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The Supreme Court’s stay of the Clean Power Plan may slow, but certainly does not stop, progress toward a cleaner power system in the United States.
There’s no telling how the legal challenges to the Clean Power Plan, which were always expected, will ultimately play out. But here are a few important points to keep in mind:
The Environmental Protection Agency’s authority to regulate greenhouse gases is settled. The Supreme Court ruled in 2007 that EPA has authority under the Clean Air Act to regulate greenhouse gases. It affirmed that ruling 8-0 in 2011 when it rejected nuisance suits against greenhouse gas emitters, ruling that “the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”
What’s at issue is whether the particular way EPA has chosen to exercise that authority in regulating carbon emissions from power plants is appropriate. Because there was little precedent to work from, EPA had to chart the direction, and did so with a very careful eye to the legal defensibility of its approach.
The Clean Power Plan has already generated tremendous learning about the practicalities of decarbonizing our power sector. In crafting the rule, EPA engaged extensively with states, utilities and others (and was widely praised for doing so). The adoption of the rule last summer has triggered similar state-level conversations across the country. Even states that are suing to overturn the rule have been actively considering how to implement it.
As a result, we all know a lot more today about the challenges of cutting carbon and the smartest strategies for doing it cost-effectively. That knowledge will be of tremendous value going forward, with or without the Clean Power Plan.
This temporary setback may give us more time to innovate. The only immediate impact of the Court’s stay is that states will not have to file paperwork with EPA later this year requesting additional time to develop their implementation plans (as most were expected to do).
Some states may suspend their planning efforts, given the court’s stay, but others will press on with preparations. If the plan is ultimately upheld, the implementation timeline may have to be extended. This means that states that keep doing their homework will have had more time to sort through the complexities and develop solid implementation plans that consider the roles of both cities and market-based approaches.
In the meantime, there’s plenty of reason to believe emissions will keep declining. U.S. emissions are at a 20-year low thanks to a mix of technological, market and policy drivers. These include improved technology to monitor and increase energy efficiency, plentiful supplies of cheap natural gas, and state and federal policies supporting renewable energy.
Going forward, we can count on these and other forces to continue driving down emissions from the power sector. A recent analysis by the Rhodium Group, for instance, found that Congress’ recent extension of tax credits for solar and wind power will by itself go a long way toward meeting the state reduction targets set under the Clean Power Plan.
In the long run, we need an economy-wide approach. EPA regulation was never anyone’s first choice, which is why many of us worked so hard to enact economy-wide cap-and-trade legislation. But when Congress failed to act, the science and the law compelled the Administration to move forward with the tools at hand – meaning a sector-by-sector approach under the Clean Air Act.
Under those circumstances, the Clean Power Plan is the right approach. It sets ambitious, achievable targets, and gives states the flexibility and incentives to employ market-based strategies to meet them. We’ll continue working with businesses, states and cities on smart ways to implement it and to make progress together in the meantime.
But ultimately – to get the steep reductions we need, and to do that cost-effectively – we need a comprehensive market-based solution. And that will require action by Congress. The regulatory uncertainty inherent in lengthy judicial reviews could conceivably mean we’ll get there that much sooner.
The bottom line is that the Supreme Court’s decision to temporarily stay the Clean Power Plan may prove only a minor setback, and regardless of the ultimate legal outcome, the broader trends at play favor continued momentum toward stronger climate action. It’s easy to get distracted by legal intricacies and punditry. What’s important is that we keep our eye on the goal – a low-carbon economy – and keep crafting practical, on-the-ground strategies to get there.
Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions
February 9, 2016
Contact: Marty Niland, firstname.lastname@example.org, (cell) 410-963-8974
The Supreme Court has made clear in previous rulings that EPA has the authority to regulate greenhouse gases. Whether or not the Court ultimately upholds this particular rule, the need to cut carbon emissions will remain, and states need to figure out the most cost-effective ways to do that. It’s in everyone’s interest that states keep at it, because whether it’s the Clean Power Plan or some other policy, they’ll need smart strategies to get the job done.
The country has made substantial progress reducing emissions and ramping up clean energy technologies. Much of that progress has come from business, state and city leadership and initiative. There’s no reason to halt progress and innovation as we wait for these legal challenges to work through the courts. C2ES will continue working with businesses, states and cities on market-based approaches to curbing emissions while keeping our power supplies reliable and affordable.
