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

"Two separate government analyses have now come to the same conclusion," Lieberman said in a statement (see text here).  "Our bill curbs global warming without harming the U.S. economy."

Lieberman said the new study predicted impacts "below even the modest figures" cited by the EPA He said the energy department also found that the bill would benefit wind and solar, as well as carbon capture and storage technology.       

The Environmental Defense Fund, which supports using markets to tackled climate change, also lauded the study's conclusions, as did the Natural Resources Defense Council (see press statements here and here). Environmental Defense recently released its own analysis of Lieberman-Warner, concluding that economic models showed cap-and-trade "consistent with long-term economic growth (see Climate Law Update story here).”

Both environmental groups characterized the economic pull of the legislation as virtually unnoticeable.

"It's like two cars driving different routes from New York to L.A. and predicting one will get there at noon and the other will arrive at 12:45," said Environmental Defense's climate campaign director Steve Cochran in the group's statement. NRDC said bill's impact would be equivalent to a two-month delay in growth.

Environmental Defense also again noted, as it has in the past with other studies, that the document didn't look at the price of doing nothing, including higher insurance costs, damage from droughts and more intense storms.

But not so fast. Inhofe, the ranking minority member of the Senate Environment and Public Works Committee, had his own take on the study, which also foresaw potentially higher prices for coal and natural gas. Inhofe focused the study's predictions of higher energy costs for households, and the consequences for industry. He also said the energy department analysts also based some assumptions on a "massive and unrealistic" boom in the construction of new nuclear plants (see statement here). Said Inhofe:

"Only in Washington could higher energy prices be characterized as not negatively impacting the U.S. economy. If Democrats have their way, Americans will pay significantly more at the pump, in their homes and in many cases, with their jobs, all to accomplish an undetectable impact on the climate."

The EDF's Cochran might have had Inhofe in mind when he declared the debate over:

“Anyone claiming the Lieberman-Warner bill will bring economic doom can now go sit with those still saying climate change is a hoax. It’s time for the Can’t-Do crowd to retire the scare tactics.”

But there's little evidence the two sides will see eye-to-eye anytime soon.

(Photo: Sen. James Inhofe's office)

Environmental groups have previously noted that reports on the economic footprint of efforts to combat global warming have failed to take into account the cost of not acting. Nathaniel Keohane, director of economic policy for Environmental Defense, reiterated that point in the group’s statement:

“It’s important to keep in mind that these forecasting models compare climate policy to a business-as-usual case that doesn’t take the costs of climate change into account. If we fail to take action on global warming, the future will be anything but business as usual. The most expensive policy by far is to do nothing at all.”

Elsewhere, the statistical arm of the U.S. Department of Energy has released data showing that federal subsidies and support to all forms of energy hit $16.6 billion in 2007, more than double the comparable figure from 1999. The document, from the Energy Information Administration, analyzed money going into direct federal spending,  tax incentives, research and development and such programs as the Tennessee Valley Authority and the Bonneville Power Administration.

It found that the percentage of the subsidies and support going to renewable energy rose from 17 percent of the total to 29 percent in 2007, as assistance for natural gas and petroleum declined. About 41 percent of all the subsidies were related to electricity production. The report also noted that despite the increased subsidies energy production in the United States stayed virtually unchanged (access report documents here).

Additionally, the report also found some major differences in the power produced per dollar spent on subsidies. For instance, it showed that by far the highest per-megawatt-hour subsidies went to coal-based synthetic fuels, wind and solar. Synfuels received nearly $30 per MW hour, while solar topped $24 and wind got more than $23. On the other end of the scale, coal, natural gas, biofuels, geothermal and hydroelectric all came in at under $1 per MW hour, while nuclear was at $1.59. The report noted that wholesale electricity costs averaged about $53 a MW hour in 2006.

The report noted, however, that the apparent disparities are driven by the amount of electricity generation across the fuel types. Baseload generation technologies such as coal and nuclear produce nearly 70 percent of the power, a fact that tended to reduce their subsidies and support per unit of electricity. The document also cautioned that it was only a snapshot of a particular time:

“Some electricity sources, such as nuclear, coal, oil, and natural gas, have received varying levels of subsidies and support in the past which may have aided them in reaching their current role in electricity production. The impacts of prior subsidies, some of which may no longer be in effect, are not measured in the current analysis.”

Meanwhile, an industry analysis showed energy efficiency improvements could cut the need for some, but not all, new generation over the next two decades. The study, released by the Electric Power Research Institute and the Edison Electric Institute, reported that electricity demand was expected to rise 30 percent by 2030 (see press statement here).

Theoretically, an eventual placement of the animals on the list could lead to restrictions on a number of the local activities, as well as adding the agency as a regulatory player in combating climate change. The endangered species law contains provisions mandating that “federal departments and agencies shall seek to conserve endangered species and threatened species and shall utilize their authorities in furtherance of the purposes of this act.”

