SFC ranking member Wyden and 25 other Democrats (including minority leader Schumer) introduced tech-neutral energy legislation this week. The bill includes energy storage provisions. Following is a summary followed by summaries pertaining to energy storage. The legislation would consolidate 44 energy incentives into three tech-neutral provisions to promote energy independence and a low-carbon economy. All of the original co-sponsors are Democrats. The roll out of the legislation was accompanied by supporting statements from about a dozen supporting organizations.Read More
Advancing President Trump’s campaign promise to end the “war on coal,” on August 21, 2018, the U.S. Environmental Protection Agency (“EPA”) proposed a new rule to replace the Obama administration’s Clean Power Plan (“CPP”). Unlike the CPP, the proposed Affordable Clean Energy Rule (the “ACE Rule”) does not set numerical standards or targets for greenhouse gas (“GHG”) emissions. Instead, the ACE Rule would give states flexibility to set their own standards of performance for existing coal-fired power plants. EPA asserts that the ACE Rule will eventually reduce GHG emissions to a similar extent as the CPP would have; however, according to EPA, the ACE Rule would reduce GHG emissions by 1.5% by 2030, compared to 32% by 2030 under the CPP. Interested parties will have 60 days from the date of publication in the Federal Register to comment on the ACE Rule.
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The federal Renewable Fuel Standard (RFS) requires refiners and importers of gasoline and diesel to blend a minimum volume of renewable fuel into their transportation fuel products. Refiners and importers subject to the RFS must purchase Renewable Identification Numbers (RINs), which are compliance credits traded on a secondary market, to prove that their fuel contains U.S. Environmental Protection Agency (EPA)-required volumes of cellulosic biofuels, biomass-based diesel, advanced biofuels, and total renewable fuel. While the RFS has generated controversy from the moment its first iteration was passed in the Energy Policy Act of 2005, volatile RIN prices and lower fuel demand have more recently prompted refiners to become increasingly vocal in their opposition to the program.
Two recent court rulings and a rulemaking proceeding could contribute to additional uncertainty, at least in the short term. On August 15, 2017, the U.S. Tenth Circuit Court of Appeals potentially expanded the RFS exemptions available to small refineries, a ruling that was followed by lower RIN prices in the secondary market. The RFS has a case-by-case exemption for small refineries that face “disproportionate economic hardship” in achieving compliance. EPA had previously interpreted the exemption to apply only where there existed an existential threat to a refinery’s survival. In Sinclair Wyoming Refinery Company v. EPA, the 10th Circuit rejected EPA’s interpretation, finding that a small refinery could qualify for an exemption if it suffered hardship that was merely out-of-line with that suffered by other small refineries. While the longer term implications of the case are unclear, if EPA grants more small refinery exemptions, fewer entities will be required to purchase RINs, which could potentially depress the market. It is worth noting that the Tenth Circuit broke with other circuits on the standard used to review EPA’s decision, and this case could be taken up by the U.S. Supreme Court.
While Sinclair may reduce the pool of regulated entities required to buy RINs, there is also reason to believe that EPA may require the remaining refiners and importers to blend an increased volume of biofuels into their gasoline and diesel. On July 28, 2017, the D.C. Circuit Court of Appeals struck down an Obama-era reduction in the amount of ethanol required to be blended in the nation’s fuel supply. In Americans for Clean Energy v. EPA, the D.C. Circuit concluded that the EPA had improperly used its “inadequate domestic supply” waiver to reduce blending targets below Congressionally-approved levels. Going forward, EPA will not be able to consider the “inadequate domestic supply” waiver by considering the retail demand for biofuels—the biofuel supply available to refiners, blenders, and importers should instead be the focus of the analysis. Pro-biofuel stakeholders praised the decision, which could result in more biofuels being sold into the marketplace.
These two cases were decided against the backdrop of EPA’s Renewable Fuel Standard Program rulemaking for its 2018 standards and 2019 biomass-based diesel volume. While the annual rulemaking process is used to set volumetric requirements and to consider various waivers, EPA is also presently seeking comment on whether the proposed 2018 biofuel volumes would cause “severe harm” to the economy. EPA is accepting public comments on the rulemaking through August 31, 2017.
Given recent developments, those in favor and those opposed to the RFS should have plenty to say in the rulemaking proceeding. K&L Gates attorneys are continuing to monitor the situation as we guide our clients through important RIN and RFS issues that affect their businesses.
President Donald Trump signed an Executive Order on March 28, 2017, entitled “Promoting Energy Independence and Economic Growth” (“Order”), which is designed to prompt reconsideration, and in some cases revocation, of the Obama Administration’s actions to address greenhouse gas emissions and climate change. The Order directs several federal agencies to review, and possibly withdraw, specific policy initiatives like the Environmental Protection Agency (“EPA”) Clean Power Plan rulemaking and the U.S. Department of the Interior (“Interior”) 2015 and 2016 rules on oil and gas production on federal lands. In addition, the Order directs the U.S. Council on Environmental Quality (“CEQ”) to rescind its 2016 final guidance document regarding the consideration of greenhouse gas emissions and climate change impacts in environmental reviews performed under the National Environmental Policy Act (“NEPA”). More broadly, the Order also directs all federal agencies to review “all agency actions” that “potentially burden the development or use of domestically produced energy resources.”
