texas is already subject to having its authority withdrawn so I suppose it has nothing to lose, but it shouldn't pretend that state's administering the CAA aren't required to comport with the EPA's definitions. (I would also point out that regardless of the tailoring rule's fate, most agree that the definition of "subject to regulation" will include greenhouse gases after the EPA starts regulating them in January 2011 (pursuant to Supreme Court directive) and that the this interpretation and does not have to go through formal notice and comment, as Texas should well know.)

Alaska Judge Again Nixes Offshore Oil in the Chukchi

victorflatt — Tue, 27 Jul 2010 03:09:00 GMT

This week a federal judge in Alaska weighed in on last year's leases in the Chukchi Sea in Alaska. Though the leases had been suspended since the Gulf Disaster and were also required to revisit information under the Outer Continental Shelf Lands Act, this case added that the Mineral Management Service (now the Bureau of Offshore Energy Management and Resource Extraction) also erred in failing to consider the environmental issues surrounding natural gas procurement. This is just more evidence that the MMS has not been working properly. I would note that the energy companies themselves are better off by getting the "gold standard" environmental review if they really want to procure resources in this sensitive ecological area.

Much more happened this week with climate change. Comments later.

Deep Well Moratorium Injunction - Part II

victorflatt — Thu, 24 Jun 2010 22:48:00 GMT

As noted today by Tom Fowler, Judge Feldman refused to reconsider his decision to enjoin the ban on deep water drilling so that the government can appeal to teh 5th Circuit. No surprise there. The whole point of a preliminary injunction is that action is needed immediately. Nevertheless, Judge Feldman will not require compliance for thirty days, and that is enough time for an emergency appeal.

Now back to the merits of Judge Feldman's decision. As I noted in an earlier blog, when weighing equities there certainly seems to be a case that the government needs to have some reliable evidence in order to counteract the potential harm a ban would cause. At that time, all reports indicated that the government did not have such evidence. However, after reading the "reasons" supporting Judge Feldman's order, I find some significant problems with his original decision.

He agrees to rely on data beyond the original moratorium order, and notes that the government produced studeis showing that in one instance 3 out of 6 ram shear (part of blow-out preventers) failed at 3000 p.s.i. (pounds per square inch approximate depth 6000 feet), and in another 7.5% did.

Granted, this does not demonstrate a high failure rate at 500 feet (approximately 225 psi) BUT 500 feet is the point where the ram shears must be used.

The problem is that the opinion itself does not go through these calculations. It merely states that there is no "rational" relation between the studies and the ban at 500 feet. I would disagree. Moreover, the judge's analogy about one plane's failure or one oil tanker's failure do not mean all will fail, can hardly be squared with a potential failure rate of 7.5% At this level, we are talking about something on the failure rate of the O rings in the space shuttle. which did grind to a halt after a major disaster.

Bottom line, Judge Feldman's opinion has its own flaws. Ultimately, it appears that it won't matter as DOI will institute a more tailored ban in any event.

Judge Blocks Deep Well Drilling Moratorium - What Happens Now

victorflatt — Tue, 22 Jun 2010 20:24:00 GMT

U.S. District Judge Martin Feldman just issued an injunction ordering the government to lift its 6 month moratorium on the oil drilling deeper than 500 feet, noting that the government's reason for the moratorium was not logical. I haven't seen the opinion yet, but the crux of the matter in an injunction is the "balancing of the equities." Bsaically the judge is to make a preliminary determination on the legal issues (without benefit of full evidence or briefing) and then based on the judge's belief in the success of the legal argument, balance that against the hardship to the parties of waiting.

Well the economic hardship argument is quite compelling. Certainly the moratorium puts many person out of work, and impacts the economies of the region. The legal issues are less clear. One can certiainly make an argument that one spill does not portend any more spills, but one can also make the argument that something in the permitting process did not work correctly (indicating there could be another problem) and that we have no known way to do a clean-up (without which is severe economic and environmental harm).

The biggest failure seems to be that many of these have been approved under the assumption that a failure of the back-up systems is essentially impossible. We know that is not the case. The question is how many others may have deficient back-up systems. Certainly the spill clean up plans maintained by the majors are inadeuate for something of this scale. So....while I don't discount the judge's opinion, nor do I think it is a slam dunk to be upheld on appeal. It basically comes down to how much remaining risk one believes still exists in the other wells. Is it one in a million? or on in a hundred. We don't yet know, and that is the problem.