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our energy and climate challenges. Learn more at www.c2es.org.
Distribution of Allowances under the Clean Power Plan
In August 2015, the U.S. Environmental Protection Agency (EPA) finalized the Clean Power Plan for existing power plants. Under the rule, states can implement a mass-based or rate-based compliance plan to reduce greenhouse gas emissions from the power sector. States choosing a mass-based approach must also decide how to allocate emission allowances. This fact sheet provides an overview of how allowances could be distributed under a mass-based approach and the policy objectives achieved by their distribution.
Energy Efficiency under the Clean Power Plan
Energy efficiency programs are in wide use, whether administered by state governments, city governments, or utilities. Because energy efficiency is often a low-cost means for reducing power sector emissions, the U.S. Environmental Protection Agency (EPA) expects it will be broadly used to comply with the Clean Power Plan, which sets greenhouse gas standards for existing power plants. This fact sheet compares the treatment of energy efficiency under two types of Clean Power Plan compliance approaches: rate-based
or mass-based emission standards.
Market Oversight under the Clean Power Plan
Carbon markets, like other commodities markets, require provisions to ensure that the market functions effectively and is not manipulated by some participants. Regulators conduct oversight to ensure that buyers can procure carbon credits when needed at a price that reflects the cost of reducing emissions and buyers’ risk tolerance. By making sure that buyers only pay a fair and transparent price, regulators help protect consumers from overpaying for cleaner electricity. This fact sheet investigates the options and implications
of potential market oversight provisions that might be useful as states consider implementing the Clean Power Plan.
Tracking Systems in the Clean Power Plan
Tracking systems provide the foundation for a smoothly operating trading market. They are used by market participants to track the use, trading, banking, and retirement of tradable assets. In trading programs under the Clean Power Plan, tracking systems will be used to track emission reduction credits (ERCs) in rate-based programs and allowances in mass-based programs.
Federal agencies are pursuing regulatory and voluntary steps to reduce methane emissions from the oil and natural gas production system, the largest manmade source of this potent greenhouse gas.
On January 14, 2015, the Environmental Protection Agency (EPA) announced a goal to cut methane emissions from the oil and gas sector by 40–45 percent from 2012 levels by 2025.
As part of achieving this goal, it released proposed regulations on August 18, 2015, for new and modified sources of methane emissions from the oil and natural gas sector. These regulations will be finalized by summer 2016.
Separately, the Department of the Interior (DOI) has proposed regulations to be finalized in 2016 to reduce methane emissions from certain wells.
EPA also plans to work collaboratively with industry and states, including expanding its voluntary Natural Gas Star program, to reduce methane from existing oil and gas operations.
Steps to reduce methane from other sources, such as landfills and coal mines, are also part of President Obama’s Climate Action Plan.
What is methane?
Methane, or CH4, is the main component of natural gas. When combusted as fuel, natural gas produces half as much carbon dioxide emissions as coal, and one-third less than oil (per unit of energy produced). However, natural gas that is released into the atmosphere without being combusted is a potent greenhouse gas.
Why is it important to reduce methane emissions?
Methane is the second biggest driver of climate change. It is much more potent than carbon dioxide (CO2) at increasing the atmosphere’s heat-trapping ability, but it remains in the atmosphere a much shorter time (a little more than a decade compared with hundreds of years for CO2).
Averaged over a 100-year time frame, the warming potential of methane is about 21 times stronger than that of CO2. However, in a 20-year time frame, it is 72 times more potent. (The most recent report by the Intergovernmental Panel on Climate Change raises estimates of the global warming potential of methane to 34 times stronger than CO2 for the 100-year time frame, and 86 times stronger for the 20-year time frame. However, the earlier estimates are still used to maintain comparability among U.S. greenhouse gas inventory reports.)
Because methane is potent and short-lived, reducing methane emissions can have a more immediate benefit, and is especially important at a time of growing U.S. oil and natural gas production.
What are the primary sources of methane emissions in the United States?
Natural gas and petroleum systems are the largest emitters of methane in the U.S., according to EPA estimates. These emissions come from intentional and unintentional releases.
Agriculture, solid waste landfills, and coal mines are also major sources and are addressed by other EPA programs.