As discussed in greater detail below, the Order may have far-reaching implications for U.S. policy on energy production, greenhouse gas regulation, and climate change that could have spillover impacts for energy infrastructure development. A vigorous debate is certain to follow with interested stakeholders evaluating strategic options including notice and comment rulemaking, litigation, and legislative advocacy.
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K&L Gates is pleased to invite you to our September 20th Distinguished Speaker Program breakfast featuring A. Stanley Meiburg, Acting Deputy Administrator of the Environmental Protection Agency (EPA).
Meiburg spent 18 years as Deputy Regional Administrator of EPA’s Region 4 office in Atlanta, Georgia, following service as Deputy Regional Administrator in EPA’s Region 6 office in Dallas, Texas. He is the second person in EPA history to serve as Deputy Regional Administrator in more than one region.
From 1990 to 1995, Meiburg was Director of Region 6’s Air, Pesticides and Toxics Division. From 1985 to 1990, he was Director of the Planning and Management Staff of EPA’s Office of Air Quality Planning and Standards in Durham, North Carolina, leading work on the 1990 Clean Air Act Amendments as well as planning and budgeting for the air program.
Meiburg joined EPA in 1977, serving in a variety of positions in Washington, D.C., Research Triangle Park, N.C., and Dallas, Texas, before coming to Atlanta. Meiburg holds a B.A. degree from Wake Forest University and M.A. and Ph.D. degrees in political science from The Johns Hopkins University.
To attend, please email Kristen Hughes or call +1.202.661.3795 by 5:00 p.m. EDT, Monday, September 19.
This event is not a fundraiser. To maintain the informality of this event, it is strictly off the record.
Late last month, the United States Environmental Protection Agency (“EPA”) submitted briefs to the United States Court of Appeals for the District of Columbia in support of its Clean Power Plan (“CPP”) rule. The agency’s briefs were filed in response to a challenge against the rule brought by industry groups and states (“Petitioners”). Amici curiae briefs on both sides of the issue were also filed by several cities, states, advocacy groups, and companies. The D.C. Circuit will hear oral arguments on the legality of the CPP in June. In February, the United States Supreme Court stayed the implementation of the CPP until the resolution of these legal challenges.
On February 9, 2016, in an historic and unprecedented decision, the U.S. Supreme Court blocked the U.S. Environmental Protection Agency (“EPA”) from implementing the Clean Power Plan (“CPP”) while the rule is challenged in lower courts. The decision is a victory for twenty-nine states and state agencies, along with several industry and trade groups (the “Petitioners”), who appealed the D.C. Circuit’s January 21, 2016 decision not to stay the CPP.
The Petitioners argued to the Supreme Court that the EPA does not have the Clean Air Act authority to implement the CPP, which they assert would reorganize the entire electric power sector of the U.S. economy. The petitioners persuaded the U.S. Supreme court that there was a reasonable probability that four justices would agree to hear the case, that there was a fair prospect that the majority of the court would find that the CPP was unlawful, and that irreparable harm would have resulted from the denial of the stay.
On January 19, 2016, the Federal Energy Regulatory Commission (“FERC”) issued a Staff White Paper outlining four guiding principles to assist transmission planning entities – including regional transmission organizations (“RTOs”), independent system operators (“ISOs”) and electric utilities – in analyzing the Clean Power Plan (“CPP”) promulgated by the U.S. Environmental Protection Agency (“EPA”). The CPP requires each state to demonstrate that it has considered electric system reliability issues in developing its state emissions reduction plan. The EPA explained that one particularly effective way for states to make such a demonstration is by consulting with the relevant RTO, ISO, or other transmission planning entities and documenting this consultation process in their state plans.
EPA published the Clean Power Plan (“CPP”) regulations in the Federal Register late last month. The CPP is the landmark climate change rule championed by the Obama Administration that requires reductions in greenhouse gas emissions from existing power plants nationwide. Almost immediately, opponents lodged petitions seeking review of the rule, with some petitioners also seeking a stay of the rule.
The latest edition of the K&L Gates Environmental Policy Quarterly focuses on (1) EPA’s Carbon Pollution Standards and Clean Power Plan, (2) congressional efforts to streamline environmental reviews of infrastructure projects, and (3) EPA’s draft Assessment on the Potential Impact of Hydraulic Fracturing on Drinking Water Resources. We are delighted to include contributions by a number of K&L Gates lawyers who focus on these matters on a daily basis.