Under the law, regulators throughout government are supposed to consider potential impacts on endangered species when carrrying out their duties. That means, for one, consulting with colleagues in the wildlife regulatory agencies. It's a wide net that environmentalists believe should be used to cover government activities such as issuing permits for power plants or new highway construction.

Cummings said the seals face a "double-barreled threat" both from local development, such as oil and gas projects, and from greenhouse gas-related global warming. He noted that new threats to the animals might also develop as the ice disappears, allowing for shipping lanes to open and for additional fisheries to develop.

"It's being viewed as the new gold rush," he said. A listing of the seals would give the creatures some additional protections if the new developments occur.

But he said there would also have to be efforts to curtail emissions of greenhouse contributors such as carbon and methane.

"If we don’t stop global warming, there’s not much we can do for these species,” said Cummings, whose office is in Joshua Tree, California. He noted, for instance, that unlike some other marine mammals such as the walrus that can use dry land as a habitat of last resort, the ribbon seal is never seen on land.

In addition, he said other issues need to be examined “pro-actively,” including the impacts of an ocean fishery that may be shifting geographically northward along with warming waters.

A listing by the fisheries service would also engage an agency, which is housed in the U.S. Commerce Department's National Oceanic and Atmospheric Administration, that the environmental group feels has been historically more responsive to endangered species considerations than its sister bureaucracies. That latter category includes the Interior Department’s Fish and Wildlife Service, with which the organization has repeatedly tangled.

Part of the goal, Cummings said, is to “get [the fisheries service] involved in species management in a changing climate.”

Doug Mecum, acting administrator for the fisheries service’s Alaska region, was reluctant to predict what would result if the seals were to be listed.

“We’re kind of a long ways away from determining what, if anything, might be done,” he told Climate Law Update. He acknowledged, however, that “it’s kind of mind-boggling given the potential scope” of actions that theoretically could be implicated.

At the same time, Mecum suggested his agency’s specific authority had limits.

“I think that first and foremost you look at things under your immediate control,” he said. For example, the agency has since the early 1990s listed some part of the Stellar sea lion population as threatened and others endangered, and officials have identified threats to animals as  diverse as killer whales because of climate change and issues related to the commercial fishing industry. He said the agency has little it can do about the first two and so it has concentrated on regulation related to the fisheries (see recovery plan here).

When it comes to the seals, he said, one thing to look at would be finding ways to mitigate the impact of oil and gas development in their habitat.

On the larger issue of how multiple government agencies would deal with species found to be threatened by climate change, Mecum said he “wouldn’t hazard a guess” about what the future holds.

“This is pretty much new ground we’re breaking here,” he said.      

Clearly, organizations such as Cummings’ intend to press the issue. The Center for Biological Diversity has targeted global warming’s alleged effects on a number of cold-climate animals, including the polar bear and the Pacific walrus, in addition to the seals. It recently joined with other environmental groups to sue the fish and wildlife service (see Climate Law Update story) to prod some action out of the agency on listing the bears. The group has also sent the agency a formal request (see press release and petition) to protect the walrus under the endangered species law.  Regarding more temperate regions of the world, the group successfully pushed the fisheries service into listing two species of Florida and Caribbean coral as threatened because of global warming, and designating "critical habitat" for the invertebrates (see press release).

But traditional wildlife agencies aren’t the only ones facing the group’s legal assault. Attorneys for the organization recently enlarged a lawsuit against the U.S. Department of Energy regarding that agency’s designation of new power transmission line corridors. The lawsuit claimed officials allegedly failed to consider the impacts on endangered species, specifically by not going through the inter-agency consultation process (see lawsuit and Climate Law Update story). In addition, the environmental group in 2007 won a federal appeals court ruling against the U.S. Department of Transportation that just last week produced action to begin considering global warming when setting fuel economy standards for light trucks and sport utility vehicles (see Climate Law Update story).

(Photo of ribbon seal courtesy of NOAA) 

Utah’s new law also places the 20 percent against a base of retail sales reduced by the amount of power generated by a nuclear plant or a coal plant using carbon sequestration. Additionally, it would only impose the requirement if it were “cost effective.” It also does not set interim targets. All of those qualifications drew skepticism from some observers.

“This bill is so fuzzy in terms of who it is really protecting,” Tim Wagner of the Utah Chapter of the Sierra Club told Climate Law Update. Wagner, who has followed the legislation closely,  said it accomplished little more than codifying what major Utah utilities, including Rocky Mountain Power had already planned to do. The club did not oppose the measure, although it supported a rival bill that would have established interim goals. Wagner noted, however, that the utility was not opposed to renewables, and that the state currently has neither a nuclear plant nor a coal plant using carbon sequestration.

Neither state Sen. Curt Bramble, the legislation's Republican sponsor, nor a spokesman for the utility could be reached for comment. Bramble, however, according to a least one Salt Lake Tribune report, has said he believes that mandatory goals are not necessary.