Figure 1: 2012 U.S. Methane Emissions, By Source
In 2012, U.S. methane emissions totaled 567 million metric tons of carbon dioxide equivalent.
Source: U.S. Environmental Protection Agency, “Draft Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2012” (Washington, DC: U.S. Environmental Protection Agency, 2014), http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
How much methane is released in oil and natural gas production and how will this announcement improve the accuracy of measurements?
Methane is released unintentionally and intentionally from oil and gas systems. According to EPA, natural gas and petroleum systems were responsible for 29 percent of methane emissions in 2012. The rate of methane emissions from the sector has decreased in recent years, even as natural gas production has surged.
However, independent studies estimate a wide range of leak rates from natural gas production, from 0.71 to 7.9 percent. More comprehensive studies are needed for accurate results.
EPA has committed to examining options for applying remote sensing and other technologies to improve methane emissions data accuracy and transparency, and strengthening reporting requirements for methane in its Greenhouse Gas Reporting Program.
Why is methane intentionally released?
In the production process, small amounts of methane can leak unintentionally. In addition, methane may be intentionally released or vented to the atmosphere for safety reasons at the wellhead or to reduce pressure from equipment or pipelines.
How does EPA propose to address methane emissions from oil and natural gas production?
EPA proposed a rule in August 2015 under Section 111(b) of the Clean Air Act. It would require operators of new oil and gas wells to find and repair leaks, capture natural gas from the completion of hydraulically fractured oil wells, limit emissions from new and modified pneumatic pumps, and limit emissions from several types of equipment used at natural gas transmission compressor stations, including compressors and pneumatic controllers. EPA estimates that this proposal would prevent the emission of 340,000 to 400,000 short tons of methane in 2025, which is the equivalent of 7.7 million to 9 million metric tons of carbon dioxide. A final rule is expected in 2016.
EPA already regulates Volatile Organic Compounds (VOCs, which are ozone-forming pollutants) from new oil and gas production sources, which has the side benefit of also reducing methane.
In addition, on January 22, 2016, the Department of the Interior proposed a Methane Waste and Reduction Rule to reduce methane emissions from all wells on lands managed by the Bureau of Land Management and Indian lands. The proposal from DOI will update rules and require oil and gas producers to reduce methane emissions from operations. It proposes the first-ever limits for flaring of natural gas as well as increased disclosure requirements. The proposal would prohibit venting except in specified circumstances, require pre-drill planning for leak reduction, and increased use of leak-detection technology
What entities will be covered by the regulations?
The proposed rule would cover new and modified oil and gas production sources, and natural gas processing and transmission sources. Specifically, EPA notes it will look to reduce emissions from five specific sources:
- oil well completions
- pneumatic pumps and leaks from well sites
- gathering and boosting stations
- compressor stations.
In developing new standards, EPA says it will focus on in-use technologies, current industry practices, emerging innovations and streamlined and flexible regulatory approaches to ensure that emissions reductions can be achieved as oil and gas production and operations continue to grow.
The DOI proposal would affect all oil and gas wells on federally owned onshore lands, amounting to 100,000 wells responsible for 5 percent of US oil supply and 11 percent of gas supply.
How would the EPA’s proposed methane actions complement existing regulation?
The actions would work with EPA’s new source performance standards (NSPS) and hazardous air pollutant regulations, finalized in 2012. They already apply to oil and gas production and gas processing, transmission, and storage facilities, and the rule proposed in August 2015 would apply them directly to methane as well.
While primarily aimed at reducing smog-forming and toxic air pollutants, known as volatile organic compounds (VOCs), the NSPS rules also had the indirect effect of reducing methane emissions. They include the requirement to use "green completions" at natural gas wells to limit emissions from hydraulic fracturing, a rapidly growing means of drilling and production. In a “green completion,” special equipment separates hydrocarbons from the used hydraulic fracturing fluid, or flowback, that comes back up from the well as it is being prepared for production. This step allows for the collection (and sale or use) of methane that may be mixed with the flowback and would otherwise be released to the atmosphere. Because the same technologies in place to reduce VOC emissions would also be used to reduce methane, no additional steps would be necessary to reduce methane.
In its January 2015 announcement, EPA said it will develop new guidelines to assist states in reducing VOCs from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region. Like the earlier NSPS, these guidelines will also reduce methane emissions.
