JUICE: CA Green Ain’t the New Black

17 Nov 2016

Last week’s national election was demoralizing for clean energy advocates and many others but it also had the inverse effect of galvanizing state and local leadership.

A few days after the election, Gov. Jerry Brown pledged to “protect the precious rights of our people and continue to confront the existential threat of our time, devastating climate change.” He also announced that the number of countries, states and cities committed to a subnational climate protection agreement, complementing the United Nations’ Paris climate pact, grew to 165 this week.

California Public Utilities Commission President Mike Picker promised “to keep the feds chasing us.”

Los Angeles Department of Water & Power Board President Mel Levine expressed similar sentiments. He noted this week that the public power agency will continue to promote less polluting energy to keep the state and Southern California “in the lead, regardless of what the feds do.”

The San Francisco Board of Supervisors pledged like action.

The good news is that state environmental laws—from clean air to water—can be stricter than federal laws. But in some cases, the federal government must approve tighter state rules.

A well-known, prolonged and costly federal-state fight that California ultimately won was over the state’s unprecedented vehicle emission standards passed in 2002. The Bush administration first asserted California had no jurisdiction over greenhouse gas emissions. Brown, then California’s Attorney General, sued. Later in 2007, the federal administration rejected the state’s emission rules. One of President Barack Obama’s first actions was to approve the standards under AB 1493 by then Assemblymember Fran Pavley. Many other states followed California’s example and adopted parallel emission standards as did the federal government.

But, eyes are wide open. Potential land mines include loss of federal money and incentives for clean energy and a clash between federal and state energy regulators over policies. Other risks are a possible trade war with China that could impact the Golden State’s 50 percent renewable mandate and hostility to skilled foreign workers, many of whom are employed at state utilities, state agencies, renewable energy companies, and high-tech companies involved in the energy field.

Here is our list of potential war zones:

Federal Energy Regulatory Commission appointments:

  • Trump can immediately appoint two members to the five-member Federal Energy Regulatory Commission. He also will be able to replace a third commissioner next year because Commissioner Collette Honorable’s term expires in June. Before his first term in office expires, he will be able to replace the two other commissioners. Given Trump’s apparent penchant for retribution, his appointees may be hostile to California, blocking state actions that need FERC approval with delays and legal maneuvering. A key question is whether FERC will reverse its position that demand response constitutes a wholesale transaction and also whether enforcing standards related to how power imported into California, for instance, related to its carbon content, contravenes the Interstate Commerce Clause of the Constitution. Also unclear is whether FERC will ease enforcement of policies designed to prevent the type of market manipulation that caused the state’s 2000-01 energy crisis.

International trade policy:

  • Trump threatened to place a 45 percent tariff on imports from China, which he accuses of currency manipulation. That would stymie California’s plans to meet a 50 percent renewable energy level by 2050, or at least raise the price tag. The U.S. imports more than 40 percent of the photovoltaics installed here from China, with California being the leading installer. Systems are made here and in other nations, but China is the single biggest manufacturer in the world. It has driven the price of solar down dramatically, initially by dumping panels. Even with anti-dumping and countervailing duties imposed on imports from China, producers there have barely lost any U.S. market share, but that may change with stiff tariffs and bad blood.
  • Rare earth metals are at the heart of many of the clean energy technologies needed for California to achieve a clean economy. China is the overwhelming source, producing upwards of 80 percent of the world’s supply. Rare earth metals are used in wind turbines, solar panels, LED and compact fluorescent lighting, and electric vehicles. Meanwhile, the only U.S. rare earth metal mine is closed down with the bankruptcy of Molycorp. It tried to reopen the Mountain Pass mine in San Bernardino County after China restricted exports earlier this decade only to be quickly crushed after China rolled back the restrictions.

Immigration policy:

  • While not normally thought of as an energy issue, Trump’s pledge to crack down on Muslims may bode poorly for California energy companies’ ability to maintain the talent pool needed to dramatically transform themselves to satisfy the state’s green policies. Last week, the California Public Utilities Commission leadership pledged to refer staff here on Green Cards and H-1B visas to immigration law specialists. Meanwhile, Southern California Edison has hundreds of foreign information technology specialists. Over a two-year period ending in 2015 Pacific Gas & Electric applied for some 150 H-1B visas for new hires. Unknown is the scope of the potential threat to California’s energy sector talent pool and/or their family members from legal action by the Department of Homeland Security and harassment and threats from the white nationalists and xenophobia that Trump’s campaign rhetoric has unleashed. What is known is that the foreign workers are highly trained engineers and computer specialists, often from the Middle East, who are at the heart of company operations.

Public Land Management:

  • The Bureau of Land Management has strived to increase the number of public acres available to foster clean energy. Under threat are public lands designated for solar and wind energy development. Also, BLM fracking rules are likely to be weakened in the rush to open federal lands to more oil and gas drilling and coal mining.

Environmental policy:

  • Trump’s choice of Myron Ebell of the Competitive Enterprise Institute to lead his transition team on environmental issues, particularly on climate policy, is ringing alarms among environmentalists both here and abroad. Ebell, who denies that burning fossil fuel is contributing substantially to a warming climate, could be the next head of the U.S. Environmental Protection Agency or Department of Energy. Trump pledged to withdraw the nation from the Paris climate agreement and it’s assumed he will quickly rescind President Obama’s clean power plan and halt other national policies that have made it easier for California to pursue a clean energy policy. The agenda is predicted to include axing federal methane rules. As a result California will be faced with going it alone, including in its effort to slash methane emissions from oil and gas sector.

While a Trump Administration and Republican-dominated Congress can’t halt California’s energy and environmental progress, it can do considerable harm. There’s even talk of reconsidering federal energy efficiency standards for appliances and lighting. The silver lining is that the damage will be curbed by California’s leadership, which has no plans to back down from its commitment to decarbonize the energy sector.  These ongoing efforts will continue to be aided by market forces that are promoting the spread of renewable resources here and around the world.

—Elizabeth McCarthy & William J. Kelly

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