The Vermont legislation also nods toward boosting renewable energy by stating a a state goal of producing 25 percent of the energy consumed within its borders by 2025, “particularly from Vermont’s farms and forests.” Along those lines, the bill expands the concept of “net metering,” in which customers earn credit for electricity sent back onto the grid, for systems of up to 250 kilowatts. That’s an increase over the previous limit of 15 kilowatts. Only renewable systems or small “micro-combined heat and power systems” that meet air quality standards can qualify.

Provisions in that part of the bill allow customers who are within the service area of an individual electric company to combine into a “group net metering system.” That would include farms and various buildings owned by municipalities, including water districts, fire districts, school districts and towns. In addition, scattered or “noncontiguous” groups of customers, could be bundled together if that was found to “promote the general good.” A report on the legislation distributed by the U.S. Department of Energy’s division of energy efficiency and renewable energy said the bill would allow even individuals, including residents of apartment buildings or subdivisions, to be treated as a group.

“Such group net metering could encourage people to band together to install a large renewable energy system that will serve them all,” said the energy department account.

Among other provisions, the bill establishes a energy efficiency fund that Douglas pegged at $4 million, including $2.4 million from the state’s participation in RGGI. Money from the fund will be used to provide “energy efficiency services to Vermont heating and process fuel consumers,” according to the bill, as well as carrying out “cost-effective efficiency measures and reductions in greenhouse gas emissions from those sectors.”

Funding for such programs had been a sticking point for previous versions of the legislation and had led to a veto, according to news reports, including this dispatch from the Bennington Banner. In his public statement, Douglas did not directly address his earlier rejection of similar legislation but he noted it was important to protect the state’s taxpayers. He added:

“I am very proud of the fact that Vermont is the nation’s greenest state. Because we have made responsible decisions in recent years regarding our energy development and the preservation of our green space, Vermont absorbs more carbon than we produce. This puts us in a strong position to capitalize on our RGGI relationship to obtain new revenues to make sustainable [investments] in this energy efficiency and affordability.”

(Photo: Gov. Jim Douglas, courtesy Vermont governor's office)

According to the two earlier lawsuits, the designation of the Southwest corridor affects an area of 70,000 square miles in California and Arizona, while the Mid-Atlantic region covered by the department’s action includes “broad areas” of eight states and the District of Columbia.

The new move to the 9^th Circuit came after federal officials argued in the Pennsylvania case that such challenges could only be brought in the appeal courts. Although the initial filing in the appeals court did not include details of the plaintiffs’ allegations, a public statement from the organizations involved in the case outlined a number of objections, including the department’s alleged failure to fully consider public comments and alternatives.   

The cases stem from the department’s decision last October to designate the two corridors. The latest lawsuit came shortly after the department earlier this month denied requests to reconsider the order (see DOE press statement here).

Areas within the corridors could be subject to jurisdiction by the Federal Energy Regulatory Commission under the energy policy law, according to energy department documents.

“In practice, this will mean that if an applicant does not receive approval from a state to site a proposed new transmission facility within a national corridor, the applicant may then apply to FERC for a permit and authorization to construct the facility,” the energy department said in an information packet distributed at the time of the October decision. Once granted a permit, a builder could also use the power of eminent domain to acquire property rights for the lines, except if the land is owned by the state or federal governments, the department said.

Opponents of the department’s move saw numerous problems with it. The Pennsylvania lawsuit, charged, for instance:

“As a result of the Order, proposed utility and transmission line projects
within the Corridor will be subject to “fast-track” federal approval, bypassing
state-level processes for locating transmission infrastructure, overriding federal
environmental laws, and enabling federal condemnation of private land and
diversion of public land for new high voltage transmission lines.

By facilitating utility right-of-way creation and transmission line construction without a detailed analysis of the associated environmental impacts and without full consultation with the appropriate resource and land management agencies, DOE’s proposed corridor designation will have avoidable impacts on ecosystems, wildlife habitats and populations, historic resources and water quality.”

Anjali Jaiswal, an attorney for the Natural Resources Defense Council, one of the groups bringing the 9^th Circuit lawsuit, said the case was not about stopping transmission projects:

“We recognize the need for increased investment in transmission solutions across the country. But we need to ensure that these transmission corridor designations take place in compliance with federal environmental law.”

The lead plaintiff in the case was the Wildnerness Society. The California Wilderness Coalition also joined the litigation. 

In its public statement released at the time of the rehearing denial, the energy department said it had “dismissed without merit” challenges raised by those seeking a new look at the decision. It also asserted that a number of federal statutes, including those cited in the lawsuits, were “not applicable” to the decision to designate the corridors. Rather, reviews under those laws would be conducted by FERC before issuing any construction permit.

Julie Ruggiero, a spokeswoman for the energy department, said Wednesday that the designation of the corridors "in and of itself has no environmental impact and instead shines a spotlight on areas of the country that are experiencing congestion and constraint." She said the department had also provided "all interested parties with fair and ample opportunities" to give their views.

Last month, the federal attorneys representing the energy department moved to dismiss the Pennsylvania case, arguing such challenges could only be heard in the court of appeals.

(Photograph of transmission lines in Oregon courtesy Department of Energy)