Law and the Environment

Governor Vetoes Bill That Would Have Allowed Two Coal-Fired Power Plants in Kansas

In a rather stunning development, Governor Kathleen Sebelius vetoed a bill passed by the Kansas Legislature to allow two coal fired-power plants to receive their air emissions permits in a move to overturn the Kansas environmental agency to hold them back in response to the greenhouse gases they would emit. The veto in effect is a current ban on coal-fired power plants in Kansas. This development shines a spotlight on the need to develop a coherent and effective climate change and energy policy for the United States. Carbon capture and storage or sequestration will be a necessary part of those policies.

After vetoing the bill that would have allowed 11 million tons of greenhouse gases to be produced from two new coal-fired power plants, the governor signed Executive Order 08-03, which establishes the Kansas Energy and Environmental Policy Advisory Group.

"We know that greenhouse gases contribute to climate change,” Sebelius stated. “As an agricultural state, Kansas is particularly vulnerable. Therefore, reducing pollutants benefits our state not only in the short term – but also for generations of Kansans to come.”

Sebelius has named Jack Pelton, chairman, president and chief executive officer of Cessna Aircraft Company, to lead this group.

"I am so pleased that one of our most prominent business leaders has agreed to serve as chair,” Sebelius said. “Jack understands the balance between continuing to grow our economy and making sure that we protect our environment and maximize our natural assets for future generations. The Advisory Group will explore opportunities in all sectors of our economy to accomplish the goal of reducing our greenhouse gas emissions; and, at the same time, continue to take advantage of the economic prosperity provided by job growth throughout Kansas."

In her State of the State Address this past January, Sebelius discussed the need for Kansas to join 36 other states in developing a state plan to deal with climate change. The Energy and Environmental Advisory Group will develop recommendations to the governor involving opportunities to reduce greenhouse gas emissions, as well as a recommended timetable for implementation.  Other issues to be examined by this group include a study of the impact electrical production has on community economic development and the opportunities to diversify Kansas’ energy portfolio.

The process will be facilitated by the Center for Climate Strategies (CCS). Their work is supported by the Energy Foundation and the Sandler Family Supporting Foundation, which includes the Rockefeller Brothers Fund. CCS has developed climate action plans in: Arizona, New Mexico, Montana, Colorado, Washington, Minnesota, North Carolina, and Vermont. State plans are underway in South Carolina, Florida, Arkansas, Michigan, Maryland, and Alaska.

The veto decision places increasing pressure on state legislatures and the federal government to develop a coherent and national climate change and greenhouse gas management plan that incorporate an energy policy and strategy the US has lacked for decades.  It is clear that climate change policy and energy policy are inextricably intertwined, requiring policy decisions in the near future as Congress and the current President have failed to take on these issues.

One of the other key issues not discussed is the reality that coal-fired power plants must capture and store or sequester the carbon underground.  The capture phase presents some challenges but could be implemented with existing technologies.  Cost is the primary concern and utilities cannot justify the expense unless legislation requires the investment.  The transportation and storage or sequestration below ground is an old technology used to enhance oil and gas recovery.  Thus, to begin requiring new coal-fired power plants to capture the carbon dioxide from these plants and to inject it underground is a step that is critical to using a low cost source of energy in a manner that protects the environment.  By capturing the gases emitted from coal-fired power plants, other pollutants like sulfur dioxide and mercury would also removed from the emissions of the plants that would otherwise be released to the atmosphere.

This veto and effective prohibition of coal-fired power plants demonstrates it is clearly time for the sake of the utility industry and the public that we have a coherent energy and climate change policy for the United States. Hopefully, we will see consistent and dedicated work in Congress this year and leadership by a newly-elected president in 2009, whomever that party may be.

EPA's Proposed Lowering of Ozone Standard Facing Stiff Industry Opposition

The US Environmental Protection Agency (EPA) is preparing to promulgate a rule to lower the National Ambient Air Quality Standard for Ozone to 70 to 75 parts per million (ppm) from the current standard of 80 ppm.    The proposed rule was issued on July 11, 2007.  Oil industry and agriculture representatives have presented their case to EPA and the White House Office of Management and Budget last month to discuss a proposal set for release in March.  The National Association of Manufacturers has issued a study that finds that the costs would be significant if the standard becomes stricter.