The proposed regulation of August 2015 will extend emission reductions further downstream from the 2012 rules and cover certain equipment used in the natural gas transmission sector in addition to equipment covered by regulation in 2012.
What other non-regulatory steps has the administration announced it will take?
The president will request $15 million for the Department of Energy (DOE) to develop and demonstrate more cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems, including leak repairs, and developing next-generation compressors. The president’s budget will also propose $10 million to launch a program at DOE to enhance the quantification of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory in coordination with EPA. Congress must appropriate funding for these programs for them to be implemented. DOE will also be responsible for other recommendations to reduce emissions from the natural gas system.
Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions
January 28, 2016
The Center for Climate and Energy Solutions (C2ES) is honored to be recognized once again as one of the world’s leading think tanks.
We learned today that we ranked fifth among environment policy think tanks in the 2015 University of Pennsylvania’s Global Go To Think Tank Index, based on a worldwide survey of more than 4,600 scholars, public and private donors, policymakers, and journalists from 143 countries.
C2ES’s consistently high ranking is a tribute to our unique ability to bring together diverse stakeholders – business leaders, city and state officials, federal policymakers, and international climate negotiators – to achieve practical, commonsense solutions to our climate and energy challenges.
I congratulate and thank our outstanding staff, partners, and supporters who have helped C2ES achieve and maintain our success through the years.
Contact Laura Rehrmann at email@example.com
About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address the challenges of energy and climate change. Learn more at www.c2es.org.
Rate-Based Compliance Under the Clean Power Plan
|Image courtesy International Civil Aviation Organization (ICAO)|
The new Paris Agreement provides a broad global framework to strengthen efforts to address climate change. Now, governments are working toward another agreement on a critical issue Paris doesn’t directly address – reducing greenhouse gas emissions from aviation.
The Paris Agreement, negotiated under the United Nations Framework Convention on Climate Change (UNFCCC), ties together national efforts pledged by more than 180 countries to limit or reduce their own emissions. However, international aviation is inherently a cross-border activity, and a global approach to reducing emissions from aviation is being negotiated separately under the International Civil Aviation Organization (ICAO). A new sector-wide agreement is expected this October.
Emissions from the aviation sector comprised 2 percent of global emissions in 2013, but that share is set to expand rapidly by 2050 without policy interventions. In 2010, the aviation industry carried 2.4 billion passengers and 40 million metric tons of goods. By 2050, that could grow to 16 billion passengers and 400 million metric tons of goods.
If global aviation were a country, it would rank as the seventh largest carbon dioxide emitter. So reducing emissions from aviation is critical to meeting the global goal of limiting average temperature rise below 2 degrees Celsius.
ICAO was established in 1947 to regulate civil aviation by establishing common standards on safety, pollution, technology, and other important issues. In 2010, governments adopted a goal put forward by the airline industry to achieve carbon neutrality from 2020 onwards – known as CNG2020. This means that, from 2020 onwards, net carbon emissions from international aviation would remain constant.
Negotiations are moving toward an agreement on how to achieve this target. The key challenge will be allocating obligations to individual countries. The Chicago Convention, which established ICAO, is based on the principle of uniform application (e.g., all nations must meet the same standards), which is in contrast to the concept of common but differentiated responsibilities familiar to those involved in the UNFCCC. It will be a challenge for negotiators to find a workable compromise that apportions obligations in a manner deemed fair by all nations.
To meet the CNG2020 goal, a number of policy options are available. Technology improvements in aircraft and engine design, operational efficiency gains, and investments in new infrastructure will all reduce emissions. Additionally, the development and possible use of biofuels would drive down emissions by reducing the jet fuels burned by aircraft.
However, in the face of continued aviation sector growth, industry believes that emission reductions occurring outside the sector must also be available to count toward the goal. At the 38th ICAO Assembly in 2013, member states agreed to develop a global market-based mechanism, allowing for offsetting aviation sector emissions. A task force has been deliberating the rules and eligibility criteria that would underpin this mechanism, and it is hoped that these rules will be adopted at the October ICAO Assembly and take effect from 2020.
2016 is an opportunity to continue the momentum of international cooperation on climate change, with aviation becoming the first sector to sign a binding international agreement to reduce its emissions.