CLIMATE CHANGE ROUNDUP: Bioenergy Action Planned

By Published On: December 10, 2010

California is banking on increased use of bioenergy--including urban and forest waste--to meet future energy needs and cut greenhouse gas emissions. In an “action plan” to be discussed Dec. 14, numerous state agencies call on lawmakers to renew state subsidies for utility-scale solid fuel biomass plants (as well as solar thermal energy plants). The current program--administered by the California Energy Commission--expires at the end of next year. The action plan also calls for increased use of urban biomass and forestry waste to make electricity, including thinning forests to prevent wildfires and using the cut material to make power. Resulting reductions in wildfires could generate emission reduction credits for particulate matter. Power plant and other industrial facility operators need emissions reduction credits to offset their emissions under the federal Clean Air Act when they expand or build new facilities. Credits, particularly for particulate emissions, are in short supply and have prevented construction of numerous power plants in the smoggy Los Angeles area. The plan also would seek to eliminate restrictions on sending biomethane from landfills into natural gas pipelines for use in both industries and buildings. Concerns about trace levels of toxic materials have proven problematical in the past. Action on these and other items outlined in the plan is to be completed over the next two years. Agencies involved in the plan include the Energy Commission, CalFire, California Public Utilities Commission, the California Air Resources Board, and Cal Recycle. * * * * * The California Air Resources Board’s plan to set a $10 a ton price floor for carbon emissions rights in its market-based cap-and-trade program appears not to be market-based at all, says Independent Energy Producers policy director Steven Kelly. Compared to the price of carbon emissions rights traded in other markets, he maintains it’s inflated. Indeed, carbon credits changing hands in the most recent auction held Dec. 1 by the Northeast states’ Regional Greenhouse Gas Initiative went for $1.86 a ton. That’s the price Kelly suggested the Air Board should use as an initial price floor in its own proposed cap-and-trade program, which is up for an approval vote next week. Kelly told the Air Board in comments filed Dec. 1 that even $5 would be better than $10. A more inflated floor price, he said, will create “a bigger shock to the electrical pricing system than needed.” Under the Air Board’s cap-and-trade plan, the power generators Kelly represents would have to purchase their emissions rights from utilities in an auction. The Air Board would grant the emissions rights for free to the utilities, which are supposed to use the money from selling them to the generators to help offset the expected increase in energy prices for their customers and also to cut carbon emissions. The Air Board has not responded to Kelly’s suggestion. Asked about it, the Air Board did not respond to Current either. * * * * * The U.S. Supreme Court announced Dec. 6 it plans to review a case involving whether states can sue power generators and other companies to reduce their greenhouse gas emissions on public nuisance grounds. Connecticut, California, and other states sued AES and other power companies in 2005 seeking court-ordered emissions reductions at power plants. The plaintiffs alleged that the emissions constituted a public nuisance by contributing to climate change, but the U.S. District Court for the Southern District of New York disagreed. Overturning the federal district court in September of 2009, the U.S. Court of Appeals for the Second Circuit found the states did indeed have standing to pursue the action. This prompted AES and the other generators to ask the appellate court for en banc reconsideration, which the court turned down. The utilities then appealed the ruling to High Court. The appellants argued that greenhouse gas emissions policy should be set by the political branches of the federal government, not the bench. They further maintained the court cannot adjudicate their “butterfly” effect on the climate, since emissions come from literally billions of sources around the world. The so-called butterfly effect poses the question of whether a butterfly flapping its wings could cause a distant tornado due to the ripple of air. The Tennessee Valley Authority supports AES and the other utilities in the case. A decision is expected by next summer. * * * * * The U.S. Environmental Protection Agency called on California and 12 other states to update their Clean Air Act implementation plans to include greenhouse gas emissions. The changes are to ensure that beginning in January, power plants and other large industrial emissions sources are eligible to receive permits if they plan to build new facilities or make major modifications to existing ones from the authorized state agency. The facilities are to “work with permitting authorities to identify and implement the most efficient control technologies to minimize their greenhouse gases,” EPA stated Dec. 3 The Clean Air Act requires states to develop implementation plans that include requirements for issuing air permits. Last March, EPA revised its rules and released a greenhouse gas tailoring rule, which requires the gases to be covered in those permits. California must modify its air quality plan to comply with the changes.

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