Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

In an e-mail to Climate Law Update, Shell Exploration and Production Company spokesman Curtis Smith said:

"Shell has already conducted safe and environmentally responsible seismic programs in the Beaufort and Chukchi seas during 2006 and 2007. We will continue to do so in 2008 while meeting or exceeding all regulatory requirements."

He added that the prior explorations "were successfully completed without any recordable safety incidents or known negative impact to the environment or local communities." The company spent $2.1 billion earlier this year acquiring oil and gas leases in the Chukchi Sea. 

A BP spokesman, Steve Rinehart, who noted that the company was not active in the Chukchi Sea,  told Climate Law Update:

"BP does have a well-considered seismic survey planned for this summer. It's a survey that will be conducted in a way, and is designed in a way to not harm or conflict with fish, sea birds, marine mammals or other wildlife."

He also said that the timing of the explorations means they would not occur during whale migrations, and would take place at a time of lessened ice, meaning fewer bears should be present. 

Although the latest lawsuit has little explicitly to do with global warming, that issue was clearly not far from the minds of some of the protagonists. Brendan Cummings, a California attorney for the Center for Biological Diversity, and one of the plaintiffs in the litigation, said in a statement issued by the groups (see text here):

"All of the marine mammals of the Arctic are under severe threat from global warming and should not be subjected to further harm. Yet the planned seismic surveys would subject literally tens of thousands of these already imperiled animals to dangerously loud sounds."

Cummings' group, along with the Natural Resources Defense Council, another plaintiff in the latest litigation, recently won a judge's ruling ordering federal wildlife officials to quickly decide whether to grant Endangered Species Act protection to the polar bear because of threats posed by climate change. Such a move also could require heightened environmental scrutiny for oil exploration operations, the groups contend (see Climate Law Update stories here, here, here and here).

The center is also pressing federal officials to extend the protections of the endangered species law to four seal species that inhabit the Chukchi and Beaufort seas, both as a result of global warming and oil development (see Climate Law Update story here).

Shell and BP are also among the defendants in a separate lawsuit filed in federal court in San Francisco alleging global warming damage to Kivalina, an Alaskan village (see lawsuit here).

 (Photo: Minerals Management Service)

Wilken rejected a request by the government that would have pushed the effect of any final decision to protect the animals under the law until about Aug. 1. The government had wanted to wait to issue any decision until June 30 and then to allow another 30 days before it actually took effect. At the same time, federal officials had agreed that the environmental group's motion requiring action should be granted -- but disagreed on the timing.

The judge, who sits in Oakland, Calif., however, didn't buy any of the arguments asking for more time:

"Other than the general complexity of finalizing the rule, defendants offer no specific
facts that would justify the existing delay, much less further delay. To allow defendants more time would violate the mandated listing deadlines under the [Endangered Species Act] and congressional intent that time is of the essence in listing threatened species."  

She also found that the endangered species law would be much more protective of the bears than another federal statute, the Marine Mammal Protection Act, because the former law also covers the bears' habitat. Federal officials had argued that the marine mammal law would give the bears adequate coverage while a decision was pending on whether to extend endangered species protection to the bear.

Wilken also noted a rule had been proposed to exempt oil industry operations in part of the bears' habitat, in the Chukchi Sea region of the Arctic Ocean, from the marine mammal law's prohibition against harming protected animals. 

In addition to the Center for Biological Diversity, other plaintiffs in the case include the Natural Resources Defense Council and Greenpeace.

(Photo: U.S. Fish and Wildlife Service)

Wilken is presiding over a lawsuit brought by environmental groups who contended that the government, as a result of prior litigation, was supposed to have formally issued its decision by Jan. 9 (see text of lawsuit here; see Climate Law Update story here; ). More recently, the environmentalists filed a summary judgment motion asking Wilken to order officials to act within a week of the next hearing on the matter, now scheduled for May 8 (see motion here).

In court filings Thursday, Justice Department lawyers representing Interior argued that Wilken should grant the plaintiff’s motion – but “adopt the [wildlife] service’s proposed deadline of June 30, 2008 for submission of the final listing determination for the polar bear to the Federal Register.” The government acknowledged that as far back as December 2006 officials had proposed listing the bear as threatened. Additional studies were ordered, however, and a draft decision is now in the hands of Lyle Laverty, the department’s assistant secretary for fish and wildlife and parks. Laverty “anticipates a final listing decision will be completed” by the June date, the department's lawyers wrote.

They also asked the court to allow the decision to go into effect 30 days after its publishing in the register, meaning no protections would kick in until about Aug. 1. The filing noted that 670,000 public comments have been received on the issue.

“The assistant secretary must ensure that the final determination has addressed the public comments, is supported by the best available scientific and commercial data, and is legally sufficient,” the government attorneys wrote. Additionally, they argued that a 30-day waiting period “will have a negligible effect” on the bear, which they contended is adequately covered in the short term by the Marine Mammal Protection Act.

The move came barely a day after President Bush warned against attempts to use the endangered species law and other federal statutes to prod action on climate change (see Climate Law Update story here).

Kassie Siegel, an attorney for the Center for Biological Diversity, one of the plaintiffs in the lawsuit, told Climate Law Update the government has handed out oil and gas leases in the region and is also issuing permits for related seismic exploration. Officials, she charged, do not want to go through the additional steps “on any of that stuff” that they would be required to take if the bear were listed. The plaintiffs also issued a written statement criticizing the administration (see text here). 

