Industry Seeks Greenhouse Gas Bookkeeping Change

As the California Air Resources Board establishes a greenhouse gas emissions reduction target under state law, the energy industry wants to make sure global warming gases are not double-counted. Electricity generators and others fear that carbon dioxide and other greenhouse emissions will be overregulated. The industry fears that the state air board's preliminary interest in having generators and large electricity consumers report emissions attributable to power production may inflate apparent greenhouse gas levels and lead to more reductions than strictly needed to meet the law's goal. The air board is charged with developing regulations to implement AB 32. This new state statute mandates that greenhouse gas levels be cut by 25 percent by 2020. Energy companies also maintain that if the air board accounts for life-cycle energy emissions - from well to burner tip - it should credit California companies for greenhouse gas reductions made where energy is produced, which often is out of state. "California ought not to regulate those emissions a second time," said Al Pak, Sempra Global Enterprises director of state regulatory affairs. His remarks were representative of industry concerns. He pointed out, for instance, that Indonesia is requiring greenhouse gas reductions where natural gas will be produced for export to the company's Costa Azul liquefied natural gas terminal in Baja California and then sent to California. Regulators must recognize these reductions, Pak said. These and other complications in tracking greenhouse gases and setting an emissions reduction goal were aired at two separate workshops late last week - at the California Energy Commission on November 30 and at the air board on December 1. "Greenhouse gas emissions reporting is a very different world" than the type of reporting on pollutants that air regulators are familiar with, according to Peggy Taricco, CARB emissions inventory branch chief. Electricity imports to California fluctuate from year to year, in both their levels and their source - depending on weather variations and hydropower conditions. Moreover, ownership of the power changes hands several times before it is used, and some of the power that crosses state lines is wheeled to other states. Thus, keeping track of greenhouse gas emissions through all those transactions without counting them more than once may be a challenge. There is also a limit on information on the source of electricity inputs, said Al Alvarado, CEC greenhouse gas emissions team leader. Ultimately, there is no way to match all of the state's import purchases to the actual source of power production and accurately account for the associated greenhouse gas emissions, Alvarado added. As imperfect as it is, the Energy Commission has drafted a new greenhouse gas emissions inventory and will pass it over to the air board for further development on January 1. Under the state's climate change mitigation law, AB 32, the air board in 2007 must determine what California's greenhouse gas emissions were in 1990 and set that as the emissions limit in 2020. The air board will start off by refining the Energy Commission's emissions inventory. That inventory shows that the state's greenhouse gas emissions in carbon dioxide equivalents stood at 426.6 million metric tons in 1990 and grew to 492.1 million metric tons in 2004. The electric power industry accounted for 22.2 percent of 2004 emissions; transportation 40.7 percent; industry 20.5 percent; agriculture and forestry 8.3 percent; and all other sources 8.3 percent. The energy commission estimated that emissions attributable to power imports from out of state have grown from 43.3 million metric tons in 1990 to 60.8 million metric tons in 2004. Most of the growth is attributable to reliance on new out-of-state gas-fired power plants, said Alvarado. Businesses that have reported their emissions to the California Climate Action Registry will be able to continue to use the same methodology unless CARB determines that changes are needed to improve accuracy. - William J. Kelly

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