Some agricultural groups believe the lowering of the concentrations will put rural areas into non-attainment zones.  They fear this will raise the cost of farming at a time when energy prices are already high. It is not clear if this proposed rule will be issued, postponed, or revised.

Congress Includes Greenhouse Gas Reporting Requirement and Registry in Omnibus Spending Bill

On December 21,2007, Congress moved forward with the foundation of any future greenhouse gas regulatory system by including in the Omnibus Spending bill a requirement that EPA promulgate an economy-wide greenhouse gas reporting regulation and create a greenhouse gas registry.  President Bush has signed this spending bill, making this obligation law.  A proposed regulation is due nine months from December 2007, and a final regulation 18 months from December 2007.  The details of this system will be developed by EPA unless additional legislation is passed in the next nine months further defining the parameters of the reporting requirements and registry.  Absent such legislation, how EPA will handle this mandate under the current Administration is not clear, particularly with respect to which industries and sources will be required to submit reports, what de minimis level of emissions will be set, and what other exemptions will be provided.  In any event, it would appear that a greenhouse gas reporting requirement will go into effect in less than two years.

California Federal District Court Dismisses Auto Industry Challenge of California Greenhouse Gas Emission Standards for Cars and Trucks

A federal District Court in California granted summary judgment to the State of California in a suit filed by the auto industry challenging California's power to pass legislation limiting greenhouse gas emissions from automobiles.  California submitted a request for a waiver under the federal Clean Air Act to enact their own emissions standards for automobiles, but the US Environmental Protection Agency (EPA) has yet to rule on the request.  The case follows the ruling in the US Supreme Court that EPA may regulate greenhouse gases under the federal Clean Air Act and the carbon dioxide is an “air pollutant” under the Act.

The auto industry argued that California was prevented from were barred from regulating greenhouse emissions by the federal Energy Policy and Conservation Act, and that regulations proposed by the California Air Resources Control Board are preempted by U.S. foreign policy.

The District Court granted summary judgment to California, holding that the state's law would not conflict with federal authority nor bar the state from regulating greenhouse gas emissions.  Further he concluded that if the EPA granted a waiver under the federal Clean Air Act to allow California’s proposed emissions standards, enforcement of such regulations would be consistent with the Clean Air Act.

The judge stated in his ruling, “Although regulations proposed by California ... must broadly advance EPA's primary purpose to protect public health and welfare and must be at least as stringent as the corresponding EPA regulations in the aggregate, the proposed, California regulations need not establish perfect compliance with all provisions of the Clean Air Act.” 

The two-year delay in EPA issued a waiver for California resulted in the recent filing of a lawsuit against EPA to attempt to force action.  Fourteen other states — including New York, Illinois and Massachusetts.  The waiver also would allow these states and other states to adopt the California greenhouse gas emissions standards for automobiles.  These standards would reduce emissions by 2009 from cars and light trunks by 25% and from sport utility vehicles by 18%. 

“Evidence presented to this court supports the conclusion that regulation of greenhouse gases emitted from motor vehicles has a place in the broader struggle to address global warming,” the opinion said. “Ultimately, the court concludes that plaintiffs have not met their burden to demonstrate that the regulation stands as an obstacle to the Energy Policy and Conservation Act’s objectives.”

Air Permit for Coal-Fired Power Plant Denied in Kansas as a Result of Greenhouse Gas Emissions

For what appears to be the first time in the United States, an air emissions permit has been denied on the basis of greenhouse gas emissions in Kansas.  The Kansas Department of Health and Environment citing carbon dioxide emissions rejected an air permit for a proposed coal-fired power plant.  The agency stated that the greenhouse gas threatens public health and the environment.  See Washington Post article.

Federal District Court Upholds Vermont's Adoption of California Greenhouse Gas Controls for Automobiles

A federal district court in Vermont ruled against all of the auto industry challenges and upheld under the Clean Air ACt, Vermont’s adoption of California’s standards for reducing greenhouse gas emission. The opinion can be found here.