In a statement (see text here), the Sierra Club, which is not a plaintiff in the case, charged that the government’s delay has “allowed just enough time for the Interior Department to open polar bear habitat to oil drilling.” It added that seismic tests in the Chukchi Sea, a part of the Arctic Ocean, could begin this summer.

Shane Wolfe, an Interior Department spokesman, told Climate Law Update Friday that the court filings, including a sworn statement from Laverty, would speak for themselves “because there’s a lot of information” in them. He added, however, that the Chukchi Sea lease sale had been “long-scheduled” and constituted only a “very early step in the process of producing oil and natural gas.” He pointed to Laverty’s court declaration, which noted that the government had previously determined that oil and gas development, among other potential dangers, “do not threaten the polar bear throughout its range.”

In light of that finding, Wolfe said Interior Secretary Dirk Kempthorne has argued that to cancel the lease sale “would really say that what we said [earlier] wasn’t true.” 

(Photo: Steve Hillebrand, U.S. Fish and Wildlife Service)

The CPUC goal is to reach 1,750 MW of solar installations by 2017. With the 249 MW of applications on the books, the report said the program “would appear to be on track to meet at least 14 percent of the program’s 10-year goal.” There are no annual targets because the program’s demand is expected to fluctuate as incentive levels drop.

 Despite the report’s relatively sunny findings, it noted that “new challenges” may confront the program in the months ahead. Those include the fact that strong demand in the first year has caused incentive levels to drop three times within 15 months for some areas. For instance, PG&E and Edison are now offering $1.55 a watt for commercial systems, down from a maximum of $2.50 a watt.

Other possible clouds on the horizon include uncertainty over federal incentives, which have been tied up in Congress (see most recent Climate Law Update story here), strong worldwide demand for solar driving up the price of components, fluctuations in the rate at which applicants drop out of the program and the health of the nation’s troubled housing markets.

(Photo: California Solar Initiative)

The document is in the form of a proposed decision to be presented for consideration by the full five-member CPUC. If adopted by the panel, the paper would  then constitute a recommendation to the California Air Resources Board, which is the key body in charge of implementing AB 32,  the law that mandates big reductions in California climate-change emissions by 2020 and which officials hope to have up and running by 2012.

Peevey wrote:

We favor inclusion of the electricity sector in a cap-and-trade program for
a number of policy reasons. While we fundamentally favor a certain minimum
level of mandatory reductions from existing programs as described above, a
cap-and-trade system in combination with these mandatory reductions should
be able to produce the GHG emissions reductions required by AB 32 at a lower
cost than reliance on additional mandatory reductions. This is because emissions
trading maximizes flexibility in achieving emissions targets by allowing
obligated entities to rely on the least-cost options across the entire economy.

Significantly, Peevey wrote that any cap-and-trade program must include a component to include electricity imported from other states. While California gets about 20 percent of its juice from neighboring states, those imports represent more than half of the greenhouse gas emissions from the sector, he noted.

It was partly along those lines that he recommended that electricity deliverers to the grid bear the burden of complying with AB 32. Other options would have placed the responsibility on retail providers; in-state generators, with no inclusion of imports in the cap-and-trade system; and in-state generators, with retail providers as the point of regulation for imports. All the choices were evaluated against a set of criteria including "environmental integrity," accuracy and ease of reporting, compatibility with ongoing reforms in energy markets and legal issues.

The so-called deliverer option worked best, Peevey wrote:

After evaluating the point of regulation options against these key criteria,
we find that the deliverer option best meets the criteria. Each of the other
options has serious shortcomings regarding one or more of our priorities. The
deliverer system provides for the environmental integrity of the system by
covering imported power as well as in-state generation. It also shares a number
of common characteristics with a pure generation-based point of regulation
making it likely to be compatible with the eventual design of a cap-and-trade
system that is broader in geographic scope (regional and/or national). The
deliverer point of regulation also improves the ability to report and track
emissions in the sector and minimizes the impact of AB 32 GHG regulations on
California’s wholesale electricity markets. Finally, the deliverer method can be supported on legal grounds.

Despite advocating the inclusion of a market-based approach in efforts to control climate-changing emissions from the electricity sector, Peevey shied away from backing an immediate move along those lines for natural gas. He cited "key differences between the electricity and natural gas sectors" for his recommendation to leave gas out of the equation for now. Those included, he wrote, "significantly fewer options" for reducing greenhouse emissions in the natural gas sector and the "very limited availability of low-carbon alternatives" to gas. However, he added that as California gains experience with a cap-and-trade system and other developments occur, "it may become appropriate" to add the natural gas sector to such a system.

Peevey cited support for a cap-and-trade approach from a wide range of interests, not all of whom usually see eye-to-eye, including environmental groups, utilities, power suppliers and others.

There isn't unanimity among all of the parties, however, as reflected in written comments filed with the CPUC.  Environmentalists, including The Natural Resources Defense Council, filed comments urging officials to "move forward in designing a [greenhouse gas] cap and trade program for electricity. Those same organizations also advocated that California go ahead with "a cap and trade system that includes natural gas, even if regional and federal programs have not yet emerged." Meanwhile, El Paso Corporation, a large natural gas supplier, submitted arguments urging a wait-and-see approach to imposing a gas cap and trade system. The Utility Reform Network, a vocal California ratepayer group, asked that any cap and trade system adopted for 2012 exclude electrical generation, arguing that the state would be better off "promoting existing policies that result in real GHG reductions" and taking other steps, such as developing a regional tracking system for the emissions.