The election results make California\u2019s efforts to limit the flow of faux green electricity imports into the state less challenging. With the reelection of President Barack Obama, it is unlikely that the U.S. Environmental Protection Agency will reverse the requirement that owners of dirty coal power plants cut smog-forming emissions. That well could have been the case if Republican Presidential candidate Mitt Romney was elected. EPA\u2019s continued pressure on coal plants to clean up--particularly out-of-state ones that send power into our state but that the California Air Resources Board can\u2019t directly control--helps us get cleaner. Requisite emissions reduction investments in coal plants make them less financially attractive. That reduces their output and minimizes the risk to the Golden State of resource shuffling. California has been blasted for going it alone on cutting carbon emissions via a cap-and trade program, but the election results solidify the Air Board\u2019s partnership with EPA. For example, with EPA\u2019s involvement, there are two Teecoalers worrying about the 2,250 MW Navajo coal plant in Arizona. The Los Angeles Department of Water & Power hopes to divest its share of that coal asset by 2015. The rub is that if and when it sells its share in the coal plant, and if it continues to operate at the same level, carbon emissions won\u2019t drop. That is where California\u2019s cap-and trade program and federal standards work hand in hand to cut greenhouse gases (see sidebar). As it is, the California Air Board has had a tough time keeping its carbon trading market on track. That\u2019s no surprise, given its complexity. Although California-centric, it includes in- and out-of-state impacts, with billions of dollars in trades expected. Front and center stage recently at the Air Board was its proposal to require producers and traders to swear they weren\u2019t wearing green-tinted eye shades when importing coal-fired electricity. It was to be accompanied by a less-than-clear definition of \u201cresource shuffling.\u201d Resource shuffling--slapping a green label on coal power imports that are diverted elsewhere, resulting in no greenhouse gas emission reductions--has been under debate in various forums, including at the California Public Utilities Commission in 2008. It became the issue de jour at the California Air Board last month. Much focus has been on the Los Angeles muni. That utility plans to sell its interest in the Navajo coal project and also get out of the Intermountain Power Project in Utah ahead of schedule. The concern is the replacement power over the short- and long-term. Will L.A. import generic power that includes electrons from the divested coal power? Will the Air Board\u2019s emissions value given to unspecified, generic electricity imports encourage that kind of trading? Not easy to predict or prove. Thus, until the Air Board and stakeholders nail down the definition of resource shuffling next summer, the agency includes in its list of activities not considered resource shuffling the divestiture of coal plants (Current, Oct. 19, 2012). Unlike coal, the issue is far from black--or white--given the market\u2019s many shades in between. Agreeing to put off until the summer of 2013 the definition of resource shuffling and attestations of abstinence for 18 months while the market goes forward was an unusual regulatory action. Regulations are typically defined before a program is put in place. But, the Air Board was getting squeezed from a lot of different directions. In addition to stakeholder objections, it was up against a regulatory deadline, the agency received a stern warning from a federal regulator that the move in an untested market would wreak economic havoc in the state, while overworked Air Board staff also toil to launch the first quarterly state carbon auction set for Nov. 14. The Air Board also is focused on staying on the legal side of the federal Interstate Commerce Clause to ensure legal victory if and when charges of disparate treatment of out-of-state resources are brought. There are also other unknowns as to how this brave new carbon market will play out. Although generating a lot of attention, how big a problem resource shuffling is will be unknown for some time. Part of the answer depends on how big a power player coal will be in the next several years. Some bet its role is shrinking because the cost of natural gas has plummeted while the cost of coal deliveries is rising. State policies to green power supplies also are affecting coal-generated power Regardless of how federal and state policies and laws affect coal\u2019s future role, a lot of money is on the table. There also are significant concerns about liability and fines for running afoul of the Air Board\u2019s resource shuffling rules. \u201cThere are a range of possible enforcement actions that could occur depending on the severity of the reshuffling and related facts, including monetary penalties or environmental remediation, or both,\u201d the Air Board stated in a Nov. 6 regulatory guidance appendix. Also unanswered is resource shuffling\u2019s impact on carbon market prices. It shall be a few years before any one knows. After the market debut, the Air Board will be busy monitoring and analyzing data from in-state and imported supplies. Its findings will surely be contested, but at least until the next election cycle it has one less thing to worry about.